Brad G. O’Connor
HOVNANIAN ENTERPRISESAbout Brad G. O’Connor
Brad G. O’Connor is Chief Financial Officer (CFO) of Hovnanian Enterprises, Inc., appointed effective November 1, 2023, after serving as Senior Vice President, Chief Accounting Officer and Treasurer in prior years . As CFO, he oversees Enterprise Risk Management and reports to both the CEO and the Audit Committee, reflecting core credentials in finance, controls, and risk oversight . During his tenure as an executive, Hovnanian’s operating performance and stock price improved materially: sale-of-homes revenues rose 9.3% year-over-year in FY 2024, income before income taxes increased to $317.1 million, diluted EPS reached $31.79, and the average October stock price climbed to $190.12 (from $87.56 in October 2021), supporting pay-for-performance program outcomes . He also participates in investor outreach and engagement as part of Hovnanian’s capital markets strategy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hovnanian Enterprises, Inc. | Senior Vice President, Chief Accounting Officer and Treasurer | FY 2021–FY 2023 | Led accounting, treasury, and disclosure; signed rights agreement amendments underpinning shareholder rights architecture . |
| Hovnanian Enterprises, Inc. | Chief Financial Officer | Effective Nov 1, 2023–present | Assumes ERM leadership; strengthens investor engagement and compensation governance alignment . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | — |
Fixed Compensation
- Base salary: Increased to $600,000 effective November 1, 2023 due to promotion to CFO .
- FY 2025 adjustment: Committee approved a 4% base salary increase for O’Connor, effective December 21, 2024 .
Multi-year compensation (as disclosed):
| Metric ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 483,650 | 488,037 | 604,615 |
| Bonus (cash discretionary) | — | — | — |
| Stock Awards (grant date fair value) | 503,235 | 589,626 | 1,000,008 |
| Non-Equity Incentive Plan Compensation (annual bonus plans) | 1,430,918 | 500,000 | 1,050,000 |
| Change in Pension Value & NQDC Earnings | 21,473 | 22,791 | 25,395 |
| All Other Compensation | 106,243 | 185,029 | 85,409 |
| Total | 2,545,519 | 1,785,483 | 2,765,427 |
Performance Compensation
Annual bonus structure (FY 2024):
| Component | Structure / Weighting | Target | Actual FY 2024 | Payout (O’Connor) | Notes |
|---|---|---|---|---|---|
| ROAE | % of base salary; up to 100% at 20% ROAE | 20% ROAE → 100% of base salary | 34.6% ROAE | 100% of base salary (within cap) | ROAE defined per proxy; rigorous targets . |
| Liquidity Balances | Fixed $ amounts based on quarters ≥$200m | 4 quarters ≥$200m → $225k | 4 quarters ≥$200m | $225,000 | Liquidity = cash + restricted cash + revolver capacity . |
| Alternative Capital Raises | Fixed $ amounts ($0–$225k) based on thresholds | ≥$250m → $225k | $574.3m | $225,000 | Excludes registered/144A debt; favors innovative capital . |
| Total Cash Bonus | — | — | — | $1,050,000 | Cap applied; maximum achieved . |
Equity and long-term incentives (design and vesting):
| Award | Grant Date | Target | Fair Value ($) | Metric(s) | Vesting | Delivery |
|---|---|---|---|---|---|---|
| PSUs – EBIT | Jun 14, 2024 | 2,308 PSUs | 274,998 | Absolute EBIT vs target; 50–200% multiplier | 3rd anniversary (Jun 14, 2027) | 2-yr delayed delivery (Jun 14, 2029) |
| PSUs – EBIT ROI | Jun 14, 2024 | 2,308 PSUs | 274,998 | EBIT ROI vs target; 50–200% multiplier | 3rd anniversary (Jun 14, 2027) | 2-yr delayed delivery (Jun 14, 2029) |
| Total 2024 PSUs | Jun 14, 2024 | 4,616 PSUs | 549,996 | As above | As above | As above |
| 2024 LTIP – Shares | Dec 14, 2023 | 1,743 target shares | 224,969 | Peer-relative EBIT ROI and net debt/capital (36-month) | End of performance period (Oct 31, 2026) | 2-yr delayed delivery (Oct 31, 2028) |
| 2024 LTIP – Phantom Shares (cash) | Dec 14, 2023 | 1,397 target phantom shares | 225,043 | Same as above | End of performance period (Oct 31, 2026) | Paid following performance period |
| LTIP Target Multiple (FY 2024) | — | 0.75× base salary | — | EBIT ROI rel. to peers + net debt/capital | — | — |
| LTIP Target Multiple (FY 2025) | — | Increased to 1.0× base salary | — | EBIT ROI rel. to peers + net debt/capital | — | — |
Achievement examples:
- 2023 PSUs earned at 200% for both absolute EBIT ($563.9m for 4 quarters ending Apr 30, 2024) and top-ranked relative EBIT ROI; distribution remains subject to vesting/delayed delivery to June 9, 2028 .
