Alexander A. Hovnanian
HOVNANIAN ENTERPRISESAbout Alexander A. Hovnanian
Alexander A. Hovnanian is a Named Executive Officer serving as Executive Vice President, National Homebuilding Operations, and was appointed to become President effective November 1, 2025 . Company performance context for his incentives in FY2024: revenues from home sales rose 9.3% on 9.6% more deliveries, net contracts rose 11.6%, and income before taxes increased to $317.1M; average stock price in October 2024 was $190.12 versus $87.56 in October 2021, underscoring multi‑year value creation . Incentive plans emphasized ROAE, liquidity, alternative capital raises, EBIT, EBIT ROI, and net debt to capital to drive profitability and balance sheet improvement .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Hovnanian Enterprises, Inc. | Executive Vice President, National Homebuilding Operations | 2024–2025 | Named Executive Officer overseeing national homebuilding operations (basis for bonus and long-term incentives) |
| Hovnanian Enterprises, Inc. | President (appointed) | Effective Nov 1, 2025 | Elevated responsibility; base salary set to $750,000 and LTIP target multiple 1.25× base salary |
External Roles
- Not disclosed in the company’s proxy or 8-K filings reviewed; no additional public company board or external roles identified in these documents .
Fixed Compensation
| Year | Base salary ($) | Target/Structure | Actual annual bonus ($) | Perquisites (key items) |
|---|---|---|---|---|
| FY2024 | 600,000 | Bonus formula based on ROAE, Liquidity Balances, Alternative Capital Raises (max $1,050,000) | 1,050,000 | $17,380 total; auto allowance/maintenance, company-subsidized medical, LTD premium |
| Effective 11/1/2025 | 750,000 | LTIP target multiple 1.25× salary (other cash/equity at Committee discretion) | — | — |
Notes:
- No discretionary bonuses in FY2024 .
- Company provides 401(k) match; in FY2024 Alexander received $20,700 401(k) contribution; no EDCP contribution shown for him .
Performance Compensation
Annual Bonus (FY2024 structure and outcome)
| Metric | Construction | Target threshold(s) | Actual FY2024 | Payout consequence |
|---|---|---|---|---|
| ROAE | % of base salary based on ROAE grid | 20% ROAE yields 100% of base salary for Alexander | 34.6% ROAE | 100% of base salary ($600,000) |
| Liquidity Balances | # of fiscal quarter-ends with Liquidity ≥$200M | 4 quarter-ends → $225k | 4 quarter-ends ≥$200M | $225,000 |
| Alternative Capital Raises | Amount from alternative capital sources | ≥$250M → $225k | $574.3M | $225,000 |
| Total | Formula cap | Max $1,050,000 for Alexander | Achieved max | $1,050,000 |
Definitions: Liquidity Balances include homebuilding cash, restricted cash securing LCs, and undrawn revolver capacity; alternative capital excludes SEC-registered/144A debt; detailed definitions in proxy .
Equity and Long-Term Incentives
| Grant/Program | Grant date | Target amount | Performance metrics & period | Vesting & delivery | Notes |
|---|---|---|---|---|---|
| PSUs (FY2024) | 6/14/2024 | 4,616 target PSUs ($549,996 grant-date fair value) | 50% Absolute EBIT; 50% Absolute EBIT ROI; period = 4 quarters ending 4/30/2025 | Earned PSUs vest at 3rd anniversary (6/14/2027); mandatory 2-year delayed delivery to 6/14/2029 | Interpolation 50–200% of target vs hurdles |
| LTIP (2024 cycle) | 12/14/2023 | 0.75× base salary target; payout 0–250% | Relative EBIT ROI vs peer group (4Q ended 10/31/2026) and Net Debt to Capital at 10/31/2026 | 50% shares (delayed delivery to 10/31/2028), 50% cash-settled phantom shares (paid after performance period) | Change-in-control qualifying termination → deemed earned at target, immediate vest/pay |
| LTIP (2025 cycle) | Performance period 11/1/2024–10/31/2027 | Target multiple increased to 1.0× base salary for Alexander | Relative EBIT ROI vs peer group and Net Debt to Capital at 10/31/2027 | Shares with 2-year delayed delivery to 11/1/2029 | — |
| PSUs (FY2023) | 6/9/2023 | 6,174 target PSUs in each of two tranches | 50% Absolute EBIT; 50% Relative EBIT ROI rank vs peers (4Q ended 4/30/2024) | Vests at 3rd anniversary; 2-year delayed delivery to 6/9/2028 | Company achieved 200% payout on both tranches (top ROI rank; EBIT $563.9M vs max) |
Peer group used for relative metrics and market benchmarking in FY2024: Beazer, Century Communities, Dream Finders, KB Home, LGI Homes, M/I Homes, Meritage, Taylor Morrison, TRI Pointe; MDC removed and DFH added due to MDC merger .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (1/28/2025) | 14,830 Class A (0.29% of Class A); 97,009 Class B (13.24% of Class B) |
| Note on trust holdings | Includes 14,272 Class A and 82,404 Class B held by trusts for Ara K. Hovnanian’s family where Alexander is investment trustee with voting/dispositive power |
| Options outstanding (exercisable) at 10/31/2024 | 1,200 @ $45.25 exp. 7/24/2026; 600 @ $56.25 exp. 6/8/2027; 800 @ $48.75 exp. 6/7/2028; 1,000 @ $7.85 exp. 6/13/2029 |
| Unvested/uneared equity at 10/31/2024 | RSUs/PSUs/LTIP share and phantom awards across 2021–2024 cycles with detailed counts and values (e.g., 6/10/2022 PSUs: 6,334 absolute EBIT; 7,186 relative EBIT ROI; 6/9/2023 PSUs: 6,174 per tranche; 6/14/2024 PSUs: 1,154 EBIT and 2,308 EBIT ROI) |
| Ownership guidelines | CEO 6× salary; CFO 3× salary; CEO and CFO compliant; guidelines not specified for Alexander |
| Hedging/pledging | Hedging and short-term/speculative trades prohibited; pledging requires Company consent; no pledging by Alexander disclosed |
| Post-vesting holding | Mandatory two-year delayed delivery on executive equity awards (mitigates immediate selling pressure) |
Employment Terms
- Employment agreements: Company maintains no employment agreements for NEOs other than the CFO; Alexander has no individual employment contract or cash severance arrangement disclosed .
