Paul C. Saville
NVRAbout Paul C. Saville
Paul C. Saville is Executive Chairman of NVR’s Board (since May 4, 2022) and previously served as President & CEO from July 1, 2005 to May 3, 2022; he has been employed by NVR since 1981 . Age: 69 . Under Saville’s long-tenured leadership, NVR emphasizes TSR- and return-driven discipline: 2024 TSR was 17%, net income $1.682B, EPS $506.69 ; 20-year TSR was 963% (highest among peers), while 30-year TSR reached 148,607% . NVR was the only public homebuilder to remain profitable through the 2006–2011 housing downturn, highlighting the durability of its capital-light lot strategy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NVR | President & CEO | 2005–2022 | Led capital-light model and disciplined lot strategy underpinning superior long-term returns; only public homebuilder profitable in 2006–2011 downturn |
| NVR | Executive Chairman | 2022–present | Provides strategic direction, risk oversight and Board leadership, with CEO handling operations |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | No other public company boards disclosed | — | Director nominees table lists “—” for Saville’s other public boards |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 2,178,750 | 2,257,500 | 2,368,750 (annualized base increased to $2,400,000 effective 4/1/24) |
| Target/Max Bonus (% of Base) | 100% cap | 100% cap | 100% cap |
| Actual Annual Bonus ($) | 1,743,000 | 2,257,500 | 2,308,330 |
| Equity Awards ($ grant-date FV) | 38,952,650 | — | — (no grants in 2024; periodic grants expected again in 2026) |
| Total Compensation ($) | 42,887,000 | 4,528,200 | 4,691,280 |
Performance Compensation
- Annual bonus structure emphasizes profitability and growth; payout capped at 100% of base salary (NVR unique among peers for Executive Chair/CEO/CFO) .
| 2024 Annual Bonus Metric | Weight | Threshold | Target/Max | Actual | Payout Earned |
|---|---|---|---|---|---|
| Consolidated Pre-Tax Profit (before annual bonus & SBC) | 80% | $1,658,441k | $2,073,051k | $2,299,410k | 100% of weighted component |
| New Orders (net of cancellations) | 20% | 19,550 | 23,000 | 22,560 | 87% of weighted component |
| Total Bonus as % of Max | — | — | — | — | 97% of max (max=100% of base) |
- Long-term equity is 100% stock options (no RSUs), with 50% subject to 3-year ROC performance vs peer group; vest over 4 years after a 3-year cliff (years 3–6) .
| Performance Options (2022 Grant) | Peer Group Percentile | Earned % | Measurement Period | Result |
|---|---|---|---|---|
| Return on Capital (ROC) | Threshold: 50th (50% earned); Target: 75th (100% earned, no >100%) | 100% earned (highest ROC 33.1%) | FY 2022–FY 2024 | Performance met; vesting now based on continued employment through 12/31/2024–2027 |
- Pay-versus-performance: “Compensation actually paid” primarily driven by option fair value changes; 2024 CAP to Saville $13.9M; TSR $214.8 (fixed $100 basis) and net income $1,681,928k; CAP reconciliations provided in proxy .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 170,769 shares; 5.6% of class (includes ESOP, Profit Sharing, and Deferred Comp trust holdings) |
| Vested Options (counted in “Number of Shares”) | 56,874 (included in share count per footnote) |
| Options Outstanding (Exercisable/Unexercisable) | 2018 grants fully exercisable (25,000 T; 25,000 P) at $3,022.99 expiring 5/9/28; 2022 grants: 3,437 T + 3,437 P exercisable; 10,313 T + 10,313 P unexercisable at $4,475.53 expiring 5/3/32; vesting each 12/31 in 2024–2027 |
| 2024 Option Exercises | 8,800 options exercised; value realized $55,554,612 (2014 options at $1,094.22; market at exercise $7,166.90–$7,600.00) |
| Ownership Guidelines | 8× base salary; Saville requirement $19,200,000. All execs in compliance |
| Hedging & Pledging | Prohibited for named executive officers and directors |
| Deferred Compensation | Plan 1 balance $866,006,469; Plan 2 balance $6,352,936; invested solely in NVR stock; no employer contributions; distributions at termination (Plan 1 immediate; Plan 2 after 6 months); single-trigger change-of-control accelerates distribution |
