0001104659-21-048717.txt : 20210409 0001104659-21-048717.hdr.sgml : 20210409 20210409161628 ACCESSION NUMBER: 0001104659-21-048717 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 23 CONFORMED PERIOD OF REPORT: 20210520 FILED AS OF DATE: 20210409 DATE AS OF CHANGE: 20210409 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VORNADO REALTY TRUST CENTRAL INDEX KEY: 0000899689 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 221657560 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11954 FILM NUMBER: 21818033 BUSINESS ADDRESS: STREET 1: 888 SEVENTH AVE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-894-7000 MAIL ADDRESS: STREET 1: 888 SEVENTH AVE CITY: NEW YORK STATE: NY ZIP: 10019 DEF 14A 1 tm212374-1_def14a.htm DEF 14A tm212374-1_def14a - none - 10.812554s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.   )
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12
VORNADO REALTY TRUST
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:
 

[MISSING IMAGE: lg_vornadorealtytrust-k.jpg]
888 Seventh Avenue
New York, New York 10019
Notice of Annual Meeting of Shareholders to Be Held on May 20, 2021
To our Shareholders:
The 2021 Annual Meeting of Shareholders of Vornado Realty Trust, a Maryland real estate investment trust (“Vornado” or the “Company”), will be held virtually, via the Internet, on Thursday, May 20, 2021, beginning at 11:30 A.M., New York City time, for the following purposes:
(1)
To consider and vote upon the election of 10 persons to the Board of Trustees of the Company, each to serve until the 2022 Annual Meeting of Shareholders of the Company and until his or her successor is duly elected and qualified.
(2)
To consider and vote upon the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the current fiscal year.
(3)
To consider and vote upon the approval of a non-binding, advisory resolution on executive compensation.
(4)
To transact any other business as may properly come before the meeting and any postponement or adjournment of the meeting.
The Board of Trustees of the Company has fixed the close of business on March 22, 2021 as the record date for the determination of shareholders entitled to notice of, and to vote at, the meeting.
To attend the virtual 2021 Annual Meeting you will need to access www.virtualshareholdermeeting.com/VNO2021 and enter the 16-digit control number found on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. There is no physical location for the annual meeting. We encourage you to allow ample time for online check-in, which will begin at 11:15 A.M. New York City time. Additional details regarding how to participate in the Annual Meeting can be accessed at the Company’s website, www.vno.com or at www.proxyvote.com. For further information on how to attend and participate in the meeting please see “Questions and Answers About the Annual Meeting, How do you attend, vote and ask questions during the meeting?”
Please review the accompanying proxy statement and proxy card or voting instruction form. Whether or not you plan to attend the meeting, it is important that your shares be represented and voted. You may authorize your proxy through the Internet or by touch-tone telephone as described on the proxy card or voting instruction form. Alternatively, you may sign the proxy card or voting instruction form and return it in accordance with the instructions included with the proxy card or voting instruction form. You may revoke your proxy by (1) timely executing and submitting a later-dated proxy card or voting instruction form, (2) subsequently authorizing a proxy through the Internet or by telephone, (3) timely sending a written revocation of proxy to our Secretary at our principal executive office located at 888 Seventh Avenue, New York, New York 10019, or (4) attending the meeting and voting via the Internet (but your attendance at the virtual annual meeting will not automatically revoke your proxy unless you validly vote again during the annual meeting). To be effective, later-dated proxy cards, voting instruction forms, proxies authorized via the Internet or telephone or written revocations of proxies must be received by us by 11:59 P.M., New York City time, on Wednesday, May 19, 2021.
By Order of the Board of Trustees,
Steven J. Borenstein
Secretary
April 9, 2021
 

ii
VORNADO REALTY TRUST
2021 PROXY STATEMENT SUMMARY
Company Overview
Vornado is a fully integrated real estate investment trust (“REIT”) with a collection of premier assets and a focused strategy of growing its dominant positions in New York City office and retail. While concentrated in New York, Vornado also has premier assets in Chicago and San Francisco, and maintains a 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns seven properties in the greater New York metropolitan area. Vornado is a real estate industry leader in sustainability policy, with over 27 million square feet of Leadership in Energy and Environmental Design (“LEED”) certified buildings, representing approximately 95% of our portfolio, with over 23 million square feet at LEED Gold or better. In 2020, we were recognized by the National Association of Real Estate Investment Trusts (“NAREIT”) as a Leader in the Light (11 years running), we achieved ENERGY STAR Partner of the Year with Sustained Excellence (sixth time with this distinction) and we earned accolades from the Global Real Estate Sustainability Benchmark (eighth year with “Green Star” Ranking, top quintile of performers, and an “A” grade for our public disclosure).
We are highly focused on delivering long-term value to shareholders through the pursuit of our investment philosophy and execution of our operating strategies, including:

Maintaining a superior team of operating and investment professionals and an entrepreneurial spirit.

Investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital appreciation.

Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents.

Developing and redeveloping properties to increase returns and maximize value.

Investing in operating companies that have a significant real estate component.
2020 Business Highlights
During 2020, our business faced substantial challenges from the COVID-19 pandemic. Our performance was adversely affected by decreases in revenues from our cleaning and maintenance services, signage, parking and tradeshow businesses, Hotel Pennsylvania closure and lease terminations resulting primarily from retail tenant bankruptcies. While our business was adversely affected by the COVID-19 pandemic during 2020, we nevertheless made significant progress executing on our goals and positioning Vornado for future growth, accomplishing the following strategic initiatives:

We continued to advance the redevelopment of the PENN District, positioning our Company to capitalize on the enormous opportunity we have on the West Side of Manhattan, including:

Completing the largest lease in New York in 2020 with Facebook for all 730,000 square feet (694,000 at our share) of the office portion at our Farley property. The first phase of Facebook space was delivered in January 2021 and the remainder will be delivered later in 2021.

Finalizing our agreement with the Metropolitan Transportation Authority (the “MTA”) to oversee the redevelopment of the Long Island Rail Road Concourse at Penn Station (the “Concourse”), within the footprint of PENN 1. In connection with the redevelopment, we entered into an agreement with the MTA which will result in the widening of the Concourse to relieve overcrowding and our trading of 15,000 square feet of back of house space for 22,000 square feet of retail frontage space.

In December 2020, the Moynihan Train Hall opened to the public, further cementing PENN as the transportation center of New York. We, together with our partners, the Related Companies and Skanska Moynihan Train Hall Builders, redeveloped the Moynihan Train Hall.

Continued progress on the redevelopment of PENN 1 (2.5 million square feet) and PENN 2 (1.8 million square feet), including unique architectural design and amenities on top of New York’s main transportation hub—the largest rail hub in North America.

During 2020, despite a significant decrease in leasing activity generally due to the COVID-19 pandemic, we were able to lease 2.2 million square feet in 54 separate leasing transactions in our New York Office portfolio. Our initial rents were strong at $89.33 per square foot and the average term of these leases was 14.4 years, with positive mark-to-markets of 11.0% GAAP and 4.6% cash. This includes the 730,000
 

VORNADO REALTY TRUST
iii
2021 PROXY STATEMENT SUMMARY
square feet (694,000 at our share) new Facebook lease at Farley Office and 633,000 square feet (348,000 at our share) for the New York University long-term renewal at One Park Avenue, the two largest New York City leasing deals in 2020.

During 2020, we closed on the sale of 35 condominium units at 220 Central Park South (“220 CPS”) for net proceeds of $1.05 billion resulting in a financial statement net gain of $381.3 million. From inception of the 220 CPS project to December 31, 2020, we closed on the sale of 100 units for net proceeds of $2.9 billion, resulting in cumulative financial statement net gains of $1.1 billion.

Sustainability—In 2020, we were recognized by NAREIT as a Leader in the Light (11 years running), we achieved ENERGY STAR Partner of the Year with Sustained Excellence (sixth time with this distinction) and we earned accolades from the Global Real Estate Sustainability Benchmark (eighth year with “Green Star” Ranking, top quintile of performers, and an “A” grade for our public disclosure). We were cited as the industry model with our innovative approach to having our Environmental Stewardship, Social Responsibility and Governance (“ESG”) Report assured by a third party and furnishing it to the Securities and Exchange Commission (“SEC”).
Recent Management Changes
Our organization maintains an entrepreneurial spirit, and a key tenet of our strategy is to maintain a deep, talented and proven team of operating and investment professionals. In 2019, the Board oversaw several generational leadership changes, including three internal promotions to the positions of President (Mr. Michael J. Franco), and Co-Heads of Real Estate (Messrs. Glen J. Weiss and Barry S. Langer), and one external hire as our Head of Retail (Mr. Haim H. Chera). In 2020, we continued our leadership transition, with the separation from service of Mr. David R. Greenbaum from his officer role of executive Vice Chairman and Mr. Joseph Macnow from his role as Chief Financial Officer and Chief Administrative Officer, as of December 31, 2020. Messrs. Greenbaum and Macnow are currently serving in consulting roles for the Company as non-executive Vice Chairman and Senior Advisor, respectively. Effective December 31, 2020, Mr. Michael J. Franco, the Company’s President, was appointed to the additional position of Chief Financial Officer, and Mr. Thomas Sanelli was promoted to Executive Vice President—Finance & Chief Administrative Officer.
We believe the recent management succession changes are a very important step in the process of continuing the generational leadership changes at our Company. The Board has established a purposeful and smooth transition process by appointing this younger generation of executives to new roles with increased responsibilities, while allowing the Company to benefit from the continuing guidance of our long-serving executives.
Shareholder Engagement and Board Responsiveness
At our 2020 Annual Meeting of Shareholders, our say-on-pay proposal did not receive the support of the holders of a majority of our common shares (“Shares”). This result was well below the level of support for our prior annual say-on-pay votes.
In December 2020, we implemented the following substantial compensation reductions:

Reduced our CEO’s Direct/Realizable Compensation by $3.0 million, or 27%, from 2019 to 2021 (based on anticipated 2021 compensation, as further described below), including a reduction in our CEO’s Direct/Realizable Compensation by $1.8 million, or 16%, from 2019 to 2020 (our CEO’s compensation was not increased between 2016 and 2019); and

Reduced the Direct/Realizable Compensation of our other NEOs by a total of $8.3 million, or 45%, from 2019 to 2021 (taking into account Messrs. Greenbaum’s and Macnow’s 2021 consulting roles and reduced compensation), including a reduction of $3.7 million, or 20%, from 2019 to 2020.
 

iv
VORNADO REALTY TRUST
2021 PROXY STATEMENT SUMMARY
[MISSING IMAGE: tm212374d1-bc_ceototalpn.jpg]
Direct /Realizable and Realized Compensation are calculated as described in the Compensation Discussion and Analysis section of this Proxy Statement. 2021 Total Direct/Realizable Compensation and Realized Compensation represents additional compensation reductions to which the Compensation Committee and Mr. Roth have agreed for 2021 and the equity components are calculated using the same fair-value methodology that was applied to the 2020 Direct /Realizable Compensation. The Realized Compensation for 2021 does not include the value of OPP units granted under our 2018 OPP Plan because those units did not meet the applicable performance requirements as of March 15, 2021 and, accordingly, the applicable units can no longer be earned.
Our executive compensation program is designed so that the actual Total Realized Compensation closely aligns with our actual Share performance. As the chart above demonstrates, total Direct/Realizable Compensation for our CEO decreased in 2020, compared to 2019, and his Realized Compensation is significantly lower than total Direct/Realizable Compensation for each year. Performance-based, long-term equity awards for the three-year performance periods ending in 2018, 2019 and 2020 were not earned and no such payouts were made in 2018, 2019 or 2020, demonstrating the at-risk nature of our performance-based program and its alignment with shareholder interests. In addition, the Compensation Committee and Mr. Roth have agreed to further reductions to his 2021 compensation and his OPP award that was granted in 2018 with a grant date fair value of $5.6 million did not meet the performance threshold at the March 15, 2021 measurement date and therefore was not earned.
Since our 2020 annual meeting, we reached out to shareholders representing more than 58% of our outstanding Shares (as of December 31, 2020) and spoke with shareholders representing more than 56% of our outstanding Shares, including those who voted against our say-on-pay proposal in 2020. Our Lead Independent Trustee participated in conversations with over half of these shareholders.
[MISSING IMAGE: tm212374d1-pc_contactpn.jpg]
 

VORNADO REALTY TRUST
v
2021 PROXY STATEMENT SUMMARY
The following table summarizes key topics discussed with shareholders during our most recent engagement, the feedback we received and the actions taken in response for 2020 and 2021:
What we Heard
How we Responded
Pay For Performance

Shareholders are focused on alignment of executive compensation and shareholder performance

Overall NEO Direct/Realizable Compensation was reduced from $29.6 million in 2019 (excluding one-time awards) to an expected $18.3 million in 2021, a 38% reduction, reflecting the reduced amounts payable to Messrs. Greenbaum and Macnow in 2021 for their consulting roles and no increase in 2021 compensation for Mr. Franco despite his additional role as Chief Financial Officer.

