The CEOs of the four largest commercial real estate brokerages have received pay cuts as their firms deal with slowing sales and profits caused by high interest rates and low deal volume.

The total compensation, including salary, stock and bonuses typically tied to their companies’ financial and strategic performance, dropped as much as 29% in the past year for Bob Sulentic of CBRE, Christian Ulbrich of JLL, Cushman & Wakefield’s Michelle MacKay and Jay Hennick of Colliers, according to filings the firms made with regulators.

The lower compensation was driven by declines in bonus and stock payouts that make up the bulk of the pay packages for the CEOs, who faced a tough operating environment at a time of declines in real estate investment sales, office leasing and other revenue, according to a CoStar News analysis of proxy statements filed by the top four brokerages ranked by revenue.

Brokerages had to deal with a drop in U.S. office leasing to 321.8 million square feet in 2023, the lowest since leasing declined to a historic low of 280 million square feet in 2020. That low came in the first year of the COVID-19 pandemic as some businesses closed their physical offices during work-from-home mandates. Office sales volume, meanwhile, fell nearly 60% last year compared to 2022 levels, according to CoStar data, hitting a pandemic-era low.

These conditions weighed on performance and in turn, the pay of executives. CBRE's Sulentic, for example, saw his pay drop 29% in 2023 — roughly equal to the Dallas-based brokerage's 30% decline in annual profit last year.

The commercial real estate brokerage pay declines were in contrast to a recent study by Equilar showing the value of the median pay package for CEOs who run companies in the overall S&P 500, including salary, stock grants and bonuses, jumped 12.6% last year to $16.2 million, as many chief executives were rewarded for the economic resilience that underpinned strong profits and boosted stock prices.

CBRE and Colliers did not respond to emails and calls from CoStar News regarding executive pay in 2023. JLL and Cushman & Wakefield declined to comment further beyond the information available in the public filings.

The pay packages for CEOs are generally structured to deliver more bonuses, stock or options if their companies meet financial goals or share-price performance.

But all these brokerages reported losses or double-digit declines in annual profit last year. Sulentic, the highest paid chief executive among the biggest brokerages, saw his total compensation, including salary, bonuses, stock and other pay, drop to just under $18.4 million in 2023 from the prior year.

Sulentic, who has been CEO and president of the world's largest commercial real estate brokerage since 2012, earned $18.4 million in total compensation last year, down from the nearly $26 million he received in total compensation in 2022 as part of a special pay package designed to reward what the company called solid financial performance.

Last year, Sulentic earned $14.7 million in annual stock awards, nearly 34% less than the $22.3 million he received in 2022, when his stock awards included a one-time "strategic equity" payment with a grant value of $7.5 million, according to the proxy filing.

His $2.35 million in executive bonus plan compensation last year was down about 5% from his bonus payments of just under $2.48 million in 2022, according to the filing.

Declines in office leasing and capital markets transactions, along with higher costs, drove CBRE's lower profit last year, despite a 3.6% year-over-year increase in total revenue to just under $32 billion in 2023, according to the company's full-year earnings report.

CBRE identified $150 million in cost cuts as property demand kept dropping in 2023. That was on top of $400 million in layoffs and other cuts announced by the company as the industry braced against economic headwinds that picked up in 2022.

While CBRE didn't comment on Sulentic's compensation, the company's nonequity executive bonus plan payments are based on achieving financial and strategic performance objectives that are established at the beginning of each fiscal year, according to the proxy filing.

Ulbrich, who took over in 2016 as CEO of JLL, the world's second-biggest global brokerage, earned $12.04 million in total compensation in 2023, slightly less than the $12.06 million he received the prior year, mainly due to an annual 11% decline in his stock awards, according to the brokerage's proxy filing.

Ulbrich received the smaller stock payout despite an 18.5% gain in the share price as the Chicago-based company reported a $225.4 million annual profit in the face of declines in fees from capital markets, financing and leasing.

Industrywide, real estate investment sales volume reached its lowest last year since 2012 while annual leasing volume fell sharply last year — especially in office markets, struggling with lower demand as businesses cut costs at a time of higher interest rates and some businesses maintained hybrid work schedules. That translated to lower commission fees and other revenue connected to commercial property transaction activity.

Ulbrich, who has been with JLL for 19 years, earned $2.29 million in bonuses last year — more than the $1.38 million he was awarded in 2022, but short of the $4.5 million in nonequity incentive pay that he received under JLL's incentive program in 2021.

JLL's top executive, who is paid in euros and lives near Frankfurt, Germany, received $1.03 million in salary last year — about the same as 2022, factoring in exchange rates between the two currencies, according to JLL's proxy filing.

The company didn't have anything to add on Ulbrich's compensation beyond the information in the public filings, a JLL spokesperson said in an email.

In the filing, JLL said Ulbrich earned the bonuses under the company's annual incentive plan last year based on a "leadership multiplier" determining that his oversight included "significant actions taken to improve efficiency and productivity, including continued efforts to reduce costs, while continuing to invest in technology advancements," according to the proxy filing.

