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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

 

 

 

 

Filed by the Registrant  ☒                                  Filed by a Party other than the Registrant  ☐

 

 

Check the appropriate box:

 

 

 

Preliminary Proxy Statement

 

 

Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

 

Definitive Proxy Statement

 

 

Definitive Additional Materials

 

 

Soliciting Material Pursuant to §240.14a-12

 

 

CBRE Group, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

No fee required.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 


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LOGO

 

 

 

       

2100 McKinney Avenue, Suite 1250

Dallas, Texas 75201

(214) 979-6100

 

April 6, 2022

 

Dear Fellow Stockholder:

 

Like the rest of the world, our attention has been focused on Russia’s invasion of Ukraine and we are closely monitoring the effects of the humanitarian crisis as well as the economic consequences. Our company mobilized quickly – with support of our teams in neighboring countries – to offer help with temporary housing, transportation and monetary support to employees of CBRE’s affiliate in Ukraine. More broadly, our people worldwide responded generously to a global internal fundraising campaign CBRE launched in support of the wider relief efforts. Shortly after the invasion, we announced that CBRE is exiting our Advisory Services business in Russia, while our Global Workplace Solutions employees continue to manage essential facilities for our multinational clients that continue to operate in Russia. The Ukrainian people’s acts of courage and resolve inspire us daily and we continue to support equitable humanitarian assistance that we hope can help to ease their suffering.

 

CBRE delivered outstanding results in 2021: revenue, net revenue, earnings and free cash flow reached all-time highs. Steadfast stockholder support has helped CBRE to navigate through difficulties and seize opportunities amid a global health crisis now entering its third year. Throughout, we have worked hard to earn your trust by delivering resilient financial performance while making strategic investments to sustain our success well into the future. In 2021, we deployed approximately $2 billion of capital targeted mainly at advancing the diversification of our business across four dimensions – asset types, lines of business, clients and geographies – and driving future growth. Our purchase of a 60% interest in Turner & Townsend, our largest investment in more than a decade, has markedly expanded our capabilities in infrastructure, which is seeing increased public and private investment, and green energy, which is playing a key role in the world’s transition to a low-carbon economy. Expanding our arsenal of client-focused sustainability services was also the rationale for our investment in Altus Power, Inc. By partnering with Altus, we can deliver commercial solar solutions for clients that are looking for clean energy sources.

 

Beyond important societal benefits, we see environmental sustainability as a key business imperative: clients are increasingly looking to CBRE for help in reducing their carbon footprints. In 2021, our Global Workplace Solutions team eliminated more than 270,000 metric tons of carbon emissions at facilities we manage for large occupiers. That’s the equivalent of the electricity use at 49,000 homes and 300 million pounds of coal burned. Equally important, our success – today and in the future – depends on fostering an inclusive culture where people of all backgrounds feel valued and can build thriving careers. As part of our Community Impact Initiative, announced in December 2021, we are working actively with the Thurgood Marshall College Fund, Project Destined and other organizations to help more young people of color from underrepresented communities to learn about and prepare for commercial real estate careers. This will help us build a rich pipeline of future talent and increase the ranks of next-generation diverse leaders. In 2021, we also exceeded our goal of spending $1 billion with diverse suppliers – a down payment on our pledge to spend $3 billion with such suppliers by 2025. We are passionately committed to making further progress on both sustainability and diversity, equity and inclusion, and will discuss our efforts in more detail in our Corporate Responsibility Report, published later this year.

 

We look forward to engaging with you at our annual Stockholder Meeting on Wednesday, May 18, 2022 at 10:00 a.m. (Central Time). As a safety precaution, we will once again hold our meeting virtually this year. You can attend the Annual Meeting, vote your shares electronically and submit your questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/CBRE2022. Regardless of whether you attend, please take advantage of this opportunity to vote your shares.*

 

We remain very mindful of both heightened geopolitical tensions and Covid-19’s persistent challenges. Despite these challenges, we believe CBRE is poised for another strong year in 2022. We hope that you and your loved ones stay safe and healthy.

 

LOGO

 

Robert E. Sulentic

President and Chief Executive Officer

 

*Please see page 1 of this Proxy Statement for the many options available to vote your shares and other details on how you can participate in our Annual Meeting.


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Notice of 2022 Annual

Meeting of Stockholders

 

Date:

Wednesday, May 18, 2022

 

Time:

10:00 a.m. (Central Time)

 

Virtual Meeting Website:

www.virtualshareholdermeeting.com/CBRE2022

 

Record Date:

March 21, 2022

Your Vote Matters — How to Vote:

 

LOGO   

Online

 

Visit www.proxyvote.com. You will need the 16-digit number included in your proxy card, voter instruction form or notice.

LOGO   

Phone

 

Call 1-800-690-6903 or the number on your voter instruction form. You will need the 16-digit number included in your proxy card, voter instruction form or notice.

LOGO   

Mail

 

Send your completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form.

LOGO   

Via webcast During the Annual Meeting

 

Visit www.virtualshareholdermeeting.com/CBRE2022. You will need the 16-digit number included in your proxy card, voter instruction form or notice. Online access begins at 9:45 a.m. (Central Time).

Agenda:

 

1.

Elect the 10 Board-nominated directors named in the Proxy Statement;

 

2.

Ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;

 

3.

Conduct an advisory vote on named executive officer compensation for the fiscal year ended December 31, 2021;

 

4.

Approve the Amended and Restated 2019 Equity Incentive Plan;

 

5.

If properly presented, consider a stockholder proposal regarding our stockholders’ ability to call special stockholder meetings; and

 

6.

Transact any other business properly introduced at the Annual Meeting.

Your vote is important, and you are encouraged to vote promptly whether or not you plan to virtually attend the 2022 Annual Meeting of Stockholders.

We hope that you can attend the Annual Meeting. Regardless of whether you will attend via our live webcast, please complete and return your proxy so that your shares can be voted at the Annual Meeting in accordance with your instructions.

Important Notice Regarding the Availability of Proxy Materials for the 2022 Annual Meeting of Stockholders to be held on Wednesday, May 18, 2022: Our Proxy Statement and 2021 Annual Report are available free of charge on our website or www.proxyvote.com.

We believe that this allows us to provide you with the information that you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting.

April 6, 2022

By Order of the Board of Directors

 

LOGO

Laurence H. Midler

Executive Vice President, General Counsel, Chief Risk Officer and Secretary

 

 

This Proxy Statement and accompanying proxy card are first being made available on or about April 6, 2022. References in this Proxy Statement to “CBRE,” “the company,” “we,” “us” or “our” refer to CBRE Group, Inc. and include all of its consolidated subsidiaries, unless otherwise indicated or the context requires otherwise. References to “the Board” refer to our Board of Directors. A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, including financial statements, is being sent simultaneously with this Proxy Statement to each stockholder who requested paper copies of these materials and will also be available at www.proxyvote.com.


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     1  

 

 

Proxy Summary

 

To help you review the proposals to be voted upon at our 2022 Annual Meeting, we have summarized important information in this Proxy Statement and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. This summary does not contain all of the information that you should consider, and you should carefully read the entire Proxy Statement and Annual Report on Form 10-K before voting.

 

 

Voting

 

Stockholders of record as of March 21, 2022 may cast their votes in any of the following ways:

 

            
LOGO    LOGO    LOGO    LOGO
       

Online

 

Visit www.proxyvote.com. You will need the 16-digit number included in your proxy card, voter instruction form or notice.

  

Phone

 

Call 1-800-690-6903 or the number on your voter instruction form. You will need the 16-digit number included in your proxy card, voter instruction form or notice.

  

Mail

 

Send your completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form.

  

Via Webcast During the Annual Meeting

 

Visit www.virtualshareholdermeeting.com/CBRE2022. You will need the 16-digit number included in your proxy card, voter instruction form or notice. Online access begins at 9:45 a.m. (Central Time).

                

Voting Matters and Board Recommendation

 

Proposals

   Board recommendation      Page
reference  

1. Elect Directors

   LOGO    FOR each nominee      10

2. Ratify the Appointment of Independent Registered Public Accounting Firm for 2022

   LOGO    FOR      34

3. Advisory Vote to Approve Named Executive Officer Compensation for 2021

   LOGO    FOR      37

4. Approve the Amended and Restated 2019 Equity Incentive Plan

   LOGO    FOR      85

5. If Properly Presented, Consider a Stockholder Proposal Regarding Special Stockholder Meetings

   LOGO    AGAINST      92


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     2  

 

 

Corporate Governance Highlights

We are committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability, and helps build public trust in our company. Our governance practices include:

 

  Robust director selection process resulting in a diverse Board in terms of gender, race, ethnicity, experience, skills and tenure

 

  Independent Board Chair

 

  9 out of 10 of our director nominees are independent

 

  7 out of 10 of our director nominees are diverse

 

  Annual election of directors

 

  Majority voting standard for uncontested elections
  Maximum of one Board-nominated management director

 

  12-year director term limit, which has resulted in the addition of 7 new independent directors since adoption of the term limit in December 2015

 

  Proxy access rights for director nominations

 

  Stockholder rights to call a special meeting

 

  Annual Board, committee and individual director evaluations and self-assessments

 

  Regular executive sessions, where independent directors meet without management present
  Active risk oversight by the Board and its key committees

 

  Stock ownership requirements for directors and executive officers

 

  Policy restricting trading, and prohibiting hedging and short-selling, of CBRE stock

 

  Compensation clawback policy for executive officers

 

  Ongoing stockholder outreach and engagement
 

 

Our Board Nominees

Here is summary information about each of the director nominees who is being voted on by stockholders at the Annual Meeting.

 

    Name   Age   Director
Since
  Principal Occupation   Independent   Committees  

Other Public

Company Boards  

LOGO  

Brandon B. Boze

Board Chair

  41   2012   Partner and President of ValueAct Capital    

– Executive (Chair)

  0
LOGO  

Beth F. Cobert

  63   2017   Chief Operating Officer of the Markle Foundation    

– Compensation (Chair)

– Corporate Governance and Nominating

  0
LOGO  

Reginald H. Gilyard

  58   2018   Senior Advisor to The Boston Consulting Group    

– Compensation

– Corporate Governance and Nominating

  3
LOGO  

Shira D. Goodman

  61   2019   Advisory Director of Charlesbank Capital Partners    

– Audit (Chair)

– Compensation

  1
LOGO  

Christopher T. Jenny

  66   2016   Chair and Chief Executive Officer of Jennus Innovation    

– Audit

– Corporate Governance and Nominating (Chair)

  0
LOGO  

Gerardo I. Lopez

  62   2015   Executive-in-Residence at Softbank Investment Advisers    

– Compensation

– Corporate Governance and Nominating

– Executive

  2
LOGO  

Susan Meaney

  62   2022   Senior Advisor to KSL Capital Partners    

– Audit

  1
LOGO  

Oscar Munoz

  63   2020   Special Advisor to United Airlines Holdings    

– Audit

– Corporate Governance and Nominating

  2
LOGO  

Robert E. Sulentic

  65   2012   President and Chief Executive Officer of CBRE      

– Executive

  0
LOGO  

Sanjiv Yajnik

  65   2017   President of Capital One Financial Services    

– Audit

– Compensation

  0


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     3  

 

 

Board Diversity

The following charts summarize the race & ethnicity, gender, independence and tenure of our 2022 director nominees.

 

LOGO

Our Corporate Strategy

In 2020, we completed a comprehensive review of our business, markets, competitive position and potential disruptions to our operating model. This review resulted in an update to our corporate strategy with an increased emphasis on strategies specific to our three business segments: Advisory Services, Global Workplace Solutions and Real Estate Investments. Our strategy review took into account the anticipated effects of the Covid-19 pandemic. To date, the strategy has proven effective, with business performance resilient through the downturn triggered by the pandemic and the subsequent recovery.

At its core, our strategy continues to be underpinned by a strong focus on delivering consistently superior outcomes for three key stakeholder groups – our clients, our employees and our stockholders. Our strategy is framed by five key themes, each selected to help further distinguish our performance from the competition.

Our Five Key Performance Themes

 

                 
1.   2.   3.   4.   5.
         
Drive operational excellence by streamlining processes, increasing efficiency and strengthening corporate functions.   Differentiate our service offering— particularly property leasing and sales— with data.   Build on core line of business and geographic strengths in the Advisory Services and Global Workplace Solutions segments.   Amplify our principal investments in our investment management and real estate development business lines.   Execute focused strategic bets on new and enhanced offerings in areas where we see opportunities for rapid growth.
                 


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     4  

 

 

2021 Business Highlights

 

Revenue      Net Revenue (1)      GAAP Net Income
$27.7B      $17.0B      $1.8B
+17%      +23%      +144%
         

Consolidated

Adjusted EBITDA (1)

     GAAP EPS      Adjusted EPS (1)
$3.1B      $5.41      $5.80
+62%      +143%      +77%
         
Core Adjusted EPS (1)      Cash Flow from Operations      Free Cash Flow (1)
$5.33      $2.4B      $2.2B
+63%      +29%      +38%
         
1-Year Total Stockholder Return (2) (as of 12/31/2021)      3-Year Total Stockholder Return (2) (as of 12/31/2021)      5-Year Total Stockholder Return (2) (as of 12/31/2021)
73%      171%      245%

vs. 29% for S&P 500

(+44% outperformance)

    

vs. 100% for S&P 500

(+71% outperformance)

    

vs. 134% for S&P 500

(+111% outperformance)

 

(1)

These are non-GAAP financial measures. For definitions and more information, see Annex A of this Proxy Statement. Our Board and management use these non-GAAP financial measures to evaluate our performance and manage our operations. However, non-GAAP financial measures should be viewed in addition to, and not as an alternative for, financial results prepared in accordance with GAAP. The term “GAAP,” as used in this Proxy Statement, means generally accepted accounting principles in the United States.

(2)

Inclusive of dividends, assuming reinvestment.


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     5  

 

 

Company Performance and Financial Highlights

We delivered strong 2021 results, as revenue, net revenue, earnings and free cash flow reached all-time highs. This result was not foreordained. In early 2021, we faced significant headwinds. As the year progressed, the macro environment became more supportive, and we benefited additionally from our longstanding work to strengthen our balance sheet and improve our financial resiliency. Our efforts to diversify our business across four dimensions – asset types, lines of business, clients and geographies – and to position CBRE to capitalize on secular tailwinds also helped drive our financial performance.

Our performance in 2021 resulted in strong stockholder value creation. This extended a long-term record of consistently increased stockholder value.

 

Comparison of 5-Year Cumulative Total Return(1) among CBRE Group, Inc., the S&P 500 Index(2) and Peer Group(3)

 

 

 

LOGO

 

(1)

$100 invested on December 31, 2016 in stock or index-including reinvestment of dividends, fiscal year ending December 31.

(2)

Copyright© 2022 Standard & Poor’s, a division of S&P Global, All rights reserved.

(3)

Peer group contains companies with the following ticker symbols: JLL, CIGI, CWK, ISS, MMI, NMRK, SVS.L (London), EXH0.PA and WD.

2021 saw a significant acceleration in our capital deployment. We deployed approximately $2 billion of capital targeted at accelerating future growth while further enhancing our resiliency.

2021 capital deployment included:

 

  The acquisition of a 60% stake in Turner & Townsend Holdings Limited, one of the global leaders in program, project and cost management, for approximately $1.27 billion. This transaction expands our capabilities in infrastructure and green energy, which we expect to benefit from strong secular growth tailwinds.

 

  The completion of the acquisition of a 40% interest in Industrious National Management Company LLC, a leading provider of premium flexible workplace solutions. This investment aligns us with an outstanding operator and capable leadership team, and enables us to participate in the rapidly growing flex-space opportunity at scale.
  Investing in commercial solar provider, Altus Power, Inc. (Altus), through our special purpose acquisition company. Altus is now publicly traded (NYSE:AMPS) and we expect to have a strong relationship and to drive value for Altus.

 

  Stockholder capital returns of over $370 million through share repurchases. We expect programmatic stockholder returns will remain a core part of our capital deployment strategy.
 


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     6  

 

 

Awards & Recognition

In 2021 and early 2022, we were recognized with the following awards and accolades:

 

     

MOST ADMIRED REAL

ESTATE COMPANIES

 

Fortune Magazine, 12th consecutive year, including 2022

     

MOST RECOGNIZED COMMERCIAL

REAL ESTATE BRAND

 

Lipsey Company Survey, 21st consecutive year, including 2022

     

WORLD’S MOST ETHICAL

COMPANY

 

Ethisphere Institute, 9th consecutive year, including 2022

           
     

INCLUDED IN THE DOW JONES

SUSTAINABILITY WORLD INDEX

 

Only commercial real estate provider for three consecutive years

     

LISTED IN THE BLOOMBERG

GENDER EQUALITY INDEX

 

For three consecutive years, including 2022

     

RANKED 11TH MOST

SUSTAINABLE U.S. COMPANY

 

Barron’s, including 2022, making top 100 list for five consecutive years

Environmental and Social Responsibility

In 2021, we continued to make strides on our environmental, social and governance (ESG) initiatives. As the world’s largest commercial property manager, we believe we are well-positioned to tackle one of the biggest contributors to climate change: greenhouse gas emissions. We signed the Climate Pledge, which commits CBRE to net-zero carbon emissions by 2040—10 years ahead of the Paris Agreement. We have committed to science-based greenhouse gas reduction targets with a goal of cutting our operational emissions by more than two-thirds by 2035 through 100% renewable electricity in our offices by 2025 and electric vehicle fleet transitions. We also set similarly ambitious greenhouse gas emissions reduction goals for the properties and facilities we manage for our clients.

We are committed to providing transparent, meaningful sustainability information to stakeholders and have published SASB and TCFD-aligned disclosures in our Corporate Responsibility Report since 2017 and 2019, respectively. In addition, our report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards and we have supported the Ten Principals of the United Nations Global Compact (UNGC) for the 14th consecutive year.

We have also continued to make progress enhancing diversity, equity and inclusion at CBRE and in the broader commercial real estate industry. In 2021, we exceeded our goal of spending $1 billion with diverse suppliers, positioning us to meet our pledge to spend $3 billion with diverse suppliers by 2025. We also committed time, talent and funding to help organizations that help people from underrepresented communities to learn about and prepare for commercial real estate careers.

To learn more about our ESG efforts, please view our Corporate Responsibility Report at www.cbre.com/responsibility. The information contained on or available through this website is not a part of, or incorporated by reference into, this Proxy Statement.

Executive Compensation Highlights

Our Pay for Performance Compensation Philosophy

Our executive compensation program is designed to:

 

 

Align pay and performance;

 

 

Reinforce our corporate strategy;

 

 

Attract and retain accomplished and high-performing executives; and

 

 

Motivate those executives to consistently achieve short- and long-term goals to further our corporate strategy.

To do this, we focus a significant percentage of our executive officers’ compensation on both annual and long-term incentive awards intended to drive growth in our business and in our share price in the short- and long-term, with a relatively modest portion of compensation paid in fixed base salary.


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     7  

 

 

2021 Total Target Direct Compensation Mix

The total 2021 target direct compensation mix for our Chief Executive Officer (“CEO”) is shown here:

 

CEO Target Compensation Mix

 

 

 

LOGO

2020 and 2021 Performance and NEO Compensation

Despite our solid overall financial and operational performance in 2020 and strong performance by each of our executive officers to build a more resilient business, the impact of the Covid-19 pandemic led to a meaningful reduction in named executive officer compensation in a number of ways:

 

 

Mr. Robert E. Sulentic voluntarily agreed to a temporary reduction of 100% of his base salary. Mses. Leah C. Stearns and Chandra Dhandapani and Messrs. Michael J. Lafitte and Daniel G. Queenan also voluntarily agreed to a 15% temporary reduction of their base salaries. The temporary executive salary reductions took effect on April 4, 2020 and expired on December 31, 2020. The temporary base salary reductions did not impact other items tied to base salary such as minimum common stock ownership requirements.

 

 

Compared to annual cash bonus targets, 2020 cash bonuses awarded to the named executive officers during 2020 were below target and averaged 60.6% of target.

 

 

Although we had a record year of performance in 2019, the Covid-19 pandemic severely impacted our business in 2020. As a result, 2019 Adjusted EPS Awards, which were based on our two-year cumulative Adjusted EPS performance, were earned at 52.5% of target.

In contrast, the company’s financial performance significantly improved in 2021, exceeding both 2020 and 2019 levels, with revenue, net revenue, earnings and free cash flow reaching all-time highs. On a consolidated basis, revenue and net revenue grew 17% and 23%, respectively, compared to 2020. GAAP net income and consolidated adjusted EBITDA increased 144% and 62%, respectively, and GAAP EPS, Adjusted EPS and Core Adjusted EPS increased 143%, 77% and 63%, respectively, compared to 2020. Cash flow from operations and free cash flow increased 29% and 38%, respectively, compared to 2020. We generated a 73% total stockholder return in 2021.

Our strong performance in 2021 resulted in higher payouts for all of our named executive officers.

 

 

Compared to annual cash bonus targets, 2021 cash bonuses awarded to our named executive officers during 2021 averaged 172% of target.

 

 

2020 Adjusted EPS Awards were earned at 200% of target.

For 2021, Mr. Sulentic requested, and the Board agreed, that Mr. Sulentic would forego $3.7 million of his total target annual compensation opportunity in light of the ongoing business challenges related to Covid-19 pandemic that existed in March 2021, when the Board set Mr. Sulentic’s 2021 pay opportunity. As reduced from what the Board originally approved, Mr. Sulentic’s total target annual compensation was $12,550,000, comprised of an annual base salary of $920,000 (reduced by $230,000), an annual target performance award of $1,840,000 (reduced by $460,000) and an annual target equity award of $9,790,000 (reduced by $3,010,000). These reductions represent a roughly even reduction as a percentage of each individual pay element from the 2020 target levels. Concurrent with his request to forego $3.7 million of his total target annual compensation opportunity, Mr. Sulentic also agreed to extend his existing Restrictive Covenants Agreement with the company (initially scheduled to expire on December 1, 2023) through December 31, 2025.


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CBRE 2022 PROXY STATEMENT    PROXY SUMMARY     8  

 

 

2021 NEO Total Annual Compensation

Set forth below is the 2021 annual compensation for our named executive officers. The table below differs from the total compensation reported in the Summary Compensation Table in that it excludes certain severance payments and strategic equity awards granted to our named executive officers in connection with a promotion.

