Joseph A. Marengi
HOVNANIAN ENTERPRISESAbout Joseph A. Marengi
Independent director since March 2006; former Venture Partner at Austin Ventures (2007–2012), Senior Vice President, Commercial Business Group at Dell, and President/COO at Novell. He chairs HOV’s Compensation Committee and serves on the Audit Committee and the Corporate Governance & Nominating Committee, with technology/cybersecurity experience highlighted by the board’s skills matrix .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Austin Ventures | Venture Partner | Jul 2007–Mar 2012 | Growth investing; operating oversight |
| Dell Inc. | SVP, Commercial Business Group (US) | Joined Jul 1997 | Led medium/large corporate, government, education, healthcare segments |
| Novell Inc. | President & COO | Prior to Jul 1997 | Enterprise software operations leadership |
External Roles
| Company | Role | Tenure | Notes |
|---|---|---|---|
| Quantum Corporation (NYSE) | Director | 2008–2013 | Public company board experience |
| Entorian Technologies, Inc. (OTC) | Director | 2008–2012 | Public company board experience |
Board Governance
- Independence: Classified as independent; included among independent directors post-2025 annual meeting .
- Committees: Chair, Compensation Committee; member, Audit Committee; member, Corporate Governance & Nominating Committee; member, Cybersecurity Subcommittee (CG&N), which met three times in FY2024 .
- Attendance: 100% attendance at Board and all committee meetings in FY2024; all directors attended 2024 Annual Meeting (Board met 4x; Audit met 12x; Compensation met 4x; CG&N met 4x) .
- Governance practices: Independent executive sessions presided over by Lead Independent Director; governance documents and committee charters publicly available; related person transaction policy in governance guidelines .
Fixed Compensation
| Component | FY2024 Terms | Detail |
|---|---|---|
| Annual Board Cash Retainer | $50,000 | Paid to each non-employee director |
| Committee Cash Retainer | $27,500 per committee | Prorated for partial years; additional $50,000 for Lead Director (not applicable to Marengi) |
| Meeting Fees | $3,000 regular quarterly board; $2,000 additional board; $5,000 regular quarterly committee; $2,500 additional committee | Paid to Board/committee members and Board-appointed observers |
| Annual RSU Award | $75,000 for Board service + $15,000 per committee served (valued at grant; illiquidity discount applied) | RSUs vest on first anniversary; mandatory two-year post-vesting delayed delivery; accelerated vesting on death/disability/qualified retirement; delivery within 60 days after delivery date if qualified termination |
| Charitable Donation | $15,000 | Company donation in each Director’s name |
| Joseph A. Marengi – FY2024 Director Compensation | Amount ($) |
|---|---|
| Fees Earned or Paid in Cash | 222,000 |
| Stock Awards (RSUs, grant-date fair value) | 119,984 |
| Option Awards | — |
| Non-Equity Incentive Compensation | — |
| Change in Pension Value/Deferred Comp Earnings | — |
| All Other Compensation (Charitable Donation) | 15,000 |
| Total | 356,984 |
Additional design features: Fixed June grant dates for equity awards to avoid timing around MNPI; committee uses independent consultant (FW Cook) for director/executive compensation reviews; FY2024 director program continued at FY2023 values (no increase) .
Performance Compensation
HOV does not use performance-based pay for non-employee directors; however, as Compensation Committee Chair, Marengi oversees executive incentive structures, metrics, and outcomes that influence pay-for-performance alignment.
| Program | Performance Period | Key Metrics & Definitions | Payout Range / Outcome |
|---|---|---|---|
| Annual Bonus (NEOs) | FY2024 | Pretax profit, liquidity, shareholder value preservation, debt reduction, alternative capital raises, EBIT ROI, gross margin, new communities opened | Determined annually by Committee; CEO excluded from self-evaluation |
| 2022 LTIP (NEOs) | Nov 1, 2021–Oct 31, 2024 | Cumulative Pre-tax Profit and reduction in Annualized Interest Incurred; focus on operating efficiencies and improved bottom line | Achieved $1.1B cumulative pre-tax profit and $98.9M Annualized Interest Incurred at 10/31/2024; payout 152.74% of target |
| 2024 PSUs (NEOs) | Grants Jun 9, 2023 & Jun 14, 2024 | Absolute EBIT and Absolute EBIT Return on Investment; PSUs vest on third anniversary; two-year delayed delivery to Jun 14, 2029 | FY2024 performance at threshold (EBIT) and between threshold/target (EBIT ROI) for 2024 grants |
| 2025 LTIP (NEOs) | Nov 1, 2024–Oct 31, 2027 | EBIT ROI relative to Peer Group (four most recent quarters as of 10/31/2027) and net debt to capital at 10/31/2027; payout in shares subject to two-year delayed delivery to Nov 1, 2029 | Payout 0–250% of target based on metric achievement |
| Most Important Performance Measures (Pay vs Performance) | FY2024 | Absolute EBIT; Absolute EBIT ROI; Liquidity | Used to link compensation actually paid to performance |
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Compensation Committee Interlocks | During FY2024, Committee members (including Marengi) were not officers/employees of HOV and had no relationships requiring Item 404(a) disclosure; no interlocks with other entities’ boards/comp committees involving HOV executive officers |
| Outside Compensation Consultant | FW Cook engaged for executive and director compensation; no conflicts; no other services provided without Committee approval |
Expertise & Qualifications
- Technology/cybersecurity experience considered valuable for cost/benefit analyses and vigilance over cybersecurity/data protection; public company board experience; financial and risk management competencies per Board’s Experience Matrix .
- Role as Compensation Chair positions him centrally in setting rigorous, leveraged-mindful metrics and risk oversight for pay programs .
Equity Ownership
| Holder | Class A Shares | % of Class A | Class B Shares | % of Class B |
|---|---|---|---|---|
| Joseph A. Marengi | 22,535 | 0.43% | — | — |
- Outstanding voting securities at record date: 5,195,297 Class A shares and 729,354 Class B shares .
- Director stock ownership guideline: 5x annual Board retainer ($250,000) within five years; all non-employee directors currently in compliance .
- Anti-hedging and pledging: Hedging prohibited; pledging only with Company consent .
Governance Assessment
- Strengths: Independent director with 19+ years of board service; chairs Compensation Committee; 100% attendance across Board/committees; active participation in Audit and Governance (including Cybersecurity Subcommittee); uses independent consultant; fixed grant dates; mandatory delayed delivery to discourage short-termism; robust ownership guidelines and compliance .
- Alignment: Director compensation mix blends cash retainers, meeting fees, and RSUs with delayed delivery; stock ownership guideline enforcement enhances skin-in-the-game .
- Red flags and watch items:
- Say-on-Pay passage “assured” due to Hovnanian family voting power—minority investor influence risk; monitor shareholder feedback and engagement processes .
- Highly leveraged capital structure influences metric selection; Committee emphasizes EBIT/ROI and liquidity rather than pure profitability—appropriate given context but warrants ongoing scrutiny of target calibration and risk-taking incentives .
- Conflicts/Related Parties: No Item 404(a) related-party relationships for Compensation Committee members; interlocks not present .
- Overall: Governance profile supports investor confidence—independence, high engagement, and disciplined compensation oversight—with a structural control consideration via dual-class voting that investors should factor into stewardship assessments .