Compensation Highlights
| | | | | |
| What we do | What we do not do |
| Pay for performance and align interests of executives with those of long-term stockholders | No single-trigger cash severance upon a change in control |
| Majority of executive pay is in the form of at-risk compensation | No hedging of stock permitted |
| Hold-until-retirement requirements applicable to 25% of all equity granted to executives and our stock ownership | No stock options repricing without stockholder approval |
| Clawback policy — which provides for recoupment of previously earned incentives — is a precondition to receiving incentive-based compensation | |
| Capped annual incentive opportunities | |
| Mitigation of risk through Compensation Risk Assessments | |
| Independent compensation consultant | |
2022 EXECUTIVE COMPENSATION PROGRAM IN DETAIL
Base Salary
Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain executive leadership talent. In making base salary decisions, the compensation and human capital committee considers the CEO’s recommendations, as well as each NEO’s position and level of responsibility within the Company. The compensation and human capital committee considers factors such as relevant market data as well as individual performance and contributions. The compensation and human capital committee approved annual base salary rates for 2022 as follows:
| | | | | |
Name | 2022 |
Howard M. Lorber | $1,837,500 |
Richard J. Lampen | 650,000 |
J. Bryant Kirkland III | - |
Scott J. Durkin | 600,000 |
J. David Ballard | 425,000 |
Mr. Kirkland does not receive a base salary from the Company, and pursuant to the Transition Services Agreement (“TSA”) entered into between the Company and Vector Group, dated December 21, 2021, his base salary is a component of Vector Group’s expenses paid by the Company pursuant to the TSA.
Annual Incentive Awards
Annual incentive awards are designed to provide an opportunity for our senior executives, including our NEOs, to earn an annual incentive, paid in cash, based on the achievement of certain goals and objectives as established by the compensation and human capital committee.
Management Annual Incentive Plan: Messrs. Lorber and Lampen. The Management Annual Incentive Plan (the “Plan”) is administered by the compensation and human capital committee. The compensation and human capital committee approves participation in the Plan. For the fiscal year ending December 31, 2022, participants under this Plan included Messrs. Lorber and Lampen. An executive’s incentive target is a percentage of his base salary. Actual award payouts depend on the achievement of pre-determined performance objectives and can range from 0% to 125% of target award amounts. The table below discloses the annual incentive targets for Messrs. Lorber and Lampen for 2022.
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Name | 2022 Base Salary | Annual Incentive Target (% of Base Salary) | Annual Award at Target ($) |
Howard M. Lorber | $1,837,500 | 150.0% | $2,756,250 |
Richard J. Lampen | $650,000 | 112.5% | $731,250 |
Performance Metrics At A Glance. The actual annual awards earned by each of Messrs. Lorber and Lampen are determined by the compensation and human capital Committee based on the attainment of quantitative and qualitative performance goals. The following table shows the performance metrics and performance levels necessary to achieve threshold (0% payout), target (100% payout), and maximum (125% payout) annual award amounts for fiscal year 2022:
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Goals | Weight | Performance Metrics | Weight | Performance Range (% of Target Award) |
Threshold (75%) | Target (100%) | Maximum (125%) |
Quantitative | 75% | Adjusted EBITDA | 30% | $72.0 M | $80.0 M | $95.0 M |
Gross Transaction Value (“GTV”) | 15% | $32.0 B | $40.0 B | $50.0 B |
New Market Expansion (“Expansion”) | 15% | 2 | 5 | 6 |
Company Dividends (“Dividends”) | 15% | $0.15 | $0.20 | $0.25 |
Qualitative | 25% | Diversity, Equity & Inclusion (“DEI”) Initiatives | 25% | See below |
Climate Change Initiatives |
Total: | 100% | | | |
A Closer Look at the Quantitative Metrics (75% of the overall award). For fiscal year 2022, to prioritize profitability and value creation for our stockholders, the compensation and human capital Committee used a mix of performance metrics that place an emphasis on Adjusted EBITDA, while maintaining a focus on growth and delivering meaningful dividends to stockholders:
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Quantitative Metrics | Weight | Rationale | Definition |
Adjusted EBITDA | 30% | Adjusted EBITDA provides a useful illustration of our financial performance and the ongoing operations of our business, since the adjustments exclude certain expenses that are not indicative of our recurring core operating results. This facilitates better comparisons to our historical performance and our competitors’ operating results. | Adjusted EBITDA for our brokerage operations, adjusted to exclude corporate-level expenses and non-operating items and expenses for restructuring, productivity initiatives or new business initiatives, including, but not limited to, losses from expansion into new markets, including, but not limited to, international (through Knight Frank), incentive and other purchase payments associated with the acquisition of the Texas, California and Colorado businesses, as well as the cost of Information Technology initiatives, including the enhancement of the agent technology experience and the financial reporting and control environment. |
GTV | 15% | Douglas Elliman’s annual revenue from commissions is a critical component of its operating performance. To reflect this, we have selected GTV as a criterion for our Annual Bonus Plan because it correlates directly with commission revenues, particularly in our existing markets. | GTV is the sum of all closing sale prices for properties transacted by our brokerage operations agents (excluding rental transactions). |
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Expansion | 15% | Expansion into new markets is a key component of Douglas Elliman’s future strategy to deliver stockholder return because revenues from additional luxury markets will enable the Company to increase margins as it gains economies of scale from its investments in its technology platform and administrative services. The compensation and human capital committee believes the NEOs should be rewarded for their work in entering markets were Douglas Elliman’s existing clients are purchasing additional luxury residences or relocating due to changes in population trends in the US. | Expansion includes the continued growth of the brokerage operations business and adjacent real estate services in adjoining markets to create a diversified footprint. |
Dividends | 15% | Dividends enable stockholders to participate in the profits of the Company. | Cash dividends and/or distributions paid per share of the Company’s common stock, as appropriately adjusted for stock splits, distributions and similar events. |
A Closer Look at the Qualitative Metrics (25% of the overall award). For the year ending December 31, 2022, this portion of the executive’s annual incentive award was determined by the compensation and human capital Committee in its sole discretion based on how effectively management responds to achieving the objectives related to DEI and climate change initiatives, considering all the factors it considers relevant and appropriate. In making this determination, the compensation and human Capital Committee considered both non-financial metrics, including such qualitative factors as the well-being of the Company’s workforce, the safety of employees, agents and customers, and the establishment of processes to implement and measure compliance with the long-term objectives of DEI and Climate Change, as well as any financial metrics it considers appropriate. The maximum an executive may earn on this portion of the award is 125% of target. DEI and climate change initiatives are defined under the Plan as follows:
•DEI Initiatives – DEI initiatives include consideration of efforts made to encourage the development of a more diverse workforce, making the Company a higher performing organization over the long term. These efforts include increasing outside sponsorships, internal employee events and engagement, and other activities designed to bring additional long-term value to the Company brand and workplace by supporting diversity on a basis of gender, race and sexual orientation, creating a supportive environment for individuals with disabilities and encouraging the professional development of the next generation of leaders in the organization.
