Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
 
 
Filed by the Registrant 
          Filed by a Party other than the Registrant 
Check the appropriate box:
 
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant to §240.14a-12
PulteGroup, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
 
 
No fee required.
 
Fee paid previously with preliminary materials.
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
 
 


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LOGO

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION – DATED March 8, 2024


Table of Contents

 

LOGO

March 22, 2024

Dear Shareholders of PulteGroup:

We look forward to your participation in PulteGroup’s 2024 Annual Meeting of Stockholders which will be held on Monday, May 6, 2024, at 1:00 p.m. ET. Our board of directors has fixed the close of business on March 15, 2024, as the record date for determining those holders of our common stock entitled to notice of, and to vote at, the Annual Meeting of Stockholders and any adjournments or postponements thereof.

As we have done for each of the last four years, and consistent with many S&P 500 companies, the 2024 Annual Meeting will again be held virtually. You will be able to access the live audio webcast of the meeting by visiting www.virtualshareholdermeeting.com/PHM2024. At the time of the meeting, you will be able to vote your shares electronically and submit your questions through the virtual meeting platform. To participate in the meeting, you must have your 16-digit control number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you elected to receive proxy materials by mail. Please note that in-person attendance at the 2024 Annual Meeting cannot be accommodated.

As Chairman, I speak for the entire Board in saying that we are extremely pleased with the operating and financial results PulteGroup’s management and the entire organization delivered in 2023, including:

 

LOGO

Achieved record revenues of $16 billion and diluted earnings per share of $11.72, while lowering the Company’s debt-to-capital ratio to 15.9%. These results are all the more impressive given the volatile macroeconomic conditions that saw a dramatic rise in mortgage interest rates leading into 2023.

 

LOGO

Returned $1.1 billion to shareholders through share repurchases and dividends, which brings the Company’s 5-year total of repurchases to $4.1 billion.

 

LOGO

Filled out its senior leadership team with the hiring of a new Chief Operating Officer and a Chief People Officer. The organization also continued to evidence its strong culture as it was again named a Fortune 100 Great Place to Work.

 

LOGO

Continued to advance important sustainability initiatives designed to support our Company’s ongoing business and financial success. Among its efforts, the Company is advancing the energy efficiency of all its homes and made significant progress toward our goal of having all of homes built in 2025 capable of being Energy Star 3.1 certified.

Beyond the Company’s 2023 accomplishments, as part of this year’s annual meeting process, I want to welcome our newest Board nominee, Kristen Actis-Grande. Currently the Chief Financial Officer of a publicly-traded company, Kristen brings extensive financial and operational expertise to our Board, and I look forward to working with her as we help guide PulteGroup in the years ahead.

The Notice of Annual Meeting of Stockholders and Proxy Statement, both of which accompany this letter, provide details regarding the business to be conducted at the meeting, including proposals for: the election of the directors; the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm; an advisory vote to approve the compensation of our named executive officers; and an amendment to our Articles of Incorporation to eliminate two 69.3% supermajority requirements. We have two shareholder proposals included, and for the reasons described in our Proxy Statement, we recommend that our shareholders do not support those proposals.

Our board of directors recommends that you vote “FOR” the eleven director nominees named in this Proxy Statement and “FOR” each of Proposals 2, 3 and 4 and “AGAINST” Proposals 5 and 6. Each proposal is described in more detail in this Proxy Statement.

Your vote is very important, so please vote your shares promptly, whether or not you expect to participate at the meeting. You may vote over the Internet, as well as by telephone, or, if you requested to receive printed proxy materials, by mailing a proxy card or voting instruction form, as applicable.

Sincerely,

 

 

LOGO

Thomas J. Folliard

Non-Executive Chairman of the Board of Directors

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   i


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NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS

 

When:    Monday, May 6, 2024 at 1:00 P.M., Eastern Time
Where:    Via the internet at: www.virtualshareholdermeeting.com/PHM2024
Items of

Business:

  

Proposal 1 – Election of eleven nominees for director named in this Proxy Statement

 

Proposal 2 – Ratification of appointment of Ernst & Young LLP as our independent registered public accounting firm for 2024

 

Proposal 3 –Say-on-pay: Advisory vote to approve executive compensation

 

Proposal 4 – Amendment and restatement of the Company’s Articles of Incorporation to eliminate the 69.3% supermajority voting requirements in Article X and Article XI

 

Proposal 5 – Shareholder proposal on simple majority vote, if properly presented at the meeting

 

Proposal 6 – Shareholder proposal regarding a director resignation By-law amendment, if properly presented at the meeting

 

In addition, any other business as may properly come before the meeting

Who Can

Vote:

   Shareholders of record at the close of business on Friday, March 15, 2024
Who Can

Participate:

   Shareholders who wish to attend the virtual meeting should review pages 72-76. To be admitted electronically to the annual meeting, you must go to the meeting website at www.virtualshareholdermeeting.com/PHM2024, and enter the 16-digit control code included in your proxy materials. Shareholders participating in the virtual meeting are deemed to be present in person at the annual meeting. Further instructions on how to participate in and vote at the annual meeting are available at www.virtualshareholdermeeting.com/PHM2024.
Date of

Mailing:

   On or about Friday, March 22, 2024, a Notice of Internet Availability of Proxy Materials and Notice of Annual Meeting are being mailed or made available to our shareholders containing instructions on how to access this Proxy Statement and our 2023 Annual Report on Form 10-K and vote online, as well as instructions on how to receive paper copies of these documents for shareholders who so elect.
Shareholder
List:
   A list of shareholders entitled to vote at the annual meeting will be available at www.virtualshareholdermeeting.com/PHM2024 for examination during the annual meeting. Shareholders will need their 16-digit control code to access the list.
Questions:    You may submit questions online during the annual meeting at www.virtualshareholdermeeting.com/PHM2024. The Company reserves the right to edit or reject any questions deemed duplicative, profane or inappropriate.

How To Vote In Advance

Your vote is important. We encourage you to vote promptly, whether or not you plan to attend the meeting. In accordance with the rules and regulations adopted by the Securities and Exchange Commission, instead of mailing a printed copy of our proxy materials, we are furnishing proxy materials to our shareholders over the internet. Make sure to have your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials and Notice of Annual Meeting in hand and follow the instructions.

 

LOGO      By Telephone: You can vote your shares by calling 1-800-690-6903 within the USA, US territories and Canada on a touchtone phone
LOGO   By Internet: You can vote your shares online at www.proxyvote.com
LOGO      By Mail: If you received a proxy card by mail, you can vote your shares by signing and returning the proxy card in the postage-paid envelope.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 6, 2024. The Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders and the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 are available at: www.virtualshareholdermeeting.com/PHM2024.

By Order of the Board of Directors

 

 

LOGO

TODD N. SHELDON

Executive Vice President, General Counsel and Corporate Secretary

Atlanta, Georgia

[March 22, 2024]

 

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   i


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PROXY SUMMARY

 

This summary highlights selected information about the items to be voted on at the 2024 annual meeting of shareholders (“annual meeting”) of PulteGroup, Inc. (“PulteGroup,” the “Company,” “we” or “our”). This summary does not contain all of the information that you should consider in deciding how to vote. You should read the entire Proxy Statement before voting.

Meeting Agenda and Voting Recommendations

 

    
   PROPOSAL ONE  
   Election of Directors  
    

 

 

 

The Board recommends a vote FOR each of the director nominees named in this Proxy Statement.

 

•  Slate of directors with broad and diverse leadership experience

 

•  Significant experience in relevant industries (including real estate and consumer markets) and public company leadership experience, among other key competencies

 

•  Ongoing refreshment and succession process of Board composition

 

 
 

•  Proactive shareholder engagement

 

 

u  See pages 5-11 for further information

 

 

DIRECTOR NOMINEES

                       

Current Committee Memberships(1)

 

Name

  Principal Professional Experience   Years of
Tenure
 

 

Diversity

      Independence   Audit   Comp   Finance  

Nom/ 

Gov

  Gender   Ethnic 
                   

KRISTEN ACTIS-GRANDE

 

Executive Vice President and Chief Financial Officer,

MSC Industrial Direct Co., Inc.

  0   LOGO       LOGO        
                   

BRIAN P. ANDERSON

 

Former Chief Financial Officer,

Baxter International Inc.

  19     LOGO     LOGO        
                   

BRYCE BLAIR

 

Former Chairman of the Board and Chief Executive Officer,

AvalonBay Communities, Inc.

  13         LOGO         C
                   

THOMAS J. FOLLIARD

Non-Executive Chairman

  Non-Executive Chairman of the Board and Former President and Chief Executive Officer, CarMax, Inc.   12         LOGO        
                   

CHERYL W. GRISÉ

  Former Executive Vice President, Northeast Utilities (now known as Eversource Energy)   16   LOGO       LOGO        
                   

ANDRÉ J. HAWAUX

  Former Executive Vice President, Chief Financial Officer and Chief Operating Officer, Dick’s Sporting Goods, Inc.   11         LOGO   C      
                   

J. PHILLIP HOLLOMAN

  Former President and Chief Operating Officer, Cintas Corporation   4     LOGO     LOGO        
                   

RYAN R. MARSHALL

  President and Chief Executive Officer, PulteGroup, Inc.   8         LOGO        
                   

JOHN R. PESHKIN

  Founder and Managing Partner,
Vanguard Land, LLC
  8         LOGO       C  
                   

SCOTT F. POWERS

  Former President and Chief Executive Officer, State Street Global Advisors   8         LOGO     C    
                   

LILA SNYDER

  Chief Executive Officer, Bose Corporation   6   LOGO       LOGO        

(1) These columns show the current committee memberships of the director nominees. Should Ms. Actis-Grande be elected at the Annual Meeting, the Nominating and Governance Committee will recommend Committee assignments for Ms. Actis-Grande and review the current Committee configuration for additional changes. It is anticipated that, effective as of the date of the Annual Meeting, Ms. Actis-Grande will be appointed to the Audit Committee.

 

Audit = Audit Committee

  

Finance = Finance and Investment Committee

Comp = Compensation and Management Development Committee

  

Nom/Gov = Nominating and Governance Committee

C = Chair of Committee

  

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   i


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PROXY SUMMARY

 

BOARD NOMINEE HIGHLIGHTS

 

     

Significant corporate leadership

experience at public companies

in relevant industries

   

Broad governance experience

by service on other public

company boards

   

Mix of seasoned directors

and fresh perspectives

     

🌑🌑🌑🌑

🌑🌑🌑🌑

🌑🌑🌑   

   

🌑🌑🌑🌑

🌑🌑🌑🌑

🌑🌑🌑   

   

🌑🌑🌑🌑

🌑🌑🌑🌑

🌑🌑🌑   

     

SEVEN OF OUR NOMINEES HAVE
EXPERIENCE IN THE REAL ESTATE
OR CONSUMER MARKETS

 

    NINE OF OUR NOMINEES
HAVE OTHER PUBLIC COMPANY
BOARD EXPERIENCE
    SIX OF OUR NOMINEES
WILL HAVE JOINED THE BOARD
IN THE LAST EIGHT YEARS

 

GOVERNANCE HIGHLIGHTS

PulteGroup has a long-standing commitment to strong corporate governance and throughout the years has evolved its governance framework to align with evolving best practices. In particular, we believe that the following corporate governance features help us best serve the interests of our shareholders:

 

Shareholder Rights

 

LOGO    Annual election of all directors

 

LOGO    Majority vote standard in uncontested director elections

 

LOGO    Right to call a special meeting for shareholders with 20% or more of outstanding shares

 

LOGO    Right to take action by written consent for shareholders

 

LOGO    Active engagement with the Company’s top 20 largest shareholders

  

Independent Oversight

 

LOGO    Strong Non-Executive Chairman role

 

LOGO    Audit Committee, Compensation and Management Development Committee and Nominating and Governance Committee each comprised solely of independent directors

 

LOGO    All directors are independent except the Chief Executive Officer

 

LOGO    Committees have authority to retain independent advisors

 

  

Good Governance

 

LOGO    Frequent cross-committee and Board communications

 

LOGO    Regular Board, committee and director evaluation processes

 

LOGO    Code of ethical business conduct and code of ethics

 

LOGO    Director orientation and continuing education programs

 

LOGO    Meaningful share ownership guidelines for executive officers and directors

 

LOGO    Prohibition against hedging and pledging Company securities by all employees and directors

 

LOGO    Charter of Nominating and Governance Committee expresses strong commitment to inclusion of diverse groups, knowledge and viewpoints in selection of Board nominees

 

ii   PULTEGROUP, INC. | 2024 PROXY STATEMENT  


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PROXY SUMMARY

 

    
   PROPOSAL TWO  
   Ratification of Appointment of Ernst & Young LLP as the Independent Registered Public Accountant for 2024  
    

 

 

 

The Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accountant for 2024.

 

•  Independent firm with a reputation for integrity and competence

 

•  Provides significant financial reporting expertise

 

 
 

•  Few ancillary services and reasonable fees

 

 

u See page 61 for further information

 

 

 

    
   PROPOSAL THREE  
   Say-on-Pay: Advisory Vote to Approve Executive Compensation  
    

 

 

 

The Board recommends a vote FOR this proposal.

 

•  Ongoing review of compensation practices by Compensation and Management Development Committee with assistance from an independent compensation consultant

 

•  Compensation programs designed to reward executives for performance against established performance objectives and improving shareholder returns

 

 
 

•  Adherence to commonly viewed executive compensation best practices

 

 

u  See pages 62-63 for further information

 

 

 

    
   PROPOSAL FOUR  
   Amendment and Restatement of the Company’s Articles of Incorporation to eliminate the 69.3% Supermajority Voting Requirements in Article X and Article XI  
    

 

 

 

The Board recommends a vote FOR this proposal.

 

•  Elimination of the 69.3% supermajority voting requirement to enter into certain business combinations with interested shareholders in Article X of the Articles of Incorporation.

 

•  Elimination of the 69.3% supermajority voting requirement to amend Articles X and XI of the Articles of Incorporation.

 

u  See page 64 for further information

 

 

 

    
   PROPOSAL FIVE  
   Shareholder Proposal on Simple Majority Vote  
    

 

 

 

The Board recommends a vote AGAINST this proposal.

 

•  Given the management proposal on the same topic to eliminate the 69.3% supermajority voting requirements in the Company’s Articles of Incorporation, this proposal is unnecessary and confusing.

 

 
   

u  See pages 65-66 for further information

 

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   iii


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PROXY SUMMARY

 

    
   PROPOSAL SIX  
   Shareholder Proposal Regarding a Director Resignation By-law Amendment  
    

 

 

 

The Board recommends a vote AGAINST this proposal.

 

•  The Company’s existing By-laws effectively satisfy the goals of the shareholder proposal while preserving the flexibility of the Board to exercise its independent judgment on a case-by-case basis in the best interest of all shareholders.

 

 
   

u  See pages 67-68 for further information

 

 

EXECUTIVE COMPENSATION HIGHLIGHTS

Our executive compensation program is designed to reward executives for producing sustainable growth and improving shareholder returns consistent with our strategic plan and to align compensation with the long-term interests of our shareholders. In accordance with this pay for performance philosophy, PulteGroup compensates its named executive officers using a mix of cash and equity compensation elements with an emphasis on short-term and long-term performance:

 

Element

   Description    Further
Information
(pages)
     

BASE SALARY

   Provides base pay levels that are competitive with market practices to attract and retain top executive talent.    33
     

ANNUAL INCENTIVE

  

Provides annual incentive opportunities competitive with market practices to attract, motivate and retain top executive talent.

 

Rewards executives for annual performance results relative to pre-established goals deemed critical to the success of the Company and its strategy and for year-over-year growth in pre-tax income.

 

Focuses on key annual results that we believe will position the Company for success over time, in keeping with the interests of shareholders.

 

Retention of talent over performance / vesting period

   34
     

LONG-TERM INCENTIVE PROGRAM

  

Provides equity incentives competitive with market practices in order to attract, motivate and retain top executive talent.

 

Focuses executives on long-term performance of the Company.

 

Directly aligns interests of executives with those of our shareholders.

 

Retention of talent over performance / vesting period.

 

Beginning in 2024, all performance metrics are based on relative performance to peer group

   36
     

RESTRICTED SHARE UNITS

  

Provides equity incentives competitive with market practices in order to attract, motivate and retain top executive talent.

 

Focuses executives on long-term performance of the Company.

 

Directly aligns interests of executives with those of our shareholders.

 

Retention of talent over performance / vesting period.

   38

PulteGroup is also committed to having strong governance standards with respect to our executive compensation program, policies and practices. Consistent with this focus, we maintain the following policies and practices that we believe demonstrate our commitment to executive compensation best practices.

