Jonathan M. Jaffe
About Jonathan M. Jaffe
Jonathan M. Jaffe is Co-Chief Executive Officer and President of Lennar Corporation. He is 65 years old, has served on the Board since 2018 (and previously from 1997–2004), was appointed Co-CEO in November 2020, and became President in September 2023 after earlier roles including Chief Operating Officer (2004–2019), Vice President (1994–2018), and Regional President in Homebuilding operations . Lennar’s fiscal 2024 performance included $35.4B revenue, $3.9B net income, 80,210 home deliveries, and 76,951 new home orders . Over FY2020–FY2024, Lennar’s Class A stock price rose from $75.86 to $174.39 (+130%), and FY2024’s pay-versus-performance TSR metric indicates a $100 investment grew to $242.97 versus peer group $230.38 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lennar Corporation | Co-Chief Executive Officer | Nov 2020–present | Shared operational leadership nationally; co-CEO structure supports growth and “land-light” strategy and tech-enabled “Lennar Machine” . |
| Lennar Corporation | President | Sept 2023–present; Apr 2018–Nov 2020 | Oversight of operations and strategic plans . |
| Lennar Corporation | Co-President | Nov 2020–Sept 2023 | Coordinated expansion across key markets; supported technology initiatives and innovation . |
| Lennar Corporation | Chief Operating Officer | Dec 2004–Jan 2019 | Responsibility for operations nationally; institutional knowledge across markets . |
| Lennar Corporation | Vice President | 1994–Apr 2018 | Leadership across corporate functions; earlier Regional President roles in Homebuilding . |
| Lennar Corporation | Regional President (Homebuilding) | Not disclosed | Led regional operations and expansion in core markets . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Five Point Holdings, LLC | Director (previously) | Not disclosed | Real estate/community development oversight experience . |
| Opendoor Technologies Inc. | Director (previously) | Not disclosed | Exposure to proptech and iBuyer model . |
Fixed Compensation
| Metric ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 800,000 | 800,000 | 800,000 |
| Non-Equity Incentive Plan Compensation | 6,000,000 | 5,306,190 | 872,946 |
| Stock Awards (Grant-date fair value) | 23,199,948 | 22,999,640 | 23,374,974 |
| All Other Compensation | 33,035 | 34,837 | 38,886 |
| Total | 30,032,983 | 29,140,667 | 25,086,806 |
Notes:
- Perquisites in 2024 included $20,769 car allowance, $17,250 401(k) match, and term life and LTD insurance contributions; aircraft personal companion travel has no incremental cost to company when seats are available .
Performance Compensation
Annual Cash Incentive (2024)
| Component | Detail |
|---|---|
| Formula | 0.15% of fiscal 2024 Pretax Income after a 7.3% tangible capital charge; subject to $6.0M cap . |
| Pretax Income and Capital Charge | Pretax Income $5.3B; Capital charge $1.9B . |
| Pre-Reduction Bonus (calculated) | $5,121,231 . |
| Negative Discretion Applied | 15% of sum of Pre-Reduction Bonus plus grant-date fair value of 1/8/2024 equity ($23,200,671) deducted; Final bonus $872,946 . |
| Governance | Cash bonus caps continued in 2024 after stockholder outreach; Compensation Committee retains negative discretion . |
2024 Equity Awards (Grant date: Jan 8, 2024; closing price $149.31)
| Award Type | Value ($) | Shares | Vesting |
|---|---|---|---|
| Service-based Restricted Stock | 6,960,222 | 46,615 | Vests equally on Feb 14, 2025, 2026, 2027 . |
| Performance-based Restricted Stock (Target) | 16,414,753 | 108,770 | 3-year performance period Dec 1, 2023–Nov 30, 2026; vests upon Committee certification . |
Equity Mix and Performance Design:
- For Messrs. Miller and Jaffe, equity mix ~70% performance-based and ~30% time-based in 2024, consistent with 2023 and above stockholder-suggested levels .
- Performance metrics for PSUs: Relative Gross Profit %, Relative Return on Tangible Capital, Relative TSR, and Debt/EBITDA, with threshold/target/max payout curves; Jaffe’s target payouts set at 65th percentile; threshold payout 30% of target .
