Twenty individuals--the chief executives of United States-based public home building organizations--earned total collective compensation of just shy of $140 million in 2016, an average of $6.9 million, and a median total comp package of $5.4 million. Now, the spectrum of compensation packages across the 19 companies ranges from a high of $13.8 million, which is Lennar ceo Stuart Miller's 2016 comp package, and $1.8 million, which AV Homes ceo Roger Craig earned in the same period.

So, averages have limited instructive value. Here are 2016's ceo "total compensation" packages ranked in order of size.

Note, Charlotte O'Malley, Hanley Wood Data Studio chief and engagement editor, produced the chart materials for this analysis of company proxy statements.

As a whole, for those same 20 ceos, the total in 2015 earnings and value was $116.5 million, for an average of $5.8 million across the universe of public home builders. Collectively, the group's earnings jumped 20.7% over the prior year, an average of $1.2 million, which is about consistent with the amount CEO packages rose across the broader economy of industries in 2016, according to Equilar, which tracks executive compensation of public companies.

Per Marketwatch correspondent Tonya Garcia, home building enterprise ceo's tend to average well under the total compensation levels of their peers in other industries:

Total compensation for CEOs included in the annual Equilar 100 rose a median of 6% for fiscal 2016, with median pay reaching $15.0 million. Average pay was $16.6 million, up from $15.5 million last year.

One should also note that the $6.9 million average for public home builder ceos is a far cry from "peak comp" in public home building. The year was 2004, and the median compensation package among the public home building enterprises at the time was almost $11 million, skewed by lusty eight- and even nine-figure packages to the likes of former KB Home chief Bruce Karatz. If you'd like to have a look at some history on this, we have analyses from 2014's ceo rankings here, and 2012 here.

Since then, of course, a little thing called the Great Recession came along and whacked all of the performance-driven metrics ceo's achieved thanks to an irrationally exuberant spree that came quickly and died an ugly, destructive death in the mid-to-late 2000s.

Not only that. Activist investors began scrutinizing executive compensation as an actual cause and contributor--not simply a symptom--of the economic and financial insanity, dislocation, and meltdown. Thus, began intense criticism of board compensation committees against a practice of overly generous financial rewards to public company ceos in a number of fields. Even though home builders' total compensation doesn't tend to compare with the stratospheric mid-$20s-to-mid-$30s million of some ceos, today's world of transparency, accountability, and outright risk suggests that the chiefs of home building organzations-and their boards--are keeping somewhat mindful of the spread between highest-paid individuals and the low-paid workers at the firm.

So, as activists upped their game in more and more shareholder meetings, board of director compensation committees increasingly looked over their shoulders to ensure that the packages, reward structures, and bonus and incentive triggers are essentially on par with peers in the secular home building business community group.

CEO base salaries, for instance, have become more range-bound around the $1 million mark, in 2016 clocking in at an average of $884,499 for the peer group. What's noteworthy about that figure, however, is that, as a percentage of each ceo's entire compensation package, the base salary ranges from about 5.2% for Stuart Miller to very nearly 50% (49.77%) for NVR's Paul Saville in 2016.

This speaks, of course, to the varying ways each company and their boards calculate equity and non-equity rewards bonuses and disbursements for their chief executives.

Non-equity incentives--the accounting term describing a performance-based cash bonus to motivate and recognize annual financial performance--accounted for the largest percentage of most of our peer set's rewards in 2016. In absolute cash dollars and share of total compensation, the largest non-equity cash payout was to Lennar ceo Stuart Miller, a $13.4 million award, representing upwards of 70% of Miller's total package for 2016.

In Lennar's case, the argument for Miller's "good year" on a performance basis includes the following data points.

  • Net earnings of $911.8 million – up 14%
  • Revenues of $10.9 billion – up 16%
  • Deliveries of 26,563 homes – up 9%
  • New orders of 27,372 homes – up 9%

Based on our Pretax Income of $1.34 billion, Messrs. Miller, Beckwitt and Jaffe were entitled to cash bonus payments of $13,435,580, $12,360,734 and $12,360,734, respectively.

Percentage-wise, the ceo whose comp package derived the least from non-equity incentives was Eric Lipar, whose board structured a cash "bonus" based on performance triggers, as opposed to a non-equity cash award. The second lowest share of a comp package coming from non-equity incentives was PulteGroup's rookie-year ceo Ryan Marshall, whose $690,690 non-equity incentive accounted for 18.4% of his 2016 comp. One would imagine that in 2017 and beyond, more of Marshall's upside will come from the non-equity incentive portion of his package.

Clearly, unit closing volume increases bear very little direct influence on the compensation of many of the ceos, although you can see in the case of a few of them--Century Communities' Dale and Robert Francescon, for instance, and Taylor Morrison's Sheryl Palmer--that there's a pretty strong match between unit volume increases and the percentage change (increase) in their 2016 compensation. In a few cases, the relationship was inverse. MDC's Larry Mizel (-27% compensation), AV's Roger Cregg (-11% compensation), TRI Pointe's Doug Bauer (-5% compensation), and Beazer ceo Allan P. Merrill (-1% compensation), each stepped back in total earnings even as their companies' unit volume grew during calendar 2016.

This just means that from a compensation structure point of view, it was "not their year." We may see some dramatic year-to-year changes among these four ceos in the proxy statements that come out 12 months from now.

Note, proxy statements for UPC and Green Brick Partners were not available at the time we hit our deadline this morning.