 

iv   PULTEGROUP, INC. | 2024 PROXY STATEMENT  


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PROXY SUMMARY

 

 

WHAT WE DO

      

 

WHAT WE DO NOT DO

 

LOGO

Annual say-on-pay vote

 

LOGO

Shareholder engagement

 

LOGO

Compensation and Management Development Committee comprised entirely of independent directors

 

LOGO

Independent outside compensation consultant

 

LOGO

Pay for performance—CEO pay approximately 90% at-risk

 

LOGO

Multi-year vesting schedule for equity awards

 

LOGO

Meaningful share ownership guidelines

 

LOGO

Clawback policies for both financial restatements and executive misconduct

 

LOGO

Market comparison of executive compensation against a relevant peer group

 

LOGO

Primarily use different metrics for short-term and long-term incentive programs

LOGO

Prohibition on hedging and pledging Company securities

 

LOGO

No dividends or dividend equivalents paid on unearned performance-based equity awards

 

LOGO

No automatic single-trigger vesting of equity awards upon a change-in-control

 

LOGO

No change-in-control tax gross-ups for named executive officers

 

LOGO

No excessive perquisites

 

LOGO

No service-based defined benefit pension plan

 

LOGO

Plan prohibits re-pricing of underwater stock options

 

LOGO

Plan prohibits granting discounted stock options

 

LOGO

No fixed term employment agreements

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   v


Table of Contents

 

TABLE OF CONTENTS

 

Letter from Thomas Folliard

     i  

Notice of 2024 Annual Meeting of Shareholders

     i  

Proxy Summary

     i  

Proxy Statement

     1  

Board of Directors Information

     2  

Proposal 1: Election of Directors

     5  

Committees of the Board of Directors

     12  

Corporate Governance

     16  

Corporate Governance Highlights

     16  

Governance Guidelines; Code of Ethical Business Conduct; Code of Ethics; Prohibition on Hedging

     16  

Board Leadership

     16  

Board Role in Risk Oversight

     17  

Board Assessments

     18  

Board Oversight of Director Time Commitments

     19  

Available Information about PulteGroup

     19  

Director Nomination Recommendations

     20  

2023 Director Compensation

     21  

Compensation Discussion and Analysis

     23  

Executive Summary

     23  

Establishing and Evaluating Executive Compensation

     29  

How We Make Executive Compensation Decisions

     30  

Executive Compensation Program Elements

     32  

2024 Compensation Decisions

     41  

Compensation and Management Development Committee Report

     42  

2023 Executive Compensation

     43  

2023 Summary Compensation Table

     43  

2023 Grants of Plan-Based Awards Table

     44  

2023 Outstanding Equity Awards at Fiscal Year-End Table

     46  

2023 Option Exercises and Stock Vested Table

     47  

2023 Non-Qualified Deferred Compensation Table

     47  

Potential Payments Upon Termination or Change-In-Control

     48  

Risk Management and Compensation

     51  

Pay Ratio Disclosure

     52  

Pay Versus Performance

     53  

Equity Compensation Plan Information

     57  

Certain Relationships and Related Transactions

     58  

Report of the Audit Committee

     59  

Other Audit Matters

     60  

Proposal 2: Ratification of Appointment of Ernst & Young LLP as the Independent Registered Public Accountant for 2024

     61  

Proposal 3: Say-On-Pay: Advisory Vote to Approve Executive Compensation

     62  

Proposal 4: Amendment and Restatement of the Company’s Articles of Incorporation to Eliminate the 69.3% Supermajority Voting Requirements in Article X and Article XI

     64  

Proposal 5: Shareholder Proposal on Simple Majority Vote

     65  

Proposal 6: Shareholder Proposal Regarding a Director Resignation By-Law Amendment

     67  

Beneficial Security Ownership

     69  

Other Matters

     71  

Questions and Answers About the Proxy Materials and the Annual Meeting

     73  

Appendix A – Proposed Amendments to Be Reflected in the Amended and Restated Articles of Incorporation

     1  

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   1


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PROXY STATEMENT

 

The board of directors (the “Board” or “Board of Directors”) of PulteGroup, Inc. (“PulteGroup,” the “Company,” “we” or “our”) is soliciting proxies on behalf of the Company to be used at the annual meeting of shareholders (the “annual meeting”) to be held on Monday, May 6, 2024, at 1:00 P.M. Eastern Time, via the internet at: www.virtualshareholdermeeting.com/PHM2024. The annual meeting will be held in a virtual meeting format only, and you will not be able to attend the annual meeting in person. See pages 73-76 for additional information on attending the annual meeting. In accordance with rules adopted by the Securities and Exchange Commission (the “SEC”), the Company is making this Proxy Statement and the Company’s Annual Report on Form 10-K (“Annual Report”) available to our shareholders electronically via the internet. In addition, the Company is using the SEC’s Notice and Access Rules to provide shareholders with more options for receipt of these materials. Accordingly, on or about March 22, 2024, the Company will be mailing a Notice of Internet Availability of Proxy Materials and Notice of Annual Meeting (the “Notice”) to our shareholders containing instructions on how to access this Proxy Statement and the Company’s Annual Report on the internet, how to vote online or by telephone, and how to receive paper copies of the documents and a proxy card.

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   1


Table of Contents

 

BOARD OF DIRECTORS INFORMATION

 

Board of Directors Qualifications and Attributes

The Board annually reviews the skills and experiences that it believes should be represented on the Board. As a result of this ongoing review, the Board developed the following matrix, which sets forth the collective experiences and qualifications of the directors that the Board believes are critical in order to continue to drive effective oversight of the Company:

 

Name

 

Public

Company

Leadership

 

Public

Company

Board

Experience

 

Real

Estate and

Housing

 

Financial

Expertise

 

Consumer

Markets

Experience

 

Corporate

Governance

 

Human

Capital

 

Strategic

Risk

Management

KRISTEN ACTIS-GRANDE

  LOGO           LOGO           LOGO   LOGO

BRIAN P. ANDERSON

  LOGO   LOGO       LOGO       LOGO       LOGO

BRYCE BLAIR

  LOGO   LOGO   LOGO           LOGO   LOGO    

THOMAS J. FOLLIARD

  LOGO   LOGO           LOGO   LOGO   LOGO    

CHERYL W. GRISÉ

  LOGO   LOGO               LOGO   LOGO   LOGO

ANDRÉ J. HAWAUX

  LOGO   LOGO       LOGO   LOGO           LOGO

J. PHILLIP HOLLOMAN

  LOGO   LOGO           LOGO       LOGO   LOGO

RYAN R. MARSHALL

  LOGO   LOGO   LOGO       LOGO       LOGO    

JOHN R. PESHKIN

  LOGO   LOGO   LOGO   LOGO   LOGO            

SCOTT POWERS

  LOGO   LOGO       LOGO       LOGO   LOGO    

LILA SNYDER

  LOGO               LOGO       LOGO   LOGO

In addition to these competencies and experiences, the Board also believes that integrity, business judgment, leadership skills, dedication and collaboration are personal attributes that are vital to the Board’s ability to effectively oversee the Company and act in the best interests of the Company’s shareholders. More detail regarding the Company’s individual director nominees is provided below. In addition to these personal characteristics and qualifications, PulteGroup highly values the collective experience and qualifications of the directors. PulteGroup believes that the diverse set of collective experiences, viewpoints, and perspectives of its directors results in a Board with the commitment and energy to advance the interests of PulteGroup’s shareholders.

 

 

LOGO

Commitment to Diversity

In March 2018, the Nominating and Governance Committee amended its charter to express the Nominating and Governance Committee’s commitment to the inclusion of diverse groups (including, where appropriate, diversity of age, gender, race, ethnicity and professional experience), knowledge, and viewpoints in its selection of Board nominees. When adding new Board members or filling vacancies, the Nominating and Governance Committee will conduct its search consistent with its amended charter and our Corporate Governance Guidelines.

Consistent with this charter amendment, all searches conducted since March 2018, including the search that resulted in the nomination of Ms. Actis-Grande, have included a diverse pool of candidates with the objective of further enhancing the collective experiences and qualifications

 

 

2   PULTEGROUP, INC. | 2024 PROXY STATEMENT  


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BOARD OF DIRECTORS INFORMATION

 

of the Board. This has served to enhance the diversity, including the gender and racial/ethnic diversity, of our Board, and the Board remains committed to continue to work to enhance the diversity of the Board.

The Board also continues to maintain policies which help to enhance diversity in the context of its Board refreshment efforts. For example, our Corporate Governance Guidelines provide that no director shall stand for election after the age of 75. This policy promotes refreshment of the Board, providing more vacancies and therefore more opportunities to enhance the diversity, including the gender and racial/ethnic diversity, of our Board.

Independence

Under the Company’s Corporate Governance Guidelines, which are available to shareholders at https://www.pultegroupinc.com/investor- relations/corporate-governance/governance-documents/default.aspx, a substantial majority of the members of our Board must be independent. The Company has established director qualification standards to assist the Nominating and Governance Committee in determining director independence, which either meet or exceed the independence requirements of the NYSE corporate governance listing standards. The Board will consider all relevant facts and circumstances in making an independence determination. To be considered “independent”, the Board must affirmatively determine that the director has no material relationship with the Company, directly or as an officer, shareholder or partner of an organization that has a relationship with the Company, and that the director is otherwise independent under NYSE listing standards. In each case, the Board shall broadly consider all relevant facts and circumstances and shall apply the standards set forth below. A director will be determined to be independent if (in addition to having no material relationship with the Company, director or as an officer, shareholder or partner of an organization that has a relationship with the Company, and satisfying the independence requirements under the NYSE listing standards) the director:

 

LOGO

has not been an employee of the Company for at least three years;

 

LOGO

has not, during the last three years, been employed as an executive officer by a company for which an executive officer of the Company concurrently served as a member of such company’s compensation committee;

 

LOGO

has no immediate family members (i.e., spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than employees) who shares the director’s home) who did not satisfy the foregoing criteria during the last three years; provided, however, that such director’s immediate family member may have served as an employee but not as an executive officer of the Company during such three-year period so long as such immediate family member shall not have received, during any twelve-month period within such three-year period, more than $120,000 in direct compensation from the Company for such employment;

 

LOGO

is not a current partner or employee of the Company’s internal or external audit firm, and the director was not within the past three years a partner or employee of such a firm who personally worked on the Company’s internal or external audit within that time;

 

LOGO

has no immediate family member who (i) is a current partner of a firm that is the Company’s internal or external auditor, (ii) is a current employee of such a firm and personally works on the Company’s internal or external audit or (iii) was within the past three years a partner or employee of such a firm and personally worked on the Company’s audit within that time;

 

LOGO

has not received, and has no immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company (other than in his or her capacity as a member of the Board);

 

LOGO

is not a current employee, and has no immediate family member who is a current executive officer, of a company that made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues;

 

LOGO

does not serve, and has no immediate family member who has served, during the last three years as an executive officer or general partner of an entity that has received an investment from the Company or any of its subsidiaries, unless such investment is less than the greater of $1 million or 2% of such entity’s total invested capital in any of the last three years; and

 

LOGO

has not been, and has no immediate family member who has been, an executive officer of a charitable or educational organization for which the Company contributed more than the greater of $1 million or 2% of such charitable organization’s consolidated gross revenues, in any of the last three years.

In addition, Audit Committee members may not have any direct or indirect financial relationship whatsoever with the Company other than as directors.

Furthermore, in affirmatively determining the independence of any director who will serve on the Compensation and Management Development Committee, the Board will consider all factors specifically relevant to determining whether a director has a relationship to the Company which is material to that director’s ability to be independent from management in connection with the duties of a member of the Compensation and Management Development Committee, including, but not limited to, (i) the source of compensation of such director,

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   3


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BOARD OF DIRECTORS INFORMATION

 

including any consulting, advisory or other compensatory fee paid by the Company to such director and (ii) whether such director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.

The Board considered all relevant facts and circumstances in assessing director independence. In connection with this assessment, the Board affirmatively determined that Kristen Actis-Grande, Brian P. Anderson, Bryce Blair, Thomas J. Folliard, Cheryl W. Grisé, André J. Hawaux, J. Phillip Holloman, John R. Peshkin, Scott F. Powers, and Lila Snyder are independent in accordance with the Company’s Corporate Governance Guidelines. The Board further determined that Ryan R. Marshall, who is a current PulteGroup employee, is not independent within the meaning of the Company’s categorical standards and the NYSE listing standards.

 

4   PULTEGROUP, INC. | 2024 PROXY STATEMENT  


Table of Contents

 

PROPOSAL 1 - ELECTION OF DIRECTORS

 

 

 

LOGO

 

The Board recommends a vote FOR each of the director nominees named in this Proxy Statement.

 

•  Slate of directors with broad and diverse leadership experience

 

•  Significant experience in relevant industries (including real estate and consumer markets) and public company leadership experience, among other key competencies

 

•  Ongoing refreshment and succession process of Board composition

 

•  Proactive shareholder engagement

       

The Restated Articles of Incorporation, as amended, of the Company (the “Articles of Incorporation”), require that we have at least three, but no more than 15, directors. The exact number of directors is set by the Board and is currently ten. All directors will be elected on an annual basis for one-year terms. The ten directors comprising the Board, all of whose terms are expiring at the annual meeting, are Brian P. Anderson, Bryce Blair, Thomas J. Folliard, Cheryl W. Grisé, André J. Hawaux, J. Phillip Holloman, Ryan R. Marshall, John R. Peshkin, Scott F. Powers, and Lila Snyder. In addition, Kristen Actis-Grande is standing for election at the Annual Meeting. The source of Ms. Actis-Grande’s recommendation to serve as a director of the Company was a search led by our Nominating and Governance Committee and conducted by a national third-party search firm, which was followed by a collective determination by our Board to nominate Ms. Actis-Grande. The Amended and Restated By-laws of the Company (the “By-laws”) provide that a nominee for director at the annual meeting shall be elected by the affirmative vote of a majority of the votes cast with respect to that director’s election. A majority of votes cast means that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director’s election (with “abstentions” and “broker non-votes” not counted as a vote cast either “for” or “against” that director’s election). If a nominee for director, who is an incumbent director, is not elected, the director shall promptly tender his or her resignation to the Board of Directors. The Nominating and Governance Committee will make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board of Directors shall act on the resignation, taking into account the committee’s recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days following certification of the election results. The director who tenders his or her resignation will not participate in the recommendation of the committee or the decision of the Board of Directors with respect to his or her resignation.

 

The eleven persons listed below are the nominees to serve a one-year term expiring at the Company’s 2025 annual meeting of shareholders, and each has agreed to serve the one-year term for which he or she has been nominated, if elected. Each director will hold office until his or her successor is elected and qualified or until the director’s earlier death, resignation, retirement, disqualification or removal. Please see below for a description of the occupations and recent business experience of all director nominees. In addition, the specific experience, qualifications, attributes, or skills that led the Nominating and Governance Committee to the conclusion that each of the director nominees should serve as a director of the Company are included in the descriptions below.

 

BOARD NOMINEE EXPERIENCE AND SKILLS

 

LOGO

 

Nominees to Serve a One-Year Term Expiring at the 2025 Annual Meeting of Shareholders

  u

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   5


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PROPOSAL 1 - ELECTION OF DIRECTORS

 

Kristen Actis-Grande

       

LOGO

 

Nominee for Election

 

Age: 43

 

Experience & Skills:

 

 

LOGOLOGOLOGOLOGO

    

Biography

Ms. Actis-Grande has significant financial experience as a chief financial officer of a large public company and through serving in increasing roles of responsibility within the finance function of a large public multi-national manufacturer of products used in residential, commercial and industrial applications. Ms. Actis-Grande has extensive knowledge of the preparation and review of complex financial reporting statements as well as experience in internal controls, risk management and risk assessment. Her experience as a senior executive for one of the largest manufacturers of heating and cooling systems for residential applications gives her unique insights into the homebuilding industry and the broader economy.

 

Relevant Business Experience:

Since 2020 Ms. Actis-Grande has served as Executive Vice President and Chief Financial Officer of MSC Industrial Direct Co., Inc., a leading North American distributor of a broad range of metalworking and maintenance repair and operations (MRO) products and services. At MSC, in addition to the leadership of all finance related functions, Ms. Actis-Grande is also responsible for corporate strategy, mergers and acquisitions, and investor relations. Prior to joining MSC, Ms. Actis-Grande served in various finance-related roles for seventeen years at Ingersoll Rand Inc., a provider of flow creation and industrial products, including as Chief Financial Officer for their Compression Technologies and Services Division from 2018 to 2020 and Chief Financial Officer for their Residential HVAC and Supply division from 2016 to 2018 which included the Trane and American Standard brands. Ms. Actis-Grande is an audit committee financial expert for purposes of the SEC’s rules.

 

       

Brian P. Anderson

       

LOGO

 

Director Since: 2005

 

Age: 73

 

Committees:

• Audit

• Finance and Investment

 

Experience & Skills:

 

 

LOGOLOGOLOGOLOGOLOGO

    

Biography

Mr. Anderson has significant experience as a chief financial officer of two large multinational companies and as a director of several large public companies. In addition, he has held finance positions including chief financial officer, corporate controller and vice president of audit and was an audit partner at an international public accounting firm. Mr. Anderson has significant experience in the preparation and review of complex financial reporting statements as well as experience in risk management and risk assessment. Mr. Anderson also serves on the board of directors of Stericycle, Inc. and previously served on the board of directors of W.W. Grainger, Inc., among other public companies.

 

Relevant Business Experience:

Mr. Anderson is the former Executive Vice President of Finance and Chief Financial Officer of OfficeMax Incorporated, a distributor of business-to-business and retail office products. Prior to assuming this position in 2004, Mr. Anderson was Senior Vice President and Chief Financial Officer of Baxter International Inc., a global diversified medical products and services company, a position he assumed in 1998. Mr. Anderson has extensive experience sitting on and chairing the audit committees of public companies. Mr. Anderson also brings to the Board meaningful experience based on his service as the former Lead Director of W.W. Grainger, Inc. and former Chairman of A.M. Castle & Co., as well as his service as a Governing Board Member at the Center for Audit Quality. Mr. Anderson is an audit committee financial expert for purposes of the SEC’s rules.

