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Lennar Corporation
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Stockholders We are focused on creating long-term value for our stockholders through a commitment to corporate ethics, risk management, careful execution of our strategies, and investments in initiatives that are redefining the future of both Lennar and our industry. While we are intensely focused on our core homebuilding business, we believe our technology investments represent a significant opportunity to create efficiencies in our internal operations and to reduce our costs. |
Homebuyers We are bringing the dream of homeownership to our homebuyers. We use our size to maximize our purchasing power so we can provide our homeowners with luxury features as standard items through our Everything’s Included®approach. We also provide connected homes that are wifi guaranteed with no dead spots, and green building features that reduce energy consumption and costs. Our investments in technology provide our homeowners with enhanced experiences, including our digitized financing process that allows homeowners to finance their homes with less paper, in less time, and with more transparency. |
Environment Our purchasing power enables us to include green features in our homes. Each new home we build is healthier and more energy efficient, and has less impact on the environment, than prior generations of homes as a result of features like: • Solar power that generates clean energy at no upfront cost to the homeowner. – 10,090 solar power home deliveries in fiscal 2020, 93% of which were on Lennar homes – ~40,000 solar power home deliveries since inception in 2013 • Low-VOC paint that reduces pollution • WaterSense®faucets that reduce water flow without sacrificing performance • Low-E windows that reduce infrared and ultraviolet light coming into the home • Energy Star®appliances that reduce energy consumption In addition, our home design and engineering work optimizes building materials and reduces construction waste. We are embracing green practices as we move toward a more environmentally and economically sustainable future. |
Community Giving back to the communities in which we operate, with both our time and financial support, is one of our core values. THE LENNAR FOUNDATION The Lennar Foundation, created 30 years ago, has received 1% of Lennar’s after-tax income each year. For fiscal 2021, the Lennar Foundation will receive $1,000 per home delivered. The Foundation’s focus is helping people through medical research, education, jobs training, and support for vulnerable groups. Below are recent examples of The Lennar Foundation’s giving and support: • Helped build state-of-the-art outpatient hospital, “The Lennar Foundation Medical Center,” at the University of Miami • Supported cancer research at The City of Hope in Los Angeles and the Sylvester Comprehensive Cancer Center in Miami • Established a college scholarship program for underserved students where the student’s full college costs, including dorm, books and meals, are paid for • Created a residential construction job skills training program in Miami, and expanded the program to Denver, Homestead, Houston, Las Vegas, Portland Sacramento and Tampa FOCUSED ACTS OF CARING Annually, each of Lennar’s divisions chooses a charitable organization to help by donating time and financial support. DOLPHINS CANCER CHALLENGE Lennar associates from across the country participate in a bike, run, and walk event. Funds raised from these efforts support the Sylvester Comprehensive Cancer Center in Miami. |
Associates We believe that everyone can succeed, no matter where you start or the path you have taken. Our associates are our most valuable asset, and we are committed to building an inclusive and diverse workforce that supports each associate’s unique journey. TALENT Our success starts and ends with having the best talent. We are focused on attracting, developing, engaging and retaining our associates. For example, our university talent program brings diverse new college graduates and summer interns into Lennar to grow our talent pipeline. WELL-BEING We understand the importance of balance, and offer associates a competitive and comprehensive benefits package, including paid parental leave and resources for whole-self well-being (physical, social, and financial). CULTURE We believe having an inclusive work environment, where everyone has a sense of belonging, not only drives engagement but fosters innovation, which is critical to driving growth. Our “Everyone’s Included” mantra anchors our unique culture. SAFETY Safe work environments, through worker safety and regulatory compliance, are a priority for us. Measurements of our worker safety metrics are reviewed by our Board of Directors so we can ensure that we are successfully managing and improving our safety program. |
Trade Partners We are focused on being the builder of choice for our trade partners. Our size and scale, combined with our even-flow production and Everything’s Included® platform, allow us to provide predictable, consistent work for our trade partners.
Corporate Governance Our Board is built on a foundation of strong governance practices that promote integrity and accountability, and this guides our conduct and commitment to doing the right thing for the right reason. Our governance practices include: • Majority independent directors • Strong independent Lead Director • Annual election of all directors • Stock ownership guidelines • Active stockholder engagement • Board oversight of risk management and cybersecurity protection • Executive compensation that is aligned with stockholder interests • Strong corporate controls | ||||||||||
We can only be an engine of social good if we are ultimately successful in our business. We believe that our ability to serve each of our stakeholders plays a vital role in our success. | ||||||||||||
 | ANNUAL MEETING OF STOCKHOLDERS | |||||||||||||
YOUR VOTE IS IMPORTANT Even if you plan to attend the Annual Meeting, we encourage you to vote your shares in advance to ensure they are counted. | When: Wednesday, April 7, 2021 11:00 AM Eastern Time |
www.virtualshareholdermeeting.com/LEN2021 | ||||||||||||
NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS
February 28, 2018
Dear Stockholder:
You are cordially invited to attend Lennar Corporation’s 2018 Annual Meeting of Stockholders. The meeting will be held on Wednesday, April 11, 2018, at 11:00 a.m. local time at our corporate office, located at 700 Northwest 107th Avenue, Miami, Florida 33172. At the meeting, you will be asked to:
HOW YOU CAN VOTE | Dear Stockholder: We are pleased to welcome you to the 2021 Annual Meeting. Due to the COVID-19 pandemic, the Annual Meeting will be held in a virtual format to provide a safe experience for our stockholders and associates. To attend, vote, and submit questions during the Annual Meeting visit www.virtualshareholdermeeting.com/LEN2021 and enter the control number included in your Notice Regarding the Availability of Proxy Materials, voting instruction form, or proxy card. Online access to the webcast will open approximately 15 minutes prior to the start of the Annual Meeting. At the Annual Meeting, you will be asked to consider the following proposals: Proposal 1: Elect eleven directors to serve | |||||||||||||
Proposal 2: Approve, on an advisory basis, the compensation of our named executive officers. Proposal 3: Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending November 30, Proposal 4: Vote on a stockholder proposal regarding our common stock voting structure. We will also transact any other business that may properly come before the Annual Meeting and any adjournment or postponement of the Annual Meeting. Only stockholders of record as of the close of business on February 16, 2021, may vote at the Annual Meeting. It is important that your shares be represented at the Annual Meeting, regardless of the number you hold. Even if you plan to attend the virtual Annual Meeting, please vote in advance. You can still vote your shares during the Annual Meeting if you participate electronically. Sincerely,
Mark Sustana Vice President, General Counsel and Secretary February 25, 2021 | ||||||||||
 | Online Before the Meeting* www.proxyvote.com | |||||||||
 | Phone 1-800-690-6903 | |||||||||
| Complete, sign and date your proxy/voting instruction card and mail it in the postage-paid return envelope. | |||||||||
| Online at the Meeting* Attend the Annual Meeting virtually and follow the instructions on the website. | |||||||||
* Detailed instructions for Internet voting are set forth on the Notice Regarding the Availability of Proxy Materials, which also contains instructions on how to access our proxy statement and annual report online. | ||||||||||
We mailed a Notice Regarding the Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report on or about February 25, 2021. Lennar’s proxy statement and annual report are available online at www.proxyvote.com. | ||||||||||
This summary does not contain all the information stockholders should consider, and we encourage stockholders to read the entire proxy statement carefully.
| Annual Meeting of Stockholders | ||
| When: Wednesday, April 7, 2021 11:00 AM Eastern Time Where: Virtual Meeting Site: www.virtualshareholdermeeting.com/LEN2021 Due to the COVID-19 pandemic, the Annual Meeting will be held in a virtual format to provide a safe experience for our stockholders and associates. To attend, vote, and submit questions during the Annual Meeting visit www.virtualshareholdermeeting.com/LEN2021 and enter the control number included in your Notice Regarding the Availability of Proxy Materials, voting instruction form, or proxy card. Online access to the webcast will open approximately 15 minutes prior to the start of the Annual Meeting. | |
Voting Matters
| For more information | Board’s recommendation | |||||
| Proposal 1 | To elect eleven directors to serve until the 2022 Annual Meeting of Stockholders. | Page 1 | FOR all nominees | |||
| Proposal 2 | To approve, on an advisory basis, the compensation of our named executive | |||||
We will also transact any other business that may properly come before the Annual Meeting and any adjournment or postponement of the Annual Meeting.
Only stockholders of record as of the close of business on February 14, 2018 may vote at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting, regardless of the number you may hold.Whether or not you plan to attend, please vote using the Internet, by telephone or by mail, in each case by following the instructions in our proxy statement.This will not prevent you from voting your shares in person if you are present.i | LENNAR CORPORATION 2021 PROXY STATEMENT
I look forward to seeing you on April 11, 2018.
Sincerely,Proxy Summary
Mark SustanaDirectors
Secretary and General CounselThe following table introduces our Board of Directors (“Board”) .
We mailed a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report on or about February 28, 2018.
Current Committee Memberships
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| Director Nominee |
Independent |
Director Since |
Audit |
Compensation | Nominating & Corporate Governance |
Executive | Independent Directors Transactions | |||||||
Amy Banse(1)
| ⬛ | 2021 | ||||||||||||
Rick Beckwitt
| 2018 | |||||||||||||
Irving Bolotin (2)
| ⬛ | 1974 | ⬛ | ⬛ | ||||||||||
Steven L. Gerard
| ⬛ | 2000 | ⬛* | ⬛ | ⬛ | |||||||||
Theron (Tig) Gilliam
| ⬛ | 2010 | ⬛* | ⬛ | ⬛ | |||||||||
Sherrill W. Hudson
| ⬛ | 2008 | ⬛* | ⬛ | ||||||||||
Jonathan M. Jaffe (3)
| 2018 | |||||||||||||
Sidney Lapidus (4)
| ⬛ | 1997 | ⬛ | ⬛ | ||||||||||
Teri P. McClure
| ⬛ | 2013 | ⬛ | ⬛ | ||||||||||
Stuart Miller (5)
| 1990 | ⬛ | ||||||||||||
Armando Olivera
| ⬛ | 2015 | ⬛* | ⬛ | ||||||||||
Jeffrey Sonnenfeld
| ⬛ | 2005 | ⬛ | |||||||||||
Scott Stowell (2)
| ⬛ | 2018 | ||||||||||||
| Meetings in fiscal 2020 | 9 | 6 | 4 | 0 | 0 | |||||||||
⬛ Chairperson
| * | Audit committee financial expert |
| (1) | Ms. Banse was elected to the Board on February 18, 2021 |
| (2) | Directors who will not stand for re-election at the 2021 Annual Meeting |
| (3) | Mr. Jaffe also was a director from 1997-2004 |
| (4) | Lead Director since 2005 |
| (5) | Executive Chairman since 2018 |
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Lennar’s proxy statement and annual report are available online atwww.proxyvote.com.LENNAR CORPORATION 2021 PROXY STATEMENT | ii
Experience and Expertise
The following chart reflects the experience and expertise of Contentsour 11 director nominees.
SKILLS & QUALIFICATIONS OF OUR 11 DIRECTOR NOMINEES
Corporate Governance Practices
Independence
Accountability
Board Practices
Ethical Practices
Alignment with Stockholder Interests
iii | LENNAR CORPORATION 2021 PROXY STATEMENT
Proxy Summary
Stockholder Engagement
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PROXY STATEMENT
Proxy Statement for Annual Meeting of Stockholders to be held on April 11, 2018
You are receiving this proxy statement because you own shares of our Class A common stock and/or Class B common stock that entitle you to vote at the 2018 Annual Meeting of Stockholders. Our Board of Directors is soliciting proxies from stockholders who wish to vote at the meeting. By use of a proxy, you can vote even if you do not attend the meeting. This proxy statement describes the matters on which you are being asked to vote and provides information regarding those matters so that you can make an informed decision.
Date, Time and Place of the 2018 Annual Meeting
We will hold the 2018 Annual Meeting on Wednesday, April 11, 2018, at 11:00 a.m. local time at our corporate offices located at 700 Northwest 107th Avenue, Miami, Florida 33172.
Questions and Answers about Voting at the Annual Meeting and Related Matters
If your shares are held by a brokerage firm, bank, trustee or other agent (“nominee”), you are considered the “beneficial owner” of these shares. If your shares are held by a nominee, the Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) should have been forwarded to you by your nominee. As the beneficial owner, you have the right to direct your nominee on how to vote your shares by following your nominee’s instructions for voting by telephone or on the Internet or, if you specifically request a copy of the printed materials, you may use the voting instruction card included in the materials you receive.
Detailed instructions for Internet and telephone voting are set forth on the Notice of Internet Availability, which also contains instructions on how to access our proxy statement and annual report online. You may also vote in person at the Annual Meeting.
If you are a beneficial owner, you must follow the voting procedures of your nominee included with your proxy materials. If your shares are held by a nominee and you intend to vote at the meeting, please bring with you evidence of your beneficial ownership as of the record date (such as a letter from your nominee confirming your beneficial ownership or a bank or brokerage firm account statement).
If your shares are held in our 401(k) plan, your proxy will serve as a voting instruction for the trustee of our 401(k) plan, who will vote your shares as you instruct. If the trustee does not receive your instructions by the date required by the trustee, the trustee will vote the shares you hold through our 401(k) plan in the same proportion as it votes the shares in our 401(k) plan for which voting instructions are received.
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We will also consider any other business that may come before the meeting in a manner that is proper under Delaware law and ourBy-Laws.Performance Highlights
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With regard to each proposal, holders of shares of our Class A common stockDuring fiscal 2020, we achieved strong financial and Class B common stock vote together as a single class (but with different voting rights). A proposal has received a majority of the votes cast if the votes cast “FOR” the proposal exceed the votes cast “AGAINST” the proposal.
Proposal 3 is an advisory vote, which means that while we ask stockholders to approve resolutions regarding the compensation of our named executive officers, the results of that vote will not have a binding effect on us. Although the advisory vote isnon-binding, our Board and the Compensation Committee will review the results of the vote and take them into account in making future determinations concerning executive compensation. Proposals 4, 5 and 6 are precatory proposals, which means that each proposal is requesting our Board take steps to accomplish what the stockholder is proposing in the proposal. An affirmative vote will not, by itself, result in the change that is requested in the proposals.
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The table below sets forth, for each proposal on the ballot, whether a broker can exercise discretion and vote shares absent instructions from the beneficial owner and, if not, the impact of broker non-votes on the approval of the proposal.operational performance, including:
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| REVENUE |
| HOME DELIVERIES | NEW HOME ORDERS | |||||||||
$22.5B p 1% | $3.1B p 28% | 52,925 p 3% | 56,169 p 9% |
Compensation Practices
We employ a number of practices that reflect our pay-for-performance compensation philosophy and related approach to executive compensation.
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|  | What we don’t do | |||||||||
• Directly link pay of senior management to performance • Maintain a compensation clawback policy • Maintain robust stock ownership guidelines for executive officers and our directors • Require a “double-trigger” for change in control severance benefits • Retain an independent compensation consultant | ||||||||||||
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• No excise tax “gross-up” payments • No supplemental company-paid retirement benefits | •No | |||||||||||
| employment contracts with our NEOs
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LENNAR CORPORATION 2021 PROXY STATEMENT | iv
If you voteProxy Summary
Compensation Highlights
Our executive compensation programs are designed to reward both short-term and long-term growth in advancethe revenues and also attendprofitability of our business, as well as total stockholder return. As shown below, the vast majority of fiscal 2020 compensation for our named executive officers was performance-based or equity-based.
