Company: HOVVB
Filing Date: 2025-02-07
Form Type: DEF 14A
Source: 0001140361-25-003579
Chunk: 38

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-02-07
Form: DEF 14A
Chunk 38
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 retain and attract executive talent with industry-specific knowledge, in constructing the Peer Group, the Committee selected those companies that compete directly with the Company in the homebuilding industry, are of comparable complexity in operations to the Company and are generally in the markets in which the Company competes. The Committee feels that it is important to compare the Company to others in the homebuilding industry, even if certain of these peers have different financial profiles, because the Company competes with homebuilding industry peers for executive talent with industry-specific knowledge and experience. In addition, the Company competes directly in all of its markets with most of the Peer Group companies for customers, land and trade partners. In some markets, the Company is larger than some of the Peer Group companies even though it may be smaller nationally. The Committee will continue to review the appropriateness of the Peer Group composition. The Committee relies on Peer Group comparisons for the CEO and CFO positions and intends for Total Direct Compensation to be competitive with the Peer Group. For the other NEOs, the Committee places greater weight on its consideration of internal pay equity, an evaluation of individual performance contributions and other factors. 77 CONSIDERATION OF MARKET CONDITIONS In determining overall compensation for all the NEOs, the Committee also takes into account leadership abilities and risk management contributions, which are especially critical during challenging market conditions. In addition, in establishing compensation levels, the Committee takes into consideration market pressures, both within and outside of the homebuilding industry. When setting bonus formulas applicable to all NEOs other than Mr. Wyatt in December 2023, the Committee determined to continue to emphasize the importance of maintaining appropriate levels of liquidity, including the use of alternative capital raises, by retaining these metrics in the NEOs’ bonus programs for fiscal 2024 and increasing the fiscal 2024 alternative capital raises goals to further enhance our liquidity in order to grow the Company. The Committee also determined to maintain the ROAE bonus components for each NEO. However, given the Company’s improved financial performance, the Committee raised the fiscal 2024 bonus cap for Mr. Ara Hovnanian to $7 million, which was higher than his 2023 bonus cap but lower than his 2022 bonus cap. In light of his promotion, the Committee increased Mr. O’Connor’s fiscal 2024 bonus potential to align with his new position. In addition, the Committee determined that the PSUs granted to the NEOs would be tied to financial performance conditions. Specifically, half of these PSUs are tied to specific absolute EBIT