2021 Performance Share Awards – Results (3-year period ended Nov 30, 2023; certified Feb 2024)
| Metric | Actual Performance | Payout (%) |
|---|---|---|
| Relative Gross Profit % | 78.7th percentile | 200.0% |
| Relative Return on Tangible Capital | 67.9th percentile | 171.6% |
| Relative Total Shareholder Return | 59.1st percentile | 136.4% |
| Debt/EBITDA Multiple | 0.694 | 200.0% |
| Weighted Average Payout | — | 177.0% |
| Jaffe Shares Earned | Issued at target: 68,312; Additional shares issued: 52,600; Total: 120,912 | — |
Equity Ownership & Alignment
Beneficial Ownership (as of Feb 12, 2025)
| Class | Shares Beneficially Owned | Percent of Class | Notes |
|---|---|---|---|
| Class A Common | 1,388,435 | <1% | Includes 1,610 ESOP shares and 173,591 held by the Jaffe Family Foundation; 350,000 shares pledged as collateral (red flag) . |
| Class B Common | 25,222 | <1% | Includes 200 ESOP shares and 1,866 held by the Jaffe Family Foundation . |
| Shares Outstanding | Class A: 232,685,409; Class B: 31,660,558 | — | Reference base for % ownership . |
Outstanding Equity Awards (Fiscal year-end Nov 30, 2024; price $174.39)
| Grant Date | Unvested Service-based Shares (#) | Market Value ($) | PSU Maximum Unearned (#) | Market/Payout Value ($) |
|---|---|---|---|---|
| 2/28/2022 | 18,678 | 3,257,256 | 184,780 | 32,223,784 |
| 11/17/2022 | — | — | 154,940 | 27,019,987 |
| 2/28/2023 | 29,092 | 5,073,354 | 335,750 | 58,551,443 |
| 1/8/2024 | 29,229 | 5,097,245 | 217,540 | 37,936,801 |
| Total | 76,999 | 13,427,856 | 893,010 | 155,732,014 |
Alignment Policies:
- Executive stock ownership guidelines require holding shares equal to a multiple of base salary within five years; until compliant, must retain at least 50% of vested restricted shares (100% if not achieved by deadline). As of Jan 31, 2025, all NEOs well above requirements .
- Prohibitions: hedging by executive officers and directors, and pledging of stock used to satisfy ownership guidelines . Note: Jaffe has pledged 350,000 Class A shares (outside guideline-covered shares), which heightens collateral-call/selling pressure risk .
Employment Terms
| Term | Details |
|---|---|
| Employment Agreements | None; no severance agreements or severance plans for NEOs . |
| Change-in-Control Treatment | Double-trigger acceleration only: unvested restricted stock vests upon CIC plus qualifying termination within 24 months (termination without Cause or resignation for Good Reason) . |
| CIC Accelerated Vesting Value (Hypothetical as of Nov 30, 2024) | $91,293,863 for Jaffe . |
| Clawback Policy | Executive Officer Recovery Policy allows recovery of incentive compensation upon certain circumstances including restatements; compliant with SEC Rule 10D-1 and NYSE . |
| Tax Gross-Ups | No excise tax gross-ups, except for Hart-Scott-Rodino filings related to equity grants and expenses . |
| Ownership Guidelines | Multiple of base salary; retention requirements until compliant; all NEOs above requirements as of Jan 31, 2025 . |
| Perquisites | Car allowance; 401(k) match; term life and LTD; limited aircraft companion travel with no incremental company cost . |
Board Governance
- Director Service: Jaffe is a management director (non-independent); Director since 2018 and previously 1997–2004 .
- Committee Roles: Jaffe serves on no Board committees; all Audit, Compensation, and Nominating & Corporate Governance committee members are independent .
- Board Structure: Co-CEO model; Lead Independent Director is Armando Olivera (effective April 10, 2024); non-management directors meet in executive session; majority voting; annual say-on-pay .
- Meetings in FY2024: Audit 11; Compensation 4; Nominating 4; Executive 0; Independent Directors Transactions 0 .
Dual-role implications:
- As Co-CEO and Director, Jaffe’s inside status reduces independence; mitigated by independent committees, a Lead Independent Director, and robust governance practices (clawback, ownership guidelines, executive sessions) .
Compensation Committee Analysis
- Chair: Teri P. McClure; all members independent .