 

Name and Principal Position

   Year     

Salary(1)

($)

    

Bonus(2)

($)

    

Annual

Stock
Awards(3)

($)

    

Non-Equity

Incentive Plan

Compensation

($)

    

All Other

Compensation(4)

($)

    

Total

($)

 

Robert E. Sulentic

President and Chief Executive Officer

     2021        939,726               9,789,859        3,174,000        4,500        13,908,085

Emma E. Giamartino

Global Group President, Chief Financial Officer
and Chief Investment Officer

     2021        520,438               1,214,886        1,307,692        4,500        3,047,516

Leah C. Stearns

Former Chief Financial Officer

     2021        700,000               2,574,926        2,150,000        4,500        5,429,426

Michael J. Lafitte

Global Chief Executive Officer,
Real Estate Investments

     2021        735,000               2,849,948        1,885,000        4,500        5,474,448

Daniel G. Queenan

Global Chief Executive Officer,
Advisory Services

     2021        700,000               2,699,894        1,815,000        4,500        5,219,394

Chandra Dhandapani

Chief Transformation Officer and Global Chief Operating Officer, Global Workplace Solutions

     2021        700,000               1,799,712        1,477,599        4,500        3,981,811

 

(1)

Salary Column Ms. Giamartino became our Global Group President, Chief Financial Officer and Chief Investment Officer on July 28, 2021. Her salary reflects 30 weeks at her previous base salary and 22 weeks at her current base salary of $680,000.

(2)

Bonus Column Does not include a $1,000,000 one-time promotion cash award paid to Ms. Giamartino.

(3)

Annual Stock Awards Column Does not include a Strategic Equity Award granted to each of Mses. Giamartino and Dhandapani in the amount of $1,500,000.

(4)

All Other Compensation Column Does not include the following amounts paid to Ms. Stearns pursuant to her Transition Agreement: (i) a lump-sum cash severance payment of $2,662,500, (ii) COBRA continuation coverage of $25,345, (iii) outplacement assistance services of $15,000 and (iv) reimbursement of legal fees of $16,908.

Forward-Looking Statements

This Proxy Statement contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the company’s future business outlook and performance, capital deployment strategies, performance of investments, and sustainability and social responsibility targets, strategies and goals. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results and performance in future periods to be materially different from any future results or performance suggested in forward-looking statements in this Proxy Statement. Any forward-looking statements speak only as of the date of this Proxy Statement and, except to the extent required by applicable securities laws, the company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in the company’s Annual Report for the year ended December 31, 2021, particularly those under the captions “Cautionary Note on Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in the company’s press releases and other periodic filings with the SEC.

This Proxy Statement contains certain voluntary disclosures regarding our sustainability and social responsibility goals and related matters because we believe these matters are of interest to our investors; however, we do not believe these disclosures are “material” as that concept is defined by or construed in accordance with the securities laws or any other laws of the U.S. or any other jurisdiction, or as that concept is used in the context of financial statements and financial reporting. These disclosures speak only as of the date on which they are made, and we undertake no obligation and expressly disclaim any duty to correct or update such disclosures, whether as a result of new information, future events or otherwise, except as required by applicable law.


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CBRE 2022 PROXY STATEMENT    TABLE OF CONTENTS     9  

 

 

Table of Contents

 

Proposal 1: Elect Directors

    10  

Director Nomination Criteria

    10  

Director Independence

    10  

Director Term Limits

    10  

Director Resignation Policy Upon Change of Employment

    10  

Majority Voting to Elect Directors

    11  

Director Nomination Process

    11  

Director Nominee Skills and Experience Matrix

    12  

Board Diversity

    13  

Our 2022 Director Nominees

    13  
         

Corporate Governance

    19  

Governance Highlights

    19  

Board Structure and Leadership

    20  

Board Meetings and Committees

    21  

Board Committees

    22  

Compensation Committee Interlocks and Insider Participation

    23  

Selected Areas of Board Oversight

    24  

Information Technology/Cyber Security

    26  

Environmental and Social Responsibility

    27  

Stockholder Engagement

    29  

Communications with our Board

    30  

Governance Practices and Policies

    30  

Director Compensation

    31  
         
Proposal 2: Ratify Appointment of Independent Registered Public Accounting Firm     34  

Audit and Other Fees

    35  

Audit Committee Pre-Approval Process

    35  

Audit Committee Report

    35  
         
Proposal 3: Advisory Vote on Executive Compensation     37  
         

Executive Management

    38  
Compensation Discussion
and Analysis
(See separate detailed Table of Contents)
    40  
         

Executive Compensation

    69  
         
Proposal 4: Approve the Amended and Restated 2019 Equity Incentive Plan     85  
         
Proposal 5: Consider a Stockholder Proposal Regarding Stockholders’ Ability to Request a Special Stockholder Meeting     92  
         

Stock Ownership

    95  

Security Ownership of Principal Stockholders

    95  

Security Ownership of Management and Directors

    96  
Section 16(a) Beneficial Ownership Reporting Compliance     97  
         

Related-Party Transactions

    98  
         
Annual Meeting Information     99  

How to Attend the Annual Meeting Q&A

    99  

Voting Instructions and Information

    99  
Stockholder Recommendations of Director Candidates     102  

Stockholder Proposals and Board Nominees

    102  

Eliminating Paper and Duplicative Materials

    103  

Transfer Agent Information

    104  
         
Annex A: Reconciliation of Certain Non-GAAP Financial Measures     A-1  
         
Annex B: Amended and Restated 2019 Equity Incentive Plan     B-1  
 


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    DIRECTOR NOMINATION CRITERIA     10  

 

 

Proposal 1:

Elect Directors

Our Board has nominated 10 directors for election at this Annual Meeting to hold office until the next annual meeting and the election of their successors. All of the nominees were selected to serve on our Board based on one or more of the following criteria:

 

  outstanding achievement in their professional careers;

 

  broad experience;

 

  personal and professional integrity;

 

  their ability to make independent, analytical inquiries;

 

  financial literacy;
  mature judgment;

 

  high-performance standards;

 

  familiarity with our business and industry;

 

  an ability to work collegially.
 

 

We believe that all of our director nominees have a reputation for honesty and adherence to high ethical standards. Each agreed to be named in this Proxy Statement and to serve if elected.

Director Nomination Criteria

Our Board seeks directors who represent a mix of backgrounds and experiences that will enhance the quality of our Board’s deliberations and decisions. In nominating candidates, our Board considers a diversified membership in the broadest sense, including persons diverse in experience, gender and ethnicity. Our Board does not discriminate on the basis of race, color, national origin, gender, religion, disability or sexual orientation or any other category protected by law. When evaluating candidates, our Board considers whether potential nominees possess integrity, accountability, informed judgment, financial literacy, mature confidence and high-performance standards.

Our Board is especially interested in adding candidates over time who are operating executives (particularly current chief executives or other operating executives of other large public companies) or who have a strong technology background and in both cases a passion for building a transformative business on a global basis. Other factors include having directors with international experience, including knowledge of emerging markets or management of business operations and resources that are dispersed across a global platform.

Director Independence

A majority of our Board must be independent, under our Corporate Governance Guidelines and New York Stock Exchange (NYSE) listing standards. Also, at least one member of our Audit Committee should have the qualifications and skills necessary to be considered an “Audit Committee Financial Expert” under Section 407 of the Sarbanes-Oxley Act, as defined by the rules of the Securities and Exchange Commission, or SEC.

Director Term Limits

Under our by-laws, the Board may not nominate any non-management director for re-election to the Board if that director has completed 12 years of service as an independent member of the Board on or prior to the date of election to which such nomination relates. No exemptions are permitted. Our Board believes that these restrictions contribute to Board stability, vitality and diversity and help ensure that our Board continuously benefits from a balanced mix of perspectives and experiences.

Our focus on Board refreshment has resulted in the addition of seven new directors since the adoption of the director term limits in December 2015.

Director Resignation Policy Upon Change of Employment

Our Board’s Corporate Governance Guidelines require that directors tender their resignation upon a change of their employment. The Corporate Governance and Nominating Committee of our Board of Directors, or the Governance Committee, will then consider whether the change in employment has any bearing on the director’s ability to serve on our Board, our Board’s goals regarding Board composition or any other factors considered appropriate and relevant. Our Board will then determine whether to accept or reject the tendered resignation.


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    DIRECTOR NOMINATION PROCESS     11  

 

 

Majority Voting to Elect Directors

In uncontested elections, directors are elected by a “majority vote” requirement. Under this requirement, in order for a nominee to be elected in an uncontested election, the nominee must receive the affirmative vote of a majority of the votes cast in his or her election (i.e., votes cast “FOR” a nominee must exceed votes cast as “AGAINST”). Votes to “ABSTAIN” with respect to a nominee and broker non-votes are not considered votes cast, and so will not affect the outcome of the nominee’s election. The company maintains a plurality vote standard in contested director elections, where the number of nominees exceeds the number of directors to be elected.

If an incumbent director in an uncontested election does not receive a majority of votes cast for such incumbent’s election, the director is required to submit a letter of resignation to the Board for consideration by the Governance Committee. The Governance Committee is required to promptly assess the appropriateness of such nominee continuing to serve as a director and recommend to the Board the action to be taken with respect to the tendered resignation. The Board will act on the Governance Committee’s recommendation within 90 days of the date of the certification of election results.

Required Vote

This is an uncontested Board election. In order to be elected, each nominee must receive the affirmative vote of a majority of the votes cast on his or her election (i.e., votes cast “FOR” a nominee must exceed votes cast as “AGAINST”). Votes to “ABSTAIN” with respect to a nominee and broker non-votes are not considered votes cast, and so will not affect the outcome of the nominee’s election.

Director Nomination Process

The Governance Committee is responsible for identifying and evaluating potential candidates and recommending candidates to our Board for nomination. They also perform assessments of the skills and experiences needed to properly oversee our interests.

 

LOGO     

The Governance Committee regularly reviews the composition of our Board and determines whether the addition of directors with particular experience, skills or characteristics would make our Board more effective. When a need arises to fill a vacancy, or it is determined that a director possessing particular experiences, skills or characteristics would make our Board more effective, the Governance Committee conducts targeted efforts to identify and recruit individuals who have the identified qualifications.

 

As a part of the search process, the Governance Committee:

 

•  May consult with other directors and members of our senior management; and

 

•  May also hire a search firm to assist in identifying and evaluating potential candidates.

 

    

 

All potential candidates are interviewed by our CEO, our Board Chair, our Governance Committee Chair and, to the extent practicable, the other members of the Governance Committee, and may be interviewed by other directors and members of senior management as desired and as schedules permit.

 

    

 

The General Counsel:

 

•  Reviews a director questionnaire submitted by the candidate; and

 

•  Conducts a background and reference check as appropriate.

 

    

 

The Governance Committee meets to consider the final candidates and makes its recommendation to the Board to nominate or appoint the new director.

 

The selection process for candidates is intended to be flexible, and the Governance Committee, in the exercise of its discretion, may deviate from the selection process when particular circumstances so warrant. The Governance Committee will also consider candidates recommended to our Board by our stockholders. See “Stockholder Recommendations and Nominations of Director Candidatesin this Proxy Statement for more information.


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    DIRECTOR NOMINATION PROCESS     12  

 

 

Director Nominee Skills and Experience Matrix

Our director nominees bring a well-rounded variety of experiences, qualifications, attributes and skills, and represent a mix of deep knowledge of the company and fresh perspectives. The director nominee skills and experience matrix below summarizes some of the key attributes that our Board has identified as particularly valuable to the effective oversight of our company and the execution of our corporate strategy. This director nominee skills and experience matrix is not intended to be an exhaustive list of each of our director nominees’ skills or contributions to the Board. Further information on each director nominee, including some of their specific experience, qualifications, attributes and skills is included in the biographies on pages 14 to 18 of this Proxy Statement.

 

 

Skill

 

 

 

Boze

 

 

Cobert

 

 

Gilyard

 

 

Goodman

 

 

Jenny

 

 

Lopez

 

 

Meaney

 

 

Munoz

 

 

Sulentic

 

 

Yajnik

LOGO  

Cyber Security

                                 
LOGO  

Finance and Accounting

                     
LOGO  

Global Business Operations

                   
LOGO  

Human Capital Management

                     
LOGO  

M&A

                     
LOGO  

Other Public Company Board Service

                       
LOGO  

Real Estate Industry Experience

                       
LOGO  

Risk Management

                   
LOGO  

Senior Leadership/CEO

                     
LOGO  

Sustainability

                           
LOGO  

Technology and Innovation

                         

Demographic Background

                                       

Board Tenure (Years)

  9   5   3   3   6   6   0   1   9   4

Age

  41   63   58   61   66   62   62   63   65   65

Gender

  M   F   M   F   M   M   F   M   M   M

Race/Ethnicity

                                       

Asian

                                     

Black/African American

                                     

Hispanic/Latinx

                                   

White/Caucasian

                           


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    OUR 2022 DIRECTOR NOMINEES     13  

 

 

Skills and Experience Definitions

 

Cyber Security

Experience in the development of technology and processes that protect the storage of information and maintain confidentiality.

Finance and Accounting

High-level expertise in finance and accounting, gained through (i) experience as an operating executive with responsibility for all or a portion of a company’s financial reporting, (ii) experience in the financial sector or private equity or as an audit committee member for publicly traded companies, or (iii) an educational background or training in accounting or finance.

Global Business Operations

International experience, including knowledge of emerging markets or management of business operations and resources that are dispersed across a global platform.

Human Capital Management

Experience and expertise related to human resource issues such as attracting and retaining talent, succession planning, engagement of employees, and the development and evolution of culture, including the alignment of culture and long-term strategy.

M&A

Experience overseeing investment capital decisions, strategic investments and mergers and acquisitions.

Other Public Company Board Service

Experience serving on the boards of other public companies.

Real Estate Industry Experience

Deep commercial real estate operating and investment experience.

Risk Management

Experience assessing risk and reviewing measures to address and mitigate material risks.

Senior Leadership/CEO

Experience serving in senior leadership roles at a large organization.

Sustainability

Experience in sustainability initiatives and practices.

Technology and Innovation

Experience in technology-related business, technological functions or experience implementing innovative technological business strategies, as well as an understanding of emerging technology trends.

 

 

Board Diversity

The following charts summarize the race & ethnicity, gender, independence and tenure of our 2022 director nominees.

 

LOGO

 

Our 2022 Director Nominees

For our upcoming annual meeting, the Board recommends the election of each nominee as a director. Each nominee has informed the Board that he or she is willing to serve as a director.

A brief biography summarizing the background and qualifications of each director nominee is provided on the following pages.

 

 

     LOGO

 

The Board of Directors recommends a vote “FOR” the election of each of the following

2022 Director Nominees for a one-year term.

 


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    OUR 2022 DIRECTOR NOMINEES     14  

 

 

LOGO    Brandon B. Boze   
  

 

Age: 41

Director Since: December 2012

Independent

 

  

 

Board Committee:

•  Executive (Chair)

Skills & Experience

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

•  Sustainability

•  Technology and Innovation

 

  

Qualifications

 

Mr. Boze is the President, a Partner and a member of the Management Committee of ValueAct Capital, a privately owned investment firm that he joined in August 2005.

 

Prior to joining ValueAct Capital, Mr. Boze was an investment banker at Lehman Brothers, focused on power utilities and technology mergers and acquisitions.

 

Mr. Boze brings to our Board experience in finance, strategy, mergers and acquisitions and investment business.

 

He previously served on the board of directors of Trinity Industries, Inc. and Valeant Pharmaceuticals International.

 

Mr. Boze holds a B.E. from Vanderbilt University and is a CFA charterholder.

 

Other Public Company Boards

•  None.

 

              
LOGO    Beth F. Cobert   
  

 

Age: 63

Director Since: May 2017

Independent

 

  

 

Board Committees:

•  Compensation (Chair)

•  Governance

Skills & Experience

•  Cyber Security

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

•  Technology and Innovation

  

Qualifications

 

Ms. Cobert has served as the Chief Operating Officer of the Markle Foundation since July 2020 where she helps lead their Rework America Alliance Initiative, a coalition of non-profits, private sector companies, educators and others that focuses on enabling workers to secure good jobs in the digital economy. She also led Markle’s Skillful initiative as Chief Executive Officer from June 2017 to July 2021.

 

She previously served as the Acting Director of the U.S. Office of Personnel Management from July 2015 to January 2017, and as the Deputy Director for Management of the U.S. Office of Management and Budget from October 2013 to July 2015. From 2001 to October 2013, Ms. Cobert served as a Senior Partner at McKinsey & Company, a global business strategy consulting firm. From 1990 to 2001, Ms. Cobert was a Partner at McKinsey & Company. She joined the firm in 1984 as an Associate and served in various leadership roles at McKinsey & Company.

 

Ms. Cobert brings to our Board over 30 years of experience as a consultant in business strategy, where she worked with corporate, non-profit and government entities on key strategic, operational and organizational issues across a range of sectors, including financial services, health care, legal services, real estate and telecommunications. Our Board also benefits from Ms. Cobert’s government service.

 

Ms. Cobert previously served on the Board of Trustees of Princeton University, as a member of the board of directors and chair of the United Way of the Bay Area and as a member of the Stanford University Graduate School of Business Advisory Council.

 

Ms. Cobert holds a B.A. from Princeton University and an M.B.A. from Stanford University.

 

Other Public Company Boards

None.

 

              


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    OUR 2022 DIRECTOR NOMINEES     15  

 

 

LOGO    Reginald H. Gilyard   
  

 

Age: 58

Director Since: November 2018

Independent

 

  

 

Board Committee:

•  Compensation

•  Governance

Skills & Experience

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Real Estate Industry Experience

•  Risk Management

•  Technology and Innovation

  

Qualifications

Mr. Gilyard has served as a Senior Advisor to The Boston Consulting Group, Inc. (BCG), a global management consulting firm, since August 2017. Prior to this role, Mr. Gilyard served as the Dean of The Argyros School of Business and Economics at Chapman University from August 2012 to July 2017. Prior to joining Chapman University, Mr. Gilyard served as Partner and Managing Director at BCG, where he led strategy, M&A and business transformation initiatives for large corporations, from 1996 to 2012. Prior to BCG, he served nine years in the U.S. Air Force and three years in the U.S. Air Force Reserves, rising to Major in the Reserves.

 

Mr. Gilyard brings to our Board more than 20 years of experience developing and implementing successful strategies for Fortune 500 companies, educational institutions and large national foundations.

 

He serves on the board of directors of First American Financial Corporation, Orion Office REIT Inc. and Realty Income Corporation. He also serves as the Board Chair of Pacific Charter School Development, a real estate development company serving low income families in urban centers across the country.

 

Mr. Gilyard holds a B.S. from the United States Air Force Academy, an M.S. from the United States Air Force Institute of Technology and an M.B.A. from Harvard Business School.

 

Other Public Company Boards

•  First American Financial Corporation

•  Orion Office REIT Inc.

•  Realty Income Corporation

 

              
LOGO    Shira D. Goodman   
  

 

Age: 61

Director Since: May 2019

Independent

 

  

 

Board Committees:

•  Audit (Chair)

•  Compensation

Skills & Experience

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Risk Management

•  Senior Leadership/CEO

•  Sustainability

  

Qualifications

Ms. Goodman has served as an Advisory Director to Charlesbank Capital Partners, a private equity firm, since January 2019. She previously served as the Chief Executive Officer of Staples, Inc. from September 2016 to January 2018. Ms. Goodman served in roles with increasing responsibility at Staples since joining Staples in 1992, including President and Interim Chief Executive Officer from June 2016 to September 2016, President, North American Operations from January 2016 to June 2016, and President, North American Commercial from February 2014 to June 2016.

 

Prior to that, she served as Executive Vice President of Global Growth from February 2012 to February 2014, Executive Vice President of Human Resources from March 2009 to February 2012, Executive Vice President of Marketing from May 2001 to March 2009, and in various other management positions. Prior to Staples, Ms. Goodman worked at Bain & Company from 1986 to 1992, in project design, client relationships and case team management.

 

Ms. Goodman brings to our Board more than 25 years of experience in business operations, marketing, sales force management, human resources, business growth and distribution logistics.

 

She serves on the board of directors of CarMax, Inc. and previously served on the board of directors of Henry Schein, Inc., Staples, Inc. and The Stride Rite Corporation.

 

Ms. Goodman holds a B.A. from Princeton University, an M.S. in Management from the Massachusetts Institute of Technology and a J.D. from Harvard University.

 

Other Public Company Boards

•  CarMax, Inc.

 

           


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    OUR 2022 DIRECTOR NOMINEES     16  

 

 

LOGO    Christopher T. Jenny
  

 

Age: 66

Director Since: January 2016

Independent

 

  

 

Board Committees:

•  Audit

•  Governance (Chair)

Skills & Experience

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

  

Qualifications

Mr. Jenny has served as the Chief Executive Officer of Jennus Innovation, a business development incubator/accelerator, since February 2021 and as its Chair since January 2018. He previously served as a Senior Advisor to EY-Parthenon a global strategy consulting organization, from January 2016 to December 2018 and as a Senior Managing Director from August 2014 to December 2015. He previously served as President and Senior Partner with The Parthenon Group LLC, a Boston-based private management consulting firm, from 1995 to 2014 prior to its merger with Ernst & Young in August 2014. Prior to joining The Parthenon Group LLC in 1995, Mr. Jenny was a Partner at Bain & Company, Inc., a global business strategy consulting firm.

 

Mr. Jenny brings to our Board more than 30 years of experience as a consultant in business strategy, and has worked on issues related to business-unit strategy, profit improvement and mergers and acquisitions. He has experience as a senior operating executive and has managed portfolio companies for two of the nation’s leading private-equity firms.

 

He is a member of the board of directors of Jennus Innovation, The Guardian Life Insurance Company of America, Mobile Virtual Player and PLT4M. He previously served on the board of directors of Mac-Gray Corporation.

 

Mr. Jenny holds a B.A. from Dartmouth College and an M.B.A. from Harvard Business School.

 

Other Public Company Boards

 

None.

