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Severance boosts pay of former Duke Realty exec

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Locally based Duke Realty Corp. last year gave its former chief operating officer an exit package that more than doubled his previous year’s total compensation. Meanwhile, Duke awarded pay raises to its CEO and the rest of his management team.

According to Duke’s annual proxy statement, filed with the Securities and Exchange Commission this month, CEO Dennis D. Oklak, 56, earned total compensation of $3.4 million last year, or 4.1 percent more than in 2008.

Thanks to a hefty severance package, Oklak’s former second-in-command took home nearly as much.

In November, Duke announced the resignation of COO Robert M. Chapman, who earned $3.1 million in total compensation last year, or 103 percent more than he made in 2008. Most of the increase came from a $1.4 million severance package.

Duke blamed Chapman’s departure on the recession, which has forced the company to scale back new property development and focus on local leasing operations.

“On behalf of our associates, board of directors and myself personally, I would like to thank Bob for his many contributions to Duke Realty and wish him the best in his future endeavors,” Oklak said in a Nov. 9 news release. “Bob has been with Duke since 1997, and has been instrumental in overseeing our transformation into a national real estate company.”

Duke’s 2009 revenue was $1.34 billion, almost identical to 2008’s. But the company swung from a $114 million profit in 2008 to a loss of $271.5 million in 2009. Shares in the office, industrial and retail property owner and manager rose 22 percent in 2009, to $11.98 each. Monday morning they opened at $12.75.

Oklak’s $3.4 million in total compensation included a base salary of $635,385, a performance-based bonus of $400,000 and restricted stock worth $2.3 million. He also is the company's chairman.

Pay for other Duke top executives:

—Chief Financial Officer Christie B. Kelly, who joined the company in February 2009, earned $1.2 million.

—Executive Vice President and General Counsel Howard L. Feinsand earned $1 million, up 6.4 percent.

—Executive Vice President of Construction Steven R. Kennedy earned $1 million, up 2.9 percent.

IBJ uses the Associated Press formula to calculate executive pay. It gauges the value of compensation such as stock and options grants at the time they are awarded, not the time they are cashed in.

Duke spent a total of $1.5 million last year on compensation for its 10 independent directors, 16 percent less than it spent in 2008.

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