VORNADO REALTY TRUST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant

☐

​

Filed by a Party other than the Registrant

☐

​

Check the appropriate box:

☐

Preliminary Proxy Statement

​

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

​

☒

Definitive Proxy Statement

​

☐

Definitive Additional Materials

​

☐

Soliciting Material under §240.14a-12

​

VORNADO REALTY TRUST

​

(Name of Registrant as Specified in Its Charter)

​

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒

No fee required.

​

☐

Fee paid previously with preliminary materials.

​

☐

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.

​

888 Seventh Avenue

New York, New York 10019

Notice of Annual Meeting of Shareholders to Be Held on May 23, 2024

To our Shareholders:

The 2024 Annual Meeting of Shareholders (the “Annual Meeting”) of Vornado Realty Trust, a Maryland real estate investment trust (“Vornado”, “we”, “us”, “our” or the “Company”), will be held virtually, via the Internet, on Thursday, May 23, 2024, beginning at 11:30 A.M., New York City time, for the following purposes:

(1)

To consider and vote upon the election of 10 persons to the Board of Trustees of the Company, each to serve until the 2025 Annual Meeting of Shareholders of the Company and until his or her successor is duly elected and qualified.

​

(2)

To consider and vote upon the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the current fiscal year.

​

(3)

To consider and vote upon the approval of a non-binding, advisory resolution on executive compensation as described in the Proxy Statement.

​

(4)

To transact any other business as may properly come before the meeting and any postponement or adjournment of the Annual Meeting.

​

The Board of Trustees of the Company has fixed the close of business on March 25, 2024 as the record date for the determination of shareholders entitled to notice of, and to vote at, the meeting.

To attend the virtual 2024 Annual Meeting you will need to accesswww.virtualshareholdermeeting.com/VNO2024 and enter the 16-digit control number found on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. There is no physical location for the Annual Meeting. We encourage you to allow ample time for online check-in, which will begin at 11:15 A.M. New York City time. Additional details regarding how to participate in the Annual Meeting can be accessed at the Company’s website, www.vno.com or atwww.proxyvote.com. For further information on how to attend and participate in the meeting please see “Questions and Answers About the Annual Meeting, How do you attend, vote and ask questions during the meeting?”

Please review the accompanying Proxy Statement and proxy card or voting instruction form. Whether or not you plan to attend the meeting, it is important that your shares be represented and voted. You may authorize your proxy through the Internet or by touch-tone telephone as described on the proxy card or voting instruction form. Alternatively, you may sign the proxy card or voting instruction form and return it in accordance with the instructions included with the proxy card or voting instruction form. You may revoke your proxy by (1) timely executing and submitting a later-dated proxy card or voting instruction form, (2) subsequently authorizing a proxy through the Internet or by telephone, (3) timely sending a written revocation of proxy to our Secretary at our principal executive office located at 888 Seventh Avenue, New York, New York 10019, or (4) attending the meeting and voting via the Internet (but your attendance at the virtual annual meeting will not automatically revoke your proxy unless you validly vote again during the Annual Meeting). To be effective, later-dated proxy cards, voting instruction forms, proxies authorized via the Internet or telephone, or written revocations of proxies must be received by us by 11:59 P.M., New York City time, on Wednesday, May 22, 2024.

By Order of the Board of Trustees,

Steven J. Borenstein

Secretary

April 9, 2024

Company Overview

Vornado Realty Trust (“Vornado”, “we”, “us”, “our,” or the “Company”) is a fully integrated real estate investment trust (“REIT”) with a collection of premier assets and a focused strategy of maintaining its leading positions in New York City Class A office and retail. While concentrated in New York, Vornado also has premier office assets in Chicago and San Francisco, and maintains a 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns five properties in the greater New York metropolitan area. Vornado is a real estate industry leader in sustainability, with over 25 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing approximately 96% of our in-service office portfolio, with over 24 million square feet at LEED Gold or Platinum.