2020 COMPENSATION PAY MIX
Consistent with our compensation objectives, our named executive officers received the following total direct compensation (base salary, annual cash incentive awards, and equity awards) in fiscal 2020:
2020 NEO COMPENSATION SUMMARY
| Name | Salary ($) | Stock Awards ($) | Annual Cash Incentive Awards ($) | Total ($) | ||||||||||||
| Stuart Miller | 1,000,000 | 12,904,795 | 11,255,756 | 25,160,551 | ||||||||||||
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| Rick Beckwitt | 800,000 | 11,439,861 | 9,713,872 | 21,953,733 | ||||||||||||
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| Jonathan M. Jaffe | 800,000 | 10,042,266 | 8,480,365 | 19,322,631 | ||||||||||||
Co-Chief Executive Officer and Co-President |
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| Diane Bessette | 750,000 | 1,749,981 | 2,000,000 | 4,499,981 | ||||||||||||
Vice President, Chief Financial Officer and Treasurer |
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| Jeff McCall | 750,000 | 1,499,932 | 2,000,000 | 4,249,932 | ||||||||||||
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| Mark Sustana | 465,000 | 1,189,941 | 906,750 | 2,561,691 | ||||||||||||
Vice President, General Counsel and Secretary |
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v | LENNAR CORPORATION 2021 PROXY STATEMENT
Directors are elected at each annual meeting you do not need to vote againof stockholders for a term expiring at the meeting unless you want to change your vote with regard tonext annual meeting. Upon the recommendation of the Nominating and Corporate Governance Committee (the “NCG Committee”), our Board has nominated Amy Banse, Rick Beckwitt, Steven L. Gerard, Theron I. (“Tig”) Gilliam, Sherrill W. Hudson, Jonathan M. Jaffe, Sidney Lapidus, Teri P. McClure, Stuart Miller, Armando Olivera and Jeffrey Sonnenfeld for re-election, each for a matter. Written ballotsterm that will be availableexpire at the next annual meeting for stockholders of record and for beneficial ownersstockholders. Each nominee has consented to serve if elected. Ms. Banse is a new director who have proxies from their nominees.
Beneficial stockholders who wish to vote in person must request a legal proxy from the broker or other nominee and bring that legal proxywas elected to the Board in February 2021. Irving Bolotin and Scott Stowell each notified the Board in November 2020 that he will not stand for re-election to the Board at the 2021 Annual Meeting.
Our Board of Directors is responsible for overseeing the management of our business. We believe that each of our directors possesses the necessary experience, skills, and qualities to fully perform the duties of a director and to contribute to Lennar’s success. In addition, each of our directors possesses outstanding personal integrity and interpersonal and communication skills, is highly accomplished professionally, has an understanding of the interests and issues that are important to our stockholders, and is able to dedicate sufficient time to fulfilling the obligations of a director. Each director’s principal occupation and other pertinent information about each director’s experience, qualifications, attributes, and skills that led the Board to conclude that these individuals should serve as directors follows below.
We keep our non-management directors informed of our business at meetings and through reports and analyses presented to the Board of Directors or to committees of the Board. Regular communications between the directors and management also occur apart from meetings of the Board of Directors and committees of the Board. Among other things, from time to time, the Board schedules calls with senior management to discuss the Company’s business strategies.
Under ourBy-Laws, directors are elected at each annual meeting of stockholders for aone-year term expiring at the next annual meeting of stockholders. Upon the recommendation of the Nominating and Corporate Governance Committee (the “NCG Committee”), our Board has nominated Mr. Irving Bolotin, Mr. Steven L. Gerard, Mr. Theron I. (“Tig”) Gilliam, Mr. Sherrill W. Hudson, Mr. Sidney Lapidus, Ms. Teri P. McClure, Mr. Stuart Miller, Mr. Armando Olivera, Dr. Donna Shalala, Mr. Jeffrey Sonnenfeld and Mr. Scott Stowell forre-election, each for aone-year term that will expire at the 2019 annual meeting of stockholders, and each has consented to serve if elected. Mr. Stowell was elected to our Board in February 2018 pursuant to the terms of the merger agreement relating to the strategic combination of Lennar and CalAtlantic. His nomination forre-election was made by our Board, upon the recommendation of the NCG Committee, without any contractual commitment to do so.
We believe that each of our directors possesses the experience, skills and qualities to fully perform his or her duties as a director and contribute to our success. Our directors were nominated because each possesses outstanding personal integrity and interpersonal and communication skills, is highly accomplished in his or her field, has an understanding of the interests and issues that are important to our stockholders and is able to dedicate sufficient time to fulfilling his or her obligations as a director. Our directors as a group complement each other and each other’s respective experiences, skills and qualities.LENNAR CORPORATION 2021 PROXY STATEMENT | 1
Each director’s principal occupation and other pertinent information about particular experience, qualifications, attributes and skills that led the Board to conclude that each nominee should serve as a director is as follows:
Irving Bolotin, 85, has served as a director of our Company since 1974. Mr. Bolotin is currently retired. From 1972 until his retirement in December 1998, Mr. Bolotin served as a Senior Vice President of our Company. Mr. Bolotin also serves with the BoardProposal 1: Election of Directors of WPBT Channel 2.Nominees for Election
Qualifications. The Board nominated Mr. Bolotin to serve as a director because of the extensive knowledge of homebuilding he obtained during the many years he was a member of our senior management.
Nominees for Election
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Amy Banse Age: 61 Director Since: 2021 Independent | Committees • None | |||
Professional Experience Ms. Banse has served as senior adviser to the executive committee of Comcast Corporation, a global media and technology company (including Comcast Ventures, LLC, its venture capital arm), since September 2020. She previously served as executive vice president, Comcast Corporation, from January 2020 to September 2020 and as managing director and head of funds at Comcast Ventures LLC from August 2011 to September 2020. Under her leadership, Comcast Ventures grew the size and diversity of its portfolio, making it one of the country’s most active corporate venture arms, investing in early-and later-stage companies across a wide spectrum of industries, including commerce, digital media, cybersecurity, SaaS, enterprise, and autonomous vehicles. From 2005 to 2011, Ms. Banse was senior vice president, Comcast Corporation and president, Comcast Interactive Media, a division of Comcast responsible for developing online strategy and operating the company’s digital properties. In this role, she drove the acquisition of a number of digital properties, including Fandango, and, together with her team, oversaw the development of Xfinity TV. Since joining Comcast in 1991, Ms. Banse has held various positions at the company, including content development, programming investments and overseeing the development and acquisition of Comcast’s cable network portfolio. Earlier in her career, Ms. Banse was an associate at Drinker, Biddle & Reath LLP. Qualifications The Board nominated Ms. Banse to serve as a director because of her experience with digital media and technology, her strategic and financial expertise, and her executive leadership experience. | Other Boards • The Clorox Company • Adobe , Inc. | |||
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Rick Beckwitt Age: 61 Director Since: 2018 | Committees • None | |||
Professional Experience Mr. Beckwitt has served as our Co-Chief Executive Officer and Co-President since November 2020, and, prior to that, our Chief Executive Officer from April 2018 to November 2020. Before that time, Mr. Beckwitt served as our President from April 2011 Qualifications The Board nominated Mr. Beckwitt to serve as a director because he has extensive knowledge of the homebuilding industry, and our Company’s operations and strategic plans. | Other Boards • Eagle Materials Inc. • previously, Five Point Holdings, LLC | |||
2 | Steven L. GerardLENNAR CORPORATION, 72, has served as a director of our Company since May 2000. Mr. Gerard has been the Chairman of CBIZ, Inc., a provider of professional business services to individuals and companies throughout the United States, since October 2002. Mr. Gerard was appointed Chief Executive Officer and Director of CBIZ, Inc. in October 2000, and served as its CEO until his retirement in March 2016. From July 1997 to October 2000, Mr. Gerard served as Chairman and Chief Executive Officer of Great Point Capital, Inc., an operations and financial consulting firm. From September 1992 to July 1997, Mr. Gerard served as Chairman and Chief Executive Officer of Triangle Wire & Cable, Inc., and its successor, Ocean View Capital, Inc., a manufacturer of residential, commercial and industrial wire and cable products. Prior to that, Mr. Gerard spent sixteen years in various corporate finance and banking positions at Citibank, N.A. and spent seven years at the American Stock Exchange, last serving as Vice President of its Securities Division. Mr. Gerard also serves on the Board 2021 PROXY STATEMENT
Proposal 1: Election of Directors of Las Vegas Sands Corp. and previously served onNominees for Election
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Steven L. Gerard Age: 75 Director Since: 2000 Independent | Committees • Audit (financial expert) • Compensation (chair) • Independent Directors Transactions | |||
Professional Experience Mr. Gerard served as the Chief Executive Officer of CBIZ, Inc., a provider of professional business services, from October 2000 until his retirement in March 2016, and he continues to serve as the Chairman of its Board of Directors, a position he has held since October 2002. From July 1997 to October 2000, Mr. Gerard served as Chairman and Chief Executive Officer of Great Point Capital, Inc., an operations and financial consulting firm. From September 1992 to July 1997, Mr. Gerard served as Chairman and Chief Executive Officer of Triangle Wire & Cable, Inc., and its successor, Ocean View Capital, Inc., a manufacturer of residential, commercial, and industrial wire and cable products. Prior to that, Mr. Gerard spent sixteen years in various corporate finance and banking positions at Citibank, N.A. and spent seven years at the American Stock Exchange, last serving as Vice President of its Securities Division. He is a National Association of Corporate Directors Board Leadership Fellow. Qualifications The Board nominated Mr. Gerard to serve as a director because of his experience as a Chief Executive Officer and in other senior management positions of significant companies for many years. | Other Boards • AutoNation, Inc. • CBIZ, Inc. • previously, Joy Global, Inc. and Las Vegas Sands Corp. | |||
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Tig Gilliam Age: 56 Director Since: 2010 Independent | Committees • Audit (financial expert) • Compensation • Independent Directors Transactions | |||
Professional Experience Mr. Gilliam has served as Chief Executive Officer of NES Global Talent, a global talent solutions company, since November 2014. Mr. Gilliam was previously a Managing Director and Operating Partner of AEA Investors LP, a private equity firm, from November 2013 to November 2014, and the Regional Head of North America and member of the Executive Committee at Addeco Group SA, a human resources, temporary staffing, and recruiting firm, from March 2007 until July 2012. From 2002 until he joined Addeco, Mr. Gilliam was with International Business Machines (“IBM”), serving, among other things, as the Global Supply Chain Management Leader for IBM Global Business Services. Mr. Gilliam was a partner with PricewaterhouseCoopers Consulting until it was acquired by IBM in October 2002. Qualifications The Board nominated Mr. Gilliam to serve as a director because of his expertise in matters related to supply chain management and human resources. | Other Boards • GMS, Inc. | |||
LENNAR CORPORATION 2021 PROXY STATEMENT | 3
Proposal 1: Election of Directors of Joy Global, Inc. He is also a National Association of Corporate Directors Board Leadership Fellow.Nominees for Election
Qualifications. The Board nominated Mr. Gerard to serve as a director because of his experience as the Chief Executive Officer and in other senior management positions of significant companies for many years.
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Sherrill W. Hudson Age: 77 Director Since: 2008 Independent | Committees • Audit (chair, financial expert) • Compensation | |||
Professional Experience Mr. Hudson served as the Chairman of TECO Energy, Inc., an energy-related holding company, from January 2013 until July 2016. Previously, Mr. Hudson was Executive Chairman of TECO Energy from August 2010 to December 2012, and Chairman and Chief Executive Officer of TECO Energy from 2004 until August 2010. Prior to joining TECO Energy in July 2004, Mr. Hudson spent 37 years with Deloitte & Touche LLP until he retired in 2002. Mr. Hudson is a member of the Florida Institute of Certified Public Accountants. Qualifications The Board nominated Mr. Hudson to serve as a director because of his extensive knowledge of accounting and his management experience. | Other Boards • CBIZ, Inc. • United Insurance Holdings Corp. • previously, Publix Supermarkets, Inc. | |||
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Jonathan M. Jaffe Age: 61 Director Since: 2018 | Committees • None | |||
Professional Experience Mr. Jaffe has served as our Co-Chief Executive Officer and Co-President since November 2020, and, prior to that, served as our President from April 2018 to November 2020. Mr. Jaffe served as our Chief Operating Officer from December 2004 to January 2019, and he continues to have responsibility for the Company’s operations nationally. Previously, Mr. Jaffe served as Vice President of Lennar from 1994 to April 2018, and prior to then, he served as a Regional President in our Homebuilding operations. Qualifications The Board nominated Mr. Jaffe to serve as a director because he has extensive knowledge of the homebuilding industry, and our Company’s operations and strategic plans. | Other Boards • Opendoor Technologies Inc. • previously, Five Point Holdings, LLC | |||
4 | LENNAR CORPORATION 2021 PROXY STATEMENT
Tig Gilliam, 53, has served as a director of our Company since June 2010. Mr. Gilliam has served as Chief Executive Officer of NES Global Talent, a global talent solutions company, since November 2014. Mr. Gilliam was previously a Managing Director and Operating Partner of AEA Investors LP, a private equity firm, from November 2013 to November 2014 and the Regional Head of North America and former member of the Executive Committee at Addeco Group SA, a human resources, temporary staffing and recruiting firm, from March 2007 until July 2012. From 2002 until he joined Addeco, Mr. Gilliam was with International Business Machines (“IBM”), serving, among other things, as the Global Supply Chain Management Leader for IBM Global Business Services. Mr. Gilliam was a partner with PricewaterhouseCoopers Consulting until it was acquired by IBM in October 2002. Mr. Gilliam also serves on the BoardProposal 1: Election of Directors of GMS, Inc.Nominees for Election
Qualifications. The Board nominated Mr. Gilliam to serve as a director because of his expertise in matters related to supply chain management and human resources.
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Sidney Lapidus Age: 83 Director Since: 1997 Lead Director Since: 2005 Independent | Committees • Independent Directors Transactions (chair) • Executive | |||
Professional Experience Mr. Lapidus is a retired partner of Warburg Pincus LLC, a private equity investment firm, where he was employed from 1967 until his retirement in 2007. Qualifications The Board nominated Mr. Lapidus to serve as a director because of the extensive knowledge of business enterprises (including homebuilding companies) and corporate governance he gained as a partner in a private equity investment firm and as a director of a number of publicly- and privately-owned companies. | Other Boards • Mr. Lapidus serves on the boards of a number of non-profit organizations • previously, Knoll, Inc. | |||
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Teri P. McClure Age: 57 Director Since: 2013 Independent | Committees • Compensation • Nominating and Corporate Governance | |||
Professional Experience From 1995 until her retirement in 2019, Ms. McClure worked at United Parcel Service (“UPS”), serving most recently as Chief Human Resources Officer and Senior Vice President, Labor. Ms. McClure has served in various positions at UPS, including Chief Legal, Communications and Human Resources Officer, and, prior to that, Senior Vice President of Legal, Compliance and Public Affairs, General Counsel and Corporate Secretary. Before joining UPS, Ms. McClure practiced with the Troutman Sanders law firm in Atlanta. Qualifications The Board nominated Ms. McClure to serve as a director because of her long tenure as a senior executive of a Fortune 500 company, strong operational capabilities and broad business experience. | Other Boards • Fluor Corporation • GMS Inc. • JetBlue Airways Corporation | |||
Sherrill W. HudsonLENNAR CORPORATION, 75, has served as a director of our Company since January 2008. Mr. Hudson served as the Chairman of TECO Energy, Inc., an energy-related holding company, from January 2013 until July 2016. Previously, Mr. Hudson was Executive Chairman of TECO Energy from August 2010 to December 2012, and Chairman and Chief Executive Officer of TECO Energy from 2004 until August 2010. Prior to joining TECO Energy in July 2004, Mr. Hudson spent 37 years with Deloitte & Touche LLP until he retired in 2002. Mr. Hudson is a member of the Florida Institute of Certified Public Accountants. Mr. Hudson serves on the Boards 2021 PROXY STATEMENT | 5
Proposal 1: Election of Directors of CBIZ, Inc. and United Insurance Holdings Corp, and, from 2003 until April 2015, served on theNominees for Election
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Stuart Miller Age: 63 Director Since: 1990 Executive Chairman Since: 2018 | Committees • Executive | |||
Professional Experience Mr. Miller has served as our Executive Chairman since April 2018. Before that time, Mr. Miller served as our Chief Executive Officer from 1997 to April 2018 and our President from 1997 to April 2011. Before 1997, Mr. Miller held various executive positions with us. Qualifications The Board nominated Mr. Miller to serve as a director because he has extensive knowledge of the homebuilding industry, he has been in executive leadership positions at the Company for decades and he is able to define the Company’s strategy and future priorities. | Other Boards • Five Point Holdings, LLC | |||
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Armando Olivera Age: 71 Director Since: 2015 Independent | Committees • Audit (financial expert) • Nominating and Corporate Governance | |||
Professional Experience Mr. Olivera was President of Florida Power & Light Company (“FPL”), a subsidiary of NextEra Energy, Inc. and one of the largest investor-owned electric utilities in the United States, from June 2003, and Chief Executive Officer from July 2008, until his retirement in May 2012. Mr. Olivera joined FPL in 1972. Prior to his 2003 appointment as President, Mr. Olivera served in a variety of management positions with FPL, including Vice President of Planning and Budgets, Vice President of Construction Services, System Operations and Distribution and Senior Vice President of System Operations. From 2012 to 2015, Mr. Olivera served as a Senior Advisor to Britton Hill Partners, a private equity firm. Mr. Olivera has been a Senior Advisor to Ridge-Lane Limited Partners, a strategic advisory firm, since 2017 and a Venture Partner in the Ridge-Lane Sustainability Practice since 2018. Qualifications The Board nominated Mr. Olivera to serve as a director because of his experience and understanding of operations and finance as well as his strong business leadership skills. | Other Boards • Consolidated Edison, Inc. • Fluor Corporation • previously, AGL Resources, Inc. | |||
6 | LENNAR CORPORATION 2021 PROXY STATEMENT
Proposal 1: Election of Directors of Publix Supermarkets, Inc. He is also Chairman of the Florida Chapter of the National Association of Corporate Directors.Nominees for Election
Qualifications. The Board nominated Mr. Hudson to serve as a director because of his extensive knowledge of accounting and his management experience.