In addition to continuing Douglas Elliman’s long-standing commitment to DEI, management has recently launched the inaugural “Agents of Change” initiative, which is a conversation series discussing timely social issues and celebrating Douglas Elliman’s agents who are actively working to increase diversity and social change in the real estate industry. Topics to date have been held in honor of Black History Month and “Shattering the Glass Ceiling.” These panel discussions support Douglas Elliman’s ongoing efforts to foster a respectful and supportive workplace that attracts and retains a diverse workforce representing its customers and communities. Douglas Elliman’s commitment to DEI is further reinforced by its support of initiatives and organizations committed to combating economic disparity issues including food insecurity, housing instability, and unemployment.
•Climate Change Initiatives – Climate change initiatives include consideration of efforts to proactively address carbon emissions to enhance the Company’s brand value and reputation. These include establishment of company-wide standards to address the impact of climate change on the Company and its clients, investments in climate change technology to measure the impact of climate change, development of tools to report the impact of climate change to the Company’s clients and other stakeholders, development of metrics to measure acquisitions of any new office space to LEED certified buildings and adherence to new financial reporting standards related to climate change.
In 2022, the Company’s management began the process of developing a preliminary measurement of the Corporation’s impact of Scope 1 and Scope 2 emissions.
Performance Results and Award Payouts.
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Goals | Weight | Performance Metrics | Weight | Performance Range (% of Target Award) | Actual Results |
Threshold (75%) | Target (100%) | Maximum (125%) |
Quantitative | 75% | Adjusted EBITDA | 30% | $72.0 M | $80.0 M | $95.0 M | $34.5 M |
GTV | 15% | $32.0 B | $40.0 B | $50.0 B | $42.95 B |
Expansion | 15% | 2 | 5 | 6 | 8 |
Dividends | 15% | $0.15 | $0.20 | $0.25 | $0.20 |
Qualitative | 25% | DEI Initiatives | 25% | See above | 125% |
Climate Change Initiatives | |
Total: | 100% | Award Earned: | 81.11% of Target |
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Name | Annual Incentive Target (% of Base Salary) | Annual Award at Target ($) | Actual Award (% of Target) | Actual Award Payout ($) |
Howard M. Lorber | 150.0% | $2,756,250 | 121.66 | % | $2,235,491 |
Richard J. Lampen | 112.5% | $731,250 | 91.24 | % | $593,089 |
Discretionary Annual Incentive Awards: Messrs. Durkin and Ballard
Bonus
Mr. Durkin’s discretionary bonus for 2022, in the amount of $650,000 was paid in 2023 based on his outstanding leadership in 2022 as well as Douglas Elliman Realty, LLC’s revenues of $1.153 billion and Adjusted EBITDA of $34.5 million. The bonus was approved by the compensation and human capital committee upon recommendation from management. Mr. Durkin will continue to be eligible for a discretionary bonus in 2023.
Mr. Ballard’s discretionary bonus for 2022, in the amount of $375,000, was paid in 2023 based on his outstanding leadership in implementing technology initiatives for Douglas Elliman Realty in 2022. The bonus was approved by the compensation and human capital committee upon recommendation from management. Mr. Ballard will continue to be eligible for a discretionary bonus in 2023.
Stock Awards
Long-term equity compensation is intended to provide a variable pay opportunity that rewards long-term performance by the Company as a whole and serves as a significant incentive to remain with the Company. The compensation and human capital committee uses the 2021 Plan to structure its incentive compensation programs and believes these awards provide Douglas Elliman a competitive advantage in attracting and retaining talented employees. Because the compensation and human capital committee and stock grant subcommittee granted awards of restricted stock in connection with the distribution on December 31, 2021, no stock awards were granted to NEOs in 2022. Shares received in respect of the December 31, 2021 restricted stock grants are subject to the Company’s Equity Retention, Hedging and Pledging Policy. See “Equity Retention Policy.”
Other Benefits
The Company’s executive officers are eligible to participate in all its employee benefit plans, such as medical, dental, vision, group life, disability and accidental death and dismemberment insurance and the 401(k) Plan on the same terms as all other employees. These benefits are designed to provide a safety net of protection against the financial catastrophes that can
result from illness, disability or death. The Company also provides vacation and other paid holidays to its executive officers, as well as certain other perquisites further described below.
Stock Ownership Guidelines
The Company has Stock Ownership Guidelines that are applicable to all named executive officers and each non-employee member of the Board. Under the guidelines, which are phased in within the five years after the date that a covered person becomes a named executive officer or member of the Board, the following ownership requirements exist.
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| Title | | Value of Shares Owned |
| | | | |
| Chief Executive Officer | | 3.0 | X | Base Salary |
| Executive Vice Presidents | | 1.5 | X | Base Salary |
| Other named executive officers | | 1.0 | X | Base Salary |
| Non-employee directors | | 2.0 | X | Annual Retainer |
“Shares owned” for purposes of the policy include shares of the Company’s stock owned outright, any shares held under an employee benefit plan, and restricted shares. The valuation of shares includes all shares held beneficially or directly by any covered person or the person’s family members or trusts but excludes pledged shares. Compliance is assessed on the last day of each quarter. As of December 31, 2022, all covered individuals were following the guidelines.
Equity Retention Policy
Under its Equity Retention, Hedging and Pledging Policy, the Company formalized its practice of significant share retention by senior management. Until age 60, each executive officer is required to retain at least 25% (after taxes and exercise costs) of the executive officer’s shares of Common Stock acquired by them under an incentive plan or award (the “Award Shares”).
