8-K: Newmark CEO Barry Gosin's Employment Agreement Extended and Amended

Newmark Group, Inc. has extended and amended CEO Barry Gosin's employment agreement through December 31, 2026, with additional compensation and clarified terms.

Summary

• Newmark Group has entered into a second amended and restated employment agreement with CEO Barry Gosin, effective August 7, 2024.
• The agreement extends Mr. Gosin's employment term to December 31, 2026, removing a previous termination option.
• Mr. Gosin will receive a one-time cash payment of $5,000,000 and additional non-exchangeable partnership units (NPSUs) valued at $20,000,000.
• The NPSUs are split with $5,000,000 attributable to 2025 and $15,000,000 to 2026.
• He will also receive a $1,500,000 cash bonus for 2026, payable in 2027.
• Mr. Gosin's annual total contractual compensation will be $17,500,000 for 2024, 2025, and 2026, including salary, NPSUs, and cash awards.
• The agreement clarifies Mr. Gosin's ability to invest in real estate personally or through funds not controlled by Newmark's competitors, with a right of first offer for Newmark to participate up to 50%.

Sentiment

Score: 8

Explanation: The document reflects a positive sentiment due to the extension of the CEO's contract and the provision of additional compensation. The terms are generally favorable and indicate confidence in the CEO's continued leadership.

Positives

• The extension of Mr. Gosin's contract provides stability and continuity in leadership.
• The additional compensation package, including the $5,000,000 cash payment and $20,000,000 in NPSUs, is a strong incentive for continued performance.
• The clarification of real estate investment terms allows Mr. Gosin to pursue personal opportunities while aligning with company interests.
• The agreement maintains Mr. Gosin's total annual compensation at $17,500,000, consistent with the previous year.

Negatives

• The document does not explicitly mention any negative aspects of the agreement.

Risks

• The conversion of NPSUs to PSUs is contingent on Newmark achieving at least $10,000,000 in gross revenues in the relevant calendar quarter.
• Mr. Gosin's ability to receive the full benefits of the agreement is dependent on his continued employment and compliance with its terms.
• The agreement includes non-compete, non-solicitation, and non-disparagement clauses that could restrict Mr. Gosin's future activities.

Future Outlook

The agreement provides for Mr. Gosin's continued employment through December 31, 2026, with potential for further extensions. The document also outlines the terms for potential retirement and change of control scenarios.

Management Comments

• The Amended and Restated Agreement and awards thereunder were approved by the Compensation Committee of the Company's Board of Directors after careful consideration of Mr. Gosin's contributions to the Company.

Industry Context

This agreement is a standard practice for retaining key executives in the real estate industry. The terms, including the non-compete and non-solicitation clauses, are typical for senior management roles.

Comparison to Industry Standards

• The compensation package, including salary, bonuses, and equity awards, is comparable to those of CEOs at similar-sized real estate brokerage firms.
• The non-compete and non-solicitation clauses are standard in executive employment agreements within the financial and real estate sectors, similar to those seen at companies like CBRE, JLL, and Cushman & Wakefield.
• The inclusion of a change of control provision is also a common practice to protect executives in the event of a merger or acquisition, similar to agreements at other publicly traded real estate companies.

Stakeholder Impact

• Shareholders may view the extension of the CEO's contract and the additional compensation as a positive sign of stability and commitment to the company's future.
• Employees may see the agreement as a sign of the company's commitment to leadership and may be motivated by the company's continued success.
• Customers and suppliers may not be directly impacted by the agreement, but may benefit from the continued stability and leadership of the company.

Next Steps

• The company will make a one-time cash payment of $5,000,000 to Mr. Gosin.
• The company will grant Mr. Gosin $20,000,000 in non-exchangeable partnership units (NPSUs).
• The company will pay a cash bonus of $1,500,000 for 2026 in 2027.
• The company will continue to monitor Mr. Gosin's performance and compliance with the agreement.

Key Dates

Keywords

employment agreement, Barry Gosin, CEO, Newmark Group, compensation, NPSUs, PSUs, real estate investment, non-compete, contract extension