Form 4: Paramount Group SVP, GC and Secretary Gage R. Johnson Acquires 30,713 LTIP Units

Gage R. Johnson, SVP, GC and Secretary of Paramount Group, Inc., acquired 30,713 LTIP units on February 29, 2024, through a cash bonus exchange election.

Summary

• On February 29, 2024, Gage R. Johnson, SVP, GC and Secretary of Paramount Group, Inc., acquired 30,713 LTIP units.
• The acquisition was made pursuant to the Issuer's Amended and Restated 2014 Equity Incentive Plan, in connection with a cash bonus exchange election.
• The LTIP units vest 40% on February 15, 2025, 40% on February 15, 2026, and 20% on February 15, 2027, subject to continued employment.
• Each vested LTIP Unit will be converted automatically into a common unit of limited partnership interest ('OP Unit') in Paramount Group Operating Partnership LP.
• Each OP Unit acquired upon conversion of a vested LTIP Unit may be presented for redemption for cash equal to the then fair market value of one share of the Issuer's common stock, or the Issuer may elect to acquire each OP Unit for one share of common stock.
• Such OP Units are generally not redeemable without the consent of the Issuer until two years from the date of the grant.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. It reflects a standard executive compensation practice, indicating alignment of interests between management and shareholders. The vesting schedule promotes long-term commitment.

Positives

• The acquisition of LTIP units by a key executive demonstrates alignment with the company's long-term performance.
• The vesting schedule incentivizes continued employment and commitment to Paramount Group's success.

Risks

• The value of the LTIP units is tied to the performance of Paramount Group's common stock and the operating partnership.
• The vesting of the LTIP units is contingent upon continued employment, creating a potential risk if the executive leaves the company before full vesting.

Future Outlook

The document does not contain specific forward-looking statements beyond the vesting schedule of the LTIP units.

Industry Context

This filing is a routine disclosure of executive compensation in the form of equity, common in the real estate industry to align management incentives with shareholder value.

Comparison to Industry Standards

• LTIP (Long-Term Incentive Plan) units are a common form of executive compensation in the real estate industry, similar to grants at companies like Boston Properties (BXP) and Vornado Realty Trust (VNO).
• The vesting schedules are fairly standard, typically ranging from three to five years, aligning with industry norms for retaining key personnel.
• The conversion of LTIP units into OP Units, redeemable for cash or common stock, is a structure often used by REITs to provide liquidity to executives while maintaining flexibility for the company.

Stakeholder Impact

• The LTIP units incentivize the executive to drive long-term value for shareholders.
• The vesting schedule encourages continued employment, benefiting employees and the company's operations.

Key Dates