By Rebecca Picciotto

Paramount Group, a big New York City and San Francisco office landlord, made at least $4 million in previously undisclosed payments for its CEO's personal expenses and business interests, according to recent securities filings.

Paramount paid more than $900,000 for Chief Executive Albert Behler's personal accounting services over the past three years, the company disclosed for the first time in a proxy statement Thursday.

That disclosure followed a February securities filing from Paramount in which the company revealed that it had paid millions of dollars during that three-year period for contracts with companies in which Behler and his wife, Robin Kramer, had ownership stakes.

Those payouts included more than $3 million from Paramount to a jet-chartering company part-owned by Behler. Paramount also paid $214,000 for one of its consultants to retain Behler's wife's design firm over the past three years. The company entered into another, $220,000 agreement with her design firm in February.

The previous lack of disclosure of these payouts from the company could raise red flags with financial authorities, including the Securities and Exchange Commission. Most public companies are required each fiscal year by securities law to disclose any transactions above $120,000 with people or entities related to the companies.

An SEC investigation into lack of disclosure could result in anything from a criminal punishment to a relatively minor fine, depending on the severity of the case.

Shareholders in situations like this could try to sue a company for nondisclosure, but such a move would require proving damages, said Frank Borger Gilligan, a securities attorney at Dickinson Wright, a law firm. For instance, investors would have to demonstrate that the contracts Behler made with his own businesses were financially harmful to Paramount.

" Paramount Group regularly updates its disclosures as part of its commitment to transparency and in response to shareholder feedback," the company said in a statement to The Wall Street Journal. It added that this year's filings disclosed "direct and indirect transactions, even those that fall well below the materiality threshold for reporting."

Paramount owns about 14 million square feet of commercial real estate space in New York City and San Francisco, making it one of the largest office landlords in those business hubs. The New York-based company's portfolio is stuffed with a number of prominent skyscrapers, including office buildings on Manhattan's Fifth Avenue, Wall Street and Broadway.

The company's initial public offering in 2014 was the largest of any U.S. real-estate investment trust at the time. By the end of 2019, Paramount's market capitalization was at a record high of more than $3 billion.

Like other office building owners, Paramount was hit hard during the pandemic when remote work became more popular and vacancy rates in Manhattan and San Francisco jumped to record highs.

While both markets have been bouncing back, Paramount has struggled to fill many of its empty floors. In February, the company provided 2025 guidance that estimated its net loss available to common stockholders would be between 36 cents and 30 cents per diluted share.

Behler, 73 years old, joined Paramount as its chief executive in 1991 and shaped the firm's current real-estate portfolio. He grew up in Germany and previously worked at a major German steel company.

The Paramount CEO gave up his U.S. green card in 2011, according to a public filing. Still, in 2019, Behler purchased a $33.5 million apartment at 220 Central Park South in Manhattan, where the hedge-fund manager Ken Griffin bought a penthouse at about the same time.

Paramount and its CEO came under criticism with the company's shareholders years before these personal disclosures came to light.

Top executives at the company have disproportionately high pay packages given Paramount's returns and relative to peers in the industry, analysts at the real-estate analytics firm Green Street said in a recent report.

They called Paramount "one of the worst performing office REITs over many time periods." Its share price has plummeted more than 60% over the past four years.

Since 2020, Paramount has received two takeover offers and rejected both without conducting a "strategic review" of the offers or providing shareholders a reasonable explanation, the analysts said.

"We layer these business dealings on top of larger looming issues that the company is facing," said Dylan Burzinski, a Green Street analyst who wrote the report.

Some of the recent disclosures from Paramount were earlier reported in Crain's New York Business.

The recent filings disclosed for the first time other expenses related to Behler. Paramount paid $12,000 for wine from his German vineyard, according to the February filing. And Behler spent $77,000 above the company's limit on "club memberships," the Thursday filing said.

The Thursday proxy filing also shows that the CEO's pay was higher than previously reported. Behler's annual compensation in 2022 and 2023 was hundreds of thousands of dollars more than the company reported last year.

Behler made $20.8 million in 2023 and $9.8 million in 2022, above the $20.2 million and $9.3 million that the company reported last year.

The revised compensation numbers in this year's filing are "due to a reclassification of certain payments," the filing said.

Write to Rebecca Picciotto at Rebecca.Picciotto@wsj.com

(END) Dow Jones Newswires

April 05, 2025 07:00 ET (11:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.