In 2019, we adopted a 10-year plan to make our buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy reduction, recovery, and renewable power. We rely on technology, as well as meaningful stakeholder collaboration with our tenants, our employees, and our communities, to achieve this plan. Our commitment to carbon neutrality and associated emissions reduction targets have been approved by the Science Based Targets Initiative as consistent with a 1.5°C climate scenario, the most ambitious goal of the Paris Agreement.

Our business objective is to maximize shareholder value. We intend to achieve this objective by continuing to pursue our investment philosophy and to execute our operating strategies through:

•

Maintaining a superior team of operating and investment professionals and an entrepreneurial spirit;

​

•

Investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital appreciation;

​

•

Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents;

​

•

Developing and redeveloping properties to increase returns and maximize value; and

​

•

Investing in operating companies that have a significant real estate component.

​

2023 Business Highlights

During 2023, we made significant progress executing on our goals and positioning Vornado for future growth, accomplishing the following strategic initiatives:

•

We continued the redevelopment of THE PENN DISTRICT, positioning Vornado to capitalize on the enormous opportunity we have on the West Side of Manhattan, including:

​

◦

Completion of the redevelopment of PENN 1 (2.6 million square feet).

​

◦

Nearing completion of PENN 2 (1.8 million square feet as expanded), on top of Penn Station, New York’s main transportation hub—the largest rail hub in North America.

​

◦

Continued leasing of retail space at the newly expanded Long Island Rail Road Concourse.

​

◦

Completed demolition of Hotel Pennsylvania, with plans to develop a premier office tower on the site.

​

◦

Opened restaurants or finalized leases with leading food and beverage operators including Blue Ribbon Sushi & Steak, The Avra Group, Noho Hospitality’s Bar Primi, Sunday Hospitality, Roberta’s Pizza, Anita Gelato and Los Tacos No. 1.

​

◦

Finalized lease with LifeTime Fitness and Pickleball.

​

•

We and the Rudin family completed agreements with Citadel Enterprise Americas LLC (“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO for a series of transactions relating to 350 Park Avenue and 40 East 52 nd Street, including full building leases for both buildings and to potentially form a joint venture to build a new 1.7 million square foot office tower.

​

•

We entered a joint venture with Blackstone Inc. and Hudson Pacific Properties to develop Sunset Pier 94 Studios, a 266,000 square foot purpose-built studio campus at Pier 94 in New York City.

​

•

We leased approximately 2.8 million square feet in 2023 (2.2 million square feet at share).

​

•

Financed/Refinanced $800 million of mortgage loans in 2023.

​

​

•

Entered into $1.2 billion of interest rate swap arrangements and a $950 million 1% SOFR interest rate cap arrangement for the 1290 Avenue of the Americas mortgage loan.

​

•

Completed over $200 million of dispositions in 2023, including several non-core retail properties and The Armory Show located in New York.

​

•

We (i) ranked #1 in the Diversified Office/Retail REITs in the USA in the Global Real Estate Sustainability Benchmark (“GRESB”), and received the “Green Star” distinction for the eleventh consecutive year and GRESB’s five star rating, (ii) received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (“NAREIT”) for diversified REITs for the thirteenth time, and (iii) were recognized as an EPA ENERGY STAR Partner of the Year with the distinction of having demonstrated nine years of sustained excellence.

​

​

A Message from the Compensation Committee

Vornado’s executive compensation program is based on a pay-for-performance philosophy. It is designed to attract, retain, and incentivize the exceptional talent that gives us a competitive advantage in our industry. Especially in today’s complex and highly competitive environment in which Vornado is competing with private equity firms and major private developers and real estate operators, it is essential that we continue to develop innovative compensation strategies that enable us to maintain our talented team and keep this edge.