Employment Terms
| Provision | Detail |
|---|---|
| Employment Agreement | Saville’s agreement expires Dec 31, 2025 |
| Severance – Without Cause / Good Reason | 200% of base salary + pro-rated annual bonus (assumed 100% of target) + up to $100,000 outplacement; paid 6 months post-termination |
| Retirement | 100% of base salary + pro-rated annual bonus (to extent targets achieved), payable after 6 months |
| Death/Disability | 2 months’ salary + 2 months’ pro-rated bonus (assume 100% of annual bonus for period) |
| Change-in-Control (CiC) | Double trigger for equity vesting and severance; CiC definitions per agreements; no excise tax gross-ups |
| CiC Termination (Saville) | Severance $4,800,000 + Annual Incentive $2,368,750 + Equity accelerated vesting intrinsic value $76,385,710 + $100,000 outplacement = $83,654,460 |
| Non-Compete | During employment and for one year post-termination (voluntary, retirement, for cause, without cause). Non-compete not applicable after good reason or CiC-related voluntary termination |
Board Governance
- Board service history: First elected/appointed 2022; Executive Chairman since 2022; not independent .
- Leadership structure: Separate Chairman (Saville) and CEO (Bredow); Board maintains an Independent Lead Director rotating among committee chairs .
- Committee roles: Saville chairs the Executive Committee; not on Audit/Comp/Nominating (all independent) .
- Attendance and independence: Board met 5 times in 2024; directors attended 100% and annual meeting; independent directors held two executive sessions; Audit Committee holds executive sessions each meeting .
- Dual-role implications: Executive Chairman is not independent; mitigants include separate CEO, rotating Lead Independent Director, majority independent board, and independent committees .
Director Compensation (Saville as Director)
- Saville receives no additional director compensation (compensated as a named executive officer) .
- Director cash schedule (for non-employee directors): Board retainer $75k; committee retainer $8k; Audit Chair $20k; Compensation Chair $15k; Nominating Chair $15k .
- Director stock ownership requirement: 5× $75k retainer = $375,000; all directors in compliance .
Compensation & Incentives Structure Analysis
- Mix and philosophy: Cash compensation below 25th percentile of peer group; annual bonuses capped at 100% of base; long-term incentives entirely stock options tied to TSR/ROC with long vesting (years 3–6) .
- No perquisites; no excise tax gross-ups; no option repricing; no evergreen; robust clawback and compensation recovery policies; prohibitions on hedging/pledging; strong share repurchases to mitigate dilution .
- Periodic grants (not annual); last grant in May 2022; next expected in 2026, supporting retention and multi-year alignment .
Compensation Peer Group and Benchmarking
- Homebuilding peer group: D.R. Horton, KB Home, Lennar, Toll Brothers, Meritage Homes, PulteGroup, Taylor Morrison (MDC removed post-acquisition) .
- Targeted cash compensation for Executive Chairman and CEO below 25th percentile of peers; highest % of compensation tied to TSR in peer group .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval: 95% “FOR,” viewed as aligned with shareholder interests .
- Ongoing shareholder engagement on ESG, compensation, CEO transition, tenure .
Related Party Transactions
- No related person transactions requiring disclosure in 2024 .
Risk Indicators & Red Flags
- Hedging/pledging prohibited for executives/directors (mitigates misalignment) .
- No perquisites; no excise tax gross-ups; no option repricing; no evergreen provisions .
- Robust insider-trading pre-clearance and Code of Ethics; independent audit oversight and cybersecurity reviews .
- Insider liquidity events: Saville exercised 8,800 options in 2024 realizing $55.6M; continued vesting through 2027 may create periodic exercise opportunities, governed by policy .
