(August 9, 2012) — The Louisiana Municipal Police Employees Retirement System (LAMPERS) is suing Simon Property Group’s board, alleging that the shopping-mall giant increased pay for its CEO without obtaining shareholder approval.
In a lawsuit filed with the Delaware Court of Chancery, the police pension accused the company and its 10-member board of exceeding its authority by granting its CEO David Simon shares worth $120 million to stay on until 2019, the Indianapolis Star reported. “We believe this is a meritless lawsuit,” Les Morris, a spokesman for Simon Property Group, told the newspaper. “While we vigorously defend ourselves against these claims, we will focus on continuing to deliver outstanding performance to our shareholders, building on our 42 percent total shareholder return since July 2011.”
The compensation package features a $1.25 million annual salary and a cash bonus double that amount.
Pension funds have been active participants in aiming to moderate executive pay, especially since the financial crisis. In 2010, for example, the $562 million International Brotherhood of Electrical Workers Local 98 pension fund accused Goldman Sachs of overpaying its executives while underpaying its shareholders, hurting its stock price. The suit aimed to recoup some of the compensation by preventing the bank from allocating nearly half (47%) of its 2009 net revenues to compensation. The lawsuit claimed the payments “vastly overcompensate management and constitute corporate waste.”
In October 2011, Highland Capital Management, a Dallas-based investment adviser with approximately $24 billion in assets under management, announced that a lawsuit from the Houston Municipal Employees Pension System had been dismissed. The scheme sued hedge fund operator Highland Capital Management in May 2011, along with JPMorgan Chase, over the shut Highland CrusaderFund, which was set up to invest in distressed corporate debt.