Empire State Realty Trust Inc

For the period ended May 9, 2024. Filed Mar 28, 2024.

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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.

May 9, 2024 · Filed Mar 28, 2024

ESRT$5.31+0.2%Stored close · as of Nov 6, 2026

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Contents

Compensation Setting Process

ROLES OF OUR COMPENSATION AND HUMAN CAPITAL COMMITTEE, COMPENSATION CONSULTANT AND MANAGEMENT

COMPENSATION AND HUMAN CAPITAL COMMITTEE

Our Compensation and Human Capital Committee is comprised entirely of independent directors and chaired by Thomas J. DeRosa. The committee has overall responsibility for monitoring the performance of the company’s executives and evaluating and approving our executive compensation policies and programs. In addition, the committee oversees the administration of our equity plans. The committee determines all components of our CEO’s compensation.

With respect to the other NEOs, the committee seeks input from our CEO and reviews and approves all components of our other NEOs’ compensation.

COMPENSATION CONSULTANT

Our Compensation and Human Capital Committee has engaged Ferguson Partners to provide guidance with respect to the development and implementation of our compensation programs. Ferguson Partners provides the committee with advice concerning the types and levels of compensation to be paid to our NEOs. In connection with this, Ferguson Partners provides market data on base salary, annual incentive bonus, and long-term incentive compensation at other REITs.

The committee requires that its consultant be independent of company management and performs an annual assessment of such independence. It most recently assessed Ferguson Partners’ independence in March 2023 and confirmed that Ferguson Partners remains independent and free of any conflict of interest which might affect its work.

MANAGEMENT

Our CEO attends Compensation and Human Capital Committee meetings, provides information as to the individual performance of the other NEOs and makes annual recommendations to the committee regarding appropriate compensation levels for all NEOs other than himself. All elements of our NEOs’ compensation must be approved by our Compensation and Human Capital Committee and the committee regularly meets in executive session without the CEO or any members of management present.

PEER BENCHMARKING PROCESS

In developing our executive compensation programs, our Compensation and Human Capital Committee commissions an annual compensation benchmarking analysis to ensure that our programs are competitive with those of other similar publicly-traded REITs, including consideration of the cost of attracting and retaining talented executives in the New York City marketplace.

PEER DATA

Our company has few public REIT direct business competitors, particularly when factoring our geographic focus in the metropolitan New York City marketplace. In order to allow for a robust examination of market practices, the Compensation and Human Capital Committee, in consultation with Ferguson Partners, strives to develop a peer group that best reflects the characteristics noted in the table below.

Guiding Principles for Empire State Realty Trust’s Peer Selection

	INDUSTRY				SIZE				BUSINESS CHARACTERISTICS
	CONSIDER INDUSTRY to identify companies with a similar business model or philosophy ◗ Start with New York City office-focused REITs with substantial portfolios in New York City ◗ Expand to other high barrier to entry market office-focused REITs				CONSIDER SIZE (i.e., total capitalization) to ensure companies are similar in scope				CONSIDER OTHER BUSINESS CHARACTERISTICS that distinguish the complexity of the particular business (e.g., operating the Observatory)

				2024 PROXY STATEMENT 39

	QUESTIONS ADDRESSED IN DEVELOPING AN EFFECTIVE PEER GROUP
	Who are key performance comparators?					◗ Who do we compete with for tenants? ◗ Who do we compete with for investors? ◗ Which companies have similar market demands and influences?
	Who are closest competitors for talent?					◗ Which companies might logically try to recruit our executives? ◗ If our company had to replace a member of its executive team externally, from which companies might it recruit to attract executives with similar capabilities?
	Who are the peers from an external perspective?					◗ Who does the investment community name as peers? ◗ Who cites Empire State Realty Trust as a peer? ◗ Who are other REITs classified within the Nareit Index and broader MSCI US REIT Index that best fit the characteristics noted above?

After our peer group has been confirmed, Ferguson Partners, our independent compensation consultant, provides market data and practices of the peer group for our Compensation and Human Capital Committee to consider, as well as information on executive compensation trends and developments generally. Specifically, Ferguson Partners provides information regarding the design and levels of compensation paid by our peers and overall counsel to determine the appropriate incentive design for our company. Such compensation data for peers is analyzed by our Compensation and Human Capital Committee with the assistance of Ferguson Partners to set a suitable and competitive compensation package in the context of the New York City marketplace in which we operate and the competitive conditions for the talent pool in that market. The resulting compensation is intended to serve the company’s requirements in both recruitment and retention of key qualified executives and to motivate our executive officers to achieve our corporate goals and increase value for our shareholders. An executive’s target compensation is not mechanically set at a particular percentage of the peer group. Rather, our Compensation and Human Capital Committee also takes into account the executive’s role and experience and the competitive factors needed to retain and incentivize such executive.

2023 PEER GROUP

In December 2022, the Compensation and Human Capital Committee, in consultation with Ferguson Partners reviewed the company’s peer group. The Compensation and Human Capital Committee determined to keep the same peer group for 2023 as 2022, but removed iStar, Inc. due to its merger with Safehold.

2023 PEER GROUP

At the time Ferguson Partners conducted its analysis of executive compensation during the fourth quarter of 2022 for the purposes of 2023 compensation-setting, our company size ranked among this peer group (without iStar, Inc.) at approximately the following relative percentiles across the categories below:

	UPREIT (EQUITY) MARKET CAPITALIZATION				TOTAL CAPITALIZATION				NUMBER OF EMPLOYEES
	36th PERCENTILE				24th PERCENTILE				75th PERCENTILE

	40 EMPIRE STATE REALTY TRUST

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