After an investor on a conference call criticized the size of his $16 million severance package after exiting as executive chairman of Developers Diversified Realty Corp., Scott Wolstein had a short answer in a phone interview this afternoon.
“My contract speaks for itself,” Mr. Wolstein said. “Whatever my package is, it is what it is, and I earned it.”
In response to two questions from analysts, Developers Diversified officials on the conference call this morning said Mr. Wolstein is entitled to $8 million in salary and bonus and about $8 million from 550,000 shares he was previously issued over the past few years. The company will take a charge for that amount in the first quarter of this year.Near the scheduled end of the call, Ben Williams, director of Brookfield Investment Management Inc. of New York City, said he and his colleagues had been discussing Mr. Wolstein’s severance package since an initial question on the call raised this issue.“We think it’s appalling that (Mr. Wolstein) is being paid such an excessive amount of money,” Mr. Williams said, “given that he almost drove the company into bankruptcy.”None of the Developers Diversified executives on the conference call responded to the remark before the conference call was ended.Brookfield owned about 4.18 million shares, or 1.7%, of Developers Diversified shares outstanding, as of Dec. 31, according to a Securities and Exchange Commission filing. Brookfield is the Beachwood company’s 12th-largest institutional shareholder in terms, also in shares outstanding, according to SEC documents.Asked if he had been listening to the call directly or listened to a replay of the call since the media began reporting it this afternoon, Mr. Wolstein said he is “not interested in listening to negative comments about my compensation.”Mr. Wolstein said he did not listen to the conference call because he is attending a conference in Utah and is “obviously very interested in the company.”Mr. Wolstein headed Developers Diversified as CEO from its initial public offering as a regional development firm with about 50 shopping centers, and later became chairman through its growth to an international development company with more than 500 centers. He succeeded his late father, Bertram Wolstein, as chairman of the company built on the base his father had developed as a Kmart shopping center developer.Developers Diversified stumbled in the recession and banking crisis of 2008, its stock price plummeted and it has been engaging in triage since. Daniel B. Hurwitz succeeded Scott Wolstein as president and CEO 13 months ago. Mr. Wolstein announced Feb. 15 he was leaving his job as executive chairman. Separately, Mr. Hurwitz disclosed in the conference call that the company paid about $3 million in severance to 22 employees, including several executive team members, who were let go after the company decided its model called for a smaller management structure.
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