As home building’s public company group goes, so goes the broader economy. Or maybe it’s the other way around. Whether one’s fortunes causally effect the other is arguable. What’s not arguable is that there’s a strong correlation between trends in pay for the nation’s leading corporations’ top executives and compensation of home building’s public company chief executive officers.
Bottom line, public home building company CEOs had a good year. They’re average $5 million total compensation package would stand up comparably with Fortune 500 companies’ executive pay awards.
With the exception of a few stragglers, home building’s public company peer group has been busy filing Securities and Exchange Commission proxy statements, and our own Data Studio research maven Katie Gloede teamed up with editor Jerry Ascierto to rank and spotlight the 19 CEOs for which we have data. A Wall Street Journal analysis last week by Theo Francis and Joann Lublin, “CEOs Awarded More Cash Pay,” articulated the challenges of measuring pay apples to apples. They write:
CEO pay packages can be a complex mix of moving parts. Cash typically comes largely from bonuses pegged to annual results and base salaries. Another dollop is sometimes tied to long-term performance measures that typically pay out over three years, provided targets are met.
Cash was the fastest-growing component of pay for the surveyed CEOs last year. Their salaries and annual bonuses rose by a median 7.8%, up sharply from the previous year’s 1.2% and a decline in the year before that.
The issue challenging compensation committees of home builders is that performance during cyclical upswings is decidedly different than during a downturn, or a bottom. Three-year earn-outs have become a popular tool, with claw-backs to insure appropriate balance of risk and caution. Ascierto’s notes on last year’s awards will help most readers decipher how each company’s board prioritizes achievement.
-
1: Paul C. Saville, NVR Inc.
NVR's Paul Saville tops 2014 CEO compensation among public builders, earning close to $20 million last year in total compensation.
-
2: Stuart A. Miller, Lennar
Lennar's Staurt Miller got an overall compensation boost of more than 30%, keeping him the second highest-paid CEO among public home builders for the last two years.
-
3: Jeffrey T. Mezger, KB Home
Thanks to nearly a 50% boost in compensation, KB Home's Jeffrey Mezger jumped from 10th to fourth highest-compensated CEO among public home builders.
-
4: Douglas C. Yearley, Jr., Toll Brothers
The fourth highest-paid public home builder CEO, Douglas Yearley saw a slight increase in compensation last year, earning just over $10 million in total compensation in 2014.
-
5: Donald J. Tomnitz, DR Horton
Moving to fifth place this year in top paid CEOs among the public builders, Tomnitz made nearly $10 million in 2014.
-
6: Larry T. Nicholson, The Ryland Group
Earning more than $4 million in stock awards last year, Ryland's Larry Nicholson is one of the top 10 highest-compensated CEOs among public home builders.
-
7: Allan P. Merrill, Beazer USA Inc.
Beazer Homes' Allan Merrill overall compensation increased 182% between 2013 and 2014.
-
8: Richard J. Dugas, Jr., PulteGroup
Pulte's Richard Dugas had one of the highest base salaries last year among public home builder CEOs at $1.2 million.
-
9: Steven J. Hilton, Meritage Homes
Meritage CEO Steven Hilton was among the highest compensated public home builder executives in 2014 with total earnings at more than $7 million, a slight increase over 2013.
-
10: Scott D. Stowell, Standard Pacific Corporation
Standard Pacific's Scott Stowell rounds out the top 10 highest compensation CEOs among public home builders with overall compensation close to $6.5 million in 2014.
