Dexus trio locked in with incentives as property pay packets surge

Big executive pay increases are making a comeback in property with Dexus locking in a trio of top executives in a move worth up to $6.5m.

CEO of Dexus Darren Steinberg. Picture: Britta Campion

Big executive pay increases are making a comeback in the property sector with office play Dexus seeking to lock in a trio of top executives in a move worth up to $6.5m.

Dexus has set up fresh pay deals for its three top executives, including chief executive Darren Steinberg, who will be eligible for a $3.5m share rights award over coming years, atop his existing package.

The Dexus measure, which will need to be approved by investors, will see the once-off incentive award to Mr Steinberg, vesting over a three-year period, as well as retention equity awards of $1.5m to funds head Deborah Coakley and investments chief Ross Du Vernet, vesting over a three and four-year period.

The move effectively locks Mr Steinberg into the office and funds group for the next three years as it pushes more deeply into areas including logistics and healthcare property.

But generous pay deal comes as a surprise as many listed companies including major banks have steered clear of pay increases in the wake of the coronavirus crisis.

Scentre, owner of the local Westfield empire, this year suffered a significant vote against its remuneration practices at its annual meeting, in a show of dissatisfaction with how it has structured payments to top executives, including an issue of performance rights to CEO Peter Allen.

Dexus has steered clear of the troubles that beset owners of major malls but its pay practices could draw scrutiny. Mr Steinberg was paid $4.7m last year with Mr Du Vernet paid $1.7 and Ms Coakley paid $1.5m.

The Dexus move comes after a round of job-swapping by commercial property chiefs with new bosses at Stockland and Lendlease also signing on packages worth $6m and $7.5m respectively.

Former Lendlease chief financial officer Tarun Gupta is to become the chief executive of Stockland and Lendlease Asia chief Tony Lombardo is stepping up to head the company.

Meanwhile, Lendlease chief Steve McCann is headed to Crown Resorts.

Dexus said its veteran chief was worth the incentive payments.

“Darren is well regarded as one of Australia’s leading chief executives with a proven track record of creating value for investors, at Dexus and across multiple real estate businesses,” Dexus chairman Richard Sheppard said.

Since joining Dexus in 2012, Mr Steinberg has led a significant growth at Dexus and broadened it into a funds house that also pursues property trading and opportunistic deals.

“Dexus is currently moving into a growth phase consistent with the group’s strategic objective of being a wholesale partner of choice and its focus on expanding and diversifying the funds management business,” Mr Sheppard said.

Dexus has granted its top executives the share rights over the next four years as they led the group out of the coronavirus crisis which put the shivers through the office market

But they must now hit hurdles including diversifying the business and making strategic acquisitions, with the company’s proposed takeover of APN Property Group, which runs a near $3bn funds empire, a pointer to its direction.

The company said Mr Steinberg‘s payments would be based on the board’s overall assessment of how well he “has navigated the challenges in the office market, maintained a market leading position in ESG and delivered long-term value for security holders”.

“The board will determine the percentage of performance rights to vest with reference to these overarching items and the successful delivery of key strategic initiatives over the three year period,” Dexus said.

The initiatives include Dexus diversifying capital partners and investors and growing in funds management, making strategic acquisition and divesting assets across its investment portfolio and progressing the group‘s development pipeline.

Dexus chairman Richard Sheppard said Dexus was “currently moving into a growth phase consistent with the group’s strategic objective of being a wholesale partner of choice and its focus on expanding and diversifying the funds management business”.

“The Retention Equity Award reinforces the importance of Deborah and Ross to the leadership at Dexus and delivering on this objective,” he said.