CEOs at Toll Bros., Hovnanian, KB Home top pay list
By JANET MORRISSEY

The Associated Press
Dow Jones Newswires

NEW YORK (Dow Jones/AP) – Chief executives at Toll Brothers Inc.,
Hovnanian Enterprises Inc. and KB Home topped the list of the
highest-paid CEOs in the home-building sector in 2004, according to
a study by investment manager UBS AG.

The study, released this week, found the highest-paid executives
weren’t necessarily from the companies that delivered the best stock
performance. However, since a big chunk of the compensation comes from
options, the compensation is connected to stock performance over the
long term, the report said.

UBS said Toll Brothers Chairman and Chief Executive Robert Toll took
home a salary, bonus, options and other compensation totaling $42.8
million in 2004, up 77 percent from 2003. This company also delivered
the biggest stock returns in 2004 as shares rose 73 percent, the
study said.

Hovnanian’s Ara Hovnanian saw his compensation package rise 78 percent
to $36.7 million, while KB Home’s Bruce Karatz received $32.8 million,
up 38 percent from 2003, the study said. Hovnanian’s stock was up
only 14 percent in 2004 while KB Home’s rose 44 percent.

On average, a home-building chief executive pocketed $18.1 million,
up 52 percent from $11.9 million in 2003.

The report concluded that D.R. Horton Inc. and Pulte Homes Inc.
offered the best value based on compensation and stock performance.
D.R. Horton Chief Executive Don Tomnitz received a compensation package
worth only $9.8 million – even though his company’s stock increased
40 percent. Pulte’s Richard Dugas took home a compensation package
valued at $15.3 million while his company’s stock rose 36 percent.

The builders posting the biggest stock gains in 2004 were Toll at 73
percent, Meritage Corp. at 69 percent, and NVR Inc. at 65 percent.

The study concluded that Lennar Corp. and Hovnanian offered the
poorest value based on compensation and stock performance.

Lennar’s Stuart Miller took home a compensation package valued at
$21.5 million, but his company’s stock rose only 18 percent.

UBS, based in Zurich, is one of the world’s largest investment managers
with offices in some 50 countries.

05/13/05 12:51 EDT