Empire State Realty Trust, Inc. (NYSE:ESRT) has announced the extension of the employment agreement with its Chairman and Chief Executive Officer, Anthony E. Malkin. The new contract, approved by the Board of Directors on September 17, 2024, extends Malkin's term for an additional three years, until October 7, 2027.
The Third Amended and Restated Employment Agreement introduces a retention bonus of $1 million, aimed at incentivizing Malkin to remain with the company through the end of the current term. The bonus is payable within thirty days following October 7, 2027, or upon earlier termination of Malkin's employment by the company without cause or by Malkin for good reason.
Under the new agreement, the automatic renewal of the employment term for consecutive one-year periods is subject to a non-renewal notice given at least thirty days prior to the expiry of the current term. Additionally, the company has clarified that a failure to renew the contract will be considered a termination without cause.
Malkin's current position as Chairman and CEO is reflected in the updated agreement, along with his current base salary. The agreement was filed with the SEC, providing transparency to shareholders and the public regarding the compensatory arrangements of the company's key executive.
In other recent news, Empire State Realty Trust (ESRT) has reported strong performance in the second quarter of 2024, with its Manhattan office portfolio reaching 93.3% occupancy. This marks the company's 10th consecutive quarter of lease percentage growth. The Empire State Building Observatory, under ESRT's management, has maintained its status as a top global attraction.
The company is also expanding its asset base, having entered into agreements to acquire prime retail assets in Williamsburg, Brooklyn for $195 million. Financially, ESRT has reported a core FFO of $66 million for Q2 and anticipates an FFO per share range of $0.90 to $0.94 for the full year.
In terms of future outlook, ESRT is focusing on investment opportunities and distressed transactions, with an expected 0-3% increase in same-store cash net operating income for the commercial portfolio. The company also anticipates an NOI of $94 million to $102 million for the Observatory business in 2024.
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