Cushman & Wakefield's Michelle MacKay earned just under $4.67 million in salary, bonuses, stock awards and other compensation in her initial year leading the world's third-largest brokerage — about 5.4% less than she received in 2022 as president and chief operating officer, according to Cushman's proxy statement.

Cushman increased MacKay’s base pay 33% to $1 million when she was promoted to CEO on July 1, 2023. But her stock awards and bonuses fell 9.5% to $3.8 million from the prior year as the brokerage reported a $35.4 million loss last year after posting a more-than $196 million profit in 2022.

Chicago-based Cushman's stock price ended 2023 at $10.69 per share, about 16.5% lower than the $12.46 at the end of the prior year.

After succeeding John Forrester as chief executive last July, MacKay embarked on a review that she called "a deep dive and a heavy scrub" of the brokerage's operations and finances as Cushman looked to narrow $3.2 billion in debt incurred following the brokerage's 2018 initial public offering. The company targeted $130 million in cost savings through layoffs and other cuts in 2023.

MacKay wasn't Cushman & Wakefield's highest paid executive officer last year. That was Brett White, the brokerage indicated, who was CEO and executive chairman of the board from 2015 until he stepped down as chief executive in 2021.

White, who received tens of millions in salary, bonuses and stock grants while serving in the dual roles for several years, did not receive a salary or an annual bonus while serving as executive chairman in 2023, according to Cushman’s 2024 proxy statement. However, he did get more than $6.8 million in stock awards and other compensation under a December offer letter filed with the U.S. Securities and Exchange Commission.

Cushman & Wakefield had no comment on the executives' compensation beyond the information in the public filings, a spokesperson said in an email.

In the filing, the company said it promoted MacKay "based on her track record of creating substantial value for shareholders and clients through her deep expertise in commercial real estate and corporate strategy," according to Cushman's proxy.

The stock awards include the value of time- and performance-vesting awards, and for last year, included grants made in both February and July of 2023.

The annual incentive plan awards for MacKay and other executives were designed to be based on achieving growth in earnings and fee revenue, as well as the executives' individual performance in achieving goals, according to the proxy.

Canadian billionaire Jay Hennick, CEO of Colliers and founder and former chief executive of property management company FirstService Residential, received an annual salary of $1.52 million in 2023 — and no bonuses or other compensation — as the world’s fourth-largest brokerage by revenue reported a 26% annual decline in net earnings to $144.7 million.

Hennick received $5.35 million in salary and bonuses in 2022, when the Toronto-based company reported a profit of just under $195 million. His total pay for both years was significantly lower than the $14.68 million Hennick earned in 2021 that included roughly $13.4 million in bonuses, according to filings.

The CEO, who is the controlling shareholder of Colliers, is not eligible to participate in the company’s stock option plan, according to the Colliers proxy.

Hennick earned less compensation last year than some other top Colliers executives, including Christopher McLernon, CEO of real estate services, CFO Christian Mayer and co-chief investment officers Elias Mulamoottil and Zachary Michaud.

Mulamoottil and Michaud each received $3.52 million in salary and option-based awards, up slightly from the total of just over $3.5 million in salary, options and bonuses the prior year. McLernon earned $3.9 million last year in total pay that included salary and options, well below the almost $11 million that he earned in salary, options, bonuses and long-term incentive pay in 2022, when he was promoted to CEO of real estate services from chief executive of the brokerage's Europe, Middle East and Africa division.

While Colliers didn't respond to requests to comment on the executives' compensation, Hennick's pay plan is designed to recognize his role as the founder and most significant shareholder of the company, according to the firm's proxy filing.

Hennick’s "primary incentive is the appreciation of the market value of his shareholdings," and accordingly, he is not eligible to participate in the company's stock option plan, according to the filing.

Brokerage executives are hoping for an industrywide return to deal making this year as the headwinds of last year dwindle, potentially in the form of lower interest rates.

Investment property sales and financing fell to low levels early in the pandemic before starting to recover in 2021 and 2022 — only to take another dive last year as higher interest rates caused sales to dry up, Marcus & Millichap CEO Hessam Nadji said during a recent earnings call with analysts.

CBRE Chief Financial Officer Emma Giamartino told investors she doesn't anticipate the firm returning to peak earnings until 2025, and that the firm is "taking a hard look at corporate costs." Analysts said cost cuts across brokerages are helping as those businesses realize they have a longer wait in store for deals to pick up.

Walter Bialas, a senior insight analyst in Avison Young's Dallas office, previously told CoStar News he doesn't anticipate "a return to normal for brokerages" until interest rates decline, and until "there's more certainty in property performance."

In a more optimistic anecdote, Sulentic noted leasing outperformed expectations in the first three months of 2024, driven by office deals that reflect a resilient economy and companies bringing employees back to the office.