Sidney Lapidus, 80, has served as a director of our Company since April 1997, and has served as our Lead Director since 2005. Mr. Lapidus is a retired partner of Warburg Pincus LLC, a private equity investment firm, where he was employed from 1967 until his retirement in 2007. Mr. Lapidus also serves on the Board of Directors of Knoll, Inc., as well as a number ofnon-profit organizations.
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Jeffrey Sonnenfeld Age: 66 Director Since: 2005 Independent | Committees • Nominating and Corporate Governance (chair) | |||
Professional Experience Mr. Sonnenfeld has served as the Senior Associate Dean for Executive Programs and the Lester Crown Professor-in-the-Practice of Management at the Yale School of Management since 2001. In 1989, Mr. Sonnenfeld founded the Chief Executive Leadership Institute of Yale University, the world’s first “CEO College,” and he has served as its President since that time. Previously, Mr. Sonnenfeld spent ten years as a professor at the Harvard Business School. Recently, Mr. Sonnenfeld was named by Business Week as one of the world’s “ten most influential business school professors.” He has chaired several blue ribbon commissions for the National Association of Corporate Directors, and the NACD’s Directorship magazine recently named him one of the “100 most influential figures in governance.” He was awarded the Ellis Island Medal in 2018 by the US Ellis Island Foundation, and awarded many scholarly honors for the impact of his many research articles on leadership and governance matters. In addition to his post as a regular commentator for CNBC, he is a columnist for Fortune, a regular commentator on PBS’s “Nightly Business Report,” and a frequently cited management expert in the global media. Mr. Sonnenfeld’s columns also regularly appear in The Wall Street Journal, Forbes, The Washington Post, Politico, and the New York Times. Qualifications The Board nominated Mr. Sonnenfeld to serve as a director because of his business acumen and experience, as well as his exceptional work in the areas of corporate governance and leadership development as President of the Chief Executive Leadership Institute of Yale University. | Other Boards • IEX Group Investors Exchange • Atlas Merchant Capital | |||
Qualifications. The Board nominated Mr. Lapidus to serve as a director because of the extensive knowledge of business enterprises (including homebuilding companies) and corporate governance he gained as a partner in a private equity investment firm and as a director of a number of publicly and privately owned companies.
Teri P. McClure, 54, has served as a director of our Company since June 2013. Ms. McClure is currently Chief Human Resources Officer and Senior Vice President Labor and Communications of UPS. She also serves as a member of the nine member Management Committee which is responsible for setting strategy, operating and profit plans for UPS. Ms. McClure joined UPS in 1995 and has served in various positions at the company including Chief Legal Officer, Senior Vice President of Compliance and Public Affairs, General Counsel and Corporate Secretary from 2006 to December 2015, when she assumed her current position. Prior to joining UPS, Ms. McClure practiced with the Troutman Sanders law firm in Atlanta.
Qualifications. The Board nominated Ms. McClure to serve as a director because of her experience as a senior executive of a Fortune 500 company, her operational capabilities and her business experience.
Stuart MillerLENNAR CORPORATION, 60, has served as a director of our Company since April 1990 and has served as our Chief Executive Officer since April 1997. Mr. Miller also served as President of our Company from April 1997 to April 2011. In addition, Mr. Miller serves as a representative of our Company on the Board of Directors of Five Point Holdings, LLC.
Qualifications. The Board nominated Mr. Miller to serve as a director because he is our Chief Executive Officer and has extensive knowledge of our Company, its operations and its strategic plans. 2021 PROXY STATEMENT | 7
Armando Olivera, 68, has served as a director of our Company since January 2015. Mr. Olivera was President of Florida Power & Light Company (FPL), a subsidiary of NextEra Energy, Inc. and one of the largest investor-owned electric utilities in the United States, from June 2003, and Chief Executive Officer from July 2008, until his retirement in May 2012. Mr. Olivera joined FPL in 1972. Prior to his 2003 appointment as President, Mr. Olivera served in a variety of management positions with the company, including Vice President of Construction Services, System Operations and Distribution and Senior Vice President of System Operations. Mr. Olivera also serves on the Board of Directors of Consolidated Edison, Inc. and Fluor Corporation, and previously served on the Board of Directors of AGL Resources, Inc., Florida Power & Light Company and Nicor Inc.
Qualifications. The Board nominated Mr. Olivera to serve as a director because of his experience and understanding of operations and finance as well as his strong business leadership skills.
Donna Shalala, 77, has served as a director of our company since January 2017, and previously served as a director of our company from 2001 to 2012. Since June 2001, Dr. Shalala has served as Trustee Professor of Political Science at the University of Miami, and since 2015, Dr. Shalala has served as President of the Clinton Foundation. Dr. Shalala served as President of the University of Miami from 2001 to 2015. From 1993 to 2001, Dr. Shalala served as the United States Secretary of Health and Human Services. Dr. Shalala served as Chancellor and Professor of Political Science at the University of Wisconsin—Madison from 1987 to 1993 and as President and Professor of Political Science at Hunter College from 1980 to 1987. From 1977 to 1980, Dr. Shalala served as Assistant Secretary for Policy Development and Research of the Department of Housing and Urban Development. Dr. Shalala also serves on the Board of Directors of MEDNAX, Inc.
Qualifications. The Board nominated Dr. Shalala to serve as a director because of her experience as President of a successful university, her experience as the former Secretary of the United States Department of Health and Human Services and her leadership skills.
Scott D. Stowell, 60, has served as a director of our Company since February 2018. Mr. Stowell served as Executive Chairman of the Board of Directors of CalAtlantic Group, Inc. from October 2015 to February 2018. Prior to that, Mr. Stowell served as CalAtlantic’s Chief Executive Officer from January 2012 to September 2015 and as President from March 2011 to September 2015. Mr. Stowell also served as Chief Operating Officer of CalAtlantic from May 2007 to March 2011. Mr. Stowell joined CalAtlantic in 1986 as a project manager. Mr. Stowell also serves on the Board of Directors of Pacific Mutual Holding Company.
Qualifications. We believe that Mr. Stowell’s extensive homebuilding expertise and knowledge regarding CalAtlantic’s assets allows him to provide important guidance and leadership to the Company.
Jeffrey Sonnenfeld, 63, has served as a director of our Company since September 2005. Mr. Sonnenfeld has served as the Senior Associate Dean for Executive Programs and the Lester CrownProfessor-in-the-Practice of Management at the Yale School of Management since 2001. In 1989, Mr. Sonnenfeld founded the Chief Executive Leadership Institute of Yale University, and he has served as its President since that time.
Qualifications. The Board nominated Mr. Sonnenfeld to serve as a director because of his business acumen and experience, as well as his exceptional work in the areas of corporate governance and leadership development as President of the Chief Executive Leadership Institute of Yale University.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “FOR” all the director nominees.
Our Board of Directors normally meets quarterly, but holds additional meetings as required. Under our Corporate Governance Guidelines, each director is required to attend substantially all meetings of the Board. During fiscal 2017, the Board of Directors met eight times. During that year, each director attended at least 75% of (1) the total number of meetings of the Board of Directors held while that director was serving on our Board, and (2) the total number of meetings of each committee of the Board on which the director was serving. It is our policy to encourage directors and nominees for election as directors to attend the annual meeting of stockholders. All members of our Board who were serving at the time of the 2017 annual meeting of stockholders attended the meeting.
Each year, the Board undertakes a review of director independence, which includes a review of each director’s responses to questionnaires asking about any relationships with us. In
The Board reviewed director independence in January 2018, our Board of Directors undertook its review of director independence. Based on this review, our Board of Directors has2021, except with respect to Ms. Banse, for which it was reviewed in February 2021, and determined that each of Ms. Banse, Mr. Bolotin, Mr. Gerard, Mr. Gilliam, Mr. Hudson, Mr. Lapidus, Ms. McClure, Mr. Olivera, Ms. ShalalaMr. Sonnenfeld, and Mr. SonnenfeldStowell is “independent” under the NYSE corporate governance listing standards and the Director Qualification Standardsdirector independence standards set forth in our Corporate Governance Guidelines, which are consistent with the NYSE standards. After considering any relevant transactions or relationships between each director or any of his or her family members on one side, and the Company, our senior management or our independent registered public accounting firm on the other side, the Board of Directors has affirmatively determined that none of the independent directors has a material relationship with us (either directly, or as a partner, significant stockholder, officer or affiliate of an organization that has a material relationship with us), other than as a member of our Board of Directors.Board. In determining whether Mr. Gilliam is independent, the Board viewed Mr. Gilliam’s position as a director of a company that supplies wallboard to Lennar as not impairing his independence. The Board also considered that NES Global Talent, where Mr. Gilliam is Chief Executive Officer, and Generation Brands, from which Lennar purchases lighting products, are both subsidiaries of AEA Investors LP, of which Mr. Gilliam was a Managing Director and Operating Partner from November 2013 to November 2014, but did not view these relationships as impairing Mr. Gilliam’s independence. In determining whether Ms. McClure is independent, the Board viewed Ms. McClure’s position as a director of a company that supplies wallboard to Lennar as not impairing her independence.
Mr. Lapidus serves as our Lead Director. In this capacity, Mr. Lapidus presides over Board meetings and presides at all meetings of our independent directors. In connection withThe Lead Director’s additional duties, which are listed in our regularly scheduledBy-Laws, include:
at the request of the Board of Directors, presiding over meetings ourof stockholders;
conveying recommendations of the independent directors regularly meet in executive sessions that exclude ournon-independent directorto the full Board; and
serving as a liaison between the Board and management. Mr. Lapidus presides over these executive sessions.
We have a Lead Director who presides over Board meetings and presides at all meetings of our independent directors. Our Board believes that arrangementhaving an Executive Chairman and an independent Lead Director, each with distinct responsibilities, works well for us because all but twothree of our directors (our Chief Executive OfficerChairman, and Mr. Stowell, for whom independence as a director has not been determined yet)each of our Co-CEOs) are independent, and our Lead Director can cause the independent directors to meet at any time. Therefore, the Lead Director can at any time bring to the attention of a majority of the directors any matters he thinks should be addressed by the Board.
The Lead Director’s duties, which are listed in ourBy-Laws, include:
The Board has five standing Committees: the Audit Committee, the Compensation Committee, the NCG Committee, the Executive Committee and the Independent Directors Transactions Committee. A summary of the current composition of each Committee and its responsibilities is set forth below.
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Copies of the Committee charters of each of the Audit Committee, the Compensation Committee and the NCG Committee setting forth the responsibilities of the Committees can be found under the Investors-Corporate Governance section of our website at www.lennar.com, and those charters are also available in print to any stockholder who requests them through our Investor Relations department. We periodically review and revise the Committee charters. The Board most recently adopted a revised Audit Committee Charter and NCG Committee Charter on June 23, 2015 and a revised Compensation Committee Charter on October 31, 2014.
Audit Committee
Number of Meetings in fiscal 2017: 11
Responsibilities. The Audit Committee is responsible for selecting our independent auditors and overseeing the engagement of our independent auditors;pre-approving all audit andnon-audit services provided to us by our independent auditors; reviewing our internal control environment, systems and performance; and overseeing the integrity of our financial statements, and our compliance with legal and regulatory requirements. The Audit Committee also discusses and reviews our policies with respect to risk assessment and risk management, including guidelines and policies governing our risk assessment and risk management processes. The Audit Committee Chairman reports on Audit Committee actions and recommendations at Board of Directors meetings.
Independence and Financial Expertise. The Board of Directors has determined that each member of the Audit Committee meets the independence requirements under the NYSE’s corporate governance listing standards and the enhanced independence standards for audit committee members required by the SEC, and each member is financially literate, knowledgeable and qualified to review financial statements. In addition, the Board of Directors has determined that each of Mr. Gerard, Mr. Gilliam, Mr. Hudson and Mr. Olivera meets the requirements of an audit committee financial expert under SEC rules.
Compensation Committee
Number of Meetings in fiscal 2017: 5
Responsibilities. The Compensation Committee is responsible for (i) designing our executive compensation philosophy, policies and plans, (ii) establishing salaries, targets and performance goals for annual incentive awards, terms of equity awards and other forms of compensation for our Chief Executive Officer (“CEO”), each of our senior executives and our directors and (iii) administering our equity programs, including awards under our 2007 Equity Incentive Plan, as amended (the “2007 Equity Plan”), and 2016 Equity Incentive Plan (the “2016 Equity Plan”). The 2016 Equity Plan replaced our prior equity plan, the 2007 Equity Plan, in fiscal 2016. The Compensation Committee also reviews the results of the annual advisory stockholder vote on executive compensation and considers whether to recommend adjustments to the Company’s executive compensation policies and plans as a result of such votes. In addition, the Compensation Committee establishes performance goals and certifies that the performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code, as amended (a function that no longer will be required with respect to taxable years beginning after December 31, 2017 because of amendments to Section 162(m) that were part of amendments to the Internal Revenue Code enacted in December 2017). The Compensation Committee Chairman reports on Compensation Committee actions and recommendations at Board of Directors’ meetings.
Independence. The Board of Directors has determined that each member of the Compensation Committee meets the independence requirements under the NYSE’s corporate governance listing standards, is an “outside director” pursuant to the criteria established by the Internal Revenue Service and meets the independence standards for Compensation Committee members established by the SEC.
Role of Compensation Consultants and Advisors. The Compensation Committee has the authority, pursuant to its charter, to engage the services of outside legal or other experts and advisors as it deems necessary and appropriate to assist the Compensation Committee in fulfilling its duties and responsibilities. The Compensation Committee has previously engaged, and may in the future engage, F.W. Cook & Co., Inc. (“FW Cook”), an independent management compensation consulting firm. During fiscal 2017, the Compensation Committee engaged F.W. Cook to perform a review of the compensation program for the Company’s executive officers. In doing so, the Compensation Committee considered the work previously performed by FW Cook and determined that no conflicts of interest were raised and that FW Cook was independent from management.
Role of Management and Delegation of Authority. As more fully discussed under “Compensation Discussion and Analysis — Compensation Setting Process — Role of Management,” our CEO and our President provide the Compensation Committee with (1) evaluations of each named executive officer, including themselves, (2) recommendations regarding base salary levels for the upcoming year for each named executive officer, other than themselves, (3) an evaluation of the extent to which each named executive officer met his annual incentive plan target, and (4) recommendations regarding the aggregate value of the long-term incentive compensation that each named executive officer should receive. Our CEO and our President typically attend all regularly-scheduled Compensation Committee meetings to assist the Compensation Committee in its discussion and analysis of the various agenda items, and are generally excused from the meetings as appropriate, including for discussions regarding their own compensation.
