Oh, to be a builder in a housing boom. Last year, public home building CEOs earned a median salary of $875,000, a paycheck sweetened by bonuses ($4.4 million) and restricted stock and stock options ($2.9 million). The bottom line for these 13 CEOs: a median of $10 million in total compensation in 2002, according to research by Credit Suisse First Boston.

Chad Dreier of The Ryland Group took the top spot, with $26 million, much of it in bonuses and restricted stock awards. Last year's highest paid, Dwight Schar of NVR, fell to the bottom this year, with only $3 million in total pay (not including $4 million in deferred compensation), after NVR ended a compensation plan that brought him nearly $49 million in 2001.

Yet, the "CEO who provides the most value to the company, without question NVR leads the pack with respect to return on capital, return on equity, free cash flow yield, and inventory turns, which leads to superior stock price performance," says analyst Ivy Zelman.

Another surprise: Stuart Miller of Lennar, who received $9.4 million. "We were surprised that Miller wasn't higher on the list," Zelman says. "Lennar management is an efficient capital allocator, and in general they outperform their peer group in terms of return on capital and return on equity."

Still, builders are very well-paid compared to other industries, she adds. Paul Hodgson of The Corporate Library agrees. "The construction industry fared the best" in a cash compensation survey he did of 1,020 company CEOs, he says.

Salary Scale
CEO/Company 2002 total compensation*
Chad Dreier/Ryland $26.0 million
Bruce Karatz/KB Home $23.9 million
Bob Toll/Toll Brothers $16.7 million
Larry Mizel/M.D.C. Holdings $14.4 million
Mark O'Brien/Pulte Homes $13.5 million
Larry Hirsch/Centex Corp. $10.9 million
Ara Hovnanian/Hovnanian Enterprises $10.6 million
Stuart Miller/Lennar $9.4 million
Stephen Scarborough/Standard Pacific $6.1 million
Ian McCarthy/Beazer Homes $5.9 million
Don Tomnitz/D.R. Horton $4.5 million
Irving Schottenstein/M/I Schottenstein $4.4 million
Dwight Schar/NVR $3.0 million
*Includes salary, bonus, restricted stock awards, fair value of stock options, and other compensation. Source: Credit Suisse First Boston

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