Michael J. Grubb
Toll BrothersAbout Michael J. Grubb
Senior Vice President & Chief Accounting Officer (Principal Accounting Officer) of Toll Brothers. Grubb joined Toll Brothers in July 2003, progressing from Assistant Vice President – Accounting (2003) to Vice President (2006) and Senior Vice President and Chief Accounting Officer effective January 26, 2018; prior roles include First Vice President at Bank One and Audit Senior Manager at Ernst & Young; he is a CPA with a B.S. in Accounting from Drexel University . Born in 1964 . Company performance during his executive tenure is strong: four-year TSR value up to $363 on a $100 base and rising net income and adjusted pre-tax income through FY2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ernst & Young | Audit Senior Manager | 1987–1998 | Led audit engagements; built public company reporting expertise |
| Bank One | First Vice President | 1998–2003 | Oversaw finance/accounting, strengthening internal controls foundation |
| Toll Brothers | Assistant VP – Accounting | 2003–2006 | Transition into homebuilding finance; supported SEC reporting |
| Toll Brothers | Vice President – Accounting | 2006–2018 | Expanded leadership scope; drove reporting process improvements |
| Toll Brothers | SVP & Chief Accounting Officer | Jan 2018–Present | Principal Accounting Officer; signatory on 10‑K/8‑K; oversight of controls |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed in SEC filings | — | — | No public company directorships identified in Toll Brothers’ filings; Grubb is an executive officer, not a director . |
Fixed Compensation
- Toll Brothers employs executive officers at will and does not use individualized employment agreements; perquisites are limited, with no tax gross-ups .
- Annual cash compensation for NEOs (CEO/CFO/COO) combines base salary with an annual incentive bonus; while Grubb’s specific cash amounts are not disclosed, this structure informs broader executive pay design .
Performance Compensation
Toll Brothers’ executive incentive architecture (as applied to NEOs) emphasizes at-risk pay and operational outcomes. Grubb’s specific awards are not itemized, but the company’s Omnibus plan and standard award terms govern executive equity.
| Metric | Weighting | Target | Actual | Payout vs Target | Vesting / Hold |
|---|---|---|---|---|---|
| Annual Incentive – PTI (Adjusted Pre‑Tax Income) | 100% of annual bonus | $1.72B (FY2024 guidance-aligned) | Certified based on actual performance | Committee-determined; payouts reflect PTI and qualitative factors | 1 year |
| Ops PRSU – Units Delivered | 1/3 of Ops PRSU | 10,100 units | 10,813 units | 107.1% of target; linear scale (75%/100%/150%) | Earned shares vest pro‑rata over 4 years; delivery at ~4th anniversary |
| Ops PRSU – Adjusted Home Sales Gross Margin | 1/3 of Ops PRSU | 27.9% | 28.4% | 101.7% of target; blended Ops PRSU earned 111.0% | As above |
| ROE PRSU – Three‑Year Return on Average Equity | 1/3 of PRSU | 20.0% target; 80% threshold; 120% max (linear; cap 150%) | 22.1% (Dec 2021 grant → Dec 2024 vest) | 110.5% of target → 111% earned consistent with Ops PRSU outcome | Vests/settles at end of 3‑year period; delivery then |
Key award mechanics:
- RSUs: Equal annual vesting over 4 years, but shares are generally delivered only at the 4th anniversary; dividend equivalents accrue; immediate vest/delivery on death/disability; double-trigger vesting on change of control .
- PRSUs: Performance-based earning; retirement-eligible executives continue vesting per schedule; dividend equivalents accrue; immediate vesting on death/disability; double-trigger vesting on change of control .
- Annual equity grants are typically late December (e.g., Dec 20, 2023 for FY2024 awards), clustering vest/delivery windows around late-December each year .
Equity Ownership & Alignment
| Policy | Detail |
|---|---|
| Stock Ownership Guidelines | CEO: 6× base salary; Other Executive Officers (including Principal Accounting Officer): 3× base salary; Directors: 5× annual cash retainer; compliance assessed annually . |
| Compliance (Dec 2024 review) | NEOs and directors in compliance or within permitted timeframe; executives prohibited from selling net shares before meeting guidelines . |
| Hedging & Pledging | Prohibited for executive officers and directors; the company reports no pledged shares as of the proxy date . |
| Clawback | SEC/NYSE‑compliant policy adopted Nov 2023; recovers incentive‑based compensation following restatements, including stock price/TSR-based awards via reasonable estimates; no indemnification permitted . |
Employment Terms
| Term | Key Provisions |
|---|---|
| Employment agreements | Executives employed at will; no individualized employment agreements . |
| Non‑compete / Non‑solicit | One year post‑termination for executive officers via the Non‑Interference Agreement attached to the Severance Plan . |
| Severance Plan (overview) | Company maintains an Executive Severance Plan for eligible employees; for NEOs: 2.0× salary + target bonus (CEO 2.5×), prorated bonus based on actual performance, 24–30 months COBRA premiums, and outplacement; Section 280G cut‑down/best‑net alternative applies . |
| Change‑of‑Control | Double‑trigger for equity vesting (termination in connection with CoC); RSUs/PRSUs vest on qualifying termination; SERP fully vests on CoC with lump‑sum payout for participants . |
| Equity award terms | RSUs/PRSUs include dividend equivalents; retirement‑eligible executives continue vesting; immediate vest on death/disability; delivery schedules as noted . |
| SERP & Deferred Comp | SERP exists and fully vested for NEOs at age 58; Nonqualified Deferred Compensation Plan (2015 Plan) permits deferrals; interest above‑market amounts disclosed for NEOs; no discretionary contributions in FY2024 . |
Note: Grubb’s specific severance eligibility, SERP participation, and award magnitudes are not disclosed; terms above reflect Company programs and NEO provisions .
