Eugene J. Bredow
NVRAbout Eugene J. Bredow
Eugene J. Bredow, age 55, is President and Chief Executive Officer of NVR, serving in the role since May 4, 2022; he joined NVR in 2004 and previously served as President of NVR Mortgage, Senior Vice President & Chief Administrative Officer, Chief Accounting Officer, and Vice President & Controller . Under his tenure, NVR delivered 2024 results of +4% new orders, net income up 6% to $1.682B and EPS of $506.69, with gross margin of 23.7% and TSR of 17%; the company repurchased ~$2.1B of stock (~257k shares, ~8% of 2023 year-end SO) . NVR’s return on capital averaged 33.1% over 2022–2024, ranking first in the peer group and fully satisfying the performance condition on 2022 performance stock options . NVR emphasizes long-term TSR alignment (stock options with multi-year vesting, robust ownership rules, no perquisites), and received 95% Say-on-Pay support in 2024 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| NVR | President & Chief Executive Officer | May 4, 2022 – Present | Leads day-to-day strategy execution; oversees operations and CFO and key functions . |
| NVR Mortgage | President | Apr 1, 2019 – May 3, 2022 | Led mortgage subsidiary supporting NVR homebuyers . |
| NVR | SVP & Chief Administrative Officer | Mar 1, 2018 – Mar 31, 2019 | Senior corporate administration leadership . |
| NVR | Chief Accounting Officer | Feb 2016 – Mar 1, 2018 | Principal accounting leadership . |
| NVR | Vice President & Controller | From Jun 2012 (concurrent with CAO through Feb 2018) | Corporate controllership . |
| NVR | Various roles | Since 2004 | Progressive finance/operations leadership . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Bonus Paid ($) |
|---|---|---|---|
| 2024 | 1,162,500 | 100% max (target capped at 100%) | 1,132,848 |
| 2023 | 875,000 | 100% max (target capped at 100%) | 875,000 |
| 2022 | 715,204 | 100% max (target capped at 100%) | 572,164 |
Notes:
- 2024 base increased from $900,000 to $1,250,000 effective April 1, 2024; even post-increase, CEO target cash comp was below the 25th percentile of the homebuilding peer group .
- NVR caps annual bonus at 100% of base; no discretionary cash awards .
Performance Compensation
Annual Incentive (2024)
| Metric | Weight | Threshold | Target/Max | Actual | Payout of Component |
|---|---|---|---|---|---|
| Consolidated Pre-Tax Profit (before bonus & SBC) | 80% | $1,658,441k | $2,073,051k | $2,299,410k | 100% of component |
| New Orders (net of cancellations) | 20% | 19,550 | 23,000 | 22,560 | 87% of component |
| Total | 100% | — | — | — | 97% of max (company-wide) |
- 2024 annual incentives paid at 97% of the capped maximum (100% of base salary) .
Equity Awards (Options-Only Program; Long-Term TSR Alignment)
| Grant | Type | Grant Date | Exercise Price | Vesting Schedule | Performance Condition | Expiry | Bredow Outstanding @12/31/24 |
|---|---|---|---|---|---|---|---|
| 2018 CEO grant (legacy) | Time-based options (T) | 05/10/2018 | $3,022.99 | 25% each Dec 31, 2020–2023 | None | 05/09/2028 | 6,800 exercisable |
| 2018 CEO grant (legacy) | Performance options (P) | 05/10/2018 | $3,022.99 | 25% each Dec 31, 2020–2023 | Satisfied (performance period prior) | 05/09/2028 | 6,800 exercisable |
| 2022 periodic block | Time-based options (T) | 05/04/2022 | $4,475.53 | 25% each Dec 31, 2024–2027 | None | 05/03/2032 | 1,587 exercisable; 4,763 unexercisable |
| 2022 periodic block | Performance options (P) | 05/04/2022 | $4,475.53 | 25% each Dec 31, 2024–2027 | ROC vs peers (FY22–FY24); achieved 100% (top rank) | 05/03/2032 | 1,587 exercisable; 4,763 unexercisable |
- 2022 performance metric: average return on capital vs homebuilding peer group for FY2022–FY2024; threshold 50th percentile (50% earn), target/max 75th percentile (100% earn); NVR’s 33.1% was highest in peer set, so 100% of P-options earned subject to service-vesting .
- NVR grants periodic (not annual) options; next expected executive grants in 2026 (barring promotions/new hires) .