Under the 2007 Equity Plan and the 2016 Equity Plan, the Compensation Committee has the authority to delegate all or a part of its duties with respect to awards under each plan to management (excluding awards intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code, awards made to individuals covered by Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and awards issued to any person delegated authority by the Compensation Committee). Under the Lennar Corporation 2016 Incentive Compensation Plan, which replaced the Lennar Corporation 2012 Incentive Compensation Plan, the Compensation Committee has the authority to delegate all or a part of its duties with respect to bonuses under the plan to management (excluding bonuses intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code).
Nominating and Corporate Governance Committee
Number of Meetings in fiscal 2017: 4
Responsibilities. The NCG Committee is responsible for (i) soliciting, considering, recommending and nominating candidatesendeavors to serve on the Board under criteria adopted by it from time to time; (ii) advising thecreate a Board with respect to Boarda diversity of backgrounds and Committee composition; (iii) reviewinga variety of life experiences, made up of individuals with a history of conducting their personal and recommending changes to our Corporate Governance Guidelines; (iv) overseeing periodic evaluations ofprofessional affairs with the Boardutmost integrity and consistent with the Committees; and (v) reviewing and reporting tohighest ethical standards. Beyond those threshold requirements, the Board on a periodic basis with regard to matters of corporate governance. The NCG Committee Chairman reports on NCG Committee actions and recommendations at Board of Director meetings.
Independence. The Board of Directors has determined that each member of the NCG Committee meets the independence requirements under the NYSE’s corporate governance listing standards.
Consideration of Director Nominees. The NCG Committee considers possible candidates for nomination as directors suggested by management and by stockholders and others, if there were any. The NCG Committee would evaluate the suitability of any potential candidates recommended by stockholders in the same manner as other candidates recommended to the NCG Committee. The NCG Committee and the Board of Directors have determined that a Lennar director should have the following characteristics, as set forth in our Corporate Governance Guidelines:
Ability to comprehend theLennar’s strategic goals of the Company and to help guide the Company towards the accomplishment ofmanagement to accomplish those goals;
Time available to participate in person in Board and professional affairs with the utmost integrity and observing the highest standards of values, character and ethics;
Willingness to demand that the Company’s officers and associates insist uponconduct themselves, and require all individuals they supervise to conduct themselves, at all times in an honest and ethical conduct throughoutmanner in all their dealings on behalf of the Company; and
Knowledge of and experience with regard to at least some of:of the following: (i) real estate properties and real estate-related loans and securities, including any lending and financing activities related thereto;activities; (ii) public company regulations imposed by the SEC and the NYSE, among others; (iii) portfolio and risk management; (iv) the major geographic locations within which the Company operates; (v) sound business practicespractices; and (vi) accounting and financial reporting; and
While our
8 | LENNAR CORPORATION 2021 PROXY STATEMENT
Corporate Governance Board Committees
The NCG Committee believes diversitywill consider possible candidates for nomination as to race, genderdirectors suggested by management, by directors, and ethnicity is beneficial to the Board of Directors, and takes that into account in considering potential Board members, the NCG Committee does not have a formal policy regarding Board diversity.
by stockholders. If a stockholder wishes to recommend a potential nominee for director, the stockholder should submit a recommendation in writing to the NCG Committee at the address set forth on page 57 under “Communication“Corporate Governance — Communication with Lennar’sthe Board of Directors” containingcontaining: the information set forth below:
In making its determinationThe NCG Committee will evaluate the suitability of potential candidates recommended by stockholders in the same manner as it evaluates all other candidates. When deciding whether to recommend that the Board of Directors nominate a candidate who has been recommendedpresented by a stockholder, the NCG Committee will consider, among other things, the appropriateness of addingcandidate’s background and qualifications and whether it is appropriate to add another director to the Board and the candidate’s background and qualifications.Board. The NCG Committee may conduct an independent investigation of the background and qualifications of a candidate recommended by a stockholder, and may request an interview with the candidate.
The Board has five standing committees: the Audit, Compensation, NCG, Executive, and Independent Directors Transactions Committees. The charters of each of the Audit Committee, will not determine whether to recommend that the Board nominate a candidate untilCompensation Committee, and the NCG Committee completes what it believessetting forth the committees’ respective responsibilities can be found in the Investor Relations—Governance section of our website at www.lennar.com. Those charters also are available in print to be a reasonable investigation, even if that causes its recommendation to be delayed until after it is too late forany stockholder who requests them through our Investor Relations department. We periodically review and revise the candidate to be nominated for election at a particular meeting of stockholders. Whencommittee charters. The Audit Committee and the Compensation Committee charters were most recently revised on June 26, 2019, and the NCG Committee determines not to recommend that the Board nominate a candidate recommended by a stockholder, or the Board determines to nominate or not to nominate a candidate recommended by a stockholder, the NCG Committee will notify the recommending stockholder and the candidate of the determination.
Executive Committee
Pursuant to ourBy-Laws, our Board of Directors has established an Executive Committee which has the authority to actcharter was most recently revised on behalf of the Board of Directors, except as that power is limited by the corporate laws of the State of Delaware, where our Company is incorporated, and as our Board of Directors has otherwise provided. The Executive Committee did not take any actions during fiscal 2017.
Independent Directors Transactions Committee
Number of Meetings in fiscal 2017: 2
Pursuant to ourBy-Laws, our Board of Directors has established an Independent Directors Transactions Committee which has the authority to approve certain transactions between Lennar and Five Point Holdings, LLC (in which we own a substantial minority interest and have the right to designate three directors), and to review and make recommendations to the Board with respect to matters referred to it by the Board.June 25, 2020. Only independent directors may serve on each of our committees, except the Executive Committee.
Chair: Sherrill Hudson Members: Irving Bolotin Steven L. Gerard Tig Gilliam Armando Olivera | Audit Committee | |||
THE AUDIT COMMITTEE IS RESPONSIBLE FOR: • selecting and overseeing the engagement of our independent auditors; • pre-approving all audit and non-audit services provided by our independent auditors; • reviewing reports regarding our internal control environment, systems, and performance; • overseeing the integrity of our financial statements and our compliance with legal and regulatory requirements; • discussing and reviewing our policies with respect to risk assessment and risk management, including guidelines and policies governing our risk assessment and risk management processes; and • overseeing cybersecurity matters, including response planning, disaster recovery and business continuity considerations. The Board of Directors has determined that each member of the Audit Committee meets the independence requirements under the NYSE’s corporate governance listing standards and the independence standards for audit committee members required by the SEC, and that each member is financially literate, knowledgeable, and qualified to review financial statements. In addition, the Board of Directors has determined that each of Mr. Gerard, Mr. Gilliam, Mr. Hudson, and Mr. Olivera meets the requirements of an audit committee financial expert under SEC rules. | ||||
LENNAR CORPORATION 2021 PROXY STATEMENT | 9
Corporate Governance Board Committees
Chair: Steven L. Gerard Members: Tig Gilliam Sherrill Hudson Teri P. McClure | Compensation Committee | |||
THE COMPENSATION COMMITTEE IS RESPONSIBLE FOR: • designing our executive compensation philosophy, policies, and plans; • establishing executive salaries, targets, and performance goals for annual incentive awards and certifying that the goals have been attained; • establishing terms of equity awards and other forms of compensation for our senior executives and our directors; • administering our 2016 Equity Incentive Plan (the “2016 Equity Plan”); • reviewing the results of the annual advisory stockholder vote on executive compensation and considering whether to recommend adjustments to Lennar’s executive compensation policies and plans as a result of such votes; and • overseeing the Company’s human capital management. The Compensation Committee has the authority to engage the services of outside legal or other experts and advisors as it deems necessary and appropriate to assist the committee in fulfilling its duties and responsibilities. For more information on outside advisors, see the Compensation Discussion and Analysis section of this proxy statement, which begins on page 17. The Board of Directors has determined that each member of the Compensation Committee meets the independence requirements under the NYSE’s corporate governance listing standards, is an “outside director” pursuant to criteria established by the Internal Revenue Service, and meets the independence standards for compensation committee members required by the SEC. | ||||
Compensation Committee Interlocks and Insider Participation
None of the directors who served on the Compensation Committee during fiscal 2020 was, or ever has been, an officer or employee of the Company. There were no transactions between Lennar and any of the directors who served as members of the Compensation Committee for any part of fiscal year 2020 that would require disclosure by Lennar under the SEC’s rules requiring disclosure of certain relationships and related-party transactions.
Chair: Jeffrey Sonnenfeld Members: Irving Bolotin Teri P. McClure Armando Olivera | Nominating and Corporate Governance Committee | |||
THE NCG COMMITTEE IS RESPONSIBLE FOR: • soliciting, considering, recommending, and nominating candidates to serve on the Board under criteria adopted by it from time to time; • advising the Board with respect to Board and Committee composition; • reviewing and recommending changes to our Corporate Governance Guidelines; • overseeing periodic evaluations of the Board and the committees; • overseeing the Company’s environmental, social and governance efforts and progress; and • reviewing and reporting to the Board on a periodic basis with regard to matters of corporate governance. The Board of Directors has determined that each member of the NCG Committee meets the independence requirements under the NYSE’s corporate governance standards. | ||||
10 | LENNAR CORPORATION 2021 PROXY STATEMENT
Corporate Governance Risk Management
Chair: Sidney Lapidus Members: Steven L. Gerard Tig Gilliam | Independent Directors Transactions Committee | |||
As permitted by our By-Laws, our Board of Directors has established this committee with the authority to approve certain transactions between Lennar and Five Point Holdings, LLC (in which we own a substantial minority interest), and to review and make recommendations to the Board with respect to other matters referred to it by the Board. | ||||
Members: Sidney Lapidus Stuart Miller | Executive Committee | |||
As permitted by our By-Laws, our Board has established this committee with the authority to act on behalf of the Board, except as that power is limited by the corporate laws of the State of Delaware or by our Board. | ||||
Board Role in Management of Risk
Our Board is actively involved in the oversight and management of risks that could affect Lennar. Management, in consultation with the Board, identifies areas of risk that particularly affect us. Senior members of our management team report to the Board on each of those areas of risk on a rotating basis at the regularly-scheduled quarterly Board meetings. The areas of risk reported to the Board change from time to time based on business conditions, the advice of outside advisors, and a review of risks identified by our competitors in their public filings. Currently, the risk areas reported on to our Board on a regular basis relate to joint ventures, housing inventory and land supply, construction costs and homebuilding overhead, construction quality and warranty, our multifamily business, our financial services business, associate retention and human resources, legal (including regulatory and compliance issues), natural disasters and information technology (including cybersecurity), taxation, strategic investments, and our solar business.
Our Board of Directors also asks for and receives reports on other risks that affect the Company after review of business presentations made during regular Board meetings. In addition, one of the responsibilities of our Audit Committee is to discuss and review policies with respect to risk assessment and risk management, including guidelines and policies governing our risk assessment and risk management processes.
Compensation-Related Risks
In 2020, as part of our risk management process, we conducted a comprehensive review and evaluation of our compensation programs and policies. The assessment covered each material component of executive and non-executive compensation. In evaluating our compensation components, we identified risk-limiting characteristics, which include:
We conduct an annual comprehensive analysis of peer group compensation and refer to broader market-based benchmarking studies to evaluate how our compensation program compares.
A high percentage of our overall pay mix to senior management and key associates is equity-based, which creates an incentive to generate long-term appreciation of stockholder value.
The Compensation Committee may use negative discretion to adjust annual incentive compensation downward when warranted.
Service-based equity awards granted to our executive officers vest over a three-year period, and performance-based equity awards granted to our executive officers vest after a three-year performance period, which mitigates the risk of excessive focus on short-term returns.
We have a compensation clawback policy that may be triggered in the event of a restatement of financial results.
Our stock ownership guidelines require executive officers to hold a meaningful amount of Lennar stock, which mitigates the risk of excessive focus on short-term returns and aligns the interests of those executives with the interests of stockholders.
LENNAR CORPORATION 2021 PROXY STATEMENT | 11
Corporate Governance Stockholder Engagement
We regularly engage with our stockholders about our business and operations. During fiscal 2020, we spoke with stockholders representing approximately 2/3 of our outstanding shares about issues of importance to them, including our executive compensation practices and our corporate governance policies.
Corporate Governance GuidelinesDocuments
Our Corporate Governance Guidelines describe our corporate governance practices and policies and provide a framework for our Board governance. The topics addressed in our Corporate Governance Guidelines include director qualifications, director responsibilities, management succession, director compensation, and the annual performance evaluation of the Board. independence standards.
Our Corporate Governance Guidelines are available to view at our website, www.lennar.com, under the Investor Relations-Corporate Governance section.
Compensation Committee Interlocksand Insider Participation
None of the members who served on the Compensation Committee during the fiscal year ended November 30, 2017, was, or ever had been, an officer or employee of Lennar. There were no transactions during the 2017 fiscal year between us and any of the directors who served as members of the Compensation Committee for any part of the 2017 fiscal year that would require disclosure by Lennar under the SEC’s rules requiring disclosure of certain relationships and related-party transactions.
Code of Business Ethics and Conduct, and Ethics/Related Party Transaction Policy
Our Board of Directors has adopted a Code of Business Conduct and Ethicswhich is applicable to all our directors, officers, and employees. Its purpose is to promoteassociates, promotes our commitment to high standards for ethical business practices. The Code provides that it isaddresses a number of issues, including conflicts of interest, corporate opportunities, fair dealing, confidential information, and insider trading, and confirms our policy thatintention to conduct our business be conducted with the highest level of integrity. It states that our reputation for integrity is one of our most valuable assets, and that each director, officer, and employeeassociate is expected to contribute to the care and preservation of that asset.
Our Corporate Governance Guidelines and our Code addresses aof Business Ethics and Conduct are both available on our website, www.lennar.com, in the Investor Relations—Governance section.
Our Board normally meets quarterly, but holds additional meetings as required. In connection with each of our regularly-scheduled Board meetings, our independent directors meet in executive session without our non-independent directors and management.
Our Corporate Governance Guidelines require every director to attend substantially all meetings of the Board and of the committees on which they serve. During fiscal 2020, the Board met six times. Each director attended at least 75% of the total number of issues, including conflictsBoard meetings and applicable committee meetings held while that director was serving on our Board. We encourage directors and nominees for election as directors to attend the annual meeting of interest, corporate opportunities, fair dealing, confidential informationstockholders. All members of our Board who were serving at the time of the 2020 annual meeting of stockholders attended the virtual meeting.
Communication with the Board of Directors
Stockholders and insider trading.
Pursuantother interested parties may communicate with our Board, a committee of the Board, the independent directors as a group, or any individual director by sending an e-mail to feedback@lennar.com. These communications will automatically be submitted to our Audit Committee Charter,Lead Director, who will distribute them as appropriate.
In addition, anyone who wishes to communicate with our Board, a committee of the Board, the independent directors as a group, or any individual director, may send correspondence to the Office of the General Counsel at Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida 33172. The General Counsel will compile and submit on a periodic basis all relatedstockholder correspondence as addressed. Items that are unrelated to the duties and responsibilities of the Board, such as business solicitation or advertisements, junk mail or mass mailings, resumes or other job-related inquiries, and spam, will not be forwarded.
Certain Relationships and Related Transactions
All “related person transactions astransactions” (as defined by SEC rulesrules) must be approved by our Audit Committee. Directors must recuse themselves from any discussion or decision affecting their personal, business, or professional interests.
Current SEC rules require disclosure of any transaction, arrangement, or relationship in which (i) Lennar or one of its subsidiarysubsidiaries is a participant, (ii) the amount involved exceeds $120,000, and (iii) any executive officer, director, director nominee, beneficial owner of more than 5% of Lennar’s common stock, or any immediate family member of any such persons,person, has or will have a direct or indirect material interest. A director must recuse herself or himself from any discussion or decision affecting her or his personal, business or professional interests.