Our CEO’s compensation, as shown above, has been reduced by $3.0 million, or 27%, from 2019 to 2021
Annual Incentive Awards

Shareholders generally understood the rationale for the one-time waiver by the Board and Compensation Committee of the formulaic components in our annual incentive plan with respect to 2020 performance due to the significant, negative effects of COVID-19 on our variable businesses but requested clear disclosure regarding the rationale for this change and confirmation that the formulaic components of the annual incentive plan still apply in future years

Described the one-time waiver in the Compensation Discussion and Analysis section of this proxy statement, including the applicable comparable FFO metrics and the negative effects of COVID-19 on our variable businesses and tenant retailer bankruptcies (e.g., J.C. Penney)

Maintained formulaic threshold comparable FFO components for 2021 annual incentive plan

Annual Incentive Awards are only one component of our overall compensation (comprising less than 15% of our aggregate 2020 NEO’s total compensation, as shown in the Summary Compensation Table below) and, when setting overall compensation for the NEOs in consultation with our Compensation Consultant, our Compensation Committee evaluates the level of our overall compensation program in comparison to our peers
 

vi
VORNADO REALTY TRUST
2021 PROXY STATEMENT SUMMARY
What we Heard
How we Responded
Performance-Based, Long-Term Incentive Awards

Investors broadly supported the OPP Awards granted in 2020 for 2019 performance

Granted OPP awards again in January 2021 for 2020 performance and made two changes to better align pay and performance:

Increased performance measurement period to four years from three years

Reduced maximum notional amount of OPP awards from $35 million to $30 million
Disclosure

Shareholders encouraged proxy statement disclosure of:

Board diversity

Board Refreshment progress

Political Contributions

Modifications to 2020 compensation as a result of the COVID-19 pandemic

Direct/Realizable vs. Realized Compensation disclosure and shareholder alignment

Board’s response to the 2020 say-on-pay vote outcome

Added disclosure on Board diversity, ongoing Board refreshment efforts and political contributions

Enhanced disclosure regarding 2020 compensation reductions and modifications relating to COVID-19 pandemic

Continued disclosing total Realized Compensation relative to Direct/Realizable Compensation to showcase the strong alignment of pay with performance

Enhanced disclosure related to how the Compensation Committee aligns pay with performance through program design
ESG

Emphasized the importance of continued disclosure on sustainability matters, including reporting in accordance with Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD)

Encouraged designating a Board committee as responsible for direct oversight of climate risk

Supported continued disclosure of Equal Employment Opportunity Commission (EEO) statistics and employee benefits

2020 ESG Report includes extensive information on our (i) sustainability measures and plans, including disclosures in accordance with SASB and TCFD preliminary scenario analysis and (ii) 2020 EEO statistics on employee demographics across the Company and at management levels

Board delegated to the Corporate Governance and Nominating Committee specific oversight responsibility for climate risk matters, in addition to its oversight of ESG matters
 

VORNADO REALTY TRUST
vii
2021 PROXY STATEMENT SUMMARY
The following shows the 2020 pay mix for our CEO. 99% of his total direct 2020 compensation is variable and subject to Company performance:
[MISSING IMAGE: tm212374d1-pc_ceocomppn.jpg]
Significant Compensation Reductions
As a result of the ongoing impact of the COVID-19 pandemic on our business, effective April 1, 2020, our Trustees and senior executives agreed to the following compensation reductions for the remainder of 2020:

Our Chairman and CEO, Mr. Roth, waived 50% of his annual base salary;

Mr. Franco, our President during 2020 (and, effective December 31, 2020, also Chief Financial Officer), Mr. Greenbaum, our executive Vice Chairman during 2020, and Mr. Macnow, our Chief Financial Officer and Chief Administrative Officer during 2020, each waived 30% of their respective annual base salaries;

Mr. Weiss and Mr. Langer, Co-Heads of Real Estate, and Mr. Chera, Executive Vice President—Head of Retail, each waived 15% of their respective base salaries; and

Each non-management member of our Board waived his or her $75,000 annual cash retainer.
In connection with our $35 million annual overhead reduction program announced in December 2020, our senior management agreed to significant compensation reductions for 2020 and to further significant reductions for 2021. Our NEOs’ Direct/Realizable Compensation that the Compensation Committee anticipates granting for 2021 was reduced from their corresponding 2019 levels by the following amounts and percentages:

Mr. Roth: $3.0 million, or 27%, aggregate reduction, comprised of a $1.8 million, or 16%, reduction from 2019 to 2020 and a further $1.2 million, or 11%, reduction for 2021;

Mr. Macnow: $3.1 million, or 76%, aggregate reduction, comprised of a $900,000, or 22%, reduction from 2019 to 2020 and a further $2.2 million, or 54%, reduction, from 2020 to 2021 (Mr. Macnow’s 2021 compensation is for his senior advisor consulting role and based on the terms of his consulting agreement);

Mr. Greenbaum: $3.5 million, or 64%, aggregate reduction, comprised of a $1.1 million, or 21%, reduction from 2019 to 2020 and a further $2.4 million, or 43%, reduction from 2020 to 2021 (Mr. Greenbaum’s 2021 compensation is for his consulting role and based on the terms of his consulting agreement);

Mr. Franco: $1.2 million, or 24%, reduction (excluding his receipt of a one-time grant of restricted units in 2019), notwithstanding his increased responsibilities as Chief Financial Officer; and

Mr. Weiss: $400,000, or 12%, reduction (excluding his receipt of a one-time grant of restricted units in 2019).
 

viii
VORNADO REALTY TRUST
2021 PROXY STATEMENT SUMMARY
Compensation Philosophy
Our compensation program is based on a pay-for-performance philosophy and is designed to incentivize executives to achieve financial and strategic goals that are aligned with the Company’s long-term business strategy and the creation of sustained, long-term value for our shareholders.
The objectives of the program include:

RETAIN a highly experienced, “best-in-class” team of executives who have worked together as a team for a long period of time and who make major contributions to our success.

ATTRACT other highly qualified executives to strengthen that team as needed.

MOTIVATE our executives to contribute to the achievement of company-wide and business-unit goals as well as to pursue individual goals.

EMPHASIZE equity-based incentives with long-term performance measurement periods and vesting conditions.

ALIGN the interests of executives with shareholders by linking payouts under annual incentives to performance measures that promote the creation of long-term shareholder value.

ACHIEVE an appropriate balance between risk and reward in our compensation programs that does not encourage excessive or inappropriate risk-taking.
Commitment to 2021 Compensation Program Enhancements
We believe that we made significant progress in addressing shareholder concerns with our executive compensation changes, taking into consideration the management changes and significant compensation reductions, and will continue to evaluate potential adjustments going forward. To emphasize our focus on aligning executive compensation with shareholder interests, we are committed to evaluate further modifications to our executive compensation program based, in part, on feedback provided in our dialogue with shareholders. Our goal is to create a consistent executive compensation structure that is transparent, goal-oriented and linked to objective results, and that reflects evolving best practices. In doing so, we will continue to maintain a compensation program that encourages long-term focus with compensation outcomes that are at-risk and aligned with performance.
Board and Committee Refreshment
Over the last five years, we have added three new independent Trustees, Ms. Hamza Bassey, Mr. Helman and Ms. Puri. Currently, 30% of our Trustees have joined the Board within the last five years.
We are also focused on committee rotation and have made committee assignment changes in recent years. In 2020, we appointed Ms. Puri as Chair of the Audit Committee, and in 2021 we added Ms. Hamza Bassey to the Compensation Committee, replacing Dr. West.
Over the past year, during the COVID-19 pandemic, we have benefited tremendously from the experience of our longstanding Trustees who have extensive experience in the real estate industry and navigating through numerous economic and real estate cycles. Although Dr. West considered retiring from our Board, he was asked to remain as a Trustee due to his experience with the Company and with navigating through multiple economic and real estate cycles. As a result, our Board determined to maintain our current mix of Trustees for election at the 2021 Annual Meeting, but we remain committed to ongoing Board refreshment and will continue to actively pursue qualified, diverse candidates for election to our Board.
 

VORNADO REALTY TRUST
ix
2021 PROXY STATEMENT SUMMARY
The following charts summarize the composition of our Board following our recent refreshment:
[MISSING IMAGE: tm212374d1-pc_refreshpn.jpg]
In the past three years, our Board added two new independent Trustees to replace two prior members of the Board.

Ms. Hamza Bassey joined our Board in 2020. She has served as the Group General Counsel, Chief Compliance Officer and Corporate Secretary of Atlas Mara Ltd., an African-focused banking group, since February 2015. She has brought legal, investment, financial and international experience.

Mr. Helman joined our Board in 2019. He has brought investment, technology, private equity, capital markets, and public company board experience.
We believe that the balance of skills and experiences of our Board members, enhanced by the fresh perspectives brought by our newer Trustees, and the industry and company-specific expertise and institutional knowledge of our longer-tenured Trustees, provide substantive support for the Board’s oversight of the Company’s business and strategy. In combination with Board refreshment, we have also rotated committee memberships to bring new perspectives to committees.
Environmental Stewardship, Social Responsibility and Governance (ESG) Highlights
Our Board is committed to sound governance practices designed to promote the long-term interests of shareholders and to strengthen Board and management accountability. Many of these governance practices were influenced by and responsive to shareholder feedback over the years.
BOARD OF TRUSTEES

Highly engaged, experienced Board with diverse skills and expertise

Commitment to Board refreshment, with a focus on gender, racial and ethnic diversity

90% of the Board is independent

30% of our Board members are female and 20% are racially/ethnically diverse

Lead Independent Trustee with significant authority and responsibility

Annual Board and committee self-evaluations

Annual review of Board leadership structure

Robust stock ownership guidelines that align the interests of Trustees with those of our shareholders

Four of our Board members each own more than 1% of our common shares

Actively engaged in strategic, risk and management oversight, including cybersecurity matters

Oversees diversity and inclusion matters

Active approach to management succession planning
 

x
VORNADO REALTY TRUST
2021 PROXY STATEMENT SUMMARY

Corporate Governance and Nominating Committee oversees ESG program and sustainability initiatives and receives ESG presentations from management on developments in the ESG space on a regular basis

Corporate Governance and Nominating Committee oversees and monitors internal compliance with ethical and social policies
GOVERNANCE PRACTICES

Robust and ongoing shareholder engagement program and demonstrated responsiveness to feedback

Annual Trustee elections and committee appointments

Market standard proxy access

Shareholders may amend our Bylaws

Trustee resignation policy in uncontested elections for failure to receive majority support

No poison pill

Declaration of Trust may be amended by a majority vote of the Board of Trustees and a majority vote of outstanding shares (excluding limited provisions to protect REIT tax status and removal of Trustees)
COMPENSATION PRACTICES

Pay-for-performance philosophy, including 99% of CEO’s and 71% of other NEOs’ 2020 compensation in the form of equity with actual value tied to Vornado’s share price performance

Significant portion of long-term compensation is in the form of performance-based equity, which requires the achievement of significant performance hurdles to have any value

Implemented changes reflected in our 2021 executive compensation program, including reducing notional value of our Outperformance Plan and extending performance measurement period

Robust claw-back policy, subject to the oversight of the Corporate Governance and Nominating Committee, which also provides for potential claw-backs for violations of Company policies as well as for bad faith or dishonest actions or receipt of an improper personal benefit

Formula-driven annual bonus plan cap for 2021 (was waived for 2020 due to the effects of the COVID-19 pandemic on our business)

Actual Realized Compensation of our CEO and other named executive officers is aligned with actual share performance

Anti-hedging and anti-pledging policies

Our equity plans have a double-trigger equity acceleration upon a change of control

CEO has no employment agreement and is not entitled to any special severance upon a change of control or other employment termination

No excessive perks and no retirement plan other than a 401(k)

No tax gross-ups

CEO is required to hold Company equity having a value equal to at least 6x his salary and each of our other named executive officers is required to hold Company equity with a value equal to at least 3x such executive’s salary
 

VORNADO REALTY TRUST
xi
2021 PROXY STATEMENT SUMMARY
ENVIRONMENTAL STEWARDSHIP AND SOCIAL RESPONSIBLITY

Industry-leading sustainability program

ENERGY STAR Partner of the Year Award with Sustained Excellence received six times, most recently in 2020

Global Real Estate Sustainability Benchmark Green Star Ranking in every year since 2013, with an “A” grade for our public disclosure

NAREIT Leader in the Light Award every year since 2010

One of the largest owners of LEED-certified property in the United States

Reporting pursuant to SASB framework in 2018, 2019 and 2020 ESG reports, examined by third party and furnished to the SEC on a Form 8-K filing

Signatory of the Task Force on Climate-related Financial Disclosures

Robust COVID-19 accommodations and procedures, including daily temperature and health screenings, weekly testing, flexible work-from-home policies, subsidized parking and lunch for employees working in the office

Comprehensive medical and dental insurance, 401(k) employer match and HSA contributions

Strong Code of Business Conduct and Ethics applies to all Trustees, executive officers and employees

Employee policies and manuals prohibit discrimination, bribes, money laundering and other corruption

Restrictions on conflicts of interest

Established and circulated straight-forward procedures for reporting any policy violations or other wrongdoing

Comply with all applicable laws and regulations regarding employing child labor, respecting human rights and not purchasing conflict minerals

Strictly restrict political contributions on behalf of the Company and compliance with that policy is subject to the oversight of the Corporate Governance and Nominating Committee; Consistent with Vornado’s past practices, we did not make any political contributions in 2020

Refreshed and renewed anti-harassment policy

Include gender and racial diversity data at management level and across our entire employee base in our annual ESG report; as of December 31, 2020, 54% of our Vornado corporate employees (excluding BMS employees) were female and 30% were racial minorities, and, as of December 31, 2020, 36% of BMS employees were female and 70% of BMS employees were racial minorities
Please also see our Chairman’s Letter that can be found on our website at www.vno.com/chairmansletter. Our Chairman’s Letter is not a part of, or incorporated by reference in, this Proxy Statement.
 

a
VORNADO REALTY TRUST
TABLE OF CONTENTS
TABLE OF CONTENTS
2
How do you vote? 2
Who is entitled to vote? 2
How do you attend, vote and ask questions during the meeting? 2
What is the quorum necessary for the meeting? 3
How will your votes be counted? 3
4
Trustees Standing for Election 4
Relationships Among our Trustees 8
9
Our Mission and Culture 9
Governance Highlights 9
Shareholder Engagement and Governance Changes 10
NYSE-Listed 11
Our Corporate Governance Framework 11
Corporate Governance at a Glance 12
Board Independence 13
Approval of Related Party Transactions 14
Board Participation 14
Developing an Effective Board 14
Board Leadership Structure 16
Lead Independent Trustee Role 17
Board and Committee Refreshment 17
Committees of the Board of Trustees 18
The Board’s Role in Risk Oversight 20
22
Strong Ethical and Social Policies 22
Human Capital Management and Social Engagement 22
Leader in Sustainability Practices 23
Sustainability 23
25
Principal Security Holders Table
Delinquent Section 16(a) Reports 27
 

VORNADO REALTY TRUST
b
TABLE OF CONTENTS
28
Executive Summary 28
Approach of this Compensation Discussion and Analysis Section 29
Recent Management Changes 29
Shareholder Engagement and Board Responsiveness 29
Significant Compensation Reductions 33
Commitment to 2021 Compensation Program Enhancements 33
2020 Business Highlights 33
Executive Compensation Philosophy 34
Compensation Components 35
How Pay Aligns with Performance 38
How We Determine Executive Compensation 39
Elements of Our Compensation Program 41
Equity Ownership Guidelines 45
Comparison of 2018-2020 Direct/Realizable Compensation 45
Direct/Realizable Compensation Table 46
Comparison of Realized Compensation with Direct/Realizable Compensation 47
Realized Compensation Table 47
Current Year Compensation Decisions 48
Other Compensation Policies and Practices 49
50
51
Summary Compensation Table 51
All Other Compensation Table 53
Grants of Plan-Based Awards in 2020 54
Outstanding Equity Awards at Year-End 55
Aggregate Option Exercises in 2020 and Units Vested 56
Employee Retirement Plan 56
Deferred Compensation 56
Employment Contracts 57
Severance and Change of Control Arrangements 59
Pay Ratio Disclosure 61
62
62
63
65
 

c
VORNADO REALTY TRUST
TABLE OF CONTENTS
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
66
Audit Fees 66
Audit-Related Fees 66
Tax Fees 66
All Other Fees 66
Pre-Approval Policies and Procedures 66
68
69
69
69
69
ANNEX A—RECONCILIATION OF NON-GAAP METRICS 71
 

VORNADO REALTY TRUST
1
2021 Proxy Statement
[MISSING IMAGE: lg_vornadorealtytrust-k.jpg]
888 Seventh Avenue
New York, New York 10019
PROXY STATEMENT
Annual Meeting of Shareholders to Be Held on May 20, 2021
The accompanying proxy is being solicited by the Board of Trustees (the “Board of Trustees” or the “Board”) of Vornado Realty Trust, a Maryland real estate investment trust (“we,” “us,” “our,” the “Company” or “Vornado”), for exercise at our 2021 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Thursday, May 20, 2021, beginning at 11:30 A.M., New York City time, virtually via the Internet. Our principal executive office is located at 888 Seventh Avenue, New York, New York 10019. Our proxy materials, including this proxy statement, the Notice of Annual Meeting of Shareholders, the proxy card or voting instruction form and our 2020 Annual Report are being distributed and made available on or about the date of this proxy statement.
In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide our shareholders access to our proxy materials on the Internet. Accordingly, a notice of Internet availability of proxy materials will be mailed on or about the date of this proxy statement to our shareholders of record as of the close of business on March 22, 2021. Shareholders may (1) access the proxy materials on the website referred to in the notice or (2) request that a printed set of the proxy materials be sent, at no cost to them, by following the instructions in the notice. You will need your 16-digit control number that is included with the notice mailed on or about the date of this proxy statement, to authorize your proxy for your Shares (as defined below) through the Internet. If you have not received a copy of this notice of Internet availability, please contact our investor relations department at 201-587-1000 or send an e-mail to inquiries@vno.com. If you wish to receive a printed version of these materials, you may request them at www.proxyvote.com or by dialing 1-800-579-1639 and following the instructions at that website or phone number.
 

