UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

(Amendment No.    )

 

 

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PulteGroup, Inc.

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PULTEGROUP’S ESG JOURNEY

 

In addition to providing an inclusive working environment, we are also committed to creating a healthy and safe working environment. Due to the nature of our work, health and safety our a key priority in our organization. In addition to endeavoring to comply with all applicable federal, state, and local laws regarding working conditions and occupational safety standards, we also require our employees and trade partners to meet our own, often times more stringent, internal standards. To enforce these standards, we conduct regular, unannounced audits at our divisions. The results of these audits are also reported to our Board of Directors (the “Board”).

Customers

We know that for many of our customers, their home is their largest investment, but recently it has become much more. For many of our customers, their home now serves as an office, daycare, school, and source of entertainment. Now, more than ever, we believe our purpose of “Building Incredible Places Where People Can Live Their Dreams” must be the foundation of our business. This is why we focus on building high quality, sustainable homes that meet our customers’ ever-changing needs.

To deliver on our purpose, we build our homes tracking the process through our Build Quality Experience^TM. This includes a ten-step process that takes our customers from their initial meeting with one of our construction managers who will be their partner throughout the entire process, to a build quality survey that is conducted a year after the home is completed so that we can collect valued feedback and continue to improve our homes and the Build Quality Experience^TM.

Environment

As detailed in our recently published Environmental Policy available at www.pultegroupcares.com/sustainability, we are committed to operating our business in an environmentally responsible manner.

We believe the biggest opportunity our Company has to reduce its environmental impact is through the houses that we build. We do this through thoughtful land development and responsible building practices. We also look to build energy efficient homes. Over the years, our focus on the environment has also led us to develop a number of operational improvements, including a comprehensive National Storm Water Quality Program, our “Commonly Managed Plans” initiative that minimizes job site waste, and our equipping our homes with energy efficient appliances and features. Through continued innovations in the homebuilding industry, homebuilders like PulteGroup have helped make new homes significantly more energy efficient than homes built just a decade ago.

We are also committed to reducing the environmental footprint of our operations, and have completed our organization’s first-ever greenhouse gas (“GHG”) assessment. Our GHG assessment, in alignment with the World Resource Institute’s GHG Protocol, seeks to measure our Company’s Scope 1, Scope 2 and select categories of Scope 3 emissions. The results of our assessment can be found on our PulteCares website at www.pultegroupcares.com, which we recently launched to provide our stakeholders with a central repository for our ESG information. We plan to provide updates to this data on an annual basis and leverage this information to improve the efficiency of our operations.

Communities

 

We play an important role in the communities where we build. In addition to helping address our nation’s housing shortage, we also provide important jobs for local tradespeople, support veterans through our “Built to Honor®” veteran housing program, and contribute to community revitalization projects.

In fiscal 2021, through our Built to Honor^® program, we continued to thank our military families by delivering seven new homes to deserving veterans across the country. Since it was launched in 2013, the Built to Honor^® program has provided more than 60 mortgage-free homes to veterans and their families.

PULTEGROUP’S ESG JOURNEY

 

In 2020, we also formed the PulteGroup, Inc. Charitable Foundation (the “Foundation”), which has as its mission to give back to our military veterans, help meet unmet housing needs, and educate the next generation of homebuilders. Each year, the Company has committed to contribute a portion of our profits to fund the Foundation, and grants will be made to local charities designated by our operating Divisions as well as to national charitable organizations. To date, the Foundation has committed to make over $2 million in contributions.

ESG Oversight

We believe that oversight is essential to effective ESG practices. Therefore, our entire Board and Executive Leadership Team receive regular updates on the Company’s ESG efforts, with the Nominating and Governance Committee of our Board having primary responsibility for overseeing our ESG goals and objectives. Our Nominating and Governance Committee also receives updates on ESG matters on a quarterly basis and evaluates key risks regarding environmental, workforce diversity, and health and safety issues, along with policies related to employee conduct and ethics.

