Home Building CFO Pay By The Numbers
Even as public home building companies loosen their purse strings to invest in land they hope will turn into tomorrow’s cash flow, most of them are still cutting costs to their operations and overheads.
Where strategy focuses as much on cash preservation as it does on driving topline sales and revenue growth, the honcho who wields both the axe and the gift bag tends to be the chief financial officer.
CFOs as a group performed heroics in doing their part to retrieve a collective $2.3 billion in tax benefits traced to net operating losses in 2009.
Here’s a chart from SNL Financial that maps out how each builder did in its most recent financial reporting period:
Courtesy of SNL Financial
In 2010, a big issue for public home builders will be retaining the services of talents who provide credibility and integrity behind fairly complex financial performance reporting. Trust is in short supply at the nexus of Wall Street and Main Street, and a good CFO is often the only thing between keeping the trains running and total chaos.
Still, most CFOs compensation in 2009 reflected red ink performance of their respective mother ships, with few bonuses (in cash, especially), and stock and option awards blistered by the performance of stock prices that have taken major hits.
Still, in all, they’re not doing too badly. All in all, CFOs across our 9-company universe earned an average of $1.9 million in total compensation, versus $2.6 million in 2008, a plummet of about 26%
Base pay in most cases, held at 2007 and 2008 levels, with D.R. Horton CFO Bill Wheat’s $250,000 representing the low, and Joel Rassman at Toll Brothers the high at $1 million.
Consistent with the fact that its CEO Paul Saville ranked lowest in his peer group, NVR principal financial officer Dennis Seremet had the most modest total comp package of the pack.
Here’s the way they rank (note: we only have nine due to the fact that other public company proxy statements with information on the compensation of their named executives are still forthcoming).
Click twice on the table for a larger view.
Source: Big Builder analysis of company proxies.
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