Simon Property Group Inc., seeking to avoid investor litigation, earlier this year eliminated a $120 million stock award to David Simon, chairman and CEO, in favor of a performance-based bonus.
Now, the biggest U.S. owner of shopping malls and its directors have been sued anyway. The Delaware County Employees' Retirement Fund, Media, Pa., claims the original award was nixed “only to avoid personal liability” and Mr. Simon might end up getting more than $150 million under the new plan.
The sized of the Delaware County pension fund could not be learned by press time.
“The amended award failed to establish meaningful performance metrics and instead reflects the compensation committee's decision to bury the bar in terms of performance goals for Simon,” the pension fund said in a complaint unsealed Thursday in Delaware Chancery Court in Wilmington. The pension fund wants the change rescinded.
Les Morris, a Simon Property spokesman, didn't immediately return a phone call and e-mail seeking comment on the new complaint.
Simon Property, based in Indianapolis, has faced criticism over its CEO compensation with more than 70% of shares voting in 2012 to reject Mr. Simon's initial pay package. To address the complaints, the directors changed the pay plan to cut the number of shares eligible to vest if Mr. Simon leaves before 2015.
In April, Delaware Chancery Court Judge J. Travis Laster ruled that the company won't have to face a 2012 shareholder lawsuit brought by a Louisiana fund over the plan because Simon Property officials had agreed to change it. Directors changed course because they were faced with “an imminent adverse decision” from the court, the Delaware pension fund said in its complaint.
Mr. Simon's compensation for 2013 was about $16 million, including salary, bonus and stock awards, according to the company's proxy filing in April.