Certain Relationships and Related Transactions
Except as described below, since December 1, 2016,2019, we have not had any relationshipssuch transactions, arrangements, or transactions with any of our executive officers, directors, beneficial owners of more than 5% of our Class A common stock or Class B common stock or any immediate family member of such persons that are required to be described pursuant to Item 404(a) of SEC RegulationS-K.relationships.
In February 2015, StuartMr. Miller, our CEO,Executive Chairman, entered into a Time-Sharing Agreement with one of our subsidiaries which replaced a prior agreement andthat provides that Mr. Miller cansub-lease aircraft leased by that subsidiary fornon-business or personal business purposes. Under thatthe Time-Sharing Agreement, Mr. Miller pays the subsidiary, out of a prepayment fund established under the terms of the agreement, the aggregate incremental cost of each flight based on a list of expenses authorized by federal regulations. The subsidiary retains sole discretion to determine what flights may be scheduled by Mr. Miller may schedule, and under the Time-Sharing Agreement the Company’sspecifically provides that Lennar’s prior planned use of the aircraft takes precedence over Mr. Miller’snon-business or personal business use. Mr. Miller paid our subsidiary $266,000 under the agreement$156,000 (calculated in accordance with Federal Aviation Administration regulations) for his personal use of the aircraft during fiscal 2017 (the cost reimbursed by 2020.
12 | LENNAR CORPORATION 2021 PROXY STATEMENT
Corporate Governance Director Compensation
Mr. Miller was calculated in accordance with Federal Aviation Administration regulations).
In February 2015, Rick Beckwitt and Mr. Jaffe, our President,Co-CEOs, also entered into a Time-Sharing AgreementAgreements with one of our subsidiaries, which replaced a prior agreement and providessubsidiary that Mr. Beckwitt cansub-lease aircraft leased by that subsidiary fornon-business or personal business purposes. The terms of that Time-Sharing Agreement arehave essentially the same terms as those in the Time-Sharing Agreement between the subsidiary and Mr. Miller,Miller’s agreement, including (for each executive) the establishment of a prepayment fund for the cost of each flight. Mr. Beckwitt paid our subsidiary $133,600$6,000 under thehis February 2015 agreement for his personal use of the aircraft during fiscal 2017.2020. Mr. Jaffe paid our subsidiary $434,000 under his October 2017 agreement for his personal use of the aircraft during fiscal 2020.
Occasionally, a spouse or other guest may accompany Mr. Miller, Mr. Beckwitt, or Mr. BeckwittJaffe when they are using corporate aircraft for business travel.travel and additional seating is available. As there is no incremental cost to Lennar for the spouse or other guestan additional passenger accompanying thean executive on a flight, no amount has been included in the Summary Compensation Table with respect to reflect that usage. Because there areHowever, due to special tax rules regarding personal use of business aircraft, Mr. Miller, Mr. Beckwitt, or Mr. BeckwittJaffe may be treated as receiving taxable income when a spouse or guest accompanies one of them on a business trip.
We lease charter aircraft from time to time for business-related travel for Jonathan M. Jaffe, our Chief Operating Officer (“COO”). We also permit leased aircraft to be available for personal use by Mr. Jaffe, for which he pays the Company, out of a prepayment fund established in connection with the arrangement, an amount
equal to twice the cost of fuel for each flight. In fiscal 2017, Mr. Jaffe paid the Company $254,500 for his personal use of charter aircraft.
In June 2015,April 2019, Jeffrey Miller, Stuart Miller’s brother, entered into an agreement with one of our subsidiaries whichthat provides that Jeffrey Miller cansub-lease an aircraft leased by that subsidiary for personal purposes. The Companyarrangement helps to offset the cost of the aircraft when it is not being used by Lennar. Lennar retains sole discretion to determine what flights may be scheduled, and the Company’s prior planned use of the aircraft takes precedence over Jeffrey Miller’s use.scheduled. Jeffrey Miller pays for use of the aircraft based on a fee structure similar to that used by third partythird-party charter companies. Jeffrey Miller paid our subsidiary $232,600 underdid not use the agreementaircraft in fiscal 2020, and therefore did not make any payments for his use of the aircraft during fiscal 2017. The arrangement helps to offset the cost of the aircraft when it is not being used by the Company.2020.
JonathanJack Beckwitt, Mr. Beckwitt’s son, is employed by the CompanyLennar as Constructiona Senior Land Acquisition Manager. For fiscal 2017, the Company paid Jonathan2020, Jack Beckwitt received a salary of $90,000,$110,000, a cash bonus of $35,000,$37,500, and other benefits totaling approximately $7,524$4,900 (including the Company’s matching contributions to his 401(k) plan and car allowance)plan). JonathanIn fiscal 2021, Jack Beckwitt continues to be an associate at the Company, and, in fiscal 2018, he may receive compensation and other benefits in amounts similar to or greater than those he received during fiscal 2017.2020.
Board Role in ManagementBrad Miller, Mr. Miller’s son, is employed by Lennar as a Managing Director of Risk
Our Board is actively involved in the oversight and managementLand Acquisitions. For fiscal 2020, Brad Miller received a salary of risks that could affect Lennar. Management, in consultation with the Board, identifies areas$127,000, a cash bonus of risk that particularly affect us and assigns senior members of our management to report to the Board on each of those areas of risk on a rotating basis at the regularly scheduled quarterly Board meetings. The areas of risk reported to the Board change from time to time based on business conditions, advice of outside advisors, and review of risks identified by our competitors in their public filings. Currently, the risk areas reported on to our Board on a regular basis relate to joint ventures, housing inventory and land supply, construction costs, quality and warranty, financial services, associate retention and human resources, legal, natural disasters and information technology, including cybersecurity, taxation, strategic investments, Rialto’s business, our multifamily business and our solar business.
Our Board of Directors also asks for and receives reports on other risks that affect the Company after review of business presentations made during regular Board reviews. In addition, one of the responsibilities of our Audit Committee is to discuss and review policies with respect to risk assessment and risk management, including guidelines and policies governing our risk assessment and risk management processes.
Compensation Related Risks
In early 2018, as part of our risk management process, we conducted a comprehensive review and evaluation of our compensation programs and policies. The assessment covered each material component of executive andnon-executive employee compensation. In evaluating our compensation components, we identified the following risk-limiting characteristics:
The payment of cash bonuses to our senior executives$70,000, and other members of our senior management are based upon achievement of performance goals. Whilebenefits totaling approximately $7,500 (including matching contributions to his 401(k) plan and a potentially substantial amount of thecar allowance). In fiscal 2021, Brad Miller may receive compensation of our CEO, our President and our COO is tiedother benefits in amounts similar to short-term Company performance, it is balanced by the compensation of our Chief Financial Officer (“CFO”) and our General Counsel, whose bonus targets are based on, among other factors, the
|
We maintain a compensation program for thenon-employeenon-management directors of the Board. Our current BoardDirectors who are associates do not receive any additional compensation for their services as a director of the Company. In fiscal 2020, our compensation program andfor the program under which the Board was compensated in fiscal 2017, is comprisednon-management directors consisted of the following types and levels of compensation:
| Type of pay | Amount ($) | Form | ||
| Annual Equity Grant (1) | Market Value | 2,000 shares of Class A common stock | ||
| Annual Retainer (1) | $140,000 | 50% in cash, and 50% in shares of Class A common stock | ||
| Audit Committee Members | $25,000 | Cash | ||
| Audit Committee Chair | $30,000 | Cash | ||
| Compensation Committee Members | $15,000 | Cash | ||
| Compensation Committee Chair | $20,000 | Cash | ||
| NCG Committee Members | $10,000 | Cash | ||
| NCG Committee Chair (1) | $20,000 | Cash | ||
| Lead Director | $75,000 | Cash | ||
| (1) | In June 2020, based on a review by FW Cook of the Company’s non-employee director compensation compared to its Peer Group, the following changes were made to the Company’s non-employee director compensation program: (i) increase the annual retainer from $130,000 to $140,000, (ii) convert the annual grant of shares of Class A common stock from a fixed 2,000 shares to a grant of shares with a value of $135,000 based on the closing price of the stock on the date of grant, and (iii) increase the N&CG Committee chair annual retainer from $15,000 to $20,000. |
Annual Equity Grant.At
At the time of each annual meeting, eachnon-employeenon-management director receives a grant of 2,000 shares of our Class A common stock. Directors are permitted to sell 50% of that stock at any time, but are required tomust hold the remaining 50% of the stock until the second anniversary of the grant date. Pursuant to this program, on April 18, 2017, eachnon-employee director at that time was granted 2,000 shares of Class A common stock, 50% of which may not be transferred until the second anniversary of the date of grant.
Retainer and Committee Fees Paid in Cash. Eachnon-employee director is entitled to receive an
Fifty percent of the annual retainer, of $130,000, payable on a quarterly basis, 50% in cash and 50% in shares of our Class A common stock. Those who serve on our Audit Committeethe committee fees and lead director fee, are paid an additional retainer of $25,000 (or $30,000 for the committee Chairman); those who serve on our Compensation Committee are paid an additional retainer of $15,000 (or $20,000 for the committee Chairman); and those who serve on our NCG Committee are paid an additional retainer of $10,000 (or $15,000 for the committee Chairman). Committee retainers are paidin quarterly in cash.cash installments. Non-employeeNon-management directors are also reimbursed for incidental expenses associated with eacharising from their attendance at Board of Directors and/ormeetings and committee meeting. Our Lead meetings.
LENNAR CORPORATION 2021 PROXY STATEMENT | 13
Corporate Governance Director receives an additional $75,000 per year for his services in that capacity, paid quarterly in cash. Directors who are employees do not receive any additional compensation for their services as a director.Compensation
Compensation Deferral.
A director may elect to defer payment of both the cash and stock portion of the annual retainer and committee retainersand lead director fees until the year of the member’s separation from service as a director ceases to serve on our Board or the member’sdirector’s death. If a director makes this election, a number of phantom shares of Class A common stock with a value equal to the amount of the deferred retainersretainer and fees is credited to the director’s deferred compensation account each quarter. Amounts equal to the dividends that would have been paid if theThese phantom shares had actually been outstandingaccrue dividend-equivalents, which are also credited to the director’s account and treated as though they were used to purchase additional shares of Class A common stock. Upon termination of
When a director’s deferred compensation account terminates, the director will receive cash equal to the value of the number of phantom shares of Class A common stock or Class B common stock credited to the director’s account. TheThat value of the phantom shares of Class A common stock and Class B common stock is determined by multiplying the number of phantom shares by the closing price of the applicable common stock on either the date of the director’s death or thea specified date during the year of the director’s separation from service that the director sends a notice to the Company requesting the settlement of such director’s phantom share account.service.
For fiscal 2017,2020, each of Messrs. Gilliam, Hudson, Lapidus, Olivera and Sonnenfeld, and Ms. McClure had elected to defer payment of both the cash and stock portions of their fees. During January 2020, Ms. McClure elected to terminate her participation in the deferred compensation program, which termination will be effective during the second quarter of fiscal 2021. The table below sets forth the aggregate number of phantom shares of Class A common stock and Class B common stock held by each directorsuch directors in their respective deferred compensation accounts at November 30, 2017:2020.
| Aggregate Number of Shares of Phantom Stock Held in Deferred Compensation Account at November 30, 2017 | Aggregate Number of Shares of Phantom Stock Held in Deferred Compensation Account at November 30, 2020 | |||||||||
Name | Class A | Class B | Class A | Class B | ||||||
Steven L. Gerard(1) | 48,352 | 388 | 49,089 | 388 | ||||||
Tig Gilliam | 24,898 | - | 35,107 | — | ||||||
Sherrill W. Hudson | 46,042 | - | 56,407 | — | ||||||
Sidney Lapidus | 42,104 | - | 54,055 | — | ||||||
Teri P. McClure | 11,447 | - | 20,183 | — | ||||||
Armando Olivera | 8,566 | - | 17,405 | — | ||||||
Jeffrey Sonnenfeld | 39,691 | - | 48,343 | — | ||||||
| (1) | The shares of phantom stock are shares that Mr. Gerard received prior to terminating his |
The following table sets forth information regarding the compensation of ournon-employeenon-management directors for fiscal 2017. Mr.2020. Messrs. Miller, our CEO, isBeckwitt and Jaffe are omitted from the table as he doesthey do not receive any additional compensation for his servicestheir service as a director.directors. Compensation for these three executives is described in the Compensation Discussion and Analysis section of this proxy statement, which begins on page 17.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(1)(2) | All Other Compensation ($)(3) | Total ($) | Fees Earned ($)(1) | Stock Awards ($)(1)(2) | All Other ($)(3) | Total ($) | ||||||||||||||||||||||||
Irving Bolotin | 100,000 | 169,719 | 141 | 269,860 |
| 102,500 |
|
| 145,836 |
|
| 184 |
|
| 248,520 |
| ||||||||||||||||
Steven L. Gerard | 110,000 | 169,719 | 55,840 | 335,559 |
| 112,500 |
|
| 145,836 |
|
| 28,826 |
|
| 287,162 |
| ||||||||||||||||
Tig Gilliam | 115,000 | 169,860 | 27,595 | 312,455 |
| 110,000 |
|
| 146,020 |
|
| 20,546 |
|
| 276,566 |
| ||||||||||||||||
Sherrill W. Hudson | 110,000 | 169,860 | 51,822 | 331,682 |
| 112,500 |
|
| 146,020 |
|
| 32,971 |
|
| 291,491 |
| ||||||||||||||||
Sidney Lapidus | 140,000 | 169,860 | 47,178 | 357,038 |
| 142,500 |
|
| 146,020 |
|
| 31,651 |
|
| 320,171 |
| ||||||||||||||||
Teri P. McClure | 90,000 | 169,860 | 12,288 | 272,148 |
| 92,500 |
|
| 146,020 |
|
| 11,617 |
|
| 250,137 |
| ||||||||||||||||
Armando Olivera | 90,000 | 169,860 | 8,964 | 268,824 |
| 102,500 |
|
| 146,020 |
|
| 9,880 |
|
| 258,400 |
| ||||||||||||||||
Donna Shalala | 83,750 | 189,844 | 141 | 273,735 | ||||||||||||||||||||||||||||
Jeffrey Sonnenfeld | 80,000 | 169,860 | 44,661 | 294,521 |
| 85,000 |
|
| 146,020 |
|
| 28,079 |
|
| 259,099 |
| ||||||||||||||||
Scott Stowell |
| 67,500 |
|
| 145,836 |
|
| 184 |
|
| 213,520 |
| ||||||||||||||||||||
14 | LENNAR CORPORATION 2021 PROXY STATEMENT
Corporate Governance Director Compensation
| (1) | Each of Messrs. Gilliam, Hudson, Lapidus, Olivera and Sonnenfeld, and Ms. McClure decided to defer 100% of both the cash and stock |
Name | Deferred Cash Fees ($) | Deferred Stock Awards ($) | Phantom Shares Credited to Account | Deferred Cash ($) | Deferred Stock ($) | Phantom Shares Credited to Account | ||||||||||||||||||
Tig Gilliam | 115,000 | 65,000 | 3,385 |
| 110,000 |
|
| 67,500 |
|
| 2,643 |
| ||||||||||||
Sherrill W. Hudson | 110,000 | 65,000 | 3,291 |
| 112,500 |
|
| 67,500 |
|
| 2,676 |
| ||||||||||||
Sidney Lapidus | 140,000 | 65,000 | 3,855 |
| 142,500 |
|
| 67,500 |
|
| 3,124 |
| ||||||||||||
Teri McClure | 90,000 | 65,000 | 2,915 |
| 92,500 |
|
| 67,500 |
|
| 2,378 |
| ||||||||||||
Armando Olivera | 90,000 | 65,000 | 2,934 |
| 102,500 |
|
| 67,500 |
|
| 2,527 |
| ||||||||||||
Jeffrey Sonnenfeld | 80,000 | 65,000 | 2,727 |
| 85,000 |
|
| 67,500 |
|
| 2,262 |
| ||||||||||||
| (2) | Amount reflects (i) 50% of the annual retainer fee, payable in shares of Class A common stock, and (ii) the fair market value of the 2,000 shares of Class A common stock |
| (3) | With respect to Mr. Bolotin and |
Name | Dividends Deferred ($) | Phantom Shares Credited to Account from Deferred Dividends | Dividends Deferred ($) | Phantom Shares Credited to Account for Deferred Dividends | ||||||||||||
Steven L. Gerard | 7,200 | 140 |
| 28,642 |
|
| 452 |
| ||||||||
Tig Gilliam | 3,536 | 69 |
| 20,546 |
|
| 323 |
| ||||||||
Sherrill W. Hudson | 6,699 | 130 |
| 32,971 |
|
| 519 |
| ||||||||
Sidney Lapidus | 6,095 | 118 |
| 31,651 |
|
| 498 |
| ||||||||
Teri McClure | 1,511 | 29 |
| 11,617 |
|
| 182 |
| ||||||||
Armando Olivera | 1,062 | 20 |
| 9,880 |
|
| 155 |
| ||||||||
Jeffrey Sonnenfeld | 5,740 | 111 |
| 28,079 |
|
| 442 |
| ||||||||
With respectStock Ownership Requirements
Our Board has adopted stock ownership guidelines establishing minimum equity ownership requirements for members of our Board. The purpose of the guidelines is to Messrs. Gerard, Gilliam, Hudson, Lapidus, Oliveraalign the interests of directors with the interests of stockholders and Sonnenfeld, and Ms. McClure,to further promote our commitment to sound corporate governance. Under our stock ownership guidelines, a director is expected to own, by a date not later than five years after being elected as a director, shares of our common stock with a value equal to five times the amounts include phantom shares heldannual director retainer. All of our directors are in compliance with these requirements.
