In 1998, the company created a stock-incentive plan that allowed the board of directors to change its terms without shareholder approval unless required by law, according to the Indianapolis Star. Officials with the Louisiana Municipal Police Employees Retirement System, however, claim in the lawsuit that current tax laws do require that approval in this case.
The board of Simon Property Group last year approved a new compensation package for the company's CEO that includes $120 million in stock payments to encourage Simon to remain in his position through 2019, the news report said. That provision was the main target of the lawsuit, which was filed in Delaware.
The compensation package also features a $1.25 million annual salary and a cash bonus twice that amount. Almost three-fourths of shareholders at Simon Property Group's annual meeting opposed the stock-incentive plan, company officials disclosed earlier this year, according to the report.