Generally, our compensation program is designed to encourage our executives and our team to achieve financial and strategic goals that advance the Company’s long-term business strategy and enable us to create sustained, long-term value for our shareholders. The specifics of how the Compensation Committee assessed and made compensation decisions for 2023 are detailed in the Compensation Discussion & Analysis, or CD&A, beginning on page 28.

As described below, two new incentive programs were approved by the Compensation Committee and implemented in 2023. These programs were adopted in the context of an unusual period of time, following the COVID-19 pandemic, when our business, like many others in our industry, continued to feel the impact of factors outside our team’s control. Within that context, our intent was to support Vornado’s ability to retain and motivate best-in-class talent to achieve the Company’s long-term goals. These programs, which were evaluated with the assistance of an independent compensation consultant, FTI Consulting, were designed to:

•

Create meaningful incentives for Vornado’s management in light of the impact of the COVID-19 pandemic on office REITS and the effect on the Company’s stock price; and

​

•

Retain and incentivize Vornado’s management to seek and find new opportunities to create shareholder value by raising third-party capital for development projects to diversify risk and enhance the Company’s economics. This latter program accounts for only a small portion of overall compensation, is funded by third-party fees, is tied directly to value-creating projects, and will apply to an increasing number of our team members as appropriate projects get underway.

​

In the Compensation Committee’s analysis, we have taken into account management’s important accomplishments in 2023 in positioning the Company for long-term earnings growth and shareholder value creation, as well as a significant increase in executive level departures and the threat that poses to our ability to advance our business. Ultimately, we believe these new elements of our compensation system play a valuable role in supporting the Company’s continued success on behalf of its shareholders.

We continue to welcome feedback from Vornado shareholders and will continue to factor that input into our ongoing assessment and implementation of the Company’s compensation structure. We are committed to a system that best supports performance and aligns management and shareholder interests.

Sincerely,

Daniel R. Tisch

Chair, Compensation Committee

June 2023 Awards

Recent changes to our compensation program reflect macro factors that have had a direct impact on our business:

•

Since the onset of the COVID-19 pandemic in early 2020, office REITs, including Vornado, have faced major challenges due to the dramatic increase in remote and hybrid work policies. In addition, over the past couple of years, we have faced a significant increase in interest rates coupled with high inflation. As a result of these and other factors, the capital markets for office properties have been adversely impacted and our stock price decreased substantially from 2019 to early 2023.

​

•

These factors resulted in several years of our performance equity awards failing to meet the specified performance hurdles and being forfeited. In addition, any time-based equity awards held by employees were worth substantially less than at the applicable grant date.

​

•

Due to these operational challenges, equity forfeitures/decreases and the very tight job market, a number of key employees, including at the Executive Vice President and Senior Vice President levels, left the Company from 2021 through early 2023 and we faced the very real prospect of additional departures.

​

•

Moreover, as described in more detail in this proxy statement, beginning in 2019 we initiated an important management succession process and promoted a new generation of Company leaders.

​

Given the challenging operating environment over the past few years and the substantial decrease in the value of equity awards received by the new senior management team, the Compensation Committee believed it was necessary to consider making significant grants to the senior management team and a broad group of other employees to promote retention and further align the award recipients with shareholder returns over the next few years. Additionally, given the long timelines associated with the real estate business and several of our projects, such as the PENN District and 350 Park Avenue developments, the Compensation Committee believed it was critical that we take steps to ensure employee continuity, especially at the senior management level.

In order to obtain sufficient share capacity to make equity grants that would accomplish these retention goals and incentivize shareholder returns, the Company sought and obtained shareholder approval at the 2023 Annual Meeting of Shareholders for the 2023 Omnibus Share Plan (the “2023 Omnibus Plan”). In conversations with major shareholders leading up to the 2023 Annual Meeting of Shareholders and thereafter, the shareholders were supportive of the Compensation Committee’s contemplated equity grants and provided general feedback on the structure of the grants which was incorporated in the actual award grants made by the Compensation Committee on June 29, 2023 (the “June 2023 Awards”).