LENNAR CORPORATION 2021 PROXY STATEMENT | 15
Every year, we give our stockholders the opportunity to vote, on a non-binding basis, on whether they approve the compensation of our named executive officers. This vote is often referred to as “say on pay.” At the 2021 Annual Meeting, we will ask our stockholders to vote, on an advisory basis, on the fiscal 2020 compensation of our named executive officers as disclosed in the director’s deferredCompensation Discussion and Analysis (“CD&A”) that follows this proposal.
We encourage you to review the CD&A, the compensation account resulting fromtables, and the related narrative disclosures. We believe Lennar’s success is attributable in substantial part to our talented and committed executives. Therefore, the compensation of our NEOs is designed to help us continue to retain, motivate, and recruit high-quality, experienced executives who can help us achieve our short-term and long-term corporate goals and strategies.
We believe our executive compensation program strikes an appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our executives to dedicate themselves fully to creating value for our stockholders. As explained in the CD&A, we seek this balance by using a Class B dividend. On October 29, 2017,mix of short-term and long-term compensation components—both fixed and variable—and basing a meaningful percentage of the compensation of our named executive officers on Lennar’s financial performance and stockholder return. Further, we maintain strong corporate governance practices regarding executive compensation, including robust stock ownership guidelines and a compensation clawback policy, to promote continued alignment of our executives’ interests with those of our stockholders and to discourage excessive risk- taking to achieve short-term gains.
We are requesting that our stockholders approve the following resolution:
RESOLVED, that the stockholders of Lennar Corporation approve, on a non-binding, advisory basis, the compensation of Lennar’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, which disclosure includes the Compensation Discussion and Analysis, the tabular disclosures regarding such compensation, and the accompanying narrative disclosures, set forth in Lennar’s 2021 Annual Meeting proxy statement.
Although this say on pay vote is non-binding, the Board declared a stock dividend of one share of Class B common stock for each 50 shares of Class A common stock or Class B common stockand the Compensation Committee will review the results of the Company outstanding. As a result, the directors with deferredvote and consider those results when determining future executive compensation accounts were credited with additional phantom shares, calculated by determining the value of the Class B dividend on such directors phantom shares on the payment date (November 27, 2017), and crediting the director’s deferred compensation account with phantom shares based on the fair market value of a share of our Class A common stock on the dividend record date (November 10, 2017). The table below sets forth the phantom shares of Class A common stock credited to each participating directors’ account as a result of the Class B dividend.arrangements.
Name | Class B Dividends Deferred ($) | Phantom Shares Credited to Account from Deferred Dividends | ||||||
Steven L. Gerard | 48,499 | 826 | ||||||
Tig Gilliam | 24,060 | 410 | ||||||
Sherrill W. Hudson | 45,123 | 769 | ||||||
Sidney Lapidus | 41,083 | 700 | ||||||
Teri McClure | 10,777 | 184 | ||||||
Armando Olivera | 7,902 | 135 | ||||||
Jeffrey Sonnenfeld | 38,922 | 663 | ||||||
16 | LENNAR CORPORATION 2021 PROXY STATEMENT
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This Compensation Discussion and Analysis describes our compensation philosophy, policies, and plans, and their objectives,as well as our compensation-setting process and the 20172020 compensation of our named executive officers, or NEOs. In addition, we explain why we believe that our executive compensation program is in the best interests of Lennar and you, our stockholders.
For fiscal 2017,2020, our named executive officers (“NEOs”) were:
Stuart Miller Executive Chairman | ||||||||||
Rick Beckwitt Co-Chief Executive | ||||||||||
Jonathan M. Jaffe Co-Chief Executive Officer and Co-President | Diane Bessette Vice President, Chief Financial Officer and | |||||||||
Jeff McCall Executive Vice | ||||||||||
Mark Sustana Vice President, General Counsel and Secretary |
As discussed in Proposal 3
Table of Contents | ||||||||||||||
| 17 | 2020 Compensation Decisions | 21 | ||||||||||||
| 19 | Other Benefits | 27 | ||||||||||||
| 20 | Change in Control Effects | 27 | ||||||||||||
| 21 | Other Compensation Practices | 27 | ||||||||||||
2020 Performance Highlights
During fiscal 2020, Lennar achieved strong financial and operational performance, including:
| REVENUE | PRETAX INCOME | HOME DELIVERIES | NEW HOME ORDERS | |||||||||
$22.5B p 1% | $3.1B p 28% | 52,925 p 3% | 56,169 p 9% | |||||||||
LENNAR CORPORATION 2021 PROXY STATEMENT | 17
Compensation Discussion and Analysis Executive Summary
2020 Compensation Program
Our NEO compensation program currently has three forms of direct compensation: base salary, annual cash incentive awards, and equity-based incentive awards.
| Element | Description | Primary Objectives | ||
| Base salary | Fixed cash payment | To attract and retain executives by offering salaries that are competitive with market opportunities and that recognize each executive’s position, role, responsibility, and experience. | ||
Annual cash incentive award | Variable performance-based cash payment. In addition, two of our NEOs received special cash bonuses with regard to fiscal 2020. | To motivate and reward the achievement of annual performance objectives. | ||
| Equity-based incentive award | Messrs. Miller, Beckwitt, Jaffe and McCall, and Ms. Bessette receive their grant as 50% performance-based restricted stock and 50% service-based restricted stock. Mr. Sustana receives his grant entirely in service-based restricted stock. | To align executives’ interests with the interests of stockholders, motivate executives to maximize our long-term performance and stockholder returns, and promote executive retention. | ||
We do not have a Say on Pay voteformal policy prescribing the allocation of total compensation among these various components. Our Compensation Committee believes the factors that requests your approval, on an advisory basis,determine compensation should vary with the executive’s role. For example, executives with more influence over our operating and financial performance should have a greater portion of their compensation dependent upon the compensationachievement of ourperformance objectives. By comparison, those named executive officers as describedwhose responsibilities are to establish and maintain strong corporate controls and regulatory compliance should have a larger percentage of their direct compensation from their base salary and from annual incentive awards based on factors like whether Lennar adheres to fundamental policies and procedures and avoids undue risk-taking.
The chart below shows how total direct compensation was allocated for each of our NEOs in this sectionfiscal 2020.
2020 COMPENSATION PAY MIX
18 | LENNAR CORPORATION 2021 PROXY STATEMENT
Compensation Discussion and in the tables and accompanying narrative contained in the discussion captioned “Executive Compensation.” In connection with that vote, you should review our compensation philosophies, the design ofAnalysis Our Compensation Practices
We designed our executive compensation programsprogram to:
attract, motivate, and how, we believe,retain highly qualified and experienced executives;
recognize valuable individual performance and motivate executives to maximize Lennar’s short-term and long-term achievements;
maintain flexibility to ensure that awards remain competitive within our peer group of homebuilders and Fortune 500 companies;
align the interests of our executives with those of our stockholders; and
promote adherence to good corporate governance and company policies and values.
We pursue these programs contributeobjectives while adhering to the strong financial performance that Lennar has provided to its stockholders.governance practices and company policies discussed below.
Executive Summary
We Tie Our Executives’Executive Compensation to Performance.Performance
We believe that one of the best methods for aligningways to align the interests of our senior executives with those of our stockholders is to tie a significant portion of theirexecutive compensation to ourLennar’s financial and operational performance. With respect to our Executive Chairman and each of our Co-CEOs—thethree named executive officers whose responsibilities are to grow our business, our CEO, our President and our COO, this translates into:
Annual cash incentive awards are earned only if the Company accomplishes financial and operational metrics, which we believe contribute to long-term growth and, upon being earned, the awards vest in three equal annual installments.
With respect to our other two named executive officers,for our CFO, our EVP and our General Counsel, whoseGC are based on Lennar’s performance as well as their individual performance in their respective areas of responsibility. Since the principal responsibilities are the establishmentfor these executives include establishing and maintenance ofmaintaining strong corporate controls and regulatory compliance, we basea smaller portion—approximately 82%—of their annual cash incentive award targets on their individual performance, the performance of the Company in its adherence to corporate governance, policies and procedures, the results of an annual internal audit evaluation and, in the case of our CFO, the pretax income of our Lennar Financial Services segment, which he oversees. The bonus each executive is awarded is based on the extent to which the executive achieves his target and the Company’s financial performance, measured by our pretax income. Equity awards are service-based and vest over three years with respect to our CFO. With respect to our General Counsel, equity awards are earned only if the Company accomplishes certain financial and operational metrics and, upon being earned, the awards vest in three equal annual installments. As a result, 87% of our CFO’s total direct compensation and 79% of our General Counsel’s total direct compensation for 2017fiscal 2020 was performanceeither performance-based or equity based.
We Maintain Strong Executive Compensation Policies.We maintain strong executiveGovernance Policies
The compensation governance policies tosummarized below further align our executives’ interests with those of our stockholders. Specifically, we have:
Stock ownership guidelines. Each of our executive officers is required to own shares of our common stock with a value equal to a prescribed multiple of his or her base salary. All of the NEOs significantly exceed their minimum stock ownership requirements. For more information, see page 27.
No employment agreements.We do not have employment agreements, severance agreements, or change in control agreements with any of our NEOs or other executive officers. This gives the |
2017 Compensation Reflects Exceptional 2017 Company Performance.During fiscal 2017,we achieved exceptional financial and operational performance, including:
Revenues from home sales increased 15%our executive compensation program in order to remain competitive in the fiscal year ended November 30, 2017market and address economic conditions.
Double-trigger vesting requirement. All equity grants are subject to $11.0 billion from the prior fiscal year and gross margins on home sales were $2.4 billion or 22.1%a “double-trigger” requirement to accelerate vesting in the year ended November 30, 2017. During fiscal 2017, we also had strong performancesevent of a change in control. For more information, see page 27.
Compensation Clawback Policy. Our compensation clawback policy would allow us to recover from NEOs and other associates (in certain circumstances) incentive-based compensation granted under our other business segments. Our Lennar Financial Services segment had operating earnings of $155.5 million. Our Multifamily business had operating earnings of $73.4 million in2016 Equity Plan and 2016 Incentive Compensation Plan. For more information, see page 28.
We Regularly Review the year ended November 30, 2017, benefiting fromCompensation Program and Make Appropriate Changes
In 2019, the sale of seven completed rental properties by its unconsolidated entities. Finally, in fiscal 2017, we successfully acquired and integrated a Florida-based homebuilder, WCI Communities, Inc (“WCI”).
2018 Executive Compensation Changes reflect increased Alignment with Shareholder Interests. Below are the highlights of the changes we made to our executive compensation program for Messrs. Miller, Beckwitt, and Jaffe:
Compensation Setting Process
We designed our executive compensation to:fourth metric: relative total stockholder return.
LENNAR CORPORATION 2021 PROXY STATEMENT | 19
Compensation Discussion and Analysis Roles and Responsibilities with Regard to Compensation
Roles and Responsibilities with Regard to Compensation
Role of the Compensation Committee
Our Compensation Committee annually evaluates and approves the compensation for our CEO and our most senior executive officers, including all the named executive officers. ItsThe Committee’s determinations regarding the compensation of our senior executive officers take into account information abouta variety of factors. Among other things, the Compensation Committee looks at the compensation being paid by other homebuilders or companies engaged inwith businesses similar to Lennar’s, and compensation being paid to other activities of the type in which we are engaged, as well asexecutives at Fortune 500 companies. The Compensation Committee also considers recommendations by our CEOExecutive Chairman and Presidenteach of our Co-CEOs (except regarding themselves) and other members of our senior management and any other factors the Compensation Committee believes to be applicable.are appropriate.
Role ofUnder the Independent Compensation Consultant
The Compensation Committee has the authority to engage compensation consultants. During fiscal 2017,2016 Equity Plan, the Compensation Committee engaged FW Cookis authorized to performdelegate all or a reviewpart of its duties with respect to awards to management (excluding any grandfathered awards intended to qualify as performance-based compensation under Section 162(m) of the Company’s executive compensation program, including consideringInternal Revenue Code, awards made to individuals covered by Section 16 of the Securities Exchange Act of 1934, and awards issued to any changes that could be implemented in fiscal 2018. Theperson who was delegated authority to make awards). Under the Lennar Corporation 2016 Incentive Compensation Plan, the Compensation Committee consideredis authorized to delegate all or a part of its duties with respect to bonuses under the work previously performed by FW Cook and determined that no conflictsplan to management (excluding any grandfathered awards intended to qualify as performance-based compensation under Section 162(m) of interest were raised and that FW Cook was independent from management.the Internal Revenue Code).
Role of Management
Our CEOExecutive Chairman and each of our PresidentCo-CEOs provide written background and supporting materials for review at Compensation Committee meetings, and also attend Compensation Committeethose meetings at the Committee’s request,request. Typically, these executives attend all regularly-scheduled Compensation Committee meetings, but they are excused as appropriate, including for discussions regarding their own compensation. In addition, our Executive Chairman and each of our Co-CEOs provide information regarding, and make recommendations about, designs for and, if warranted,(or changes toto) our executive compensation programs. Our CEOFinally, our Executive Chairman and each of our PresidentCo-CEOs provide reviewsthe Compensation Committee with:
evaluations of each named executive officer’s performance and recommend compensation actionsofficer, including themselves;
recommendations regarding base salary levels for the upcoming year for each named executive officersofficer, other than themselves.themselves;
an evaluation of the extent to which each named executive officer met the applicable annual incentive plan target(s); and
recommendations regarding the aggregate value of the long-term incentive compensation that each named executive officer should receive.
Role of Compensation Consultants and Advisors
The Compensation Committee has the authority to engage the services of outside legal or other experts and advisors as it deems necessary and appropriate. As it has in the past, the Compensation Committee engaged F.W. Cook & Co., Inc. (“FW Cook”), an independent management compensation consulting firm, in fiscal 2020 to assist with executive compensation matters. The Compensation Committee considered the work performed by FW Cook for the Company and determined no conflicts of interest exist and that FW Cook is independent from management.
Role of Stockholders
As part of its compensation-setting process, the Compensation Committee considers the results of the stockholder advisory vote on our executive compensation from the prior year. Approximately 86% of the votes cast at our 2020 annual meeting were voted in favor of our executive compensation, which was the same approximate percentage as the prior year.