 

              
LOGO    Gerardo I. Lopez   
  

 

Age: 62

Director Since: October 2015

Independent

 

  

 

Board Committees:

  Compensation

  Executive

  Governance

Skills & Experience

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

•  Sustainability

•  Technology and Innovation

  

Qualifications

Mr. Lopez has served as an Executive-in-Residence at Softbank Investment Advisers, Inc. since October 2021 and previously served as an Operating Partner and Head of its Operating Group from December 2018 to October 2021. Prior to Softbank, he served as an Operating Partner at High Bluff Capital from June 2018 to December 2018. From January 2018 to March 2018, Mr. Lopez served as a Senior Advisor to Extended Stay America, Inc. and its paired-share REIT, ESH Hospitality, Inc. and was its President and Chief Executive Officer from August 2015 to December 2017. Mr. Lopez previously served as President and Chief Executive Officer of AMC Entertainment Holdings, Inc. and its subsidiary, AMC Entertainment Inc., from March 2009 through August 2015. Prior to that, he was Executive Vice President of Starbucks Coffee Company and President of its Global Consumer Products, Seattle’s Best Coffee and Foodservice divisions from September 2004 to March 2009, and President of the Handleman Entertainment Resources division of Handleman Company from November 2001 to September 2004. Mr. Lopez has also held a variety of executive management positions with International Home Foods, Frito Lay, Pepsi-Cola and the Procter & Gamble Company.

 

Mr. Lopez brings to our Board his skills, knowledge and business leadership as a senior executive at hospitality, entertainment and consumer products companies. He has over 35 years of experience in marketing, sales and operations and management in public and private companies and has public company experience across diverse consumer-focused industries.

 

He serves on the board of directors of Newell Brands and Realty Income Corporation, and previously served on the board of directors of Brinker International, Inc., Extended Stay America, Inc., AMC Entertainment Holdings, Inc., Digital Cinema Implementation Partners, National Cinemedia, LLC, Open Road Films, Safeco Insurance, TXU, Inc. and Recreational Equipment, Inc.

 

Mr. Lopez holds a B.A. from George Washington University and an M.B.A. from Harvard Business School.

 

Other Public Company Boards

 

•  Newell Brands

•  Realty Income Corporation

 

              


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    OUR 2022 DIRECTOR NOMINEES     17  

 

 

LOGO    Susan Meaney   
  

 

Age: 62

Director Since: March 2022

Independent

 

  

 

Board Committees:

•  Audit

Skills & Experience

•  Finance and Accounting

•  Global Business Operations

•  Other Public Company Board Service

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

  

Qualifications

Ms. Meaney has served as a Senior Advisor to KSL Capital Partners, an investor and operator of travel and leisure businesses, since May 2020. She previously served as a Managing Director of Makena Capital Management, an investment management firm, from 2006 to December 2019. She was a member of the firm’s Management Committee, and one of the firm’s founding partners. Ms. Meaney was responsible for managing the firm’s real estate investments as well as overseeing the real assets portfolio. Prior to joining Makena Capital, Ms. Meaney was the Director of Real Estate and Real Assets Investments for the William & Flora Hewlett Foundation from 2002 to 2006. She served as a Managing Director at the Stanford Management Company from 1993 to 2001, where she co-managed the real estate group. Prior to that, she was responsible for the development and management of the Stanford Research Park.

 

Ms. Meaney brings to our Board a real estate investor-operator mindset. She is an accomplished investor with a deep and varied background in real estate and real assets.

 

She is a member of the board of directors of KKR Real Estate Select Trust and serves on the Stanford Bing Overseas Study Program Advisory Council. She is also a member of the board of directors of the Hewlett Foundation and Chair of the Investment Committee, a Trustee of the Urban Land Institute and has recently served on the Dartmouth Investment Committee. She previously served on the Board of Advisors of the Tuck School at Dartmouth.

 

Ms. Meaney holds an A.B. in Economics, with Honors from Stanford University and an M.B.A. from The Tuck School at Dartmouth.

 

Other Public Company Boards

•  KKR Real Estate Select Trust

 

              
LOGO    Oscar Munoz   
  

 

Age: 63

Director Since: November 2020

Independent

 

  

 

Board Committees:

•  Audit

•  Governance

Skills & Experience

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Risk Management

•  Senior Leadership/CEO

•  Sustainability

•  Technology and Innovation

  

Qualifications

Mr. Munoz has served as a Special Advisor to United Airlines Holdings, Inc. since May 2021. He previously served as its Executive Chair from May 2020 to May 2021, its Chief Executive Officer from September 2015 to May 2020 and President from September 2015 to August 2016. Prior to United, Mr. Munoz served as the President and Chief Operating Officer of CSX Corporation, a railroad and intermodal transportation services company, from February 2015 to September 2015, as Executive Vice President and Chief Operating Officer of CSX from 2012 to 2015, and as Executive Vice President and Chief Financial Officer of CSX from 2003 to 2012.

 

Mr. Munoz brings to our Board his skills, knowledge and business leadership as a senior executive in various financial and strategic capacities at some of the world’s most recognized consumer brands.

 

He is a member of the board of directors of Archer Aviation, Inc., salesforce.com, inc. and Univision Holdings, Inc. Mr. Munoz also serves on the board of trustees of Fidelity Investments, the University of Southern California and The Brookings Institution. He previously served on the board of directors of Continental Airlines, Inc., CSX Corporation and United Airlines Holdings, Inc.

 

Mr. Munoz holds a B.S. in business administration from the University of Southern California and an M.B.A. from Pepperdine University.

 

Other Public Company Boards

•  Archer Aviation, Inc.

•  salesforce.com, inc.

 

              


Table of Contents

 

CBRE 2022 PROXY STATEMENT    PROPOSAL 1: ELECT DIRECTORS    OUR 2022 DIRECTOR NOMINEES     18  

 

 

LOGO    Robert E. Sulentic
  

 

Age: 65

Director Since: December 2012

 

  

 

Board Committees:

•  Executive

Skills & Experience

•  Cyber Security

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Other Public Company Board Service

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

•  Sustainability

•  Technology and Innovation

  

Qualifications

Mr. Sulentic has been our President and CEO since December 2012. Previously, he served in several senior leadership roles, including Group President with responsibility for Asia Pacific, EMEA and the Development Services business; Chief Financial Officer; and President with responsibility for all business segments. At Trammell Crow Company, which CBRE acquired in December 2006, Mr. Sulentic served as Chief Financial Officer, Chief Executive Officer and Board Chair.

 

This deep and varied background enables Mr. Sulentic to bring significant strategic, financial and operating skills to our Board.

 

Mr. Sulentic previously served on the following public company boards: CBRE Acquisition Holdings, Inc. (Board Chair), which merged with Altus Power, Inc. (NYSE:AMPS); Staples, Inc. (Independent Board Chair) and Trammell Crow Company (Board Chair).

 

Mr. Sulentic holds a B.A. from Iowa State University and an M.B.A. from Harvard Business School.

 

Other Public Company Boards

None.

              
LOGO    Sanjiv Yajnik
  

 

Age: 65

Director Since: November 2017

Independent

 

  

 

Board Committees:

•  Audit

•  Compensation

Skills & Experience

•  Cyber Security

•  Finance and Accounting

•  Global Business Operations

•  Human Capital Management

•  M&A

•  Real Estate Industry Experience

•  Risk Management

•  Senior Leadership/CEO

•  Sustainability

•  Technology and Innovation

  

Qualifications

Mr. Yajnik has been the President of Capital One Financial Services, a division of Capital One, since June 2009. He is also President and Director of Capital One National Association, one of Capital One’s two national bank subsidiaries, and serves on Capital One’s Executive Committee. In addition, Mr. Yajnik oversees Capital One’s community relations throughout Texas, Oklahoma and Louisiana as President of the company’s South-Central Region. Since joining Capital One in 1998, he has held a number of senior leadership positions in Europe, Canada and the United States.

 

Prior to Capital One, he held leadership positions at PepsiCo and Circuit City and was a Chief Engineer for Mobil Oil Corporation’s shipping business.

 

He serves as the Chair of the Collin County Business Alliance, Co-Chair of the Indian American CEO (IACEO) Council and is a member of the executive board of the Dallas Symphony Association. Mr. Yajnik previously served as Chair of the Dallas Symphony Association and Texas Economic Development Corporation.

 

Mr. Yajnik brings to our board his broad business background and his experience in leading the transformation of a large, service-oriented global organization through technology enablement.

 

Mr. Yajnik received an M.B.A. with honors from the University of Western Ontario, Canada, and completed the Executive Management Program at Stanford University. He is a medalist Chartered Engineer (I), and graduated with distinction from the Marine Engineering Research Institute, India.

 

Other Public Company Boards

None.

              

Dr. Laura D. Tyson, who currently serves on our Board, is not eligible to stand for re-election due to our term limit restrictions and will retire from our Board at the expiration of her current term at the 2022 Annual Meeting. We are grateful for her contributions to CBRE.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    GOVERNANCE HIGHLIGHTS     19  

 

 

Corporate Governance

Our Corporate Governance framework is designed to strengthen the Board of Directors’ oversight of management and to serve the long-term interests of our stockholders, employees and other stakeholders. Governance is a continuous focus for us, starting with our Board and committees of the Board that meet several times throughout the year, and extending to management and our employees. We are committed to maintaining the highest standards of business conduct and corporate governance.

Governance Highlights

 

 

Corporate Governance

 

  Robust director selection process resulting in a diverse Board in terms of gender, race, ethnicity, experience, skills and tenure

 

  10 director nominees, 9 of whom are independent

 

  Director Term Limits (12 years)

 

  Independent Board Chair
  Annual Board, committee and individual director evaluations and self-assessments

 

  Maximum of one Board-nominated management director

 

  Robust Standards of Business Conduct and governance policies

 

  No “over-boarding” by our directors on other public-company boards
 

 

 

Compensation

 

  Pay-for-performance compensation program, which includes performance-based equity grants

 

  Annual “say on pay” votes, with most recent favorable “say on pay” vote of approximately 93%
  Stock ownership requirements for directors and executive officers

 

  Policy restricting trading, and prohibiting hedging and short-selling, of CBRE stock

 

  Compensation clawback policy for executive officers
 

 

 

Stockholder Rights

 

  Annual election of all directors

 

  Majority voting requirement for directors in uncontested elections

 

  Stockholder rights to call special meetings

 

  No poison pill takeover defense plans
  Stockholders may act by written consent

 

  Proxy access for director nominations

 

  Ongoing stockholder outreach and engagement
 

 

 

Corporate Governance Materials

 

The following materials, along with other Governance documents, are available on our website, https://ir.cbre.com/governance/governance-documents/default.aspx.

 

•  Standards of Business Conduct

 

•  Corporate Governance Guidelines

 

•  Policy Regarding Transactions with Interested Parties
and Corporate Opportunities

 

•  Whistleblower Policy

 

•  Equity Award Policy

 

•  Anti-Corruption Policy

 

•  Charter, By-laws and Board Committee Charters

 

 

These materials are also available in print to any person, without charge, by emailing us at investorrelations@cbre.com or by written request to:

 

Investor Relations Department

CBRE Group, Inc.

2100 McKinney Avenue, Suite 1250

Dallas, Texas 75201


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    BOARD STRUCTURE AND LEADERSHIP     20  

 

 

Governance Policies & Practices

Standards of Business Conduct. Our Board has adopted a Standards of Business Conduct applicable to all directors, officers and employees that states our corporate values and ethical standards, including our commitment to respect, integrity, service and excellence. We are firmly committed to conducting business with the highest integrity and in compliance with the letter and spirit of the law. If the Board grants any waivers from the Standards of Business Conduct to any of our directors or executive officers, or if we amend such policies, we will, if required, disclose these matters through the Investor Relations section of our website on a timely basis.

Corporate Governance Guidelines. Our Board has adopted Corporate Governance Guidelines, which provide a framework within which our Board, assisted by its committees, directs our affairs.

Other key governance policies include:

Policy Regarding Transactions with Interested Parties and Corporate Opportunities. Our Board has adopted a related-party transactions and corporate opportunities policy that directs our Audit Committee to review and approve, among other things, potential conflicts of interest between us and our directors and executive officers.

Whistleblower Policy. We have a Whistleblower Policy that directs our Audit Committee to investigate complaints (received directly or through management) regarding:

 

 

deficiencies in or noncompliance with our internal accounting controls or accounting policies;

 

 

circumvention of our internal accounting controls;

 

 

fraud in the preparation or review of our financial statements or records;

 

 

misrepresentations regarding our financial statements or reports;

 

 

violations of legal or regulatory requirements; and

 

 

retaliation against whistleblowers.

Equity Award Policy. We have an Equity Award Policy that is designed to maintain the integrity of the equity award process and to ensure compliance with all applicable laws. The Equity Award Policy sets forth the procedures that must be followed in connection with employee awards. Our Equity Award Policy is described in greater detail under the heading “Compensation Discussion and Analysis—Section 6. Compensation Policies and Practices.”

Anti-Corruption Policy. Our global Anti-Corruption Policy contains strict prohibitions on any employee or agent of the company offering or providing anything that could be perceived as a bribe to gain or maintain any business advantage.

Compensation Clawback Policy. We have a policy that permits us, subject to the discretion and approval of our Board, to recover cash-based and performance-based-equity incentive compensation paid to any current or former “Section 16 officer” if there is a restatement of our financial results in certain circumstances. These circumstances are described in greater detail under “Compensation Discussion and Analysis—Section  6. Compensation Policies and Practices.”

Board Structure and Leadership

Our Board currently consists of 11 directors, 10 of whom have been nominated for re-election. As previously noted, Dr. Tyson currently serves on our Board, but will not stand for re-election due to our term limit restrictions and will retire from our Board following the expiration of her current term at the Annual Meeting.

All of our directors are elected at each annual meeting of stockholders and hold office until the next election. Our Board has authority under our by-laws to fill vacancies and to increase or, upon the occurrence of a vacancy, decrease its size between annual meetings of stockholders.

Since 2001, we have separated the roles of CEO and Chair of the Board in recognition of the differences between the two positions. Our CEO is responsible for setting the strategic direction and overseeing the day-to-day leadership and performance of the company. The Chair of our Board, who is independent of management, provides oversight and guidance to our CEO.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    BOARD MEETINGS AND COMMITTEES     21  

 

 

Board Meetings and Committees

Our Board held nine meetings during fiscal year 2021 to review significant developments, engage in strategic planning and act on matters requiring Board approval. In 2021, each incumbent director attended at least 75% of our Board meetings and meetings of committees on which he or she served (taken in the aggregate) during the period that he or she served thereon, except for Mr. Lopez whose attendance was 71% in 2021 due to an illness that prevented him from attending meetings beginning in May 2021. Mr. Lopez attended 100% of the Board and committee meetings after his recovery.

Our Board currently has four standing committees that met or acted by written consent during fiscal year 2021: the Audit Committee, the Compensation Committee, the Governance Committee and the Executive Committee.

The following table describes the current members of each of the committees of our Board, and the number of meetings held during fiscal year 2021:

 

Director

     Board      Audit      Compensation      Governance      Executive

Brandon B. Boze

     CHAIR       

 

      

 

      

 

     CHAIR

Beth F. Cobert

           

 

     CHAIR            

 

Reginald H. Gilyard

           

 

                

 

Shira D. Goodman

          CHAIR            

 

      

 

Christopher T. Jenny

                

 

     CHAIR       

 

Gerardo I. Lopez

           

 

              

Susan Meaney

                

 

      

 

      

 

Oscar Munoz

                

 

           

 

Robert E. Sulentic

           

 

      

 

      

 

    

Laura D. Tyson(1)

                

 

      

 

      

 

Sanjiv Yajnik

                        

Number of Meetings

     9      9      3      4      1

 

(1)

Dr. Tyson currently serves on our Board, but is not eligible to stand for re-election due to our term limit restrictions and will retire from our Board at the expiration of her current term at the 2022 Annual Meeting.

Each committee (other than the Executive Committee) is composed entirely of directors whom our Board has determined to be independent under current NYSE standards. Each committee operates under a charter approved by our Board that sets out the purposes and responsibilities of the committee and that are published in the Corporate Governance section of the Investor Relations page on our website at www.cbre.com. In accordance with our Board’s Corporate Governance Guidelines, our Board and each of the Audit Committee, Compensation Committee and Governance Committee conducts an annual performance self-assessment with the purpose of increasing the effectiveness of our Board and its committees. The responsibilities of our Board committees are described below.

Board Attendance at Annual Meeting of Stockholders

Although the Board understands that there may be situations that prevent a director from attending an annual meeting of stockholders, it is the Board’s policy that all directors should attend these meetings. All of our then-serving directors attended our 2021 annual meeting of stockholders on May 19, 2021, except for Mr. Lopez who was unable to attend due to an illness.

Independent Director Meetings

Our non-management directors meet in executive session without management present each time the full Board convenes for a regularly scheduled meeting. If our Board convenes for a special meeting, the non-management directors will meet in executive session if circumstances warrant. The Chair of our Board is a non-management director that presides over executive sessions of our Board.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    BOARD MEETINGS AND COMMITTEES     22  

 

 

Board Committees

 

     
Audit Committee   

Chair:

Shira D. Goodman

  

Members:

Christopher T. Jenny*

Susan Meaney

Oscar Munoz*

Laura D. Tyson*

Sanjiv Yajnik*

The Audit Committee provides oversight of our accounting and financial reporting and disclosure processes, the adequacy of the systems of disclosure and internal control established by management, our compliance with legal and regulatory requirements and the audit of our financial statements.

THE AUDIT COMMITTEE ALSO:

 

  Oversees our risk assessment and risk management process generally;

 

  Retains, compensates, oversees and terminates the independent auditor and evaluates its qualifications, independence and performance;

 

  Pre-approves all audit and any non-audit services performed by the independent auditor;

 

  Reviews the results of the independent audit and internal audits as well as reports from our Chief Financial Officer, our Chief Ethics & Compliance Officer, our Head of Internal Audit, our Chief Digital & Technology Officer and our General Counsel and Chief Risk Officer;

 

  Reviews the independent auditor’s report describing our internal quality-control procedures and any material issues raised by the most recent internal quality-control review or any inquiry by governmental authorities;
  In consultation with the independent auditor, management and internal auditors, reviews the integrity of our internal and external financial reporting processes;

 

  Reviews financial statements and releases and guidance provided to analysts and rating agencies;

 

  Reviews the Chief Ethics & Compliance Officer’s report on the effectiveness of our compliance with applicable ethical, legal, and regulatory requirements;

 

  Reviews our cybersecurity readiness and other policies and procedures related to data governance; and

 

  Establishes procedures to handle complaints regarding accounting, internal controls or auditing matters.
 

 

In March 2020, approximately two weeks prior to the onset of the Covid-19 pandemic in the Americas, management disclosed material weaknesses in internal controls over financial reporting related to our Global Workplace Solutions segment in the Europe, Middle East & Africa region, or GWS EMEA. We intend to complete the remediation in 2022 with the delivery of additional training of relevant GWS EMEA resources and the operation of the remediated controls for a sufficient period of time for management to conclude, through testing, that these controls are operating effectively.

The Audit Committee’s oversight of these issues is one of its highest priorities. Since March 2020, management has invested significant effort and resources around the implementation of our remediation plans to address these items. As of December 31, 2021, management ensured that the root causes contributing to the majority of the previously reported issues were remediated. While we intend to complete the remediation in 2022, there can be no assurances that we will be able to successfully complete the remediation within the contemplated timeline.

 

 

 

 

All members of the Audit Committee are “financially literate” under NYSE listing standards.

* These four directors meet the SEC’s qualifications for an “audit committee financial expert.”

All members of the Audit Committee are independent within the meaning of SEC regulations, the listing standards of the NYSE and our Board’s Corporate Governance Guidelines, in each case, as such regulations, standards and guidelines apply to audit committee members.

 

 


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    BOARD MEETINGS AND COMMITTEES     23  

 

 

     
Compensation Committee   

Chair:

Beth F. Cobert

  

Members:

Reginald H. Gilyard

Shira D. Goodman

Gerardo I. Lopez

Sanjiv Yajnik

The Compensation Committee oversees the development and administration of our executive compensation policies, plans and programs, including reviewing and approving compensation of our executive officers and any compensation contracts or arrangements with our executive officers.

IN ADDITION, THE COMPENSATION COMMITTEE:

 

  Reviews the performance of our executive officers, including our CEO;

 

  Retains Frederic W. Cook & Co., Inc., or FW Cook, as its independent compensation consultant. FW Cook reports directly to the Committee, attends meetings and provides advice to the Committee; and
  Considers the results of annual stockholder advisory votes on the compensation of our named executive officers in connection with the discharge of its responsibilities.
 

 

 

Each Compensation Committee member qualifies as a “non-employee director” for purposes of the Exchange Act. All members are “independent” under NYSE listing standards applicable to compensation committee members. All members of the Compensation Committee are independent within the meaning of SEC regulations, the listing standards of the NYSE and our Board’s Corporate Governance Guidelines, in each case, as such regulations, standards and guidelines apply to compensation committee members.

 

 

 

 

     
Governance Committee   

Chair:

Christopher T. Jenny

  

Members:

Beth F. Cobert

Reginald H. Gilyard

Gerardo I. Lopez

Oscar Munoz

The Governance Committee oversees our Board’s corporate governance procedures and practices, including:

 

 

Recommendations of individuals for service on our Board; and

 

 

Recommendations to our Board regarding corporate governance matters and practices, including director compensation and directors’ and officers’ liability insurance.

In addition, the Governance Committee consults with our CEO regarding management succession planning.

 

 

 

All members are “independent” under NYSE listing standards and rules.

 

 

 

 

     
Executive Committee   

Chair:

Brandon B. Boze

  

Members:

Gerardo I. Lopez

Robert E. Sulentic

 

The Executive Committee implements policy decisions of our Board and is authorized to act on our Board’s behalf between meetings of our Board, including by approving certain transactions within dollar thresholds established by our Board.

The Executive Committee also engages in the periodic review of our balance sheet management, borrowings and capital markets activities.

 

 

 

Compensation Committee Interlocks and Insider Participation

Neither Mses. Cobert and Goodman or Messrs. Gilyard, Lopez and Yajnik (all members of the Compensation Committee) has ever been an officer or employee of the company or any of its subsidiaries. In addition, during 2021, none of our directors was employed as an executive officer of another entity where any of our executive officers served on that entity’s board of directors or compensation committee (or its equivalent).


