Paramount Is Under Scrutiny for Undisclosed Executive Compensation While Stock Struggles

Monday, April 7, 2025

• Pay to play (poorly): A recent securities filing reveals that Paramount Group has been handsomely compensating their CEO while the company’s stock continues to struggle.

• Untangling ownership: The CRE industry's intentionally opaque ownership structures slow down deals and complicate risk assessments—but new data tools aim to unravel the complexity.

Federal Policy

Paramount Is Under Scrutiny for Undisclosed Executive Compensation While Stock Struggles

As the slow recovery of the office market continues, Class A offices in the financial districts of major metros have been among the best-performing assets. So why is an office REIT made up mostly of Class A buildings in Manhattan and San Francisco still underperforming other public office REITs? That’s the question investors in Paramount REIT are asking—especially now, after the company disclosed in a recent securities filing that it paid $4 million in previously undisclosed compensation to the CEO and his wife.

Paramount has eighteen office buildings comprising about 14 million square feet. Its largest holdings are in New York City, where Paramount owns and manages eight Class A properties totaling around 8.7 million square feet. These buildings are primarily located in prime Manhattan areas, including Fifth Avenue, Wall Street, and Broadway. Paramount’s next biggest market is San Francisco, where it owns six Class A properties totaling about 4.3 million square feet. The company also owns a few additional properties in Washington, D.C.

Paramount’s stock has declined more than 60% over the past four years, performing worse than many other office real estate stocks. For the third quarter of 2024, the company reported a 5.72% increase in revenue compared to the same period the previous year, but still recorded a net loss of $9.7 million.

Executive compensation has long been a point of contention for Paramount. A recent Green Street report noted that top executives at the company have disproportionately high pay packages, given Paramount’s returns and compared to peers in the industry. Since 2020, there have been two takeover attempts of the company, both rejected without consideration.

Paramount was recently forced to disclose that some of its expenses could be considered compensation to its CEO, Albert Behler, including more than $900,000 for Behler’s personal accounting services over the past three years. It also revealed that $3 million was paid to a charter jet company partially owned by Behler.

In response to this filing, Paramount Group stated: “Paramount Group regularly updates its disclosures as part of its commitment to transparency and in response to shareholder feedback.” While the filing could potentially spark an SEC investigation, there is no indication that such a probe is underway. Still, the disclosure and the surrounding media attention may give investors pause about committing or recommitting to a company that appears more focused on executive compensation than shareholder returns.

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