 

Public Company Board Experience:

 

•  W.W. Grainger, Inc. (1999 - 2022)

•  James Hardie Industries plc (2006 - 2020)

 

  

•  Stericycle, Inc. (2017 - present)

•  A.M. Castle & Co. (2005 - 2016)

 

6   PULTEGROUP, INC. | 2024 PROXY STATEMENT  


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PROPOSAL 1 - ELECTION OF DIRECTORS

 

Bryce Blair

    
       

LOGO

 

Director Since: 2011

 

Age: 65

 

Committees:

• Audit

• Nominating and Governance Committee (Chair)

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Blair has substantial experience in real estate development and investment, including having spent over ten years as Chairman and Chief Executive Officer of a public real estate investment trust. In addition, in his former role as chief executive officer of AvalonBay Communities, Inc., Mr. Blair was responsible for day-to-day operations, and he was regularly involved in the preparation and review of complex financial reporting statements. Mr. Blair also brings to the Board meaningful experience based on his service on the boards of directors of AvalonBay Communities, Inc., Regency Centers Corp., and Invitation Homes, Inc., where he served as Non-Executive Chairman of the board.

 

Relevant Business Experience:

Mr. Blair is the Manager of Harborview Associates, LLC, a company that holds and manages investments in various real estate properties. Mr. Blair is also the former Chairman of the Board and the former Chief Executive Officer of AvalonBay Communities, Inc. In addition, Mr. Blair served in a number of senior leadership positions with AvalonBay Communities, Inc., including Chief Executive Officer from February 2001 through December 2011, President from September 2000 through February 2005 and Chief Operating Officer from February 1999 to February 2001. He is a member of the Advisory Board of Navitas Capital, a venture capital firm focused on technology for the real estate sector. Mr. Blair also serves on the Advisory Board of the Boston College Center for Real Estate and Urban Action. Mr. Blair is also a past member of the National Association of Real Estate Investment Trusts, where he served as Chairman and was on the Executive Committee and the Board of Governors, and the Urban Land Institute, where he is past Chairman of the Multifamily Council and is a past Trustee.

 

Public Company Board Experience:

    

•  Invitation Homes Inc. (2017 - 2021)

•  Regency Centers Corp. (2014 - present)

 

 

 

  

•  AvalonBay Communities, Inc. (2002 - 2013)

 

Thomas J. Folliard

    
       

LOGO

 

Director Since: 2012

 

Age: 59

 

Committees:

None (Mr. Folliard is the Non-Executive Chairman)

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Folliard has extensive experience as Chief Executive Officer of a large, consumer-focused public company. In connection with that role, Mr. Folliard has significant experience in operational matters and business strategy, which adds a valuable perspective for the Board’s decision-making. Mr. Folliard also brings to the Board of Directors meaningful experience based on his service on the board of directors of CarMax, Inc., currently as Non-Executive Chairman, and as a member of the Audit Committee of both Baron Investment Funds and Baron Select Funds.

 

Relevant Business Experience:

Mr. Folliard currently serves as a Trustee to Baron Investment Funds Trust and Baron Select Funds and has been in such positions since August 2017. Mr. Folliard served as President and Chief Executive Officer of CarMax, Inc., the largest retailer of used autos in the United States, from 2006 until his retirement on August 31, 2016. He continues to serve CarMax as Non-Executive Chairman of the board. He joined CarMax, Inc. in 1993 as the Senior Buyer and became the Director of Purchasing in 1994. Mr. Folliard was promoted to Vice President of Merchandising in 1996, Senior Vice President of Store Operations in 2000 and Executive Vice President of Store Operations in 2001.

 

Public Company Board Experience:

    

•  Baron Investment Funds Trust (2017 - present)

•  Baron Select Funds (2017 - present)

 

  

•  CarMax, Inc. (2006 - present)

 

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   7


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PROPOSAL 1 - ELECTION OF DIRECTORS

 

Cheryl W. Grisé

       

LOGO

 

Director Since: 2008

 

Age: 71

 

Committees:

• Compensation and Management Development

• Nominating and Governance

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Ms. Grisé has significant experience as a director of several large public corporations and as a former executive officer of a public utility holding company. Ms. Grisé’s substantial executive and operational experience, along with earlier experience as general counsel, corporate secretary and chief human resources executive, provide her with a unique perspective on the complex legal, governance, human capital and other issues that affect companies in regulated industries, as well as the effective functioning of the Company’s corporate governance structures. Ms. Grisé also brings to the Board meaningful experience based on her service as Lead Director of MetLife, Inc. and her service on the boards of directors of several other public companies, including ICF International, Inc.

 

Relevant Business Experience:

Ms. Grisé was Executive Vice President of Northeast Utilities (now Eversource Energy), a public utility holding company, from December 2005 until her retirement effective July 2007; Chief Executive Officer of its principal operating subsidiaries from September 2002 to January 2007; President of the Utility Group of Northeast Utilities Service Company from May 2001 to January 2007; and Senior Vice President, Secretary and General Counsel of Northeast Utilities from 1998 to 2001.

 

Public Company Board Experience:

 

•  MetLife, Inc. (2004 - present)

•  ICF International, Inc. (2012 - present)

 

 

  

•  Dollar Tree, Inc. (2022 - present)

•  Pall Corporation (2007 - 2015)

       

 

André J. Hawaux

    
       

LOGO

 

Director Since: 2013

 

Age: 63

 

Committees:

• Audit (Chair)

• Finance and Investment

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Hawaux has significant experience serving as a senior officer of several corporations, including as executive vice president and chief financial officer of a large, consumer-focused public company. In connection with that role, Mr. Hawaux has extensive experience in operational matters and business strategy, which adds a valuable perspective for the Board’s decision-making. In addition, Mr. Hawaux has significant experience in the preparation and review of complex financial reporting statements as well as experience in risk management and risk assessment. Mr. Hawaux also serves on the boards of directors of Lamb Weston Holdings, Inc. where he is a member of the audit and finance committees, and Tractor Supply Company where he is a member of the audit and nominating & governance committees.

 

Relevant Business Experience:

Mr. Hawaux is the Former Executive Vice President, Chief Financial Officer, and Chief Operating Officer of Dick’s Sporting Goods, Inc. Mr. Hawaux joined Dick’s Sporting Goods, Inc., a leading omni-channel sporting goods retailer, in June 2013 as Executive Vice President, Finance Administration and Chief Financial Officer and also served as its Executive Vice President, Chief Operating Officer through August 2017. Mr. Hawaux served as president of the Consumer Foods business of ConAgra Foods, Inc. (now ConAgra Brands Inc.), one of North America’s leading packaged food companies, from 2009 until May 2013. He joined ConAgra as Executive Vice President and Chief Financial Officer in 2006, and prior to ConAgra, he served as general manager of a large U.S. division of PepsiAmericas. Mr. Hawaux also previously served as Chief Financial Officer for Pepsi-Cola North America and Pepsi International’s China business unit. Mr. Hawaux is an audit committee financial expert for purposes of the SEC’s rules.

 

Public Company Board Experience:

    

•  Lamb Weston Holdings, Inc. (2017 - present)

 

 

  

•  Tractor Supply Company (2022 - present)

 

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PROPOSAL 1 - ELECTION OF DIRECTORS

 

J. Phillip Holloman

       

LOGO

 

Director Since: 2020

 

Age: 68

 

Committees:

• Audit

• Finance and Investment

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Holloman brings significant insight to the Board from his career as an executive of Cintas Corporation, including in his position as President and Chief Operating Officer from 2008 to 2018. Mr. Holloman successfully guided Cintas during a challenging economic period and led Cintas’ rebranding exercise, including offering new products and services, as well as its entrance into new markets. Mr. Holloman has extensive knowledge and experience in the areas of process improvement, operations, sales and marketing. He also led his functions’ succession planning, improvement of diversity and inclusion practices, and compensation and benefits strategy. Mr. Holloman’s leadership and operational experience give him a comprehensive understanding of processes, strategy, risk management and how to manage complex business operations. Mr. Holloman has also served on the boards of directors of Rockwell Automation, Inc. and BlackRock Fixed Income.

 

Relevant Business Experience:

Mr. Holloman served as President and Chief Operating Officer of Cintas Corporation, a publicly traded provider of corporate uniforms and related business services, from 2008 until July 2018. He joined Cintas in 1996 and has served in various positions including Vice President – Engineering/Construction from 1996 to 2000, Vice President – Distribution/Production Planning from 2000 to 2003, Executive Champion of Six Sigma Initiatives from 2003 to 2005, and Senior Vice President – Global Supply Chain Management from 2005 until 2008. Mr. Holloman was also recruited to be the Non-Executive Chair at Vestis Corporation as Aramark spun-out its uniform business into a separate public company in 2023.

 

Public Company Board Experience:

 

•  Rockwell Automation (2013 - 2023)

•  Vestis Corporation (2023 - present)

 

 

 

  

•  Blackrock Fixed Income (2021 - present)

 

Ryan R. Marshall

    
       

LOGO

 

Director Since: 2016

 

Age: 49

 

Committees:

• Finance and Investment

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Marshall brings significant insight to the Board from his tenure at PulteGroup, including in his position as President and Chief Executive Officer and his management of many of the Company’s largest operations. Mr. Marshall’s extensive experience at the Company through various financial and operational roles prior to his appointment as the Chief Executive Officer of the Company provides an in-depth understanding of PulteGroup’s operations and complexity and adds a valuable perspective for Board decision-making. Mr. Marshall also serves on the board of directors of Floor & Decor Holdings, Inc. where he sits on the audit committee.

 

Relevant Business Experience:

Mr. Marshall is President and Chief Executive Officer of PulteGroup, Inc. Mr. Marshall has served as the President and Chief Executive Officer of PulteGroup, Inc. since September 8, 2016, and as the President since February 15, 2016. Prior to becoming CEO, Mr. Marshall most recently had the responsibility for the Company’s homebuilding operations and its marketing and strategy departments. Prior to being named President, Mr. Marshall was Executive Vice President of Homebuilding Operations since May 2014. Other previous roles included Area President for the Company’s Southeast Area since November 2012, Area President for Florida, Division President in both South Florida and Orlando and Area Vice President of Finance. In those roles, he has managed various financial and operating functions including financial reporting, land acquisition and strategic market risk and opportunity analysis.

 

Public Company Board Experience:

    

•  Floor & Decor Holdings, Inc. (2020 - present)

 

 

  

 

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PROPOSAL 1 - ELECTION OF DIRECTORS

 

John R. Peshkin

       

LOGO

 

Director Since: 2016

 

Age: 63

 

Committees:

• Audit

• Finance and Investment (Chair)

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Peshkin has significant experience as a founder and managing partner at a leading real estate investment group. In addition, Mr. Peshkin also has significant experience in the real estate and home building industries as a successful senior executive, as an investor and as a board member at two of the nation’s top builders, which brings valuable industry knowledge and insight to the Board. Mr. Peshkin also brings to the Board meaningful experience based on his service on the board of directors of for-profit companies and non-profit institutions.

 

Relevant Business Experience:

Mr. Peshkin is the founder and Managing Partner at Vanguard Land, LLC, a private real estate investment group focused on the acquisition and development of residential and commercial properties throughout Florida since 2008. He was previously the founder and Chief Executive Officer of Starwood Land Ventures, an affiliate of Starwood Capital Group Global, a real estate private equity firm, until 2008. Mr. Peshkin spent 24 years with Taylor Woodrow plc, a national homebuilder, serving as its North American CEO and President from 2000 to 2006. Mr. Peshkin is an audit committee financial expert for purposes of the SEC’s rules.

 

Public Company Board Experience:

 

•  Standard Pacific Corp. (subsequently CalAtlantic Group, Inc., which was then acquired by Lennar Corporation) (2012 - 2015)

 

 

  
       

 

Scott F. Powers

    
       

LOGO

 

Director Since: 2016

 

Age: 64

 

Committees:

• Compensation and Management Development (Chair)

• Nominating and Governance

 

Experience & Skills:

 

LOGOLOGOLOGOLOGOLOGO

 

    

Biography

Mr. Powers has significant experience as a financial services executive executing growth strategies, managing operations and leading efforts in risk and crisis management. Mr. Powers brings additional skills to the Board honed through a career of managing through financial industry change. Mr. Powers also has public company board experience as a current member of the boards of directors of Sun Life Financial, Inc., where he also serves as Non-Executive Chairman of the Board, and Automatic Data Processing, Inc. He was also previously member of the board of directors of Whole Foods Market, Inc.

 

Relevant Business Experience:

Mr. Powers is the Former President and Chief Executive Officer of State Street Global Advisors. Mr. Powers held leadership positions at State Street Corporation, a financial holding company that performs banking services through its subsidiaries, from 2008 to 2015, most recently as Executive Vice President of State Street Corp, President and Chief Executive Officer of State Street Global Advisors. Mr. Powers also served as a member of the State Street Management Committee. In addition, he previously served as President and Chief Executive Officer of Old Mutual USA and Old Mutual Asset Management from 2001 to 2008. He also held executive roles at Mellon Financial Corporation and Boston Company Asset Management.

 

Public Company Board Experience:

    

•  Automatic Data Processing, Inc. (2018 - present)

•  Sun Life Financial, Inc. (2015 - present)

 

 

  

•  Whole Foods Market, Inc. (2017)

 

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PROPOSAL 1 - ELECTION OF DIRECTORS

 

Lila Snyder

       

LOGO

 

Director Since: 2018

 

Age: 51

 

Committees:

• Compensation and Management Development

• Finance and Investment

 

Experience & Skills:

 

LOGOLOGOLOGOLOGO

 

    

Biography

Ms. Snyder has significant experience as a consultant and corporate executive in a wide variety of industries. Ms. Snyder has advised on and led innovation initiatives in the areas of digital technology, media, cybersecurity and communications. Ms. Snyder also brings significant skills to the Board relating to strategy, operations, marketing and sales as a current chief executive officer of a large multi-national private company and as a former C-level executive of a Fortune 1000 Company.

 

Relevant Business Experience:

Ms. Snyder has served as Chief Executive Officer of Bose Corporation, a manufacturer of audio equipment, since August 2020. Prior to her current role, Ms. Snyder held numerous senior leadership positions at Pitney Bowes, Inc., including Executive Vice President and President, Commerce Services from October 2017 to August 2020, President of Global Ecommerce from June 2015 to October 2017, and President of Document Messaging Technologies from November 2013 to June 2015. Prior to joining Pitney Bowes, Inc., Ms. Snyder was a partner at global consultancy firm McKinsey & Company, Inc., where she led McKinsey’s Stamford office and served clients in the technology, media and communications sectors.

 

    

 

 

LOGO

 

 

The Board of Directors recommends that shareholders vote “FOR” the election of these eleven nominees.

 

If a nominee is unable to stand for election, the Board may reduce the number of directors or choose a substitute. If the Board chooses a substitute, shares represented by proxies will be voted for the substitute. If a director retires, resigns, dies or is unable to serve for any reason, the Board may reduce the number of directors or appoint a new director to fill the vacancy. The new director would serve until the Company’s next annual meeting of shareholders.

 

 

 

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COMMITTEES OF THE BOARD OF DIRECTORS

 

The Board has four standing committees to facilitate and assist the Board in the execution of its responsibilities. The committees are currently the Audit Committee, Compensation and Management Development Committee, Nominating and Governance Committee and Finance and Investment Committee. Charters for all of these committees are available on the Company’s website at www.pultegroupinc.com. The table below shows current membership for each of the standing Board committees.

 

Director Name

  Audit Committee  

Compensation and Management

Development Committee

 

Nominating and

Governance Committee

 

Finance and

Investment Committee

       

BRIAN P. ANDERSON

 

     

       

BRYCE BLAIR

 

    C  

       

THOMAS J. FOLLIARD*

       

       

CHERYL W. GRISÉ

   

 

 

       

ANDRÉ J. HAWAUX

  C      

       

J. PHILLIP HOLLOMAN

 

     

       

RYAN R. MARSHALL

       

       

JOHN R. PESHKIN

 

      C

       

SCOTT F. POWERS

    C  

 

       

LILA SNYDER

   

   

C = Chair

 

*

Non-Executive Chairman

Board Committee Refreshment

On at least an annual basis, the Nominating and Governance Committee reviews committee assignments and discusses whether rotation of committee members and committee chairs is appropriate to introduce fresh perspectives and to broaden and diversify the views and experiences represented on the Board’s Committees. The Board continues to actively refresh its committees with changes made on a regular basis. Most recently, effective January 1, 2023, Mr. Folliard was selected to replace Mr. Blair as Non-Executive Chairman and, as such, following his selection as Non-Executive Chairman, no longer served on the Compensation and Management Development Committee or the Nominating and Governance Committee. Effective January 1, 2023, Mr. Blair began serving as the Chair of the Nominating and Governance Committee and on the Audit Committee. Should Ms. Actis-Grande be elected at the Annual Meeting, the Nominating and Governance Committee will recommend Committee assignments for Ms. Actis-Grande and review the current Committee configuration for additional changes.

