Michael Alvarado
Chief Operating Officer, Chief Legal Officer, Vice President and Secretary at Five Point Holdings
Executive
About Michael Alvarado
Michael Alvarado, age 58, is Five Point Holdings’ Chief Operating Officer, Chief Legal Officer, Vice President and Secretary. He was appointed COO effective March 1, 2024, has served as Chief Legal Officer since May 2016, and previously was General Counsel for the management company starting in 2011; he holds a B.A. in Political Science from UCLA and a J.D. from Stanford University and has 30+ years of real estate experience, including nearly 20 years at Allen Matkins Leck Gamble Mallory & Natsis LLP . His 2024 annual incentive payout was 135% of target ($2.025M vs $1.5M target), with company metrics emphasizing Adjusted Cash Flow and year-over-year modified SG&A; shareholders supported the executive pay program with ~99% approval at the 2024 say‑on‑pay vote .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Five Point Holdings, LLC | Chief Operating Officer | Appointed Mar 1, 2024 | Focused on efficient execution of business plan and oversight of entitlement efforts across communities; trusted leadership across Board and public/private partners . |
| Five Point Holdings, LLC | Chief Legal Officer, VP & Secretary | Since May 2016 | Integral in building internal legal and operational framework enabling development strategies; managed corporate legal, risk, and HR expenses under budget . |
| Five Point Management Company | General Counsel | Starting 2011 | Oversaw legal matters for management company; deep involvement with assets and operations for ~20 years . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney (real estate development and finance) | Nearly 20 years (pre-2011) | Represented public/private real estate companies and financial institutions across U.S. projects; broad entitlement and commercial segment experience . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $550,000 | $600,000 (committee-approved level) |
| Annual Incentive Target ($) | $1,400,000 | $1,500,000 |
| Annual Incentive Payout (% of Target) | 120% | 135% |
| Annual Incentive Paid ($) | $1,680,000 | $2,025,000 |
| Stock Awards ($ grant-date fair value) | $998,205 | $997,352 |
| All Other Compensation ($) | $24,634 | $23,943 |
| Total Compensation ($) | $3,252,839 | $3,636,680 |
Performance Compensation
Annual Incentives
| Component | Weighting | Metrics | Target | Actual | Payout |
|---|---|---|---|---|---|
| Corporate performance | 70% | Adjusted Cash Flow; YoY Modified SG&A (company-selected measures for CAP linkage) | Not disclosed | Not disclosed | Included in overall payout 135% of target for 2024 |
| Individual performance | 30% | Execution on commercial land sales; favorable legal settlements; expense management; advancing entitlements | Not disclosed | Not disclosed | Included in overall payout 135% of target for 2024 |
Long-Term Incentives (2024 grants)
| Award Type | Grant Date | Target Shares/Units | Design/Targets | Vesting |
|---|---|---|---|---|
| PSU – Share price-based | 3/8/2024 | 88,300 target | Threshold $4.10; Target $7.10; 33% vests at threshold, 100% at target; measured by highest consecutive 20 trading day average between Dec 1, 2026–Feb 28, 2027 | Vests after three-year performance period; CIC: if not assumed/substituted, vests at target; if assumed, converts to time-based at target and vests on original date . |
| PSU – Strategic milestone-based | 3/8/2024 | 66,225 target | Three milestones: (i) secure strategic financial partners for communities; (ii) successfully address senior notes due 2028 (paydown/refinance/modify/extend); (iii) obtain legislative/regulatory approvals; 33%/67%/100% for 1/2/3 milestones achieved; no payout beyond target | Vest upon milestone achievement before Mar 8, 2027; CIC: same treatment as share price PSUs regarding assumption/substitution and target vesting . |
| RSU – Time-based | 3/8/2024 | 198,675 | Time-based retentive value | Vests ratably over 3 years on each Mar 8, 2025/2026/2027, subject to continuous service . |
RSU Vesting Schedule (Alvarado)
| Grant | 2025 | 2026 | 2027 |
|---|---|---|---|
| RSU (3/8/2024; 198,675 units) | 66,225 units vest Mar 8, 2025 | 66,225 units vest Mar 8, 2026 | 66,225 units vest Mar 8, 2027 |
| RSU (3/9/2023; 179,372 units) | 89,686 units vest Mar 9, 2025 | 89,686 units vest Mar 9, 2026 | — |
Equity Ownership & Alignment
| Metric | Value |
|---|---|
| Beneficial ownership (Class A shares) | 637,527; includes 55,070 Class A shares held via family trust (Alvarado and spouse as co‑trustees) |
| Ownership as % of shares outstanding | <1% of Class A; company outstanding as of Mar 31, 2025: 69,858,638 Class A and 79,233,544 Class B |
| Unvested RSUs (market value at 12/31/2024 close $3.78) | 198,675 units; $750,992 |
| Unvested PSUs (market value at 12/31/2024 close $3.78) | 520,833; $1,968,749; 358,744; $1,356,052; 269,058; $1,017,039; 264,901; $1,001,326; 198,675; $750,992 |
| Shares vested in 2023 | 110,268; value realized $265,746 |
| Hedging/Pledging policies | Anti‑hedging and anti‑pledging policies in place for executives and directors |
| Options | Company did not grant options in 2024 |
Employment Terms
| Scenario (as of 12/31/2024 valuation) | Cash Severance ($) | Annual Incentive Severance ($) | Benefits ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|---|---|
| Termination without Cause | 3,602,500 | 1,500,000 | 32,461 | 7,523,176 | 12,658,137 |
| Termination without Cause or for Good Reason with Change in Control | 4,803,333 | 1,500,000 | 32,461 | 7,523,176 | 13,858,970 |
| Death or Disability | — | 1,500,000 | — | 7,523,176 | 9,023,176 |
- RSUs: If terminated without Cause or due to death/disability prior to vesting, 100% of unvested RSUs vest; upon CIC plus termination within 24 months, all unvested RSUs vest .