Shareholder Engagement

We proactively seek to engage with a majority of our shareholders on ESG matters and to provide them with updates on our progress. We also aim to provide timely responses to ESG-related shareholder inquiries throughout the year. Feedback from our shareholder engagement, combined with our Company’s commitment to ESG best practices, continues to drive action. For example, we are committed to providing timely and relevant data disclosures related to ESG metrics. In fiscal 2021, we provided disclosures of the racial, ethnic, and gender diversity of our total Company workforce as noted above, in addition to providing disclosure aligned with the Sustainability Accounting Standards Board (commonly known as “SASB”) framework. Going forward, we plan to provide annual updates to these disclosures along with evaluating and disclosing against other relevant frameworks as appropriate, such as the Task Force on Climate-Related Financial Disclosures (commonly known as “TCFD”).

Our ESG data and disclosures can be found on our PulteCares website at www.pultegroupcares.com.

 

 

ii		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

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				FIVE OF OUR NOMINEES HAVE JOINED THE BOARD IN THE LAST SIX 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      Annual election of all directors      Majority vote standard in uncontested director elections      Proxy access rights      Right to call a special meeting for shareholders with 20% or more of outstanding shares      Right to take action by written consent for shareholders      Active engagement with the Company’s top 20 largest shareholders		Independent Oversight      Strong Non-Executive Chairman role      Audit Committee, Compensation and Management Development Committee and Nominating and Governance Committee each comprised solely of independent directors      All directors are independent except the Chief Executive Officer      Committees have authority to retain independent advisors		Good Governance      Frequent cross-committee and Board communications      Periodic Board, committee and director evaluation processes      Code of ethical business conduct and code of ethics      Director orientation and continuing education programs      Meaningful share ownership guidelines for executive officers and directors      Prohibition against hedging and pledging Company securities by all employees and directors      Charter of Nominating and Governance Committee expresses strong commitment to inclusion of diverse groups, knowledge and viewpoints in selection of Board nominees

 

		PROPOSAL TWO
		Ratification of Appointment of Ernst & Young LLP as the Independent Registered Public Accountant for 2022

 

		The Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accountant for 2022.   •  Independent firm with a reputation for integrity and competence   •  Provides significant financial reporting expertise   •  Few ancillary services and reasonable fees u  See page 55 for further information

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		iii

PROXY SUMMARY

 

		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 56-57 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 CASH 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.			33-35
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.			35-37
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

 

iv		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

PROXY SUMMARY

 

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.

 

WHAT WE DO				WHAT WE DO NOT DO

 

 

		PROPOSAL FOUR
		Approval of an amendment to extend the term of the Company’s Amended and Restated Section 382 Rights Agreement, as amended

 

		The Board recommends a vote FOR the approval of an amendment to extend the term of the Company’s Amended and Restated Section 382 Rights Agreement, as amended.   •  Protect value of deferred tax assets u  See pages 58-63 for further information

 

		PROPOSAL FIVE
		Approval of the PulteGroup, Inc. 2022 Stock Incentive Plan

 

		The Board recommends a vote FOR this proposal.   •  Align the interests of our shareholders and recipients of awards under the 2022 Stock Incentive Plan by increasing the proprietary interest of such recipients in the Company’s growth and success   •  Advance the interests of the Company by attracting and retaining officers, other employees, non-employee directors, consultants, independent contractors and agents   •  Motivate such persons to act in the long-term best interests of the Company and its shareholders   u  See pages 64-70 for further information

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		v

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		1

 

2		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		3

BOARD OF DIRECTORS INFORMATION

 

Consistent with this charter amendment, all searches conducted since March 2018 have included a diverse pool of candidates with the objective of further enhancing the collective experiences and qualifications of the Board. This has served 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 http://www.pultegroupinc.com/investors/corporate-governance/guidelines/default.aspx, a substantial majority of the members of our Board must be independent. The Board has adopted categorical independence standards to assist the Nominating and Governance Committee in determining director independence, which standards either meet or exceed the independence requirements of the NYSE corporate governance standards. Under these standards, no director can qualify as independent unless (i) the Board affirmatively determines 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, (ii) the director is otherwise independent under NYSE corporate governance standards and (iii) the director meets the following categorical standards:

 

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

 

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;

 

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;

 

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;

 

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;

 

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);

 

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;

 

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

 

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.