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    SELECTED AREAS OF BOARD OVERSIGHT     24  

 

 

Selected Areas of Board Oversight

Oversight of Risk Management

 

 
The Board oversees risk management.    

Full Board

 

Our Board regularly reviews information regarding our most significant strategic, operational, financial and compliance risks and is responsible for ensuring that the company has crisis management and business continuity plans in place to deal with potential crises. Our Board maintains direct oversight over our enterprise risk management process rather than delegating this function to a Board or management committee.

 

Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee chair reports about such risks. These committee chair reports are presented at every regularly scheduled Board meeting.

    LOGO
 
Company management is charged with managing risk through rigorous risk mitigation activities and strong internal controls.    

Management

 

Our Executive Risk Committee is chaired by our Chief Risk Officer and consists of senior executives representing a cross-section of our lines of business, operational areas and geographic regions. Our Executive Risk Committee is responsible for identifying and assessing our most significant risks. After this identification and assessment process, we assign each of our top risks to an executive-level (typically C-suite) risk owner, who is then charged with developing mitigation action plans which are then presented to the Executive Risk Committee.

 

Multiple times during the year, our Chief Risk Officer provides a detailed presentation on identified significant risks to the Board or a committee of the Board. Certain risks that are determined to be best managed directly by the Board versus management or that are in areas specific to a particular Board committee expertise are monitored and overseen at the Board or committee level as appropriate.

    LOGO
 
Board committees, which meet regularly and report back to the full Board, play significant roles in carrying out our Board’s risk oversight function.    

The Audit Committee

 

oversees management of risks related to our financial reports and record-keeping and potential conflicts of interest. They also oversee our risk assessment and risk management processes more generally including major business, financial, information technology risks (including cybersecurity and data security risks), legal and reputational risk exposures, as well as risks related to crisis management and business continuity.

 

The Audit Committee receives quarterly reports from our Chief Financial Officer, our Chief Ethics & Compliance Officer, our Head of Internal Audit, our Chief Digital & Technology Officer as well as updates from our General Counsel and Chief Risk Officer on any developments affecting our overall risk profile and on issues of non-compliance and incident management.

   
   

The Compensation Committee

 

is responsible for overseeing the management of risks relating to our compensation plans and arrangements. For additional information regarding the Compensation Committee’s assessment of our compensation-related risk, please see “Compensation Discussion and Analysis—Section 3. How We Make Compensation Decisions—Compensation Risk Assessment.”

 

The Governance Committee

 

manages risks associated with corporate governance practices, investor engagement, the independence of the Board and the composition of our Board and its committees.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    SELECTED AREAS OF BOARD OVERSIGHT     25  

 

 

Oversight of Strategy

Our Board is responsible for providing governance and oversight over the strategy, operations and management of our company. Each quarter, our Board and management devote a substantial amount of time in strategy-focused meetings discussing strategic issues that are most important to the company. At each regular Board meeting, our Board receives business and strategy updates from leaders across the company and reviews our operating plans and overall financial performance, and provides significant guidance and feedback. Annually, our Board reviews and approves our capital allocation and spending budgets, which are designed to strategically deploy capital intended to facilitate investments required to achieve operational excellence.

Oversight of ESG, Sustainability and Human Capital Management

As part of our Board’s strategic and risk oversight, our Board oversees our ESG strategic planning and risk management policies and procedures. The Board has made a deliberate decision to retain governance of ESG, sustainability and human capital management matters at the Board level. The Board chose not to delegate these matters to a specific committee because it believes that these matters are integral to the company’s future success. Throughout the year, our Board receives reports and engages in discussions with management on key ESG and sustainability matters, including progress on sustainability services we provide to clients to meet their commercial real estate sustainability goals, the company’s diversity, equity and inclusion initiatives, and other efforts to be a responsible company in our communities. The Board also receives annual updates on how ESG risk is being addressed, mitigated and managed across the company, including sustainable development considerations that influence market, reputational, operational and political risks.

Oversight of Succession Planning

Our Board reviews management succession and development plans with the CEO on at least an annual basis, and as needed throughout the year. These plans include CEO succession in the event of an emergency or retirement, as well as the succession plans for the CEO’s direct reports and other employees critical to our continued operations and success.

Oversight of Covid-19 Risks

Over the course of 2021, our Board was actively engaged with management in monitoring the pandemic’s impacts to our business, and management was in regular communication with the Board about the assessment and management of the strategic, operational and financial risks to the company associated with the pandemic.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    INFORMATION TECHNOLOGY/CYBER SECURITY     26  

 

 

Information Technology/Cyber Security

Information technology and cyber security are critical components of our risk management program. The Audit Committee receives regular, quarterly reports on these matters from our Chief Digital & Technology Officer and our Chief Information Security Officer. These reports include the status of projects to strengthen the company’s security systems and improve cyber readiness, as well as on existing and emerging threat landscapes.

Risk Oversight of IT/Cyber Security

Our information technology and cyber security program is focused on the following areas:

 

GOVERNANCE

 

We operate under an Information Security Management System (“ISMS”) which is clearly defined through specific policies and standards.

  

•  Policies are owned by senior management to ensure that they are well embedded in the business and all subsequent standards align to the wider business strategy.

 

•  At least annually, these policies are reviewed to ensure they remain relevant.

 

•  Third-party subject matter experts are leveraged across several fields to ensure we maintain an approach that is in line with leading industry recommendations.

 

•  Through our ISMS, we meet or exceed ISO and local legislative frameworks.

 

SECURITY AWARENESS / TRAINING

 

All employees are required to adhere to our Standards of Business Conduct, which identifies an employee’s responsibility for information security.

 

  

•  We provide annual cyber security training for all employees, as well as additional role-specific information security training.

 

•  Security awareness articles are disseminated periodically throughout the year.

 

•  We sponsor a “Cyber Security Month” in October each year and conduct regular phishing exercises.

 

TECHNICAL SAFEGUARDS

 

We deploy measures to protect our cloud environments, network perimeter and internal Information Technology platforms.

  

Protection measures include:

 

•  internal and external firewalls;

 

•  network intrusion detection and prevention;

 

•  penetration testing;

 

  

 

•  vulnerability assessments;

 

•  threat intelligence; plus

 

•  anti-malware and access controls.

SUPPLIER RELATIONSHIPS

 

We conduct vendor security reviews for prospective and current third-party suppliers and service providers.

  

Vender security reviews evaluate numerous key security controls and the outputs of these reviews are used:

 

•  as part of business decisions regarding procurement; and

 

•  to assess their overall security posture relative to a defined set of security criteria.

 

INCIDENT RESPONSE PLANS

 

We maintain and update incident response plans that address the life cycle of a cyber incident and routinely evaluate the effectiveness of such plans.

 

  

Incident response plans focus on:

 

•  technical issues, including detection, response and recovery;

 

•  cyber threats, with a focus on external communication and legal compliance; and

 

•  breach simulations and penetration testing through internal and external exercises.

 

CERTIFICATIONS

 

Our security program is audited on an annual basis by an accredited certification body, leading accounting firms and institutional clients.

 

  

•  We have obtained ISO 27001 certifications for our Americas, EMEA and APAC and India IT offices.

 

•  We have also certified our platform to SOC1 Type II and SOC2 Type II standards.

 

INSURANCE   

•  We maintain an information security insurance policy to protect our company against computer-related crimes and losses.

 


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    ENVIRONMENTAL AND SOCIAL RESPONSIBILITY     27  

 

 

Environmental and Social Responsibility

We are determined to set the pace for our sector on key environmental and social topics. We recognize the impact we have on our communities, clients, employees and stakeholders—and why our focus areas of corporate responsibility are key to providing leadership that grows our business in environmentally and socially sustainable ways.

In 2021, we consolidated leadership for ESG matters under a single leader—our Chief Responsibility Officer, a senior executive-level position reporting directly to our Chief Executive Officer. We believe this move gives ESG the visibility, sponsorship and accountability required to build on the gains we have made over the past several years.

In recognition of our progress in ESG, CBRE is the only commercial real estate services provider included in the Dow Jones Sustainability World Index—a feat that we have accomplished for the past three years. In addition, CBRE rose to #11 on Barron’s 100 Most Sustainable Companies in the U.S. list in February 2022, a list we have made for five consecutive years.

Environmental Sustainability

As the world’s largest manager of commercial properties, we believe that we can play an outsized role in helping to limit the rise in global temperatures, while improving the efficiency and sustainability of building operations. There is also a compelling business benefit to us, given the heightened demand from our clients for sustainability services. CBRE signed the Climate Pledge and committed to achieve net-zero carbon emissions by 2040—10 years ahead of the Paris Agreement. We have committed to science-based greenhouse gas reduction targets with a goal of cutting our operational emissions by more than two-thirds by 2035 through 100% renewable electricity in our offices by 2025 and electric vehicle fleet transitions. We also set similarly ambitious greenhouse gas emissions reduction goals for the properties and facilities we manage for our clients.

Our Commitment to Transparency

We are committed to providing transparent, meaningful sustainability information to stakeholders and have published SASB and TCFD-aligned disclosures in our Corporate Responsibility Report since 2017 and 2019, respectively. In addition, our report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards and we have supported the Ten Principles of the United Nations Global Compact (UNGC) for the 14th consecutive year.

Social Responsibility

People are at the center of our strategy to deliver measurably superior outcomes for clients, and therefore we place a high priority on attracting, retaining and developing the best talent. We champion four key values—Respect, Integrity, Service, Excellence—which serve as the foundation upon which our company is built and as a touchstone for how our employees conduct themselves.

Our Covid-19 Response

We made diligent efforts to help our CBRE colleagues and communities that were most acutely impacted by the pandemic. Since the beginning of the Covid-19 pandemic, the company’s Employee Resilience Fund has provided over 17,500 grants totaling $7.7 million to CBRE colleagues who faced financial hardship due to Covid-19.

We also developed and implemented many initiatives during the Covid-19 pandemic to promote and ensure the safety and wellbeing of our employees, including:

 

 

Adoption of benefit programs to support our people during the Covid-19 pandemic, including special Covid-19 paid time off (PTO) in the U.S. for employees required to miss work due to their own Covid-19 illness or to take care of family members without impacting their accrued PTO;

 

 

Other relevant region-specific benefits to employees globally;

 

 

A Covid-19 Risk Assessment Center, responsible for managing and monitoring positive Covid-19 cases among CBRE employees and advising on Covid-19 topics such as travel bans and return to work;

 

 

A robust communications and safety program to provide up-to-date information, guidance and resources—including a bi-weekly news communication, Stay Connected—which was intended to increase employee engagement due to remote working;

 

 

A pandemic crisis management plan to build awareness for employees on how to stay safe while working; and

 

 

Coaching on Covid-19 training in the areas of employee resources (staying focused, connected and well), manager resources (managing and engaging your team), facility resources (managing people maintaining business resources) and community resources (navigating local and federal regulations and health guidelines).

Learning and Development

We prioritize and invest in a multitude of training and development programs that enable employees to build satisfying careers. These include webinars, classroom training, self-paced e-learning, coaching, mentoring and a variety of on-the-job projects. To increase diversity, equity and inclusion awareness and adoption, we also launched a new diversity training program in 2020 for all employees globally. As part of this diversity training program, our senior leaders completed an intercultural development inventory self-assessment, attended a 3-hour instructor-led virtual session and developed an inclusive leader personal action plan.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    ENVIRONMENTAL AND SOCIAL RESPONSIBILITY     28  

 

 

Workplace Safety and Wellbeing

We drive a culture where safety and wellbeing have a prominent place in virtually every business decision. We insist on high global standards and leadership accountability and strive to continually improve safety and wellbeing outcomes. We define wellbeing across five dimensions: occupational, social, environmental, physical, and intellectual. In 2021, we hosted our annual global Safety and Wellbeing Week, themed “Connect with Purpose.” Our “Be Well” campaign focused on supporting employee well-being through benefits enhancements, awareness campaigns, podcast series and engagement programs that received external recognition.

Commitment to Diversity, Equity and Inclusion (“DE&I”)

We are committed to increasing the diversity of our workforce and strengthening an inclusive culture where everyone is valued and supported in achieving their full potential. These efforts are led by our Chief Responsibility Officer, a senior executive level position reporting directly to our Chief Executive Officer.

We have many programs and initiatives focused on driving these outcomes. These include deploying a global unconscious bias training program and enacting a policy that focuses on having a diverse talent pool and a diverse panel to interview prospective candidates. We exceeded our goal, announced in 2020, of spending more than $1 billion with diverse suppliers in 2021 and are on course to lift that annual spend to $3 billion by 2025.

Also, as part of our community impact initiative, announced in 2021, we increased engagement with eight non-profit organizations that are helping to improve education and career development opportunities for people from diverse and underrepresented communities. We are also committed to stepping up our volunteerism with these organizations in 2022 and beyond. These efforts will help to build the pipeline of diverse talent well into the future. Our employee business resource groups are an essential element of our DE&I activities, facilitating career and professional development and networking opportunities.

We publicly report demographics, including diversity data contained in our EEO-1 Submission, for our U.S. workforce in our Corporate Responsibility Report.

Our policies and practices have earned the company a place in the Bloomberg Gender-Equality Index for three consecutive years, the Human Rights Campaign’s Corporate Equality Index for nine consecutive years and recognition on the Disability Equality Index.

Employee Engagement

Employee engagement is imperative because people are at the center of our strategy. As a services organization, our ability to engage our employees is critical in achieving our goals. Employee engagement is tied to several key organizational outcomes: employee retention; absenteeism and wellness; productivity; safety; client satisfaction and retention; revenue growth and stockholder returns.

In April 2021, we partnered with an external vendor for the fourth time to conduct a worldwide employee engagement survey. CBRE’s “Your Voice” Employee Engagement Survey provided all employees an opportunity to provide confidential feedback about their work experiences. Our fifth engagement survey launched in late March 2022 and the results will be available later this year. The 2021 survey had a response rate of 84% globally, a significant increase from our 2019 survey response rate of 72%. Our results showed an increase in overall employee engagement. Our biggest gain was in employee wellbeing, showing that employees appreciated the way CBRE prioritized their health throughout the Covid-19 pandemic. Compared with our last survey in 2019, employees gave the company higher marks for work processes, supporting learning and development and acknowledging their outstanding work. Company leaders are committed to making further gains in these key areas through action plans based on employee feedback, and we plan to continue measuring our progress in future surveys.

Communities and Giving

We are committed to supporting and adding value to the communities where our employees live and work around the world, as well as in communities where the need is greatest. In 2021, the CBRE Foundation launched fund-raising programs to assist the victims of the earthquake in Haiti and the tornados in the U.S. Midwest. In December 2021, CBRE and the CBRE Foundation announced a community impact initiative creating collaborations with and contributing $7.25 million to non-profit organizations engaged in combating climate change around the world, improving education and career development opportunities for underrepresented populations, and supporting community betterment initiatives in our global headquarters city of Dallas. CBRE’s total charitable giving, including employee donations, exceeded $18 million in 2021.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    STOCKHOLDER ENGAGEMENT     29  

 

 

 

Awards and Recognition

 

In 2021 and in early 2022, our ESG efforts were recognized with the following awards and accolades:

   

•  We were named to the Dow Jones Sustainability World Index in 2021 for the third year in a row and included in the Dow Jones Sustainability Index – North America for the eighth year in a row. Inclusion in these indexes are based on an assessment of a company’s financially material ESG factors.

 

•  We remained a constituent of the FTSE4Good Index, which we have been a part of since 2014. The FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong environmental, social and governance practices.

 

•  In 2022, for the ninth consecutive year, we were named as one of the World’s Most Ethical Companies by Ethisphere, a global leader in defining and advancing the standards of ethical business practices.

 

•  In 2022, we were listed #11 on Barrons list of the 100 Most Sustainable Companies in the U.S., marking the fifth consecutive year of recognition. The 1,000 largest U.S. publicly held companies were considered for this recognition based on various environmental, social and governance performance indicators.

 

 

•  We were included in the 3BL Media 100 Best Corporate Citizens list for the third year in a row, which recognizes outstanding environmental, social and governance transparency and performance.

 

•  We earned a place in the 2022 Bloomberg Gender-Equality Index (“GEI”) for the third straight year. The public companies in the Bloomberg GEI support gender equality through policy development, representation and transparency.

 

•  We were named a Best Place to Work for LGBTQ Equality according to the Human Rights Campaign. CBRE received a perfect score on the 2022 Corporate Equality Index, a national benchmarking survey and report on corporate policies and practices related to LGBTQ workplace equality, for the ninth consecutive year.

 

•  We received a 2021 EPA ENERGY STAR® Partner of the Year – Sustained Excellence Award, marking the 14th consecutive year of ENERGY STAR recognition.

 

We received a AAA score – the highest rating – from MSCI on ESG metrics as of December 2021.

 

To learn more about our ESG efforts, please view our Corporate Responsibility Report at www.cbre.com/responsibility. The information contained on or available through this website is not a part of, or incorporated by reference into, this Proxy Statement.

Stockholder Engagement

We believe that engagement with our stockholders provide us with a valuable understanding of our stockholders’ perspectives and meaningful opportunities to share our views with them.

Throughout the year, management and members of our Board engage with a significant portion of our stockholders through a variety of forums. Our interactions cover a broad range of governance, financial and business topics. Stockholder feedback is regularly provided to the Board and the company’s management. A brief description of our stockholder engagement efforts are outlined below.

 

   

How We Engage

 

•  Quarterly earning calls

 

•  Investor conferences

 

•  Annual Shareholder Meeting

 

•  Stockholder Outreach Program

    

2021 Engagements

 

•  Extended invitations to engage to institutional shareholders holding in the aggregate over 65% of our shares

 

•  Met with shareholders representing more than 49% of shares outstanding

 

•  Hosted over 320 investor interactions

 

         
   

How We Communicate

 

•  Annual Report

 

•  Proxy Statement

 

•  SEC filings

 

•  Press releases

 

•  Company website

 

•  Corporate Responsibility Report

    

Topics of Discussion

 

•  Strategy and execution

 

•  Board refreshment

 

•  Compensation practices

 

•  Risk oversight, stockholder rights

 

•  Sustainability

 

•  Culture/human capital


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    GOVERNANCE PRACTICES AND POLICIES     30  

 

 

Communications with our Board

Stockholders and other interested parties may write to the Board Chair (who acts as the lead independent director), the entire Board or any of its members by:

 

       
LOGO   

Mail:

 

CBRE Group, Inc.

c/o Laurence H. Midler, Executive Vice President,

General Counsel, Chief Risk Officer and Secretary

2100 McKinney Avenue, Suite 1250

Dallas, Texas 75201

  LOGO   

Email:

 

to larry.midler@cbre.com.

The Board considers stockholder questions and comments to be important and endeavors to respond promptly and appropriately, even though the Board may not be able to respond to all stockholder inquiries directly.

The Board has developed a process to assist with managing inquiries and communications. The General Counsel will review any stockholder communications and will forward to the Chair of our Board, our Board or any of its members a summary and/or copies of any such correspondence that deals with the functions of our Board or committees thereof or that the General Counsel otherwise determines requires their attention. Certain circumstances may require that our Board depart from the procedures described above, such as the receipt of threatening letters or emails or voluminous inquiries with respect to the same subject matter.

Governance Practices and Policies

Director Independence

Under our Board’s Corporate Governance Guidelines and the listing standards of the NYSE, our Board must consist of a majority of independent directors. In addition, all members of the Audit Committee, Compensation Committee and Governance Committee must be independent directors as defined by our Corporate Governance Guidelines and NYSE listing standards. Members of the Compensation Committee must also meet applicable NYSE independence requirements for compensation committee members, and members of the Audit Committee must further satisfy a separate SEC independence requirement, which generally provides that they may not (i) accept directly or indirectly any consulting, advisory or other compensatory fee from us or any of our subsidiaries, other than their compensation as directors or members of the Audit Committee or any other committees of our Board or (ii) be an affiliated person of ours.

Our Board regularly conducts a review of possible conflicts of interest and related-party transactions through the use of questionnaires, director self-reporting and diligence conducted by management. This review includes consideration of any investments and agreements between directors and their related persons and the company, including those described under “Related-Party Transactions” in this Proxy Statement, and such person’s beneficial ownership of our securities. The Board has determined that 90% of our director nominees (all except for Mr. Sulentic) are independent in accordance with NYSE listing standards and our Board’s Categorical Independence Standards that it has adopted relating to our director independence. These Categorical Independence Standards are posted on the Corporate Governance section of the Investor Relations page on our website at www.cbre.com.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    DIRECTOR COMPENSATION     31  

 

 

Stock Ownership Requirements

In order to align the interests of our Board members and executives with the interests of our stockholders, our Board has adopted stock ownership requirements for non-employee directors, and the Compensation Committee has adopted executive officer stock ownership requirements that are applicable to all of our Section 16 officers.

 

Non-Employee Directors

Each non-employee director has a minimum common stock ownership requirement of five times the value of the annual stock grants made by us to the non-employee director pursuant to our then current director compensation plan.

If at any time the common stock ownership requirement is not satisfied, the director must retain the shares remaining after payment of taxes and exercise price upon exercise of stock options, the vesting of restricted stock or the settlement of vested restricted stock units, as applicable.

Shares that count toward compliance with the requirements include: shares owned outright by the director (either directly or beneficially, e.g., through a family trust); and shares issued upon the settlement of vested restricted stock units. Shares that do not count toward achievement of the requirements include:

 

  shares held by mutual or hedge funds in which the non-employee director is a general partner, limited partner or investor;

 

  unexercised outstanding stock options (whether or not vested);

 

  unvested/unearned restricted stock units or restricted stock; and

 

  shares transferred to a non-employee director’s employer pursuant to such employer’s policies.

Executive Officers

Depending on their positions, our executive officers have a minimum common stock ownership requirement of two to five times their annual base salary.

 

  The CEO’s minimum ownership requirement is five times his annual base salary,

 

  Each other NEO’s minimum ownership requirement is three times their annual base salary.

If at any time an executive officer’s equity holdings do not satisfy these minimum ownership requirements, depending on his or her position, the executive must retain 100% (for our CEO) or 75% (for our other named executive officers) of the shares remaining after payment of taxes and exercise price upon the exercise of stock options or upon the vesting of restricted stock or the settlement of vested restricted stock units, as applicable.

