Howard Hughes Holdings revises executive agreements

Published 04/04/2025, 22:00
Howard Hughes Holdings revises executive agreements

Howard Hughes Holdings Inc. (NYSE:HHH), a real estate investment trust with a market capitalization of $3.35 billion, made significant amendments to the employment agreements of three top executives, as disclosed in a recent SEC Form 8-K filing. According to InvestingPro analysis, the company appears undervalued at its current trading price of $67.40, with multiple valuation metrics suggesting potential upside. The changes, effective April 1, 2025, involve revisions to the definition of "Good Reason" and the introduction of a " Transaction (JO:NTUJ)" term, potentially affecting executive compensation following specific organizational changes.

The amendments concern the employment agreements of David R. O’Reilly (NASDAQ:ORLY), Carlos Olea, and Joseph Valane. Notably, the terms of O’Reilly’s and Olea’s agreements have been extended to December 31, 2028, aligning with Valane’s current term. Additionally, O’Reilly’s annual target Long-Term Incentive Plan award amount has been increased to $4,500,000. The company maintains strong financial health with a current ratio of 1.62, indicating solid liquidity to meet short-term obligations.

In another significant development on April 2, 2025, the company and its President, L. Jay Cross, mutually agreed not to renew Cross’s employment agreement, which is set to expire on December 1, 2025. This decision will result in Cross stepping down from his officer role at the company’s term end.

The amendments and the agreement regarding Cross’s departure are detailed in the exhibits attached to the SEC filing. This move comes as Howard Hughes Holdings continues to adjust its executive leadership structure, potentially in anticipation of future organizational changes. The information is based on the company’s statement in the SEC filing.

In other recent news, Smith Douglas Homes reported fourth-quarter earnings that did not meet analyst expectations. The company posted earnings per share of $0.46, falling short of the consensus estimate of $0.65. Revenue for the quarter was $287.5 million, marking a significant increase as the company had no revenue in the same quarter last year due to its initial public offering in January 2024. Despite the earnings miss, Smith Douglas Homes experienced a 28% increase in home closings, reaching 836 units, with home closing revenue rising 32% to $287.5 million. The company’s home closing gross margin declined slightly to 25.5% from 26.7% in the previous year. For the full year 2024, Smith Douglas reported earnings of $1.81 per diluted share on revenue of $975.5 million, with a 25% increase in home closings to 2,867 units. Meanwhile, Pershing Square Capital Management extended its standstill agreement with Howard Hughes Holdings until April 7, 2025. This extension is part of ongoing discussions about potential collaboration alternatives, though the specific details remain undisclosed.

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