2
VORNADO REALTY TRUST
2021 PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
How do you vote?
If you hold your shares of record in your own name as a registered holder, you may vote over the Internet at the Annual Meeting or you may authorize a proxy to vote your shares over the Internet (at www.proxyvote.com), by telephone (at 1-800-690-6903) or by executing and returning a proxy card. Once you authorize a proxy, you may revoke that proxy by (1) timely executing and submitting a later-dated proxy card or voting instruction form, (2) subsequently authorizing a proxy through the Internet or by telephone, (3) timely sending a written revocation of your proxy to our Secretary at our principal executive office or (4) attending the Annual Meeting and voting via the Internet (but your attendance at the Annual Meeting will not automatically revoke your proxy unless you validly vote again during the Annual Meeting).
If you hold your shares in “street name” ​(that is, as beneficial owner through a bank, broker or other nominee), your broker or nominee will not be permitted to vote your shares (other than with respect to the ratification of the appointment of our independent registered public accounting firm) unless you provide instructions to your broker or other nominee on how to vote your shares. If you hold your shares in “street name,” you will receive instructions and a voting instruction form from your nominee that you must follow in order to have your proxy authorized, or you may contact your nominee directly to request these voting instructions. You should instruct your broker or nominee how to vote your shares by following the directions provided by your broker or nominee.
To be effective, later-dated proxy cards,voting instruction forms, proxies authorized via the Internet or telephone or written revocations of proxies must be received by us by 11:59 P.M., New York City time, on Wednesday, May 19, 2021.
We will pay the cost of soliciting proxies. We have hired MacKenzie Partners, Inc. to solicit proxies for a fee not to exceed $6,000. In addition to solicitation by mail, by telephone and by e-mail or the Internet, arrangements may be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies and proxy materials to their principals and we may reimburse them for their expenses in so doing. Members of our Board of Trustees and members of management of the Company may also solicit proxies.
Who is entitled to vote?
Only holders of record of our common shares of beneficial interest, par value $0.04 per share (our “Shares”), as of the close of business on March 22, 2021 are entitled to notice of and to vote at the Annual Meeting. We refer to this date as the “record date.” On that date, 191,464,179 of our Shares were outstanding. Holders of Shares as of the record date are entitled to one vote per Share on each matter properly presented at the Annual Meeting.
How do you attend, vote and ask questions during the meeting?
Due to the ongoing impact of the COVID-19 pandemic, this year’s Annual Meeting will be a virtual meeting of shareholders conducted via live audio webcast to provide a safe experience for our shareholders and employees. To be admitted to the Annual Meeting, you must have been a shareholder at the close of business on the record date of March 22, 2021 or be the legal proxy holder or qualified representative of such shareholder. The virtual Annual Meeting will afford shareholders the same rights as if the meeting were held in person, including the ability to vote shares electronically at the Annual Meeting and to ask questions in accordance with the rules of conduct for the meeting, which will be available on www.virtualshareholdermeeting.com/VNO2021 during the Annual Meeting.
To attend and participate in the virtual meeting, please visit www.virtualshareholdermeeting.com/VNO2021. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials) to access the virtual meeting.
Shareholders must provide advance written notice to the Company if they intend to have a legal proxy (other than the persons appointed as proxies on the Company’s proxy card) or a qualified representative attend the Annual Meeting on their behalf. The notice must include the name and address of the legal proxy holder or qualified
 

VORNADO REALTY TRUST
3
2021 PROXY STATEMENT
representative and must be received by 5:00 p.m. New York City time on May 7, 2021 in order to allow enough time to register such person to attend the Annual Meeting.
If you have not voted your Shares prior to the Annual Meeting or you wish to change your vote, you will be able to vote or re-vote your Shares electronically during the Annual Meeting by clicking “Vote Here” on the meeting website. Whether or not you plan to attend the Annual Meeting, you are encouraged to vote your Shares prior to the meeting date by one of the methods described in this proxy statement.
If you wish to submit a question, you may do so live during the Annual Meeting by attending the Annual Meeting at www.virtualshareholdermeeting.com/VNO2021.
Only questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints. If any questions pertinent to meeting matters cannot be answered during the Annual Meeting due to time constraints, we will post and answer a representative set of these questions online at https://investors.vno.com. The questions and answers will be available as soon as reasonably practicable after the Annual Meeting and will remain available until one week after posting.
Attendance at the Annual Meeting is subject to capacity limits set by the virtual meeting platform provider. If you have any technical difficulties or any questions regarding the virtual meeting website, our platform provider will be ready to assist you. If there are any technical issues in convening or hosting the Annual Meeting, we will promptly post information to our investor relations website, https://investors.vno.com, including information on when the Annual Meeting will be reconvened.
What is the quorum necessary for the meeting?
The holders of a majority of the outstanding Shares as of the close of business on the record date, present in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting.
How will your votes be counted?
Any proxy, properly executed and returned, will be voted as directed and, if no direction is given, will be voted as recommended by the Board of Trustees in this proxy statement and in the discretion of the proxy holder as to any other matter that may properly come before the Annual Meeting. A broker non-vote or an abstention from voting, as applicable, will count for the purposes of determining a quorum, but will have no effect on the result of the votes on any of the proposals. Any proxy marked “withhold” will count for the purposes of determining a quorum and will have no effect on the result of the votes on election of Trustees, but, if any Trustee fails to receive approval of a majority of the votes cast (for this purpose, more “for” votes cast than “withhold” votes), that Trustee must tender his or her offer of resignation to the Board of Trustees for its consideration. A broker non-vote is a vote that is not cast on a non-routine matter because the Shares entitled to cast the vote are held in street name, the broker lacks discretionary authority to vote the Shares on that matter and the broker has not received voting instructions from the beneficial owner.
The election of each of our nominees for Trustee (Proposal 1) requires a plurality of the votes cast at the Annual Meeting; however, any nominee for Trustee who does not receive the approval of a majority of the votes cast (more “for” votes than “withhold” votes) will be required, pursuant to our Corporate Governance Guidelines, to tender his or her offer of resignation to the Board of Trustees for its consideration. The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm (Proposal 2) and the approval of the non-binding, advisory vote on executive compensation (Proposal 3) each requires the affirmative vote of a majority of the votes cast on such matter at the Annual Meeting.
 

4
VORNADO REALTY TRUST
2021 PROXY STATEMENT
PROPOSAL 1: ELECTION OF TRUSTEES
Trustees Standing for Election
Our Board has 10 Trustees who have been nominated for election at our Annual Meeting. Our Board, on the recommendation of our Corporate Governance and Nominating Committee, has nominated each of Mr. Steven Roth, Ms. Candace K. Beinecke, Mr. Michael D. Fascitelli, Ms. Beatrice Hamza Bassey, Messrs. William W. Helman IV and David M. Mandelbaum, Ms. Mandakini Puri, Mr. Daniel R. Tisch, Dr. Richard R. West and Mr. Russell B. Wight, Jr. for election at our Annual Meeting. If elected, such persons will serve until the Annual Meeting of Shareholders in 2022 and until their respective successors are duly elected and qualified. Each of these nominees currently serves as a member of our Board.
Unless you direct otherwise in your signed and returned proxy, each of the persons named in the accompanying proxy will vote your Shares for the election of each of the 10 nominees for Trustees. If any nominee at the time of election is unavailable to serve, it is intended that each of the persons named in the proxy as a proxy holder will vote for an alternate nominee who will be recommended by the Corporate Governance and Nominating Committee of our Board and nominated by the Board. Alternatively, the Board may reduce the size of the Board and the number of nominees. Proxies may be exercised only for the nominees named or such alternates. We do not currently anticipate that any nominee for Trustee will be unable to serve as a Trustee.
The Board of Trustees recommends that shareholders vote “FOR” the election of each of the nominees listed below to serve as a Trustee until the Annual Meeting of Shareholders in 2022 and until his or her respective successor has been duly elected and qualified.
Under our Bylaws, a plurality of all the votes cast at the Annual Meeting, if a quorum is present, is sufficient to elect a Trustee. However, any Trustee who does not receive the affirmative vote of a majority of the votes cast for his or her election to the Board (for this purpose, a greater number of “for” votes than “withhold” votes) in an uncontested election (such as this election) will be required, pursuant to our Corporate Governance Guidelines, to tender his or her offer of resignation to the Board for its consideration. A “withhold” vote or an abstention, as applicable, will count for the purposes of determining a quorum, but will have no effect on the result of the votes on this proposal.
 

VORNADO REALTY TRUST
5
2021 PROXY STATEMENT
[MISSING IMAGE: tm212374d1-ph_stevenpnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_candacepnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_michaelpnlr.jpg]
(1)
Beneficially owns in excess of 1% of our Shares.
(2)
Independent pursuant to the rules of the NYSE as determined by the Board.
 

6
VORNADO REALTY TRUST
2021 PROXY STATEMENT
[MISSING IMAGE: tm212374d1-ph_beatricepnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_williampnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_davidpn.jpg]
(1)
Beneficially owns in excess of 1% of our Shares.
(2)
Independent pursuant to the rules of the NYSE as determined by the Board.
 

VORNADO REALTY TRUST
7
2021 PROXY STATEMENT
[MISSING IMAGE: tm212374d1-ph_mandakinipnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_danielpnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_richardpnlr.jpg]
[MISSING IMAGE: tm212374d1-ph_russellpnlr.jpg]
(1)
Beneficially owns in excess of 1% of our Shares.
(2)
Independent pursuant to the rules of the NYSE as determined by the Board.
 

8
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Relationships Among our Trustees
We are not aware of any family relationships among any of our Trustees or executive officers or persons nominated or chosen by us to become Trustees or executive officers.
Messrs. Roth, Mandelbaum and Wight are general partners of Interstate. Since 1992, Vornado has managed all the operations of Interstate for a fee as described in “Certain Relationships and Related Transactions—Transactions Involving Interstate Properties.”
Messrs. Roth, Mandelbaum and Wight, Dr. West and Ms. Puri are also directors of Alexander’s. As of the record date, the Company, together with Interstate and its general partners, beneficially owns approximately 59% of the outstanding common stock of Alexander’s.
For more information concerning Interstate, Alexander’s and other relationships involving our Trustees, see “Certain Relationships and Related Transactions.”
 

VORNADO REALTY TRUST
9
2021 PROXY STATEMENT
CORPORATE GOVERNANCE
OUR MISSION
AND CULTURE
Our mission is to execute on the objectives and strategy that we set out in our Annual Report on Form 10-K.
Our goal, culture and intent are to do so in a manner that:

adds value to the communities in which we operate;

provides a rewarding, engaging and motivating environment for our employees; and

accomplishes our mission while seeking to maintain the highest ethical standards in a sustainable manner.
Governance Highlights
Regular Shareholder Engagement

We, at least annually, meet in person or virtually, with shareholders holding over 50% of our Shares.

Ms. Candace Beinecke, our Lead Independent Trustee, has participated in the majority of these meetings.
Strong, Independent, Diverse and Engaged Board

In the past five years, our Board has added three new independent Trustees to the Board. We are committed to a continuous process of Board refreshment. Currently, 30% of our Board members are persons who have joined the Board within the last five years.

In 2020, our Board appointed Ms. Mandakini Puri to be Chair of our Audit Committee. Dr. Richard West, after many years as the Chair of our Audit Committee has stepped down from that role, but we have asked him to stay on the Audit Committee.

In 2021, our Board appointed Ms. Beatrice Hamza Bassey as a member of our Compensation Committee, replacing Dr. West.

90% of our Board is independent, with the only non-independent member being the current Chief Executive Officer.

30% percent of our Board members are female and 20% are racially/ethnically diverse.

Our Board members are invested in our Company: they are required (within five years of election) to hold Company equity having a value of at least 5x their annual cash retainer. In fact, four of our Board members each own more than 1% of our Shares.

We have a Lead Independent Trustee with significant authority and responsibility.

Our Board is actively engaged in strategic, risk and management oversight, including cybersecurity matters, and has robust strategic discussions at every regularly scheduled Board meeting.

Our Board receives regular updates from senior management on diversity and inclusion matters and actively monitors and oversees these areas.

Our Board and Board Committees undertake a robust self-evaluation at least annually led by our Lead Independent Trustee.
 

10
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Our Board actively monitors, oversees and participates in management succession planning. In 2019, the Board oversaw the promotion and hire of a new generation of leadership across all aspects of the Company’s operations with the creation, and filling, of the roles of President, Co-Heads of Real Estate and Head of Retail and in 2020, in connection with the separation from service of Messrs. Greenbaum and Macnow, the Board appointed Mr. Franco as Chief Financial Officer (in addition to his existing President role) and Mr. Sanelli as Executive Vice President—Finance & Chief Administrative Officer, in each case, effective December 31, 2020.

The diverse skills and experiences of our Board members, enhanced by the fresh perspectives brought by our newer Trustees, and the industry and company-specific expertise and institutional knowledge of our longer-tenured Trustees, support the Board’s oversight of Company business and strategy.

Our Board directly, and through the Corporate Governance and Nominating Committee, actively monitors our sustainability initiatives and compliance with our ethical and social policies.
Strong Shareholder Rights

We have a single class of Trustees, elected annually.

We have adopted proxy access with a 3/3/20/20 market standard.

Our shareholders may amend our Bylaws.

We require a Trustee to tender his or her offer of resignation if he or she does not receive majority support.

We enhanced our claw-back policy to also provide for potential claw-backs for violations of Company policies as well as for bad faith or dishonest actions or receipt of an improper personal benefit.

We have anti-hedging and anti-pledging policies.

We do not have a poison pill.

Our Declaration of Trust may be amended by approval of the Board of Trustees and a majority vote of our outstanding Shares other than with respect to limited provisions intended to protect our real estate investment trust tax status and the removal of Trustees.
Shareholder Engagement and Governance Changes
Over the past several years we have adopted a number of significant governance changes following outreach to our shareholders for their views. During each of the last seven years, we met with or spoke to holders of more than 50% of our Shares. Based on that outreach, we believe the combination of actions we have taken present an overall governance structure responsive to our shareholders’ views. The changes implemented include:

We have added three new independent Trustees: Ms. Hamza Bassey, Mr. Helman and Ms. Puri.

We have increased the diversity of our Board so that now 30% of our Board members are female and 20% are racially/ethnically diverse.