- 2022 LTIP paid out at 152.74% of target on cumulative pre-tax profit and annualized interest incurred, reinforcing debt reduction focus; share portions subject to delayed delivery (to Oct 31, 2026) .
Equity Ownership & Alignment
- Beneficial ownership (as of Jan 28, 2025): 14,947 Class A shares; 0.29% of Class A outstanding .
- Options exercisable within 60 days (as of Jan 28, 2025): 6,500 shares (Class A) .
- Stock Ownership Guidelines: CFO required to own ≥3× current base salary; CFO in compliance as of Oct 31, 2024 .
- Anti-hedging/pledging: Prohibits short sales, derivatives, margin purchases, and pledging without Company consent—no pledging disclosed for O’Connor .
- Insider activity: In FY 2024, O’Connor exercised 800 options for $36,088 of value realized; vested stock awards totaled 14,662 shares with $2,415,060 value realized (subject to delayed delivery policies) .
Outstanding equity detail (selected grants as of FY 2024 year-end):
| Grant | Type | Exercisable/Unvested | Exercise Price / Count | Expiration / Market Value |
|---|---|---|---|---|
| Jun 12, 2015 | Options | 800 exercisable | $66.75 | Jun 11, 2025 |
| Jun 10, 2016 | Options | 1,000 + 2,000 exercisable | $42.50 | Jun 9, 2026 |
| Jun 9, 2017 | Options | 500 exercisable | $56.25 | Jun 8, 2027 |
| Jun 8, 2018 | Options | 1,000 exercisable | $48.75 | Jun 7, 2028 |
| Jun 14, 2019 | Options | 1,200 exercisable | $7.85 | Jun 13, 2029 |
| Jun 12, 2020 | RSUs | 1,750 unvested | — | $308,070 market value |
| Mar 30, 2021 | 2021 LTIP (shares) | 2,280 unvested | — | $401,371 market value |
| Jun 10, 2022 | PSUs (two tranches) | 2,956 + 3,354 unvested | — | $520,374 + $590,438 market value |
| Dec 15, 2022 | 2023 LTIP (shares + phantom) | 5,272 + 4,117 unearned | — | $928,083 + $724,757 payout values |
| Jun 9, 2023 | 2023 PSUs (two tranches) | 2,882 + 2,882 unvested | — | $507,347 + $507,347 market value |
| Jun 14, 2024 | 2024 PSUs (two tranches) | 1,154 + 2,308 threshold/target | — | $203,150 + $406,300 market values |
Employment Terms
- Agreements: Hovnanian generally has no employment agreements for NEOs other than the CFO; O’Connor has a change-in-control (CoC) severance agreement .
- CoC severance (CFO): If terminated involuntarily (other than for cause) or for good reason within two years of a CoC, receives lump-sum equal to one year’s base salary plus average of last three years’ bonuses; 100% vesting of outstanding options, RSUs, and deferred shares granted prior to CoC; LTIP payouts continue on schedule if CoC occurs after performance period; no excise tax gross-ups .
- Estimated CoC payouts (as of Oct 31, 2024): Cash severance $1,310,389; accelerated equity awards $3,246,178; accelerated LTIP $2,606,976; accrued vacation $48,594; Total $7,212,137 .
- Clawbacks: SEC/NYSE-compliant Incentive Compensation Clawback Policy requiring recovery of erroneously awarded incentive-based compensation upon restatement regardless of fault; additional misconduct-based clawback for three years preceding restatement .