Equity Ownership & Alignment (Detail Tables)
Beneficial Ownership and Options
| Metric | Value |
|---|---|
| Shares Beneficially Owned | 170,769 |
| Percent of Class | 5.6% |
| Vested Options Included in Share Count | 56,874 |
| 2018 Options (T) | 25,000 exercisable; $3,022.99 strike; exp. 5/9/28 |
| 2018 Options (P) | 25,000 exercisable; $3,022.99 strike; exp. 5/9/28 |
| 2022 Options (T) | 3,437 exercisable; 10,313 unexercisable; $4,475.53; exp. 5/3/32; vest each 12/31 (2024–2027) |
| 2022 Options (P) | 3,437 exercisable; 10,313 unexercisable; $4,475.53; exp. 5/3/32; performance met; vest each 12/31 (2024–2027) |
Deferred Compensation
| Plan | Executive Contributions (lifetime) | Aggregate Earnings (2024) | Balance at 12/31/2024 |
|---|---|---|---|
| Plan 1 | $15,995,411 (pre‑2004) | $124,777,822 | $866,006,469 |
| Plan 2 | $600,000 (2006) | $915,357 | $6,352,936 |
Board Committee Composition (2024)
| Committee | Members |
|---|---|
| Audit | C.E. Andrews (Chair), S.B. Bailey, A.E. Festa, A.A. Jung |
| Compensation | S.W. Ross (Chair), T.D. Eckert, D.A. Preiser, W.G. Rosier |
| Nominating | A.E. Festa (Chair; Lead Independent Director), M. Martinez, D.A. Preiser, S.W. Ross |
| Executive | P.C. Saville (Chair), C.E. Andrews, D.A. Preiser, W.G. Rosier |
Employment & CiC Economics (Saville)
| Scenario | Severance | Annual Incentive Assumption | Equity | Outplacement | Total |
|---|---|---|---|---|---|
| Without Cause | $4,800,000 | $2,400,000 | — | $100,000 | $7,300,000 |
| Voluntary w/ Good Reason | $4,800,000 | $2,400,000 | — | $100,000 | $7,300,000 |
| Retirement | $2,400,000 | $2,337,600 | — | — | $4,737,600 |
| Death/Disability | $400,000 | $400,000 | — | — | $800,000 |
| CiC + Without Cause (≤1yr) | $4,800,000 | $2,368,750 | $76,385,710 (accelerated vesting intrinsic value) | $100,000 | $83,654,460 |
Governance Quality and Independence
- Board: 8 of 9 nominees independent; majority voting; annual elections; proxy access; 25% special meeting right; independent consultant .
- Trading controls: robust pre-clearance; prohibition of short sales, hedging, pledging; directors and officers barred from owning NVR debt .
- Audit oversight: KPMG since 1987; fees disclosed; internal audit and cybersecurity oversight; audit committee financial experts identified .
Investment Implications
- Strong alignment: Saville’s pay is heavily at-risk via multi-year stock options tied to TSR/ROC, long vesting (2024–2027), robust ownership guidelines, and significant deferred stock balances; hedging/pledging banned .
- Limited cash incentives: Annual bonus capped at 100% of base; 2024 payout at 97% driven by profit strength but slightly below orders target, reinforcing discipline over cyclical volatility .
- Retention vs liquidity: Large unvested option tranches through 2027 and sizable deferred comp suggest retention, but periodic option exercises (e.g., $55.6M realized in 2024) can create trading overhang in open windows; mitigated by strict pre-clearance and ownership requirements .
- CiC protections: Double-trigger equity acceleration and severance (no tax gross-ups) limit opportunistic windfalls while preserving continuity; Saville’s CiC total value is substantial given in-the-money options, a consideration in M&A scenarios .
- Governance mitigants to dual role: Separate CEO/Chair structure, rotating Independent Lead Director, and independent committees temper independence concerns from Saville’s Executive Chair role .