We have rotated Compensation Committee membership, adding Ms. Hamza Bassey as a member to replace Dr. West.

We have appointed a new Chair for our Audit Committee.

We oversaw the promotion and hire of a new generation of management leadership.

We amended our organizational documents to provide shareholders with the power to amend our Bylaws.
 

VORNADO REALTY TRUST
11
2021 PROXY STATEMENT

We declassified our Board so that we now have a single class of Trustees elected annually.

We adopted proxy access with a 3/3/20/20 market standard.

We adopted anti-hedging and anti-pledging policies.

We enhanced our claw-back policy to also provide for potential claw-backs for violations of Company policies as well as for bad faith or dishonest actions or receipt of an improper personal benefit.

We provided greater disclosure concerning our policy restricting political contributions and spending and strengthened the oversight by the Corporate Governance and Nominating Committee of our compliance with this policy.

We made specific changes to our compensation program in response to shareholder input such as reinstituting our use of Outperformance Plans.

We provided greater disclosure concerning our sustainability efforts with a report by our independent auditors.

We provided greater disclosure concerning our employee training and inclusion programs.

We refreshed and renewed our anti-harassment policy.

We amended our Corporate Governance and Nominating Committee Charter to formalize and strengthen the oversight by that Committee of environmental, social and governance matters.

We added disclosure to our table of Board members to indicate which members beneficially own in excess of 1% of our Shares.

We provided increased and tabular disclosure regarding our Trustee selection process and our current and desired Trustees skill sets.
NYSE-Listed
The common shares of the Company or its predecessor have been continuously listed on the NYSE since January 1962 and the Company is subject to the NYSE’s Corporate Governance Standards.
Our Corporate Governance Framework
Vornado is committed to effective corporate governance and high ethical standards. Our Board believes that these values are conducive to strong performance and creating long-term shareholder value. Our governance framework gives our highly experienced independent Trustees the structure necessary to provide oversight, advice and counsel to the Company. The Board of Trustees has adopted the following documents, which are available on our website (www.vno.com/governance/overview):

Audit Committee Charter

Compensation Committee Charter

Corporate Governance and Nominating Committee Charter

Corporate Governance Guidelines

Code of Business Conduct and Ethics
We will post any future changes to these documents to our website and may not otherwise publicly file such changes. Our regular filings with the SEC and our Trustees’ and executive officers’ filings under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), are also available on our website. In addition, copies of these documents are available free of charge from the Company upon your written request. Requests should be sent to our investor relations department located at our principal executive office.
The Code of Business Conduct and Ethics applies to all of our Trustees, executive officers and other employees.
 

12
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Corporate Governance at a Glance
Board Independence

Nine of 10 of our Trustees are independent.

Our only non-independent Trustee is our current CEO, who has extensive and valuable experience with our Company.

Our Board members generally have significant personal investments in our Company and engage in robust and open debates concerning all significant matters affecting our Company.
Board Composition

Currently the Board has fixed the number of Trustees at 10.

The Board at least annually assesses its performance through Board and committee self-evaluation.

Our Trustees are highly experienced in their fields of endeavor and apply valuable and diverse skill sets to address our business and strategic needs.

The Corporate Governance and Nominating Committee leads the full Board in considering Board competencies and refreshment and actively seeks new candidates to consider as Board members.
Board Committees

Our Board has four committees: Audit, Compensation, Corporate Governance and Nominating and Executive.

With the exception of the Executive Committee (our Chairman serves on this Committee), all other Committees are comprised entirely of independent Trustees.
Leadership Structure

Our Chairman is the CEO of our Company. He interacts closely with our independent Lead Trustee, who has powers and duties that reflect corporate governance best practices.

The independent Board members consider our Lead Trustee annually. Our Board re-appointed Ms. Candace K. Beinecke as Lead Trustee on February 11, 2021. Among other duties, our Lead Trustee chairs executive sessions of the independent Trustees at every regular Board meeting to discuss certain matters without management present and approves agenda items and materials sent to the Board. Furthermore, Ms. Beinecke works closely with Mr. Roth in identifying overall Company strategy and other matters to be discussed in depth at regular Board meetings and takes an active role in engaging with our investors.

The Board will consider whether an independent chairperson is appropriate at the time of the next CEO transition.
Risk Oversight

Our full Board is responsible for risk oversight, and has designated, and may in the future designate, committees to have particular oversight of certain key risks. Our Board oversees management as management fulfills its responsibilities for the assessment and mitigation of risks and for taking appropriate risks. Our Board regularly has in-depth discussions concerning the Company’s strategies and risks during which the Board actively questions and considers these topics.
Open Communication and Shareholder Engagement

We encourage open communication and strong working relationships among the Lead Trustee, the Chairs of our Board committees, our Chairman and our other Trustees.

Our Trustees have access to, and regularly meet with, senior management and other employees.

We actively seek input from our shareholders through our shareholder engagement programs; shareholders may also contact our Board, Lead Trustee or management through our website or by regular mail.
 

VORNADO REALTY TRUST
13
2021 PROXY STATEMENT

We host quarterly earnings conference calls to which all shareholders have access.
Trustee Stock Ownership

Our Trustees are required to own (or to acquire within a specified time frame) Company equity having a value equal to at least five times their annual cash retainer.
Management Succession Planning

Our Corporate Governance and Nominating Committee actively monitors our succession planning.

Our Board regularly reviews senior management succession and development plans. Our Board regularly reviews future candidates for the CEO position and other senior leadership roles and potential succession timing for those positions, including under emergency circumstances. Our Board has adopted a formal CEO-succession plan and reviews that plan regularly.

In 2019, the Board oversaw the promotion and hire of a new generation of leadership by creating, and filling, the roles of President, Co-Heads of Real Estate and Head of Retail, and in 2020 our Board oversaw the transition of our Chief Financial Officer role, effective December 31, 2020.

The Board reviews and discusses career development plans for individuals identified as high-potential candidates for senior leadership positions and the Board members interact with these candidates in formal and informal settings during the year.

The Board recognizes that succession planning is a key component of the Company’s continued success. Pursuant to our Corporate Governance Guidelines, on at least an annual basis and typically more frequently, the Board, in full meetings and in its executive sessions, considers and reviews succession candidates for the CEO and other executive leadership positions for both near-term and long-term planning. The Board reviews potential candidates for promotion in light of their performance, leadership qualities and ability to manage additional responsibilities. The Board also considers potential risks regarding the retention of the Company’s current executive officers and succession candidates, the timeline for implementing each succession plan, and the extent of disruption likely to be caused as a result of unplanned attrition. In addition, as part of its risk management process, the Board has developed an interim emergency succession plan.
Sustainability, Corporate Responsibility and Political Contributions

Our Corporate Governance and Nominating Committee as well as our full Board actively monitor our programs and initiatives on sustainability, environmental matters, climate change and social responsibility and receive updates regularly. Our Board delegated to our Corporate Governance and Nominating Committee responsibility for direct oversight to monitor the effects of climate change on the Company and to develop polices relating thereto.

Our Corporate Governance and Nominating Committee monitors our policy restricting political contributions and spending. Our policy strictly restricts political contributions or political spending on behalf of the Company subject to senior management approval and Corporate Governance and Nominating Committee oversight.

Consistent with Vornado’s past practices, we did not make any political contributions in 2020.
Board Independence
The Board has determined that Mses. Beinecke, Hamza Bassey and Puri and Messrs. Fascitelli, Helman, Mandelbaum, Tisch and Wight and Dr. West are independent Trustees under the Corporate Governance Standards of the NYSE, with the result that nine of our 10 Trustees standing for election are independent. The Board reached these conclusions after considering all applicable relationships between or among such Trustees and the Company or management of the Company. These relationships are described in the sections of this proxy statement entitled “Relationships Among Our Trustees” and “Certain Relationships and Related Transactions.” Among other factors considered by the Board in making its determinations regarding independence was the Board’s determination that these Trustees met all of the “bright-line” requirements of the NYSE’s Corporate Governance Standards as well as the categorical standards adopted by the Board as contained in our Corporate Governance Guidelines.
 

14
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Approval of Related Party Transactions
Our Code of Business Conduct and Ethics includes a policy for the review and approval of transactions involving the Company and related parties. Under the policy, “related parties” means our executive officers and Trustees, as well as any such person’s immediate family members. The policy also covers entities that are owned or controlled by related parties, or entities in or of which related parties have a substantial ownership interest or control. Under the policy, all related party transactions are submitted to the Board or an independent committee thereof for review and are subject to approval.
Board Participation
Our Board is actively involved in strategic, risk and management oversight and regularly has in-depth discussions concerning the Company’s strategies and risks during which the Board actively questions and considers these topics. Our Board is involved in every strategic decision made by the Company; agendas are organized so that, at every regular meeting, strategic and business decisions receive the most prominent importance and our CEO regularly consults with Board members on these matters between meetings. Furthermore, the Board regularly meets with the Company’s most senior executive officers as well as the officers who directly report to the most senior executives. The Board believes a good working knowledge of these multiple levels of management aid it considerably in its important role of management oversight as well as with succession planning. Our Company relies upon the measured financial and strategic guidance, probing questions and judgment of our Board members.
Developing an Effective Board
Trustee Recruitment Process
[MISSING IMAGE: tm212374d1-fc_developpn.jpg]
Our Board believes that the Board should be comprised of members who encompass a broad range of skills, expertise, industry knowledge and diversity of opinion, experience, perspective and contacts relevant to our business. Our Board is deeply involved in the business and strategy of our Company and the great depth of experience and insight that our Board members bring to meetings continues to be invaluable. The Corporate Governance and Nominating Committee and the Board believe that considering a Board candidate involves various objective and subjective assessments, many of which are difficult to quantify or categorize. However, the Corporate Governance and Nominating Committee and the Board do consider the following characteristics, competencies, and attributes when considering candidates for inclusion on our Board.
Personal Characteristics

Integrity and Accountability: High ethical standards, integrity and strength of character in his or her personal and professional dealings and a willingness to act on and to be accountable for his or her decisions.

Informed Judgment: Demonstrate intelligence, wisdom and thoughtfulness in decision-making. Demonstrates a willingness to thoroughly discuss issues, ask questions, express reservations, and voice dissent.

Financial Literacy: An ability to read and understand financial statements, financial ratios and various other indices for evaluating the Company’s performance.
 

VORNADO REALTY TRUST
15
2021 PROXY STATEMENT

Mature Confidence: Assertive, responsible and supportive in dealing with others. Respect for others, openness to others’ opinions and the willingness to listen.

High Standards: History of achievements that reflect high standards for himself or herself and others.
Core competencies

Accounting and Finance: Experience in financial accounting and corporate finance, especially with respect to the industry in which our Company operates.

Business Judgment: Record of making good business decisions and evidence that he or she will act in good faith and in a manner that is in the best interests of our Company.

Strategic Insight: Record of insight with respect to our industry and market and other trends and conditions and applying such insight to create value or limit risk.

Management: Experience in corporate management. Understand management trends in general and in the areas in which we conduct our business.

Crisis Response: Ability and time to perform during periods of both short-term and prolonged crisis.

Industry: Specialized experience and skills in areas in which the Company conducts its business, including real estate, investments, capital markets and technology relevant to the Company.

Local Markets: Experience in markets in which our Company operates.

Leadership: Understand and possess leadership skills and have a history of motivating high-performing, talented managers.

Strategy and Vision: Skills and capacity to provide strategic insight and direction by encouraging innovations, conceptualizing key trends, evaluating strategic decisions, and challenging our management to sharpen its vision.

Environmental, Social and Governance: Experience in management and oversight of environmental, climate change, social and governance issues to be able to assist the Board in overseeing and advising management with regard to long-term value creation using a responsible, sustainable business plan.
Commitment to our Company

Time and Effort: Able and willing to commit the time and energy necessary to satisfy the requirements of Board and Board committee membership and service. Expected to attend and participate in all Board meetings and meetings of Board committees for which they are members. Encouraged to attend all annual meetings of shareholders. A willingness to rigorously prepare prior to each meeting and actively participate in the meeting. Willingness to make himself or herself available to management upon request to provide advice and counsel.

Awareness and Ongoing Education: Possess, or be willing to develop, a broad knowledge of both critical issues affecting our Company (including industry-, technology- and market-specific information), and Trustee’s roles and responsibilities (including the general legal principles that guide Board members).

Other Commitments: In light of other existing commitments, the ability to perform adequately as a Trustee and a willingness to do so.

Stock Ownership: Complies with the Company’s equity ownership requirements.
Team and Company considerations

Balancing the Board: Contributes talent, skills and experience to the Board as a team to supplement existing resources and provide talent for future needs preferably as evidenced by a pattern of dealings with one or more current Board members.

Diversity: Contributes to the Board in a way that can enhance perspective and judgment through diversity in gender, race, ethnicity, age, background, geographic origin, professional experience (public, private, and non-profit sectors) and other factors.
Nomination of a candidate should not be based solely on these listed factors.
 

16
VORNADO REALTY TRUST
2021 PROXY STATEMENT
The following chart summarizes the competencies currently represented on our Board; the details of each of our Trustee’s competencies are included in each Trustee’s profile.
Competency/Attribute
Roth
Beinecke
Fascitelli
Hamza Bassey
Helman
Mandelbaum
Puri
Tisch
West
Wight
Operational
x
x
x
x
x
x
x
Public company experience
x
x
x
x
x
x
x
x
x
x
Industry expertise
x
x
x
x
x
Financial literacy
x
x
x
x
x
x
x
x
x
x
Experience over several business cycles
x
x
x
x
x
x
x
x
x
x
Capital markets expertise
x
x
x
x
x
x
x
x
x
x
Investment management
x
x
x
x
x
x
x
x
x
x
Risk/crisis management
x
x
x
x
x
x
x
x
x
x
Accounting expertise
x
x
x
x
Government/business conduct/legal
x
x
x
x
x
x
x
x
Environmental, social and governance
x
x
x
x
x
Board Leadership Structure
Our Board is deeply focused on our corporate governance practices. We value independent board oversight as an essential component of strong corporate performance to enhance shareholder value. All of our Trustees are independent, except our Chief Executive Officer. In addition, all of the members of our Board’s committees, except the Executive Committee, are independent.
Our Board of Trustees is responsible for selecting the Chairman of the Board and the CEO. The Board annually reviews its leadership structure. The Board has determined that the combined role of Chairman and CEO, alongside an active and independent Lead Trustee position, is currently the best structure for Vornado and its shareholders. In its review of our leadership structure, the Board considered the following:

Our current structure promotes clear lines of responsibility and accountability, while maintaining the Board’s independence from management.

Mr. Roth, our Chairman and CEO, is a well-seasoned leader with over 40 years of experience in building and leading our Company. He has effectively guided the Company through various real estate cycles and has skillfully led the Company throughout the current COVID-19 pandemic challenge. After considering the views expressed by our shareholders and other constituents, as well as the particular circumstances affecting the Company, the Board concluded he is the best person to continue to serve as Chairman and CEO.

Mr. Roth fulfills his responsibilities in chairing an independent board through close interaction with our Lead Trustee, Ms. Beinecke.