Shares that count toward compliance with the requirements include:

 

  shares owned outright (either directly or indirectly);

 

  shares issued upon the settlement of vested restricted stock units; and

 

  allocated shares in other company benefit plans.
 

 

Unexercised outstanding stock options (whether or not vested) and unvested/unearned restricted stock and restricted stock units do not count toward compliance with the requirements.

Director Compensation

2021 Director Compensation Policy

Our 2021 director compensation policy provides for the following annual compensation for each of our non-employee directors:

 

   
BOARD RETAINER    $100,000 in cash, payable upon commencement of director’s annual term.
RESTRICTED STOCK UNIT GRANT    $200,000, granted on the date of the Annual Meeting and vesting on the earlier of the one-year anniversary of grant or the next annual meeting.
ADDITIONAL COMPENSATION FOR COMMITTEE CHAIRS    Payable in cash upon commencement of director’s annual term.
Audit Committee Chair Retainer    $25,000
Compensation Committee Chair Retainer    $20,000
Governance Committee Chair Retainer    $15,000

Our non-employee directors may elect to receive shares of our common stock in lieu of cash payments (in like amounts). Non-employee directors who are appointed or elected off-cycle (i.e., outside an annual meeting) receive a pro rata portion of their cash retainer and restricted stock unit grant based on the length of their service until the next annual meeting.

Our non-employee directors are eligible to defer their compensation through our Deferred Compensation Plan, as described under “Executive Compensation—Summary of Plans, Programs and Agreements—Deferred Compensation Plan.” We also reimburse our non-employee directors for all reasonable out-of-pocket expenses incurred in the performance of their duties as directors.

Employee directors do not receive any fees for attendance at meetings or for their service on our Board.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    DIRECTOR COMPENSATION     32  

 

 

2022 Director Compensation Policy

In 2022, the Governance Committee conducted a competitive analysis of non-employee director compensation using the same comparator companies that are used for executive compensation comparisons. See “Compensation Discussion and Analysis—Section 3. How We Make Compensation Decisions—Peer Group Benchmarking—Comparative Market Data” for details. The Governance Committee also considered the scale, complexity and financial performance of the company. Based on this review, the Governance committee recommended, and the Board approved the 2022 Director Compensation Policy, effective at our Annual Meeting, which includes certain increases to better align with market practices, as outlined in the following table. Prior to these adjustments, the Board had not increased its director compensation since 2018.

 

   
BOARD RETAINER    $110,000 in cash, payable upon commencement of director’s annual term.
RESTRICTED STOCK UNIT GRANT    $220,000, granted on the date of the Annual Meeting and vesting on the earlier of the one-year anniversary of grant or the next annual meeting.
ADDITIONAL COMPENSATION FOR COMMITTEE CHAIRS    Payable in cash upon commencement of director’s annual term
Audit Committee Chair Retainer    $30,000
Compensation Committee Chair Retainer    $25,000
Governance Committee Chair Retainer    $20,000

2021 Director Compensation

The following table provides information regarding compensation earned during the fiscal year ended December 31, 2021 by each non-employee director for his or her Board and committee service. For stock awards in the table below, the dollar amounts indicated reflect the aggregate grant date fair value for awards granted during the fiscal year ended December 31, 2021.

Robert E. Sulentic, who is our President and CEO, is not compensated for his role as a director.

 

Name

    

Fees Earned or

Paid in Cash(1)

($)

      

Stock

Awards(2)(3)

($)

      

Change in Pension

Value and Nonqualified

Deferred Compensation

Earnings

($)

      

Total

($)

 

Brandon B. Boze

       100,000          199,916                   299,916

Beth F. Cobert

       120,000          199,916                   319,916

Curtis F. Feeny(4)

                                   

Reginald H. Gilyard

       100,000          199,916                   299,916

Shira D. Goodman

       125,000          199,916                   324,916

Christopher T. Jenny

       115,000          199,916                   314,916

Gerardo I. Lopez

       100,000          199,916                   299,916

Oscar Munoz

       100,000          199,916                   299,916

Laura D. Tyson

       100,000          199,916                   299,916

Ray Wirta(4)

                                   

Sanjiv Yajnik

       100,000          199,916                   299,916

 

(1)

Fees Earned or Paid in Cash Column This includes fees associated with the annual Board service retainer and chairing a Board committee. Our non-employee directors may elect to receive shares of our common stock in lieu of cash payments (in like amounts). We reflect these “stock in lieu of cash” payments under the column titled “Fees Earned or Paid in Cash,” and not under the “Stock Awards” column.

 

(2)

Stock Awards Column Represents the grant date fair value under Financial Accounting Standards Board, Accounting Standards Codification (“ASC”), Topic 718, Stock Compensation, of all restricted stock units granted to the directors during 2021. See also Note 2 “Significant Accounting Policies” and Note 14 “Employee Benefit Plans” to our consolidated financial statements as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for a discussion of the valuation of our stock awards. Shares vest in full on the earlier of the one-year anniversary of grant or the next annual meeting of stockholders.

 

(3)

Stock Awards Column Each of Mses. Cobert, Goodman and Dr. Tyson and Messrs. Boze, Gilyard, Jenny, Lopez, Munoz and Yajnik was awarded 2,355 restricted stock units pursuant to our director compensation policy. These restricted stock units were valued at the fair market value of our common stock of $84.89 per share on the award date of May 19, 2021.


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CBRE 2022 PROXY STATEMENT    CORPORATE GOVERNANCE    DIRECTOR COMPENSATION     33  

 

 

(4)

Messrs. Feeny and Wirta did not stand for re-election due to our term limit restrictions and retired from the Board effective as of our May 2021 annual meeting. Accordingly, they did not receive any compensation for their service as a director in 2021.

Outstanding Stock Awards (RSUs)

The table below shows the aggregate number of stock awards (i.e., restricted stock units) outstanding for each non-employee director as of December 31, 2021 (no option awards were outstanding on that date):

 

Name

     Aggregate Number of Stock
Awards Outstanding
       Aggregate Number of Shares
Underlying Options Outstanding
 

Brandon B. Boze

       2,355           

Beth F. Cobert

       2,355           

Curtis F. Feeny(1)

                 

Reginald H. Gilyard

       2,355           

Shira D. Goodman

       2,355           

Christopher T. Jenny

       2,355           

Gerardo I. Lopez

       2,355           

Oscar Munoz

       2,355           

Laura D. Tyson

       2,355           

Ray Wirta(1)

                 

Sanjiv Yajnik

       2,355           

 

(1)

Messrs. Feeny and Wirta did not stand for re-election due to our term limit restrictions and retired from the Board effective as of our May 2021 annual meeting. Accordingly, they did not receive any compensation for their services as directors in 2021.


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CBRE 2022 PROXY STATEMENT    PROPOSAL 2: RATIFY APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     34  

 

 

Proposal 2: Ratify Appointment of Independent Registered Public Accounting Firm

The Audit Committee of our Board appointed KPMG LLP as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2022. During 2021, KPMG LLP served as our independent accountant and reported on our consolidated financial statements for that year. KPMG LLP has been our independent auditor at all times since 2008.

The Audit Committee periodically considers whether to rotate our independent auditor in order to assure continuing auditor independence. The Board and the members of the Audit Committee believe that the continued retention of KPMG LLP as the company’s independent auditor in fiscal year 2022 is in the best interests of the company and its stockholders.

We expect that representatives of KPMG LLP will attend the Annual Meeting and will have the opportunity to make a statement if they so desire and to respond to appropriate questions.

Although stockholder ratification is not required, the appointment of KPMG LLP is being submitted for ratification at the Annual Meeting with a view towards soliciting stockholders’ opinions, which the Audit Committee will take into consideration in future deliberations. If KPMG LLP’s selection is not ratified at the Annual Meeting, the Audit Committee will consider the engagement of other independent accountants. The Audit Committee may terminate KPMG LLP’s engagement as our independent accountant without the approval of our stockholders whenever the Audit Committee deems termination appropriate.

Required Vote

Approval of this Proposal 2 requires the affirmative vote (i.e., “FOR” votes) of a majority of the shares present or represented and entitled to vote at our Annual Meeting. A vote to “ABSTAIN” will count as “present” for purposes of this proposal and so will have the same effect as a vote “AGAINST” this proposal. In the absence of instructions, your broker may vote your shares on this proposal. For more information, see “Annual Meeting Information—Voting Instructions and Information—If you do not vote/effect of broker non-votes” beginning on page 101.

RECOMMENDATION

 

   
     LOGO

   The Board of Directors recommends a vote “FOR” the ratification of the appointment
of KPMG LLP as our independent registered public accounting firm for the fiscal year
ending December 31, 2022.


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CBRE 2022 PROXY STATEMENT    PROPOSAL 2: RATIFY APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     35  

 

 

Audit and Other Fees

The following table shows the fees for audit and other services provided by KPMG LLP for the fiscal years ended December 31, 2021 and 2020 (in millions):

 

Fees

     Fiscal 2021        Fiscal 2020  

Audit Fees

     $ 17.9          16.1

Audit-Related Fees

       3.1          2.9

Tax Fees

       0.9          2.1

All Other Fees

                 

Total Fees

     $  21.9          21.1

Audit Fees—Includes fees associated with the audit of our annual financial statements, review of our annual report on Form 10-K and quarterly reports on Form 10-Q, statutory audits, and consents and assistance with and review of registration statements filed with the SEC. In addition, audit fees include those fees related to KPMG LLP’s audit of the effectiveness of our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

Audit-Related Fees—Includes fees associated with the audit of our employee benefit plans, accounting consultations related to GAAP and the application of GAAP to proposed transactions. In addition, audit-related fees include those fees related to KPMG LLP’s examination of the effectiveness of our internal controls over client accounting.

Tax Fees—Includes fees associated with tax compliance at international locations, domestic and international tax advice and planning and assistance with tax audits and appeals.

Audit Committee Pre-Approval Process

The Audit Committee is responsible for overseeing and approving our independent auditor’s fees, and pre-approves all audit and permissible non-audit services provided by our independent auditor. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our independent auditors and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval process and the fees for the services performed to date. In certain one-off cases, the Audit Committee Chair (on behalf of the Audit Committee) may also pre-approve particular services, with that pre-approval subject to subsequent Audit Committee ratification.

Audit Committee Report

The Audit Committee consists of six directors, each of whom is independent under NYSE rules and applicable securities laws. The Board has determined that each member of the Audit Committee is financially literate as required under NYSE rules. Our Board has also determined that each of Dr. Tyson and Messrs. Jenny, Munoz and Yajnik meet the qualifications of an audit committee financial expert. The Audit Committee operates under a written charter adopted by the Board, a copy of which is published in the Corporate Governance section of the Investor Relations page of our website at www.cbre.com.

The Audit Committee assists the Board in fulfilling its responsibilities to our stockholders with respect to our independent auditors, our corporate accounting and reporting practices, risk oversight and the quality and integrity of our financial statements and reports. The Audit Committee is directly responsible for overseeing the appointment, compensation, retention and oversight of the work of our independent auditor, and the Audit Committee and its chair oversee the selection of our independent auditor’s lead engagement partner. In addition, the Audit Committee reviews and considers all potential related-party and corporate opportunity transactions involving us and our directors and executive officers.

The Audit Committee discussed with our independent auditors the scope, extent and procedures for the fiscal year 2021 audit. Following completion of the audit, the Audit Committee met with our independent auditors, with and without management present, to discuss the results of their examinations, the cooperation received by the auditors during the audit examination, their evaluation of our internal controls over financial reporting and the overall quality of our financial reporting.

Management is primarily responsible for our financial statements, reporting process and systems of internal controls. In ensuring that our management fulfilled that responsibility, the Audit Committee reviewed and discussed with management the audited financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Discussion topics included the quality and acceptability of the accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements and an assessment of the work of the independent auditors.

The independent auditors are responsible for expressing an opinion on the conformity of the audited financial statements with GAAP. The Audit Committee reviewed and discussed with the independent auditors their judgments as to the quality and acceptability of our accounting principles and such other matters as are required to be discussed by the Public Company Accounting Oversight Board and the SEC. In addition, the Audit Committee received from the independent auditors written disclosures and a letter regarding their independence as required by applicable rules of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee, discussed with the independent auditors their independence from us and our management and considered the compatibility of non-audit services with the auditors’ independence.


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CBRE 2022 PROXY STATEMENT    PROPOSAL 2: RATIFY APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     36  

 

 

Based on the reviews and discussions described above, the Audit Committee recommended to the Board (and the Board subsequently approved) the inclusion of the audited financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with the SEC.

In addition, the Audit Committee has appointed KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. The Board concurred with the selection of KPMG LLP. The Board has recommended to our stockholders that they ratify and approve the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

In accordance with law, the Audit Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints that we receive regarding accounting, internal accounting controls or auditing matters, including the confidential, anonymous submission of complaints by our employees received through established procedures of concerns regarding questionable accounting or auditing matters. The Audit Committee approved the establishment of an ethics and compliance program in 2004 and receives periodic reports from our Chief Ethics & Compliance Officer regarding that program.

Audit Committee

Shira D. Goodman, Chair

Christopher T. Jenny

Susan Meaney

Oscar Munoz

Laura D. Tyson

Sanjiv Yajnik

Notwithstanding any statement in any of our filings with the SEC that might be deemed to incorporate part or all of any filings with the SEC by reference, including this Proxy Statement, the foregoing Report of the Audit Committee is not incorporated into any such filings.


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CBRE 2022 PROXY STATEMENT    PROPOSAL 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION     37  

 

 

Proposal 3: Advisory Vote on Executive Compensation

Our Board is committed to providing competitive pay opportunities for our executives consistent with the markets in which we complete for talent, and aligning executive compensation with stockholder interests. As a part of that commitment, and in accordance with SEC rules, we are asking you to approve, on an advisory basis, a resolution on the compensation of our named executive officers as reported in this Proxy Statement. This proposal, commonly known as a “say on pay” proposal, gives you the opportunity to endorse or not endorse our 2021 executive compensation program and policies for our named executive officers. The Board has adopted a policy providing for annual “say on pay” advisory votes. Accordingly, the next “say on pay” vote will occur at our annual meeting of stockholders in 2023.

In deciding how to vote on this proposal, our Board encourages you to review the Compensation Discussion and Analysis discussion in this Proxy Statement for a detailed description of our executive compensation philosophy and programs.

This vote is not intended to address any specific item of compensation, but rather the overall compensation that was paid in 2021 to our named executive officers resulting from our compensation objectives, policies and practices as described in this Proxy Statement. Because your vote is advisory, it will not be binding upon the Board. However, the Board and the Compensation Committee value the opinions expressed by our stockholders and will review the voting results in connection with their ongoing evaluation of our executive compensation program.

We received strong support for our executive compensation program from our stockholders at our 2021 annual meeting of stockholders, at which approximately 93% of the votes cast on the “say on pay” proposal were in favor of the 2020 compensation that we paid to our named executive officers. In addition, stockholders that we engaged with as part of our outreach program generally reported that executive compensation was viewed as well-aligned with performance.

 

 

Our executive compensation program is designed to align pay and performance, reinforce our corporate strategy and to attract and retain accomplished and high-performing executives and to motivate those executives to consistently achieve short- and long-term goals consistent with and in furtherance of our corporate strategy. To achieve this goal, we have designed an executive compensation program based on the following principles:

 

 

Paying for performance—A significant portion of each executive’s potential compensation is “at risk,” with incentive programs tied to financial metrics and strategic performance objectives.

 

 

Alignment with the interests of stockholders—Equity awards (including those tied to our financial performance) and promoting stock ownership align our executives’ financial interests with those of our stockholders.

 

 

Attracting and retaining top talent—The compensation of our executives must be competitive so that we may attract and retain talented and experienced executives.

 

 

Transparency and corporate governance—It is critical to us that we are transparent and reflect best practices in corporate governance when establishing our executive compensation.

 

 

The text of the resolution in respect of Proposal 3 is as follows:

RESOLVED, that the compensation paid to our named executive officers for 2021 set forth in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in this Proxy Statement, as disclosed pursuant to Item 402 of Regulation S-K, is hereby approved on an advisory basis.

Required Vote

Approval of this Proposal 3 requires the affirmative vote (i.e., “FOR” votes) of a majority of the shares present or represented and entitled to vote at our Annual Meeting. A vote to “ABSTAIN” will count as “present” for purposes of this proposal and so will have the same effect as a vote “AGAINST” this proposal. A broker non-vote will not count as “present,” and so will have no effect in determining the outcome with respect to this proposal.

RECOMMENDATION

 

     LOGO    The Board of Directors recommends a vote “FOR” the advisory approval of
the compensation of our named executive officers for the fiscal year ended December 31, 2021.


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CBRE 2022 PROXY STATEMENT    EXECUTIVE MANAGEMENT     38  

 

 

Executive Management

Here are summary biographies of our named executive officers who are described below in the Compensation Discussion and Analysis section of this Proxy Statement, as well as our other executive officers as of March 21, 2022.

 

LOGO   

Madeleine G. Barber

Age: 58     Deputy Chief Financial Officer and Chief Accounting Officer

Ms. Barber has been our Deputy Chief Financial Officer and Chief Accounting Officer since July 2021. She previously served as our Senior Vice President, Corporate Finance and Chief Accounting, Tax and Treasury Officer from June 2020 to July 2021, Senior Vice President, Corporate Finance from January 2020 to June 2020 and as Senior Vice President and Chief Tax Officer from December 2016 to June 2020. Prior to joining CBRE, Ms. Barber served in senior finance roles, each with increasing responsibility at Tyco International Plc for 12 years, including as Senior Vice President and Chief Tax Officer from October 2011 to November 2016. Prior to that, she served as a Tax Partner at KPMG LLP from May 2002 to December 2004 and a Tax Partner at Arthur Anderson LLP from August 1988 to May 2002. Ms. Barber holds a B.S. from Villanova University and a J.D. and L.L.M. from the Charles Widger School of Law at Villanova University.

 

 

 

LOGO   

Chandra Dhandapani

Age: 54     Chief Transformation Officer and Global Chief Operating Officer, Global Workplace Solutions

Ms. Dhandapani has been our Chief Transformation Officer and Global Chief Operating Officer, Global Workplace Solutions since June 2021. She previously served as our Chief Administrative Officer from June 2020 to June 2021, Chief Digital & Technology Officer from July 2016 to July 2020 and as our Global Group President from May 2019 to June 2020. Prior to joining CBRE, Ms. Dhandapani served in senior technology roles at Capital One Financial for 17 years, including serving as Digital Transformation Leader and Chief Information Officer, Financial Services division of Capital One from January 2013 to July 2016, Managing Vice President and Chief Information Officer, Financial Services division from March 2010 to December 2012 and Vice President and Chief Information Officer, Capital One Auto Finance from August 2009 to March 2010. She previously served on the board of directors of On Deck Capital, Inc. Ms. Dhandapani holds a B.S. from Stella Maris College, University of Madras, India, an M.B.A. from IRMA India and an M.B.A. from the University of Texas at Arlington.

 

 

 

LOGO   

John E. Durburg

Age: 56     Global Chief Executive Officer, Global Workplace Solutions

Mr. Durburg has been our Global Chief Executive Officer, Global Workplace Solutions since January 2020. He previously served as our Global Chief Operating Officer from August 2018 to December 2019, Group President from January 2018 to August 2018, Chief Executive Officer—Americas from June 2016 to August 2018, Global President, Advisory and Transaction Services from July 2012 to June 2016 and President of the Central division from August 2011 to July 2012. Prior to that, Mr. Durburg served as Executive Managing Director of the Chicago region from April 2008 to August 2011, Senior Managing Director of the Chicago region from July 2003 to April 2008 and Managing Director of the Chicago region from May 2001 to July 2003. From June 1995 to May 2001, Mr. Durburg was a Vice President and Regional Leasing Director with Jones Lang LaSalle, Chicago. Mr. Durburg holds a B.A. from the Kelley School of Business from Indiana University, Bloomington and an M.B.A. from the Charles H. Jellstadt Graduate School of Business at DePaul University.

 

 

 

LOGO   

Emma E. Giamartino

Age: 39     Global Group President, Chief Financial Officer and Chief Investment Officer

Ms. Giamartino has been our Global Group President and Chief Financial Officer since July 2021 and our Global Chief Investment Officer since January 2021. Prior to that, she served as our Executive Vice President of Corporate Development and Global Head of Mergers & Acquisitions from June 2020 to January 2021 and as Head of Mergers & Acquisitions in the Americas from February 2018 to June 2020. Prior to joining CBRE, Ms. Giamartino served as Director of Corporate Development at Verizon Communications from March 2016 to February 2018. She also worked in Nomura’s technology, media and telecommunication investment banking group from June 2010 to March 2016. She began her career at Assured Guaranty (formerly Financial Security Assurance), in the residential mortgage-backed securities group. She previously served as a member of the board of directors of CBRE Acquisition Holdings, Inc., which merged with Altus Power, Inc. (NYSE:AMPS). Ms. Giamartino holds a B.S. in Electrical Engineering from Duke University and an M.B.A. from Columbia Business School.


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CBRE 2022 PROXY STATEMENT    EXECUTIVE MANAGEMENT     39  

 

 

LOGO   

J. Christopher Kirk

Age: 56     Global Chief Operating Officer and Global Chief Operating Officer, Advisory Services

Mr. Kirk has been our Global Chief Operating Officer since January 2020 and Global Chief Operating Officer, Advisory Services since January 2021. He previously served as our Chief Executive Talent Officer from August 2018 to December 2019 and Chief Administrative Officer from July 2012 to December 2019. He was our Global Director of Human Resources from June 2010 to July 2012. Mr. Kirk previously served as the Chief Operating Officer from 2007 to July 2011 and General Counsel from 2001 to 2011 of Trammell Crow Company. Prior to joining Trammell Crow Company, Mr. Kirk was a partner at the Dallas office of Vinson & Elkins LLP, where he was a corporate finance, securities and M&A lawyer. Mr. Kirk holds a B.B.A. and an M.B.A. from the University of Texas and a J.D. from the University of Texas School of Law.