Executive Compensation Clawback Policy
The Company adopted an Executive Compensation Clawback Policy (the “Clawback Policy”) on December 22, 2021, which requires, as a condition to receive bonus or incentive-based compensation from the Company, that each named executive officer must have entered into an agreement with the Company providing that any performance-based compensation awarded, paid or payable by the Company or any of its subsidiaries subsequent to the date of adoption of the Clawback Policy shall be subject to recovery or “clawback” by the Company. Under the Clawback Policy, if the Company’s financial results are restated, the result of which is that any performance-based compensation would have been lower had it been calculated based on such restated results, the compensation and human capital committee shall review the performance-based compensation received by the named executive officers. If the compensation and human capital committee determines that the performance-based compensation would have been lower and that a named executive officer who received such compensation engaged in fraud, material financial or ethical misconduct or recklessness in the performance of the named executive officer’s duties or intentional illegal conduct which materially contributed to the restatement, then the compensation and human capital committee may seek to recover the after-tax portion of the excess amount of performance-based compensation. Under the Clawback Policy, the compensation and human capital committee has the discretion to determine to seek recovery of the performance-based compensation after notice and an opportunity to be heard is provided to the named executive officer. The Company intends to update its clawback policies to comply with the SEC's and the New York Stock Exchange's new requirements regarding recovery of executive compensation prior to the effective date of those rules.
Anti-Hedging Policies
The Company’s Equity Retention, Hedging and Pledging Policy, adopted in December 2021, applies to the Company’s executive officers and directors. Executive officers are prohibited from participating in certain trading activities with respect to Award Shares, that by their nature would constitute hedging. Directors are prohibited from participating in certain trading activities with respect to Common Stock granted to them in connection with their service on the Board that by their nature would constitute hedging. For both executive officers and directors, such prohibited activities, related to the Company’s equity securities, include:
•Trading in publicly traded options;
•Trading in puts;
•Trading in calls; or
•Trading in other derivative instruments.
Perquisites
The Company has its own corporate aircraft policy, which is intended to apply to all Company employees, business associates and guests who use the aircraft owned, operated or chartered by the Company and its subsidiaries. The term “employees” includes employees of the Company’s subsidiaries. The Company’s corporate aircraft policy permits personal use of corporate aircraft, subject to an annual limit of $200,000 and $50,000 for personal use by Messrs. Lorber and Lampen, respectively. For purposes of determining the amounts allowable under this policy, the value of an employee’s personal usage is calculated using the applicable standard industry fare level formula established by the Internal Revenue Service (as distinguished from the aggregate incremental cost approach used for determining the value included in the 2022 Summary Compensation Table), and Mr. Lorber and any other executive officers pay income tax on such value.
Additionally, Mr. Lorber is entitled to a car and driver provided by the Company, a $3,750 per month allowance for lodging and related business expenses, and one club membership and Mr. Lampen is reimbursed for automobile and club expenses on an after-tax basis. Finally, certain directors and senior managers (including the NEOs) are eligible to receive discounted real estate brokerage commission rates when they use a Douglas Elliman real estate agent in connection with a real estate transaction.
All perquisites for 2022 reflected in the 2022 Summary Compensation Table were paid by the Company. See the 2022 Summary Compensation Table for details regarding the value of perquisites received by the NEOs. All perquisites reflected in the 2022 Summary Compensation Table for 2021 and 2020, other than those that apply to Mr. Durkin, were paid by Vector Group.
Change in Control Provisions
The employment agreements between the Company and each of Messrs. Lorber and Lampen contain change in control provisions. In the event of a change in control that results in a termination of employment by the Company without cause or a resignation for good reason (a “double trigger” change in control provision), Messrs. Lorber and Lampen will receive severance benefits as set forth below in “Potential Termination and Change in Control Payments.” The purpose of these provisions is to avoid the distraction and loss of key management personnel that may occur in connection with rumored or actual corporate transactions and/or other fundamental corporate changes and to provide adequate protection to key management personnel if their employment is terminated following a change in control. A change in control provision protects stockholder interests by enhancing employee focus during rumored or actual change in control activity through incentives to remain with the Company despite uncertainties while a transaction is under consideration or pending by assurance of the payment of severance and benefits for terminated executives. A detailed summary of these provisions is set forth under the heading “Payments Made Upon a Change in Control.” In addition, outstanding restricted stock awards held by named executive officers vest upon a change in control.
Inter-Relationship of Elements of Compensation Packages
The various elements of the compensation packages for the Company’s executive officers are not directly inter-related. For example, if it does not appear as though the target annual cash incentive award will be achieved, the number of restricted shares that will be granted is not affected. If shares of restricted stock that are granted in one year decline in value due to a decline in the Company’s stock price, the amount of the annual cash incentive award or compensation to be paid the executive officer for the next year is not impacted. Similarly, if shares of restricted stock granted to an executive in one year become extremely valuable due to a rising stock price, the amount of compensation or annual cash incentive award to be awarded for the next year is not affected. However, the compensation and human capital committee does evaluate the total value of executive remuneration when making decisions with respect to any compensation element.
Compensation Risk Assessment
It is our belief that a majority of an executive’s total compensation should be variable “at risk” compensation, meaning it is tied to the Company’s financial performance. However, because performance-based incentives play a large role in our compensation program, we strive to ensure that incentives do not result in actions that may conflict with the long-term best interests of the Company and our stockholders. Therefore, the compensation and human capital committee evaluated all of our compensation plans and policies (applicable to executives and employees below the executive level) for attributes that could cause excessive risk-taking. We concluded that our compensation programs and policies do not encourage excessive risk-taking because: (a) the salary component of our program is a fixed amount; (b) executive officers are subject to our executive stock ownership guidelines; and (c) the annual cash-based incentive plan and long-term incentive plans are designed with risk-
mitigating characteristics such as (i) maximum award payouts based on the attainment of various and continually evolving Company financial objectives which diversify risks associated with a single indicator of performance, (ii) our equity-based incentives encourage a longer-term focus through multi-year performance periods, (iii) our risk-mitigating policies in place such as insider trading and hedging prohibitions and clawbacks, and (iv) review and approval of final awards by our compensation and human capital committee (and the independent members of the full Board in the case of the CEO), which is composed entirely of independent directors who have discretion under our plans to approve, modify, or eliminate any award earned.
Role of Independent Compensation Consultant
The compensation and human capital committee may retain independent compensation consultants to render advice and guidance in assessing whether the Company’s compensation program is reasonable and competitive.
