Eric Lipar - Chief Executive Officer | LGI Homes (LGIH) Executive Profile & Compensation

About Eric Lipar

Eric Lipar, 54, is Chief Executive Officer and Chairman of LGI Homes. He has served as CEO since 2009, as a director since June 2013, and as Chairman since July 2013; previously President (2003–2009). He is a founder, has overseen >75,000 home closings, serves on ULI’s Residential Neighborhood Development Council and on the Harvard Joint Center for Housing Studies Policy Advisory Board . 2024 company performance: revenue $2,202.6M, gross margin 24.2%, pre-tax margin 11.8%, diluted EPS $8.30; homes closed 6,131 . The 2022-2024 PSU cycle paid 0% (three-year EPS below threshold), evidencing pay-for-performance rigor .

Past Roles

Organization	Role	Years	Strategic Impact
LGI Homes	President	2003–2009	Led early growth; transitioned to CEO in 2009
LGI Homes	CEO and Chairman	2009–present (CEO); Chair since 2013	Founder-led strategy; >75,000 closings; capital allocation and long-range planning

External Roles

Organization	Role	Years	Strategic Impact
Urban Land Institute (RNDC)	Council Member	n/a	Industry best practices and market insights
Harvard Joint Center for Housing Studies	Policy Advisory Board Member	n/a	Housing research and policy engagement

Fixed Compensation

Year	Base Salary ($)	All Other Compensation ($)	Notes
2024	975,000	72,645 (401k match $13,800; car $18,000; disability $639; club dues $40,206)	No director fees (employee director)
2023	975,000	55,737	—
2022	975,000	53,960	—

Performance Compensation

Annual Incentive (STI) – 2024 Design and Outcome

Structure: 75% Pre-tax Net Income, 25% Homes Closed; payout range 0–200% of target . Target bonus: 125% of base salary for CEO .
2024 performance and payout:

Metric (weight)	Threshold	Target	Maximum	Actual 2024	Payout Rate
Pre-tax net income (75%) ($000s)	154,055	290,250	437,614	258,913	—
Homes closed (25%)	6,000	7,500	9,000	6,131	—
Aggregate payout	—	—	—	—	80%

CEO dollar outcomes: STI target $1,218,750; actual payout $974,354 (reported) .

Long-Term Incentives (LTI)

Mix: 80% PSUs (3-year cumulative Basic EPS), 20% RSUs (3-year cliff); PSUs capped at 100% if absolute TSR is negative .
2024 grants (3/8/2024 at $111.94 close): CEO PSUs 29,615 target ($3,315,103 FV), RSUs 7,404 ($828,804 FV) .
Vesting: RSUs vest on 3rd anniversary; PSUs vest after 3-year period if threshold met .
2022–2024 PSU results: 0% payout; cumulative Basic EPS $30.71 vs threshold $42.84 .
Committee has not used stock options; no repricing policy; no options granted in 2024 .

Target Pay Mix (Alignment)

Approximately 85% of CEO total target direct compensation is performance-linked (STI + PSUs + RSUs) .

Equity Ownership & Alignment

Item	Detail
Beneficial ownership	2,308,859 shares; 9.9% of outstanding (23,397,074)
Ownership breakdown	Includes 1,663,007 via EDSS Holdings, LP; 23,244 via LGI Fund II GP, LLC; 175 via LGI Fund III GP, LLC; 17,326 spouse; plus 6,977 RSUs vesting within 60 days of 2/28/25
Unvested awards (12/31/24)	RSUs: 7,404 (MV $661,918); PSUs: 29,615 target / 59,230 max (MV $2,647,581 / $5,295,162 at $89.40)
Ownership guidelines	CEO 5x base salary; all execs in compliance as of 12/31/24
Hedging/pledging	Hedging prohibited; pledging allowed with pre-clearance
Pledged shares (risk)	605,206 shares pledged; related LOC outstanding ≈ $4,091,255 as of 2/28/25

Vesting overhang/selling pressure signals: RSUs granted 3/15/2022 were scheduled to vest 3/15/2025; RSUs granted 3/8/2023 vest 3/8/2026; RSUs granted 3/8/2024 vest 3/8/2027, which can drive sell-to-cover activity near those dates . 2022 PSUs paid 0% (no shares released) .