 

 

 

LOGO   

Vikram Kohli

Age: 42     Global Group President, Business Intelligence

Mr. Kohli has been our Global Group President, Business Intelligence since July 2021. He previously served as our Vice President, Corporate Finance from July 2020 to July 2021, Chief Operating Officer, South East Asia from April 2019 to July 2020, our Regional Managing Director, South East Asia from April 2018 to April 2019, Executive Director, Sales Manager, Asia Pacific from April 2014 to April 2018 and Senior Director, Global Transactions from August 2012 to April 2014. Mr. Kohli joined the Company in June 2001 in India as part of the Transactions team focused on occupier advisory and office leasing and has since served in various finance leadership roles, each with increasing responsibility. Mr. Kohli holds a B.B.A. from Delhi University, College of Business Studies and an M.B.A. from Northwestern University, Kellogg School of Management.

 

 

 

LOGO   

Michael J. Lafitte

Age: 61     Global Chief Executive Officer, Real Estate Investments

Mr. Lafitte has been our Global Chief Executive Officer, Real Estate Investments since January 2020 and Chief Executive Officer of Trammell Crow Company, our real estate development subsidiary, since January 2021. He previously served as our Global Chief Executive Officer, Advisory Services from August 2018 to December 2019, Global Group President from June 2016 to August 2018, Chief Operating Officer from February 2013 to June 2016, Global President of our Services business from July 2012 to February 2013 and prior to that was the President of our Americas region from August 2009 to July 2012. Prior to that, he served as President of our Institutional & Corporate Services business beginning in December 2006. He served as President, Global Services of Trammell Crow Company from June 2003 until our acquisition of that company in December 2006, and prior to that served as Trammell Crow Company’s Chief Operating Officer, Global Services beginning in September 2002. Mr. Lafitte holds a B.B.A. from the University of Texas and an M.B.A. from Southern Methodist University.

 

 

 

LOGO   

Laurence H. Midler

Age: 57     Executive Vice President, General Counsel, Chief Risk Officer and Secretary

Mr. Midler has been our Executive Vice President and General Counsel since April 2004 and Chief Risk Officer since August 2018. He also serves as our Secretary. Mr. Midler previously served as our Chief Compliance Officer from April 2004 to January 2014. Mr. Midler served as Executive Vice President, General Counsel and Secretary to Micro Warehouse, Inc., from July 2001 until April 2004. Mr. Midler began his legal career as an associate at Latham & Watkins, a global law firm, in 1990. He holds a B.A. from the University of Virginia and a J.D. from The New York University School of Law.

 

 

 

LOGO   

Daniel G. Queenan

Age: 50     Global Chief Executive Officer, Advisory Services

Mr. Queenan has been our Global Chief Executive Officer, Advisory Services since January 2020. He previously served as our Global Chief Executive Officer, Real Estate Investments from August 2018 to December 2019, Group President, Real Estate Investments from January 2018 to December 2019, President, CBRE Global Investors from April 2017 to December 2019, Chief Operating Officer, CBRE Global Investors from October 2015 to April 2017, Chief Executive Officer, Trammell Crow Company from April 2011 to March 2016, Chief Executive Officer, Asia Pacific from March 2014 to October 2015, Chief Operating Officer, Asia Pacific from August 2013 to March 2014 and President, Central division of Trammell Crow Company from March 2010 to November 2011. From May 2005 to March 2010, Mr. Queenan was the President and Chief Executive Officer of Opus North Corporation, a large U.S. real estate development company. Mr. Queenan holds a B.A. from Marquette University and a J.D. from Mitchell Hamline School of Law.

 

 

 

LOGO   

Robert E. Sulentic

Age: 65     President and Chief Executive Officer

Mr. Sulentic has been our President and CEO since December 2012. Previously, he served in several senior leadership roles, including Group President with responsibility for Asia Pacific, EMEA and the Development Services business; Chief Financial Officer; and President with responsibility for all business segments. At Trammell Crow Company, which CBRE acquired in December 2006, Mr. Sulentic served as Chief Financial Officer, Chief Executive Officer and Board Chair. Mr. Sulentic holds a B.A. from Iowa State University and an M.B.A. from Harvard Business School.


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS     40  

 

 

Compensation Discussion

and Analysis

 

 

 

This Compensation Discussion and Analysis, or CD&A, provides you with detailed information regarding the material elements of compensation paid to our executive officers, including the considerations and objectives underlying our compensation policies and practices. Although our executive compensation program is generally applicable to all of our executive officers, this CD&A focuses primarily on the program as applied to the following executives (whom we refer to as “named executive officers”):

 

Robert E. Sulentic

President and CEO

 

Emma E. Giamartino

Global Group President, Chief Financial Officer and Chief Investment Officer

 

Leah C. Stearns

Former Chief Financial Officer

 

Michael J. Lafitte

Global Chief Executive Officer, Real Estate Investments

 

Daniel G. Queenan

Global Chief Executive Officer, Advisory Services

 

Chandra Dhandapani

Chief Transformation Officer and Global Chief Operating Officer, Global Workplace Solutions

 

     Table of Contents  
    

 

Section 1. Introduction

 

 

 

 

41

 

 

    

 

Company Performance and Financial Highlights

 

 

 

 

41

 

 

    

 

Awards & Recognition

 

 

 

 

42

 

 

    

 

2021 Compensation Updates

 

 

 

 

 

 

43

 

 

 

 

    

 

Section 2. Our Executive Compensation Philosophy

 

 

 

 

 

 

44

 

 

 

 

    

 

Section 3. How We Make Compensation Decisions

 

 

 

 

47

 

 

    

 

Compensation Committee Role

 

 

 

 

47

 

 

    

 

Chief Executive Officer Role

 

 

 

 

47

 

 

    

 

Independent Compensation Consultant Role

 

 

 

 

47

 

 

    

 

Peer Group Benchmarking—Comparative Market Data

 

 

 

 

48

 

 

    

 

Consideration of Stockholder Feedback on Executive Compensation

 

 

 

 

48

 

 

    

 

Compensation Risk Assessment

 

 

 

 

 

 

49

 

 

 

 

    

 

Section 4. Elements of Our Compensation Program

 

 

 

 

50

 

 

    

 

Compensation Elements for NEOs

 

 

 

 

50

 

 

    

 

Base Salary

 

 

 

 

50

 

 

    

 

Annual Performance Awards—Executive Bonus Plan

 

 

 

 

50

 

 

    

 

Long-Term Incentive Awards

 

 

 

 

53

 

 

    

 

Other Compensation Elements

 

 

 

 

 

 

55

 

 

 

 

    

2021 Compensation Decisions

 

   

 

55

 

 

 

    

 

Section 5. 2021 NEO Compensation and Performance Summaries

 

 

 

 

 

 

61

 

 

 

 

    

 

Section 6. Compensation Policies and Practices

 

 

 

 

 

 

66

 

 

 

 

    

 

Compensation Committee Report

 

 

 

 

 

 

68

 

 

 

 

    

 

Executive Compensation

 

 

 

 

69

 

 

    

 

Summary Compensation Table

 

 

 

 

69

 

 

    

 

Employment Agreements

 

 

 

 

70

 

 

    

 

Grants of Plan-Based Awards

 

 

 

 

71

 

 

    

 

Outstanding Equity Awards at Fiscal Year-End

 

 

 

 

73

 

 

    

 

Option Exercises and Stock Vested

 

 

 

 

74

 

 

      

 

CEO Pay Ratio

 

 

 

 

74

 

 

      

 

Summary of Plans, Programs and Agreements

 

 

 

 

75

 

 

      

 

Severance Plans; Death, Disability and Retirement Plans

 

 

 

 

77

 

 


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS    SECTION 1: INTRODUCTION     41  

 

 

Section 1.

Introduction

As always, aligning pay and performance was a major focus of our executive compensation program in 2021. The Covid-19 pandemic created an extremely challenging and unpredictable operating environment in 2020 and early 2021. The resilience of our business and our people – coupled with our agility in calibrating expenses during an uncertain market environment – enabled us to deliver financial results in 2021 that surpassed our pre-pandemic performance. Moreover, we emerged in a stronger position operationally, financially and strategically than when the pandemic began.

Executive compensation reflected the resilient performance of our business in 2021. Our pay-for-performance approach aligns management and stockholder interests, resulting in strong outcomes for both parties in 2021. Management-stockholder alignment will remain the centerpiece of our executive compensation program in future years.

Company Performance and Financial Highlights

We delivered strong 2021 results, as key financial metrics – revenue, net revenue, earnings and free cash flow – reached all-time highs. We faced headwinds in early 2021, but we benefited from a supportive macro environment starting in mid-2021, as well as our longstanding work to strengthen our balance sheet and improve our financial resiliency. Our efforts to diversify our business across four dimensions – asset types, lines of business, clients and geographies – and to position CBRE to capitalize on secular tailwinds also helped drive our strong financial performance.

 

Revenue      Net Revenue (1)      GAAP Net Income
$27.7B      $17.0B      $1.8B
+17%      +23%      +144%
         

Consolidated

Adjusted EBITDA (1)

     GAAP EPS      Adjusted EPS (1)
$3.1B      $5.41      $5.80
+62%      +143%      +77%
         
Core Adjusted EPS (1)      Cash Flow from Operations      Free Cash Flow (1)
$5.33      $2.4B      $2.2B
+63%      +29%      +38%
         
1-Year Total Stockholder Return (2) (as of 12/31/2021)      3-Year Total Stockholder Return (2) (as of 12/31/2021)      5-Year Total Stockholder Return (2) (as of 12/31/2021)
73%      171%      245%

vs. 29% for S&P 500

(+44% outperformance)

    

vs. 100% for S&P 500

(+71% outperformance)

    

vs. 134% for S&P 500

(+111% outperformance)

 

(1)

These are non-GAAP financial measures. For definitions and more information, see Annex A of this Proxy Statement. Our Board and management use these non-GAAP financial measures to evaluate our performance and manage our operations. However, non-GAAP financial measures should be viewed in addition to, and not as an alternative for, financial results prepared in accordance with GAAP. The term “GAAP,” as used in this Proxy Statement, means generally accepted accounting principles in the United States.

(2)

Inclusive of dividends, assuming reinvestment.


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS    SECTION 1: INTRODUCTION     42  

 

 

Our performance in 2021 resulted in strong stockholder value creation. This extended a long-term record of consistently increased stockholder value.

 

Comparison of 5-Year Cumulative Total Return(1) among CBRE Group, Inc., the S&P 500 Index(2) and Peer Group(3)

 

 

 

LOGO

 

(1)

$100 invested on December 31, 2016 in stock or index-including reinvestment of dividends, fiscal year ending December 31.

(2)

Copyright© 2022 Standard & Poor’s, a division of S&P Global, All rights reserved.

(3)

Peer group contains companies with the following ticker symbols: JLL, CIGI, CWK, ISS, MMI, NMRK, SVS.L (London), EXH0.PA and WD.

Awards & Recognition

In 2021 and early 2022, we were recognized with the following awards and accolades:

 

LOGO


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS    SECTION 1: INTRODUCTION     43  

 

 

2021 Compensation Updates

In line with the Compensation Committee’s (referred to in this CD&A as the “Committee”) commitment to continuous improvement, and in response to stockholder feedback, the Committee made several enhancements to our executive compensation program in 2021. These changes are designed to further align pay with our long-term strategy and harmonize our goals with the unprecedented and unpredictable operating environment that challenged our business amid the Covid-19 pandemic.

Executive Bonus Plan (“EBP”). The 2021 EBP continued to align pay and performance against key financial and strategic performance measures. In prior years, the EBP used a “multiplicative” calculation where strategic performance modified 50% of the amounts funded by financial performance. For 2021, the EBP was changed to use an “additive” calculation where financial performance determines 50% of the payout and strategic performance determines the remaining 50% of the payout. In connection with this update, the effective maximum EBP payout was reduced from 200% of target to 175% of target. Additionally, payouts for 2021 performance were lower than they would have been under the previous design.

2020 Adjusted EPS Equity Awards. Our longstanding work to strengthen our balance sheet and improve our financial resiliency helped drive our strong financial performance in 2021. However, at the end of 2020 and in early 2021, we faced a particularly challenging operating environment. Our 2020 Adjusted EPS fell short of the goals set at the beginning of 2020. Our expectations for 2021 Adjusted EPS were significantly below the projections set at the beginning of 2020. Our budgeted Adjusted EPS as of the beginning of 2021, plus our actual Adjusted EPS at the end of 2020, would have resulted in a two-year cumulative Adjusted EPS far below the original threshold goal for the 2020 Adjusted EPS Equity Awards. The Committee determined it was in the best interest of all stakeholders to exercise its discretion, consistent with authority granted pursuant to the company’s equity incentive plan, to revise the cumulative adjusted EPS target for the 2020 Adjusted EPS Equity Awards in a prudent manner, ensuring the goals remained rigorous and pay and performance remained aligned.

The prior cumulative Adjusted EPS target was $8.79, which was the sum of $4.15 (approximately 12% growth over the $3.71 achieved in 2019) and $4.64 (approximately 12% growth over $4.15). The revised cumulative Adjusted EPS target of $7.90 was the sum of $3.42 (actual achieved in 2020) and $4.48 (approximately 31% growth over $3.42 in 2020, 21% over 2019, and 19% above 2021 internal budget).

CEO Target Compensation Adjustment. In March 2021, the Board increased Mr. Sulentic’s total target annual compensation to $16.25 million, comprised of $1,150,000 in his annual base salary, $2,300,000 in his annual target performance award and $12,800,000 in his annual target equity award. For 2021, Mr. Sulentic requested, and the Board agreed, that Mr. Sulentic would forego $3.7 million of his total target annual compensation opportunity to align his experience with the experience of stockholders during that period of the pandemic. As reduced, Mr. Sulentic’s total target annual compensation was $12,550,000, comprised of $920,000 in his annual base salary, $1,840,000 in his annual target performance award, and $9,790,000 in his annual target equity award. These reductions represent a roughly even reduction as a percentage of each individual pay element from the 2020 target levels. Concurrent with his request to forego $3.7 million of his total target annual compensation opportunity, Mr. Sulentic also agreed to extend his existing Restrictive Covenants Agreement with the company (initially scheduled to expire on December 1, 2023) through December 31, 2025.

Other NEOs Target Compensation Adjustments. In 2021, as part of the review of target annual compensation opportunities, the Committee approved increases to the annual long term-term equity targets for each of our other named executive officers. The Committee also approved increases to the bonus targets for Ms. Stearns and Messrs. Lafitte and Queenan. These increases (from 2020) position their compensation more appropriately in relation to market compensation levels and our stated compensation philosophy.

2021 Strategic Equity Award and Restrictive Covenants Agreement. In 2021, the Committee granted a strategic equity award (the “2021 Strategic Equity Awards”) with a grant date value of $1,500,000 to each of Ms. Giamartino and Ms. Dhandapani in connection with their promotions to Chief Financial Officer and Chief Transformation Officer, respectively. This was done in order to reflect Mses. Giamartino’s and Dhandapani’s contributions to the company and their ability to drive outperformance on key metrics against peers. The Strategic Equity Awards continue to be an effective way to retain, incentivize, and align executives with stockholders when executives join the company or are promoted into roles where they have more responsibility for, and significant influence over, company performance. The 2021 Strategic Equity Awards have the same general terms and payout curves as the 2017 Strategic Equity Awards discussed in Section 4 below of this CD&A except that the entire award is performance-based in nature, with no time-vesting component.

Additional details about these updates and decisions can be found in “Section 4. Elements of the Compensation Program” in this CD&A.


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS    SECTION 2: OUR EXECUTIVE COMPENSATION PHILOSOPHY     44  

 

 

Section 2.

Our Executive Compensation Philosophy

Our Pay-for-Performance Philosophy

Our executive compensation program is designed to align pay and performance, reinforce our corporate strategy, attract and retain accomplished and high-performing executives and motivate those executives to consistently achieve short- and long-term goals consistent with our corporate strategy. Our pay philosophy emphasizes pay-for-performance through significant variable compensation tied to accomplishment of financial and strategic objectives.

To do this, we focus a significant percentage of our executive officers’ compensation on both annual and long-term incentive awards intended to drive growth in our business and in our share price in the short- and long-term, with a relatively modest portion of compensation paid in fixed base salary.

Executive Compensation Program Goals

The Committee establishes and administers our executive compensation program. Our short- and long-term compensation incentives are designed to:

 

LINK PAY TO PERFORMANCE

We place a significant portion of each executive officer’s potential compensation “at risk,” with incentive programs tied to financial metrics and strategic performance objectives.

  

•  In our annual incentive program, the financial metrics may be at the global level (i.e., based on our global consolidated results) or based on a combination of global and segment performance, depending on the executive’s position. Payouts may be above, at or below target levels, based on achievement of these financial and strategic objectives.

 

•  All of our long-term incentives have a performance component in that the ultimate value of those incentives depends upon our stock price over a multi-year period. We seek to further link our long-term incentives to our financial results and stockholder returns by awarding a combination of Adjusted EPS Equity Awards and Time Vesting Equity Awards.

 

ALIGN THE INTERESTS OF OUR EXECUTIVES WITH THOSE OF OUR STOCKHOLDERS   

•  Our goal is to instill a sense of ownership in the company through equity-based awards and stock ownership requirements applicable to our directors and executives.

 

•  Equity awards align an executive’s financial interests with those of our stockholders by creating incentives to preserve and increase stockholder value as well as achieve solid financial results for our stockholders over a multi-year period.

 

ATTRACT AND RETAIN TOP LEADERSHIP TALENT   

•  To successfully execute our business strategy, we must attract and retain top talent in our industry. To accomplish this goal, we provide our executives with compensation opportunities at levels commensurate with other organizations competing for their talents.

 

BE TRANSPARENT AND REFLECT BEST PRACTICES IN CORPORATE GOVERNANCE   

•  In addition to creating compensation programs that are easily understood and tracked, we have adopted governance policies and practices designed to further align executive compensation with long-term stockholder interests.

 


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS    SECTION 2: OUR EXECUTIVE COMPENSATION PHILOSOPHY     45  

 

 

2021 Target Compensation Mix

The total 2021 target direct compensation mix for our Chief Executive Officer (“CEO”) and all named Executive Officers (“NEOs”) including our CEO is shown here.

 

CEO Target Compensation Mix

 

    

CEO + NEOs Target Compensation Mix

 

 

LOGO

Overview of Compensation Components

 

    

Compensation Component

     Description and Purpose
FIXED  

Base Salary

    

– Provides a level of fixed compensation necessary to attract and retain senior executives.

 

– Set at a level that recognizes the skills, experience, leadership and individual contribution of each executive as well as the scope and complexity of the executive’s role, giving due consideration to appropriate comparator group benchmarking.

 

VARIABLE  

Annual Performance Awards

    

– Variable cash incentive opportunity tied to financial metrics and achievement of individual strategic objectives.

 

– In 2021, the Committee used global adjusted EBITDA and segment operating profit to establish financial performance objectives in order to effectively tie annual cash performance compensation to our operating results. We believe that global adjusted EBITDA and segment operating profit are appropriate measures to evaluate our operating performance because they focus on profitability but exclude certain items that management does not consider directly indicative of the company’s ongoing performance.

 

– Each executive had a target cash performance award opportunity, one-half of which depends on the company’s financial performance (the “financial payout factor”) and the other half of which depends on the executive’s personal performance (the “strategic payout factor”).

 

 

Annual Long-Term Incentives

    

– Annual grants of time-based and performance-based restricted stock units (RSUs) that are intended to align the interests of our executives with those of stockholders over a multi-year period, and to support executive retention objectives.

 

– In 2021, our CEO was granted one-third of his target annual long-term incentive award value in the form of a Time Vesting Equity Award, and two-thirds in the form of an Adjusted EPS Equity Award. Our other named executive officers were granted one-half of their target annual long-term incentive award value in the form of a Time Vesting Equity Award, and the other one-half in the form of an Adjusted EPS Equity Award. We describe these two types of awards in greater detail in “Section 4. Elements of Our Compensation Program” in this CD&A.

 

 


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CBRE 2022 PROXY STATEMENT    COMPENSATION DISCUSSION AND ANALYSIS    SECTION 2: OUR EXECUTIVE COMPENSATION PHILOSOPHY     46  

 

 

Compensation Governance Practices

Our compensation program is designed to promote exceptional performance and align the interests of our executives with the interests of our stockholders while discouraging executives from excessive risk taking.

 

       
LOGO   What We Do      LOGO   What We Don’t Do
   
INDEPENDENCE

 

100% of our Committee members are independent. The Committee engages its own compensation consultant and confirms each year that the consultant has no conflicts of interest and is independent.

 

STOCK OWNERSHIP REQUIREMENTS

 

We have stock ownership requirements for our directors and executive officers that require retention of at least 75% (100% for the CEO) of the net-after-tax shares acquired upon the exercise of stock options, the vesting of restricted stock or the settlement of vested restricted stock units until required ownership levels are met.

 

•  CEO: 5x Base Salary

 

•  CFO and Other NEOs: 3x Base Salary

 

•  Non-employee directors: 5x Annual Stock Grant

 

COMPENSATION CLAWBACK POLICY

 

We have a “compensation clawback policy” that permits the company, subject to the discretion and approval of our Board, to recover cash-based and performance-based- equity incentive compensation paid to any current or former “Section 16 officer” if there is a restatement of our financial results in certain circumstances.

 

EQUITY AWARD POLICY

 

Our Equity Award Policy is designed to maintain the integrity of the equity award process and ensure compliance with all applicable laws. The Equity Award Policy sets the procedures that must be followed in connection with employee awards.

 

STOCKHOLDER ENGAGEMENT

 

We regularly engage with our stockholders about our executive compensation program.

 

     NO HEDGING

 

We have a policy that prohibits all directors, executive officers and other designated insiders from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in hedging or other derivative transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities.

 

NO “SINGLE TRIGGER” CHANGE OF CONTROL PAYMENTS

 

We do not have employment contracts, plans or other agreements that provide for “single trigger” change of control payments or benefits (including automatic accelerated vesting of equity awards upon a change of control only) to any of our named executive officers.

 

NO SPECIAL PERQUISITES

 

Our named executive officers receive no special perquisites or other personal benefits, unless such benefits serve a reasonable business purpose, such as benefits specifically relating to healthcare and insurance.

 

NO TAX GROSS-UPS

 

As a policy matter, we do not provide tax gross-ups to our named executive officers, other than in connection with tax liabilities incurred with relocations and, if applicable, expatriate tax equalization.