Since December 2021, the compensation and human capital committee has engaged Pearl Meyer to conduct a competitive market assessment of the Company’s executive compensation levels and structure, including an examination of market trends and best practices in the Company’s primary industries, as well as advise on the design and structure of incentive compensation programs for executives.
Pearl Meyer is directed by, and only provides services to, the compensation and human capital committee.
Tax and Accounting Implications
The Company accounts for stock-based compensation, including restricted stock awards under the Company’s stock plans, in accordance with the requirements of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”).
Compensation and Human Capital Committee Report
The compensation and human capital committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this document.
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| THE COMPENSATION AND HUMAN CAPITAL COMMITTEE |
| |
| Ronald J. Kramer, Chairman |
| Michael S. Liebowitz |
| Mark D. Zeitchick |
2022 SUMMARY COMPENSATION TABLE
The following table summarizes the compensation of the NEOs for the years ended December 31, 2022, 2021 and 2020. Prior to the distribution of the Company by Vector Group at the end of 2021, the compensation of Messrs. Lorber, Lampen and Kirkland was paid by Vector Group, and therefore information regarding their Vector Group compensation in 2020 and 2021 is included in the table below. In 2021, Mr. Durkin’s compensation was paid by Douglas Elliman Realty, LLC. The information set forth below for Messrs. Lorber, Lampen and Kirkland, with respect to 2021 and 2020, with the exception of certain restricted stock awards granted by the Company at the end of 2021, reflects compensation for services rendered to Vector Group.
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| | Salary | Bonus | Stock
Awards | | Non-Equity
Incentive Plan
Compensation | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings | All Other
Compensation | | Total |
| Name and Principal Position | Year | ($)(1) | ($) | ($) (2) (3) | | ($)(4) | ($)(5) | ($) | | ($) |
| Howard M. Lorber | 2022 | $ | 1,837,500 | | — | | $ | — | | | $ | 2,235,491 | | $ | — | | $ | 45,000 | | (6) | $ | 4,117,991 | |
| President and Chief | 2021 | $ | 3,426,270 | | — | | $ | 21,530,000 | | | $ | 4,282,838 | | $ | 2,707,353 | | $ | 300,197 | | | $ | 32,246,658 | |
| Executive Officer | 2020 | $ | 3,371,649 | | — | | $ | 3,001,250 | | | $ | 3,898,469 | | $ | 5,153,781 | | $ | 340,104 | | | $ | 15,765,253 | |
| Richard J. Lampen | 2022 | $ | 650,000 | | — | | $ | — | | | $ | 593,089 | | $ | — | | $ | 22,517 | | (7) | $ | 1,265,606 | |
| Executive Vice President and Chief | 2021 | $ | 1,250,000 | | — | | $ | 7,896,500 | | | $ | 1,171,875 | | $ | 320,232 | | $ | 163,093 | | | $ | 10,801,700 | |
| Operating Office | 2020 | $ | 900,000 | | — | | $ | 900,375 | | | $ | 520,313 | | $ | 609,601 | | $ | 88,075 | | | $ | 3,018,364 | |
| J. Bryant Kirkland III | 2022 | $ | — | | — | | $ | — | | | $ | — | | $ | — | | $ | — | | | $ | — | |
| Senior Vice President, Chief Financial | 2021 | $ | 550,000 | | — | | $ | 2,869,800 | | | $ | 229,144 | | $ | 78,146 | | $ | 8,700 | | | $ | 3,735,790 | |
| Officer and Treasurer | 2020 | $ | 550,000 | | — | | $ | 480,200 | | | $ | 211,958 | | $ | 330,737 | | $ | 8,550 | | | $ | 1,581,445 | |
| J. David Ballard (8) | 2022 | $ | 425,000 | | $ | 375,000 | | $ | — | | | $ | — | | $ | — | | $ | — | | | $ | 800,000 | |
| Senior Vice President, Enterprise | | | | | | | | | | |
| Efficiency and Chief Technology Officer | | | | | | | | | | |
| Scott J. Durkin (9) | 2022 | $ | 600,000 | | $ | 650,000 | | $ | — | | | $ | — | | $ | — | | $ | 23,763 | | (10) | $ | 1,273,763 | |
| President and Chief Operating Officer of Douglas Elliman Realty, LLC | 2021 | $ | 500,000 | | $ | 1,000,000 | | $ | 1,437,500 | | | $ | — | | $ | — | | $ | 4,350 | | | $ | 2,941,850 | |
___________________________
(1)Reflects actual base salary amounts paid for 2022, 2021 and 2020, unless otherwise indicated. All amounts for Messrs. Lorber, Lampen and Kirkland in 2021 and 2020 were paid by Vector Group and Mr. Durkin's amount in 2021 was paid by Douglas Elliman Realty, LLC.
(2)Represents the aggregate grant date fair value of restricted stock granted (under (i) the Vector Group Ltd. 2014 Management Incentive Plan (the “2014 Plan”), during the years ended December 31, 2021 and 2020, and (ii) the Company’s 2021 Plan, during the year ended December 31, 2021) as determined in accordance with FASB ASC Topic 718, rather than an amount paid to or realized by the named executive officer. Assumptions used in the calculation of such amount are included in (i) note 14 to Vector Group’s audited financial statements for the year ended December 31, 2022 included in its Annual Report on Form 10-K filed with the SEC on February 21, 2023 and (ii) note 13 to the Company’s audited financial statements. These grants are subject to continued service conditions; consequently, FASB ASC Topic 718 amounts included in the table may never be realized by the named executive officer.
(3)In 2021, Mr. Lorber's restricted stock award consisted of $7,155,000 awarded from Vector Group and $14,375,000 from the Company; Mr. Lampen's restricted stock award consisted of $2,146,500 awarded from Vector Group and $5,750,000 from the Company; and Mr. Kirkland's restricted stock award consisted of $1,144,800 awarded from Vector Group and $1,725,000 from the Company; and, Mr. Durkin's restricted stock award was entirely awarded by the Company. In 2020, all stock awards were awarded by Vector Group.
(4)The amounts for 2022 reflect performance-based annual cash awards paid during 2023 in respect of service performed in 2022. The amounts for 2021 and 2020 reflect performance-based annual cash awards under the Vector 2014 Plan paid during 2022 and 2021 in respect of service performed in 2022 and 2021, respectively. This plan is discussed in further detail under the heading “Annual Incentive Awards” in the “Compensation Discussion and Analysis” section. All amounts in respect of 2021 and 2020 performance for Messrs. Lorber, Lampen and Kirkland were paid by Vector Group.
