Edward A. Kangas

About Edward A. Kangas

Edward A. Kangas (age 80) has served on Hovnanian Enterprises’ Board since 2002 and is the Lead Independent Director. He is Chair of the Audit Committee, and a member of the Compensation Committee and the Corporate Governance & Nominating Committee; by virtue of being Lead Independent Director, he also serves ex officio on the Strategy Committee. The Board has designated him an “audit committee financial expert,” reflecting his deep accounting background as former Global Chairman and CEO of Deloitte.

Past Roles

External Roles

No current outside public company directorships are disclosed for Mr. Kangas in the 2025 proxy.

Board Governance

• Independence and leadership: Lead Independent Director; Board affirms his independence under NYSE rules and the company’s charter.
• Committee leadership: Audit Committee Chair; member of Compensation and Corporate Governance & Nominating; ex officio Strategy Committee as LID.
• Attendance and engagement: Board met 4 times in FY2024; Audit (12), Compensation (4), Corporate Governance & Nominating (4); each director, including Mr. Kangas, attended 100% of Board and assigned committee meetings; all directors attended the 2024 Annual Meeting.
• Audit Committee expertise and responsibilities: Board designated Kangas an “audit committee financial expert”; Audit oversees financial reporting, auditor selection/fees, and Internal Audit.
• Risk oversight: As Audit Chair and LID, he plays a key role in Enterprise Risk Management oversight with quarterly CFO updates to the Audit Committee; cybersecurity oversight sits with a Board subcommittee.
• Shareholder communication: As LID/Audit Chair, he is listed for direct Board correspondence.

Fixed Compensation (Non-Employee Director – FY2024)

Program structure and alignment:

• Annual board cash retainer $50,000; additional $27,500 for each committee served; $50,000 Lead Independent Director premium; meeting fees: $3,000 per regular quarterly board meeting, $2,000 per additional board meeting, $5,000 per regular quarterly committee meeting, $2,500 per additional committee meeting.
• Annual RSU award valued at $75,000 for board service plus $15,000 for each committee; two-year post-vesting delayed delivery to strengthen alignment.
• Director stock ownership guideline: 5x board retainer ($250,000) within five years; all non‑employee directors are currently in compliance.

Performance Compensation

• Directors receive time-based RSUs (no performance metrics); RSUs vest after one year and are subject to a two-year post‑vesting delivery delay. Mr. Kangas’ FY2024 stock award grant-date fair value was $119,984, consistent with the $75,000 board RSU plus $15,000 per committee served.

Other Directorships & Interlocks

• Compensation Committee interlocks/insider participation: None—Comp Committee members (including Kangas) were never officers/employees and had no relationships requiring Item 404(a) disclosure in FY2024.
• Related-party transactions: None disclosed involving Mr. Kangas; the proxy lists related-party items for others (e.g., services from a relative of the CEO and employment of a director’s family member), not involving Kangas.

Expertise & Qualifications

• Accounting/Audit: Former Global Chairman/CEO of Deloitte; designated Audit Committee financial expert by the Board.
• Governance and leadership: Lead Independent Director with responsibilities to preside over executive sessions, liaise with the Chair, coordinate agendas, and participate in risk oversight and strategy discussions.
• Broad public board experience across industrials, financials, healthcare, technology, telecom, and life sciences.

Equity Ownership (as of Jan 28, 2025 record date)

Additional alignment policies:

• Hedging prohibited; pledging of Company stock not allowed without Company consent.
• Director ownership guideline: 5x the $50,000 board retainer ($250,000) within five years; all non‑employee directors in compliance.

Governance Assessment

• Strengths:
  • Independent leadership as LID and Audit Chair; 100% meeting attendance and heavy audit workload (12 meetings) signal high engagement.
  • Recognized Audit Committee financial expert; robust ERM and audit oversight processes.
  • Director equity grants with mandatory two-year post‑vesting delivery support long-term alignment; strong board ownership guidelines with full compliance.
• Potential watch items:
  • Auditor is Deloitte & Touche LLP while Kangas is Deloitte’s former Global Chairman—this can create a perception risk, though his tenure ended in 2000; the Board affirms Audit Committee independence, and auditor independence policies are robust.
  • Modest direct shareholding (5,116 Class A; 0.10%) relative to outstanding shares, though guideline compliance mitigates alignment concerns.
• Conflicts/Related Parties:
  • No related‑party transactions or compensation interlocks involving Kangas disclosed.

Overall signal for investor confidence: strong independent leadership and audit oversight, excellent attendance, and alignment mechanisms (equity with delivery deferral; ownership guidelines) are positives; the historical Deloitte affiliation should be monitored but is mitigated by independence determinations and pre‑approval/independence controls.