- Clawback: SEC/NYSE-compliant incentive compensation clawback applies to current/former Section 16 officers regardless of misconduct; three-year lookback for restatements .
- Change-in-control and severance economics:
- Equity acceleration values as of 10/31/2024 (valuation at $176.04/share): Death/Disability → $4,993,903 (equity) + $254,730 (LTIP) = $5,248,633; Change in Control with qualifying termination (“good reason”/involuntary) → $5,806,503 (equity) + $2,440,266 (LTIP) = $8,246,769; no cash severance stated for Alexander .
- LTIP change-in-control: qualifying termination prior to end of performance period → deemed earned at target; immediate vesting and payout; post-period unpaid, earned awards become vested and payable .
- Delayed delivery exception: equity that vests upon a qualifying termination within two years following a change of control is not subject to the 2-year delayed delivery .
- Tax gross-ups: none provided under CIC for NEOs per policy; CFO’s CIC agreement explicitly states no excise tax gross-up; no separate CIC cash agreement disclosed for Alexander .
- 2025 role/comp update: Effective 11/1/2025 Alexander becomes President with $750,000 base salary and LTIP target multiple set at 1.25× salary (other awards at Committee discretion) .
Compensation Structure Analysis
- Pay-mix shift and rigor: Alexander’s 2024 compensation emphasized variable pay with max bonus only upon achieving stringent ROAE (≥20%), maintaining quarterly liquidity ≥$200M, and executing alternative capital raises ≥$250M; all metrics reached maximum in FY2024 (ROAE 34.6%, liquidity met all quarter-ends, alternative capital raises $574.3M), paying his maximum cash bonus ($1.05M) . PSUs and LTIPs are tightly tied to EBIT/EBIT ROI and deleveraging (net debt to capital), with payouts ranging 0–200%/250% and subject to multi-year vesting and two-year post-vesting delivery .
- Governance safeguards: No employment agreement or guaranteed severance for Alexander; SEC/NYSE clawback, anti-hedging/pledging, predetermined annual grant date, and no tax gross-ups are shareholder-friendly features .
- Peer benchmarking: Compensation referenced to a homebuilder peer set updated in 2024 (DFH added; MDC removed) to align with industry scale/complexity and to drive relative EBIT ROI performance .
Related Party Transactions
- Disclosure notes Alexander is Ara K. Hovnanian’s son and an employee; in FY2023, his compensation totaled approximately $1,008,000 cash and $825,000 equity (grant-date fair value), reviewed under the Company’s Related Person Transaction Policy . An engineering firm owned by a relative of Ara provided $1.3M in services in FY2023; neither the Company nor Ara had a financial interest in that firm .
Say-on-Pay & Shareholder Feedback
- Say-on-pay approval for FY2023 compensation was 95.7% (votes cast), viewed by the Committee as affirmation of the program; no major structural changes for FY2024; the Company reported extensive investor engagement with no compensation concerns raised .
Investment Implications
- Alignment and retention: The design creates strong alignment—performance-conditioned PSUs/LTIPs on EBIT, ROI, and deleveraging, plus mandatory two-year delivery delay that tempers immediate insider selling pressure even after vesting . With no cash severance and no personal CIC cash protections, retention hinges on ongoing award opportunities; the 2025 promotion (higher base and LTIP target) supports retention .
- Governance and control: Significant Class B ownership/votes across the Hovnanian family and trusts centralizes control; Alexander’s beneficial ownership includes trustee-held shares with voting/dispositive power, which can be positive for long-term strategy continuity but may limit outside influence . Hedging and pledging are restricted, reducing alignment risk .
- Performance leverage: Bonus outcomes directly tied to ROAE, liquidity and alternative capital raising success, while long-term awards are leveraged to EBIT performance and relative ROI. This creates high sensitivity to operating execution and balance sheet progress—positive for investors if the company sustains FY2024 momentum, but it embeds risk if ROAE/EBIT normalize or liquidity tightens .
Key numbers for Alexander A. Hovnanian in FY2024: salary $600,000; cash bonus $1,050,000; PSUs granted (target) 4,616; LTIP target 0.75× salary; perquisites $17,380; beneficial ownership 14,830 Class A (0.29%) and 97,009 Class B (13.24%) **[357294_0001140361-25-003579_ny20039970x1_def14a.htm:33]** **[357294_0001140361-25-003579_ny20039970x1_def14a.htm:35]** **[357294_0001140361-25-003579_ny20039970x1_def14a.htm:38]** **[357294_0001140361-25-003579_ny20039970x1_def14a.htm:41]** **[357294_0001140361-25-003579_ny20039970x1_def14a.htm:48]** **[357294_0001140361-25-003579_ny20039970x1_def14a.htm:5]**.