The power and authority of our Lead Trustee role was increased in 2015 and 2017, and the Lead Trustee works closely with Mr. Roth in identifying overall Company strategy and other matters to be discussed in depth at regular Board meetings and takes an active role in engaging with our investors. See “Lead Independent Trustee Role.”

The views expressed by shareholders through direct outreach and engagement.

Our governance culture fosters open communication among the Lead Trustee, Chairman and other Trustees, which we believe is essential to developing an understanding of important issues, promoting appropriate oversight and encouraging frank discussion of key topics relevant to a complex and dynamic enterprise.
 

VORNADO REALTY TRUST
17
2021 PROXY STATEMENT
Lead Independent Trustee Role
A Lead Trustee is elected annually by the independent Trustees. We refer to this role as the Lead Trustee or the Lead Independent Trustee. Ms. Beinecke was first elected by our independent Trustees to serve as Lead Trustee for a one-year term on March 16, 2016 and was most recently re-elected on February 11, 2021. When making the selection, the independent Trustees considered the attributes desired in a Lead Trustee, including being an effective communicator, having the ability to provide leadership and encourage open dialogue, and having a relevant background and the ability to devote sufficient time and attention to the position.
Our Lead Trustee position has clearly defined duties and responsibilities, which are set forth in our Corporate Governance Guidelines. They include the following authorities and responsibilities:

preside at all meetings of the Board at which the Chairman is not present;

serve as liaison between the Chairman and the independent Trustees;

approve, in consultation with the Chairman:

the schedule of Board meetings,

Board meeting agenda items, and

materials sent in advance of Board meetings, including the quality, quantity, appropriateness and timeliness of such information;

ability to call meetings of the independent Trustees as necessary and appropriate;

participate in annual self-evaluations of the Board and its committees;

contribute to ongoing management succession and development planning;

communicate to management, as appropriate, the results of private discussions among independent trustees

participate in shareholder outreach, and be available for consultation and direct communication if requested by major shareholders; and

communicate shareholder feedback to the full Board.
As Lead Trustee, Ms. Beinecke works closely with Mr. Roth identifying overall Company strategy and other matters to be discussed in depth at regular Board meetings and takes an active role in engaging with our investors.
As both Lead Trustee and Chair of the Corporate Governance and Nominating committee, Ms. Beinecke has been actively involved in governance-related discussions with our shareholders. As Lead Trustee, Ms. Beinecke has worked closely with our Chairman, Mr. Roth, to develop Board meeting agenda items and ensure sufficient time allocation to these items and Ms. Beinecke has also facilitated robust discussions regarding long-term strategy and shareholder value creation and talent retention and development. Ms. Beinecke also actively oversees the Company’s ESG policies and is involved in ongoing discussions with senior management and our shareholders regarding such matters.
The strong working relationships among the Lead Trustee, Chairman and other Trustees are supported by a Board governance culture that fosters open communications among the members, both during meetings and in the intervals between meetings. Open communication is important to develop an understanding of issues, promote appropriate oversight, and encourage the frank discussion of matters essential to leading a complex and dynamic enterprise.
Board and Committee Refreshment
Over the last five years, we have added three new independent Trustees, Ms. Hamza Bassey, Mr. Helman and Ms. Puri. Currently, 30% of our Board members have joined the Board within the last five years.
We are also focused on committee rotation and have made committee assignment changes in recent years. In 2020, we appointed Ms. Puri as Chair of the Audit Committee and in 2021, we added Ms. Hamza Bassey to the Compensation Committee, replacing Dr. West.
 

18
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Over the past year, during the COVID-19 pandemic, we have benefited tremendously from the experience of our longstanding Trustees who have extensive experience in the real estate industry and navigating through numerous economic and real estate cycles. Although Dr. West considered retiring from our Board, he was asked to remain as a Trustee due to his experience with the Company and with navigating through multiple economic and real estate cycles. As a result, our Board determined to maintain our current mix of Trustees for election at the 2021 Annual Meeting, but we remain committed to ongoing Board refreshment and will continue to actively pursue qualified, diverse candidates for election to our Board.
[MISSING IMAGE: tm212374d1-tbl_commitpn.jpg]
Committees of the Board of Trustees
The Board has an Audit Committee, a Compensation Committee, a Corporate Governance and Nominating Committee and an Executive Committee. Other than the Executive Committee, each committee is comprised solely of independent Trustees.
The Board held 10 meetings during 2020. Each of our Trustees then in office attended at least 75% of the combined total of the meetings of the Board and all committees on which he or she served during 2020.
In addition to full meetings of the Board, our non-management Trustees met nine times in sessions without members of management present. Ms. Beinecke, as Lead Trustee, acted as presiding member during these non-management sessions. We do not have a formal policy with regard to Trustees’ attendance at the Annual Meetings of Shareholders. All of our Trustees serving at the time of our 2020 Annual Meeting of Shareholders attended the virtual meeting.
Audit Committee
The Audit Committee held seven meetings during 2020. During 2020, the members of the Audit Committee were Ms. Puri, Mr. Tisch and Dr. West. Effective March 26, 2020, we appointed Ms. Mandakini Puri to be Chair of our Audit Committee. Dr. Richard West, after many years as the Chair of our Audit Committee stepped down from that role, but has remained on the Audit Committee for transition purposes.
The Board has adopted a written Audit Committee Charter, which sets forth the membership requirements and responsibilities of the Audit Committee, among other matters. The Audit Committee Charter is available on our website (www.vno.com/governance/committee-charters). The Board has determined that all existing Audit Committee members meet the NYSE and SEC standards for independence and the NYSE standards for financial literacy.
The Board has determined that each of Ms. Puri, Mr. Tisch and Dr. West is an “audit committee financial expert,” as defined by SEC Regulation S-K (and thus the Board has three such experts serving on its Audit Committee), and that each of such persons also meets the NYSE standards for financial management expertise. The Board reached this conclusion based on the relevant experience of each of Ms. Puri, Mr. Tisch and Dr. West, including as described above under “Biographies of our Trustees.”
The Audit Committee’s purposes are to: (i) assist the Board in its oversight of (a) the integrity of our financial statements, (b) our compliance with legal and regulatory requirements, (c) the independent registered public
 

VORNADO REALTY TRUST
19
2021 PROXY STATEMENT
accounting firm’s qualifications and independence and (d) the performance of the independent registered public accounting firm and the Company’s internal audit function; and (ii) prepare an Audit Committee report as required by the SEC for inclusion in our annual proxy statement. The function of the Audit Committee is oversight. The management of the Company is responsible for the preparation, presentation and integrity of our financial statements and for the effectiveness of internal control over financial reporting. Management is responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for planning and carrying out a proper audit of our annual financial statements prior to the filing of our Annual Report on Form 10-K, reviewing our quarterly financial statements prior to the filing of each of our Quarterly Reports on Form 10-Q and annually auditing the effectiveness of internal control over financial reporting and other procedures. Persons interested in contacting our Audit Committee members with regard to accounting, auditing or financial concerns will find information on how to do so on our website (www.vno.com/governance/confidential-board-contact).
Compensation Committee
The Compensation Committee is responsible for establishing the terms of the compensation of the executive officers and the granting and administration of awards under the Company’s omnibus share plans. The committee, which held four meetings during 2020 consisted of the following members: Mr. Tisch, as Chair, Mr. Helman and Dr. West. In February 2021, Ms. Hamza Bassey was appointed to the Compensation Committee, replacing Dr. West. Each of Ms. Hamza Bassey, Mr. Helman, Mr. Tisch and Dr. West had or has been determined by the Board to be independent. The Board has adopted a written Compensation Committee Charter which is available on our website (www.vno.com/governance/committee-charters).
Compensation decisions for our executive officers are made by the Compensation Committee. Decisions regarding compensation of other employees are made by our Chief Executive Officer or other senior managers and are subject to review and approval of the Compensation Committee. Compensation decisions for our Trustees are made by the Compensation Committee and/or the full Board.
The agenda for meetings of the Compensation Committee is determined by its Chairman with the assistance of the Company’s Secretary and/or other members of management. Compensation Committee meetings are attended from time to time by members of management at the invitation of the Compensation Committee. The Compensation Committee’s Chairman reports the committee’s determination of executive compensation to the Board. The Compensation Committee has authority under its charter to select, retain and approve fees for, and to terminate the engagement of, compensation consultants, special counsel or other experts or consultants as it deems appropriate to assist in the fulfillment of its responsibilities. The Compensation Committee reviews the total fees paid by us to outside consultants to ensure that such consultants maintain their objectivity and independence when rendering advice to the committee. The Compensation Committee may receive advice from compensation consultants, special counsel or other experts or consultants only after consideration of relevant factors related to their fees, services and potential conflicts of interests, as outlined in the Compensation Committee’s Charter.
The Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the committee. In particular, the Compensation Committee may delegate the approval of certain transactions to a subcommittee consisting solely of members of the committee who are (i) “Non-Employee Directors” for the purposes of SEC Rule 16b-3; and (ii) “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. Currently, all members of the Compensation Committee meet these criteria.
See “Compensation Discussion and Analysis” below for a discussion of the role of executive officers in determining or recommending compensation for our executive officers. We have also included under “Compensation Discussion and Analysis” a discussion of the role of compensation consultants in determining or recommending the amount or form of executive or Trustee compensation.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee, which met twice during 2020, currently consists of Ms. Beinecke, as Chair, and Mr. Helman and Ms. Puri as the two other members. During 2020, members of the Corporate Governance and Nominating Committee led several discussions of governance matters with the full
 

20
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Board. Further, in the past year Ms. Beinecke (and members of management) met in person or telephonically with several significant shareholders to discuss our governance practices. Each of Ms. Beinecke, Mr. Helman and Ms. Puri have been determined by the Board to be independent. The Board has adopted a written Corporate Governance and Nominating Committee Charter, which is available on our website (www.vno.com/governance/committee-charters). The committee’s responsibilities include the selection of potential candidates for the Board and the development and review of our governance principles. It also reviews Trustee compensation and benefits and oversees annual self-evaluations of the Board and its committees. The committee also makes recommendations to the Board concerning the structure and membership of the other Board committees as well as management succession plans. The committee selects and evaluates candidates for the Board in accordance with the criteria set out in the Company’s Corporate Governance Guidelines and as are set forth below. The committee is then responsible for recommending to the Board a slate of candidates for Trustee positions for the Board’s approval. Generally, candidates for a position as a member of the Board are suggested by existing Board members; however, the Corporate Governance and Nominating Committee will consider shareholder recommendations for candidates for the Board sent to the Corporate Governance and Nominating Committee, c/o Steven J. Borenstein, Secretary, Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019, and will evaluate any such recommendations using the criteria set forth in the Corporate Governance and Nominating Committee Charter and our Corporate Governance Guidelines.
In nominating Steven Roth for re-election at the 2021 Annual Meeting and assuming Mr. Roth were to be re-elected at all the boards on which he currently serves, the Corporate Governance and Nominating Committee (and later the full Board) considered that Mr. Roth would serve on boards of three public companies in addition to our Board. However, the Committee noted that one of those companies, Alexander’s, is an affiliate for which we manage its properties and the two other companies (JBG Smith and Urban Edge) resulted from spinning business units out of our Company and have a broadly overlapping shareholder base. The Corporate Governance and Nominating Committee and the full Board each determined that Mr. Roth’s service on these other Boards does not detract from his ability to represent, and devote time to, our Company and that such other Board service may in fact benefit our Company. In particular, the Corporate Governance and Nominating Committee considered that:

Alexander’s is managed by the Company, and Mr. Roth’s service on the Alexander’s Board is important to the performance of his duties to Vornado; and

Prior to the spinoffs, Mr. Roth served as the CEO of the businesses comprising Urban Edge and substantially comprising JBG Smith, both of which were fully integrated in Vornado. The spinoffs represented a significant reduction in Mr. Roth’s time devoted to these businesses. In the Corporate Governance and Nominating Committee’s view, Mr. Roth’s current service on the Boards of Urban Edge and JBG Smith provides industry knowledge that benefits Vornado and the Vornado shareholders that continue to own these companies.
The Corporate Governance and Nominating Committee will continue to assess the benefits of Mr. Roth’s service on these Boards.
Executive Committee
The Executive Committee possesses and may exercise certain powers of the Board in the direction of the management of the business and affairs of the Company. The Executive Committee consists of three members: Mr. Roth, Ms. Beinecke and Mr. Wight. Mr. Roth is the Chairman of the Executive Committee. The Executive Committee did not meet in 2020.
The Board’s Role in Risk Oversight
While day-to-day risk management is primarily the responsibility of the Company’s senior management team, the Board of Trustees is responsible for the overall supervision of the Company’s risk management activities. The Board’s oversight of the material risks faced by our Company occurs at both the full Board level and at the committee level. The Board’s role in the Company’s risk oversight process includes receiving reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, strategic, reputational, environmental, social, governance and climate change risks. The full Board (or the appropriate committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate “risk owner” within our organization or in connection with other management-prepared presentations of risk to enable the Board (or committee, as applicable) to understand our risk identification, risk management and risk mitigation strategies. By “risk owner,” we mean that person or group of
 

VORNADO REALTY TRUST
21
2021 PROXY STATEMENT
persons who is or are primarily responsible for overseeing a particular risk. As part of its charter, the Audit Committee discusses our guidelines and policies with respect to which our management assesses and manages the Company’s exposure to risk and reports to the full Board its conclusions as a partial basis for further discussion by the full Board. This enables the Board and the applicable committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. In addition to the Board’s review of risks applicable to the Company generally, the Board conducts regular strategic and personnel reviews.
* * * * *
Persons wishing to contact the independent members of the Board should call (866) 537-4644. A recording of each phone call to this number will be sent to one independent member of the Audit Committee as well as to a member of management who may respond to any such call if the caller provides a return number. This means of contact should not be used for solicitations or communications with us of a general nature. Information on how to contact us generally is available on our website (www.vno.com).
 

22
VORNADO REALTY TRUST
CORPORATE SOCIAL RESPONSIBILITY
We believe that sound corporate citizenship, governance and environmental principles are essential to our success. Our goal is to operate with the highest level of integrity and in a sustainable manner. We believe that an integrated approach to business strategy, corporate governance, sustainability and corporate citizenship provides for a better operating company, creates more attractive properties and creates long-term value. The following table highlights certain of our policies and initiatives in the area of corporate social responsibility.
Strong Ethical and Social Policies

We maintain a strong Code of Business Conduct and Ethics that applies to all of our Trustees, executive officers and employees.

We have adopted a refreshed and renewed anti-harassment policy. This policy prohibits hostility towards individuals in protected categories, prohibits sexual harassment in any form, details how to report harassment issues and prohibits retaliation.

We have enhanced our claw-back policy to also provide for potential claw-backs for violations of significant Company policies as well as for bad faith or dishonest actions or receipt of an improper personal benefit.

We have anti-hedging and anti-pledging policies.

Our policies and manuals prohibit bribes, money laundering and other corruption.

We strictly restrict conflicts of interest.

We strictly restrict political contributions on behalf of the Company and these policies are subject to the oversight of our Corporate Governance and Nominating Committee. The Company did not make any political contributions in 2020.

We have a policy restricting the receipt of gifts.

We have established and circulated straight-forward procedures for reporting any policy violations or other wrongdoing.

