Developers Diversified designates president Hurwitz as CEO in waiting
By SCOTT SUTTELL
9:56 am, August 19, 2009
Developers Diversified Realty Corp. (NYSE: DDR) has set its succession plan, with Daniel B. Hurwitz, the company's president and chief operating officer, now the CEO-in-waiting. In an Aug. 3 filing with the Securities and Exchange Commission, the Beachwood-based shopping center real estate investment trust said it has entered into new employment contracts with Mr. Hurwitz and with current chairman and CEO Scott A. Wolstein. The term of each new employment agreement runs through Dec. 31, 2012. (The 8-K filing can be accessed from this page by clicking on the link titled “Current Report” on Aug. 3.) The employment agreements “contemplate that Mr. Hurwitz may be promoted to chief executive officer of the company if at some point during the contract period Mr. Wolstein ceases to serve in that role due to being promoted to executive chairman of the company,” according to the filing. The agreements provide for minimum base salaries of $875,000 for Mr. Wolstein and $616,000 for Mr. Hurwitz. The nine-page filing also notes that the executives “are entitled to annual performance-based cash bonuses equal to a percentage of their year-end base salaries” as determined by the Executive Compensation Committee of Developers Diversified's board.
The respective threshold, target and maximum annual cash bonus opportunities, as a percentage of year-end base salary, for Mr. Wolstein are 250%, 375% and 500% and for Mr. Hurwitz are 200%, 300% and 400%. In general, Developers Diversified says in the filing, “these opportunities have been reduced from those provided for in the old employment agreements, which were 350% at threshold and 800% at maximum for Mr. Wolstein and 300% at threshold and 600% at maximum for Mr. Hurwitz.”
Developers Diversified also notes in the filing that it has “discontinued providing Mr. Wolstein with a perquisite for personal use of company-owned or company-leased aircraft.”
Mr. Wolstein, 57, has been CEO since 1992. Mr. Hurwitz, who is 45, joined the company in 1999.
Developers Diversified owns and manages nearly 700 shopping centers worldwide.
The REIT has struggled of late in the recession, which has hit commercial real estate hard. Accounting charges from efforts to reduce debt outstanding led Developers Diversified to report a net loss of $237 million, or $1.64 per share, in the second quarter that ended June 30 compared with a profit of $21 million, or 22 cents per share, in the like period last year.
Developers Diversified said its portfolio in the second quarter remained 90.7% leased, the same as at the end of the first quarter but below its 95.5% rate at the end of June 2008.
In April, Developers Diversified shareholders approved selling nearly one-third of the company to the Otto family of Germany for $112.5 million.
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