Employment Terms

Term	Key Provision
Agreement	CEO Employment Agreement effective 11/13/2018; 3-year term with automatic 1-year renewals
Cause/Good Reason	Cause and Good Reason defined (material breach, misconduct, diminutions, relocation >50 miles, etc.)
Severance (no CIC)	2x current annual base salary upon termination without Cause or resignation for Good Reason
Severance (CIC double-trigger)	If within 6 months before/12 months after CIC and terminated without Cause or for Good Reason: 2x base salary + 2x target bonus + $32,500 for health coverage; paid within 45 days, subject to release
Equity on CIC	All unvested equity vests; PSUs vest at target (single-trigger equity acceleration under plan)
Non-compete/Non-solicit	Included (durations not disclosed in proxy)

Illustrative quantified benefits (assuming event on 12/31/2024):

Involuntary termination w/o Cause (pre-CIC): Cash severance $1,950,000; equity acceleration RSUs $1,995,676; PSUs (target) $7,982,168; total ≈ $11,927,844 .
Termination after CIC: Cash severance $4,419,500; equity acceleration as above; total ≈ $14,397,344 .

Board Governance

Board service: Director since 2013; Chairman since 2013; CEO since 2009 .
Independence: CEO is not independent; majority of Board is independent (6 of 7) .
Dual-role implications: Board combines CEO/Chair roles; Lead Independent Director (Bryan Sansbury) presides over executive sessions to balance governance .
Committees: CEO is not on Board committees; committee chairs—Audit: Ryan Edone; Compensation: Maria Sharpe; Nominating & Corporate Governance: Steven Smith .
Meetings/attendance: 5 Board meetings in 2024; all directors attended 100% of Board and committee meetings .
Family relationship: Director Steven Smith is CEO’s uncle; Board determined independence is not impaired .
Director compensation (employee director): CEO receives no additional fees for Board service .

Compensation Committee and Benchmarking

Independent Compensation Committee (Chair: Maria Sharpe) retains Meridian Compensation Partners as independent consultant .
Peer group (homebuilders): Beazer, Century, Dream Finders (added), Green Brick, Hovnanian, KB Home, MDC, Meritage, M/I Homes, Taylor Morrison, Tri Pointe .
Market positioning: Target total direct compensation positioned near median of similarly sized companies; heavy emphasis on variable pay .
Say-on-Pay: 2023 vote received >95% support; annual SoP frequency adopted (next at 2026 meeting) .

Related Party Transactions and Policies

Related parties: No land transactions with affiliates in 2024 or 2023 .
Family employment: CEO’s uncle Greg Smith was an employee through 12/31/2024; 2024 compensation >$120,000; approved by Audit Committee (Steven Smith abstained) .
Captive insurance: Participation in Archway; as of 12/31/24, ~$36,000 Archway stock and $591,067 collateral; 2024 premium/expenses ~$406,634 .
Anti-hedging policy (no hedging/shorting); pledging allowed with pre-clearance .
Clawback policy adopted in 2023 per SEC/Nasdaq; 3-year lookback on restatements .
No tax gross-ups; no defined benefit pension; no option repricing .

Performance & Track Record

Metric	2024	2023	2022
Homes Closed (units)	6,131	6,729	6,621
Revenues ($000s)	2,202,598	2,358,580	2,304,455
Gross Margin (%)	24.2%	23.0%	28.1%
Pre-tax Net Income ($000s)	258,913	261,754	418,116
Pre-tax Margin (%)	11.8%	11.1%	18.1%
Diluted EPS ($)	8.30	8.42	13.76

5-year pay-versus-performance indicators:

TSR “$100 investment” value: 2024 $126.54; 2023 $188.48; 2022 $131.07; 2021 $218.66; 2020 $149.82 .
Net income: 2024 $196,071k; 2023 $199,227k; 2022 $326,567k .
CEO “Compensation Actually Paid” fluctuated with share price/PSU outcomes: 2024 $1,980,573; 2023 $8,523,949; 2022 $(7,836,526) .