We comply with all applicable laws and regulations regarding employing child labor, respecting human rights and not purchasing conflict minerals.

We require our vendors and their subcontractors to comply with our applicable policies.

We require our employees to be trained in, and to regularly review and acknowledge, our policies.

We have established reporting procedures, guidelines and hotlines to facilitate the reporting of violations of our policies.

We actively monitor and audit internal compliance with our policies with the oversight of the Corporate Governance and Nominating Committee and, ultimately, the full Board.
Human Capital Management and Social Engagement

We seek to maintain a working environment that is open, diverse and inclusive, and where our people feel valued, respected, included and accountable.

We are committed to a culture of respect and believe that all individuals should have the opportunity to excel.

We believe a diverse and inclusive environment fosters innovation, productivity and creativity, which are critical to our success.

We are focused on being an employer of choice for all talent, where employees can feel like they belong.

We aim to hire and retain employees from all races, ethnicities, genders, sexual orientations, abilities, backgrounds, experiences and locations.

We publish employee demographics data, which is the foundation of our EEO-1 report, each year in our ESG Report.
 

VORNADO REALTY TRUST
23

We have a human capital management program that provides extensive opportunities and programs for training to promote career and personal development for employees and to encourage innovation and engagement. Our tuition reimbursement program offers up to $5,250 per employee each year for qualified reimbursement of education or professional development costs.

We are committed to providing compensation and benefits programs and policies that support the needs and lifestyles of our employees and their families. Our benefit programs include:

Medical and dental insurance coverage;

Life and disability insurance;

Competitive vacation and leave policies; and

401(k) matches and HSA contributions.

To accommodate our workforce during the COVID-19 pandemic, we have implemented the following programs and accommodations:

Divided our workforce into two teams alternating weekly working in the office and working from home to maintain social distancing;

Daily COVID-19 temperature screening upon entering our buildings and daily health screening questionnaire;

Flexible work from home and sick leave policies;

Subsidized parking and lunch for employees working in our offices; and

Weekly COVID-19 testing of all employees working in our offices.

Our greatest and most scarce asset is our people. We strongly believe in training and retaining talented employees and having management at many levels engage with our Board.

Furthermore, a good relationship with the communities in which we operate is essential. We foster and encourage community engagement and volunteerism for all employees.
Leader in Sustainability Practices

We have received the ENERGY STAR Partner of the Year Award with Sustained Excellence six times, most recently in 2020.

In every year since 2013, we have received the Global Real Estate Sustainability Benchmark Green Star Ranking, and we were a Green-Star recipient in 2020.

We have received the NAREIT Leader in the Light Award for every year since 2010.

We are one of the largest owners of LEED-certified properties in the United States.
Sustainability
We believe that our Company has been a leader in promoting sustainability practices. We regularly report to the Board and the Corporate Governance and Nominating Committee on our sustainability programs, and our Board and Corporate Governance and Nominating Committee play an active role in the oversight of Vornado’s sustainability practices, recognizing that sustainability and energy efficiency are central to Vornado’s business strategy. In connection with our sustainability programs, we focus on:

Sustainable and efficient practices in the way we design, build, retrofit and maintain our portfolio of buildings. We believe that energy efficiency and resource conservation achieve the twofold benefit of controlling our operating expenses and reducing our impact on the environment.

Maintaining healthy indoor environments for our tenants and employees and incorporating health and wellness into our design principles and operating standards.

Recognizing climate change as a material issue to our business, due to the risks that it may present to our assets. We assess opportunities to fortify our assets against these risks while mitigating our own contribution
 

24
VORNADO REALTY TRUST
to climate change through reduction of our carbon footprint. We are assessing our Company’s exposure to climate change through analysis of the potential impact of various global warming scenarios. We further assess our impact on climate change mitigation through membership in business associations in our markets and support for climate change policy and regulation.

Smart infrastructure improvements, investing in sustainable technologies and employing best practices for building operations. We make investments in low-carbon technologies, including energy efficiency, retrofitting our buildings to rely on lower carbon sources of energy, smart building technology to optimize our energy demand, and exploratory opportunities in energy storage and renewable power.

Establishing partnerships with our tenants and communities.

Setting goals around our sustainability policies and reporting on our progress and achievements in our annual Environmental, Social & Governance report available on our website at www.vno.com/sustainability/overview which is not incorporated into this proxy statement.
 

VORNADO REALTY TRUST
25
PRINCIPAL SECURITY HOLDERS
The following table lists the number of Shares and Units beneficially owned, as of March 22, 2021, by (i) each person who holds more than a 5% interest in the Company or our operating partnership, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”), (ii) Trustees of the Company, (iii) the executive officers of the Company defined as “Named Executive Officers” in “Executive Compensation” below, and (iv) the Trustees and all current executive officers of the Company as a group. Unless otherwise specified, “Units” are Class A units of limited partnership interest of our Operating Partnership and other classes of units convertible into Class A units. The Company’s ownership of Units is not reflected in the table but is described in footnotes (1) and (2).
Name of Beneficial Owner
Address of
Beneficial Owner
Number of
Shares and Units
Beneficially
Owned(1)(2)
Percent of
All Shares(1)(2)(3)
Percent of All
Shares and
Units(1)(2)(4)
Named Executive Officers and Trustees
Steven Roth(5)(6)(7)
   (8)
9,417,105 4.90% 4.58%
David Mandelbaum(5)(7)(9)
   (8)
8,972,534 4.69% 4.37%
Russell B. Wight, Jr.(5)(7)(10)
   (8)
5,971,291 3.12% 2.91%
Michael D. Fascitelli(7)(11)
   (8)
2,046,260 1.07% 1.00%
David R. Greenbaum(7)(12)
   (8)
583,312 * *
Michael J. Franco(7)
   (8)
250,363 * *
Joseph Macnow(7)(13)
   (8)
217,771 * *
Daniel R. Tisch(7)(14)
   (8)
74,862 * *
Glen J. Weiss(7)
   (8)
69,009 * *
Richard R. West(7)(15)
   (8)
48,645 * *
Candace K. Beinecke(7)
   (8)
35,002 * *
William W. Helman IV(7)
   (8)
26,851 * *
Beatrice Hamza Bassey(7)
   (8)
11,018 * *
Mandakini Puri(7)
   (8)
10,549 * *
All Trustees and current executive
officers as a group (18
persons)(7)
   (8)
16,888,615 8.73% 8.22%
Other Beneficial Owners
The Vanguard Group, Inc.(16)
100 Vanguard Blvd
Malvern, PA
19355
26,300,130 13.74% 12.80%
Norges Bank
(The Central Bank of Norway)(17)
Bankplassen 2
PO Box 1179 Sentrum
NO 0107 Oslo
Norway
18,082,373 9.44% 8.80%
BlackRock, Inc.(18)
55 East 52nd Street
New York, NY
10055
16,490,214 8.61% 8.03%
State Street Corporation(19)
One Lincoln Street
Boston, MA
02111
10,461,064 5.46% 5.09%
*
Less than 1%.
 

26
VORNADO REALTY TRUST
(1)
Unless otherwise indicated, each person is the direct owner of, and has sole voting power and sole investment power with respect to, such Shares and Units. Numbers and percentages in the table are based on 191,464,179 Shares and 14,004,849 Units (other than Units held by the Company) outstanding as of March 22, 2021.
(2)
In April 1997, the Company transferred substantially all of its assets to the Operating Partnership. As a result, the Company conducts its business through, and substantially all of its interests in properties are held by, the Operating Partnership. The Company is the sole general partner of, and owned approximately 93% of the Units of, the Operating Partnership as of March 22, 2021 (one Unit for each Share outstanding). Generally, any time after one year from the date of issuance (or two years in the case of certain holders), holders of Units (other than the Company) have the right to have their Units redeemed in whole or in part by the Operating Partnership for cash equal to the fair market value, at the time of redemption, of one Share for each Unit redeemed or, at the option of the Company, cash or one Share for each Unit tendered, subject to customary anti-dilution provisions (the “Unit Redemption Right”). Holders of Units may be able to sell publicly Shares received upon the exercise of their Unit Redemption Right pursuant to registration rights agreements with the Company or otherwise pursuant to applicable securities laws and rules. The Company has filed registration statements with the SEC to register the issuance or resale of certain of the Shares issuable upon the exercise of the Unit Redemption Right.
(3)
The total number of Shares outstanding used in calculating this percentage assumes that all Shares that each person has the right to acquire within 60 days of the record date (upon the redemption or conversion of other Company or Operating Partnership securities for or into Shares) are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person.
(4)
The total number of Shares and Units outstanding used in calculating this percentage assumes that all Shares and Units that each person has the right to acquire within 60 days of the record date (upon the redemption or conversion of Company or Operating Partnership securities for or into Shares or Units) are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person.
(5)
Interstate, a partnership of which Messrs. Roth, Wight and Mandelbaum are, directly or indirectly, the three general partners, owns 5,503,548 Shares. These Shares are included in the total Shares and the percentage of class for each of them. Messrs. Roth, Wight and Mandelbaum share voting power and investment power with respect to these Shares.
(6)
Includes 3,873 Shares owned by the Daryl and Steven Roth Foundation over which Mr. Roth holds sole voting power and sole investment power. Does not include 37,299 Shares owned by Mr. Roth’s spouse, as to which Mr. Roth disclaims any beneficial interest.
(7)
The number of Shares and Units (but not the number of Shares alone) beneficially owned by the following persons also includes the number of vested and redeemable restricted units (as described below) as indicated: Steven Roth—83,469; David Mandelbaum—20,148; Russell B. Wight, Jr.—20,148; Michael D. Fascitelli—15,810; David R. Greenbaum—88,517; Michael J. Franco—27,850; Joseph Macnow—51,234; Daniel R. Tisch—19,862; Glen J. Weiss—6,793; Richard R. West—​19,540; Candace K. Beinecke—22,689; William W. Helman IV—11,651; Beatrice Hamza Bassey—11,018; Mandakini Puri—10,549; and all Trustees and executive officers as a group—497,528. The number of Shares or Units beneficially owned by the following persons does not include the number of unvested or unredeemable restricted units as indicated: Steven Roth—458,722; David Mandelbaum—1,345; Russell B. Wight, Jr.—1,345; Michael D. Fascitelli—1,345; David R. Greenbaum—266,094; Michael J. Franco—291,582; Joseph Macnow—197,222; Daniel R. Tisch—1,345; Glen J. Weiss—​135,850; Richard R. West—1,345; Candace K. Beinecke—1,345; William W. Helman IV—0; Beatrice Hamza Bassey—0; Mandakini Puri—4,034; and all Trustees and executive officers as a group—1,865,270. The number of Shares or Units beneficially owned by the following persons does not include the number of unearned and unvested Outperformance Plan Units (“OPP Units”) as indicated: Steven Roth—809,382; David R. Greenbaum—242,747; Michael J. Franco—220,211; Joseph Macnow—156,028; Glen J. Weiss—178,535; and all Trustees and executive officers as a group—1,908,827. The number of Shares or Units beneficially owned by the following persons does not include the number of unearned and unvested Appreciation Only Long-Term Incentive Plan Units as indicated: Steven Roth—265,824; David R. Greenbaum—​89,716; Michael J. Franco—83,072; Joseph Macnow—58,150; Glen J. Weiss—43,246; and all Trustees and executive officers as a group—682,371.
(8)
The address of each of such person(s) is c/o Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019.
(9)
Of these Shares, 2,909,252 are held in a partnership of which the general partner is Mr. Mandelbaum and the limited partners are Mr. Mandelbaum and trusts for the benefit of Mr. Mandelbaum and his issue. In addition, 122,002 of these Shares are held in trusts for the benefit of Mr. Mandelbaum’s grandchildren.
(10)
Includes 31,907 Shares owned by the Wight Foundation, over which Mr. Wight holds sole voting power and sole investment power. Does not include 20,575 Shares owned by the spouse and children of Mr. Wight as to which Mr. Wight disclaims any beneficial interest.
(11)
The number of Shares beneficially owned by Mr. Fascitelli includes 672,334 Shares held in a grantor annuity trust, 67,537 Shares held by a limited partnership and 105,191 Shares held in a limited liability company and does not include 3,150 Shares owned by his children as to which Mr. Fascitelli disclaims any beneficial interest.
(12)
Includes 49,817 Units held by a limited liability company, 258,323 Units held in grantor trusts and 30,700 Shares held in a family trust. Excludes 150,000 Shares held by a limited liability corporation, 53,960 Shares and 3,040 Units held in trusts for the benefit of his children and 12,948 Units held by his spouse as to which Mr. Greenbaum disclaims any beneficial interest.
(13)
Excludes 3,128 Shares held by Mr. Macnow’s spouse.
(14)
50,000 of these Shares are held through a foundation. Mr. Tisch maintains the right to control the vote and disposition of these Shares but disclaims any pecuniary interest therein.
 

VORNADO REALTY TRUST
27
(15)
Dr. West and his wife own 3,231 of these Shares jointly. Also included are 1,953 Shares that may be acquired upon conversion of 1,000 Series A preferred shares of beneficial interest owned by Dr. West.
(16)
According to an amendment to Schedule 13G filed on February 10, 2021.
(17)
According to an amendment to Schedule 13G filed on January 28, 2021.
(18)
According to an amendment to Schedule 13G filed on February 1, 2021.
(19)
According to an amendment to Schedule 13G filed on February 11, 2021.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act requires our Trustees and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership of, and transactions in, certain classes of our equity securities with the SEC. Such Trustees, executive officers and 10% shareholders are also required to furnish us with copies of all Section 16(a) reports they file.
Based solely on a review of the Forms 3, 4 and 5, and any amendments thereto, furnished to us, and on written representations from certain reporting persons, we believe that the only filing deficiency under Section 16(a) by our Trustees, executive officers and 10% shareholders in the year ended December 31, 2020 (or in 2021, prior to the mailing of this proxy statement) was one late filing in 2020 by Ms. Beinecke with regard to a transaction reported on a Form 4, due to a clerical error by the Company.
 