The Board considered all relevant facts and circumstances in assessing director independence. In connection with this assessment, the Board affirmatively determined that Brian P. Anderson, Bryce Blair, Richard W. Dreiling, Thomas J. Folliard, Cheryl W. Grisé, André J. Hawaux, J. Phillip Holloman, John R. Peshkin, Scott F. Powers and Lila Snyder are independent within the meaning of the Company’s categorical standards and the NYSE listing standards. 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.  |  2022 PROXY STATEMENT

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		5

PROPOSAL 1 - ELECTION OF DIRECTORS

 

Brian P. Anderson
Director Since: 2005   Age: 71   Committees: • Audit • Finance and Investment   Experience & Skills:				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 boards of directors of W.W. Grainger, Inc. and Stericycle, Inc.   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 (and current 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 - present) •  J. Hardie Industries plc (2006 - 2020)		•  Stericycle, Inc. (2017 - present) •  A.M. Castle & Co. (2005 - 2016)
Bryce Blair
Director Since: 2011   Age: 63   Committees: None (Mr. Blair is the Non-Executive Chairman)   Experience & Skills:				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 which 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. 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)

 

6		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

PROPOSAL 1 - ELECTION OF DIRECTORS

 

Thomas J. Folliard
Director Since: 2012   Age: 57   Committees: • Compensation and Management Development • Nominating and Governance Committee   Experience & Skills:				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; 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) •  DAVIDsTEA Inc. (2014 - 2017)

 

Cheryl W. Grisé
Director Since: 2008   Age: 69   Committees: • Compensation and Management Development • Nominating and Governance   Experience & Skills:				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 experience, including earlier experience as general counsel and corporate secretary, provide her with a unique perspective on the complex legal, compensation, and other issues that affect companies in regulated industries and the Board’s roles and responsibilities with respect to 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 board of directors of several other public companies, including ICF International, Inc., which provides Ms. Grisé meaningful experience in cybersecurity matters.   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)		•  Pall Corporation (2007 - 2015)

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		7

PROPOSAL 1 - ELECTION OF DIRECTORS

 

André J. Hawaux
Director Since: 2013   Age: 61   Committees: • Audit (Chair) • Finance and Investment   Experience & Skills:				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 board of directors of Lamb Weston Holdings, Inc. where he chairs the audit committee.   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 Foods as Executive Vice President and Chief Financial Officer in 2006, and prior to ConAgra Foods, 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)		•  The Timberland Company (2010 - 2011)

 

J. Phillip Holloman
Director Since: 2020   Age: 66   Committees: • Audit • Finance and Investment   Experience & Skills:				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 also serves 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 also serves as director of Rockwell Automation.   Public Company Board Experience:
				•  Rockwell Automation (2013 - present)		•  Blackrock Fixed Income (2021 - present)

 

8		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

PROPOSAL 1 - ELECTION OF DIRECTORS

 

Ryan R. Marshall
Director Since: 2016   Age: 47   Committees: • Finance and Investment   Experience & Skills:				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 & Décor Holdings, Inc.   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)

 

John R. Peshkin
Director Since: 2016   Age: 61   Committees: • Audit • Finance and Investment (Chair)   Experience & Skills:				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)

 

		PULTEGROUP, INC.  |  2022 PROXY STATEMENT		9

PROPOSAL 1 - ELECTION OF DIRECTORS

 

Scott F. Powers
Director Since: 2016   Age: 62   Committees: • Compensation and Management Development (Chair) • Nominating and Governance   Experience & Skills:				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 will assume the role of Non-Executive Chairman of the Board in May 2022, 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)

 

Lila Snyder
Director Since: 2018   Age: 49   Committees: • Audit • Finance and Investment   Experience & Skills:				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.

 

10		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

PROPOSAL 1 - ELECTION OF DIRECTORS

 

		The Board of Directors recommends that shareholders vote “FOR” the election of these ten 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

 

Compensation and Management Development Committee

The Compensation and Management Development Committee met 5 times in 2021. 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; and discusses performance, leadership development and succession planning for key officers with the Chief Executive Officer, as appropriate. 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 Ms. Michelle Hairston, the Company’s Senior Vice President, Human Resources, 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 making its compensation decisions.

