J. Larry Sorsby
HOVNANIAN ENTERPRISESAbout J. Larry Sorsby
J. Larry Sorsby (age 69) is a long-serving director at Hovnanian Enterprises, Inc. (HOV), having joined the Board in 1997, after serving as CFO (1996–Oct 2023), EVP (2000–2023), and SVP (1991–2000). He currently serves on the Board’s Strategy Committee and is classified as a non-independent director given his recent executive officer tenure . He has prior nonprofit governance roles at Children’s Hospital of Philadelphia (CHOP) .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Hovnanian Enterprises, Inc. | Chief Financial Officer | 1996–Oct 2023 | Led finance through deleveraging and complex capital actions; retired Oct 2023 |
| Hovnanian Enterprises, Inc. | Executive Vice President | Nov 2000–Oct 2023 | Senior leadership oversight |
| Hovnanian Enterprises, Inc. | Senior Vice President | Mar 1991–Nov 2000 | Operational leadership |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Children’s Hospital of Philadelphia (CHOP) | Chair, Board of Visitors for Urology | 2013–2023 | Oversight/advocacy for Urology; Board advisor |
| CHOP Foundation | Board of Advisors | 2015–2023 | Philanthropy and strategy advisory |
Board Governance
- Committee assignments: Strategy Committee member; the committee is chaired by Ara K. Hovnanian (CEO/Chair) .
- Independence: Non-independent director; Board independence determinations list other directors as independent, not Sorsby .
- Attendance and engagement: 100% attendance at Board and applicable committee meetings in FY2024; attended the 2024 Annual Meeting .
- Years of service: Director since 1997 .
- Lead Independent Director: Role held by Edward A. Kangas, not Sorsby .
- Cyber/ESG governance: Corporate Governance & Nominating Committee oversees related-person policy and Board evaluations; Sorsby is not listed as a member .
Fixed Compensation (Director)
| Component | FY2024 Amount |
|---|---|
| Fees Earned or Paid in Cash | $187,000 |
| Stock Awards (RSUs; grant-date fair value) | $89,958 |
| Change in Pension Value/Nonqualified Deferred Comp Earnings (EDCP) | $51,727 (above applicable federal rate, related to prior CFO service) |
| All Other Compensation | $15,374 (charitable contribution; allocable golf club fees) |
| Total | $344,059 |
Program structure (applies to non-employee directors):
- Cash retainers: $50,000 annual Board retainer; $27,500 per committee; $50,000 additional for Lead Director; plus meeting fees ($3,000 regular quarterly Board; $2,000 additional Board; $5,000 regular quarterly committee; $2,500 additional committee) .
- Equity: Annual RSU valued at $75,000 plus $15,000 per committee; grants on second Friday in June; one-year vest; mandatory two-year post-vesting delayed delivery .
Performance Compensation (Director)
| Equity Award | Grant Date | Grant-Date Fair Value | Vesting/Delivery | Performance Metrics |
|---|---|---|---|---|
| RSUs (Class A stock) | Jun 14, 2024 | Included in $89,958 total | Vest on 1st anniversary; mandatory two-year delayed delivery | None; time-based only |
Notes:
- Director RSUs are time-based (no TSR/financial performance conditions), with fixed grant timing and delayed delivery to enhance alignment and discourage timing games .
Other Directorships & Interlocks
- Public company boards: None disclosed .
- Private/nonprofit: CHOP roles as noted above .
- Interlocks: None disclosed with competitors/suppliers/customers beyond standard industry relationships; Compensation Committee explicitly notes no interlocks among members (Sorsby is not a member) .
Expertise & Qualifications
- Core credentials: 35+ years at HOV; deep finance and capital markets experience; Board’s experience matrix assigns financial expertise and enterprise leadership to Sorsby .
- Strategy-focus: Active on Strategy Committee supporting capital structure and value-creation initiatives .
Equity Ownership
| Metric | As of | Amount |
|---|---|---|
| Class A Common Shares Beneficially Owned | Jan 28, 2025 | 106,540 (includes 4,056 via a grantor retained annuity trust and 3,200 via a revocable trust) |
| % of Class A Outstanding | Jan 28, 2025 | 2.03% |
| Options (Class A) exercisable within 60 days | Jan 28, 2025 | 50,000 |
| Pledging/Hedging | Policy prohibits hedging and pledging without consent; no pledges disclosed for Sorsby |
Stock ownership guidelines (Board-wide):
- Non-employee directors: Requested to hold 5x annual Board retainer ($250,000) within five years; all non-employee directors are currently in compliance .
Related Party & Conflict Checks
| Item | Detail |
|---|---|
| Family employment | Son (Carson Sorsby) employed as Account Manager at HOV’s mortgage subsidiary; FY2024 commissions ~$199,237; determined commensurate; reviewed/approved under Related Person Transaction Policy |
| Independence risk | Non-independent status due to recent CFO tenure; sits on Strategy Committee alongside CEO, which may raise questions on board challenge function |
| Control dynamics | Hovnanian family voting power assures election outcomes, potentially reducing minority shareholder influence on Board composition |
Governance Assessment
- Strengths
- High attendance and engagement (100% Board/committee; attended Annual Meeting), indicating strong participation .
- Significant personal share ownership (2.03% of Class A) and options, enhancing financial alignment with shareholders .
- Deep financial acumen and institutional knowledge from decades-long CFO tenure; valued by Board in skill matrix .
- Compliance with director stock ownership guidelines (Board-wide) .
- Concerns and RED FLAGS
- Non-independent director status following recent executive role; may weaken perceived board objectivity on audit/compensation matters despite not serving on those committees .
- Strategy Committee composition includes CEO and non-independent directors; concentration could limit independent challenge of strategic/capital decisions .
- Related-person transaction via son’s employment (though reviewed/approved); modest but relevant for conflict monitoring .
- Family voting control effectively assures director elections, a structural governance risk for minority investors .
Overall: Sorsby brings material financial and operating expertise with strong attendance and ownership alignment. However, his non-independent status, Strategy Committee alignment with management, and family-control dynamics warrant heightened monitoring of board challenge, related-person oversight, and independent director influence on strategic and capital decisions .