20 | LENNAR CORPORATION 2021 PROXY STATEMENT
Compensation Discussion and Analysis Use of Compensation SurveyMarket Data
We userefer to compensation data regarding what we view as our peer group ofother publicly-traded homebuilding companies to analyze our compensation decisions in light of current market rates and practices, and to help ensure that our compensation decisions are reasonable in comparison to the compensation paid by our peer group and in view of the value of particular executives to Lennar.competitive. In connection with setting fiscal 20172020 compensation, the Compensation Committee reviewed summaries of information disclosed in public filings by the following publicly tradedpublicly-traded homebuilders that the Compensation Committee views as our peer group (“Peer(the “Peer Group”), based on revenue and home closings::
Beazer Homes USA, Inc. | M.D.C. Holdings, Inc. | Taylor Morrison Home Corporation | ||
D.R. Horton, Inc. | Meritage Homes Corporation | |||
Toll Brothers, Inc. | ||||
Hovnanian Enterprises, Inc. | NVR, Inc. | |||
TRI Pointe Group, Inc. | ||||
KB Home | PulteGroup, Inc. | |||
In addition,Given that only one company in the Peer Group approaches Lennar in terms of revenue, profitability, and market capitalization, the Compensation Committee also reviewed information about compensation levels generally paid by other Fortune 500 companies. The Compensation Committee does not design our executive compensation programs to fit within a specific percentile of the executive compensation programs of the Peer Group companies, the Fortune 500 companies, or any other peer group or survey. Rather, the Compensation Committee compares numerous elements of executive compensation, including base salaries, annual incentive compensation, and long-term cash and equity basedequity-based incentives, to assist in determining whether proposed compensation programs are competitive, and then uses its experience and judgment to make final compensation decisions.
Consideration of Stockholder Advisory Vote
As part of its compensation setting process, the Compensation Committee also considers the results of the prior-year’s stockholder advisory vote on our executive compensation to provide useful feedback. As part of its 2017 compensation setting process, the Compensation Committee reviewed the results of the 2017 stockholder advisory vote, including the fact that only approximately 67% of the votes cast were voted in favor of our executive compensation. As a result of the vote, and stockholder feedback, the Compensation Committee engaged FW Cook to review the Company’s executive compensation. The changes to fiscal 2018 executive compensation reflect the results of that review.
Compensation Plans
Our 2016 Equity Plan provides for the issuance of stock-based awards, such as options and restricted stock, to officers, directors, or associates of the Company and its subsidiaries, or individuals who provide significant services to the Company or its subsidiaries. The aggregate number of shares of Class A common stock or Class B common stock that may be subject to awards granted under the 2016 Equity Plan is 15 million shares. The 2016 Equity Plan replaced our prior equity plan, the 2007 Equity Plan. While awards may no longer be issued under the 2007 Equity Plan, the 2007 Equity Plan still governs the outstanding awards that were issued under the 2007 Equity Plan. Our 2016 Incentive Compensation Plan enables the Compensation Committee to establish performance goals for officers and other associates of the Company and its subsidiaries and to determine bonuses which will be awarded on the basis of achievement of performance goals.
Executive Compensation Components and 20172020 Compensation Decisions
Our named executive officers do not have employment agreements. This gives the Compensation Committee flexibility to change the components of our executive compensation program in order to remain competitive in the market and address economic conditions. Our executive compensation program currently has three components of total direct compensation: (1)Base Salaries
Why we pay base salary, (2) annual cash incentive awards, and (3) equity-based incentive awards.
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| salaries. | ||||
We do not have a formal policy relating to the allocation of total compensation among the various components. However, our Compensation Committee believes that the executives with more influence over our operating and financial performance should have a greater portion of their compensation dependent upon the achievement of the performance objectives. The Compensation Committee believes that those executives who are responsible for growth should have the largest portion of their compensation from (i) annual cash
incentive awards that are directly based on our financial performance, without a cap to motivate annual profitability and (ii) equity-based awards whose value depends on the long-term appreciation of our stock price. By comparison, those named executive officers whose responsibilities are the establishment and maintenance of strong corporate controls and regulatory compliance should have a larger percentage of their direct compensation from their base salary and from annual incentive awards based on, among other factors, the performance of the Company in its adherence to corporate governance, policies and procedures and the results of an internal audit evaluation to avoid undue risk taking.
Base Salaries
Why we pay base salaries. The Compensation Committee believes that payment of competitive base salaries isare an important element in attracting, retaining, and motivating our executives. In addition, the Compensation Committee believes that having a certainreasonable level of fixed compensation allows our executives to dedicate their full timeundivided business attention to our Company.Lennar.
How base salaries are determined. When thedetermined. The Compensation Committee sets theconsiders a number of factors when setting base salaries for the NEOs, it considers a number of factors, including:
level of experience and responsibility;
the scope and complexity of the role;
ability to contribute to our meeting annual operating objectives;
level of pay required to retain the executive’s services in light of market conditions;
average base salary of comparable executives in our Peer Group; and
market changes and the economic and business conditions affecting Lennar at the time of the evaluation.
When setting base salaries, theThe Compensation Committee does not assign a specific weight to any individual factor or apply any specifica formula as tofor how an NEO’s base salary should compare to that of similar employees ofin our Peer Group.
Except for the2020 base salary of our General Counsel, thedecisions. The NEOs’ base salaries of our NEO’s have remained unchanged since 2010. The base salary of our CEO has remained unchanged since 2003.for fiscal 2020 are shown below.
2017 Base Salary Decisions. We increased the base salary of Mr. Sustana by 3.2% to bring his base salary more in line with comparable market compensation. We did not increase the base salaries of our other NEOs in fiscal 2017.
| Name | 2020 Base Salary ($) | Change from 2019 Base Salary (%) | ||||||
Stuart Miller | 1,000,000 | unchanged since 2003 | ||||||
Rick Beckwitt | 800,000 | unchanged since 2010 | ||||||
Jonathan M. Jaffe | 800,000 | unchanged since 2010 | ||||||
Diane Bessette | 750,000 | unchanged since 2018 | ||||||
Jeff McCall | 750,000 | unchanged since 2018 | ||||||
Mark Sustana | 465,000 | unchanged since 2017 | ||||||
LENNAR CORPORATION 2021 PROXY STATEMENT | 21
Compensation Discussion and Analysis 2020 Compensation Decisions
Annual Cash Incentive Compensation
Why we pay annual cash incentive compensation.compensation. The Compensation Committee believes that annual cash incentive compensation encourages executive officers to contribute to the Company’s annualLennar’s profitability. Our 20172020 annual cash incentive awards were made under our 2016 Incentive Compensation Plan.
How2020 Annual Cash Incentive Compensation is determined.Decisions
CEO, President and COO. MESSRS. MILLER, BECKWITT AND JAFFE
The cash bonus for our CEO, our PresidentMessrs. Miller, Beckwitt and our COOJaffe is based on a percentage of our pretax income, which is net earnings attributable to Lennar plus/minus income tax expense/benefit (“Pretax Income”)., after a capital charge equal to 7.3% of tangible capital. Pretax Income takes into account and adjusts foris calculated after eliminating goodwill charges, losses or expenses on early retirement of debt, impairment charges, and impairment and similar charges. The cash bonus for our CEO, our President and our COOacquisition or deal costs related to the purchase or merger of a public company. Tangible capital is not capped.calculated as stockholders’ equity less intangible assets plus homebuilding debt. We believe that our executives’ pay should be linked to theLennar’s performance, of Lennar and that linking the annual cash bonus to Pretax Income achieves this goal. As a result,For example, there have been years, such as fiscal 2008 and 2009 during the economic downturn, when these executives did not receive a cash bonus, and other years, such as more recent years, when Lennar has returned to profitability, whenbeen profitable and the executives have received significant cash bonuses. These bonuses are not capped.
In June 2016,February 2020, our Compensation Committee reviewed an analysis of the compensation Lennar paid to its senior executives compared with that paid by 11 other publicly-traded homebuilding companies.our Peer Group. This included an analysis of the fiscal year 20152019 compensation paid to our CEO with that paid in fiscal 2015 to the chief executive officers of each of the 11 other homebuilding companiesMessrs. Miller, Beckwitt, and with the fiscal 2015 compensation of the chief executive officers of the companies in the Fortune 500. It also included an analysis of the fiscal 2015 compensation paid to our President and to our COOJaffe as compared with the compensation paid in fiscal 20152018 and 2019 to the personsindividuals in comparable positions by three of the homebuilding companies and the compensation paid in fiscal 2015 to the presidents of theat companies in the Fortune 500. In January 2017, the Compensation Committee reviewed a comparison of the fiscal 2016 compensation of our CEO, our PresidentPeer Group and our COO, which included cash incentive bonuses equal to 1.00%, 0.92% and 0.92%, respectively, of Lennar’s fiscal 2016 Pretax Income, with that of the persons in similar positions at the publicly traded homebuilding company that is most nearly comparable in size with Lennar and companies in the Fortune 500. Based on its review of those analyses,the analysis, the results Lennar had achieved during fiscal 2016,2019, and the results Lennar was expected to achieve during fiscal 2017,2020, the Compensation Committee decided to apply a formula for each of our CEO, our PresidentMessrs. Miller, Beckwitt, and our COO whichJaffe that included cash incentive bonuses equal to 1.00%0.73%, 0.92%0.63%, and 0.92%0.55%, respectively, of Lennar’s fiscal 20172020 Pretax Income. This reflectedIncome, after a capital charge equal to 7.3% of tangible capital.
Based on our fiscal 2020 Pretax Income of $3.1 billion, and after taking into account the $1.5 billion capital charge, Messrs. Miller, Beckwitt, and Jaffe were entitled to cash bonus payments of $13,014,062, $11,231,314 and $9,805,116, respectively. However, during fiscal 2020, considering the hardships caused by the COVID-19 pandemic, the Company decided to give a one-time payment of $1,500 to each Lennar associate making less than or equal to $75,000 a year. At the request of Messrs. Miller, Beckwitt and Jaffe, and upon the approval of the Compensation Committee determination thatusing its negative discretion, this one time discretionary payment, which totaled $4.6 million, was taken out of Messrs. Miller’s, Beckwitt’s and Jaffe’s cash bonuses, resulting in the reduced cash incentive bonuses the officers received in fiscal 2016 were appropriatebonus payments of $11,255,756, $9,713,872 and a decision$8,480,365 to keep the percentages the same to keep their fiscal 2017 compensation in line with the prior year compensation.
CFO and General Counsel. Mr. Gross and Mr. Sustana eachMs. Bessette had the opportunity to earn a target award of 100% of base salary based on the performance criteria set forth below, and the opportunity to receive an additional cash bonus of up to 80%200% of their respective target awardsher base salary, with 100% of the goal based on prescribed performance criteria, and the other 100% based on achievement of certain outperformance measures. The performance criteria and associated payout for the goals specifiedfirst piece of Ms. Bessette’s award are shown below.
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Target Bonus Opportunity | ||||||||||||||||||
Performance Criteria | Percent of Target Award | Threshold | % of Target | |||||||||||||||
Individual performance(1) | Up to 60% | Good Very Good Excellent | 20% 40% 60% | |||||||||||||||
Corporate | Up to 40% | Good Very Good Excellent | 10% 25% 40% | |||||||||||||||
Total | 100% | |||||||||||||||||
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| (1) | Individual performance is based on an annual performance appraisal review. |
| (2) | Determined by the Nominating and Corporate Governance Committee. |
In addition, Mr. Gross, who oversees our Lennar Financial Services segment, had the opportunity to earn 1.00% of our Lennar Financial Services pretax income, which is the operating earnings of our Lennar Financial Services segment (“LFS Pretax Income”).
2017 Annual Incentive Compensation Decisions.
CEO, President and COO. Based on our Pretax Income of $1.27 billion, Messrs. Miller, Beckwitt and Jaffe were entitled to cash bonus payments of $12,701,020, $11,684,938 and $11,684,938, respectively.
CFO and General Counsel. With respect to Mr. Gross, in determining the score earned for individual performance, the following were highlighted: overall contribution to strong financial and accounting controls22 | LENNAR CORPORATION 2021 PROXY STATEMENT
Compensation Discussion and to the Company’s solid performance during fiscal 2017. Analysis 2020 Compensation Decisions
In determining the score earned for Ms. Bessette’s individual performance, the Compensation Committee recognized the following achievements: overall contribution towards setting operational and financial strategies for our operations, communicating and implementing those strategies across the Company, and analyzing and monitoring the Company’s performance. In determining the score earned for corporate governance, adherence to company policy and procedure, and internal audit evaluation, the Nominating and Corporate Governance Company Policy and Procedure Adherence, and Internal Audit EvaluationCommittee recognized the following were highlighted:achievements: overall contribution to strong internal control environment resulting in positiveproviding executive management oversight of the Company’s accounting, management reporting, internal audit, results, leadership in response to governance challenges during the yearfinance, investor relations, legal, financial planning, treasury, tax and overall contribution to continuing development of corporate governance programspayroll and policies.compensation functions. No specific weight was given to any particular factor in the evaluations, and no one factor was material. Mr. Grossdeterminative. Ms. Bessette was deemed to meet the “excellent” performance level with respect to both performance criteria, and received a cash bonus of 100% of her base salary, or $750,000.
The second piece of Ms. Bessette’s award was based on the achievement of the following outperformance goals:
Increase efficiencies with accounting processes for corporate, regions and divisions;
Decrease the month-end closing timeline;
Increase efficiencies with planning process for corporate, regions and divisions;
Decrease and/or automate deliverables;
Maximize cash generation and capital opportunities; and
Successful strategic transactions with ancillary businesses, as appropriate.
The Compensation Committee determined that Ms. Bessette was entitled to an award equal to the additional 100% of her base salary, or $750,000, based on achievement of specified outperformance goals, including the generation of strong homebuilding cash flow, increased efficiencies related to the Company’s accounting processes and the shortening of the month-end closing timeline. Again, no specific weight was given to any particular factor in the evaluation, and no one factor was determinative. Accordingly, Ms. Bessette received a cash bonus payment of $1,500,000 under the incentive program. In recognition of her exceptional performance during fiscal 2020, the Compensation Committee also granted an award of $500,000 to Ms. Bessette. This award is separate from the 2020 cash incentive program.
MR. MCCALL
Mr. McCall had the opportunity to earn a cash bonus of up to 200% of his targetbase salary, with 150% of the goal based on prescribed performance criteria, and the other 50% based on achievement of certain outperformance measures. The performance criteria and associated payout for the first piece of Mr. McCall’s award or $650,000.are shown below.
| Performance Criteria | Percent of Target Award | Performance Levels/Target Bonus Opportunity | ||||||
| Threshold | % of Target | Quantification of Thresholds | ||||||
Departmental budget management(1) | Up to 50% | Good Very Good Excellent | 25% 40% 50% | 104% - 101% of aggregate budget spend 101% - 99% of aggregate budget < 99% of aggregate budget | ||||
Development and Implementation of strategic | Up to 50% | Good Very Good Excellent | 25% 40% 50% | Hiring of Chief Growth Officer (or similar role) Rollout of one digital enhancement tool Rollout of 2 or more digital enhancement tools | ||||
Expansion of Inclusion and Diversity program/ | Up to 50% | Good Very Good Excellent | 25% 40% 50% | Design and launch program | ||||
Target Award | 150% | |||||||
| (1) | Budget includes the sum of IT, HR, and cybersecurity cost centers. Actual performance excludes non-recurring events, including establishment of strategic joint venture. |
LENNAR CORPORATION 2021 PROXY STATEMENT | 23
Compensation Discussion and Analysis 2020 Compensation Decisions
The Compensation Committee determined that Mr. GrossMcCall achieved an “excellent” performance rating in all three performance categories and was therefore entitled to 30% ofan award equal to the potential 80%entire 150% of his target award,base salary, or $194,760,$1,125,000, based on achievement of specified performance goals, including expansion of which the following were highlighted:
budget management. No specific weight was given to any particular factor in the evaluations, and no one factor was material. Baseddeterminative.
The second piece of Mr. McCall’s award was based on our LFS Pretax Incomethe achievement of $155.5 million,the following outperformance goals:
Overall corporate leadership;
Leading/tracking/prioritizing unify and simplify initiatives;
Operational reporting enhancements/improvements; and
Contribution to other strategic initiatives.