Known Upcoming Vesting (Potential Insider Selling Pressure Windows)
| Date | Instrument | Bredow Options Scheduled to Vest |
|---|---|---|
| Dec 31, 2025 | 2022 T + 2022 P | ~3,175 total (25% of ~12,700 2022 options) |
| Dec 31, 2026 | 2022 T + 2022 P | ~3,175 total |
| Dec 31, 2027 | 2022 T + 2022 P | ~3,175 total |
Notes:
- Pre-clearance and open-window trading policy applies; hedging/pledging prohibited .
- In 2024, Bredow exercised 1,000 options for realized value of ~$6.25M (2014 grant nearing expiration) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (shares) | 19,666 shares; includes 164 shares in ESOP trust and 500 shares held in trust for adult children . |
| Vested options (exercisable) | 16,774 options (fully included within reported ownership per proxy methodology) . |
| Unexercised (unvested) options | 9,526 options at $4,475.53 (2022 T/P, service-vesting through 2027) . |
| Ownership as % of SO | ~0.66% (19,666 / 2,969,005 shares outstanding as of Mar 5, 2025) . |
| Stock ownership guideline | 8x salary; requirement $10,000,000 for CEO (based on $1,250,000 base) . |
| Compliance with guideline | All executive officers are currently in compliance . |
| Hedging/pledging | Prohibited for NEOs and directors . |
| Clawback | Equity clawback and compensation recovery policy covering bonuses and performance equity . |
| Perquisites/SERP | No perquisites; no defined benefit or supplemental executive retirement plans . |
Employment Terms
| Term | Eugene J. Bredow |
|---|---|
| Employment agreement term | Through December 31, 2025 . |
| Severance (without cause or good reason) | 200% of base salary plus pro-rated bonus (assumed at 100% of target) payable in lump sum 6 months post-termination; up to $100,000 outplacement . |
| Retirement benefit | 100% of base salary plus pro-rated bonus (subject to performance) . |
| Death/Disability | Two months’ salary plus pro-rated bonus (assumed at max 100% for period) . |
| Change-in-control (CIC) | Double-trigger for cash and equity; if terminated without cause within 1 year after CIC: 200% salary, bonus at 100% of base for the year, accelerated vesting of unvested equity; Bredow CIC total value estimated at $39.04M as of 12/31/24 (includes ~$35.28M equity accretion at $8,178.90) . |
| Non-compete | Applies during employment and for one year post-termination (voluntary, retirement, cause, or without cause); not applicable if voluntary with good reason, or voluntary within 1 year after CIC, or upon election/appointment of new Chair/CEO . |
| Deferred comp | CIC is single-trigger for plan shares, but 2024 table shows no Bredow balance reported; only Saville had balances disclosed . |
| Tax gross-ups | None on CIC or post-employment payments . |
Company Performance Snapshot (context during Bredow’s tenure)
| Metric (FY2024 unless noted) | Result |
|---|---|
| New Orders (YoY) | +4% |
| Net Income | $1.6819B |
| Diluted EPS | $506.69 |
| Gross Margin | 23.7% (vs 24.3% in 2023) |
| Total Shareholder Return (2024) | 17% |
| Share Repurchases (2024) | ~$2.1B; ~257,000 shares; ~8% of 12/31/23 SO |
| ROC vs peers (2022–2024 avg) | 33.1%; highest in peer group (drives P-option vesting) |
Compensation Peer Group and Say-on-Pay
- Peer group: D.R. Horton; KB Home; Lennar; Toll Brothers; Meritage; PulteGroup; Taylor Morrison; plus specified others for performance metric; MDC removed post-acquisition .
- Philosophy: pay-for-performance with below-25th percentile target cash for Executive Chair and CEO vs peers; 100% of equity in options; annual bonus capped at 100% of salary .
- Say-on-Pay: 95% approval in 2024 .
Related Party Transactions and Red Flags
- 2024 related person transactions: none meeting Item 404(a) disclosure threshold .
- Risk mitigants: no hedging/pledging; no option repricing; no perquisites; no excise tax gross-ups .
Investment Implications
- Strong alignment with shareholders: high option weighting, long vesting, 8x salary ownership guideline, no perquisites, clawback and hedging/pledging bans signal discipline and reduce governance risk .
- Anticipated trading windows: sizable option tranches from 2022 grant vest on Dec 31 in 2025–2027 (~3,175 options/year), which can create year-end Form 4 activity and potential selling pressure during open windows; monitor exercises/sales around those dates .
- Retention risk appears contained: meaningful unvested equity through 2027, moderate severance (2x salary + bonus) and 1-year non-compete for most termination scenarios .
- Pay-for-performance credibility: bonus tied to profit and orders (97% payout in 2024), performance options earned via top-tier ROC, and 95% Say-on-Pay support reduce activism/say-on-pay risk; watch that significant option sensitivity can increase reported pay in strong share-price years .