Audit Committee

The Audit Committee met 8 times in 2023. The Audit Committee represents and assists the Board with the oversight of the integrity of the Company’s financial statements and financial reporting process, the Company’s system of internal accounting and financial controls, the performance of the Company’s internal audit function, the annual independent audit of the Company’s financial statements, the engagement of the independent auditors, the evaluation of the independent auditor’s qualifications, independence and performance, the Company’s compliance with legal and regulatory requirements, and the Company’s management of significant financial and technological risks. The Audit Committee is also responsible for preparing the report of the Audit Committee required to be included in the Company’s annual proxy statement.

The Audit Committee is responsible for selecting (subject to ratification by our shareholders) the independent auditor as well as setting the compensation for and overseeing the work of the independent auditor and approving audit services to be provided by the independent

 

 

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auditor. The Board has determined that each of the members of the Audit Committee is independent within the meaning of the Company’s categorical standards and the applicable NYSE and SEC rules and financially literate as defined by the NYSE rules, and that Brian P. Anderson, André J. Hawaux and John R. Peshkin are audit committee financial experts for purposes of the SEC’s rules.

Compensation and Management Development Committee

The Compensation and Management Development Committee met 6 times in 2023. The Compensation and Management Development Committee is responsible for the review, approval and administration of the compensation and benefit programs for the Chief Executive Officer and the other named executive officers. It also reviews and makes recommendations regarding the Company’s general compensation philosophy and incentive plans and certain other compensation plans; reviews the Company’s leadership development programs and initiatives; discusses performance, leadership development and succession planning for key officers with the Chief Executive Officer, as appropriate; develops and implements policies with respect to the recovery or “clawback” of any excess compensation (including stock options) paid to any of the Company’s executive officers as required by law and in other circumstances deemed to be appropriate by the Compensation and Management Development Committee; and reviews the Company’s strategies and policies related to human capital management, including with respect to matters such as employee engagement and talent development. The Compensation and Management Development Committee has the power to form subcommittees and delegate responsibility to them. The Board has determined that each of the members of the Compensation and Management Development Committee is independent within the meaning of the Company’s categorical standards and the NYSE rules.

Mr. Scott F. Powers is currently the Chair of the Compensation and Management Development Committee. Mr. Powers works with the Company’s Executive Vice President, and Chief People Officer, or other senior leadership in our human resources department to establish meeting agendas and determine whether any members of PulteGroup’s management or outside advisors should attend meetings. The Compensation and Management Development Committee also meets regularly in executive session. At various times during the year at the request of the Compensation and Management Development Committee, Ryan R. Marshall, the President and Chief Executive Officer of the Company; Robert T. O’Shaughnessy, the Executive Vice President and Chief Financial Officer of the Company; and Todd N. Sheldon, the Executive Vice President, General Counsel and Corporate Secretary of the Company, may attend Compensation and Management Development Committee meetings, or portions of Compensation and Management Development Committee meetings, to provide the Compensation and Management Development Committee with information regarding the Company’s operational performance, financial performance or other topics requested by the Compensation and Management Development Committee to assist it in carrying out its responsibilities.

The Chief Executive Officer annually reviews the performance of each member of senior management (other than our Chief Executive Officer’s performance, whose performance is reviewed by the Compensation and Management Development Committee). Recommendations based on these reviews, including salary adjustments, annual bonuses, long-term incentives and equity grants, are presented to the Compensation and Management Development Committee. Recommendations regarding salary adjustments, annual bonuses, long-term incentives and equity grants for our Chief Executive Officer are made by the Compensation and Management Development Committee and approved by the full Board. All decisions for 2023 made with respect to the executives listed in the Summary Compensation Table (other than the Chief Executive Officer) were made after deliberation with Mr. Marshall.

The Compensation and Management Development Committee is also responsible for overseeing the development of the Company’s succession plan for the President and Chief Executive Officer and other key members of senior management, as well as the Company’s leadership development programs.

The Compensation and Management Development Committee receives and reviews materials provided by the Compensation and Management Development Committee’s consultant and the Company’s management. These materials include information that the consultant and management believe will be helpful to the Compensation and Management Development Committee, as well as materials the Compensation and Management Development Committee specifically requests.

The Compensation and Management Development Committee has the authority to engage its own outside compensation consultant and any other advisors it deems necessary. Since May 2019, the Compensation and Management Development Committee has engaged Semler Brossy to act as its independent consultant. Semler Brossy regularly provides the Compensation and Management Development Committee with information regarding market compensation levels, general compensation trends and best practices. The Compensation and Management Development Committee also regularly asks Semler Brossy to opine on the reasonableness of specific pay decisions and actions for the named executive officers, as well as the appropriateness of the design of the Company’s executive compensation programs.

The activities of Semler Brossy are directed by the Compensation and Management Development Committee, although Semler Brossy may communicate with members of management, as appropriate, to gather data and prepare analyses as requested by the Compensation and

 

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Management Development Committee. During 2023, the Compensation and Management Development Committee asked Semler Brossy to review market data and advise the Committee on setting executive compensation and the competitiveness and reasonableness of the Company’s executive compensation program; review and advise the Compensation and Management Development Committee regarding the Company’s pay for performance, equity grant and dilution levels, each as relative to the Company’s peers; review and advise the Compensation and Management Development Committee regarding regulatory, disclosure and other technical matters; and review and advise the Compensation and Management Development Committee regarding the Company’s compensation risk assessment procedures. The Compensation and Management Development Committee also asked Semler Brossy to provide opinions on named executive officer pay decisions.

In 2023, Semler Brossy did not provide any other services to the Company. The Compensation and Management Development Committee assessed the independence of Semler Brossy pursuant to SEC rules and concluded that the work of the compensation consultants for the Compensation and Management Development Committee does not raise any conflict of interest. The Compensation and Management Development Committee has determined that Semler Brossy is independent because it does no work for the Company other than that requested by the Compensation and Management Development Committee. The Chair of the Compensation and Management Development Committee reviews the consultant’s invoices, which are paid by the Company.

The Board has also determined that each of the members of the Compensation and Management Development Committee are

independent within the meaning of the Company’s categorical standards and the NYSE rules.

Nominating and Governance Committee

The Nominating and Governance Committee met 4 times in 2023. The Nominating and Governance Committee establishes criteria for the selection of new members of the Board and makes recommendations to the Board based on qualified identified individuals, including any qualified candidates nominated by shareholders, as described in “Director Nomination Recommendations” below. As noted above, in March 2018, the Nominating and Governance Committee amended its charter to express the Nominating and Governance Committee’s commitment to the inclusion of diverse groups (including, where appropriate, diversity of age, gender, race, ethnicity and professional experience), knowledge and viewpoints in its selection of Board nominees. Since the adoption of this charter amendment, subsequent Board searches have been conducted consistent with this practice and have served to enhance the diversity, including the gender and racial/ethnic diversity, of our Board.

The Nominating and Governance Committee is also responsible for matters related to the governance of the Company and for developing and recommending to the Board the criteria for Board membership, the selection of new Board members, and the assignment of directors to the committees of the Board. The Nominating and Governance Committee assures that a regular evaluation is conducted of the performance, qualifications, and integrity of the Board and the committees of the Board. Please see “Corporate Governance—Board Assessments” for further information regarding the regular evaluations. The Nominating and Governance Committee also reviews and makes recommendations with respect to the compensation of members of the Board.

The Nominating and Governance Committee is also responsible for reviewing the Company’s environmental sustainability, social responsibility and governance policies, practices and disclosures, reviewing the Company’s cultural metrics, and assessing and monitoring the Company’s enterprise risk management initiatives. With respect to our reporting on these matters, the Nominating and Governance Committee oversaw our Company’s process of beginning to report sustainability metrics consistent with the Sustainability Accounting Standards Board for Home Builders along with other disclosures related to our environmental and social initiatives. Sustainability-related metrics and initiatives were included in our CEO’s performance objectives for 2023 and for 2024. With respect to our Company’s culture initiatives, the Nominating and Governance Committee reviews, at least twice annually, key company metrics with regard to workforce diversity, stability, health and safety, as well as our compliance policies relating to employee conduct and anti-harassment.

The Board has determined that each of the members of the Nominating and Governance Committee is independent within the meaning of the Company’s categorical standards and the NYSE rules.

Finance and Investment Committee

The Finance and Investment Committee met 6 times in 2023. The Finance and Investment Committee reviews key aspects of the Company’s policies that relate to the management of the Company’s financial affairs. The Finance and Investment Committee also reviews the Company’s long-term strategic plans and annual budgets, capital commitments budget, certain land acquisition and sale transactions, and the Company’s cash needs and funding plans.

 

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COMMITTEES OF THE BOARD OF DIRECTORS

 

Board Meeting Information

The Board of Directors held a total of 8 meetings in 2023. During 2023, each director attended at least 90% of the aggregate number of meetings of the Board of Directors and of the committees on which such director served that were held during the period that such director served on the Board of Directors or applicable committee.

PulteGroup encourages its directors to attend each of the Company’s annual meeting of shareholders, and all of our directors serving on the date of last year’s annual meeting of shareholders attended that meeting.

Throughout the year, PulteGroup held regularly scheduled executive sessions of its non-management directors without management participation. In addition, in 2024, PulteGroup will hold at least one executive session of its non-management directors without the participation of management. Since January 1, 2023, Mr. Folliard has presided at these executive sessions. Provided that Mr. Folliard is re-elected at the annual meeting, he will continue to preside over the executive sessions as the Non-Executive Chairman (as discussed further below).

 

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CORPORATE GOVERNANCE

 

Corporate Governance Highlights

The Board continues to take steps that we believe improve our corporate governance and position our Company for long-term success, which have included:

 

LOGO

Commitment to Diversity. The Nominating and Governance Committee charter expresses the Nominating and Governance Committee’s commitment to the inclusion of diverse groups (including, where appropriate, diversity of age, gender, race, ethnicity and professional experience), knowledge and viewpoints in its selection of Board nominees. Each addition to our Board since 2018 has been diverse. The new nominee for election at the Annual Meeting is also a diverse candidate.

 

LOGO

Non-Executive Chairman of the Board. Since January 1, 2023, Mr. Folliard has served in the position of Non-Executive Chairman of the Board. The Non-Executive Chairman serves to help (i) ensure that the Board discharges its responsibilities, (ii) ensure that the Board has structures and procedures in place to enable it to function independently of management, (iii) provide leadership at independent directors’ executive sessions and in other work, (iv) promote director dialogue in and out of meetings and (v) ensure the Board clearly understands the respective roles and responsibilities of the Board and management.

 

LOGO

Board Refreshment. Our Corporate Governance Guidelines provide that no director shall stand for election after the age of 75, and five of ten members of our Board have served for eight years or less.

Governance Guidelines; Code of Ethical Business Conduct; Code of Ethics; Prohibition on Hedging

The Board has adopted Corporate Governance Guidelines, which reflect the principles by which PulteGroup operates. The guidelines address an array of governance issues and principles including: director independence, committee independence, management succession, annual Board evaluations, director nominations, director age limitations, the role of the Non-Executive Chairman or Lead Director, and executive sessions of the independent directors. PulteGroup’s Governance Guidelines are available for viewing on our website at www.pultegroupinc.com. The Board also has adopted a Code of Ethical Business Conduct, which applies to all directors and employees and a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Controller and other senior officers. The Code of Ethical Business Conduct and the Code of Ethics are also available on the Company’s website, and the Company intends to include on its website any waivers of its Code of Ethical Business Conduct that relate to executive officers and directors as well as any amendments to, or waivers from, a provision of its Code of Ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K. Among other provisions, our Code of Ethical Business Conduct prohibits all employees and directors from engaging in hedging or monetization transactions such as zero-cost collars or forward-sale contracts.

Board Leadership

Our Corporate Governance Guidelines currently contemplate that the independent directors will annually designate one of the independent directors to serve as Non-Executive Chairman for a one-year term. As noted above, the Board appointed Thomas Folliard as Chairman of the Board, and, provided that Mr. Folliard is re-elected at the annual meeting, as an independent director, he will continue to serve as Non-Executive Chairman.

Mr. Folliard will work with the President and Chief Executive Officer to ensure that the Board discharges its responsibilities, has procedures in place to enable it to function independently of management and clearly understands the respective roles and responsibilities of the Board and management. In addition, the Non-Executive Chairman’s duties have historically included and will continue to include convening and chairing regular executive session meetings of the non-management directors and, as appropriate, providing prompt feedback to the President and Chief Executive Officer; coordinating and developing the agenda for executive sessions of the independent directors; convening meetings of the independent directors if necessary; coordinating feedback to the President and Chief Executive Officer on behalf of the independent directors regarding business issues and management; providing final approval, after consultation with the President and Chief Executive Officer, as to the agendas for meetings of the Board and informational needs associated with those agendas and presentations; performing such other

 

 

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duties as may be necessary for the Board to fulfill its responsibilities or as may be requested by the Board as a whole or by the non-management directors; serving as the designated spokesperson for the Board when it is appropriate for the Board to comment publicly on any matter; and being available for consultation and communication if requested by the Company’s major shareholders. The Board recognizes that no single leadership model is right for all companies at all times, and as appropriate, the Board will continue to review its leadership model to determine the correct leadership structure for the Company.

Board Role in Risk Oversight

The Board’s involvement in risk oversight includes both formal and informal processes and involves the Board and committees of the Board.

On an annual basis, the Nominating and Governance Committee of the Board oversees a formal risk assessment during which the principal operational risks facing PulteGroup and associated responses are evaluated and enterprise risks are reviewed to determine the appropriate allocation of oversight of those risks amongst the Board and its various committees. For instance, the Audit Committee receives materials on a frequent basis to address the identification and status of certain risks to the Company, including: financial risks, regulatory risks, litigation claims and risks, and cybersecurity risks. At meetings of the full Board, these risks are identified to Board members, and the Chair of the Audit Committee reports on the activities of the Audit Committee regarding risk analysis. In addition, two times per year, the Audit Committee receives a report from PulteGroup’s Ethics Committee regarding current hotline activities and associated responses. The other committees of the Board also consider and address certain risks as they perform their respective responsibilities, and such committees report to the full Board from time to time as appropriate, including whenever a matter rises to a material or enterprise level risk. For example, annually, the Compensation and Management Development Committee reviews the potential risks associated with our compensation program.

The Nominating and Governance Committee has been designated to monitor risks related to the Company’s ESG initiatives, and in 2019 the Nominating and Governance Committee began formally reviewing metrics regarding the Company’s culture, including key company metrics with regard to workforce diversity, stability, health and safety, as well as our compliance policies relating to employee conduct and anti-harassment.

In addition to their formal risk assessment activities and oversight, the Board and committees of the Board are also involved in risk oversight on a more informal basis at regular Board and committee meetings. The Board’s efforts include the receipt of regular financial and business updates from senior management, which involve detailed reports on financial and business risks facing PulteGroup when applicable.

Cybersecurity and risks related to our information technology and other computer resources are an important focus of our Board’s risk oversight. Our computer systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches (through cyberattacks from computer hackers and sophisticated organizations), catastrophic events such as fires, tornadoes and hurricanes, usage errors by our employees, or cyber-attacks or errors by third party vendors who have access to our confidential data or that of our customers, vendors or employees. We have established processes and policies for assessing, identifying and managing material risks posed by cybersecurity threats. Our processes and policies are based upon the National Institute of Standards and Technology (NIST) Cybersecurity Framework with our processes focused on: (i) developing organizational understanding to manage cybersecurity risks, (ii) applying safeguards to protect our systems, (iii) detecting the occurrence of a cybersecurity incident, (iv) responding to a cybersecurity incident and (v) recovering from a cybersecurity incident. Where appropriate, these processes and policies are integrated into our overall risk management systems and processes. For instance, all of our employees with network access are required to complete information security and privacy training on an annual basis. We are continuously working to improve our information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to enhance our levels of protection. We have engaged independent consultants and other third-parties to assist us in establishing and improving our policies. We conduct tabletop exercises with outside consultants at least annually to test our processes and policies and use feedback from those exercises to improve our processes. Our senior management and members of the Audit Committee of our Board of Directors participate in those exercises. Our processes and policies include the identification of those third-party relationships which have the greatest potential to expose us to cybersecurity threats and, upon identification, we conduct additional due diligence as a part of establishing those relationships. We also maintain insurance coverage for cybersecurity insurance as part of our overall insurance portfolio. Our Audit Committee receives materials at least quarterly to address the identification and status of information technology cybersecurity risks, and management, including our Chief Information Officers (CIO) and Chief Information Security Officer (CISO), provides quarterly updates to our Audit Committee and an annual update to our Board with respect to cybersecurity matters. Pursuant to our Cybersecurity Incident Response Plan (CIRP), when a cybersecurity event has been identified through our detection processes, it is assessed in order to determine whether the event is a cybersecurity incident. Our CIRP designates the primary manager of a cybersecurity incident, describes the parties who should be informed about the incident and outlines the processes for containment, eradication, recovery and resolution of the incident. Depending on the severity and impact of a cybersecurity threat, members of our senior management team and Board are notified of an incident and kept informed of the mitigation and remediation of the incident.

