NEW YORK, April 25, 2012 /PRNewswire/ -- Shareholders of AvalonBay Communities Inc. (NYSE: AVB) were urged today to vote against the REIT's questionable executive compensation plan in an open letter sent to investors by 32BJ SEIU, one of the largest property sector unions in the country. In the dispatch sent to shareholders representing nearly 80% of the company, the union criticizes the current executive pay plan for providing an incentive to hire unscrupulous contractors, overlook federal health and safety requirements, and evade industry standards in the operation of AvalonBay buildings.
"AvalonBay's executive compensation plan creates an incentive for prioritizing short-term gains over long-term performance," said Ahmer Qadeer, Director of Strategic Research at 32BJ SEIU. "This is particularly troubling given AvalonBay's recent history of construction practices and the company's stated commitment to responsible employment practices," Qadeer stated.
32BJ SEIU also pointed out to investors that linking the bonuses of two key executives to low construction and operational costs could endanger workers by encouraging cutting corners and bypassing safety procedures and regulations.
As the recent report Troubling Developments found, the luxury development giant and its contractors have a record of violating workers' safety and laws as the company has raced to complete building projects around the country. AvalonBay and its contractors and subcontractors have been cited for at least 40 safety violations related to protecting workers from falls, including ones that caused the death of a 28-year-old carpenter, the report found. In addition, AvalonBay contractors in Massachusetts have been cited for violating wage and hour laws.
The letter also points to inconsistencies in AvalonBay's executive compensation peer group selection. While AvalonBay compares the overall compensation levels of its senior executives to some of the premier commercial, residential, hospitality and retail REITs in the country, it sets performance targets for those executives by comparing its return on investment to a group of mostly smaller, exclusively residential REITs.
32BJ also asked investors to require AvalonBay to compile a sustainability report based on Global Reporting Initiative standards and ensure that AvalonBay takes further steps to protect shareholder value by adhering to a critical set of standards for reporting to investors on the social and environmental impacts of its business. The document points out that there is a growing body of evidence suggesting that the interests of efficient and sustainable management are well-aligned with increasing shareholder value.
With more than 120,000 members in eight states, 32BJ is the largest property service workers union in the country. SEIU Local 32BJ represents employees who work at five AvalonBay properties in New York City. We seek to become the collective bargaining representative of additional workers employed at AvalonBay buildings. Many of 32BJ members' pensions are provided by employee benefit trusts that have interests in AvalonBay Communities.
For more information or a copy of the letter go to: www.troublingdevelopments.org
SOURCE SEIU Local 32BJ