Company: HOVVB
Filing Date: 2025-02-07
Form Type: DEF 14A
Source: 0001140361-25-003579
Chunk: 31

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-02-07
Form: DEF 14A
Chunk 31
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 in fiscal 2025. Contract backlog decreased from 1,824 homes at October 31, 2023 to 1,649 homes at October 31, 2024, and the dollar value of contract backlog decreased to $936.8 billion, a 11.7% decrease in dollar value compared to the prior year. Our backlog conversion ratio during fiscal 2024 has increased from the prior year due to our focus on having more QMI homes available to sell and deliver. 63 COMPANY PRE-TAX INCOME AND STOCK PRICE IMPROVEMENT The chart below illustrates that our operations have improved dramatically as demonstrated by the increase in pre-tax income to $317.1 million in fiscal 2024 compared to $189.9 million in fiscal 2021, and the increase in our stock price to an average of $190.12 in October 2024 compared to an average of $87.56 in October 2021.

| (1)                                                                                                     |
| Reflects the average closing price of a share of Class A Common Stock of the Company for the last month 
 of the fiscal year indicated.                                                                           |

64 BEST PRACTICES Pay-for-Performance The Compensation Committee ties increases or decreases in overall compensation to the achievement of key performance factors the Board of Directors believes are critical to the Company’s success during that period. The Committee seeks to motivate management to achieve improved financial performance of the Company through bonus plans that reward higher performance with increased bonuses and hold management accountable for financial performance that falls below targeted levels by paying reduced bonuses. In addition, the periodic LTIPs adopted by the Company have conditioned payouts on the achievement of certain targets for increasing profitability and EBIT Return on Investment, and lowering or refinancing debt, reducing interest expense and achieving strategic initiatives over multi-year performance periods. Moreover, in recent years, the NEOs have received PSUs which are tied to financial performance conditions (for 2024, absolute EBIT and absolute EBIT Return on Investment levels). The rigor of the performance conditions related to the LTIPs is demonstrated by the fact that, on average for LTIP awards granted during fiscal years 2018 through 2022, we have set the three-year cumulative pre-tax profit targets for the LTIPs at 252% of what was achieved for the most recently completed three-year periods at the time the LTIP awards were granted. In addition, LTIP awards granted during fiscal years 2023 and 2024 require Relative EBIT Return on Investment to be in the top quint