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. Decisions 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. All decisions for 2021 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 the 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 Management Development Committee. During 2021, 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 the Semler Brossy to provide opinions on named executive officer pay decisions.

 

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COMMITTEES OF THE BOARD OF DIRECTORS

 

In 2021, 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.

Nominating and Governance Committee

The Nominating and Governance Committee met 4 times in 2021. 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, Social and Governance (“ESG”) Policies, reviewing the Company’s cultural metrics, and assessing and monitoring the Company’s enterprise risk management initiatives. With respect to our ESG reporting, the Nominating and Governance Committee oversaw our Company’s process of beginning to report sustainability metrics consistent with the Sustainability Accounting Standards Board (“SASB”) for Home Builders along with other disclosures related to our environmental and social initiatives. ESG-related metrics and initiatives have been included in our CEO’s performance objectives for 2022. 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 12 times in 2021. The Finance and Investment Committee reviews all 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.

Board Meeting Information

The Board of Directors held a total of 10 meetings in 2021. During 2021, each director attended at least 94% 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’s service 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.

 

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COMMITTEES OF THE BOARD OF DIRECTORS

 

Throughout the year, PulteGroup held regularly scheduled executive sessions of its non-management directors without management participation. In addition, in 2022, PulteGroup will hold at least one executive session of its non-management directors without the participation of management. Since the Company’s 2017 annual meeting of shareholders, Bryce Blair, our Non-Executive Chairman, has presided at these executive sessions. Provided that Mr. Blair 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

 

Executive Officer, as to the agendas for meetings of the Board and informational needs associated with those agendas and presentations; performing such other 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.

As part of the Nominating and Governance Committee’s role in risk assessment in 2018, this committee was 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 the formal risk assessment, 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 also receives 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. We have privacy and data security policies, practices and controls in place that are designed to prevent and/or mitigate the impact of security breaches. 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, to the extent possible, against cyber risks and security breaches, and monitor to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have an impact on our business. The Company’s cybersecurity program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework, and periodically assessed by an independent third party. In addition, the Company maintains cybersecurity insurance as part of its overall insurance portfolio. Additionally, the Audit Committee receives materials on a frequent basis to address the identification and status of information technology cybersecurity risks, and management, including our Chief Information Officer and Chief Information Security Officer, provides quarterly updates to our Audit Committee and an annual update to our Board with respect to cybersecurity matters.

 

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CORPORATE GOVERNANCE

 

ENTERPRISE RISK AND BOARD OF DIRECTORS’ OVERSIGHT

 

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:

 

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.

 

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.

 

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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CORPORATE GOVERNANCE

 

In 2021, the Board and committee assessments were completed in December and contributed to the updating of the experience and qualifications matrix referenced previously on page 3. 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 six years. 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

Like many boards of directors, our Board has met more frequently over the last two years to manage the tactical challenges of the COVID-19 pandemic and the broader impacts of a dynamic operating environment on our long-term strategy. 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 94% of their scheduled meetings in 2021. In addition to this strong record of commitment and engagement and a rigorous assessment process, our Corporate Governance Guidelines also provide that a director may not serve on more than four total 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.pultegroup.com and in print for any shareholder upon written request to our Corporate Secretary:

 

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

 

Audit Committee Charter

 

Compensation and Management Development Committee Charter

 

Nominating and Governance Committee Charter

 

Finance and Investment Committee Charter

 

Code of Ethics (for Covered Senior Officers)

 

Code of Ethical Business Conduct

 

Corporate Governance Guidelines

 

By-laws

 

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2021 DIRECTOR COMPENSATION

 

Director Compensation

The Nominating and Governance Committee reviews the compensation of the Company’s non-employee directors. For 2021, the Nominating and Governance Committee did not make any changes to the non-employee director compensation program.

During 2021, non-employee directors were entitled to receive the following compensation for service as members of the Board of Directors and as members of Board committees:

 

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

 

Committee Chair retainer fee of $25,000 in cash;

 

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

 

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

Director Deferred Compensation

In 2021, 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.