June 2023 Awards Structure

•

Over 40% of the June 2023 Awards were granted to employees who are not named executive officers (“NEOs”)

​

•

Mix of 2.4 million time-based restricted units (“LTIPs”) of Vornado Realty L.P. (the “Operating Partnership”) and 14.4 million performance-conditioned appreciation-only Operating Partnership units (“Performance AO LTIP Units”) (which are economically similar to performance-based options)

​

◦

Based on the Omnibus Plan’s weighting of each full award that delivers the full value of one of our common shares of beneficial interest, $0.04 par value per share (the “Shares”) or one Operating Partnership unit counting as one Share equivalent, and each award of an option to acquire our Shares (or other securities that require the payment of an exercise price or deduction of a strike price) counting as one-half of a Share equivalent, the award was comprised of 25% time-based LTIPs and 75% Performance AO LTIP Units

​

•

Back-ended vesting provisions to promote retention

​

◦

LTIPs vest in two equal installments on the 3 rd and 4 th anniversaries of the grant date (except in the event of a qualifying termination), with each tranche subject to an additional one-year post-vesting lockup

​

◦

20% of the Performance AO LTIP Units vest on the 3 rd anniversary of the grant date and the remaining 80% vest on the 4 th anniversary of the grant date (except in the event of a qualifying termination)

​

•

In order for the Performance AO LTIP Units to be fully exercisable (subject to time-based vesting), the Share price must increase 75% above $16.87, the grant date Share price

​

•

Performance AO LTIP Units require sustained Share performance until the actual conversion date for the units to maintain value

​

Importantly, in consideration of the June 2023 Award grants, the Compensation Committee did not grant any equity awards in January 2024 and does not intend to make equity award grants to NEOs in January 2025.

Development Fee Pool

Our team continues to pursue major projects that will enhance the long-term value of our portfolio. They are also evolving our business model to enable us to compete and succeed better in today’s environment by spreading risk and partnering with like-minded entities on development projects. These projects require a particular set of expertise and skills, and the Compensation Committee sought to design a component of compensation specifically to retain and incentivize our team.

In doing so, the Compensation Committee considered several factors:

•

Large development projects in New York City are extraordinarily complex and require a long, intensive period of time to complete, often taking 7-10 years from conception to stabilization (e.g., 220 Central Park South), and require highly specialized knowledge of the NYC zoning process, building regulations and construction expertise, as well as financing and leasing expertise.

​

•

These development projects, while potentially very profitable, are also extraordinarily capital intensive and generally entail significant risk. In order for us to undertake large development projects that may last close to a decade, the Company must maintain a best-in-class development team and be confident that it will be able to retain that strong team throughout the development process.

​

•

Maintaining a world-class development team in-house, rather than outsourcing development projects to third parties, provides key advantages including allowing for seamless communication among our development, leasing, financing and senior management teams, and provides us with greater control. This results in higher quality projects at better yields and significantly lower costs and risk to shareholders.

​

•

It often may be beneficial to the Company to enter into joint ventures with third-party investors that can provide capital for developments and enable the Company to leverage its skills, enhance its economics and diversify its risk.

​

The Compensation Committee believes that it is important for the Company to have a compensation tool it can use to reward employees for these large, long-term development projects where the potential reward is clear to employees and is not dependent on our Share price, which is generally outside of our control, and certainly outside the control of the development team. In addition, we are often competing for talent with private developers that can offer profit-sharing opportunities and the ability for employees to participate in fees. Thus, in order to incentivize joint ventures with third-parties, reward employees’ dedication to these large development projects, and encourage retention of our team members, in December 2023, the Compensation Committee established a new compensation pool (the “Development Fee Pool”).

Development Fee Pool Structure

•

Comprised of not more than forty percent (40%) of all net development fees received by the Company and its affiliates from third parties with respect to the 350 Park Avenue development (the “350 Park Avenue Project”) and from future development projects.