(5)Amounts reported represent the increase in the actuarial present value of benefits associated with Vector Group’s pension plans. Assumptions for 2021 amounts are further described in “Pension Benefits at 2021 Fiscal Year End” in Vector Group’s Proxy Statement filed with the SEC on May 2, 2022. The amounts reflect the increase in actuarial present value for the named executive officer’s benefits under the Supplemental Retirement Plan determined using
interest rate, retirement date and mortality rate assumptions consistent with those used in the Company’s financial statements. No amount is payable from this plan before a participant attains age 60 during active service except in the case of death, disability or termination without cause. There can be no assurance that the amounts shown will ever be realized by the named executive officers. These plans remained at Vector Group following the distribution, and the Company does not currently maintain any defined benefit pension or non-qualified deferred compensation plans.
(6)Represents perquisites consisting of a $45,000 allowance paid for lodging and related business expenses in 2022.
(7)Represents perquisites in 2022 of $22,517 for reimbursement of automobile expenses and club expenses.
(8)Mr. Ballard became a NEO in 2022.
(9)Mr. Durkin became an executive officer of the Company in connection with the distribution of the Company by Vector Group. Amounts reported in 2021 are for the entire year. The "bonus" column for Mr. Durkin reflects the value of the annual bonus payments in respect of 2022 and 2021 paid in 2023 and 2022 to Mr. Durkin, which were determined at the discretion of the compensation and human capital committee based on Douglas Elliman Realty, LLC's operating performance in 2022 and 2021, as discussed further under the heading, "Bonus," of the “Compensation Discussion and Analysis” section.
(10)Represents $4,575 in contributions to the Douglas Elliman Realty, LLC 401(k) Plan and $19,188 in discounted real estate brokerage commission fees in 2022.
Employment Agreements
Agreements with Douglas Elliman. The Company entered into employment agreements with each Mr. Lorber, its President and CEO, and Mr. Lampen, its Executive Vice President and COO, each of which became effective as of the date of the distribution.
In connection with the appointment of Mr. Lorber as President and Chief Executive Officer, Mr. Lorber and the Company entered into an employment agreement dated January 10, 2022, which became effective as of December 29, 2021. Mr. Lorber’s employment agreement has an initial term of three years, which term will automatically be extended by one year on each anniversary of the effective date of the employment agreement unless either party provides prior notice that such party does not desire to the extend the term. The employment agreement, which was amended on March 18, 2022, provides for an annual base salary of $1,837,500. Commencing January 1, 2023, Mr. Lorber’s base salary is subject to an annual cost-of-living adjustment based on the South Florida Metropolitan area. As of January 1, 2023, Mr. Lorber's base salary is $2,018,678, which increase reflects a contractual cost of living adjustment in 2023. The Board of Directors of Douglas Elliman may also periodically review Mr. Lorber’s base salary for increase, but not decrease. Mr. Lorber is also entitled to receive an annual bonus based on a target bonus opportunity equal to 150% of Mr. Lorber’s annual base salary and to participate in Douglas Elliman’s long-term incentive plans on a basis consistent with his positions with Douglas Elliman. During the period of his employment, Mr. Lorber is entitled to various benefits, including a car and driver provided by Douglas Elliman, a $3,750 per month allowance for lodging and related business expenses, a club membership and dues and use of corporate aircraft in accordance with Douglas Elliman’s corporate aircraft policy. Upon a termination of Mr. Lorber’s employment by Douglas Elliman without cause (as defined in the employment agreement), termination of Mr. Lorber’s employment by him for good reason (as specified in the employment agreement) or upon death or disability, subject to continued compliance with non-competition and non-solicitation covenants, Mr. Lorber (or his beneficiary in the case of death) is entitled to receive for 36 months following termination (i) continued base salary, (ii) an annual cash bonus (in an amount equal to the bonus paid to Mr. Lorber for the performance period immediately prior to the year in which notice of termination is given, but not to exceed Mr. Lorber’s current target bonus opportunity) and (iii) continued welfare benefits for Mr. Lorber and his eligible dependents. Mr. Lorber is also entitled to accelerated vesting of outstanding equity awards. Upon a termination of Mr. Lorber’s employment for any of the reasons described above (other than death or disability) within two years following a change in control (as defined in the employment agreement), Mr. Lorber will be entitled to receive (i) a cash lump sum payable within 30 days following termination equal to 2.99 times the sum of (a) base salary and (b) the bonus earned by Mr. Lorber (including any amounts deferred) for the performance period that ended immediately prior to the performance period in which the date of termination occurs (but not to exceed Mr. Lorber’s target bonus opportunity during such year), (ii) continued participation by Mr. Lorber and his eligible dependents in welfare benefit plans in which they were participating at the time of termination for up to the end of the employment period and (iii) for 36 months after termination, continued life and medical insurance benefits (reduced to the extent comparable benefits are actually received during such 36-month period from a subsequent employer). Mr. Lorber is also entitled to accelerated vesting of all outstanding equity awards. In addition, Mr. Lorber will be indemnified in the event that excise taxes are imposed on change in control payments under Section 4999 of the Code. The employment agreement contains certain covenants by which Mr. Lorber is bound, including covenants not to compete with or solicit employees or customers of Douglas Elliman.