- PSUs: If terminated without Cause or due to death/disability prior to vesting, PSUs remain outstanding and eligible to vest per original schedule; upon CIC, PSUs vest at target if not assumed/substituted; if assumed/substituted, convert to time‑based at target and vest on original date; CIC plus termination within 24 months leads to full vesting at target .
- Clawback: Board‑adopted policy for recovery of erroneously awarded incentive compensation over trailing three fiscal years following a required restatement, consistent with Dodd‑Frank/SEC/NYSE rules .
- Hedging/Insider trading: Anti‑hedging policy prohibits hedging/monetization transactions; insider trading policy in place for directors, officers, employees and other covered persons .
Multi‑Year Compensation Summary (Alvarado)
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Salary ($) | $550,000 | $550,000 | $550,000 | $590,385 |
| Bonus ($) | $1,200,000 | — | — | — |
| Stock Awards ($) | $1,907,141 | $604,166 | $998,205 | $997,352 |
| Non‑Equity Incentive ($) | — | $1,700,000 | $1,680,000 | $2,025,000 |
| All Other Compensation ($) | $23,344 | $25,951 | $24,634 | $23,943 |
| Total ($) | $3,680,485 | $2,880,117 | $3,252,839 | $3,636,680 |
Compensation Committee Analysis
- Compensation Committee members: Michael Winer (Chair), Michael Rossi, Sam Levinson; solely independent directors; responsibilities include executive compensation oversight, plan administration, and clawback policy .
- Independent consultant: Decisions reflect input from an independent compensation consultant (Ferguson) and competitive peer practices .
- 2024 mix and design: Average NEO pay mix heavily performance‑based; equity awards ~70% performance‑based (share price ~60% of performance awards; strategic milestones ~40%) and ~30% time‑based; no options granted in 2024 .
Performance & Track Record
- 2024 achievements: Managed execution of commercial land sales; obtained/negotiated favorable legal outcomes; kept corporate legal/risk/HR expenses under budget; initiated legal responsibility transitions; advanced entitlement efforts across communities .
- Company pay-versus-performance disclosures link CAP primarily to Adjusted Cash Flow and depict relationships of CAP with TSR, GAAP Net Income, and Adjusted Cash Flow .
- Shares vested in 2023: 110,268 (value $265,746), indicating ongoing equity realization cadence .
Equity Ownership & Beneficial Holders Context
- As of Mar 31, 2025, outstanding shares: 69,858,638 Class A; 79,233,544 Class B .
- Major holders include Lennar, GFFP Holdings LLC (linked to director Sam Levinson), Robotti & Company; Alvarado holds <1% of total with 637,527 Class A shares (including 55,070 via family trust) .
Employment Terms
- Covered by Senior Management Severance and Change in Control Plan; benefit continuation valued at current plan cost multipliers; equity valuations based on $3.78 close on Dec 31, 2024 with PSUs assumed at target for scenario calculations .
Say‑On‑Pay & Shareholder Feedback
- 2024 say-on-pay approval ~99% in favor; Compensation Committee maintained approach given strong shareholder support .
Investment Implications
- Alignment and performance leverage: High variable pay with explicit share‑price PSUs ($4.10 threshold/$7.10 target) and strategic milestone PSUs ties realizable equity to TSR and execution on financing and regulatory milestones, reinforcing shareholder alignment .
- Retention vs. selling pressure: RSUs vest ratably through 2027 and PSUs have a concentrated measurement window in late 2026–early 2027; combined with CIC acceleration at target, this creates potential windows of increased insider equity settlement/selling pressure around vesting/performance certification dates .
- Risk controls: Anti‑hedging/anti‑pledging policies, clawback framework, and independent Compensation Committee governance reduce misalignment and mitigate governance risk .
- Pay program durability: Strong say‑on‑pay support (~99%) indicates investor acceptance of pay‑for‑performance design; continued emphasis on Adjusted Cash Flow and cost discipline in annual incentives should sustain focus on value creation under constrained real estate capital markets .