 

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CORPORATE GOVERNANCE

 

ENTERPRISE RISK AND BOARD OF DIRECTORS’ OVERSIGHT

 

 

LOGO

Board Assessments

Each year, the Nominating and Governance Committee leads a confidential assessment process under which our Board and its committees conduct self-assessments. Additionally, every other year, the Nominating and Governance Committee leads a confidential assessment process under which each individual director completes a formal self-assessment and an assessment of each other director. The following is a summary of the assessment process:

 

LOGO

Board assessments—Each year, the Board and the Nominating and Governance Committee review and discuss the results of the Board’s self-assessment. The discussion includes an assessment of the Board’s compliance with the principles in the Corporate Governance Guidelines and an identification of areas in which the Board could improve its performance.

 

LOGO

Committee assessments—Each year, each committee of the Board and the Nominating and Governance Committee review and discuss the results of the respective committee’s self-assessment. Each committee discussion includes an assessment of the respective committee’s compliance with the principles in the Corporate Governance Guidelines and the committee’s charter, as well as an identification of areas in which the committee could improve its performance.

 

LOGO

Director assessments—Every other year, each director completes a self-assessment and an assessment of each other director, and that feedback is shared in one-on-one discussions with each director. The Chair of the Nominating and Governance Committee conducts these assessments, except for the Chair’s own assessment, which is currently conducted by the Non-Executive Chairman. These assessments are designed to enhance each director’s participation and role as a member of the Board, as well as to assess the competencies and skills each individual director is expected to bring to the Board. While formal self-assessments are conducted every other year, the Chair and the Nominating and Governance Committee regularly solicit feedback from the other directors and take action as necessary to ensure a well-functioning Board.

 

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In 2023, the Board, committee and individual director assessments were completed in November. Our Board believes that one of the best measures of the effectiveness of an assessment process is how a Board uses the information and whether it takes action on the results. Our Board’s assessment process and annual review of our experience matrix have been the key component in our proactive Board refreshment process resulting in five new Board members over the last eight years and another new nominee for election at the Annual Meeting. The Board has also used the assessment process to assess the additional skills and experiences that would be useful to add to our Board. Our Board intends to continue to review the matrix for appropriate revisions at least annually.

Board Oversight of Director Time Commitments

As part of our individual director assessment process, our Board not only assesses each member’s attendance record, but also his or her engagement on the Board during and between meetings. As noted above, our Board members each attended at least 90% of their scheduled meetings in 2023. In addition to this strong record of commitment and engagement and a rigorous assessment process, our Corporate Governance Guidelines also provide for specified limitations on director time commitments. Our Corporate Governance Guidelines provide that a director may not serve on more than four total boards of directors of public companies, including the Company’s Board, a director who is an executive chair (or the equivalent) at another public company board of directors may not serve on more than three boards of directors of public companies, including the Company’s Board, a director who is a chief executive officer (or the equivalent) at another public company may not serve on more than two boards of directors of public companies, including the Company’s Board, and any management director may not serve on more than two boards of directors of public companies, including the Company’s Board. Our Corporate Governance Guidelines also provide that directors are expected to advise the Chairman of the Board and the Chairman of the Nominating and Governance Committee before accepting any other public company directorship or any assignment to the audit committee or compensation committee of the board of directors of any public company. Furthermore, our Nominating and Governance Committee also annually assesses a director candidate’s time commitments on other public company boards when making nomination recommendations. Currently all of our director nominees are compliant with these guidelines.

Available Information about PulteGroup

The following information is available on PulteGroup’s website at www.pultegroupinc.com and in print for any shareholder upon written request to our Corporate Secretary:

 

LOGO

Previously filed SEC current reports, quarterly reports, annual reports and reports under Section 16(a) of the Exchange Act

 

LOGO

Audit Committee Charter

 

LOGO

Compensation and Management Development Committee Charter

 

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Nominating and Governance Committee Charter

 

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Finance and Investment Committee Charter

 

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Code of Ethics (for Covered Senior Officers)

 

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Code of Ethical Business Conduct

 

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Corporate Governance Guidelines

 

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By-laws

 

  PULTEGROUP, INC. | 2024 PROXY STATEMENT   19


Table of Contents

 

DIRECTOR NOMINATION RECOMMENDATIONS

 

The Nominating and Governance Committee does not have a single method for identifying director candidates but will consider candidates suggested by a wide range of sources, including candidates recommended by shareholders. The Nominating and Governance Committee reviews the qualifications of various persons to determine whether they might make good candidates for consideration for membership on the Board. The Nominating and Governance Committee will review all proposed nominees, including those proposed by shareholders, in accordance with its charter and PulteGroup’s Corporate Governance Guidelines. The Nominating and Governance Committee considers the experience and skills for potential candidates adopted by the Board and summarized in the matrix on page 2. In addition, the Nominating and Governance Committee will review the person’s judgment, experience, qualifications, independence, understanding of PulteGroup’s business or other related industries and such other factors as the Nominating and Governance Committee determines are relevant in light of the needs of the Board and PulteGroup.

The Board also believes that diversity is an important goal and looks for potential candidates who will help ensure that the Board has the benefit of a wide range of skills and points of view. As noted above, the Nominating and Governance Committee charter expresses the Nominating and Governance Committee’s commitment to the inclusion of diverse groups (including, where appropriate, diversity of age, gender, race, ethnicity and professional experience), knowledge and viewpoints in its selection of Board nominees. Since the adoption of this charter amendment, subsequent Board searches have been conducted consistent with this practice and have served to enhance the diversity, including the gender and racial/ethnic diversity, of our Board.

The Nominating and Governance Committee will select qualified candidates and review its recommendations with the Board, which will decide whether to invite the candidate to be a nominee for election to the Board.

You may recommend a person to be nominated for director by submitting a written proposal by certified mail, return receipt requested, or by recognized overnight courier, to Todd N. Sheldon, Corporate Secretary, PulteGroup, Inc., 3350 Peachtree Road Northeast, Suite 1500, Atlanta, Georgia 30326. Shareholders wishing to directly nominate a candidate for election as a director at next year’s annual meeting of shareholders must deliver written notice to PulteGroup at the above address not less than 90 days nor more than 120 days prior to the anniversary of the prior year’s annual meeting of shareholders (unless the annual meeting is convened more than thirty days before or more than 60 days after such anniversary date, in which case notice must be received no more than 120 days prior to the date of such annual meeting nor less than the later of (i) 90 days prior to such annual meeting and (ii) 10 days after the earlier of (A) the day on which notice of the date of the meeting was mailed or otherwise provided by the Company or (B) the day on which public disclosure of the meeting date was made), and the required notice must include the information and documents set forth in the By-laws.

In addition, the By-laws permit proxy access. The proxy access By-law provision permits a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common shares continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the board, whichever is greater, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the Company’s By-laws. Shareholders wishing to directly nominate a candidate for election as a director at next year’s annual meeting of shareholders and have such nomination included in the Company’s proxy materials must deliver written notice to PulteGroup at the above address not later than 120 days nor more than 150 days in advance of the date the Company’s proxy statement was released to security holders for the annual meeting (unless the date of such meeting has been changed by more than 30 days from the date contemplated at this time), and the required notice must include the information and documents set forth in the By-laws.

 

 

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2023 DIRECTOR COMPENSATION

 

The table below shows compensation for the Company’s non-employee directors for the fiscal year ended December 31, 2023.

 

    

Fees Earned

or Paid

in Cash (1)

  

Share

Awards (2)(3)

  

Nonqualified

Deferred

Compensation

Earnings

  

All Other

Compensation

   Total

                        

BRIAN P. ANDERSON

     $ 95,000      $ 180,006      $      $      $ 275,006

                        

BRYCE BLAIR

     $ 120,000      $ 180,006      $      $      $ 300,006

                        

THOMAS FOLLIARD

     $ 170,000      $ 180,006      $      $      $ 350,006

                        

CHERYL W. GRISÉ

     $ 95,000      $ 180,006      $      $      $ 275,006

                        

ANDRE HAWAUX

     $ 125,000      $ 180,006      $      $      $ 305,006

                        

J. PHILLIP HOLLOMAN

     $ 95,000      $ 180,006      $ 1,049      $      $ 276,055

                        

JOHN R. PESHKIN

     $ 120,000      $ 180,006      $ 2,949      $      $ 302,955

                        

SCOTT F. POWERS

     $ 120,000      $ 180,006      $ 640      $      $ 300,646

                        

LILA SNYDER

     $ 95,000      $ 180,006      $      $      $ 275,006

 

(1)

The amounts in this column represent the fees earned or paid in cash for services as a director, including annual retainer, committee chairmanship and Non-Executive Chairman fees.

 

(2)

The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). Assumptions used in the calculation of these amounts are included in Note 7 to the Company’s audited financial statements included in our Annual Report for the fiscal year ended December 31, 2023. On May 3, 2023, the non-employee directors received their annual equity grant of 2,703 shares, which represents $180,000 divided by the average of the high and low share price on the date of grant. The amount reported in this column for Mr. Peshkin represents the value of share units deferred under the PulteGroup, Inc. Deferred Compensation Plan for Non-Employee Directors. The share units consist of fully vested deferred share units that are settled in common shares and subject to a deferral election consistent with Internal Revenue Code Section 409A.

 

(3)

As of December 31, 2023, each non-employee director had the number of deferred share units set forth below and did not hold any other equity awards as of December 31, 2023.

 

Director

  

Deferred

Share Units

 

  

BRIAN P. ANDERSON

      

  

BRYCE BLAIR

      

  

THOMAS FOLLIARD

     26,863  

  

CHERYL W. GRISÉ

     102,243  

  

ANDRE HAWAUX

      

  

J. PHILLIP HOLLOMAN

     6,005  

  

JOHN R. PESHKIN

     29,566  

  

SCOTT F. POWERS

     8,183  

  

LILA SNYDER

     12,725  

 

 

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2023 DIRECTOR COMPENSATION

 

Director Compensation

The Nominating and Governance Committee reviews the compensation of the Company’s non-employee directors. After considering market practices based on input from Semler Brossy, the independent compensation consultant to the Compensation and Management Development Committee, for 2023, the Nominating and Governance Committee approved an increase in the annual equity retainer as described below and did not make any other changes to the Company’s non-employee director compensation program.

During 2023, non-employee directors were entitled to receive the following compensation for service as members of the Board and as members of Board committees:

 

LOGO

Annual Board membership fee of $95,000 in cash;

 

LOGO

Committee Chair retainer fee of $25,000 in cash for each of the Nominating and Governance, Compensation and Management Development and Finance and Investment Chairs; $30,000 in cash for the Audit Committee Chair;

 

LOGO

Non-Executive Chairman retainer fee of $75,000 in cash; and

 

LOGO

Annual Equity Retainer Fee of $180,000 (increased from $150,000 in 2022) in common shares (the number of common shares determined by dividing $180,000 by the average of the high and low share price on the date of grant).

Directors who also are our employees do not receive any of the compensation described above. Accordingly, Ryan R. Marshall, our President and Chief Executive Officer, and also a director of the Company, received no additional compensation for his services as a director during 2023. The compensation received by Mr. Marshall as an employee of the Company is shown in the 2023 Summary Compensation Table set forth in this Proxy Statement.

Director Deferred Compensation

In 2023, non-employee directors were entitled to defer all or a portion of their cash and equity compensation. Deferred cash payments are credited with interest at a rate equal to the five-year U.S. treasury rate, plus 2%. Under the “Deferred Compensation Plan for Non-Employee Directors,” the payment of director cash fees may be deferred for up to eight years, and directors may elect to receive their deferred fees in a lump sum or in equal annual installments over a period not to exceed eight years. In the event of the director’s departure either before or after the commencement of a deferral period, such director’s deferred fees will be paid in a lump sum payment. Under the terms of the plan, all deferred equity will be distributed to the director upon his or her departure from the Board.

Equity Ownership Guidelines

Each non-employee member of the Board is expected to maintain an equity investment in the Company equal to at least five times the annual cash retainer, which must be achieved within five years of the director’s initial election to the Board. The holdings that may be counted toward achieving the equity investment guidelines include outstanding share awards or units, shares obtained through stock option exercises, shares owned jointly with or separately by the director’s spouse and shares purchased on the open market. Outstanding stock options do not count toward achieving the equity investment guidelines. As of the record date, all continuing non-employee members of the Board have met or, within the applicable period, are expected to meet, these share ownership guidelines.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis (our “CD&A”) provides an overview of our executive compensation program for 2023 and our executive compensation philosophies and objectives applicable to our named executive officers. This CD&A is divided into five sections:

 

Executive Summary

  

•  Overview

 

•  Return to Shareholders

 

•  Pay for Performance

 

•  Key Executive Compensation Decisions and Actions

 

•  Shareholder Feedback

 

•  Named Executive Officers

  

Establishing and Evaluating

Executive Compensation

  

•  Executive Compensation Philosophy

 

•  Key Factors in Setting 2023 Compensation

 

•  Market Comparisons

  

How We Make Executive

Compensation Decisions

  

•  The Compensation and Management Development Committee

 

•  Independent Compensation Consultant

 

•  Role of Executive Officers

 

•  Use of Tally Sheets

  

Executive Compensation

Program Elements

  

•  Base Salary

 

•  Annual Incentive Compensation

 

•  Long-Term Incentive Compensation

 

•  Equity Grants

 

•  Other Compensation Elements and Practices

  

2024 Compensation Decisions

  

•  Base Salary

 

•  Annual Incentive Compensation

 

•  Long-Term Incentive Compensation

EXECUTIVE SUMMARY

Overview

As a result of a historic rise in inflation rates, the Federal Reserve began to increase the federal funds interest rate in March 2022 and continued to increase that rate throughout 2022. These increases had a direct impact on consumer home mortgage interest rates, causing rates to more than double during the second half of 2022. The increased cost of borrowing, combined with home price inflation in recent years and inflation elsewhere in the economy, resulted in increasing affordability challenges for consumers. These challenges translated to a reduced demand for new homes and a significant increase in cancellations of pending home sale contracts in our backlog through the back half of 2022. Net new orders for homes in the fourth quarter of 2022 were down 41% over the prior year. Most analysts believed that depressed demand conditions would continue into 2023 as many economic indicators pointed to interest rates remaining elevated with a high probability of overall negative economic conditions continuing into 2023.

Our leadership team took a proactive response to these significant shifts in market conditions facing us as we moved into 2023. Beginning in early 2023, we adjusted our build model to allow for increased spec production, giving us more inventory available to meet the demand of

 

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first-time homebuyers and those consumers worried about mortgage rate volatility over a traditional build cycle. In the face of increased costs for land, labor and materials, we carefully managed product offerings, pricing and incentives to maintain high profitability while continuing to turn our assets. Despite the increased cost of borrowing, we believed that the desire for homeownership remained strong, so we developed innovative incentive strategies which, combined with the reduction in the availability of existing homes on the market, helped us deliver stronger than planned sales and profitability in 2023.

Despite mortgage rates reaching 8% in the fourth quarter of 2023, our Company’s ability to continue to deliver quality homes for our customers and meet demand resulted in our ability to deliver 28,600 homes in 2023 and record home sales of $15.6 billion. These financial results have allowed us to increase our returns to shareholders while strengthening our balance sheet. Specifically, we:

 

LOGO

Delivered gross margins of 29.3% which led to a 6% increase in earnings per share to a record $11.72 in 2023 and a return on equity of 27%;

 

LOGO

Increased activity under our share repurchase program, including the repurchase of $1.0 billion of shares in 2023;

 

LOGO

Increased our quarterly dividend by 25% to $0.20 per share effective for dividends paid beginning in 2024; and

 

LOGO

Retired over $100 million of our 2026 and 2027 senior notes and still ended the year with $1.8 billion of cash and cash equivalents and a debt to capital ratio of 15.9% as of December 31, 2023.

We believe our compensation philosophy and practices support PulteGroup’s strategy to drive consistently high returns through the cycles inherent in the U.S. housing market. Our compensation planning is designed to focus executives on balancing short-term objectives and long-term priorities, to align executive and shareholder interests, and to attract and retain the leadership needed to continue to deliver strong results. Executive pay in 2023 reflect our financial performance relative to pre-established performance goals and also reflect significant external factors throughout the year and the actions management took to strengthen PulteGroup’s position for 2024 and beyond. We believe in incentivizing performance against a critical set of metrics through the volatility of market cycles. We also believe this compensation philosophy is reflected in the compensation delivered to our senior management team for 2023, as their effective execution in a rapidly changing operating environment in 2023 enabled the Company to position itself to operate in a more challenging economic environment while delivering strong financial results and returns for our shareholders.

2023 Compensation Highlights

In the context of the operating environment described above and based on the Company’s performance, for 2023, we achieved the following results under our incentive compensation arrangements applicable to our named executive officers, which we believe demonstrates our continued commitment to a “pay for performance” culture:

 

LOGO

We achieved maximum performance with respect to both the pre-tax income and operating margin metrics under our 2023 Annual Program, resulting in a payout of 200% of target. This result was driven by our ability to quickly pivot our construction cadence and implement sales and incentive strategies to meet the affordability challenges of our customers in this volatile interest rate environment .

 

LOGO

Based on our pre-tax income growth in 2023 as compared to 2022, the Committee approved payouts under the Growth Incentive Pool for 2023 totaling $742,660.