Performance & Track Record
Company pay-versus-performance metrics underpin incentive design and signal execution efficacy.
| Metric | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| TSR – $100 initial value | $143.95 | $104.66 | $174.05 | $363.18 |
| Peer TSR (S&P Homebuilders Select Industry Index) | $132.63 | $112.87 | $159.00 | $264.42 |
| Net Income ($000s) | $833,627 | $1,286,500 | $1,372,071 | $1,571,195 |
| Adjusted Pre‑Tax Income ($000s) | $1,162,409 | $1,618,048 | $1,884,788 | $2,018,108 |
Execution indicators:
- Strong TSR outperformance vs peer index and higher APTI through FY2024 validate incentive calibration and operational execution .
- Grubb’s role as Principal Accounting Officer implies oversight of financial reporting integrity; he signed FY2023/FY2024 10‑K and 8‑K results releases, and acted as designated officer on supplemental indentures, evidencing senior finance authority .
Compensation Structure Analysis
- High at‑risk pay emphasis with PRSUs replacing TSR PRSUs since fiscal 2021, focusing on ROE, units, and margin—metrics within management control and aligned with capital efficiency .
- One‑year operational PRSU performance horizon with four‑year service vesting plus fourth‑year delivery concentrates share deliveries near late December—potentially creating periodic liquidity/selling pressure among award recipients .
- Governance guardrails: no option repricing without shareholder approval; hedging/pledging prohibited; SEC/NYSE clawback in place; strong say‑on‑pay support (96% in 2024) .
Risk Indicators & Red Flags
- Hedging and pledging banned; no pledged shares reported as of proxy date, mitigating alignment risk .
- Clawback policy compliant with SEC/NYSE; recovery applies to stock price/TSR‑based incentives, reducing restatement risk misalignment .
- Section 16(a) filings timely for FY2024 except two directors; no issues noted for executive officers in the proxy’s delinquency section .
Equity Ownership & Alignment
| Element | Detail |
|---|---|
| Ownership multiple | 3× base salary requirement for other executive officers (incl. Principal Accounting Officer) . |
| Selling restrictions | Executives may not sell net shares until compliant with guidelines . |
| Delivery timing | RSU shares typically delivered at ~4th anniversary—delivery events cluster in late December . |
Employment Terms
| Provision | Economics / Scope |
|---|---|
| Non‑compete & Non‑solicit | One year post‑termination for executive officers per Non‑Interference Agreement . |
| Severance (NEO baseline) | 2.0× salary+target bonus (CEO 2.5×), prorated bonus, 24–30 months COBRA, outplacement; 280G best‑net or cut‑down . |
| Change‑of‑Control | Double‑trigger equity vesting; SERP full vesting and lump‑sum for participants . |
| Clawback | Restatement-based recovery; stock/TSR awards recovered via reasonable estimates; no indemnification . |
Investment Implications
- Alignment: Executive stock ownership rules (3× salary), anti-hedging/pledging, and clawbacks strengthen long-term alignment; delivery timing in late December may create predictable liquidity windows that could modestly increase insider selling pressure around those dates .
- Retention: One-year non‑compete/non‑solicit and the structure of RSU/PRSU vesting with deferred delivery support retention; for NEOs, severance economics and double‑trigger vesting further stabilize leadership continuity .
- Performance linkage: Shift to ROE, units, margin and PTI metrics ties pay to controllable drivers (capital efficiency, volume, profitability); four-year TSR and income trends indicate disciplined execution—positive signal for governance quality and incentive calibration .
- Disclosure gap: As a non‑NEO executive, Grubb’s specific compensation amounts, award sizes, and share ownership are not disclosed publicly—monitor Form 4 filings and year‑end proxy changes for incremental signals; Section 16(a) compliance appears robust at the company level .