​

◦

The Development Fee Pool only applies to fees paid by joint-venture partners or other third parties but does not apply to wholly-owned Company developments. “Net development fees” excludes any amounts attributable to the Company’s share of a payment made by a joint venture.

​

•

Upon the closing of the 350 Park Avenue transaction in the first quarter of 2023, the Company received an initial $25 million installment of development fees for the 350 Park Avenue Project. Based on the Company’s anticipated 36% interest in the 350 Park Avenue Project joint venture which, if formed, will bear the cost of the development fee, $16 million of such development fee is attributable to third parties. Accordingly, $6.4 million (representing 40% of $16 million) was available in the Development Fee Pool and, on December 15, 2023, the Compensation Committee approved cash payments to Messrs. Roth, Franco, Langer and Weiss of $2.2 million, $1.4 million, $1.4 million and $1.4 million, respectively, from the Development Fee Pool in connection with their extraordinary efforts in sourcing and completing the complex 350 Park Avenue transaction.

​

•

The Compensation Committee expects that future distributions from the Development Fee Pool may also be allocated to non-NEOs that work on and support our new developments.

​

•

Because of the large scale and duration of development projects, the Compensation Committee expects that Development Fee Pool allocations will only be made on an episodic basis and that they will not be an annual occurrence.

​

​

•

All Development Fee Pool allocations must be approved by the Compensation Committee and, consistent with historical practice, the material terms of all joint venture transactions, including any development fee arrangements, must be approved by our Board of Trustees.

​

Shareholder Engagement and Feedback

At our 2023 Annual Meeting of Shareholders, our say-on-pay proposal received the support of the holders of over 77% of our Shares that voted on the proposal. Since our 2023 Annual Meeting, we reached out to shareholders representing more than 70% of our outstanding Shares (as of December 31, 2023) and spoke with shareholders representing more than 50% of our outstanding Shares. Our Lead Independent Trustee participated in conversations with several of our largest shareholders.

In addition to our ESG-focused engagements and discussions in the ordinary course of business, we engaged directly with our investors in various forums including at the BofA 2023 Global Real Estate Conference and the NAREIT REITweek NYC conference.

Total Direct/Realizable and Total Realized Compensation are calculated as described in the Compensation Discussion and Analysis section of this Proxy Statement. 2023 Total Direct/Realizable Compensation includes the June 2023 Awards discussed above.

Pay-for-Performance Alignment

Our executive compensation program is designed so that the actual Total Realized Compensation closely aligns with our actual Share performance. Total Direct/Realizable Compensation for our Chairman and Chief Executive Officer (“CEO”) excluding the June 2023 Awards, was approximately flat for the 2021-2023 period, and his Total Realized Compensation is significantly lower than Total Direct/Realizable Compensation for each year. Performance-based, long-term equity awards for the three- or four-year performance periods ending in 2019, 2020, 2021 and 2023 were not earned and no payouts were made in respect of these awards, demonstrating the at-risk nature of our performance-based program and its alignment with our actual Share performance.

The following shows the 2023 pay mix for our CEO. 76% of his Total Direct/Realizable 2023 compensation is variable and subject to Company performance:

The following graphic summarizes the performance periods and outcomes for our recent performance-based equity grants as of the record date. The performance hurdles for the Outperformance Plan (“OPP”) awards granted in each of 2015, 2016, 2017, 2018 and 2020 and the Performance AO LTIP awards granted in 2019 did not meet the applicable performance condition and accordingly each of those awards were forfeited in their entirety. The 2022 and 2023 performance program lines below show the performance of our regular 2022 Long-Term Performance Plan (“LTPP”) programs and 2023 LTPP, respectively, and the latter do not include the Performance AO LTIP Units granted as part of the June 2023 Awards. For purposes of the table below, we measure the Company’s absolute and relative performance under the 2022 and 2023 LTPPs as of December 31, 2023, though the actual number of units that will be earned will depend on actual performance through the end of the applicable measurement period. The “required price to begin earning” set forth below represents the adjusted Share price after reflecting adjustments for the Company’s spin-offs of Urban Edge Properties and JBG Smith.