 

LOGO

We achieve maximum performance with respect to each of the relative total shareholder return (“TSR”), return on invested capital (“ROIC”) and operating margin metrics applicable to the 2021-2023 performance-based equity awards, resulting in a payout of 200% of target.

 

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Named Executive Officers

For 2023, our named executive officers were:

 

Name

   Title

RYAN R. MARSHALL

   President and Chief Executive Officer
  

ROBERT T. O’SHAUGHNESSY

   Executive Vice President and Chief Financial Officer
  

MATTHEW KOART(1)

   Executive Vice President and Chief Operating Officer
  

TODD N. SHELDON

   Executive Vice President, General Counsel and Corporate Secretary
  

KEVIN A. HENRY(2)

   Executive Vice President and Chief People Officer
  

JOHN J. CHADWICK(3)

   Former Executive Vice President and Chief Operating Officer
  

MICHELLE H. HAIRSTON(4)

   Former Senior Vice President, Human Resources

 

(1)

Mr. Koart commenced employment with the Company, effective May 18, 2023

 

(2)

Mr. Henry commenced employment with the Company, effective June 20, 2023.

 

(3)

Mr. Chadwick ceased serving as our Chief Operating Officer, effective January 1, 2023, and retired from the Company, effective April 21, 2023.

 

(4)

Ms. Hairston ceased serving as our Senior Vice President, Human Resources, effective February 10, 2023.

Return to Shareholders

The following chart shows how a $100 investment in the Company’s common shares on December 31, 2018 would have grown to $422.31 on December 31, 2023, with dividends reinvested quarterly. The chart also compares the TSR on the Company’s common shares to the same investment in the S&P 500 Index and the Dow Jones U.S. Select Home Construction Index, with dividends reinvested quarterly. We believe this chart illustrates the significant value created for shareholders over the five-year period as compared to both indices.

 

COMPARISON OF FIVE-YEAR TOTAL SHAREHOLDER RETURN*

 

 

LOGO

 

 

 

*

Assumes $100 invested on December 31, 2018, and the reinvestment of dividends.

 

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     2018      2019      2020      2021      2022      2023  
                 

PulteGroup, Inc.

     100.00        151.33        170.47        228.50        184.59        422.31  
                 

S&P 500 Index – Total Return

     100.00        131.49        155.68        200.37        164.08        207.21  
                 

Dow Jones U.S. Select Home Construction Index

     100.00        149.60        189.98        284.54        210.79        357.43  

The following chart illustrates the Company’s relative TSR over the last one-, three- and five-year periods versus each of the lowest, median and highest performing peer in our defined executive compensation peer group for each period as listed on page 30 including the impact of quarterly reinvestment of any dividends.

 

 

LOGO

 

 

Pay for Performance

Our executive compensation program is designed (1) to reward executives for producing sustainable growth and improving shareholder returns consistent with PulteGroup’s strategy and (2) to align compensation with the long-term interests of our shareholders. The Committee strongly believes that a significant portion of executive compensation—both pay opportunities and pay actually realized—should be at-risk and tied to Company performance relative to the Company’s goals and share price performance. In addition, consistent with its practice in previous years, the Committee designed the 2023 executive compensation program so that variable pay elements (annual incentive awards, restricted share units (“RSUs”) and performance-based awards) constitute a significant portion of our total executive pay opportunities at target levels. The following charts demonstrate the variable pay elements as compared to the targeted annual compensation of our continuing named executive officers. These charts demonstrate that the variable pay elements comprised at least 90% of the targeted annual compensation for our President and Chief Executive Officer and, on average, 76% of the targeted annual compensation for the other named executive officers in 2023.

 

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2023 TOTAL DIRECT COMPENSATION

 

LOGO    LOGO

 

*

All components are based on target value for the year. Since the target for the Growth Incentive Pool payments were zero, the 2023 Growth Incentive Pool payments have been excluded from these calculations.

 

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Key Executive Compensation Decisions and Actions

We are committed to having strong governance standards with respect to our executive compensation program, policies and practices. Consistent with this focus, we maintain the following policies and practices that we believe demonstrate our commitment to executive compensation best practices.

 

WHAT WE DO

       WHAT WE DO NOT DO
LOGO

Annual say-on-pay vote

 

LOGO

Shareholder engagement

 

LOGO

Compensation and Management Development Committee comprised entirely of independent directors

 

LOGO

Independent outside compensation consultant

 

LOGO

Pay for performance—CEO pay approximately 90% at-risk

 

LOGO

Multi-year vesting schedule for equity awards

 

LOGO

Meaningful share ownership guidelines

 

LOGO

Clawback policies for both financial restatements and executive misconduct

 

LOGO

Market comparison of executive compensation against a relevant peer group

 

LOGO

Primarily use different metrics for short-term and long-term incentive programs

LOGO

Prohibition on hedging and pledging Company securities

 

LOGO

No dividends or dividend equivalents paid on unearned performance-based equity awards

 

LOGO

No automatic single-trigger vesting of equity awards upon a change-in-control

 

LOGO

No change-in-control tax gross-ups for named executive officers

 

LOGO

No excessive perquisites

 

LOGO

No service-based defined benefit pension plan

 

LOGO

Plan prohibits re-pricing of underwater stock options

 

LOGO

Plan prohibits granting discounted stock options

 

LOGO

No fixed term employment agreements

 

 

Shareholder Feedback

In its compensation review process, the Committee considers whether our executive compensation and benefits program serves the interests of our shareholders. In that respect, as part of its ongoing review of our executive compensation program, the Committee considered the approval by approximately 92% of the votes cast for the Company’s “say-on-pay” vote at our 2023 Annual Meeting of Shareholders, which is consistent with the average approval percentage of nearly 93% over the last five years. The Committee was pleased with this favorable outcome and interpreted this level of support as an endorsement by our shareholders of our executive compensation program and policies and did not make changes to our executive compensation program in response to the 2023 “say-on-pay” vote. The Committee values continuing and constructive feedback from our shareholders on compensation, and members of senior management have discussed the Company’s executive compensation program with various shareholders and have shared this shareholder feedback with the Committee. The Committee will continue to monitor our executive compensation program and, as it deems appropriate, engage with our shareholders and take into account shareholder input.

 

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ESTABLISHING AND EVALUATING EXECUTIVE COMPENSATION

Executive Compensation Philosophy

To align the Company’s incentive compensation program with the Company’s overall executive compensation philosophy, the Committee has adopted the following compensation philosophy and guiding principles:

 

 

 

Our Executive Compensation Philosophy

 

Our overall compensation philosophy applicable to named executive officers is to provide a compensation program that is intended to attract and retain qualified executives for the Company through fluctuating business cycles, provide them with incentives to achieve our strategic, operational and financial goals, increase shareholder value and reward long-term financial success.

 

 

    
 

 Guiding Principles

  

LOGO    Providing total compensation levels that are competitive with our direct competitors within the homebuilding industry, as well as companies of similar size and complexity in related industries.

 

LOGO    Fostering a pay for performance environment by delivering a significant portion of total compensation through performance-based, variable pay.

 

LOGO    Aligning the long-term interests of our executives with those of our shareholders.

 

LOGO    Requiring our executives to own significant levels of Company shares.

 

LOGO    Balancing cash compensation with equity compensation so that each executive has a significant personal financial stake in the Company’s share price performance (in general, we seek to provide a significant portion of total compensation to named executive officers in the form of equity-based compensation).

 

LOGO    Balancing short-term compensation with long-term compensation to focus our senior executives on the achievement of both operational and financial goals and longer-term strategic objectives.

 

Key Factors in Setting 2023 Compensation

In establishing and evaluating our 2023 executive compensation program, the Committee, in consultation with our Chief Executive Officer, considered the following key factors:

 

LOGO

Overall Company performance and specific financial results relative to incentive performance goals established by the Committee in February 2023;

 

LOGO

Competitive pay practices (evaluated based on market comparisons and recommendations of the Committee’s independent compensation consultant);

 

LOGO

Individual performance of each of our named executive officers;

 

LOGO

Historical equity grants;

 

LOGO

Tally sheets presenting the potential compensation for each of our named executive officers based on equity grant values and performance levels under our incentive compensation programs; and

 

LOGO

Our ability to attract and retain and motivate key talent.

Market Comparisons

While the Committee considers relevant market pay practices when setting executive compensation, it does not believe that it is appropriate to establish compensation levels based only on market practices. The Committee believes that compensation decisions are complex and require a deliberate review of Company performance and peer compensation levels, as well as the overall business environment and the role and contributions of each individual. Accordingly, the review of peer information is one of many factors the Committee considers in determining compensation levels. For each element of compensation, the Committee reviews market data (i.e., peer group and survey data) to evaluate target compensation levels, while also considering the relative responsibilities of some of our named executive officers as compared

 

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to the peer group, revenue size relative to the peer group, our historical compensation practices, the overall mix of our compensation elements being weighted more heavily toward long-term and equity-based compensation, management ownership and financial performance. Other factors that influence the amount of compensation awarded include an individual’s experience and past performance inside or outside the Company, compensation history, role and responsibilities within the Company, tenure with the Company and associated institutional knowledge, long-term potential with the Company, contributions derived from creative and innovative thinking and leadership and industry expertise.

The Committee believes that the Company’s peer group should reflect the industry in which the Company competes for business and executive talent. Accordingly, the Company’s peer group includes companies meeting the following criteria: (i) companies within, or operating in an industry similar to, the home-building industry and (ii) companies of similar size in terms of revenue or market capitalization (generally 1/3 to 3 times the Company’s revenue and market capitalization). The peer group used for evaluating 2023 compensation decisions consisted of the companies below, which was the same peer group that was used for evaluating 2022 compensation decisions.

 

 

 D.R. Horton, Inc.

 

 

Mohawk Industries, Inc.

 KB Home   NVR, Inc.
 Lennar Corporation   Owens Corning
 Masco Corporation   Taylor Morrison Home Corporation
 M.D.C. Holdings, Inc.   Toll Brothers, Inc.

 Meritage Homes Corporation

 

 

In addition to reviewing compensation practices among the compensation peer group, the Committee believes it is important to review compensation practices within the industry generally. The Company participates in and purchases a number of compensation surveys. With the assistance of Semler Brossy, the Committee reviewed general industry and peer group data in establishing target compensation levels and evaluating whether our compensation policies are in line with market data. The 2023 general industry survey data represented comparably sized companies and similarly situated executive positions from general industry companies. The Committee believes that the compensation practices at companies of this size are most relevant to the Committee’s decision-making process.

Based on Semler Brossy’s competitive market analysis prepared for evaluating 2023 compensation decisions, the Committee found that target compensation opportunities, in total, for the named executive officers was generally competitive. As noted above, the Committee also considered the relative responsibilities of some of our named executive officers as compared to the market data, revenue size relative to the market data, our historical compensation practices, the overall mix of our compensation elements being weighted more heavily toward long-term and equity-based compensation, management ownership and financial performance, as well as the other individual factors noted above.

HOW WE MAKE EXECUTIVE COMPENSATION DECISIONS

Role of the Compensation and Management Development Committee

The Committee establishes our executive compensation philosophies and oversees the development and implementation of our executive compensation program. The Committee operates under a written charter adopted by the Committee. A copy of the charter is available at www.pultegroupinc.com. In general, the scope of the Committee’s authority is determined by the Board, or established by formal incentive plan documents. The fundamental responsibilities of the Committee include the following with respect to our senior executives:

 

LOGO

Establish compensation-related performance objectives to determine annual and long-term incentive compensation;

 

LOGO

Establish individual performance goals and objectives for the Chief Executive Officer and evaluate the job performance of the Chief Executive Officer in light of those goals and objectives;

 

LOGO

Evaluate the job performance of the other named executive officers;

 

LOGO

Annually review and recommend compensation levels for our Chief Executive Officer for full Board approval and approve compensation levels for other named executive officers, with input from the Committee’s compensation consultant;

 

LOGO

Administer the Company’s equity compensation;

 

LOGO

Develop and review succession plans for the Chief Executive Officer position, including assessing and creating development plans for internal talent;

 

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LOGO

Review succession planning, leadership development programs, diversity representation and bench strength for all other senior executive positions; and

 

LOGO

Annually review the potential risks associated with our compensation program.

Information on the Committee’s processes and procedures for consideration of executive compensation are addressed under “Committees of the Board of Directors—Compensation and Management Development Committee” above.

The Committee is currently comprised of Ms. Cheryl W. Grisé, Ms. Lila Snyder and Mr. Scott F. Powers, with Mr. Powers currently serving as the Committee Chair.

Each current member of the Committee qualifies as an independent director under NYSE listing standards and our Corporate Governance Guidelines.

Role of the Independent Compensation Consultant

Semler Brossy provides independent executive consulting services to the Committee. Semler Brossy is retained by and reports to the Committee and participates in Committee meetings, as requested by the Committee. Semler Brossy also:

 

LOGO

Participates in the design of our executive compensation program to help the Committee evaluate the linkage between pay and performance;

 

LOGO

Provides and reviews market data and advises the Committee on setting executive compensation and the competitiveness and reasonableness of our executive compensation program;

 

LOGO

Reviews and advises the Committee regarding the elements of our executive compensation program, equity grant and dilution levels, each as relative to our peers;

 

LOGO

Reviews and advises the Committee regarding individual executive pay decisions;

 

LOGO

Reviews and advises the Committee with respect to new compensation plans and programs;

 

LOGO

Reviews and advises the Committee regarding regulatory, disclosure and other technical matters;

 

LOGO

Reviews and advises the Committee regarding our compensation risk assessment procedures; and

 

LOGO

Reviews and advises the Nominating and Governance Committee regarding our non-employee director compensation.

During 2023, the compensation consultant did not provide any other services to the Company.

Role of Executive Officers

As noted above, the Committee is responsible for all compensation recommendations and/or decisions for our senior executives (which include the named executive officers). Our Chief Executive Officer annually reviews the performance of each member of senior management (other than his own performance). Recommendations based on these reviews, including salary adjustments, annual bonuses and equity grants, are presented to the Committee. Recommendations regarding salary adjustments, annual bonuses and equity grants for the Chief Executive Officer are made by the Committee for full board approval. All decisions for 2023 made with respect to the named executive officers other than the Chief Executive Officer were made by the Committee after deliberation with Mr. Marshall. Mr. Marshall is not present during discussions of his compensation.

At various times during the year, at the request of the Committee, Messrs. Marshall, O’Shaughnessy, Sheldon and Henry, attended Committee meetings, or portions of Committee meetings, to provide the Committee with information regarding our operational performance, financial performance or other topics requested by the Committee to assist the Committee in making its compensation decisions.

Use of Tally Sheets

The Committee reviews tally sheets, prepared by management and reviewed by the compensation consultant, which present comprehensive data on the total potential compensation for each of the named executive officers based on various equity grant values and performance levels under our incentive compensation programs. The tally sheets provide the Committee with a framework of potential minimum and maximum compensation levels that each named executive officer may earn under our executive compensation program. While the tally sheets provide a framework for the Committee, they are not determinative of the elements or amounts of compensation paid.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

EXECUTIVE COMPENSATION PROGRAM ELEMENTS

The Committee has designed the elements of the compensation program for the named executive officers to advance the operational objectives and the long-term strategies of the Company. The following table lists the principal elements of our 2023 executive compensation program. The Committee believes that the design of the Company’s executive compensation program balances fixed and variable compensation elements and provides alignment with our short and long-term financial and operational priorities and shareholder interests through the annual and long-term incentive compensation programs. Our incentives are designed to drive overall corporate and individual performance, with compensation payouts varying from target based on actual performance against pre-established and communicated performance objectives.

 

 

Pay Element

 

    Salary  

Annual

Incentive Awards

 

Performance-Based

Restricted Share Units

(“PSUs”)

 

  Restricted Share

  Units (“RSUs”)

       

WHO RECEIVES

  All named executive officers   LOGO
       

WHEN GRANTED

  Annually   LOGO
       

FORM OF DELIVERY

  Cash    Cash, with 50% of the Growth Incentive Pool granted as RSUs   Equity    LOGO
       

TYPE OF PERFORMANCE

  Short-term emphasis (fixed)   Short-term emphasis (variable)  

Long-term emphasis

(variable)

  LOGO
       

PERFORMANCE PERIOD

  1 year   1 year, with RSU component of Growth Incentive Pool vesting over 2 years   3-year cliff vesting based on performance   3-year cliff vesting based on service
       

WHY WE PAY THIS ELEMENT

  Provides base pay levels that are competitive with market practices to attract and retain top executive talent.   Provides annual incentive opportunities competitive with market practices to attract, motivate and retain top executive talent.   Provides equity incentives competitive with market practices in order to attract, motivate and retain top executive talent.   LOGO
    Rewards executives for annual performance results relative to pre-established goals deemed critical to the success of the Company and its strategy and for year-over-year growth in pre-tax income.   Focuses executives on long-term performance of the Company.  

 

 

LOGO

    Focuses on key annual results that we believe will position the Company for success over time, in keeping with the interests of our shareholders.   Directly aligns interests of executives with those of our shareholders.  

 

 

 

 

LOGO

    Retention of talent over
performance / vesting
period. 
  Retention of talent over
performance / vesting
period.    LOGO
       

 

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Pay Element

 

   

Salary

 

Annual

Incentive Awards

 

Performance-

Based Restricted

Share Units

(“PSUs”)

 

  Restricted Share

  Units (“RSUs”)

HOW PAYOUT DETERMINED

  Responsibilities, individual performance and tenure, internal equity, market data and recommendations from the Committee’s independent compensation consultant.  

