Simon Property Group Inc., the biggest U.S. mall owner, signed an employment agreement with CEO David Simon that will keep him as head of the Indianapolis-based company for the next eight years.

Simon, 49, will receive a one-time award of 1 million long- term incentive performance units that begin vesting in six years as part of the agreement, the Indianapolis-based company said Thursday in a regulatory filing. The value of the award was $120 million, based on Wednesday’s closing share price.

“David Simon is widely recognized as the leading CEO in our industry and one of the top executives in corporate America,” Simon Property said in an e-mailed statement. “The board believes it is in the best interest of SPG shareholders to secure Mr. Simon’s continued service as CEO for at least the next eight years through this equity-based retention plan with long-term vesting.”

The employment agreement was signed Wednesday and runs through July 5, 2019, according to the company. Simon has been CEO of the real estate investment trust since 1995.

As IBJ reported in May, Simon Property's executive pay outclassed other Hoosier public companies in 2010. Using a new system of long-term stock awards, the company boosted total compensation by roughly fivefold for each of its top five executives.

David Simon received a pay package of cash, stock and perks valued at $24.6 million, topping all other Indiana executives. About $13.3 million came in the form of stock awards that will pay out only if Simon achieves certain targets in the future. The same is true for Simon’s other top brass.

Still, the compensation committee of Simon’s board said then that it was working on a long-term compensation package for the CEO, who members believe was underpaid relative to his peers.

“David Simon has been widely recognized as the best and most effective chief executive in an extremely competitive industry and one of the top chief executives in corporate America,” the six-member compensation committee gushed in the company’s proxy statement, released in April.

“The committee has considered for several years that David Simon’s compensation has not been commensurate with his contributions to our success and creation of long-term stockholder value.”

Simon’s stock has been hot indeed. It gained 28.5 percent last year and has since risen another 22 percent. And even after a sharp decline in late 2008 and 2009, Simon’s shares are now above their value at the end of 2007.