Commercial real estate brokerage Newmark, less than a week after posting a quarterly profit that more than doubled, extended CEO Barry Gosin's employment for the next three years at an annual pay of $17.5 million.
The New York City-based firm said Gosin and Newmark Partners and Newmark Holdings entered into an amended and restated deal through Dec. 31, 2026, according to a filing late Monday with the U.S. Securities and Exchange Commission. The amended agreement supersedes a previous contract under which Gosin could have terminated the agreement on Dec. 31 of this year by providing at least six months’ notice.
The board compensation committee of Newmark approved the amended employment deal "after careful consideration of Mr. Gosin’s contributions to the company," according to the SEC filing. Newmark reported on Aug. 7 that its year-over-year profit more than doubled to $14.3 million in the second quarter as increases in fee revenue from sales, leasing and mortgage origination and servicing fueled its business.
Under the new employment agreement, "Mr. Gosin’s annual total contractual compensation would be $17,500,000 for each of calendar years 2024, 2025, and 2026," according to the SEC filing. That dollar figure represents the $1 million annual salary Gosin is in line to receive and $16.5 million in non-distribution earning partnership units in Newmark Holdings, or NPSUs, in this year and the two that follow, according to the agreement.
The amended agreement also calls for Gosin to be granted a one-time cash payment of $5 million "as soon as practical following the Effective Date," according to the SEC filing that states that date as Aug. 7.
In 2022, Gosin was paid a salary of $1 million and received a $1.5 million bonus, according to Newmark's 2023 proxy statement. The brokerage's 2024 proxy statement is expected to be released within a month. While the summary compensation table included in the proxy statement listed Gosin's total compensation as $2.61 million in 2022, that number excluded $10 million awarded to the CEO as part of his employment agreement in effect at the time. "Including this amount, Mr. Gosin’s total compensation for 2022 was $12,614,072," according to the proxy statement.
In 2023, the total compensation paid to the chief executive officers of several of Newmark's competitors was cut as the brokerages contended with slower sales and lower profits caused by high interest rates and a drop in 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.
CBRE's Similar Move
In 2022, CBRE made a move similar to the one Newmark exercised this week with Gosin when it increased Sulentic's target total compensation for that year to $18.5 million. Also, CBRE's compensation committee approved a one-time equity grant for Sulentic with the target grant value of $7.5 million and a five-year vesting period, according to an SEC filing in February 2022.
"This grant, in combination with his ongoing target total direct compensation, is intended to motivate and reward Mr. Sulentic to continue leading the company to achieve superior performance over the next five years," CBRE said in the February 2022 filing.
As part of Gosin's updated employment agreement, he also would receive an annual cash bonus of $1.5 million through 2026.
The agreement also includes a non-compete provision that would bar Gosin from managing, working for or providing services to a "business, individual, partnership, firm, corporation or other entity which is engaged, wholly or partly, in the same or similar business" during his employment and for two years after his agreement expires or is terminated.
During the two-year non-compete period, Newmark will pay Gosin $83,333.33 per month for his adherence to the terms and in exchange for his availability as the company needs to consult and answer questions relating to Newmark and other matters he's familiar with at no added cost, according to the updated employment agreement.