Equity Award Detail and Vesting Schedules (Selected)

Grant	Type	Shares	Grant Date	Vesting	Grant-date FV ($)
2024 LTI	PSUs (target)	29,615	3/8/2024	Cliff at end of 2024–2026 EPS period	3,315,103
2024 LTI	RSUs	7,404	3/8/2024	3-year cliff (3/8/2027)	828,804
2023 LTI	RSUs	7,942	3/8/2023	3-year cliff (3/8/2026)	MV $710,015 at 12/31/24 [$89.40]
2022 LTI	RSUs	6,977	3/15/2022	3-year cliff (3/15/2025)	MV $623,744 at 12/31/24 [$89.40]
2022 LTI	PSUs (cycle outcome)	—	3/15/2022	0% payout (no shares delivered)	—

Note: Market values above use $89.40 share price at 12/31/2024 .

Director Service and Compensation (Employee Director)

No additional Board compensation for CEO (director fees and equity apply only to non-employee directors) .
Non-employee director program (for context): $75,000 cash retainer; additional chair/lead retainers; $155,000 in RSUs with one-year cliff .

Compensation Structure Analysis

Heavy at-risk mix: ~85% variable for CEO aligns with performance .
Shift to RSUs/PSUs (no options): time-based RSUs (retention) + PSU performance linkage; no option repricing; no evergreen; no share recycling .
2022 PSU 0% payout indicates challenging targets and alignment with outcomes .
No tax gross-ups; modest perquisites .

SAY-ON-PAY & Shareholder Feedback

2023 Say-on-Pay approval >95% .
Annual frequency adopted; next advisory vote planned at 2026 annual meeting schedule .

Risk Indicators & Red Flags

Pledging: CEO pledged 605,206 shares (LOC ~$4.09M outstanding), posing margin-call/forced-sale risk in drawdowns; pledging allowed only with pre-clearance .
Single-trigger equity acceleration at change-in-control (PSUs at target), which some investors view as less protective of pay-for-performance on transactions .
Family relationship on Board (uncle), though independence determination maintained; oversight mitigated via Lead Independent Director and majority independent Board .
Anti-hedging policy in place; clawback policy adopted .

Employment & Contracts (Retention/Transition)

Item	Detail
Term/renewal	3-year term, auto-renews yearly
Severance	2x salary (no CIC)
CIC severance	2x salary + 2x target bonus + $32,500 (double-trigger cash)
Equity	Vests on CIC (single-trigger; PSUs at target)
Covenants	Confidentiality, non-compete, non-solicit (durations not disclosed)

Investment Implications

Alignment: CEO holds 9.9% of shares outstanding with ownership guidelines met; mix is ~85% variable, with PSUs driving outcomes; 2022 PSU 0% payout confirms performance linkage .
Retention: Auto-renewal CEO contract with moderate severance (2x salary) and CIC double-trigger cash; single-trigger equity on CIC may incentivize neutrality on deal outcomes; peer-aligned pay practices and strong Say-on-Pay support suggest limited near-term comp friction .
Trading signals/overhang: Material pledged shares introduce potential forced-selling risk in volatility; RSU cliff vests in March 2025/2026/2027 can create sell-to-cover flow; anti-hedging and pre-clearance mitigate but do not eliminate pressure .
Governance: Combined CEO/Chair offset by Lead Independent Director and majority independent Board; family tie disclosed and independence affirmed; committee structure and attendance are robust .

If you want, I can augment this with Form 4 insider trading analytics over the last 24 months to quantify any sale patterns around vesting.