- Consultant: FW Cook engaged in 2024; peer group refined by removing Beazer Homes USA and M.D.C. Holdings (acquired) to strengthen benchmarking .
- Philosophy: Team-based leadership, heavy performance-based equity, capped cash bonuses for co-CEOs, and use of negative discretion to align pay with performance .
Compensation Peer Group (used for relative metrics)
| Company |
|---|
| D.R. Horton, Inc. |
| KB Home |
| Meritage Homes Corporation |
| NVR, Inc. |
| PulteGroup, Inc. |
| Taylor Morrison |
| Toll Brothers, Inc. |
| TRI Pointe Homes |
| Beazer Homes USA, Inc. (removed in 2024) |
| M.D.C. Holdings, Inc. (removed in 2024) |
Performance & Track Record
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Class A Stock Price ($) | 75.86 | 105.05 | 87.83 | 127.92 | 174.39 |
| Class B Stock Price ($) | 60.70 | 85.78 | 72.61 | 114.74 | 164.83 |
| Market Cap ($mm) | 23,154 | 31,785 | 25,019 | 35,947 | 47,069 |
| Book Value per Share ($) | 57.55 | 69.52 | 83.16 | 94.61 | 103.90 |
| Diluted EPS ($) | 7.85 | 14.27 | 15.72 | 13.73 | 14.31 |
| Cash Dividends per Share ($) | 0.63 | 1.00 | 1.50 | 1.50 | 2.00 |
Additional FY2024 operating metrics:
- Revenue $35.4B; Net Income $3.9B; Home Deliveries 80,210; New Home Orders 76,951 .
Pay-versus-performance (FY2020–FY2024):
- Value of initial fixed $100 investment: Company $242.97; Peer group $230.38 (FY2024 endpoints) .
Equity Ownership & Director Stock Ownership Guidelines (Directors)
- Directors must own shares worth 5x the annual director retainer within five years; all directors are compliant or on track .
Risk Indicators & Red Flags
- Pledging: Jaffe has pledged 350,000 Class A shares as collateral, introducing potential forced-selling pressure in adverse markets; company prohibits pledging of shares used to meet ownership guidelines, but pledging outside that bucket is disclosed .
- Hedging: Prohibited for directors and executive officers .
- Change-in-Control: Double-trigger only; no single-trigger acceleration or cash severance agreements .
- Tax Gross-ups: Generally prohibited, with limited HSR-related exception .
Compensation Structure Analysis
- Year-over-year mix: Jaffe’s cash incentive fell from $5.306M (2023) to $872,946 (2024) while equity grants remained substantial ($23.375M in 2024 vs $22.999M in 2023), reinforcing a shift toward long-term, performance-based equity .
- Equity design: 70% PSUs/30% RS reinforces pay-for-performance; targets at the 65th percentile with lower 30% threshold payout improve rigor .
- Governance: Caps on co-CEO cash bonuses and Committee negative discretion used to align payouts with pretax income outcomes .
Say-on-Pay & Shareholder Feedback
- Outreach: Lennar engaged with holders of ~75% of non-affiliated shares in 2024, discussing executive compensation and governance; Board recommends FOR the advisory say-on-pay proposal .
Investment Implications
- Alignment: Heavy weighting to performance-based equity tied to robust relative metrics (gross profit %, ROTC, TSR, leverage) supports long-term value creation; the Committee’s discretionary reduction of 2024 cash bonuses underscores discipline .
- Retention and Overhang: Significant unvested service-based shares and multi-year PSU tranches (893,010 maximum unearned units across grants) indicate strong retention incentives but also create potential future share issuance overhang .
- Selling Pressure Risk: The pledge of 350,000 Class A shares is a governance and trading risk flag; adverse price moves or lender actions could trigger sales independent of fundamentals .
- Governance Mitigants: No employment/severance agreements, double-trigger CIC vesting only, robust clawback, and strict ownership/hedging policies offset dual-role independence concerns under the co-CEO structure and support pay-for-performance credibility .
- Performance Context: FY2024 operational strength (revenue, deliveries) and multi-year TSR outperformance vs peers frame Jaffe’s tenure favorably, though pretax income slightly missed goals and macro headwinds persisted; compensation outcomes reflected this balance .