 

Say on Pay Results

 

LOGO

The Committee considers the results of annual stockholder advisory votes on the compensation of our named executive officers in connection with the discharge of its responsibilities. We received strong support for our executive compensation from our stockholders at our 2021 annual meeting of stockholders, at which approximately 93% of the votes cast on the “say on pay” proposal were in favor of the 2020 compensation for our named executive officers. At this Annual Meeting, we will again hold an advisory vote to approve our named executive officer compensation for 2021. The Committee will continue to consider the results of these annual advisory votes in evaluating our executive compensation policies and programs.


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Section 3.

How We Make Compensation Decisions

Compensation Committee Role

At the beginning of each performance year, the Committee determines the appropriate target levels of each component of compensation and establishes annual financial and strategic performance objectives for each executive officer based on factors the Committee deems relevant in its business judgment. Following year-end, performance relative to these objectives is measured, and individual annual performance awards are then determined.

When establishing target compensation levels and annual performance objectives the Committee may consider any factors it deems relevant, including:

 

 

Industry and market conditions;

 

 

The company’s financial performance (i.e., based on our global consolidated results and/or segment results);

 

 

The company’s global and segment performance relative to competitors;

 

 

Our Board-approved annual operating plan and related strategy and objectives;

 

 

Individual factors, including performance and expectations, responsibilities, experience, retention risk, succession planning, prior compensation and positioning among other senior executives;

 

 

Overall effectiveness of the compensation program in achieving, measuring and rewarding desired performance levels;

 

 

The results of our annual “say on pay” vote;

 

 

Advice from the Committee’s independent compensation consultant;

 

 

Market compensation data among comparable companies; and

 

 

Current and evolving practices and trends among comparable companies.

These factors may vary from year to year based upon the Committee’s subjective business judgment reflecting its members’ collective experience.

Chief Executive Officer Role

Our CEO meets with the Committee and its independent compensation consultant to provide perspective about us and our industry that may be helpful in conducting an accurate survey of relevant market data. In addition, our CEO makes recommendations on non-CEO executive compensation and reviews and provides the Committee with commentary on the competitive pay information regarding non-CEO executive compensation contained in the consultant’s report to the Committee. At the invitation of the Committee, our CEO also attends meetings when the performance of other executive officers is discussed. During these meetings, our CEO provides an assessment of those executives’ performance and recommends a payout percentage with respect to the strategic objectives portion of the annual performance bonus for each of those executive officers. The Committee makes all ultimate compensation decisions with respect to our executive officers (including for our CEO), incorporating both the feedback from its independent compensation consultant and our CEO. Our CEO does not attend Committee discussions where the Committee evaluates his performance or sets his compensation.

Independent Compensation Consultant Role

The Committee has retained Frederic W. Cook & Co., Inc., or FW Cook, as its independent compensation consultant. FW Cook reports directly to the Committee, attends meetings and provides advice to the Committee. FW Cook prepares analyses for the Committee based on its review of market data that it believes to be relevant, including compensation levels at, and the financial performance of, a comparator group of companies identified for the relevant period.

FW Cook meets with the Committee and with management to solicit input on job scope, performance, retention issues and other relevant factors. FW Cook then prepares reports for the Committee with respect to management recommendations as to compensation opportunities of the applicable executive officers and the reasonableness of such recommendations. FW Cook works independently with the Committee chair to develop recommendations for CEO compensation. FW Cook also advises the Committee on compensation-related developments and best practices.

FW Cook has not provided the company any services other than the services that it provided to the Committee. After considering, among other things, the other factors described elsewhere in this Proxy Statement with respect to FW Cook’s work for the Committee and (i) the absence of any business or personal relationship between FW Cook and any member of the Committee or any of our executive officers, (ii) a certification from FW Cook that it does not trade in our securities, (iii) FW Cook’s Independence Policy that is reviewed annually by its board of directors, and (iv) FW Cook’s policy of proactively notifying the Committee chair of any potential or perceived conflicts of interest, the Committee has concluded that FW Cook is independent and that its work does not raise any conflict of interest.


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Peer Group Benchmarking—Comparative Market Data

We seek to offer total compensation opportunities competitive with the market in which we compete for executive talent. For some positions, this market is broader than the commercial real estate services and investment industry in which we operate. Accordingly, the Committee periodically reviews comparator company compensation data, general industry compensation survey data and recommendations from the Committee’s independent compensation consultant to understand whether our executive compensation is reasonable and competitive. For certain executives, the Committee examines target compensation levels against business services sector comparators and a broad group of non-manufacturing companies, including those that the Committee considers to be our most comparable public company competitors. This group changes from time to time, and for 2021 executive-compensation-planning purposes it consisted of the following companies:

Benchmarking Compensation Peer Group

 

     
Accenture plc   Cushman & Wakefield plc   ManpowerGroup Inc.
AECOM   DXC Technology Company   Marsh & McLennan Companies, Inc.
Aon plc   Fluor Corporation   The Bank of New York Mellon Corporation
Automatic Data Processing, Inc.   Hewlett Packard Enterprise Company   Willis Towers Watson Public Limited Company
Brookfield Asset Management Inc.   Jacobs Engineering Group Inc.    
Cognizant Technology Solutions Corporation   Jones Lang LaSalle Incorporated    

The group of companies listed above includes business services companies outside our industry, with stature, size and complexity that are generally similar to our own, in recognition of the fact that all of our direct competitors are smaller than us and/or are non-public organizations, and competition for certain senior management talent is not limited to our industry. We believe the compensation paid by the comparator group, taken as a whole, serves as one appropriate reference for our executive compensation, and we do not target any particular compensation percentile within the comparator group when setting executive compensation.

The Committee considers market compensation data that it believes to be reliable and relevant when establishing executive compensation targets. As one factor in setting compensation targets for our CEO, the Committee examines data for comparable positions in the comparator group described above, which indicates, for example, that our CEO’s base salary and annual incentive targets should be significantly more than those of the next highest paid company executive. This is partly a function of competitive market data, which indicates that chief executive officers are paid significantly higher than other executives, but it also reflects the Committee’s view that our CEO bears ultimate responsibility for our global results and our overall success, such that his compensation opportunity should be set higher. Because reliable comparative data for other positions that might be specific to our business, such as a business-line chief executive officer, is not broadly available from the comparator group, the Committee also reviews compensation data from the comparator group for the most comparable level positions (e.g., 2nd or 3rd highest paid). The Committee also reviews data from outside the identified comparator group that it considers to be a reliable indicator of market compensation levels for those positions. As noted above, market compensation data is only one of many factors considered by the Committee when setting the compensation mix and levels for any particular executive. The actual factors considered by the Committee may vary from year to year based upon the Committee’s subjective business judgment reflecting its members’ collective experience.

Consideration of Stockholder Feedback on Executive Compensation

In 2021, we continued our stockholder outreach program and sought feedback from stockholders on a variety of topics, including strategy and execution, board refreshment, compensation practices, risk oversight, stockholder rights, sustainability and culture/human capital. With respect to executive compensation, stockholders generally reported that executive compensation was viewed as well-aligned with performance. The Committee endeavors to incorporate feedback from our stockholders into our annual compensation decisions. For additional information regarding our stockholder engagement program, see “Corporate Governance—Stockholder Engagement” in this Proxy Statement.

Say on Pay Results

The Committee also considers the results of annual stockholder advisory votes on the compensation of our named executive officers in connection with the discharge of its responsibilities. We received strong support for our executive compensation from our stockholders at our 2021 annual meeting of stockholders, at which approximately 93% of the votes cast on the “say on pay” proposal were in favor of the 2020 compensation for our named executive officers. The Committee will continue to consider the results of these annual advisory votes in evaluating our executive compensation policies and programs.


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Compensation Risk Assessment

The Committee annually reviews the risks that may arise from our compensation programs, and in 2021, we undertook a comprehensive assessment of risk relating to those programs. Our management prepared a detailed inventory of all of our compensation programs, and with the assistance of FW Cook, on behalf of the Committee, analyzed each program’s design to determine whether the program creates or encourages excessive or inappropriate risk taking. Based on this review and analysis, we and the Committee have concluded that our compensation programs do not present any risk that is reasonably likely to have a material adverse effect on us.


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Section 4.

Elements of Our Compensation Program

Compensation Elements for NEOs

The compensation program for our named executive officers consists primarily of three elements: base salary, annual performance awards (paid in cash), and long-term equity-based incentives (granted with time-based and performance-based vesting conditions).

We endeavor to attract, motivate and retain exceptional individuals with demonstrated leadership and other capabilities required to implement innovative business initiatives, while concurrently encouraging those leaders to work towards ambitious long-term business objectives. We further seek to customize our pay practices based on individual performance, leadership and potential, as well as global and segment results. We assess our executives in the context of a methodical performance management process. We believe that our pay practices support all of these efforts.

A significant percentage of our executive officers’ annual compensation package is variable, consisting of annual cash performance awards and long-term equity-based incentives. As shown in the charts below, for 2021, the target annual cash performance awards and long-term equity incentives comprised approximately (i) 93% of total target direct compensation for our CEO and (ii) on average 86% of total target direct compensation for our CEO together with our other named executive officers.

2021 CEO “At Risk” Performance-Based Compensation

 

 

 

LOGO

2021 NEO “At Risk” Performance-Based Compensation

 

 

 

LOGO

Base Salary

We provide competitive base salaries that allow us to attract and retain a high-performing leadership team at a reasonable level of fixed costs. Base pay levels generally reflect a variety of factors, such as the executive’s skill and experience, the seniority of the position, the difficulty of finding a replacement, affordability and the positioning of the base pay against market salary levels and against base salaries of other senior executives at the company. Base salaries are generally reviewed annually during the first quarter of the year but may also be reviewed at other times if an executive officer’s responsibilities have materially changed or other special circumstances so warrant.

Annual Performance Awards—Executive Bonus Plan

In 2021, the Committee granted annual performance awards to our executive officers under our Executive Bonus Plan, or EBP. Within the framework of the EBP, the Committee establishes target and maximum award opportunities and corresponding performance goals and determines actual payouts for our executives. The EBP is designed to motivate and reward executives by aligning pay with annual performance, and the amount of an award is measured by the executive’s success against a combination of challenging financial and strategic performance objectives established by the Committee. We may determine in any year to pay an award under the EBP in cash, or in the form of company stock or other non-cash forms of compensation.


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EBP Calculation

In 2021, the EBP continued to be based on two key components, financial performance and strategic performance. However, in 2021, the Committee made a technical change to the payout calculation. In prior years, the EBP used a “multiplicative” calculation where strategic performance modifies 50% of the amounts funded by financial performance. The 2021 EBP calculation uses an “additive” calculation where financial performance determines 50% of the payout and strategic performance determines the remaining 50% of the payout. Further, the maximum payout under the strategic performance component was set to 175% of target.

In response to stockholder feedback requesting an increased focus in our compensation program on long-term business strategy, including important ESG initiatives, a significant portion of awards earned under the EBP is based on each executive’s individual contribution to our long-term business strategy, as outlined in pre-established strategic objectives approved by the Committee at the beginning of each year. The Committee made the change from a “multiplicative” to an “additive” design to ensure that each executive’s achievement of the strategic performance goals would stand on its own and would not be inappropriately augmented or reduced by the financial performance component. The Committee believes this strikes a better balance between the importance of financial performance, strategic performance, and line of sight for participants which ultimately better aligns pay and performance.

In connection with this update, the effective maximum payout was reduced from 200% of target to 175% of target. In addition, payouts for 2021 performance under the revised design were lower than they would have been under the previous design.

2021 Financial Metrics Under the EBP

As noted above, in 2021, 50% of each executive’s annual performance award was based on achievement of financial performance targets. The Committee used adjusted EBITDA for our global business (measured against plan) when establishing 2021 financial performance targets under the EBP for our CEO and other corporate executives with enterprise-wide roles to effectively tie compensation to our operating results. We believe that adjusted EBITDA is an appropriate measure to evaluate our operating performance because it focuses on profitability but excludes certain items that management does not consider directly indicative of the company’s ongoing performance.

For our executives who run our business segments, their 2021 financial performance targets were based on a combination of adjusted EBITDA for the global business and segment operating profit. We believe segment operating profit is an appropriate measure to evaluate segment operating performance because it focuses on profitability but excludes certain items that management does not consider directly indicative of the relevant segment’s ongoing performance. Segment operating profit is also the metric by which management tracked segment financial performance in 2021. We believe it is appropriate that the financial metrics driving compensation outcomes match the metrics by which the business is managed. We believe that this combined measurement encourages our executives to collaborate across and contribute to the success of our entire enterprise, while also holding executives accountable for the results of the segment they lead.

Following year-end, our actual financial performance is then compared to the targeted financial performance. For our executives to be eligible to receive any award under the financial component of the EBP for 2021, our actual financial performance had to exceed 70% of the applicable target for adjusted EBITDA/segment operating profit. Performance at the target level for adjusted EBITDA/segment operating profit would have resulted in a payout of 100% of target for the financial component, and performance at 130% or greater of the target level for adjusted EBITDA/segment operating profit would have resulted in a payout of 200% of target for the financial component. For performance between 70% and 130% of the target goal, payout for the financial component is linearly interpolated.

The 2021 adjusted EBITDA/segment operating targets for our named executive officers, as compared to actual adjusted EBITDA/actual segment operating profit in 2021, were as follows:

 

    

Target for

2021 adjusted

EBITDA/segment
operating profit

(in millions)

    

Actual

2021 adjusted

EBITDA/segment
operating profit

(in millions)

     Actual
Achievement
Against Target
    Financial Payout
Factor
    Relevant Business
Objective Weighting
 

Robert E. Sulentic

Emma E. Giamartino

Leah C. Stearns

   $ 2,099      $ 2,898        138     200     Global (100%)  

Michael J. Lafitte

   $

$

2,099

305

 

 

   $

$

2,898

520

 

 

    

138

170.5


   

200

200


   

Global (50%)

REI (50%)

 

 

Daniel G. Queenan

   $

$

2,099

1,482

 

 

   $

$

2,898

2,055

 

 

    

138

138.6


   

200

200


   

Global (50%)

Advisory (50%)

 

 

Chandra Dhandapani

   $

$

2,099

665

 

 

   $

$

2,898

701

 

 

    

138

105.4


   

200

118.1


   

Global (62.5%)

GWS (37.5%)

 

 

See “Section 5. 2021 NEO Compensation and Performance Summaries” in this CD&A for a discussion of each named executive officer’s 2021 financial objectives.


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2022 Financial Metrics under the EBP

For 2022, the Committee continued to use adjusted EBITDA for our global business (measured against plan) to establish 2022 financial performance targets under the EBP for our CEO and other corporate executives with enterprise-wide roles. We also continued to use a combination of adjusted EBITDA and segment operating profit to set 2022 financial performance targets for executives who run our business segments. Historically, our Board has set challenging annual financial targets to achieve strategic growth and increase stockholder value, and our 2022 operating plan assumes continued solid growth over 2021. We do not disclose the specific financial targets for 2022 due to competitive reasons.

2021 Strategic Objectives under the EBP

Although company financial performance is critical to our success, the Committee also believes that a substantial portion of the EBP award (50% for 2021) should take into account the executive’s overall performance, including important strategic objectives. The strategic objective component of annual performance awards under the EBP is both qualitative and quantitative in measurement. These pre-set objectives—which the Committee approves for each executive at the beginning of each performance year—enable the Committee to influence management’s performance against strategies beyond near-term financial objectives to include certain strategic objectives related to ESG initiatives, the quality of our earnings, the positioning of our business for the future and the mitigation of risk. We believe this approach is also responsive to our stockholders that have requested linking earned incentive compensation to annual progress against longer-term strategic goals, including important ESG initiatives. See “Section 5. 2021 NEO Compensation and Performance Summaries” in this CD&A for a discussion of the specific 2021 strategic objectives approved for each named executive officer.

Pursuant to the EBP, following the end of the performance year, the CEO (or in the case of the CEO, the Committee) reviews each executive’s overall performance, taking into account the various strategic objectives that were established at the beginning of the year and any special factors that could have affected performance during the year, such as other objectives and measures that may have become important to us or the executive during the year that are not reflected in the formal strategic objectives approved at the beginning of the performance year.

Under our EBP, the CEO (or the Committee, as applicable) then determines the payout factor, as a percentage of target, for the strategic performance component using the ratings framework below:

Strategic Performance Measurement Scorecard

 

Rating

   Performance Assessment    Strategic Payout Factor (% of Target)

1

   Far Below Expectations    0%

2

   Partially Met Expectations    75%

3

   Met Expectations    100%

4

   Somewhat Exceeded Expectations    125%

5

   Far Exceeded Expectations    150%


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2021 CEO Strategic Performance Objectives

For 2021, our CEO’s strategic performance objectives consisted of the following:

 

Metric

   Target    Actual

Enhance the company’s perception among investors.

   Lead effort to have CBRE rerated relative to the S&P 500.    We separated ourselves from our direct competitors relative to our valuation multiple and general operating performance but fell short on some areas.

Establish clear aspirations for employee engagement.

   Escalate focus on rank and file, as measured by improved engagement scores.    Engagement scores improved from the previous year as a result of increased focus on training and benefits, as well as a very well-received response to the company’s Covid-related Employee Resilience Program.

Drive efforts related to capital investment.

   Escalate efforts across the business related to capital investment, as measured by the potential value creation opportunities.    The effort to escalate our capital investment program in 2021 resulted in us committing $2 billion, including $1.2 billion for strategic acquisitions and growth investments, with remaining upside to produce more investment opportunities bottom-up.

Advance our corporate responsibility.

   Advance corporate responsibility with gains in diversity and sustainability.    In 2021, we increased African American and gender diversity in our leadership ranks. We ran a successful Vice Chair sponsored Diverse Broker Recruiting program. We also improved diversity in our supplier procurement program and increased market facing sustainability investments, including Turner & Townsend and Altus Power.

Make material gains in succession planning.

   Ensure advancement of succession planning across segments and corporate functions.    Succession planning was advanced in numerous areas including: senior leadership, Advisory geographic leadership in the Americas, GWS Enterprise leadership, People, Finance, Corporate Development, and both Trammell Crow Company and Investment Management.

Based on the Committee’s review of Mr. Sulentic’s strategic objectives, we noted his achievement across all strategic objectives exceeded expectations, which warranted an above target payout of 145%. The strategic components for our other NEOs are discussed in greater detail in “Section 5. 2021 NEO Compensation and Performance Summaries” of this CD&A.

2021 EBP Award Payout Determination

The payouts for the financial component and the strategic component of the EBP award, each as described above, are then added together to arrive at a total 2021 EBP award. Payout on the financial component (weighted 50%) may range from 0 to 200% of target, while payout on the strategic component (weighted 50%) may range from 0 to 150% of target. As a result, the maximum payout for 2021 EBP awards is 175% of target. The Committee may also determine to issue to our CEO a supplemental and discretionary award under our EBP in exceptional and exceedingly deserving circumstances, and our CEO (subject to ratification by the Board or the Committee) may determine to issue to our other executive officers a supplemental and discretionary bonus under the EBP in such circumstances not to exceed 200% of the target award. No supplemental EBP awards were awarded in 2021.

“Section 5. 2021 NEO Compensation and Performance Summaries” in this CD&A describes how each named executive officer’s EBP payout for 2021 was calculated.

Long-Term Incentive Awards

We use equity compensation as a long-term incentive to create alignment with stockholders, to reward achievement of multi-year financial objectives, and as a retention tool for top executives that have the most direct impact on corporate results. The link to performance in our long-term incentive grants is prospective in nature. For example, equity grants encourage executives not only to contribute to the creation of additional stockholder value but also to help maintain and preserve existing stockholder value—because the executives share in that value through their equity. Our equity grants are subject to multi-year vesting schedules, which help us to retain key talent.


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Annual Long-Term Incentive Program

In 2021, the Committee granted annual equity awards in two forms—a Time Vesting Equity Award and an Adjusted EPS Equity Award.

2021 Annual Equity Award Grant Metrics

 

 

 

LOGO

 

   

TIME VESTING EQUITY AWARD

RSUs

   Vest 25% per year on each of March 3, 2022, 2023, 2024 and 2025, subject to the executive’s continued service.

ADJUSTED EPS EQUITY AWARD

Performance-based RSUs

  

May be earned from 0 to 200% of the target number of performance-based RSUs, based on the extent to which our cumulative 2021 to 2022 adjusted EPS performance meets, exceeds or falls short of established targets. We do not disclose these targets prior to the end of the performance period for competitive reasons.

 

If actual adjusted EPS is less than the minimum threshold, then none of the units will be earned. Achievement of the threshold, target, and maximum adjusted EPS goals would result in payout of 50%, 100%, and 200% of the target units, respectively. The payout is linearly interpolated for performance between the adjusted EPS threshold and target and for performance between and the adjusted EPS target and maximum.

 

Any earned performance-based RSUs vest in full in March 2024.

AWARD DETERMINATIONS   

For our CEO, the Committee determines the amount of his equity award. For our other executive officers, our CEO recommends to the Committee the recipients of equity awards as well as the amount of each award. In evaluating these recommendations and making its final award determinations for all executive officers, the Committee considers:

 

•  the executive’s position within our organization;

 

•  ongoing performance and expected contributions by the executive to our future success; and

 

•  input from the Committee’s independent compensation consultant (FW Cook), taking into consideration relevant market data (when applicable), pay equity among the relevant employee group and other factors.


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Other Compensation Elements

 

   
DEFERRED COMPENSATION PLAN (DCP)   

The plan provides select management employees whose incomes exceed a certain threshold (including our executive officers) and non-employee directors a tax-efficient method to defer compensation to future years, thus increasing the value of our overall compensation program in support of our recruitment and retention objectives.

 

•  None of our non-employee directors or named executive officers, except Ms. Dhandapani, deferred compensation under the DCP in 2021.

 

The DCP is described in more detail under “Executive Compensation—Summary of Plans, Programs and Agreements—Deferred Compensation Plan.”

SEVERANCE PLAN

 

  

We have a Change in Control and Severance Plan for Senior Management, or Severance Plan, in which all of our named executive officers for 2021 participate. The Committee believes that the Severance Plan is reflective of current compensation practices and trends and is essential to recruiting, retaining and developing high-quality executive talent in the competitive market because it provides protection to the executive if the company does not retain him or her in certain circumstances.

