Hilla Sferruzza
Meritage HomesAbout Hilla Sferruzza
Executive Vice President and Chief Financial Officer of Meritage Homes since 2016 (at Meritage since 2006), with prior leadership roles at KPMG and Starwood Hotels & Resorts; she holds an Executive MBA (Washington State University) and a BS from University of Arizona and is an Arizona CPA . Under Ms. Sferruzza’s finance program, Meritage delivered record 2024 home closings (15,611), grew diluted EPS 7.6% to $10.72, and lifted book value per share 12.9% . Long-term performance metrics embedded in pay include Adjusted ROA (achieved 13.8% vs. 10% target in 2024) and rTSR (46.1st percentile over 2022–2024; 57.1st percentile over 2021–2023) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Meritage Homes | CFO (EVP) | 2016–present | Led finance, capital markets, IT, and financial services operations; strengthened liquidity and growth strategy . |
| Meritage Homes | Chief Accounting Officer | 2010–2021 | Oversaw SEC reporting, accounting controls; supported expansion and post-recession recovery . |
| Meritage Homes | Corporate Controller | 2010–2015 | Built reporting/process infrastructure for scaling volumes . |
| Meritage Homes | Accounting/Finance Management | 2006–2010 | Early leadership roles building finance function . |
| Starwood Hotels & Resorts | Various management roles | Pre-2006 | Public company finance/operations experience, SEC reporting . |
| KPMG | Public auditor | Pre-2006 | Audit/controls foundation; CPA credential . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Footprint International Holdco, Inc. | Director; Audit Committee Chair | 2022–present | Appointed March 2022; materials science company board leadership . |
| Arizona State University (W. P. Carey) | Dean’s Council; Finance Advisory Board | Ongoing | Executive advisor and community engagement . |
Fixed Compensation
Multi-year compensation (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $725,000 | $725,000 | $775,000 |
| Stock Awards (grant-date fair value) | $1,477,117 | $1,520,797 | $1,718,540 |
| Non-Equity Incentive (cash bonus earned) | $1,364,789 | $3,171,875 | $2,704,651 |
| All Other Compensation | $49,850 | $56,784 | $47,189 |
| Total Compensation | $3,616,756 | $5,474,456 | $5,245,380 |
Target and actual annual cash incentive:
| Item | 2024 | 2025 (effective Jan 1) |
|---|---|---|
| Base Salary | $775,000 | $800,000 |
| Target Annual Cash Incentive | $1,356,250 | $1,400,000 |
| Actual Cash Incentive Paid (Feb following year) | $2,704,651 (for 2024 performance) | n/a |
Perquisites in 2024: health/insurance premiums and 401(k) match totaling $47,189 . Company-wide pay-for-performance design with majority variable pay and clawback policy in place .
Performance Compensation
Annual Cash Incentive (2024 results)
| Metric | Weight | Target | Actual | Payout % | Payout $ |
|---|---|---|---|---|---|
| Adjusted EBITDA | 60% | $950,000k | $1,114,494k | 210.2% | $1,710,113 |
| Home Closings (units) | 30% | 15,000 | 15,611 | 161.1% | $655,476 |
| Customer Satisfaction | 10% | 89.0% | 95.0% | 250.0% | $339,062 |
| Total | 100% | — | — | — | $2,704,651 |
Targets and payout curves were set with Threshold/Target/Maximum of 50%/100%/250% for each measure (Hilton capped at 100% max; not applicable to CFO) .
Long-Term Equity Incentives (2024 grants; 3-year cliff vest)
| Component | Metric | Weight | Grant Date | Threshold Shares | Target Shares | Max Shares |
|---|---|---|---|---|---|---|
| PSUs | Adjusted ROA | 70% | 2/22/2024 | 5,692 | 11,384 | 22,768 |
| PSUs | rTSR (peer-relative) | 30% | 2/22/2024 | 5,692 | 11,384 | 22,768 |
| RSUs | Time-based | — | 2/22/2024 | — | 11,382 (approx.) | — |
Performance measurement outcomes:
- Adjusted ROA: 13.8% vs. 10.0% target for FY2024 ⇒ 137.6% payout factor for the 2024 tranche .
- rTSR: 2022–2024 cumulative at 46.1st percentile vs. 50th target ⇒ 92.2% payout factor (applies to 2022 grants vesting in 2025) .