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 2021. The compensation received by Mr. Marshall as an employee of the Company is shown in the 2021 Summary Compensation Table set forth in this Proxy Statement.

Equity Ownership Guidelines

Each member of the Board of Directors 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 members of the Board of Directors have met or, within the applicable period, are expected to meet, these share ownership guidelines.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

2021 also brought significant disruption in the homebuilding supply chain, as we faced limited availability and cost pressures related to labor and materials, due in large part to a shortage of workers and supply chain challenges resulting from ongoing effects of the COVID-19 pandemic and other macroeconomic factors. Such shortages impacted the availability and costs of certain wood products, including roof and floor trusses and oriented strand boards, windows, siding, and appliances, among other supply categories. This combination of sustained high demand for new homes and instability in our supply chain created unprecedented challenged for our operations.

Despite the unique challenges of 2021, our Company’s ability to modify its operations quickly to deliver quality homes for our customers resulted in the second highest annual pre-tax income and the highest year-end backlog (as measured in dollars) in our history. These financial results have, combined with a favorable outlook for housing in the future, allowed us to invest in our future operations and increase our returns to shareholders while maintaining modest financial leverage. Specifically, we:

 

Increased our share repurchase program, including the repurchase of $ 897 million of shares in 2021;

 

Increased our quarterly dividend by 17% to $0.15 per share effective for dividends paid in 2021;

 

Retired $726 million in debt, including the completion of a tender offer in March 2021 for $300 million of our senior notes scheduled to mature in 2026 and 2027; and

 

Ended the year with $1.8 billion of cash and cash equivalents and a debt to capital ratio of 21.3% as of December 31, 2021.

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 decisions for 2021 were made in the context of our financial performance relative to performance goals established with consideration to the significant external factors throughout the year and the actions management took to strengthen PulteGroup’s position for 2022 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 2021, as their effective execution against unprecedented challenges during the year enabled the Company to navigate the supply chain and operational challenges in 2021 and deliver exceptional financial results and returns for our shareholders.

CEO 2021 Total Direct Compensation

In February 2021, the Compensation and Management Development Committee of our Board of Directors (the “Committee”) increased the target value of Mr. Marshall’s long-term incentive awards to $7,000,000 from $6,000,000, with such awards equally weighted between a share-settled three-year performance-based award and service-based restricted share units. The Committee made no other changes to Mr. Marshall’s compensation for 2021.

This change to Mr. Marshall’s compensation reflected, among other things, the Committee’s acknowledgement of Mr. Marshall’s strong performance in 2020 and a desire to align Mr. Marshall’s compensation more closely with the competitive market and to deliver the increased compensation in the form of long-term incentive awards, further aligning his interests with our shareholders while increasing the retention value of his compensation package.

Based on performance against the performance goals established in February 2021, the Committee approved a payout under the 2021 annual incentive program to Mr. Marshall of $4,000,000 (200% of target) and a 2021 Growth Incentive Pool allocation based on pre-tax income growth of $4,122,429. We believe these payouts are appropriately aligned with the Company’s strong results this year and reflect Mr. Marshall’s leadership of the continued implementation of our strategy of generating cash flows to fund growth, continued improvements in build quality measurements, and enhanced employee engagement, which helped the Company achieve outstanding 2021 financial performance.

For additional information, see “Pay for Performance” on page 26 of this Proxy Statement and the “Annual Incentive Compensation” section on page 33 of this Proxy Statement.

 

24		PULTEGROUP, INC.  |  2022 PROXY STATEMENT

COMPENSATION DISCUSSION AND ANALYSIS

 

Named Executive Officers

For 2021, 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
JOHN J. CHADWICK		Executive Vice President and Chief Operating Officer
TODD N. SHELDON		Executive Vice President, General Counsel and Corporate Secretary
MICHELLE H. HAIRSTON		Senior Vice President, Human Resources

Return to Shareholders

The following chart shows how a $100 investment in the Company’s common shares on December 31, 2016 would have grown to $332.09 on December 31, 2021, with dividends reinvested quarterly. The chart also compares the total shareholder return (“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*

 

 

 

*	Assumes $100 invested on December 31, 2016, and the reinvestment of dividends.

 

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