Rouse CEO got $10 million

Deering received fattened pay package for him to remain

`Very highly regarded'

Executive suite

April 13, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Rouse Co. paid its chairman and chief executive officer nearly $8 million last year in exchange for an unprecedented six-year contract, according to the company's proxy statement filed yesterday with the Securities and Exchange Commission.

In all, the Columbia-based real estate concern paid Anthony W. Deering about $10 million in 1998.

Deering has overseen four years of record earnings by the real estate investment trust. Last year, Rouse shattered an earnings record by posting an income gain of 13 percent, to $204.8 million.

But Deering's financial package -- which includes a bonus, restricted stock award, money to pay income taxes on the stock award linked to the retention contract and debt forgiveness -- also comes as Rouse's common stock has flagged.

In the past year, shareholders -- including Deering, who owns more than 908,000 shares, or 1.24 percent of all outstanding Rouse stock -- have seen the value of their stock holdings fall 33 percent.

Rouse's common shares closed yesterday at $21.562, up 6 cents.

Analysts said retaining Deering was necessary to maintaining the company's solid performance.

"He's very well respected," said Robert L. Levy, an analyst with BancBoston Robertson Stephens, in San Francisco, who tracks Rouse.

"He's a good, solid real estate person; he runs a good company. He's a very highly regarded individual.

"They made some mistakes in 1998; I think they overpaid for some projects, and it's significantly hurt their stock price. But, overall, they have a good portfolio and management team, and it's a quality company."

Deering's salary was raised to $800,000 in 1998 from $725,000 to reflect his added duties as chairman, a title he added during 1997.

Rouse's board granted Deering the $1 million bonus and $3 million stock award in part because of the company's "excellent results" in 1998, and because it was afraid he would be lured away by another company, said a member of the company's board of directors who asked not to be identified.

Aside from the payments under his "special retention contract arrangement," the CEO got $2.4 million of compensation in 1998, the proxy filing said.

Deering's $2.4 million of annual pay was 53 percent less than the $5.1 million he got in 1997, although that year included a $2.9 million stock options grant.

Deering has made the "short-list" for a number of top executive posts, and was even considered for the president's job at the Walt Disney Co.

He has repeatedly told the board that he has no intention of leaving Rouse, the director said.

Deering, 54, has run the company since 1993, when he took the helm from Mathias J. DeVito. He is but the third chief executive in the company's 60-year history.

Rouse's second-highest executive, Vice Chairman and Chief Operating Officer Douglas A. McGregor, earned $1.72 million last year, up 23 percent from 1997.

As part of the employment contract, Deering's base salary will be at least $800,000 through January 2005, when his restricted stock award becomes vested, the proxy said.

During his tenure, Deering has worked to consolidate Rouse's corporate debt and lower its interest rates, as well as strengthen the quality of the projects Rouse both buys and develops.

In 1998 alone, Deering oversaw the purchase of five premier shopping malls, including Towson Town Center, from a Canadian retail developer for $1.1 billion; bought out a longtime partner for $375 million to increase its portfolio by 57 office and industrial buildings and more than 100 acres of land; and opened a new regional mall and upgraded and added other new department stores to its retail projects.

In all, Rouse controls more than 200 projects valued at more than $4 billion.

Bloomberg News contributed to this article.

Pub Date: 4/13/99

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