Equity Ownership & Alignment
| Ownership Item | Detail |
|---|---|
| Beneficial Ownership (as of Mar 27, 2025) | 108,367 shares; <1% of outstanding . |
| Outstanding Unvested RSUs (12/31/2024) | 75,037 shares; $5,771,096 market value @ $76.91 . |
| Unearned PSUs (target; 12/31/2024) | 15,898 shares; $1,222,715 payout value @ $76.91 . |
| Earned but not yet vested PSUs (as of 12/31/2024) | 35,505 shares across 2025–2027 cliffs (by annual Adjusted ROA tranches) . |
| Insider Sale (Section 16; Form 4) | Sold 2,500 shares on 7/31/2024 at $205; post-transaction ownership reported at 44,570 shares (direct) . |
Alignment policies:
- Ownership guidelines: CFO must hold 3× base salary; as of 12/31/2024, all officers/directors in compliance or transitional compliance .
- Anti-pledging and anti-hedging: prohibited under Securities Trading Policy; no pledging by any NEO/director .
- Option awards: program does not include options (focus on RSUs/PSUs) .
Employment Terms
| Provision | CFO Terms |
|---|---|
| Employment Agreement | Auto-renews annually; originally entered January 2021 (company-wide for NEOs) . |
| Severance (Good Reason or Without Cause) | 125% × (base salary + target bonus); COBRA coverage up to 24 months; time-based awards vest; PSUs vest after performance period based on actual performance; minimum severance of $2,000,000 for CFO . |
| Change-in-Control (Double Trigger) | 200% × (base salary + target bonus); 100% of PSUs vest at target; immediate vesting of time-based awards; COBRA coverage . |
| Clawback Policy | Recovery of erroneously awarded incentive compensation per NYSE/SEC rules . |
| Deferred Compensation Plan | 2024 executive contributions $1,400,146; plan balance $4,182,115 at 12/31/2024 . |
Performance Compensation – Additional Details
| Measure | Target | Actual | Payout Basis | Context |
|---|---|---|---|---|
| Adjusted EBITDA (Bonus) | $950,000k | $1,114,494k | 210.2% payout | Set early-year amid rate/incentive headwinds; overperformance drove above-target payouts . |
| Home Closings | 15,000 units | 15,611 | 161.1% payout | Record closings with strategic late-stage selling shift . |
| Customer Satisfaction | 89.0% | 95.0% | 250.0% payout | Third-party measured; reflects customer experience emphasis . |
| Adjusted ROA (PSUs) | 10.0% | 13.8% | 137.6% factor | Efficiency in asset returns central to LTIs. |
| rTSR (PSUs) | 50th percentile (3-yr) | 46.1st (2022–2024) | 92.2% factor | Peer-relative stock performance over cycle. |
Investment Implications
- Pay-for-performance structure: Majority variable pay tied to Adjusted EBITDA, closings, customer satisfaction (short-term) and Adjusted ROA/rTSR (long-term) indicates strong alignment; 2024 above-target operational delivery yielded sizeable bonus, while rTSR moderation tempered PSU outcomes—a balanced design that reduces windfall risk .
- Retention and change-in-control economics: CFO has robust severance protection (125% without cause/good reason with $2,000,000 floor; 200% in CoC with accelerated vesting), lowering near-term departure risk but raising potential CoC payout obligations in an M&A scenario; double-trigger design mitigates single-trigger windfalls .
- Ownership alignment and selling pressure: Anti-pledging/hedging and stock ownership rules (3× salary) support alignment; insider sale of 2,500 shares on 7/31/2024 appears modest relative to reported beneficial holdings and typical tax-withholding/scheduling around vest dates, though continued monitoring of Section 16 filings is prudent for signals on liquidity or diversification .
- Execution track record: Record closings/EPS and improved book value in 2024 under current leadership, alongside strong Adjusted ROA results, indicate disciplined asset utilization and operational execution; say-on-pay support (~94% approval in 2024) reduces governance friction risk .
- Watch items: rTSR variability vs peers (92.2% factor for 2022–2024) implies equity payouts sensitive to market relative performance; continued cycle-time and margin management will be key as incentives and lot costs pressure gross margins into 2025 .