Ratings firm adds Maine Mall owner to risk list
Corporate governance ratings firm GMI has added the owner of the Maine Mall to its risk list, highlighting poor compensation and accounting practices.
New York City-based GMI gave General Growth Properties an F in its environmental, social and governance rating, citing large post-bankruptcy incentive awards and severance payments, as well as what the firm called an "exorbitant golden hello package" for new CEO Sandeep Mathran, according to a press release. The firm also cited accounting issues around expense decisions and a potential overvaluation of misclassification of assets, and a dominant ownership group "whose interests may take precedence over those of minority investors." According to GMI's CEO pay survey, former CEO Adam Metz was among the top 10 highest-paid executives in the country in 2010, and top executives received an aggregate of $114.6 million in incentive payments despite the company's struggling stock prices.
Chicago-based General Growth Properties emerged from Chapter 11 bankruptcy last November, restructuring to split into two companies, one that holds its 200 shopping centers and another that holds its riskier investments. Also this month, analysts at Goldman Sachs downgraded the company's shares from a "buy" rating to a "neutral" rating, and Credit Suisse also downgraded it to a neutral rating.
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