28
VORNADO REALTY TRUST
2021 PROXY STATEMENT
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
Key Compensation Highlights
Shareholder Engagement and Board Responsiveness

Robust shareholder engagement, with participation by our Lead Independent Trustee, seeking input on our executive compensation program

Continued in-depth review of our compensation program, led by the Compensation Committee, with input from shareholders and our independent compensation consultant
Changes for 2021 and Beyond

Implemented changes to our 2021 executive compensation program for 2020 performance, including reducing maximum notional amount of OPP and increasing performance measurement period to four years

Granted a one-time waiver of the formulaic threshold components of our Annual Incentive Plan for 2020 due to the substantial, negative effects of the COVID-19 pandemic on our non-real estate businesses including Building Maintenance Services (“BMS”), our signage and parking business, tradeshows, Hotel Pennsylvania and lease terminations resulting primarily from retail tenant bankruptcies. Waiver does not apply to 2021 and upon the normalization of our variable businesses following the COVID-19 pandemic, our Compensation Committee will consider reducing the bonus pool cap of 1.75% of FFO, as adjusted, as appropriate, based on the reduction in the size of the executive team
Substantial Performance-Based and At-Risk Components

Pay-for-performance philosophy, including 99% of CEO’s and 71% of other NEOs’ compensation in the form of equity with actual value tied to Vornado’s Share price performance

Significant portion of long-term compensation in the form of performance-based equity that requires the achievement of significant performance hurdles to have any value

Realized Compensation outcomes demonstrate the strong pay-for-performance alignment within our program

Except for 2020, our annual bonus plan has a formula-driven cap and we disclose goals and results

Metrics in our compensation program continue to align with the most important business metrics that drive value creation: FFO, NOI, and Total Shareholder Return (“TSR”)
Shareholder-Friendly Compensation Programs

CEO required to hold equity having a value of at least 6x salary and other NEOs must hold equity with a value of at least 3x salary

Maintain a cap on incentive compensation payouts

Double-trigger equity acceleration upon a change of control

No excessive retirement benefits or retirement plan (other than a 401(k))

No excessive perquisites or benefits

Anti-hedging and anti-pledging policies; our anti-hedging policy applies to Trustees and executive officers and covers hedging their ownership in Shares, including by trading in options, puts, calls, or other derivative instruments related to Shares

No tax gross-ups

No dividends or other distributions on unearned equity awards subject to performance-based vesting (other than limited distributions on operating partnership awards for tax purposes)
 

VORNADO REALTY TRUST
29
2021 PROXY STATEMENT
Approach of this Compensation Discussion and Analysis
This Compensation Discussion and Analysis, or “CD&A,” describes our executive compensation program for 2020, including certain elements of our 2021 program and the executive compensation philosophy used by our Compensation Committee to make decisions.
We use our program to attract, retain and appropriately reward our senior executive team. This CD&A explains how the Compensation Committee made 2020 compensation decisions for the following named executive officers (the “Named Executive Officers” or “NEOs”):

Steven Roth, Chairman and Chief Executive Officer (our “CEO”);

Joseph Macnow, Chief Financial Officer and Chief Administrative Officer, separated from service December 31, 2020;

David R. Greenbaum, Vice Chairman, separated from service as of December 31, 2020;

Michael J. Franco, President (and, effective December 31, 2020, Chief Financial Officer); and

Glen J. Weiss, Executive Vice President—Office Leasing, Co-Head of Real Estate.
Under SEC rules and regulations, the “Summary Compensation Table” must report the salary paid and cash bonus earned during that year. That table also requires all equity-based awards to be reported in the year granted, even if that year is different than the year for which a grant applies. We grant annual incentive equity retrospectively—in the first quarter of a new year for the actual performance in the most recently completed year. To more accurately present our compensation information in line with how we make decisions about compensation (as described in more detail under “— Comparison of 2018-2020 Direct/Realizable Compensation”), the following discusses both the salary and bonus paid for a year and the equity granted in the following year for that year. We also present (under “— Realized Compensation Table”), the actual compensation received for 2020, 2019, and 2018. We believe Realized Compensation is helpful in evaluating the effectiveness of our compensation program.
Recent Management Changes
Effective December 31, 2020, we made the following management changes:
1.
David R. Greenbaum (age 69), executive Vice Chairman, separated from service with the Company and is now serving in a consulting role as non-executive Vice Chairman;
2.
Joseph Macnow (age 75), Executive Vice President, Chief Financial Officer and Chief Administrative Officer separated from service with the Company and is now serving as a Senior Advisor;
3.
Michael J. Franco (age 52), previously our President was appointed to also serve as our Chief Financial Officer; and
4.
Thomas Sanelli (age 48) was promoted to Executive Vice President—Finance & Chief Administrative Officer.
Three of these individuals (Messrs. Greenbaum, Macnow and Franco) are designated as NEOs for purposes of our CD&A and these four individuals listed above, together with Messrs. Roth, Chera, Langer and Weiss, comprise our senior management team (and to whom we refer in this Proxy Statement as the “Senior Executives”). We believe that these management changes are important steps in continuing our generational management succession plans and allow for a seamless transition and a significant reduction in overhead.
Neither Mr. Franco nor Mr. Sanelli received compensation increases in connection with their additional responsibilities and we did not make any one-time grants to such executives in connection therewith.
Shareholder Engagement and Board Responsiveness
At our 2020 Annual Meeting of Shareholders, our say-on-pay proposal did not receive the support of the holders of a majority of our shares. This result was well below the level of support for our prior annual say-on-pay votes. In December 2020, we implemented the following substantial compensation reductions:

Reduced our CEO’s Direct/Realizable Compensation by $3.0 million, or 27%, from 2019 to 2021 (based on anticipated 2021 compensation, as further described below), including a reduction in our CEO’s Direct/Realizable Compensation by $1.8 million, or 16%, from 2019 to 2020 (our CEO’s compensation was not increased between 2016 and 2019); and

Reduced the Direct/Realizable Compensation of our other NEOs by a total of $8.3 million, or 45%, from 2019 to 2021 (taking into account Messrs. Greenbaum’s and Macnow’s 2021 consulting roles and reduced compensation), including a reduction of $3.7 million, or 20%, from 2019 to 2020.
 

30
VORNADO REALTY TRUST
2021 PROXY STATEMENT
[MISSING IMAGE: tm212374d1-bc_ceototalpn.jpg]
Direct /Realizable and Realized Compensation are calculated as described in this Compensation Discussion and Analysis section of this Proxy Statement. 2021 Total Direct /Realizable Compensation and Realized Compensation represents additional compensation reductions that the Compensation Committee and Mr. Roth have agreed to for 2021 and the equity components are calculated using the same fair-value methodology that was applied to the 2020 Direct/Realizable Compensation. The Realized Compensation for 2021 does not include the value of OPP units granted under the 2018 OPP Plan because those units did not meet the applicable performance requirements as of March 15, 2021 and, accordingly, the applicable units can no longer be earned.
Our executive compensation program is designed so that the actual Total Realized Compensation closely aligns with our actual Share performance. As the chart above demonstrates, total Direct/Realizable Compensation for our CEO decreased in 2020, compared to 2019, and his Realized Compensation is significantly lower than total Direct/Realizable Compensation for each year. Performance-based, long-term equity awards for the three-year performance periods ending in 2018, 2019 and 2020 were not earned and no such payouts were made in 2018, 2019 or 2020, demonstrating the at-risk nature of our performance-based program and its alignment with shareholder interests. In addition, the Compensation Committee and Mr. Roth have agreed to further reductions to his 2021 compensation and his OPP award that was granted in 2018 with a grant date fair value of $5.6 million did not meet the performance threshold at the March 15, 2021 measurement date and therefore was not earned.
Since our 2020 Annual Meeting, we reached out to shareholders representing more than 58% of our outstanding common shares (as of December 31, 2020) and spoke with shareholders representing more than 56% of our outstanding common shares, including those who voted against our say-on-pay proposal in 2020. Our Lead Independent Trustee participated in conversations with over half of these shareholders.
[MISSING IMAGE: tm212374d1-pc_contactpn.jpg]
 

VORNADO REALTY TRUST
31
2021 PROXY STATEMENT
The following table summarizes key topics discussed with shareholders during our most recent engagement, the feedback we received and the actions taken in response for 2020 and 2021:
What we Heard
How we Responded
Pay For Performance

Shareholders are focused on alignment of executive compensation and shareholder performance

Overall NEO Direct/Realizable Compensation was reduced from $29.6 million in 2019 (excluding one-time awards) to an expected $18.3 million in 2021, a 38% reduction, reflecting the reduced amounts payable to Messrs. Greenbaum and Macnow in 2021 for their consulting roles and no increase in 2021 compensation for Mr. Franco despite his additional role as Chief Financial Officer.

Our CEO’s compensation, as shown above, has been reduced by $3.0 million, or 27%, from 2019 to 2021
Annual Incentive Awards

Shareholders generally understood the rationale for the one-time waiver by the Board and Compensation Committee of the formulaic components in our annual incentive plan with respect to 2020 performance due to the significant, negative effects of COVID-19 on our variable businesses but requested clear disclosure regarding the rationale for this change and that the formulaic components of the annual incentive plan still apply in future years

Described the one-time waiver in this section of our proxy statement, including the applicable comparable FFO metrics and the negative effects of COVID-19 on our variable businesses and tenant retailer bankruptcies (e.g., J.C. Penney)

Maintained formulaic threshold comparable FFO components for 2021 annual incentive plan

Annual Incentive Awards are only one component of our overall compensation (comprising less than 15% of our aggregate 2020 NEO’s total compensation, as shown in the Summary Compensation Table) and, when setting overall compensation for the NEOs in consultation with our Compensation Consultant, our Compensation Committee evaluates the level of our overall compensation program in comparison to our peers
 

32
VORNADO REALTY TRUST
2021 PROXY STATEMENT
What we Heard
How we Responded
Performance-Based, Long-Term Incentive Awards

Investors broadly supported the OPP Awards granted in 2020 for 2019 performance

Granted OPP awards again in January 2021 for 2020 performance and made two changes to better align pay and performance:

Increased performance measurement period to four years from three years

Reduced maximum notional amount of OPP awards from $35 million to $30 million
Disclosure

Shareholders encouraged proxy statement disclosure of:

Board diversity

Board Refreshment progress

Political Contributions

Modifications to 2020 compensation as a result of the COVID-19 pandemic

Direct/Realizable vs. Realized Compensation disclosure and shareholder alignment

Board’s response to the 2020 say-on-pay vote outcome

Added disclosure on Board diversity, ongoing Board refreshment efforts and political contributions

Enhanced disclosure regarding 2020 compensation reductions and modifications relating to COVID-19 pandemic

Continued disclosing total Realized Compensation relative to Direct/Realizable Compensation to showcase the strong alignment of pay with performance

Enhanced disclosure related to how the Compensation Committee aligns pay with performance through program design
ESG

Emphasized the importance of continued disclosure on sustainability matters, including reporting in accordance with SASB and TCFD

Encouraged designating a Board committee as responsible for direct oversight of climate risk

Supported continued disclosure of Equal Employment Opportunity Commission (EEO) statistics and employee benefits

2020 ESG Report includes extensive information on our (i) sustainability measures and plans, including disclosures in accordance with SASB and TCFD preliminary scenario analysis and (ii) 2020 EEO statistics on employee demographics across the Company and at management levels

Board delegated to the Corporate Governance and Nominating Committee the specific oversight responsibility for climate risk matters, in addition to its oversight of ESG matters
 

VORNADO REALTY TRUST
33
2021 PROXY STATEMENT
Significant Compensation Reductions
As a result of the ongoing impact of the COVID-19 pandemic on our business, effective April 1, 2020, our Trustees and senior executives agreed to the following compensation reductions for the remainder of 2020:

Our Chairman and CEO, Mr. Roth, waived 50% of his annual base salary;

Mr. Franco, our President during 2020 (and, effective December 31, 2020, also Chief Financial Officer), Mr. Greenbaum, our executive Vice Chairman during 2020, and Mr. Macnow, our Chief Financial Officer and Chief Administrative Officer during 2020, each waived 30% of their respective annual base salaries;

Mr. Weiss and Mr. Langer, Co-Heads of Real Estate, and Mr. Chera, Executive Vice President—Head of Retail, each waived 15% of their respective base salaries; and

Each non-management member of our Board waived his or her $75,000 annual cash retainer.
In connection with our $35 million annual overhead reduction program announced in December 2020, our senior management agreed to significant compensation reductions for 2020 and to further significant reductions for 2021. Our NEOs’ Direct/Realizable Compensation that the Compensation Committee anticipates granting for 2021 was reduced from their corresponding 2019 levels by the following amounts and percentages:

Mr. Roth:   $3.0 million, or 27%, aggregate reduction, comprised of a $1.8 million, or 16%, reduction from 2019 to 2020 and a further $1.2 million, or 11%, reduction for 2021;

Mr. Macnow:   $3.1 million, or 76%, aggregate reduction, comprised of a $900,000, or 22%, reduction from 2019 to 2020 and a further $2.2 million, or 54%, reduction, from 2020 to 2021 (Mr. Macnow’s 2021 compensation is for his senior advisor consulting role and based on the terms of his consulting agreement);

Mr. Greenbaum:   $3.5 million, or 64%, aggregate reduction, comprised of a $1.1 million, or 21%, reduction from 2019 to 2020 and a further $2.4 million, or 43%, reduction from 2020 to 2021 (Mr. Greenbaum’s 2021 compensation is for his consulting role and based on the terms of his consulting agreement);

Mr. Franco:   $1.2 million, or 24%, reduction (excluding his receipt of a one-time grant of restricted units in 2019), notwithstanding his increased responsibilities as Chief Financial Officer; and

Mr. Weiss:   $400,000, or 12%, reduction (excluding his receipt of a one-time grant of restricted units in 2019), notwithstanding his execution of the two largest New York City leases during 2020 with Facebook and New York University.
Commitment to 2021 Compensation Program Enhancements
We believe that we made significant progress in addressing shareholder concerns with our executive compensation changes, taking into consideration the management changes and significant compensation reductions, and will continue to evaluate potential adjustments going forward. To emphasize our focus on aligning executive compensation with shareholder interests, we are committed to evaluate further modifications to our executive compensation program based on feedback provided in our dialogue with shareholders. Our goal is to create a consistent executive compensation structure that is transparent, goal-oriented and linked to objective results, and that reflects evolving best practices. In doing so, we will continue to maintain a compensation program that encourages long-term focus with compensation outcomes that are at-risk and aligned with performance.
2020 Business Highlights
During 2020, our business faced substantial challenges from the COVID-19 pandemic. Our performance was adversely affected by decreases in revenues from our cleaning and maintenance services, signage, parking and tradeshow businesses, Hotel Pennsylvania closure and lease terminations resulting primarily from retail tenant bankruptcies. While our business was adversely affected by the COVID-19 pandemic during 2020, we nevertheless made significant progress executing on our goals and positioning Vornado for future growth, accomplishing the following strategic initiatives:

We continued to advance the redevelopment of the PENN District, positioning our Company to capitalize on the enormous opportunity we have on the West Side of Manhattan, including:

Completing the largest lease in New York in 2020 with Facebook for all 730,000 square feet (694,000 at our share) of the office portion at our Farley property. The first phase of Facebook space was delivered in January 2021 and the remainder will be delivered later in 2021.
 

34
VORNADO REALTY TRUST
2021 PROXY STATEMENT

Finalizing our agreement with the MTA to oversee the redevelopment of the Long Island Rail Road Concourse, within the footprint of PENN 1. In connection with the redevelopment, we entered into an agreement with the MTA which will result in the widening of the Concourse to relieve overcrowding and our trading of 15,000 square feet of back of house space for 22,000 square feet of retail frontage space.

In December 2020, the Moynihan Train Hall opened to the public, further cementing PENN as the transportation center of New York. We, together with our partners, the Related Companies and Skanska Moynihan Train Hall Builders, redeveloped the Moynihan Train Hall.

Continued progress on the redevelopment of PENN 1 (2.5 million square feet) and PENN 2 (1.8 million square feet), including unique architectural design and amenities on top of New York’s main transportation hub—the largest rail hub in North America.

