Daniel D. Malzahn
NVRAbout Daniel D. Malzahn
Daniel D. Malzahn (age 55) is Senior Vice President, Chief Financial Officer and Treasurer of NVR; he has served as CFO and Treasurer since February 20, 2013, was elevated to Senior Vice President in February 2016, and has been employed by NVR since 1994 . In 2024, NVR delivered 17% TSR, net income of $1.7B (+6% YoY), and EPS of $506.69 (+9% YoY), underscoring the company’s long-term TSR-focused compensation model . NVR’s 2024 annual return on capital was 29.7% and the three-year (2022–2024) ROC used for PSU vesting measured 33.1%, the highest in the peer group and fully earning the performance-based options subject to continued employment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NVR | Chief Financial Officer & Treasurer | 2013–present | Finance leadership aligned to long-term TSR-focused model |
| NVR | Senior Vice President | 2016–present | Senior executive oversight; tenure supports stable execution |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | None disclosed in proxy |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus Cap (% of Base) | Actual Bonus Paid ($) | Notes |
|---|---|---|---|---|
| 2024 | 719,500 | 100% (target=max) | 701,148 | Paid at 97% of cap; metrics: 80% pre-tax profit, 20% new orders |
| 2023 | 682,250 | 100% | 682,250 | — |
| 2022 | 652,500 | 100% | 522,000 | — |
- 2024 salary increased from $688,000 to $730,000 effective April 1, 2024; target total cash compensation for the CFO remained below the 25th percentile of the homebuilding peer group .
Performance Compensation
Annual Incentive Plan (2024)
| Metric | Weighting | Threshold | Target/Max | Actual | Component Payout |
|---|---|---|---|---|---|
| Consolidated Pre-Tax Profit ($000s) | 80% | 1,658,441 | 2,073,051 | 2,299,410 | 100% |
| New Orders (net of cancellations) | 20% | 19,550 | 23,000 | 22,560 | 87% |
| Total Payout | — | — | — | — | 97% of cap |
- CFO’s 2024 bonus equaled 97% of the 100% cap on base salary ($701,148) .
Long-Term Equity (Options) – Structure and 2022 Grant Status
| Grant Date | Type | Vesting Dates (Dec 31) | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Performance Condition Status |
|---|---|---|---|---|---|---|---|
| 05/04/2022 | Time-based (T) | 2024, 2025, 2026, 2027 | 1,131 | 3,394 | 4,475.53 | 05/03/2032 | n/a |
| 05/04/2022 | Performance-based (P) | 2024, 2025, 2026, 2027 | 1,131 | 3,394 | 4,475.53 | 05/03/2032 | ROC 33.1% (highest); 100% earned, subject to continued employment |
| 05/10/2018 | Time-based (T) | 2020, 2021, 2022, 2023 | 8,200 | — | 3,022.99 | 05/09/2028 | Fully vested |
| 05/10/2018 | Performance-based (P) | 2020, 2021, 2022, 2023 | 8,200 | — | 3,022.99 | 05/09/2028 | Fully vested |
- Options vest 25% at the end of each of years 3, 4, 5 and 6 after grant; the May 2022 block vests 25% on each of December 31, 2024, 2025, 2026, 2027 .
- Equity grants are made periodically (not annually); no named executive officer equity grants in 2024; next expected periodic grant in 2026 (subject to promotions/new hires) .
2024 Option Exercise Activity
| Grant Date | Options Exercised (#) | Exercise Price ($) | Market Price at Exercise ($) | Value Realized ($) |
|---|---|---|---|---|
| 05/14/2014 | 3,891 | 1,094.22 | $7,166.90–$7,600.00 | 24,391,461 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 5, 2025)
| Shares Owned | Percent of Class | ESOP Shares | Profit Sharing Plan Shares |
|---|---|---|---|
| 33,900 | 1.1% | 1,037 | 372 |
- Exercisable options reported for Malzahn: 18,662 (included in “Number of Shares” in beneficial ownership table per footnote) .
- Unexercisable options outstanding at 12/31/2024: 6,788 (2022 T+P) .
- Stock ownership guidelines for CFO: 6× base salary; requirement $4,380,000; all executive officers are in compliance .
