Simon Property Group Inc. shareholders will vote on a proposal requesting that future employment agreements with Chairman and CEO David Simon not include any termination benefits following a change in control of the company.
The shareholder putting forward the proposal, the Laborers' District Council and Contractors' Pension Fund, which owns 3,162 shares of the company's stock, argued that David Simon's interests are already aligned with those of other shareholders and he need not worry about being fired in the event of a merger or acquisition, and therefore the termination benefit, which the group estimated at more than $258.0 million, is not justified.
The board of the mall real estate investment trust recommended that shareholders vote against the proposal, arguing that it is inconsistent with best practices and improperly limits authority to negotiate an employment agreement with David Simon. The board added that the amount of the termination benefits that the shareholder said David Simon would receive is incorrect, and pointed to a table in the company's proxy statement that put it at $215.2 million.
The proposal, along with others, will be voted on at the upcoming annual meeting of shareholders May 8.