Market practice and individual performance.

 

Annual Program Component: Participants are eligible to receive a cash payout ranging from 0% - 200% of target based on the achievement of corporate goals.

  Market practice, individual performance and Company performance over the 2023-2025 performance period.   Market practice and individual performance.
    Growth Incentive Pool Component: Incentive pool funded based on pre-tax income growth as compared to 2022, with Growth Incentive Pool allocations established by the Committee at the beginning of 2023.(1)   Participants vest in PSUs, with vesting levels ranging from 0% - 200% of target based on the achievement of corporate goals.  
       

PERFORMANCE MEASURES

  Individual  

Pre-tax income

 

Operating margin

 

Relative TSR

 

ROIC

 

Operating margin

  Share price

 

(1)

As described below, payouts under the Growth Incentive Pool were made 50% in cash and 50% in the form of RSUs that will vest on the two-year anniversary of the January 31, 2024 grant date.

Base Salary

The Committee determines the appropriateness of executives’ base salaries by considering the responsibilities of their positions, their individual performance and tenure, a comparison to the base salary levels of executives in the compensation peer group and industry compensation surveys, and the recommendations of the Committee’s independent compensation consultant, as described below. Base salary increases are considered annually and are based upon both individual and Company performance in the prior year; however, historically the Committee has not had a practice of regularly adjusting base salaries for our executive officers on an annual basis.

The base salaries for Messrs. Koart and Henry were determined in connection with their commencements of employment 2023 and were based on the compensation for executives at companies in our compensation peer group and internal pay equity, as well as the broader industry market for senior human resources positions with respect to Mr. Henry. None of our other named executive officers received a base salary adjustment with respect to 2023 and Mr. Marshall’s base salary has remained the same since 2019.

The table below sets forth the 2022 and 2023 base salary levels for each of our named executive officers.

 

Named Executive Officer

   2022 Base Salary    2023 Base Salary(1)  
         

RYAN R. MARSHALL

     $ 1,000,000      $ 1,000,000   
         

ROBERT T. O’SHAUGHNESSY

     $ 750,000      $ 750,000
         

MATTHEW KOART

       N/A      $ 750,000
         

TODD N. SHELDON

     $ 550,000      $ 550,000
         

KEVIN A. HENRY

       N/A      $ 550,000
         

JOHN J. CHADWICK

     $ 700,000      $ 700,000
         

MICHELLE H. HAIRSTON

     $ 525,000      $ 525,000

 

(1)

The 2023 base salaries for Messrs. Koart, Henry and Chadwick and Ms. Hairston reflect their annualized base salaries. Messrs. Koart and Henry commenced employment with the Company in May and June 2023, respectively. Mr. Chadwick and Ms. Hairston separated from the Company in April 2023 and February 2023, respectively.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Annual Incentive Compensation

We provide annual incentive compensation in order to motivate and reward our named executive officers for achieving short-term performance objectives. Annual incentive compensation is intended to be a significant component of an executive’s total compensation opportunity in a given year, helping create a “pay for performance” culture. Consistent with 2022, in 2023 there were two components to the Company’s annual incentive compensation program. For the first component, the Committee established a 2023 Annual Incentive Program (the “Annual Program” or the “2023 Annual Program”) similar to its historical approach, with payouts determined based on the Company’s performance against pre-established financial performance goals. This component is designed to reward progress against the achievement of the Company’s annual operating plan. As it did in 2022, the Committee also established an annual incentive pool (the “Growth Incentive Pool”), with funding based on the Company’s pre-tax income growth, as defined in the Annual Program, as compared to the prior year. The Growth Incentive Pool is designed to reward growth and to align with the interests of the Company’s shareholders, with management experiencing higher payouts in times of greater performance relative to the Company’s prior year and receiving no payouts during years when pre-tax income did not exceed the prior year. The 2023 Growth Incentive Pool includes an RSU component that vests over two years in order to further align the Company’s executive compensation program with shareholder interests through the risks and rewards of stock ownership. The Annual Program and Growth Incentive Pool are described in further detail below.

2023 Annual Program

The financial measures used to assess corporate performance in 2023 were pre-tax income and operating margin, each as defined in the Annual Program and weighted equally. Pursuant to the terms of the Annual Program, each performance goal is measured independently of the other performance goal, and payouts are determined based on the weighted average result of the performance goals, with a potential payout ranging from 0% to 200% of the participant’s target opportunity. The Committee believes that the 2023 Annual Program performance metrics were meaningful measures of 2023 performance because these metrics increase the focus of participants on profitability and are tied to our strategy with respect to shareholder value creation.

The Committee established the payout formula for performance objectives to encourage strong, focused performance. The required financial performance required to achieve target payout levels were lower than the 2022 target and actual achievement levels because of the significant change in the sales and demand environment, which began with the sharp increase in mortgage lending rates in 2022 and which suppressed demand through the back half of 2022 and into early 2023. While our 2022 financial performance was strong, that was due in large part to the delivery of homes that went under contract in the second half of 2021 and the first half of 2022 in a strong demand environment. At the time the 2023 Annual Program performance metrics and requisite performance levels were established, the targets exceeded both internal and external projections and the Committee believed that they were robust and would require a significant amount of ingenuity, planning and execution by the named executive officers. The table below indicates the financial performance metrics and potential payouts with respect to the Company’s achievement of the 2023 Annual Program goals.

 

    

2023 Consolidated Goals

($ in 000s)(1)

    

Weighting

     Threshold
Payout
(50%)
     Target
Payout
(100%)
     Maximum
Payout
(200%)
     Performance
Results
     Achieved
Payout
  

Weighted  

Payout  

                    

Pre-Tax Income(2)

     50%      $ 1,653,838      $ 2,067,298      $ 2,480,758        $3,675,219      200.00%     100.00%  
                    

Operating Margin %(3)

     50%        13.0 %      16.0 %      19.0 %      22.3 %    200.00%     100.00%  
                    
                      Total % of Target:    200.00%  

 

(1)

Payouts for performance between threshold and target payout levels and between target and maximum payout levels are calculated using straight line interpolation.

 

(2)

Pre-tax Income represents Income Before Income Taxes as reported in the Company’s Annual Report, as adjusted to exclude the impact of certain items, including, where applicable: certain incentive compensation, Company-wide restructuring costs as offset by savings associated with those restructuring efforts, changes in U.S. Generally Accepted Accounting Principles (“GAAP”), gain or loss on debt retirements, and adjustments to Pulte Financial Services reserves related to mortgage origination and other legacy mortgage exposures prior to 2012.

 

(3)

Operating Margin represents the quotient of (i) Home Sale Gross Margin less SG&A expenses (excluding, where applicable, certain incentive compensation, Company-wide restructuring costs as offset by savings associated with those restructuring efforts, changes in GAAP, gain or loss on debt retirements, and adjustments to Pulte Financial Services reserves related to mortgage origination and other legacy mortgage exposures prior to 2012), divided by (ii) Home Sale Revenues.

 

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The table below sets forth the award opportunities established by the Committee and the cash payout under the Annual Program applicable to the named executive officers. The Committee determined the target payout level for each of the named executive officers other than Messrs. Koart and Henry based on each named executive officer’s position within the Company, historical pay levels, the incentive pay for executives at companies in our compensation peer group, the general industry compensation surveys and the recommendations of the Committee’s independent compensation consultant. The target payout levels for Messrs. Koart and Henry were determined in connection with their commencements of employment with the Company and were based on the incentive pay for executives at companies in our compensation peer group and internal pay equity, as well as the broader industry market for senior human resources positions with respect to Mr. Henry. The 2023 target award opportunity, as a percentage of base salary, for the other named executive officers were unchanged from 2022.

 

Executive

   Base Salary
2023
     Target as a
% of Salary(1)
   Threshold(2)    Target      Maximum     

Total  

Payout(2)  

                 

RYAN R. MARSHALL

   $ 1,000,000        200    $500,000    $ 2,000,000      $ 4,000,000      $ 4,000,000    
                 

ROBERT T. O’SHAUGHNESSY

   $ 750,000        133    $250,000    $ 1,000,000      $ 2,000,000      $ 2,000,000  
                 

MATTHEW KOART

   $ 750,000        167    $312,500    $ 1,250,000      $ 2,500,000      $ 1,561,644  
                 

TODD N. SHELDON

   $ 550,000        100    $137,500    $ 550,000      $ 1,100,000      $ 1,100,000  
                 

KEVIN A. HENRY

   $ 550,000        100    $137,500    $ 550,000      $ 1,100,000      $ 587,671  
                 

JOHN J. CHADWICK

   $ 700,000        107    $187,500    $ 750,000      $ 1,500,000      $ 456,164  
                 

MICHELLE H. HAIRSTON

   $ 525,000        100    $131,250    $ 525,000      $ 1,050,000      $ 117,945  

 

(1)

The Committee sets target opportunities under the Annual Program at whole dollar values. The amounts in this column reflect such target opportunities at the approximate percentage of each named executive officer’s base salary.

 

(2)

The threshold amount represents the minimum award that could be paid to the named executive officer upon the Company’s satisfaction of threshold performance for only one of the performance goals. As noted previously, each performance goal is measured independently of the other performance goals. In accordance with the terms of their offer letters, Messrs. Koart and Henry’s payouts under the Annual Program were pro-rated based on their May and June 2023 commencement dates, respectively. In accordance with the terms of the Company’s Retirement Policy and Executive Severance Policy, respectively, Mr. Chadwick and Ms. Hairston also received a pro-rated payout under the 2023 Annual Program.

Growth Incentive Pool

As it did in 2022, in 2023 the Committee established a Growth Incentive Pool, the size of which was dependent on pre-tax income growth, as defined in the Annual Program, over the prior year, and with the aggregate amount capped at $25 million. As previously disclosed, beginning in 2022, payouts under the Growth Incentive Pool are made 50% in cash and 50% in the form of RSUs that vest on the two-year anniversary of the grant date, subject to the participant’s continuous service through the vesting date. The Committee established the Growth Incentive Pool in order to recognize and incentivize the efforts to be taken to achieve pre-tax income growth and to further align the interests of the participants with the interests of the Company’s shareholders. In addition, the inclusion of an RSU component further aligns the Company’s executive compensation program with shareholder interests through the risks and rewards of stock ownership. For purposes of the Growth Incentive Pool, pre-tax income was calculated in the same manner as described above with respect to the 2023 Annual Program. The Committee elected to allocate 2% of pre-tax income growth over 2022 to be awarded pursuant to the Growth Incentive Pool, with the allocation of the Pool for each named executive officer as shown in the table below. Based on our pre-tax income growth in 2023, the Committee approved the following payouts under the Growth Incentive Pool for 2023 with 50% of the pool allocation being paid in cash and 50% of the pool allocation paid in RSUs which will vest on January 31, 2026.

 

Name

   Pool Allocation  
   %      $(1)  
     

RYAN R. MARSHALL

     24 %    $ 178,238  
     

ROBERT T. O’SHAUGHNESSY

     15 %    $ 111,399  
     

MATTHEW KOART

     15 %    $ 69,586  
     

TODD N. SHELDON

     6 %    $ 44,560  
     

KEVIN A. HENRY

     6 %    $ 23,806  
     

JOHN J. CHADWICK

     15 %    $ 0  
     

MICHELLE H. HAIRSTON

     6 %    $ 0  

 

(1)

In accordance with the terms of their offer letters, Messrs. Koart and Henry’s payouts under the Growth Incentive Pool were to be pro-rated based on their May and June 2023 commencement dates, respectively, and Mr. Chadwick and Ms. Hairston were not eligible to receive 2023 Growth Incentive Pool payouts upon their separations from the Company.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Long-Term Equity Incentive Compensation

In order to provide management with incentives to achieve our long-term goals, in 2023, the Committee continued its practice of providing a significant portion of our named executive officer’s compensation in the form of both performance-based and time-based equity incentive awards over the same three-year period. The Committee believes this balance of long-term incentives encourages outsized performance during the incentive period as well as a meaningful retentive effect. The entire award is in the form of equity compensation, with the 2023 performance-based component delivered as PSUs rather than the Company’s prior practice of a cash-denominated award that is converted to shares at the time of settlement. The Committee approved this change after considering market practices and to further align the interests of executive officers and shareholders over the course of the performance period.

We believe that equity awards:

 

LOGO

Balance the overall compensation program by providing an appropriate mix of equity and cash compensation;

 

LOGO

Properly focus executives on long-term value creation for shareholders; and

 

LOGO

Encourage executive retention, particularly through fluctuating business cycles.

Our philosophy is to award equity grants to our named executive officers in amounts that reflect market data, the participant’s position, the participant’s ability to influence our overall performance, and individual performance based on a review of results during the prior year against pre-determined objectives, such as operational efficiency, employee engagement, and retention and development of key talent. In addition, the Committee considers historical grant practices and market compensation levels in determining grants for individual executives.

The Committee believes that these annual equity incentive grants to the named executive officers should be determined after a review of the Company’s financial statements for a full year. As a result, all annual equity awards are expected to be granted on the date of the regular Compensation Committee meeting to be held in February of the following year. In determining the annual equity grants the Committee considered the following: (i) the Company’s historical year-over-year compensation practices, including historical grant levels; (ii) total compensation awarded to the named executive officers; (iii) a peer group analysis conducted by the Committee’s independent compensation consultant of the compensation of executive officers holding comparable positions at the companies within the compensation peer group and survey data; and (iv) the Company’s objective to provide a significant portion of executive incentives based on long-term Company performance. Once the appropriate amount is determined for each executive, one-half of the award is granted as PSUs under our LTI Program described below and the other half granted in the form of a service-based RSU award, which cliff vest three years after the grant date.

Annual Performance-Based Equity awards – LTI Program

2023-2025 LTI Program

In 2023, the Committee approved PSU awards for the 2023-2025 LTI Program that vest based on (i) the Company’s TSR performance relative to the TSR of the Company’s Performance Peer Group, as described below, (ii) the Company’s ROIC performance and (iii) the Company’s operating margin performance, with each goal weighted equally. These performance measures were deemed by the Committee to be effective long-term measures of performance reflective of our success in executing on our long-term business plan and aligning the executives’ interests with the interests of shareholders.

The Committee utilized operating margin as an element in both the Company’s Annual Program and 2023-2025 LTI Program in recognition that this measure is viewed as a core driver of the Company’s performance and shareholder value creation. In designing the Company’s executive compensation program, the Committee supplemented the use of operating margin with additional performance measures in order to strike an appropriate balance with respect to incentivizing top-line growth, profitability and shareholder returns over both the short-term and long-term horizons.

For purposes of the 2023-2025 LTI Program, the Company is required to achieve a TSR over the three-year performance period that ranks between the third and fourth highest TSRs of the component companies in the Performance Peer Group in order to earn the award target, with no payout for bottom quartile performance. To measure relative TSR performance, the Committee approved a Performance Peer Group consisting of the homebuilders in the Company’s compensation peer group – namely, D.R. Horton, Inc.; KB Home; Lennar Corporation; M.D.C. Holdings, Inc.; Meritage Homes Corporation; NVR, Inc.; Taylor Morrison Home Corporation; and Toll Brothers, Inc. The Committee determined that this was an appropriate measure of performance as the members of the Performance Peer Group were also subject to the cyclical nature of the homebuilding industry.

The Committee established the payout formula for the ROIC and operating margin performance objectives to encourage strong, focused performance. Given the economic and market conditions at the time the targets were set, the target payout levels were designed to be

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

achievable with strong performance, while payouts at the maximum performance levels were designed to be very difficult to achieve. Under the 2023-2025 LTI Program, ROIC and operating margin are defined as follows:

 

LOGO

ROIC is defined as (i) consolidated earnings before interest and taxes (adjusted to exclude, where applicable, the expense related to certain incentive compensation, Company-wide restructuring costs as offset by savings associated with those restructuring efforts, changes in GAAP, gain or loss on debt retirements, and adjustments to Pulte Financial Services reserves relating to mortgage origination and other legacy mortgage exposures prior to January 1, 2012), divided by (ii) consolidated shareholders’ equity plus homebuilding debt (each as adjusted to exclude consolidated deferred taxes, internal mortgage company debt and changes in GAAP).

 

LOGO

Operating margin represents the quotient of (i) Home Sale Gross Margin less SG&A expenses (excluding, where applicable, certain incentive compensation, Company-wide restructuring costs as offset by savings associated with those restructuring efforts, changes in GAAP, gain or loss on debt retirements, and adjustments to Pulte Financial Services reserves relating to mortgage origination and other legacy mortgage exposures prior to January 1, 2012) divided by (ii) Home Sale Revenues.

The table below shows the award opportunities established by the Committee relating to the 2023-2025 LTI Program. The target award opportunities for Messrs. Koart and Henry were established by the Committee in connection with the commencements of their employment with the Company and were based on the long-term incentive award opportunities for executives at companies in our compensation peer group and internal pay equity, as well as the broader industry market for senior human resources positions with respect to Mr. Henry. The target award opportunities for the other named executive officers did not change as compared to the opportunities established for the 2022-2024 LTI Program.