 

Participants under the Severance Plan are eligible to receive:

 

•  severance benefits upon a qualifying termination of employment, including enhanced benefits for a qualifying termination that occurs within a window period surrounding a change in control of the company, and

 

•  continued vesting in respect of equity awards held by them if they remain employed with us on the date of a change in control of the company (or accelerated vesting if such equity awards are not assumed by the successor company).

TREATMENT OF ANNUAL EQUITY AWARDS ON TERMINATION DUE TO DEATH, DISABILITY AND RETIREMENT    The award agreements under which we granted our 2018, 2019, 2020 and 2021 equity awards provide for continued or accelerated vesting of the unvested portion of those awards in the event of termination of employment due to death, disability or retirement.
TREATMENT OF STRATEGIC EQUITY AWARDS ON QUALIFYING TERMINATION OR RETIREMENT    The award agreements under which we granted the Strategic Equity Awards provide for continued or accelerated vesting of a pro-rata amount of the unvested portion of those awards in the event of termination of employment due to death or disability, by the company without cause or the grantee for good reason, or due to retirement.
BENEFITS   

We believe the following other elements of compensation are important to attract, motivate and retain the top executive talent for which we compete.

 

•  Our named executive officers are eligible to participate in the same health, welfare and insurance benefit plans in which our employees are generally able to participate.

 

•  In addition, we offer our named executive officers out of country medical coverage and reimbursement for an annual physical.

 

•  Some or all of our executive officers may also participate in broad-based plans and policies (such as our 401(k) plan).

2021 Compensation Decisions

CEO Target Compensation Adjustment

In March 2021, the Board increased Mr. Sulentic’s total target annual compensation to $16,250,000, comprised of his annual base salary ($1,150,000), annual target performance award ($2,300,000) and annual target equity award ($12,800,000). The Board believes that the increase in Mr. Sulentic’s total target compensation was warranted in light of the company’s performance over the past several years, and that the structure of his compensation package aligns with long-term stockholder value creation. The company has had an outstanding track record since Mr. Sulentic became CEO in December 2012, as reflected in strong revenue and earnings growth and stockholder return. While he has exhibited strong leadership throughout his tenure, the Board noted he provided exceptional leadership navigating the company through the Covid-19 pandemic. As a result of Mr. Sulentic’s leadership, the company emerged in a stronger position operationally, financially and strategically than when the pandemic began. During Mr. Sulentic’s tenure, the company has also made significant environmental, social and governance progress, as evidenced by its inclusion in the Dow Jones Sustainability World Index and the Bloomberg Gender-Equality Index, among others.


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For 2021, Mr. Sulentic requested, and the Board agreed, that Mr. Sulentic would forego $3.7 million of his total target annual compensation opportunity ($230,000 from his base salary, $460,000 from his 2021 EBP target award, and $3,010,000 from his total 2021 annual equity award) in light of the ongoing business challenges related to Covid-19 pandemic that existed in March 2021, when the Board set Mr. Sulentic’s 2021 pay opportunity. As reduced from what the Board originally approved, Mr. Sulentic’s total target annual compensation was $12,550,000, comprised of his annual base salary ($920,000), annual target performance award ($1,840,000) and annual target equity award ($9,790,000). These reductions represent a roughly even reduction as a percentage of each individual pay element from the 2020 target levels.

 

     Base Salary      EBP Target Awards      Total Annual Equity Awards      Total Target
Compensation
 

2020 Target Compensation

   $ 1,000,000      $ 2,000,000      $ 10,650,000      $ 13,650,000  

2021 Target Compensation (Approved on 3/3/2021)

   $ 1,150,000      $ 2,300,000      $ 12,800,000      $ 16,250,000  

Actual 2021 Target Compensation (After Mr. Sulentic’s voluntary reduction in Target Compensation)

   $ 920,000      $ 1,840,000      $ 9,790,000      $ 12,550,000  

Decrease in Actual 2021 Target Compensation Relative to 2020

   $ 80,000      $ 160,000      $ 860,000      $ 1,100,000  

Decrease in Actual 2021 Target Compensation Relative to 2021 Target Compensation (Approved on 3/3/2021)

   $ 230,000      $ 460,000      $ 3,010,000      $ 3,700,000  

At the same time, Mr. Sulentic also agreed to extend his existing Restrictive Covenants Agreement with the company (initially scheduled to expire on December 1, 2023) through December 31, 2025. Mr. Sulentic’s Restrictive Covenants Agreement provides for one-year post-termination non-competition and non-solicitation covenants in the event of a resignation without good reason or a termination for cause prior to its expiration date.

Other NEOs Target Compensation Adjustments

In 2021, as part of the review of target annual compensation opportunities, the Committee approved increases to the annual long term-term equity targets for each of our other named executive officers. The Committee also approved increases to the EBP targets for Ms. Stearns and Messrs. Lafitte and Queenan. These increases (from 2020) reflect their strong performance and position their compensation more appropriately in relation to market compensation levels and our stated compensation philosophy. For more information, see “Section 5. 2021 NEO Compensation and Performance Summaries” in this CD&A. Additionally, in connection with her promotion to Global Group President, Chief Financial Officer and Chief Investment Officer, Ms. Giamartino received a $1,000,000 promotion cash award. Information regarding the terms of Ms. Giamartino’s employment can be found under “Executive Compensation—Employment Agreements—Giamartino Agreement.”

 

     2021 Base Salary      2021 EBP Target Awards      Total 2021 Annual Equity Awards

Emma E. Giamartino(1)

   $680,000      $769,231      $1,215,000

Leah C. Stearns(2)

   $700,000

(No change)

     1,075,000

(Increase of $75,000)

     $2,575,000

(Increase of $275,000)

Michael J. Lafitte

   $735,000

(No change)

     $1,160,000

(Increase of $60,000)

     $2,850,000

(Increase of $190,000)

Daniel G. Queenan

   $700,000

(No change)

     $1,100,000

(Increase of $100,000)

     $2,700,000

(Increase of $400,000)

Chandra Dhandapani(1)

   $700,000      $913,462      $1,800,000

 

(1)

Mses. Giamartino and Dhandapani were not named executive officers for 2020, and so we do not present compensation information for them for that year.

(2)

Ms. Stearns transitioned out of the Chief Financial Officer role and into an advisory role on July 27, 2021.

Revisions to 2020 Adjusted EPS Equity Awards

In 2020, as part of our commitment to align pay and performance, we granted (including to our named executive officers for 2021) Adjusted EPS Equity Awards. The goals for the 2020 Adjusted EPS Equity Awards were set approximately one month prior to the onset of the Covid-19 pandemic. Throughout 2020 and into early 2021, we faced an extremely challenging operating environment with significant uncertainty and market volatility.

In March 2021, the Committee discussed the performance-to-date of the 2020 Adjusted EPS Awards. Despite the fact that the company had significantly preserved stockholder value and 2020 Adjusted EPS was only 8% (for purposes of calculating payouts for Adjusted EPS Equity Awards) below 2019, cumulative 2020-2021 Adjusted EPS was expected to be well below the threshold goal under the 2020 Adjusted EPS Equity Awards. At the time of the Committee’s deliberations, there was still significant uncertainty in the market, and the Committee wanted to maintain management’s motivation to drive financial performance that generated long-term stockholder value. Further, the Committee took into consideration the challenging labor market and increased competition for talent. Upon weighing its potential options, the Committee determined it was in the best interest of all stakeholders to exercise its discretion, consistent with authority granted pursuant to the company’s equity incentive plan, to revise the cumulative adjusted EPS target for the 2020 Adjusted EPS Awards in a prudent manner, ensuring the goals remained rigorous and pay and performance remained aligned. While a discussion of the pre- and post-pandemic goals are below, it is important to note that at the time of revision, the expected probable outcome of the award remained below threshold even under the revised goals.


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Pre-Pandemic Goals

As noted above, in 2020, we granted (including to our named executive officers for 2021) Adjusted EPS Equity Awards. These 2020 Adjusted EPS Equity Awards were granted with a target number of RSUs, of which zero to 200% could be earned based on the extent to which the company achieved adjusted EPS targets over a minimum threshold as measured on a cumulative basis for the 2020 and 2021 fiscal years. The cumulative adjusted EPS “threshold,” “target” and “max” for the 2020 Adjusted EPS Equity Awards were originally set at $8.32, $8.79 and $9.28, respectively. The target goal of $8.79 was developed by applying an approximately 12% cumulative compound annual growth in Adjusted EPS to the 2019 base year Adjusted EPS of $3.71 (i.e., sum of $4.15 (approximately 12% growth over $3.71) and $4.64 (approximately 12% growth over $4.15)).

 

 

LOGO

Threshold and maximum goals were similarly established by using two-year cumulative compound annual growth rates four percentage points below and above the target, respectively.

Harmonizing Goals with the Impact of the Pandemic

As discussed in greater detail below, our 2020 Adjusted EPS fell short of goals set at the beginning of the year, but still represented a significant accomplishment that positioned us well for the success we achieved in 2021. In early 2021, the Committee determined that it was in the best interest of all stakeholders to exercise its discretion, consistent with authority granted pursuant to the company’s equity incentive plan, to revise the cumulative adjusted EPS target for the 2020 Adjusted EPS Awards in a prudent manner, ensuring the goals remained rigorous and pay and performance remained aligned.

The prior cumulative Adjusted EPS target was $8.79, which was the sum of $4.15 (approximately 12% growth over the $3.71 achieved in 2019) and $4.64 (approximately 12% growth over $4.15). The revised cumulative Adjusted EPS target was $7.90, which was the sum of $3.42 (the actual achieved in 2020) and $4.48 (approximately 31% growth over $3.42 in 2020, 21% over 2019, and 19% above 2021 internal budget).

The Committee believed that achieving Adjusted EPS in 2021 of $4.48—the 2021 Adjusted EPS required to achieve target payout under the revised goals and a growth target of 31% over 2020—was a very rigorous hurdle for management, especially considering the decline of Adjusted EPS of 8% (for purposes of calculating the payout for Adjusted EPS Equity Awards) in 2020 and the challenging market dynamics. At the time of the adjustment, the expected probable outcome for actual cumulative 2020-2021 Adjusted EPS was still below the threshold goal. Notwithstanding that the goals were reduced, the adjusted goals were still highly rigorous.

 

 

LOGO

Certified Achievement for Adjusted EPS Equity Awards Granted in 2020

On February 18, 2022, the Committee certified the company’s cumulative adjusted EPS performance for the performance period at $8.75. As a result, payout was 200% of target for the 2020 Adjusted EPS Equity Awards.

The Committee considered whether to apply downward discretion to the payout for named executive officers and ultimately decided against this approach. The Committee determined that the payout for the 2020 Adjusted EPS Equity Awards had effectively aligned pay and performance as intended. The Committee believed it was important to honor its commitment to management and recognize their outstanding achievements against the rigorous goals set in 2021 that, again, had an expected probable outcome of below threshold at the time they were set. In addition to achieving record financial performance in 2021, the Committee also considered the following:

Balance Sheet/Capital Deployment Accomplishments

 

 

Generated record free cash flow of nearly $2.2 billion, up 38% from 2020 and 132% from 2019.


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Deployed approximately $2 billion of capital, including $1.2 billion for strategic acquisitions and growth investments (includes Turner & Townsend, Industrious investment and Altus Power investment) and $0.4 billion for share repurchases.

 

 

Issued $500 million 10-year senior notes at 2.5%, the lowest coupon rate in company history.

Operational accomplishments

 

 

Achieved top ranking for global investment sales market share for the 11th consecutive year according to Real Capital Analytics.

 

 

Unveiled new brand positioning.

 

 

Expanded property development capabilities into Europe.

Sustainability Accomplishments

 

 

Committed to achieving net zero by 2040 and signed The Climate Pledge.

 

 

Consolidated leadership for ESG matters under a single leader—our Chief Responsibility Officer, a senior executive-level position reporting directly to our CEO.

 

 

Maintained our status as the only commercial real estate services provider included in the Dow Jones Sustainability World Index for three consecutive years.

The 2020 Adjusted EPS Equity Awards are subject to forfeiture in certain circumstances as set forth in their award agreement. The certified result differs from our publicly reported Adjusted EPS results because they (i) include adjustments for one-time, direct Covid-19 related expenses in 2020 (e.g., frontline worker bonuses, charitable contributions for Covid-19 and social justice causes, Covid-19 Employee Response Center costs, PPE and office deep cleaning costs, etc.), net of government subsidies, aggregating $0.15, and (ii) exclude $0.47 of gains in 2021 from non-controlling equity investments that are not directly related to our business segments, including a one-time gain on deconsolidation of the SPAC.

Refer to Annex A for a reconciliation of cumulative GAAP EPS to cumulative Adjusted EPS, as certified by the Committee.

2017 Strategic Equity Award

The 2017 Strategic Equity Award is a six-year cliff vesting award with challenging performance hurdles, that required executives to enter into restrictive covenants as described below. This award was structured to:

 

 

encourage focus on longer-term business outcomes (performance periods are six years); and

 

 

provide our executives with a significant and incremental financial incentive to achieve superior outcomes for our stockholders.

The Committee views these awards as crucial to our compensation program and our philosophy of aligning pay and performance. As seen below, the Committee has used these awards to create immediate alignment within the executive ranks by allowing key individuals to participate in the same program or effectively the same program with the same goals and performance periods in cases of new hires or promotions since the original 2017 Strategic Equity Awards were granted.

NEO Eligibility: In 2017, in exchange for the execution of certain restrictive covenants described below, a group of our most senior executives around the globe, including Messrs. Lafitte and Queenan and Ms. Dhandapani, received Strategic Equity Awards with a six-year cliff vesting period (2018-2023). Upon joining the company in 2019, Ms. Stearns also received a Strategic Equity Award having the same terms and conditions as the Strategic Equity Awards granted in 2017. As described below, upon their promotion in 2021, Mses. Giamartino and Dhandapani received Strategic Equity Awards. The Strategic Equity Awards continue to be an effective way to retain, incentivize, and align executives with stockholders when executives join the company or are promoted into roles where they have more significant influence on company performance.

The Committee also offered Mr. Sulentic a significant Strategic Equity Award, which Mr. Sulentic declined. Notwithstanding the fact that Mr. Sulentic does not participate in the 2018-2023 program, Mr. Sulentic entered into the same Restrictive Covenants Agreement with the company as our other named executive officers.

The Strategic Equity Award granted to Messrs. Lafitte and Queenan and Mses. Dhandapani and Stearns is strongly performance-based, with vesting of two-thirds of the award to each executive driven by the extent to which the company achieves rigorous cumulative Adjusted EPS and total stockholder return performance hurdles relative to the S&P 500 over a six-year performance period.


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The Strategic Equity Award is split into three types of RSU awards:

 

   

TIME VESTING STRATEGIC EQUITY AWARD

(one-third of target grant value)

   VESTING: Cliff vests on December 1, 2023.

RELATIVE TSR (“rTSR”) STRATEGIC EQUITY AWARD

(one-third of target grant value)

  

Granted with a target number of RSUs, zero to 175% of which may be earned based on the cumulative total stockholder return (“TSR”) of the company compared to the cumulative TSR of each of the other companies comprising the S&P 500 on December 1, 2017 (the “S&P 500 Comparison Group”).

 

PERFORMANCE PERIOD: Six-year measurement period commencing on December 1, 2017 and ending on December 1, 2023.

 

VESTING: Vesting will occur on the date on which the Committee certifies the performance percentile ranking achieved (which certification will occur as soon as practicable following the end of the performance period, but in no event more than 60 days).

RELATIVE EPS (“rEPS”) STRATEGIC EQUITY AWARD

(one-third of target grant value)

  

Granted with a target number of RSUs, zero to 175% of which may be earned based on the cumulative adjusted EPS growth of the company compared to the cumulative EPS growth, as reported under GAAP, of each of the other companies in the S&P 500 Comparison Group.

 

PERFORMANCE PERIOD: Six-year measurement period commencing on January 1, 2018 and ending on December 31, 2023.

 

VESTING: Vesting will occur on the date on which the Committee certifies the performance percentile ranking achieved (which certification will occur as soon as practicable following the end of the performance period, but in no event more than 90 days).

Performance and Payout Schedule for rTSR and rEPS Awards

The performance and payout schedule for the rTSR and rEPS Strategic Equity Awards is intended to be challenging, as evidenced by the fact that these performance awards will not vest unless the company’s performance on the relevant metric exceeds 50th percentile performance. The payout schedule for the rTSR and rEPS Strategic Equity Awards is as follows:

 

CBRE’s rTSR Performance
(Percentile Rank)
  

% of Target rTSR

Share Units that Vest

   CBRE’s rEPS Performance
(Percentile Rank)
  

% of Target rEPS  

Share Units that Vest  

<= 50th Percentile    0%    <= 50th Percentile    0%  
>= 75th Percentile    175%    >= 75th Percentile    175%  

The payout percentage is linearly interpolated if the company’s performance percentile ranking falls between the 50th percentile and 75th percentile.

Restrictive Covenants Agreement Executed in Connection with Strategic Equity Award

As a condition to receiving the Strategic Equity Award, the group of global senior executives participating in the program, including Messrs. Lafitte and Queenan and Ms. Dhandapani entered into a restrictive covenants agreement with the company which provides for certain post-termination non-competition, non-solicitation of clients and non-solicitation of employees covenants. Ms. Stearns also entered into this restrictive covenants agreement upon joining the company. Although Mr. Sulentic declined his Strategic Equity Award as stated above, he nonetheless entered into the same restrictive covenants agreement with the company as our other named executive officers.

2021 Strategic Equity Award and Restrictive Covenants Agreement

In 2021, the Committee granted a strategic equity award (the “2021 Strategic Equity Awards”) with a grant date value of $1,500,000 to each of Ms. Giamartino and Ms. Dhandapani in connection with their promotions to Chief Financial Officer and Chief Transformation Officer, respectively. This was done in order to better reflect Mses. Giamartino’s and Dhandapani’s contributions to the company and their ability to drive outperformance on key metrics against peers. The Strategic Equity Awards continue to be an effective way to retain, incentivize, and align executives with stockholders when executives join the company or are promoted into roles where they have more significant influence on company performance.

The 2021 Strategic Equity Awards have the same general terms and payout curves as the 2017 Strategic Equity Awards discussed above, except that the entire award is performance-based in nature, with no time-vesting component.

The 2021 Strategic Equity Award is split into two types of RSU awards:

 

 

rTSR Strategic Equity Award (one-half of target grant value)—granted with a target number of RSUs, zero to 175% of which may be earned based on the cumulative TSR of the company compared to the cumulative TSR of each of the companies in the S&P 500 Comparison Group over a six-year measurement period commencing on December 1, 2017 and ending on December 1, 2023.


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rEPS Strategic Equity Award (one-half of target grant value)—granted with a target number of RSUs, zero to 175% of which may be earned based on the cumulative adjusted EPS growth of the company compared to the cumulative EPS growth, as reported under GAAP, of each of the other companies in the S&P 500 Comparison Group over a six-year measurement period commencing on January 1, 2018 and ending on December 31, 2023.

As a new recipient of a strategic equity award, Ms. Giamartino executed a Restrictive Covenants Agreement with the same terms as our other named executive officers.


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Section 5.

2021 NEO Compensation and Performance Summaries

Linking Pay and Performance

Summaries of the compensation decisions made by the Compensation Committee in recognition of our named executive officers’ performance during 2021 are described below.

 

LOGO   

Robert E. Sulentic

 

President and Chief Executive Officer

 

           
Base Salary   $920,000                

                             Target Compensation Mix

     
Total Long-Term
Annual

Equity Awards

Adjusted EPS

Time Vesting

  Adjusted EPS        $6,526,667       

 

LOGO

 

  (at Target)           
  Time Vesting        $3,263,333  
  Total        $9,790,000  

Annual Performance Awards

– Executive Bonus Plan

  Financial Objectives (weighted 50%)

Global adjusted EBITDA - 100%

Actual Achievement Against Target: 138%

 

Financial Component Payout: 200%

Strategic Component Payout: 145%

 

Strategic Objectives (weighted 50%)

Mr. Sulentic was expected to achieve specific objectives set for him in support of the company’s corporate strategy:

 Enhance the company’s perception among investors;

 Establish clear aspirations for employee engagement across the enterprise;

 Drive escalated efforts across enterprise related to capital investment;

 Advance corporate responsibility with particular focus on diversity and sustainability; and

 Make material gains in succession planning and executive development for senior leaders and roles.

 

Based on the Committee’s review of Mr. Sulentic’s strategic objectives, we noted his achievement across all strategic objectives exceeded expectations, which warranted an above target payout of 145%.

    

2021 Target

$1,840,000

 

 

    

2021 Payout

$3,174,000

 

 

In March 2021, the Board increased Mr. Sulentic’s total target annual compensation to $16,250,000, comprised of his annual base salary ($1,150,000), annual target performance award ($2,300,000) and annual target equity award ($12,800,000).

For 2021, Mr. Sulentic requested, and the Board agreed, that Mr. Sulentic would forego $3.7 million of his total target annual compensation opportunity in light of the ongoing business challenges related to Covid-19 that existed at the time Board set Mr. Sulentic’s 2021 target pay opportunity.


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LOGO   

Emma E. Giamartino

 

Global Group President, Chief Financial Officer and Chief Investment Officer

 

           
Base Salary   $680,000                

                             Target Compensation Mix

    
Total Long-Term Annual

Equity Awards

Adjusted EPS

Time Vesting

  Adjusted EPS        $607,500       

 

LOGO

 

  (at Target)           
  Time Vesting        $607,500  
  Total        $1,215,000  

Annual Performance Awards

 Executive Bonus Plan

  Financial Objectives (weighted 50%)

Global adjusted EBITDA - 100%

Actual Achievement Against Target: 138%

 

Financial Component Payout: 200%

Strategic Component Payout: 140%

 

Strategic Objectives (weighted 50%)

Ms. Giamartino was expected to achieve specific objectives set for her in support of the company’s corporate strategy:

 Develop a framework for identifying and executing strategic M&A and REI investments;

 Develop a mechanism to objectively measure and generate insights regarding the financial impact of the company’s investment activities;

 Develop a list of M&A and “sponsor