In connection with the appointment of Mr. Lampen as Executive Vice President and COO, Mr. Lampen and the Company entered into an employment agreement dated January 10, 2022, which became effective as of December 29, 2021. Mr. Lampen’s employment agreement has an initial term of two years, which term will automatically be extended by one year on each anniversary of the effective date of the employment agreement unless either party provides prior notice that such party does not desire to the extend the term. The employment agreement provided for an initial annual base salary of $650,000. As of January 1, 2023, Mr. Lampen's base salary is $682,500, which increase reflects a cost of living adjustment in 2023. Mr. Lampen is also entitled to receive an annual bonus based on a target bonus opportunity equal to 112.5 % of Mr. Lampen’s annual base salary and to participate in Douglas Elliman’s long-term incentive plans on a basis consistent with Mr. Lampen’s position with Douglas Elliman. During the period of his employment, Mr. Lampen is entitled to various benefits, including first-class air travel and lodging, as well as reimbursement for certain automobile and club expenses on an after-tax basis and use of corporate aircraft in accordance with Douglas Elliman’s corporate aircraft policy. Upon a termination of Mr. Lampen’s employment by Douglas Elliman without cause (as defined in the employment agreement), termination of Mr. Lampen’s employment by him for good reason (as specified in the employment agreement) or upon death or disability, subject to continued compliance with non-competition and non-solicitation covenants, Mr. Lampen (or his beneficiary in the case of death) is entitled to receive for 24 months following termination (i) continued base salary, (ii) an annual cash bonus (in an amount equal to the bonus paid to Mr. Lampen for the performance period immediately prior to the year in which notice of termination is given, but not to exceed Mr. Lampen’s current target bonus opportunity) and (iii) continued welfare benefits for Mr. Lampen and his eligible dependents. In addition, Mr. Lampen is also entitled to receive accelerated vesting of outstanding equity awards. Upon a termination of Mr. Lampen’s employment for any of the reasons described above (other than death or disability) within two years following a change in control (as defined in the employment agreement), Mr. Lampen will be entitled to receive (i) a cash lump sum payable within 30 days following termination equal to 2 times the sum of (a) base salary and (b) the bonus earned by Mr. Lampen (including any amounts deferred) for the performance period that ended immediately prior to the performance period in which the date of termination occurs (but not to exceed Mr. Lampen’s target bonus opportunity during such year), (ii) continued participation by Mr. Lampen and his eligible dependents in welfare benefit plans in which they were participating at the time of termination for up to the end of the employment period and (iii) for 24 months after termination, continued life and medical insurance benefits (reduced to the extent comparable benefits are actually received during such 24-month period from a subsequent employer). In addition, Mr. Lampen is also entitled to receive accelerated vesting of all outstanding equity awards. The employment agreement contains certain covenants by which Mr. Lampen is bound, including covenants not to compete with or solicit employees or customers of Douglas Elliman.
The Company has entered into an employment agreement, effective December 29, 2021, with J. David Ballard (the “Ballard Agreement”), who serves as Senior Vice President − Enterprise Efficiency and Chief Technology Officer of the Company. The Ballard Agreement had an initial term of 12 months with an automatic one-year extension on December 31, 2022 and each year thereafter unless notice of non-extension is given by either party within 60 days prior to the end of the initial term. The Ballard Agreement provided Mr. Ballard an initial annual base salary of $400,000, which has since been increased to $446,250, effective January 1, 2023. Mr. Ballard is eligible to participate in any annual incentive plan, which shall be based on Company profitability, individual performance and other factors and shall be paid by March 31 following the end of the calendar year which it relates. Following termination of his employment by the Company without cause (as defined in the Ballard Agreement), termination of employment by Mr. Ballard for good reason (as defined in the Ballard Agreement), termination of employment due to the nonrenewal of the Ballard Agreement or upon death, Mr. Ballard (or his beneficiaries in the case of death) would continue to receive (i) for a period of 12 months following the termination date his base salary and most recent annual bonus and (ii) for 18 months after termination, continued medical and dental insurance benefits (reduced to the extent comparable benefits are actually received during such 18-month period from a subsequent employer). In addition, Mr. Ballard is also entitled to receive accelerated vesting of all outstanding equity awards. The severance payments and benefits payable to Mr. Ballard under the Ballard Agreement are subject to Mr. Ballard's execution of a release of claims in favor of the Company and its affiliates. The Ballard Agreement contains certain covenants by which Mr. Ballard is bound, including covenants not to compete with or solicit employees or customers of Douglas Elliman.
Messrs. Kirkland and Durkin do not have employment agreements with the Company.
CEO Pay Ratio
Pursuant to Item 402(u) of Regulation S-K and Section 953(b) of the Dodd-Frank Act, presented below is the ratio of annual total compensation of the Company's CEO to the annual total compensation of the Company's median employee (excluding the CEO) for 2022.
The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make
reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below because other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
In its 2022 analysis, the Company first determined its employee population using a determination date of December 31, 2022. The Company identified the median employee using a compensation measure consisting of base salary or wages (as applicable), overtime pay, and any bonuses paid during the twelve-month period preceding the determination date. Conforming adjustments were made for permanent employees who were hired during that period and did not receive pay for the full period.
The 2022 annual total compensation as determined under Item 402 of Regulation S-K for the Company's CEO was $4,117,991, as reported in the 2022 Summary Compensation Table. The 2022 annual total compensation as determined under Item 402 of Regulation S-K for the median employee identified in 2022 was $73,607. The ratio of the Company's CEO’s annual total compensation to the Company's median employee’s annual total compensation for fiscal year 2022 is 56 to 1.
GRANTS OF PLAN-BASED AWARDS IN 2022
The table below provides information with respect to incentive compensation granted to each of the named executive officers during the year ended December 31, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | All Other Stock Awards: Number of Shares of Stock (#) | | All Other Option Awards: Number of Shares of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($) | | Grant Date Fair Value of Stock and Option Awards ($) |
| | | Estimated Future Payouts Under Non-
Equity Incentive Plan Awards (1) | | Estimated Future Payouts
Under Equity Incentive Plan Awards | | | | |
| | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | |
| Name | Grant Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Howard M. Lorber | 5/13/2022 | | — | | | $ | 2,756,250 | | | $ | 3,445,313 | | | — | | — | | — | | — | | — | | | — | | | $ | — | |
| Richard J. Lampen | 5/13/2022 | | — | | | 731,250 | | | 914,063 | | | — | | — | | — | | — | | — | | | — | | | $ | — | |
| J. Bryant Kirkland III | — | | | — | | | — | | | — | | | — | | — | | — | | — | | — | | | — | | | $ | — | |
| J. David Ballard | — | | | — | | | — | | | — | | | — | | — | | — | | — | | — | | | — | | | $ | — | |
| Scott J. Durkin | — | | | — | | | — | | | — | | | — | | — | | — | | — | | — | | | — | | | $ | — | |
___________________________
(1)Represents the annual incentive awards made under the 2021 Plan on May 13, 2022. In 2022, target levels were equal to 150% of base salary for Mr. Lorber and 112.5% of base salary for Mr. Lampen. The actual bonus amounts earned for 2022 have been determined and paid in 2023 and are reflected in the “Non-Equity Incentive Plan Compensation” column in the 2022 Summary Compensation Table. Messrs. Durkin and Ballard do not participate in a non-equity incentive plan and instead, their right to receive an annual bonus is discretionary. Mr. Kirkland was not eligible for a bonus from Douglas Elliman for 2022.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2022
The table below provides information with respect to the outstanding Douglas Elliman equity awards of the named executive officers as of December 31, 2022.