During 2020, despite a significant decrease in leasing activity generally due to the COVID-19 pandemic, we were able to lease 2.2 million square feet in 54 separate leasing transactions in our New York Office portfolio. Our initial rents were strong at $89.33 per square foot and the average term of these leases was 14.4 years, with positive mark-to-markets of 11.0% GAAP and 4.6% cash. This includes the 730,000 square feet (694,000 at our share) new Facebook lease at Farley Office and 633,000 square feet (348,000 at our share) for the New York University long-term renewal at One Park Avenue, the two largest New York City leasing deals in 2020.

During 2020, we closed on the sale of 35 condominium units at 220 CPS for net proceeds of $1.05 billion resulting in a financial statement net gain of $381.3 million. From inception of the 220 CPS project to December 31, 2020, we closed on the sale of 100 units for net proceeds of $2.9 billion resulting in cumulative financial statement net gains of $1.1 billion.

Sustainability—In 2020, we were recognized by NAREIT as a Leader in the Light (11 years running), we achieved ENERGY STAR Partner of the Year with Sustained Excellence (sixth time with this distinction) and we earned accolades from the Global Real Estate Sustainability Benchmark (eighth year with “Green Star” Ranking, top quintile of performers, and an “A” grade for our public disclosure). We were cited as the industry model with our innovative approach to having our ESG Report assured by a third party and furnishing it to the SEC.
Executive Compensation Philosophy
Our compensation program is based on a pay-for-performance philosophy and is designed to incentivize executives to achieve financial and strategic goals that are aligned with the Company’s long-term business strategy and the creation of sustained, long-term value for our shareholders.
The objectives of the program include:
RETAIN a highly experienced, “best-in-class” team of executives who have worked together as a team for a long period of time and who make major contributions to our success.
ATTRACT other highly qualified executives to strengthen that team as needed.
MOTIVATE our executives to contribute to the achievement of company-wide and business-unit goals as well as to pursue individual goals.
EMPHASIZE equity-based incentives with long-term performance measurement periods and vesting conditions.
ALIGN the interests of executives with shareholders by linking payouts under annual incentives to performance measures that promote the creation of long-term shareholder value.
ACHIEVE an appropriate balance between risk and reward in our compensation programs that does not encourage excessive or inappropriate risk-taking.
 

VORNADO REALTY TRUST
35
2021 PROXY STATEMENT
The following shows the 2020 pay mix for our CEO. 99% of his total Direct/Realizable 2020 Compensation is variable and subject to Company performance. For our 2021 performance-based equity award (granted for 2020 performance), our OPP awards have four-year performance periods.
[MISSING IMAGE: tm212374d1-pc_ceocomppn.jpg]
Compensation Components
Our Named Executive Officers’ compensation currently has three primary components:

annual base salary, which includes cash payments or equity in lieu thereof;

annual incentive award, which includes cash payments and/or equity in lieu thereof; and

long-term equity incentive, which includes restricted units and long-term incentive performance awards.
The overall compensation levels and allocation among these components are determined annually by our Compensation Committee considering the Company’s performance during the year and a review of the competitive market for executive talent. Historically, most of the total compensation for our CEO has been in long-term equity awards. These longer-term, equity-based awards reflect the Compensation Committee’s desire to directly align management and shareholder interests and to provide incentives to successfully implement our long-term strategic objectives.
 

36
VORNADO REALTY TRUST
2021 PROXY STATEMENT
The compensation program for our Senior Executives is described in the table below. Importantly, each component of compensation is subject to a cap.
PAY ELEMENT
COMPENSATION
TYPE
OBJECTIVE AND KEY FEATURES
Base Salary Cash
Objective: To provide appropriate fixed compensation that will promote executive retention and recruitment
Key Features/Actions:

Fixed Compensation

No more than $1,000,000 in salary

“Same Store” NEO base salaries remain unchanged since 2008
Annual Incentive Awards Short-Term Variable Incentive Cash and/or Restricted Equity
Objective: To reward the achievement of financial and operating objectives based on the Compensation Committee’s quantitative and qualitative assessment of the executive’s contributions. All or a portion of earned annual awards is typically in restricted equity to further align executive’s interests with shareholders.
Key Features/Actions:

Variable, short-term compensation awards

Aggregate pool only funded upon the achievement of a threshold level of FFO, as adjusted, a key operating metric in the REIT industry (waived for 2020 due to COVID-19 pandemic)

Aggregate pool capped at 1.75% of FFO, as adjusted (waived for 2020 due to COVID-19 pandemic)

Allocated based on objective and subjective Company, business unit and individual performance

Committee can decide to pay out less than the full amount of the funded pool
Annual Restricted Equity Grants Long-Term Variable Incentive Equity
Objective: To align executive and shareholder interests, promote retention with multi-year vesting and provide stable long-term compensation.
Key Features/Actions:

Aligns executive and shareholder interests

Vest ratably over four years

Subject to a two-year holding period (regardless of vesting) and a “book-up” event (typically an increase in Share price) to have value
 

VORNADO REALTY TRUST
37
2021 PROXY STATEMENT
PAY ELEMENT
COMPENSATION
TYPE
OBJECTIVE AND KEY FEATURES
Outperformance Plan (awarded in 2021 for 2020 performance, 2020 for 2019 performance and 2018 for 2017 performance) Long-Term Variable Incentive At-Risk Equity
Objective: To enhance the pay-for-performance structure and shareholder alignment, while motivating and rewarding senior management for superior and sustained TSR performance based on rigorous absolute and relative hurdles.
Key Features/Actions of 2021 OPP:

Only provides value to our executives upon the creation of meaningful shareholder value above specified hurdles over a four-year performance period

four-year measurement period (increased from three-year measurement period in 2020 OPP) and subject to a maximum plan value of $30 million for grants in 2021 for 2020 performance, a decrease from maximum plan value of $35 million for grants in 2020 for 2019 performance

Under the Absolute TSR component of the 2021 OPP, the Company must achieve a return in excess of 28% (or 7% per annum) for OPP Units to earn any value

Under the Relative TSR Component, the Company must achieve a return above an applicable industry index or indices (the “Index”) for OPP Units to earn any value. OPP Units awarded in 2021 used the SNL US Office REIT Index (80%) and the SNL US Retail REIT Index (20%)

Under the Relative TSR Component, to the extent the Company underperforms the Index by more than 800 basis points (or 200 basis points per annum), the Absolute TSR Component payout, if any, is reduced with a maximum payout of 50%

The Relative TSR Component value is reduced if the Absolute TSR is below 2% per annum with a maximum payout of 50% of the awards if the Absolute TSR is less than 0%

50% of the earned payouts vest at the end of the performance measurement period and the remaining 50% vest on the one-year anniversary of the end of the performance period. Earned payouts are also subject to an additional one-year holding period following vesting
 

38
VORNADO REALTY TRUST
2021 PROXY STATEMENT
Pay Mix
We believe that the executive team’s compensation should be tied to Company goals. 99% of the Chief Executive Officer’s 2020 compensation and 83% of the other NEOs’ compensation is tied to performance. Approximately 44% of our Chief Executive Officer’s 2020 compensation and 26% of the other NEOs’ compensation are dependent on the achievement of objective performance criteria. The charts below reflect the pay mix of our CEO and other NEOs.
[MISSING IMAGE: tm212374d1-pc_paymixpn.jpg]
How Pay Aligns with Performance
2020 Performance Metrics Considered
For 2020 compensation, among the factors considered, both objectively and subjectively, were the changes in the Company’s results during the year (NOI at share, FFO and FFO, as adjusted), our TSR for the year, and the factors mentioned below. The decreases in 2020 compensation for Named Executive Officers, and the further decreases for 2021, were based, in part, upon these factors. “NOI” ​(or Net Operating Income) means total revenues less operating expenses. “FFO” means funds from operations as defined by NAREIT. “FFO, as adjusted,” means FFO as adjusted to exclude non-comparable gains and losses, impairments and non-real estate related items. Each of these metrics are presented in our regular annual and quarterly reports with reconciliations to the most comparable metric presented in accordance with GAAP. Although they are non-GAAP metrics, we use them in making compensation decisions because they facilitate meaningful comparisons in operating performance between periods and among our peers. TSR means our total shareholder return (including dividends) for a given period.
Key Year-Over-Year Comparisons
Our TSR for 2020 was (40.5)% while that of our NY REIT Peers (comprised of SL Green Realty Corp., Empire State Realty Trust and Paramount Group, Inc.) was (29.2)% and that of the FTSE Nareit Office Index was (18.4)%. For 2020, we decreased each of our NEOs’ total Direct/Realizable Compensation as reflected in the “Direct/Realizable Compensation Table.” In addition, as shown in the “Realized Compensation Table,” in 2020, our CEO’s total Realized Compensation was 56% of his total Direct/Realizable Compensation reflecting alignment with shareholder returns. The same is the case for our other NEOs where the average of the total Realized Compensation was 74% of the average of their total Direct/Realizable Compensation.
Key Considerations
We operate in a highly competitive commercial real estate industry where we actively compete for business opportunities and executive talent. In determining compensation levels for 2020, our Compensation Committee did not attribute a numeric weight to any one factor, but sought to find a balance among (i) appropriately recognizing the significant operational achievements during the year, particularly in light of the very difficult operating environment resulting from the COVID-19 pandemic, (ii) maintaining total compensation levels in line with the
 

VORNADO REALTY TRUST
39
2021 PROXY STATEMENT
competitive market for executive talent and at a level adequate to address our recruitment and retention needs and (iii) maintaining a balanced program to foster alignment of management and shareholder interests consistent with evolving market “best practices” as well as views of our shareholders.
How We Determine Executive Compensation
Our Compensation Committee, comprised solely of independent Trustees, determines compensation for our Named Executive Officers and other Senior Executives. Our Compensation Committee exercises independent judgment on executive compensation and administers our equity incentive programs, including reviewing and approving equity grants under our Omnibus Share Plan (as may be, or may have been amended, the “Omnibus Plan”). Our Compensation Committee operates under a written charter adopted by the Board, which is available on our website (www.vno.com/governance/committee-charters).
In connection with the adverse effect that the COVID-19 pandemic had on our business, our Board and Compensation Committee implemented major changes for the 2020 and 2021 compensation programs as part of a $35 million annual overhead reduction program, including the following:

Reduced our CEO’s Direct/Realizable Compensation by $3.0 million, or 27%, from 2019 to 2021 (based on anticipated 2021 compensation, as described herein), including a reduction in our CEO’s Direct/Realizable Compensation by $1.8 million, or 16%, from 2019 to 2020 (our CEO’s compensation was not increased between 2016 and 2019);

Reduced the Direct/Realizable Compensation of our other NEOs by a total of $8.3 million, or 45%, from 2019 to 2021 (taking into account Messrs. Greenbaum’s and Macnow’s 2021 consulting roles and reduced compensation), including a reduction of $3.7 million, or 20%, from 2019 to 2020;

No annual compensation increases were provided to employees for 2020 performance;

Reduced compensation for certain employees making over $250,000 per year, comprised of an aggregate of $12 million of reductions for the Senior Executives and $4 million of reductions for other employees; and

Implemented a 70-person reduction in force reducing the annual compensation run-rate by $14 million.
We make our compensation decisions in the first quarter of a year. These decisions cover the prior year’s performance and contributions. In addition, in the first quarter of a fiscal year, we establish that year’s performance threshold for our short-term annual incentive program.
Our compensation decisions are based primarily upon our assessment of each executive’s leadership, operational performance and potential to enhance long-term shareholder value. For our CEO, this assessment is made by the Compensation Committee. For our other Named Executive Officers, this assessment is initially made by our CEO subject to the review and approval of the Compensation Committee. Our annual, short-term incentive program provides for a minimum performance threshold for, and a cap on, a bonus pool for annual incentive awards to our senior executive team. Key factors we consider when making compensation decisions include: actual performance compared to the financial, operational and strategic goals established for the Company or the executive’s operating division; the nature, scope and level of responsibilities; contribution to the Company’s financial results, particularly on metrics such as NOI at share, FFO, FFO, as adjusted, and TSR for the year; contribution to the Company’s sustainability efforts; contribution to the Company’s COVID-19 response generally as well as its collection percentages from tenants during the pandemic; and contribution to the Company’s commitment to corporate responsibility, including success in creating a culture of unyielding integrity and compliance with applicable laws and our ethics policies. These factors may be considered on an absolute and/or relative basis with respect to other companies or indices.
In determining individual pay levels, we also consider each executive’s historical compensation, the value of an executive’s equity stake in the Company, the appropriate balance between incentives for long-term and short-term performance and the compensation paid to the executive’s peers within the Company. We also consider competitive market compensation paid by other companies that operate in our business or that compete for the same talent pool, such as other S&P 500 REITs, other real estate companies operating in our core markets and, in some cases, investment banking, hedge fund and private equity firms. However, we do not formulaically tie our compensation decisions to any particular range or level of total compensation paid to executives at these companies. Furthermore, we consider the actual Realized Compensation historically received by our management in determining whether our compensation program meets our goals of alignment with shareholder interests.
 

40
VORNADO REALTY TRUST
2021 PROXY STATEMENT
In addition, we encourage alignment with shareholders through equity-based compensation. We apportion incentive awards in order to provide the appropriate incentives to meet our compensation objectives both individually and in the aggregate for executives and other employees. Typically, our CEO receives a higher proportion of his compensation in equity than other Named Executive Officers who, in turn, receive a higher proportion in equity than our other employees. We regularly review our compensation program to determine whether we have given the proper incentives to our Named Executive Officers to deliver superior performance on a cost-effective basis and for them to continue their careers with us.
Role of the Corporate Governance and Nominating Committee, the Compensation Committee, and the CEO
The Corporate Governance and Nominating Committee is responsible for evaluating potential candidates for Chairman and CEO, and for overseeing executive succession plans. The Compensation Committee (1) reviews and approves the compensation of our executive officers and other employees whose total cash compensation exceeds $200,000 per year, (2) oversees the administration and implementation of our incentive compensation and other equity-based awards, and (3) regularly evaluates the effectiveness of our overall executive compensation program.
The Compensation Committee oversees the compensation program for our CEO and our other Named Executive Officers. The Compensation Committee evaluates CEO performance and sets his compensation. Our CEO and the Compensation Committee together assess the performance of other senior executives and our Compensation Committee determines their compensation, based on the initial recommendations of our CEO. The other NEOs do not play a role in determining their own compensation, other than discussing individual performance objectives with our CEO.
In support of these responsibilities, members of our senior executive team, along with other senior executives, have the initial responsibility of reviewing the performance of the employees reporting to them and recommending compensation for those employees.
Role of Compensation Consultants
Until January 2021, our Compensation Committee retained Willis Towers Watson Public Limited Company (“Willis Towers Watson”) as its independent compensation consultant to provide the Compensation Committee with relevant data concerning the marketplace and our peer group as well as its own independent analysis and recommendations concerning executive compensation. Willis Towers Watson regularly participated in Compensation Committee meetings and provided analysis and recommendations with respect to our 2020 compensation. Our Compensation Committee was authorized by the Board to set Willis Towers Watson’s compensation and to replace Willis Towers Watson as its independent outside compensation consultant or hire additional consultants at any time. Prior to the 2016 merger of Towers Watson & Co. with Willis Group, Willis Group had provided us with insurance-related services including services to our captive insurance company. Willis Towers Watson has continued to provide us with such insurance-related services.