Our Performance AO LTIP Units granted in 2019 included a performance condition requiring that our Share price close 10% above the strike price of $62.62 for 20 consecutive trading days before January 14, 2023. That performance condition was not met and consequently these units were forfeited.

Our 2020 OPP Plan provided participants the opportunity to earn equity awards if Vornado achieved certain absolute total shareholder returns and/or outperformed a benchmark weighted index consisting of other office and retail real estate companies. As of March 30, 2023, the end of the 2020 OPP measurement period, Vornado’s total shareholder return over the measurement period was-52.08% compared to a-8.60% return for the weighted index during such period and accordingly all awards under the 2020 OPP Plan were forfeited in their entirety.

Our 2021 OPP Plan provides participants the opportunity to earn equity awards if Vornado achieves certain absolute total shareholder returns and/or outperforms a benchmark weighted index consisting of other office and retail real estate companies. As of March 31, 2024, Vornado’s total shareholder return over the measurement period was-7.53% compared to a-4.99% return for the weighted index during such period.

Executive Compensation Philosophy

Our compensation program is based on a pay-for-performance philosophy and is designed to incentivize executives to achieve financial and strategic goals that are aligned with the Company’s long-term business strategy and the creation of sustained, long-term value for our shareholders.

The objectives of the program include:

Board and Committee Refreshment

Over the last eight years, we have added four new independent Trustees, comprising 40% of our Board: Ms. Hamza Bassey, Mr. Helman, Mr. McGuire and Ms. Puri.

We are also focused on committee rotation and have made committee assignment changes in recent years. In 2020, we appointed Ms. Puri as Chair of the Audit Committee, in 2021 we added Ms. Hamza Bassey to the Compensation Committee, in 2022 we added Ms. Hamza Bassey to the Audit Committee and in 2023 we added Mr. McGuire to the Compensation Committee.

As demonstrated by our Board’s actions over the past several years, we remain committed to ongoing Board refreshment and will continue to pursue qualified, diverse candidates for election to our Board.

The following charts summarize the composition of our Board following our recent refreshment:

In the past five years, our Board added three new independent Trustees:

•

Ms. Hamza Bassey joined our Board in 2020. She has served as the Group General Counsel, Chief Compliance Officer and Corporate Secretary of Atlas Mara Ltd., an African-focused banking group, since February 2015. She has brought legal, investment, financial and international experience.

​

•

Mr. Helman joined our Board in 2019. He has brought investment, technology, private equity, capital markets, and public company board experience.

​

•

Mr. McGuire joined our Board in 2022. He is President of Lazard, Inc. and was previously Vice Chairman of Citigroup and Chairman of Citi’s Banking, Capital Markets and Advisory business and brings investment, financial, capital markets and strategic experience.

​

We believe that the balance of skills and experiences of our Board members, enhanced by the fresh perspectives brought by our newer Trustees, and the industry and company-specific expertise and institutional knowledge of our longer-tenured Trustees, provide substantive support for the Board’s oversight of the Company’s business and strategy. In combination with Board refreshment, we have also rotated committee memberships to bring new perspectives to committees.

Environmental Stewardship, Social Responsibility and Governance (ESG) Highlights

Our Board is committed to sound governance practices designed to promote the long-term interests of shareholders and to strengthen Board and management accountability. Many of these governance practices were influenced by and responsive to shareholder feedback over the years.

Please also see our Chairman’s Letter that can be found on our website atwww.vno.com/chairmansletter. Our Chairman’s Letter is not a part of, or incorporated by reference in, this Proxy Statement.