Matthew B. Kelpy
NVRAbout Matthew B. Kelpy
Matthew B. Kelpy (age 52) is Vice President and Chief Accounting Officer (CAO) of NVR, serving as CAO since March 1, 2018 and continuing as Vice President & Controller since joining NVR in 2017 . NVR’s 2024 performance included 6% net income growth to $1.68B, 9% EPS growth to $506.69, gross margin of 23.7%, and 17% TSR; NVR led peers in returns with 1-year average ROC of 31% (ranked 1st) and multi-year leadership in ROC/ROE, consistent with its pay-for-performance design emphasizing TSR and return on capital .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| NVR | Chief Accounting Officer | Since Mar 1, 2018 | CAO communicates directly with the Audit Committee on emerging accounting/disclosure topics, supporting financial reporting integrity and governance |
| NVR | Vice President & Controller | Since 2017 | Controller responsibilities underpin financial reporting and internal controls across NVR’s operations |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| — | No external directorships or roles disclosed in the proxy | — | — |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Annual base salary rate ($) | $378,000 | $396,900 (effective Apr 1, 2024) |
| Target/maximum annual bonus (% of base) | 100% of base (cap) | 100% of base (cap) |
Performance Compensation
2024 Annual Bonus Mechanics and Outcome
| Metric | Weighting | Threshold | Target/Max | Actual | Component payout |
|---|---|---|---|---|---|
| Consolidated pre-tax profit (before annual bonus & SBC, after other charges) | 80% | $1,658,441k | $2,073,051k | $2,299,410k | 100% |
| New orders (net of cancellations) | 20% | 19,550 | 23,000 | 22,560 | 87% |
| Total bonus payout vs. max | — | — | — | — | 97% of max (cap is 100% of base) |
| Item | 2023 | 2024 |
|---|---|---|
| Actual bonus paid ($) | $374,750 | $382,172 |
Long-Term Equity Compensation (Options)
Periodic options (not annual) with 6-year schedules; 50% time-based and 50% performance-based tied to 3-year Return on Capital versus peer group; the 2022–2024 ROC was highest in peer set (33.1%), fully earning performance-based tranches subject to continued employment .
| Grant date | Award type | Ratable vesting dates | Exercisable (#) | Unexercisable (#) | Exercise price ($) | Expiration |
|---|---|---|---|---|---|---|
| 03/01/2018 | Performance-based options (P) | 2020, 2021, 2022, 2023 | 600 | — | $2,843.17 | 02/29/2028 |
| 05/04/2022 | Time-based options (T) | 2024, 2025, 2026, 2027 | 250 | 750 | $4,475.53 | 05/03/2032 |
| 05/04/2022 | Performance-based options (P) | 2024, 2025, 2026, 2027 | 250 | 750 | $4,475.53 | 05/03/2032 |
| Performance condition status (2022 grants) | — | ROC vs. peers (FY 2022–2024) | — | — | — | Fully achieved; 100% eligible subject to service |
Notes:
- No equity grants to NEOs in 2024; next periodic grants expected in 2026 (except promotions/new hires) .
- Options are granted at market price; no repricing; no evergreen; double-trigger change-in-control acceleration only .
Equity Ownership & Alignment
Beneficial Ownership and Option Status (as of Mar 5, 2025 / Dec 31, 2024)
| Category | Amount |
|---|---|
| Shares beneficially owned | 1,365 (includes plan holdings) |
| Vested options included in beneficial ownership | 1,100 |
| Ownership % of shares outstanding | <1% |
| ESOP vested shares | 24 |
| Profit Sharing vested shares | 33 |
Stock Ownership Guidelines and Compliance
| Executive | Base salary | Multiple | Dollar holding requirement | Compliance status |
|---|---|---|---|---|
| Matthew B. Kelpy | $396,900 | 4× | $1,587,600 | In compliance |
- Hedging and pledging of NVR stock are prohibited for executive officers and directors; robust pre-clearance is required for trades in open windows .
2024 Option Exercises
| Year | Options exercised (#) | Value realized ($) |
|---|---|---|
| 2024 | 2,150 | $13,086,097 |
Employment Terms
| Item | Details |
|---|---|
| Employment agreement | None; at-will employment; no severance benefits upon termination other than equity agreement rights |
| Change-in-control treatment | Double-trigger acceleration of unvested equity upon termination without cause within 1 year post-CoC; intrinsic value as of 12/31/2024 estimated at $5,555,055 |
| Non-compete | Non-compete provisions embedded in equity agreements; employment agreements contain non-compete covenants (Kelpy has no employment agreement) |
| Clawbacks | Equity agreements allow recapture of option gains if restatement due to misconduct; broader compensation recovery policy applies to annual bonus and performance equity |
| Perquisites, SERP, gross-ups | No perquisites; no supplemental executive benefits or tax gross-ups |
| Deferred compensation | No balances or elections disclosed for Kelpy |
| Trading policy | Pre-clearance required; prohibition on short sales, hedging, pledging, and owning NVR debt by NEOs/directors |
Compensation Structure Analysis
- Emphasis on TSR-aligned, at-risk equity via long-vesting options; annual bonuses capped at 100% of base—unique versus peers—keeps cash compensation below peer medians and biases incentives to long-term value creation .
- 2024 annual bonus paid at 97% of max (cap) on strong profitability but slightly below new-orders target; Kelpy’s actual cash bonus was $382,172 .
- The 2022 performance options fully earned on ROC vs. peers, reinforcing capital-efficiency discipline; vesting continues through 2027, supporting retention through multi-year service requirements .
Governance, Say‑on‑Pay, and Related Party
- 2024 say‑on‑pay support was 95% (“FOR”), indicating broad shareholder endorsement of the compensation program design and outcomes .
- No related person transactions requiring disclosure occurred in 2024 .
Investment Implications
- Alignment is strong: strict ownership requirements (4× salary for Kelpy), ban on hedging/pledging, clawbacks, and a double‑trigger CoC design mitigate agency risk and incentivize long-term TSR and ROC outperformance .
- Multi-year vesting through 2027 and periodic grant cadence (no grants in 2024; next expected 2026) suggest retention risk is low; however, significant 2024 option exercises ($13.1M value) indicate ongoing liquidity events that can create intermittent insider selling pressure in open windows .
- Kelpy has no severance protection and only equity acceleration under double trigger, implying disciplined change‑of‑control economics and limited guaranteed payouts—supportive of shareholder-friendly pay governance .
- NVR’s operational and financial metrics (net income/EPS growth; top-tier ROC/ROE) tie directly to performance metrics governing incentives (pre‑tax profit, new orders, ROC), reinforcing a pay-for-performance culture that has historically supported superior long-term returns .