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SCOTTSDALE, AZ – Meritage Homes Corporation (NYSE:MTH), a leading U.S. homebuilder with a market capitalization of $5.6 billion and annual revenue of $6.4 billion, announced changes to its executive compensation structure, effective January 1, 2025, as part of a leadership compensation update. According to InvestingPro data, the company maintains strong profitability with a healthy 25% gross margin.
The company’s Executive Compensation Committee has approved pay increases for several top executives, except for Steven J. Hilton, Executive Chairman, whose compensation will remain unchanged. The adjustments align with the terms of the respective employment agreements for the officers. The compensation changes come as InvestingPro analysis suggests the company is currently undervalued, trading at an attractive P/E ratio of 7.2x earnings.
Hilla Sferruzza, Executive Vice President and Chief Financial Officer, Clinton Szubinski, Executive Vice President and Chief Operating Officer, Malissia Clinton, Executive Vice President and General Counsel, and Javier Feliciano, Executive Vice President and Chief People Officer, are set to receive higher base salaries. The revised base salaries are as follows: Sferruzza and Szubinski will each earn $800,000, Malissia Clinton will receive $560,000, and Feliciano’s salary will be $515,000.
Additionally, the target annual cash incentive bonus and target value of equity compensation for these executives have been increased. CEO Phillippe Lord will have a target cash incentive of $3,250,000 and $5,500,000 in equity compensation. Sferruzza’s target cash incentive is now $1,400,000 with $1,800,000 in equity, Szubinski’s cash incentive has been set at $2,000,000 with $2,200,000 in equity, Malissia Clinton will have a $560,000 cash incentive and $952,000 in equity, and Feliciano’s figures are $386,250 in cash with $849,750 in equity.
The equity compensation is structured to be approximately 50% time-based restricted stock units and 50% performance-based share awards. These changes reflect the company’s commitment to aligning the interests of its executives with those of its shareholders.
The adjustments in compensation come as Meritage Homes continues to navigate the housing market, focusing on growth and operational efficiency. The company has not provided further details on the strategic reasons behind the executive compensation changes.
This information is based on a press release statement and reflects the company’s filings with the Securities and Exchange Commission.
In other recent news, Meritage Corporation reported its fourth-quarter 2024 financial results, surpassing earnings expectations with an earnings per share (EPS) of $4.72, significantly exceeding the forecast of $2.28. The company also posted revenue of $1.6 billion, slightly above the expected $1.57 billion. Despite this strong performance, Meritage’s stock witnessed a decline during regular and aftermarket trading. The company maintained its status as a top 5 builder, expanding into new markets such as Huntsville, Alabama. Meritage provided guidance for 2025, targeting home closing revenue between $6.6 billion and $6.9 billion and aiming for long-term gross margins of 22.5% to 23.5%. Meanwhile, the homebuilding sector, including companies like LGI Homes (NASDAQ:LGIH), PulteGroup Inc (NYSE:PHM), Lennar (NYSE:LEN), Toll Brothers (NYSE:TOL), and DR Horton (NYSE:DHI), faced challenges due to President Trump’s decision to impose a 25% tariff on Canadian lumber imports. These tariffs are expected to increase costs for homebuilders, potentially affecting profitability and home prices. Investors are closely monitoring how these companies will respond to the rising material costs and the broader economic implications of these tariffs.
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