- Hedging and pledging of NVR stock by named executive officers and directors are prohibited; robust pre-clearance policy governs trading windows .
Alignment Features and Policies
- 100% of long-term equity compensation is stock options (not RSUs), tying value realization to stock price appreciation and TSR; 50% of grants are subject to ROC performance vs peer group .
- Equity clawback and compensation recovery policies cover stock options and annual cash bonuses in the event of certain misconduct and accounting restatements .
- No perquisites, no excise tax gross-ups, no option repricing, no evergreen; double-trigger change-in-control vesting .
Employment Terms
Employment Agreement and Key Provisions
- Malzahn is party to an employment agreement expiring December 31, 2025 .
- Severance multiples: 100% of base salary for termination without cause or voluntary with good reason; includes pro-rated annual bonus (assumed at 100% of target) and up to $100,000 outplacement .
- Double-trigger change-of-control: acceleration of unvested equity vesting only if terminated without cause or with good reason within one year post-change; annual incentive based on 100% of base salary in such scenarios .
- Non-compete restrictions include working for competitors, soliciting customers/employees, or engaging with developers/subcontractors; generally apply during employment and for one year post-termination (exceptions for good reason and certain CoC-related voluntary terminations) .
- No tax gross-ups provided .
Potential Payments (as of 12/31/2024)
| Scenario | Severance ($) | Annual Incentive ($) | Equity – Accelerated Vesting ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|
| Without Cause | 730,000 | 730,000 | — | 100,000 | 1,560,000 |
| Voluntary with Good Reason | 730,000 | 730,000 | — | 100,000 | 1,560,000 |
| Retirement | 730,000 | 711,020 | — | — | 1,441,020 |
| Death or Disability | 121,667 | 121,667 | — | — | 243,334 |
| Without Cause Within One Year After a CoC | 730,000 | 719,500 | 25,138,476 | 100,000 | 26,687,976 |
| Voluntary Within One Year After a CoC | 730,000 | 719,500 | — | — | 1,449,500 |
- Equity intrinsic values use closing price of $8,178.90 on December 31, 2024 to compute acceleration value .
Compensation Structure Notes and Peer Context
- Annual bonus cap fixed at 100% of base salary; the Compensation Committee has not used discretion to exceed formula outcomes .
- Target cash compensation for CFO is below the 25th percentile of the homebuilding peer group after 2024 salary adjustments .
- Peer group companies used for benchmarking: D.R. Horton, KB Home, Lennar, Meritage, PulteGroup, Taylor Morrison, Toll Brothers (MDC removed post-acquisition) .
- 2024 Say-on-Pay support: 95% approval .
- No related person transactions in 2024 per Item 404(a) policy .
Additional Data Points
- Deferred compensation: No contributions or balances disclosed for Malzahn in 2024 Non-Qualified Deferred Compensation table (entries for Saville only) .
- 2024 pay-versus-performance provides context on compensation “actually paid” vs TSR, net income, and return on capital; 2024 ROC 29.7%, net income $1,681,928k .
Investment Implications
- High alignment with shareholders: 100% of long-term equity is in options, with half subject to ROC vs peer group; 2022–2024 ROC achieved at the top of the peer group, fully earning performance-based options subject to continued service .
- Retention dynamics: Unvested options (6,788) scheduled to vest 25% annually through 2027, creating multi-year retention hooks; exercise price $4,475.53 vs $8,178.90 YE price implies material in-the-money value at current levels, contingent on open windows and service .
- Insider supply watch: The first 25% tranche of the 2022 grant vested on 12/31/2024; given deep ITM status, monitor Form 4s around trading windows for potential exercises/sales that could signal liquidity needs or confidence (market price at recent exercises ranged $7,166.90–$7,600.00) .
- Downside protection for shareholders: No hedging/pledging, robust clawback and recovery policies, no perquisites/gross-ups, and no option repricing mitigates governance and pay-risk concerns .
- Change-of-control economics: Double-trigger structure limits single-trigger windfalls; CFO’s equity acceleration value at YE2024 is $25.1M, with cash components modest relative to peers, which balances retention and shareholder protections .
- Say-on-Pay support at 95% indicates investor acceptance of the TSR-centric, option-heavy design; continued delivery on ROC, net income and EPS should sustain support .