The vesting level of the awards will be determined after the end of the three-year performance period based on the Company’s relative TSR, ROIC and operating margin performance during that time. Under the award agreements, the 2023-2025 LTI Program PSU awards are share-denominated and will be settled in Company common shares following the end of the performance period.

Award Opportunity Under 2023-2025 LTI Program

 

Executive

   Base Salary(1)    Target as %
of Salary(2)
   Threshold    Target    Maximum   
                        

RYAN R. MARSHALL

     $ 1,000,000        350 %      $ 1,750,000      $ 3,500,000      $ 7,000,000    
                        

ROBERT T. O’SHAUGHNESSY

     $ 750,000        126.7 %      $ 475,000      $ 950,000      $ 1,900,000
                        

MATTHEW KOART

     $ 750,000        133.3 %      $ 500,000      $ 1,000,000      $ 2,000,000
                        

TODD N. SHELDON

     $ 550,000        81.8 %      $ 225,000      $ 450,000      $ 900,000
                        

KEVIN A. HENRY

     $ 550,000        63.6 %      $ 175,000      $ 350,000      $ 700,000
                        

JOHN J. CHADWICK(3)

     $ 700,000        103.6 %      $ 362,500      $ 725,000      $ 1,450,000
                        

MICHELLE H. HAIRSTON(4)

     $ 525,000        38.1 %      $ 100,000      $ 200,000      $ 400,000

 

(1)

Base salary was measured as of the first day of the performance period.

 

(2)

The Committee sets target opportunities under the LTI Program at whole dollar values. The amounts in this column reflect such target opportunities at the approximate percentage of each named executive officer’s base salary.

 

(3)

Pursuant to the terms of the Company’s Retirement Policy, Mr. Chadwick was entitled to retirement vesting treatment of his outstanding equity awards in connection with his retirement in April 2023, as described in “Potential Payments Upon Termination or Change in Control” beginning on page 48.

 

(4)

Pursuant to the terms of the Company’s Executive Severance Policy, Ms. Hairston’s 2023-2025 LTI Program awards remained outstanding following her separation from the Company in February 2023 and are eligible to vest on a pro-rated basis based on actual performance.

Outstanding Performance Based Equity Awards under the LTI Program

The 2022-2024 LTI Program remains outstanding and will be settled following the completion of the three-year performance period, based on (i) the Company’s TSR performance relative to the TSR of the Performance Peer Group, (ii) the Company’s ROIC performance, and (iii) the Company’s operating margin performance, with each goal weighted equally.

 

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At the end of 2023, the 2021-2023 LTI Program concluded, with each named executive officer other than Messrs. Koart and Henry (who were not employed with the Company in 2021) achieving 200.0% of their target award pursuant to the terms of the 2021-2023 LTI Program established at the time of grant. The table below sets forth the performance metrics and achievement levels with respect to the 2021-2023 LTI Program goals.

 

2021-2023 LTI Program Consolidated Goals(1)

 

    Weighting     Threshold Payout
(50%)
    Target Payout
(100%)
    Maximum Payout
(200%)
    Performance
Results
  Achieved Payout
(of target)
  Weighted
Payout
             

Relative TSR(2)

    33.34%       25th percentile       75th percentile      
Ranked 1stin
peer group

 
  Ranked 1st in
peer group
   200%    66.8%

ROIC(3)

    33.33%       18.9%       21.9%       24.9%     33.9%   200%    66.6%

Operating Margin(4)

    33.33%       12.1%       15.1%       18.1%     21.3%   200%    66.6%
         

Total % of Target:

  200.0%

 

(1)

Payouts for performance between threshold and target payout levels and between target and maximum payout levels are calculated using straight line interpolation.

 

(2)

Measured relative to the Performance Peer Group.

 

(3)

ROIC is defined as (i) consolidated earnings before interest and taxes (adjusted to exclude, where applicable, the expense related to certain incentive compensation, Company-wide restructuring costs as offset by savings associated with those restructuring efforts, changes in GAAP, gain or loss on debt retirements, and adjustments to Pulte Financial Services reserves relating to mortgage origination and other legacy mortgage exposures prior to January 1, 2012), divided by (ii) consolidated shareholders’ equity plus homebuilding debt (each as adjusted to exclude consolidated deferred taxes, internal mortgage company debt and changes in GAAP).

 

(4)

Operating Margin represents the quotient of (i) Home Sale Gross Margin less SG&A expenses (excluding, where applicable, certain incentive compensation, Company-wide restructuring costs as offset by savings associated with those restructuring efforts, changes in GAAP, gain or loss on debt retirements, and adjustments to Pulte Financial Services reserves relating to mortgage origination and other legacy mortgage exposures prior to January 1, 2012) divided by (ii) Home Sale Revenues.

2024 Long Term Equity Incentive Awards

In determining the annual equity grants made in February 2024 for 2023 performance – of the Company and of each continuing executive – the Committee considered the following: (i) the Company’s historical year-over-year compensation practices, including historical grant levels; (ii) total compensation earned by the named executive officers; (iii) a peer group analysis conducted by the Committee’s independent compensation consultant of the compensation of executive officers holding comparable positions at the companies within the compensation peer group; and (iv) the Company’s objective to provide a significant portion of executive incentives based on long-term Company performance.

As set forth in the tables below, in February 2024, the Committee granted RSUs to each continuing executive, informed by his or her individual contributions during 2023. The value of these awards is excluded from the 2023 Summary Compensation Table, which instead reflects the value of the equity awards granted in 2023 in recognition of the named executive officers’ performance in 2022. The first portion (60%) of these awards comprise our 2024-2026 LTI Program and include relative TSR performance, return on equity and operating margin, each as measured against the Performance Peer Group, as the performance metrics and amounts as follows, with a comparison to the 2023 – 2025 LTI Program amounts:

 

    

2023-2025 LTI Program

Target

 

  

2024-2026 LTI Program  
Target  

 

Executive

   #    Value    #    Value
                   

RYAN R. MARSHALL

       61,019      $ 3,500,000        50,939      $ 5,400,000   
                   

ROBERT T. O’SHAUGHNESSY

       16,563      $ 950,000        14,858      $ 1,575,000
                   

MATTHEW KOART

       14,318      $ 1,000,000        14,858      $ 1,575,000
                   

TODD N. SHELDON

       7,846      $ 450,000        7,075      $ 750,000
                   

KEVIN A. HENRY

       4,699      $ 350,000        5,094      $ 540,000

In light of the pending acquisition of one of the members of the Performance Peer Group, the Committee approved a new Performance Peer Group for the 2024 long-term incentive awards consisting of the homebuilders in the Company’s compensation peer group – namely, D.R. Horton, Inc.; KB Home; Lennar Corporation; Meritage Homes Corporation; M/I Homes, Inc.; NVR, Inc.; Taylor Morrison Home

 

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Corporation; Toll Brothers, Inc.; and Tri Pointe Homes, Inc. The Committee determined that this was an appropriate measure of performance as the members of the Performance Peer Group were also subject to the cyclical nature of the homebuilding industry. The remaining portion (40%) of these awards include annual grants of service-based equity in the form of service-based RSU awards with a three-year vesting period in the amounts as follows:

 

   

 Time-Based 
 Restricted Share Units(1) 

 

Executive

  #   Value(2)
       

RYAN R. MARSHALL

      33,960     $ 3,600,100
       

ROBERT T. O’SHAUGHNESSY

      9,905     $ 1,050,029
       

MATTHEW KOART

      9,905     $ 1,050,029
       

TODD N. SHELDON

      4,717     $ 500,049
       

KEVIN A. HENRY

      3,396     $ 360,010

 

(1)

These equity awards were granted in 2024 and, accordingly, are excluded from the 2023 Summary Compensation Table.

 

(2)

The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.

Other Compensation Elements and Practices

Employment Arrangements

The Company generally executes an offer of employment before an executive joins the Company. This offer describes the basic terms of the executive’s employment, including his or her start date, starting salary, annual incentive target and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will apply as warranted.

Severance Arrangements

The Committee has adopted the PulteGroup, Inc. Executive Severance Policy, which provides for severance benefits ranging from one times base salary to two times base salary, depending on the length of service with the Company and the executive’s position at the time of a qualifying termination of employment. The Committee also has adopted the PulteGroup, Inc. Retirement Policy, which establishes administrative guidelines for the treatment of outstanding equity and long-term incentive awards following an employee’s qualifying retirement. The Committee believes that these policies help us accomplish our compensation philosophy of attracting and retaining exemplary talent and reduce the need to negotiate individual severance arrangements with new and departing executives. In connection with his retirement from the Company, Mr. Chadwick did not receive any severance benefits under the Executive Severance Policy, but received retirement vesting treatment with respect to his outstanding equity and long-term incentive awards. In addition, in connection with Ms. Hairston’s February 10, 2023 separation from the Company, Ms. Hairston became eligible for separation benefits under the Executive Severance Policy based on a qualifying termination of employment without cause. See “Potential Payments Upon Termination or Change in Control” on page 48 for additional information regarding the retirement vesting treatment received by Mr. Chadwick in connection with his retirement in April 2023 and the severance benefits received by Ms. Hairston in connection with her separation in February 2023.

While these policies reduce the need to negotiate individual severance provisions, the Committee recognizes that under certain circumstances individual severance arrangements may be desirable or beneficial to the Company. Pursuant to the Company’s Executive Severance Policy, the Company is prohibited from entering into a severance agreement with a senior executive of the Company without shareholder approval if such agreement would provide for specified benefits exceeding 2.99 times the sum of (a) the senior executive’s annual base salary as in effect immediately prior to termination of employment and (b) the senior executive’s target annual bonus in the fiscal year in which the termination of employment occurs. Benefits excluded from this policy are (i) the value of any accelerated vesting of any outstanding equity-based award provided under plans, programs or arrangements of the Company applicable to one or more groups of employees in addition to the Company’s senior executives, (ii) a pro-rata portion of the value of any accelerated vesting of any outstanding long-term cash-based incentive award provided under plans, programs or arrangements of the Company applicable to one or more groups of employees in addition to the Company’s senior executives, (iii) compensation and benefits for services rendered through the date of termination of employment, (iv) any

 

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post-termination retirement and other benefits, special benefits or perquisites provided under plans, programs or arrangements of the Company applicable to one or more groups of employees in addition to the Company’s senior executives and (v) payments that are required by the Company’s By-laws regarding indemnification and/or a settlement of any claim made against the Company. The policy is available for viewing on our website at www.pultegroupinc.com.

Benefits

Named executive officers participate in employee benefit plans on the same terms as generally available to all employees. In addition, each of the named executive officers is eligible to participate in our Financial Counseling Reimbursement Plan and our Health Exam Reimbursement Plan. As an inducement to accept his offer of employment, Mr. Koart also received a monthly living stipend of $3,500, which amount was increased to $12,000 per month in September 2023. The named executive officers, as well as other Company executives, may also participate in the Company’s Non-Qualified Deferral Program, under which they may elect to defer the receipt of their annual incentive cash awards. This plan is discussed further under the section “2023 Non-Qualified Deferred Compensation Table.” We do not have a defined benefit pension plan.

Clawback Policies

In September 2023, the Board adopted a new compensation recovery, or “clawback,” policy for cash and equity incentive awards paid to executive officers providing for the recovery of applicable incentive-based compensation from current and former executive officers of the Company in the event the Company is required to restate its financial results due to the Company’s material non-compliance with any financial reporting requirement under the federal securities laws as required by the Dodd-Frank Act and corresponding NYSE listing standards.

The Company also maintains an additional clawback policy with respect to the Annual Program, Growth Incentive Pool, LTI Program, and equity grants. Under the policy, in the event any current or former executive officer (or other employee deemed by the Board to be subject to the policy) engages in “detrimental conduct” (as defined in the policy), the Committee may require that such employee (i) reimburse the Company for all or any portion of any bonus, incentive payment, equity-based award, or other compensation received by such employee within the 36 months following such detrimental conduct and (ii) remit to the Company any profits realized from the sale of Company securities within the 36 months following such detrimental conduct.

Prohibition Against Pledging and Hedging of Company Securities

To further enhance the linkage between executives’ long-term incentive compensation and shareholder value, the Company’s insider trading policy prohibits directors and executive officers from engaging in hedging or monetization transactions, such as zero-cost collars and forward sale contracts, with respect to their Company security holdings. See page 16 for further information regarding the Company’s anti-hedging policy. Additionally, under the Company’s insider trading policy, directors and executive officers are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan, as such arrangements could result under some circumstances in a margin sale or foreclosure sale occurring at a time when the director or executive officer is aware of material nonpublic information or otherwise is not permitted to trade in Company securities. The policy is available for viewing on our website at www.pultegroupinc.com.

Share Ownership Guidelines

To align our executives’ interests with those of our shareholders and to assure that our executives own meaningful levels of Company common shares throughout their tenures with the Company, our executive officers are subject to share ownership guidelines adopted by the Committee. The share ownership guidelines require, within a five-year period from date of hire, promotion or determination that a position is subject to Section 16 of the Exchange Act, the Chief Executive Officer to own Company common shares equal in value to at least six times his base salary and each of the other named executive officers to own Company common shares equal to at least three times their respective base salary. Included in the definition of share ownership are restricted shares and RSUs, any Company common shares owned outright (including the value of restricted shares that have vested at the higher of the current market price or the share price on the date of vesting) and common shares in any Company benefit plan. Stock options, whether vested or unvested, and unearned PSU awards do not count towards meeting share ownership guidelines. As of the record date, all of the continuing named executive officers have either met the share ownership guidelines or are within the five-year period to become in compliance with the guidelines.

 

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2024 Compensation Decisions

At its February 2024 meeting, the Committee took the following actions with respect to 2024 compensation matters:

 

LOGO

Base Salary. The Committee approved 2024 base salaries for the named executive officers. There were no changes to 2024 base salaries from 2023 for any named executive officer, other than Mr. O’Shaughnessy, whose base salary was increased from $750,000 to $800,000 to better align his compensation with market.

 

LOGO

Annual Incentive Compensation. The Committee approved the 2024 Annual Program which eliminated the Growth Incentive Pool and included the following components: (i) Annual Incentive Plan with plan-based components identical to the prior year, and (ii) a Pre-Tax Pool based on a percentage of pre-tax income for 2024 with the pool payout modified based on the rank of the Company’s year-over-year pre-tax growth versus its homebuilder peer group. The Committee believes these modifications will decrease the variability of annual incentive payouts and more accurately align payouts with the Company’s performance relative to its homebuilding peers. The target award opportunity for each named executive officer for each component of the 2024 Annual Program is as follows

 

Executive

  AIP – Plan Based Component   AIP – Pre-Tax Pool Component 
       

RYAN R. MARSHALL

    $ 1,500,000     $ 3,500,000   
       

ROBERT T. O’SHAUGHNESSY

    $ 525,000     $ 1,300,000
       

MATTHEW KOART

    $ 525,000     $ 1,350,000
       

TODD N. SHELDON

    $ 250,000     $ 450,000
       

KEVIN A. HENRY

    $ 230,000     $ 220,000

 

LOGO

2024-2026 LTI Program. As noted above, the Committee approved changes to the annual performance-based long-term incentive awards for 2024-2026 to make all three metrics of the awards (TSR, return on equity and operating margin) payout based on the Company’s relative performance against its homebuilding peer group. The Committee believes that the inclusion of relative performance goals for the entire award will help to incentivize stronger relative performance through dynamic market cycles. The Committee also approved a change to the allocation of awards under the 2024-2026 LTI Program between time-based and performance-based awards. Whereas in previous years the allocation had been split equally between the two, in 2024-2026 the allocation is weighted 60% to performance-based awards and 40% to time-based awards.

 

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COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT

 

The Compensation and Management Development Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation and Management Development Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and this Proxy Statement.

 

   

Scott F. Powers, Chair

Cheryl W. Grisé

Lila Snyder

 

 

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2023 EXECUTIVE COMPENSATION

 

2023 Summary Compensation Table

The table below sets forth information concerning the compensation of our named executive officers for 2023 and, to the extent required by SEC disclosure rules, 2022 and 2021.

 

Name and

Principal Position

  Year   Salary
($)
  Bonus   Stock
Awards
($)(1)
  Non-Equity
Incentive Plan
Compensation
($)(2)
  Nonqualified
Deferred
Compensation
Earnings
($)
  All Other
Compensation
($)(3)
  Total
($)
                               

RYAN R. MARSHALL

President and CEO

      2023     $ 1,000,000           $ 7,406,576     $ 4,089,119     $     $ 35,213     $ 12,530,908
      2022     $ 1,000,000           $ 8,605,099     $ 4,848,040     $ 37     $ 30,848     $ 14,484,024
      2021     $ 1,000,000           $ 7,000,001     $ 8,122,429     $ 25     $ 27,100     $ 16,149,555
                               

ROBERT T. O’SHAUGHNESSY

EVP & CFO

      2023     $ 750,000           $ 2,042,003     $ 2,055,699           $ 21,886     $ 4,869,588
      2022     $ 750,000           $ 2,903,183     $ 2,685,025           $ 23,266     $ 6,361,474
      2021     $ 750,000           $ 1,900,026     $ 4,576,518           $ 13,415     $ 7,239,959
                               

MATTHEW KOART(4)

EVP & COO

      2023     $ 467,308               $ 2,049,500     $ 1,596,589       603     $ 82,257     $ 4,196,257