Form 4: Empire State Realty Trust CEO Anthony Malkin Receives Long-Term Incentive Plan Units

Anthony Malkin, Chairman and CEO of Empire State Realty Trust, was granted LTIP units that vest over time and are convertible into Class A Common Stock.

Summary

• Anthony E. Malkin, Chairman and CEO of Empire State Realty Trust, Inc. (ESRT), received Long Term Incentive Plan (LTIP) units on March 13, 2024.
• A total of 323,824 LTIP units were granted, vesting ratably over four years from January 1, 2024, with an additional two-year holding period after vesting.
• Another 285,615 LTIP units were granted, vesting ratably over three years from January 1, 2024, also with a two-year holding period, issued in lieu of the 2023 cash annual incentive bonus.
• These LTIP units can be converted into units of limited partnership interests, which are redeemable for Class A Common Stock on a one-for-one basis or the cash value of such shares, at the Issuer's option.
• Following these transactions, Malkin directly owns 4,531,673 shares of Class A Common Stock.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The granting of LTIP units is a standard practice and aligns management's interests with shareholders. It suggests confidence in the company's future performance.

Positives

• The grant of LTIP units aligns the CEO's interests with the long-term performance of the company.
• The vesting schedule encourages continued employment and commitment to the company's success.
• Receiving LTIP units in lieu of cash bonus demonstrates confidence in the company's future performance.

Future Outlook

The LTIP units vest over the next three to four years, incentivizing the CEO to drive long-term value for the company.

Industry Context

Granting LTIP units is a common practice in the real estate industry to align executive compensation with shareholder value and long-term company performance.

Comparison to Industry Standards

• Equity-based compensation, such as LTIP units, is a standard practice among publicly traded REITs like Simon Property Group (SPG) and Prologis (PLD) to incentivize executives.
• The vesting schedules and holding periods are also typical, designed to ensure long-term commitment and alignment with shareholder interests.
• The specific number of units granted and their value would need to be compared to peer companies to assess whether the compensation is competitive and reasonable.

Stakeholder Impact

• Shareholders: Aligns CEO's interests with long-term company performance, potentially increasing shareholder value.
• Employees: Demonstrates the company's commitment to incentivizing and retaining key executives.

Key Dates