| | | | | | | | | | | | | | | | | |
| | | Stock Awards |
| | Number of
Shares or
Units of
Stock That
Have Not Vested (#) | | Market
Value of
Shares or
Units of
Stock That
Have Not Vested ($) | |
| Name | | | |
| Howard M. Lorber | | 937,500 | | (1) | $ | 3,815,625 | | |
| Richard J. Lampen | | 375,000 | | (1) | $ | 1,526,250 | | |
| J. Bryant Kirkland III | | 112,500 | | (1) | $ | 457,875 | | |
| J. David Ballard | | 37,500 | | (1) | $ | 152,625 | | |
| Scott J. Durkin | | 93,750 | | (1) | $ | 381,563 | | |
___________________________
(1)These restricted shares vest in three equal annual installments. The first vesting occurred on December 15, 2022 and the next three tranches will vest on each of December 15, 2023, December 15, 2024 and December 15, 2025, provided the recipient is then still an employee of the Company, subject to earlier vesting upon the recipient's death or disability, termination of employment without cause, resignation for good reason and change in control.
STOCK VESTED IN YEAR ENDED DECEMBER 31, 2022
The table below provides information with respect to Douglas Elliman restricted stock awards that vested during 2022, as well as the value realized on the vesting date, based on the average of the high and low of Douglas Elliman’s Common Stock on that date.
| | | | | | | | | | | | | | | | | | |
| | | | | Stock Awards |
| Name | | | | | | Number of
Shares Acquired
on Vesting (#) | | Value Realized
on Vesting ($) |
| | |
| Howard M. Lorber | | | | | | 312,500 | | | $ | 1,245,313 | |
| Richard J. Lampen | | | | | | 125,000 | | | $ | 498,125 | |
| J. Bryant Kirkland III | | | | | | 37,500 | | | $ | 149,438 | |
| J. David Ballard | | | | | | 12,500 | | | $ | 49,813 | |
| Scott J. Durkin | | | | | | 31,250 | | | $ | 124,531 | |
| | | | | | | | |
PENSION BENEFITS AT 2022 FISCAL YEAR END
The Company does not sponsor any defined benefit pension plans and therefore, there are no pension benefits at December 31, 2022.
Termination and Severance Benefits
Assumptions Regarding Post-Termination Payment Tables
The following tables were prepared as though each named executive officer’s employment with the Company was terminated on December 31, 2022 using the closing price per share of the Company’s Common Stock as of that day ($4.07). The amounts under the columns that reflect a change in control assume that a change in control followed by a qualifying
termination of employment occurred on December 31, 2022. However, no NEO’s employment was terminated on December 31, 2022 and a change in control did not occur on that date. There can be no assurance that a termination of employment, a change in control or both would produce the same or similar results as those quantified below if either or both of these events occur on any other date or at any other price, or if any other assumption used in these estimates changes based on the facts and circumstances at the time of an actual change in control or termination of employment.
Equity-Based Assumptions
•Restricted stock held by Messrs. Lorber, Lampen, Kirkland, Ballard and Durkin would have vested on December 31, 2022 with respect to a termination of employment due to the executive's death, disability, or upon a termination of employment without cause or resignation for good reason or a change in control.
Incentive Plan Assumptions
•All amounts under the Company’s 2021 Plan were deemed to have been earned for 2022 in full based on actual performance and are not treated as subject to the excise tax upon a change in control.
Howard M. Lorber
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by
Company without Cause
or by Named
Executive Officer
with Good Reason | | Disability | | Death | | Termination by Company
for Cause or Voluntary
Termination by
Named Executive Officer
Without Good Reason | | Termination by
Company without Cause
or by Named Executive
Officer with Good Reason
upon a
Change in Control | |
| Cash Severance | $ | 12,218,973 | | (1) | $ | 12,218,973 | | (1) | $ | 12,218,973 | | (1) | $ | — | | | $ | 12,178,243 | | (2) |
| Value of Accelerated Unvested Equity (3) | $ | 3,815,625 | | | $ | 3,815,625 | | | $ | 3,815,625 | | | $ | — | | | $ | 3,815,625 | | |
| Benefits Continuation (4) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
| Excise Tax and Gross-Up | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | (5) |
___________________________
(1)Reflects the value of the sum of Mr. Lorber’s 2022 base salary ($1,837,500) and actual 2022 bonus limited to 150% of base salary paid over a period of 36 months after termination.
(2)Reflects the value of the sum of Mr. Lorber’s 2022 base salary ($1,837,500) and actual 2022 bonus limited to 150% of base salary for a period of 2.99 years paid in a lump-sum payment commencing after termination.
(3)Reflects the value of any unvested restricted stock that would have vested upon the event using the closing price per share of the Company’s Common Stock on December 31, 2022 ($4.07). See “Outstanding Equity Awards at December 31, 2022.”
(4)Mr. Lorber does not participate in the benefits plans of the Company.
(5)Mr. Lorber is entitled to receive a tax gross-up for any excise taxes and related income taxes on gross-ups for benefits received upon a change in control. Based on the assumptions set forth above, no excise tax would be due on a qualifying termination of Mr. Lorber's employment in connection with a change in control.
Richard J. Lampen
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by
Company without Cause
or by Named
Executive Officer
with Good Reason | | Disability | | Death | | Termination by Company
for Cause or Voluntary
Termination by
Named Executive Officer
Without Good Reason | | Termination by
Company without Cause
or by Named Executive
Officer with Good Reason
upon a
Change in Control |
| Cash Severance (1) | $ | 2,486,178 | | | $ | 2,486,178 | | | $ | 2,486,178 | | | $ | — | | | $ | 2,486,178 | |
| Value of Accelerated Unvested Equity (2) | $ | 1,526,250 | | | $ | 1,526,250 | | | $ | 1,526,250 | | | $ | — | | | $ | 1,526,250 | |
| Benefits Continuation (3) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
___________________________
(1)Reflects the value of the sum of Mr. Lampen’s 2022 base salary ($650,000) and actual 2022 bonus limited to 112.50% of base salary paid over a period of 24 months commencing after termination.
(2)Reflects the value of any unvested restricted stock and related dividends that would have vested upon the event using the closing price per share of the Company’s Common Stock on December 31, 2022 ($4.07). See “Outstanding Equity Awards at December 31, 2022.”