- Insider trading policy: Prohibits short-term/speculative transactions and pledging without consent .
- Deferred Compensation: EDCP “make-whole” contributions credited at 10.0% for calendar 2024; EDCP balance $619,637 and LTI deferred balance $3,478,902 at FY 2024 year-end for O’Connor; Company EDCP contributions in FY 2024 were $45,255 .
Performance & Track Record
- ERM leadership and Audit Committee interface: O’Connor presents risk assessments quarterly and coordinates cybersecurity oversight via the Board’s Cybersecurity Subcommittee process .
- Investor outreach: Participated in meetings with >139 investors in FY 2024, with no compensation design concerns raised by investors .
- Company outcomes supporting incentive payout rigor: FY 2024 pre-tax income increased to $317.1 million; diluted EPS rose to $31.79; sale-of-homes revenues up 9.3%; stock price average in October 2024 reached $190.12 versus $87.56 in October 2021 .
- Pay-for-performance validation: 2023 Say-on-Pay support was 95.7% of votes cast, underpinning investor endorsement of program design .
Compensation Committee Analysis (context)
- Peer group: Nine homebuilders (e.g., Beazer, Meritage, KB Home, LGI, Taylor Morrison, TRI Pointe, M/I Homes, Century Communities, Dream Finders) used to benchmark total direct compensation and performance metrics .
- Program emphasis: Variable compensation dominated (annual bonus tied to ROAE/liquidity/alternative capital raises; PSUs tied to EBIT and EBIT ROI; LTIPs tied to peer-relative EBIT ROI and net debt/capital), with mandatory two-year delayed delivery to foster retention and alignment .
- FY 2025 updates: Increased bonus potential and LTIP target multiple for CFO and Alexander Hovnanian; continuation of EBIT ROI and leverage-improvement focus .
Equity Ownership & Alignment Table
| Item | Status / Amount |
|---|---|
| Beneficial Class A shares (Jan 28, 2025) | 14,947 (0.29% of Class A) |
| Options exercisable within 60 days | 6,500 Class A options |
| Stock ownership guideline compliance | CFO compliant (≥3× salary) as of Oct 31, 2024 |
| Anti-hedging/pledging | Restricted; pledging requires Company consent |
| Insider exercises FY 2024 | 800 options exercised; $36,088 realized |
| Vested stock FY 2024 | 14,662 shares vested; $2,415,060 value |
Employment Terms & Severance Table
| Provision | Terms / Estimated Amounts |
|---|---|
| Employment agreement | None (Company generally has no NEO employment agreements other than CFO’s CoC agreement) |
| CoC severance formula | 1× annual base salary + average of last three years’ bonuses; full vesting of options/RSUs/deferred shares; LTIP payout scheduling continuation (post-performance period) |
| Estimated CoC payout (as of FY 2024 year-end) | $7,212,137 total (cash severance $1,310,389; equity acceleration $3,246,178; LTIP acceleration $2,606,976; vacation $48,594) |
| Clawback policy | SEC/NYSE-compliant; misconduct-based supplemental clawback for three years |
| EDCP crediting rate (2024) | 10.0% on Company “make-whole” contribution balances; EDCP balance $619,637 |
Investment Implications
- Alignment and retention: O’Connor’s pay mix is highly variable with performance-linked cash bonuses (ROAE/liquidity/alternative capital) and multi-year PSU/LTIP awards subject to strict vesting and mandatory two-year delayed delivery, fostering long-term alignment and tempering near-term selling pressure .
- Leverage and operating focus as performance levers: Equity awards emphasize EBIT ROI (operating efficiency) and net debt to capital (balance sheet de-risking), consistent with Hovnanian’s strategy to reduce interest burden and strengthen liquidity—supportive of quality-of-earnings and cash generation over time .
- Governance safeguards: No tax gross-ups, robust clawback regime, anti-hedging/pledging restrictions, and ownership guideline compliance mitigate governance risk and signal disciplined compensation risk management .
- CoC economics: While CoC protections are present, the estimated total payout (~$7.2 million as of FY 2024) appears moderate relative to role and program scale, and lacks excise tax gross-ups, limiting parachute risk inflation .
Section 16(a) compliance was reported as satisfactory for FY 2024, with no delinquent filings noted—reducing regulatory red flag risk .