(3)Mr. Lampen does not participate in the benefits plans of the Company.
J. Bryant Kirkland III
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by
Company without Cause
or by Named
Executive Officer
with Good Reason | | Disability | Death | | Termination by Company
for Cause or Voluntary
Termination by
Named Executive Officer
Without Good Reason | | Termination by
Company without Cause
or by Named Executive
Officer with Good Reason
upon a
Change in Control |
| Cash Severance (1) | $ | — | | | $ | — | | $ | — | | | $ | — | | | $ | — | |
| Value of Accelerated Unvested Equity (2) | $ | 457,875 | | | $ | 457,875 | | $ | 457,875 | | | $ | — | | | $ | 457,875 | |
| Benefits Continuation (3) | $ | — | | | $ | — | | $ | — | | | $ | — | | | $ | — | |
| Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | $ | — | | | $ | — | | | $ | — | |
___________________________
(1)Mr. Kirkland does not receive a salary from the Company or its subsidiaries.
(2)Reflects the value of any unvested restricted stock and related dividends that would have vested upon the event using the closing price per share of the Company’s Common Stock on December 31, 2022 ($4.07). See “Outstanding Equity Awards at December 31, 2022.”
(3)Mr. Kirkland does not participate in the benefits plans of the Company.
J. David Ballard
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by
Company without Cause
or by Named
Executive Officer
with Good Reason | | Disability | | Death | | Termination by Company
for Cause or Voluntary
Termination by
Named Executive Officer
Without Good Reason | | Termination by
Company without Cause
or by Named Executive
Officer with Good Reason
upon a
Change in Control |
| Cash Severance (1) | $ | 800,000 | | | $ | 800,000 | | | $ | 800,000 | | | $ | — | | | $ | 800,000 | |
| Value of Accelerated Unvested Equity (2) | $ | 152,625 | | | $ | 152,625 | | | $ | 152,625 | | | $ | — | | | $ | 152,625 | |
| Benefits Continuation (3) | $ | 104,026 | | | $ | 104,026 | | | $ | 57,448 | | | $ | — | | | $ | 104,026 | |
| Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
___________________________
(1)Reflects the value of the sum of Mr. Ballard’s 2022 base salary ($425,000) and actual 2022 bonus paid over a period of 12 months commencing after termination.
(2)Reflects the value of any unvested restricted stock and related dividends that would have vested upon the event using the closing price per share of the Company’s Common Stock on December 31, 2022 ($4.07). See “Outstanding Equity Awards at December 31, 2022.”
(3)Reflects the value of premium payments for life insurance, medical, dental and disability plans for 24 months at the Company’s cost, based on 2022 premiums.
Scott J. Durkin
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by
Company without
Cause or by Named
Executive Officer
with Good Reason | | Disability | | Death | | Termination by Company
for Cause or Voluntary
Termination by
Named Executive Officer
Without Good Reason | | Termination by Company
without Cause or by
Named Executive Officer
with Good Reason
upon a
Change in Control |
| Cash Severance (1) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Value of Accelerated Unvested Equity (2) | $ | 381,563 | | | $ | 381,563 | | | $ | 381,563 | | | $ | — | | | $ | 381,563 | |
| Benefits Continuation (3) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
___________________________(1)Mr. Durkin has no contractual arrangement for severance with the Company.
(2)Reflects the value of any unvested restricted stock and related dividends that would have vested upon the event using the closing price per share of the Company’s Common Stock on December 31, 2022 ($4.07). See “Outstanding Equity Awards at December 31, 2022.”
(3)Mr. Durkin has no contractual arrangement for continued benefits coverage with the Company.
Compensation of Directors
The compensation of the Company's non-employee directors is designed to be fair based on the amount of work required of directors of the Company. Under our current director compensation program, each of the non-employee directors receives:
•annual cash retainer fee of $75,000;
•annual committee retainer fee of $5,000;
•additional annual fees for serving as the committee chairperson of $10,000 for each of the audit, compensation and human capital, and corporate responsibility and nominating committees;
•periodic grants of shares of restricted stock (the Company did not grant restricted stock during 2022);
•reimbursement for reasonable out-of-pocket expenses incurred in serving on the Company's Board; and
•access to and payment for the Company's health, dental and standard life insurance coverage.
The table below summarizes the compensation the Company paid to the non-employee directors for the year ended December 31, 2022.
NON-EMPLOYEE DIRECTOR COMPENSATION IN FISCAL YEAR 2022
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fees
Earned
or Paid
in Cash | | Stock
Awards | | All Other
Compensation | | | | Total |
| Name | ($) (1) | | ($) | | ($) | | | | ($) |
| Ronald J. Kramer | $ | 95,000 | | | $ | — | | | $ | — | | | | | $ | 95,000 | |
| Michael S. Liebowitz | $ | 95,000 | | | $ | — | | | $ | 2,361 | | | (2) | | $ | 97,361 | |
| Lynn Mestel | $ | 85,000 | | | $ | — | | | $ | — | | | | | $ | 85,000 | |
| Wilson L. White | $ | 95,000 | | | $ | — | | | $ | — | | | | | $ | 95,000 | |
| Mark D. Zeitchick | $ | 85,000 | | | $ | — | | | $ | — | | | | | $ | 85,000 | |
___________________________
(1)Represents service for the year ended December 31, 2022.
(2)Represents health insurance premiums paid by the Company in 2022.
Compensation and Human Capital Committee Interlocks and Insider Participation
No member of the Company’s compensation and human capital committee is, or has been, an employee or officer of the Company. During 2022, (i) no member of the Company’s compensation and human capital committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K (except with respect to Mr. Liebowitz’s interest in the performance-based earn-out described below and under “Certain Relationships and Related Party Transactions”); and (ii) none of the Company’s executive officers served on the compensation and human capital committee (or other board committee performing equivalent functions or, in the absence of such committee, the board of directors) of another entity whose executive officer(s) served on the Company’s compensation and human capital committee. A subsidiary of the Company and Mr. Liebowitz each owned a 50% interest in Innova Risk Management, the business and assets of which were sold to Alliant Insurance Services, Inc. in 2019. In May 2022, Alliant Insurance Services, Inc. paid the performance-based earn-out payment of $2,000,000; the subsidiary of the Company received a final distribution of $653,767 and Mr. Liebowitz received a final distribution of $1,230,650. There were no other earn-out payments received.