The Compensation Committee determined that Mr. GrossMcCall was entitled to $1,555,240 for that portionan award equal to the additional 50% of his base salary, or $375,000, based on achievement of specified outperformance goals, including successful executive management oversight of the award.Company’s information technology, cybersecurity, and human resource management departments, improvement of the Company’s operations reporting processes and contribution to strategic technology initiatives. Again, no specific weight was given to any particular factor in the evaluation, and no one factor was determinative. Accordingly, Mr. GrossMcCall received a cash bonus payment of $2,400,000$1,500,000 under the incentive program.
With respect In recognition of his exceptional performance during fiscal 2020, the Compensation Committee also granted an award of $500,000 to Mr. McCall. This award is separate from the 2020 cash incentive program.
MR. SUSTANA
Mr. Sustana inhad the opportunity to earn a cash bonus of up to 195% of his base salary, with 100% of the goal based on prescribed performance criteria, and the other 95% based on achievement of certain outperformance measures. The performance criteria and associated payout for the first piece of Mr. Sustana’s award are shown below.
| Performance Levels/ Target Bonus Opportunity | ||||||||
Performance Criteria | Percent of Target Award | Threshold | % of Target | |||||
Individual performance(1) | Up to 60% | Good Very Good Excellent | 20% 40% 60% | |||||
Corporate governance, company policy and procedure adherence, and internal audit evaluation(2) | Up to 40% | Good Very Good Excellent | 10% 25% 40% | |||||
Total | 100% | |||||||
| (1) | Individual performance is based on an annual performance appraisal review. |
| (2) | Determined by the Nominating and Corporate Governance Committee. |
In determining the score earned for Mr. Sustana’s individual performance, the Compensation Committee recognized the following were highlighted:achievements: successful resolution of litigation matters, and legal recoveries, strong level of support provided to business units and overall contribution to the Company’s solid performance during fiscal 2017 and successful recovery of insurance claims.2020. In determining the score earned for corporate governance, adherence to company policy and procedure, and internal audit evaluation, the Nominating and Corporate Governance Company Policy and Procedure Adherence, and Internal Audit EvaluationCommittee recognized the following were highlighted:achievements: overall contribution to control environment and creation and implementation of training systems resulting in positive internal audit results, leadership in response to legal and governance challenges during the year and overall contribution to continuing development of corporate governance programs and policies. No specific weight was given to any particular factor in the evaluations, and no one factor was material.determinative. Mr. Sustana was deemed to meet the “excellent” performance level with respect to both performance criteria, and received a cash bonus of 100% of his targetbase salary, or $465,000.
The second piece of Mr. Sustana’s award or $465,000.was based on the achievement of the following outperformance goals:
Exceeding business plan profitability;
Modernize the proxy statement;
Prepare a sustainability report and evaluate a sustainability rating system;
Robotics—develop programs for litigation intake and risk management claims tracking;
Maximize cash inflows / minimize cash outflows; and
Improve coordination between corporate and regional transaction attorneys.
24 | LENNAR CORPORATION 2021 PROXY STATEMENT
Compensation Discussion and Analysis 2020 Compensation Decisions
The Compensation Committee determined that Mr. Sustana was entitled to 72% ofan award equal to the potential 80%additional 95% of his target award,base salary, or $335,000,$441,750, based on achievement of specified performanceoutperformance goals, including modernizing the proxy statement, preparation of which the following were highlighted:
No regional transaction attorneys. Again, no specific weight was given to any particular factor in the evaluationsevaluation, and no one factor was material.determinative. Accordingly, Mr. Sustana received a cash bonus payment of $800,000$906,750 under the cash incentive program.
Equity-Based Compensation
Why we pay equity-based compensation.compensation. The Compensation Committee’s philosophy isCommittee believes that a significant component of a senior executive’s compensation should be long-term incentive compensation in the form of restricted stock so asequity in order to align the financial interests of our senior executives with those of our
stockholders. Since 2009, we have provided long-term equity incentive awards solely in the form of restricted stock, both performance-based and service-based. The Compensation Committee believes that granting equity incentives to our senior executives in the form of restricted stock:stock with deferred vesting:
motivates our senior management to maximize our long term,long-term, as well as our short term,short-term, performance;
helps us attract and motivate highly qualified and experienced executives; and
helps retain key personnel aspersonnel.
During 2020, our Compensation Committee reviewed the effect that our restricted stock grant program had on retention, and determined that the program has provided, and continues to provide, a resultstrong retention incentive for senior executives. Moreover, the Compensation Committee determined that, because of deferred vesting.
How equity-based compensation is determined.was determined. Annually, the Compensation Committee evaluates the appropriate form of equity-based compensation that Lennar will grant as part of its long term incentive compensation and approves the dollar value of long-term equity awards that will be granted to each NEO.
During 2017,NEO under our Compensation Committee reviewed the effect that our restricted stock grant program had on our retention of our senior executives. The Committee decided that the program had provided, and continued to provide, a strong retention incentive for senior management and that, because of the “stacking” effect, a program of annual grants that vests in three annual installments provides better employee retention benefits than a grant that vests upon the grant date. The Compensation Committee also believes that restricted stock awards provide a strong retention incentive for other key associates. In 2017, the Compensation Committee decided that we should continue making grants of restricted stock to a wider group of key associates, and, with the approval of the Compensation Committee, in June 2017, the Company awarded grants of restricted stock to senior management, our Division Presidents, our key Regional Managers and other key associates (323 persons).One-third2016 Equity Plan. of the restricted stock awarded to an associate in June 2017 will vest on each of July 2, 2018, July 2, 2019, and July 2, 2020 and unvested shares will, under most circumstances, be forfeited if the associate ceases to be employed by us.
The numbers of shares of restricted stock to be awarded to members of our senior management with regard to 2020 were based upon recommendations by our CEO, our PresidentMr. Miller, Mr. Beckwitt, Mr. Jaffe and other members of our senior management, followed by a review bymanagement. In addition, our Compensation Committee engaged in a review of the total compensation our senior management had received over the last five years, a comparison of their 2015the comparative compensation with that of similarly positioned executives atanalysis described above, and the Peer Group companies, a review ofexecutives’ total potential compensation for fiscal 2017, as well as consideration of2020, and considered each executive’s responsibilities and expected contributions to our company. When considering the number of shares to award, theLennar. The Compensation Committee did not assign a specific weight to any individual factor, or consider any policy as to how the compensation should compare to that of employees performing similar functions for our Peer Group.Group or other Fortune 500 companies.
2017 Equity Based
LENNAR CORPORATION 2021 PROXY STATEMENT | 25
Compensation Discussion and Analysis 2020 Compensation Decisions.
2020 Equity-Based Compensation Decisions
In June 2017,February 2020, the Compensation Committee approved the following awards shown below of restricted Class A common stock for our NEOs under the 2016 Equity Incentive Plan:Plan.
Officer | Restricted Stock Value ($) | Restricted Stock (#) | ||||||||||||||||||||||
| Executive | Service-based restricted stock value ($)(1) | Service-based restricted (#)(2) | Performance- based ($)(1) (3) | Performance- based at target (#) | ||||||||||||||||||||
Stuart Miller | 5,417,360 | 104,000 | 6,452,398 | 106,934 | 6,452,398 | 106,934 | ||||||||||||||||||
Rick Beckwitt | 4,531,830 | 87,000 | 5,719,930 | 94,795 | 5,719,930 | 94,795 | ||||||||||||||||||
Jonathan M. Jaffe | 2,578,455 | 49,500 | 5,021,133 | 83,214 | 5,021,133 | 83,214 | ||||||||||||||||||
Bruce Gross | 2,083,600 | 40,000 | ||||||||||||||||||||||
Mark Sustana | 989,710 | 19,000 | ||||||||||||||||||||||
| Diane Bessette | 874,990 | 14,501 | 874,990 | 14,501 | ||||||||||||||||||||
| Jeff McCall | 749,966 | 12,429 | 749,966 | 12,429 | ||||||||||||||||||||
CEO, President, COO and General Counsel.
| (1) | Value is based on $60.34 per share, which was the closing price of Lennar’s Class A common stock on the grant date (February 28, 2020). |
| (2) | The shares of service-based restricted stock will vest in equal installments on each of February 14, 2021, February 14, 2022, and February 14, 2023. |
| (3) | If the threshold number of shares of performance-based restricted stock that potentially could be earned were used rather than the target number, the total grant date fair value of the performance-based awards would be $3,226,199 for Mr. Miller, $2,859,965 for Mr. Beckwitt, $2,510,566 for Mr. Jaffe, $437,495 for Ms. Bessette and $374,983 for Mr. McCall. If the maximum number of shares of performance-based restricted stock that potentially could be earned were used rather than the target number, the total grant date fair value of the awards would be $12,904,795 for Mr. Miller, $11,439,861 for Mr. Beckwitt, $10,042,266 for Mr. Jaffe, $1,749,981 for Ms. Bessette and $1,499,932 for Mr. McCall. |
The equity awards grantedperformance-based restricted stock awarded in 2020 will vest, if at all, only to Messrs. Miller, Beckwitt, Jaffe and Sustana in June 2017 were performance shares which would be earned if Lennar achieved at least three of the fiveextent that specific performance goals set forth below. The shares of restricted stock would then vest in equal installments on each of July 2, 2018, July 2, 2019 and July 2, 2020.are met with respect to the four equally-weighted metrics over the three-year performance period. The Compensation Committee awardedhas assigned a threshold, target, and maximum performance sharesgoal to each of the metrics. If the threshold performance level for a particular metric is not achieved, no amount will be paid for that metric. Payouts for performance between threshold and target goals and between target and maximum goals will be calculated by linear interpolation. The performance goals for the four metrics were as follows:
| Payout | Relative Gross Profit Percentage* | Relative Return on Tangible Capital* | Relative Total Stockholder Return* | Debt/EBITDA Multiple | ||||||||||||
| 0% | <25th Percentile | <25th Percentile | <25th Percentile | >4.20 | ||||||||||||
| 50% (threshold) | 25th Percentile | 25th Percentile | 25th Percentile | 4.2 | ||||||||||||
| 100% (target) | 50th Percentile | 50th Percentile | 50th Percentile | 2.6 | ||||||||||||
| 200% (maximum) | 75th Percentile | 75th Percentile | 75th Percentile | £2.30 | ||||||||||||
| * | Relative metrics are determined by reference to Lennar’s Peer Group. |
The Compensation Committee selected these performance metrics because, as discussed below, they are effective long-term measures of performance, they align our CEO,executives’ interests with the interests of our Presidentstockholders, and they are important internal and external operating metrics.
Gross profit percentage is an industry standard that research analysts and investors use to gauge the strength of businesses like ours because it shows whether costs are being managed effectively. A high gross profit percentage target incentivizes our COO becauseexecutives to maximize our sales prices, control sales incentives, and minimize costs of sales, which include the Committee believes that their responsibilitycosts of land, labor, materials, and products used in building our homes. A relative gross profit percentage metric indicates whether Lennar is managing costs and sale prices more effectively than our peers.
Return on tangible capital encourages our executives to focus on our returns and the efficient use of our assets and resources, while also driving earnings. A relative return on tangible capital metric indicates whether Lennar is using assets and resources more efficiently than our peers. Return on tangible capital is calculated by dividing the Company’s net operating profit after tax by its tangible capital. Net operating profit after tax is calculated by taking the Company’s net income and adding back any after-tax interest expense and adjusting for growingtax items or other adjustments to the extent approved by the Compensation Committee. Tangible capital is defined as stockholders’ equity less intangible assets plus homebuilding debt.
Debt/EBITDA multiple encourages our business translates into earning equity awards only ifexecutives to maximize cash flow and reduce our leverage. Debt is calculated as the Company achieves financial andCompany’s consolidated debt balance for the applicable period, divided by the Company’s EBITDA for such period.
26 | LENNAR CORPORATION 2021 PROXY STATEMENT
operational metrics which reflect growth. Mr. Sustana’s awardCompensation Discussion and Analysis Other Benefits
Total stockholder return is a measure that captures stock price appreciation plus dividends paid over a defined period, reflecting the total return to stockholders during that time. A relative total stockholder return metric indicates whether an investment in Lennar was also tiedbetter for our stockholders than an investment in our Peer Group would have been.
The threshold performance levels outlined above are designed to be reasonably achievable, yet uncertain under expected market and business conditions at the time of grant. Target performance criteria in orderlevels are designed to take advantage of the tax benefits resulting from his grant becoming qualified performance-based compensation deductible under Section 162(m).require significant management effort to achieve, and maximum performance levels are designed to be measurably more difficult to achieve than target performance levels.
In January 2018,June 2020, the Compensation Committee determined that four of the five performance goals had been achieved.
Performance Measure | November 30, 2016 Results | November 30, 2017 Performance Goals | November 30, 2017 Results | Performance Goals Achieved | ||||
Revenues for the twelve months ended | $10.9 billion | $11.49 billion | $12.6 billion | Yes | ||||
Homes Deliveries for the twelve months ended | 26,563 | 26,432 | 29,394 | Yes | ||||
Gross Margin for the twelve months ended | 23.0% | 21.5% | 22.1% | Yes | ||||
SG&A as a % of Homebuilding Revenue for the twelve months ended | 9.4% | 9.8% | 9.2% | Yes | ||||
HomebuildingDebt-to Capital Ratio as of | 39.4% | Less than 42.9% | 44.9% | No |
CFO. The equity award grantedapproved a grant to Mr. Gross in June 2017 was service-based restrictedSustana of 19,912 shares of Class A common stock whichthat will vest in equal installments on each of July 2, 2018,2021, July 2, 20192022 and July 2, 2020.2023. The Compensation Committee awarded service-based restricted stock to Mr. Gross because the Committee believes that his responsibility for the establishment and maintenancehad a grant date fair value of strong corporate controls and regulatory compliance translates into the stability$1,189,941.
Effect of service-based vesting.
retirement on equity awards.Our 2007 Equity Plan and our 2016 Equity Plan provideprovides that uponwhen an officer’sofficer or employee’s retirement,associate retires, all restrictions on all restricted stock granted to the officer or employeethat individual will immediately lapse and thatthe restricted stock will no longer be subject to forfeiture. Retirement under our equity plansFor this purpose, “retirement” is defined as a termination of service (other than for cause) of a grantee on or after the grantee’s attainment ofdate the grantee attains age 65 or on or after the grantee’s attainment ofdate the grantee attains age 60 with 15 consecutive years of service with the Company.Lennar (“retirement-eligible”). Of our six NEOs, Mr. Miller, turned 60 in fiscal 2017Mr. Jaffe and if heMs. Bessette are retirement-eligible. If any of them were to retire, all of his restricted stock, including the restricted stock granted in fiscal 2017, would immediately vest because he is eligible for retirement under our equity plan as a result of his 20 years of service as Chief Executive Officer of our Company, and in other positions at the Company prior to that. Both Messrs. Jaffe and Gross will turn 60 in fiscal 2019, and if they were to retire after reaching that age, such officer’sor her service-based restricted stock would immediately vest. In addition, when a retirement-eligible executive is granted shares of restricted stock that are subject to service-based vesting, these grants are taxable events subject to withholding. Further, with respect to the 2018 Grant of performance shares, if a retirement-eligible executive were to retire, he would become vested in a pro rata portion of the shares of performance-based restricted stock that he would have earned if that executive had remained employed for the entire performance period. With respect to the 2019 Grant and 2020 Grant of performance shares, if a retirement-eligible executive were to retire, he or she would become vested in the shares of performance-based restricted stock that he or she would have earned if he or she had remained employed for the entire performance period. Mr. Beckwitt and Mr. Sustana will become retirement-eligible in March 2021 and July 2021, respectively. None of these peopleNEOs has indicated any intention to retire.
Our NEOs are eligible to receive a match on their 401(k) contributions up to $8,100$8,550 for 2020 and $8,250$8,700 for 20172021, and 2018, respectively, andto participate in our active employeeassociate health and welfare benefits plans, which benefits are generally available to all full-time associates. Under theour flexible benefits plans, all associates are entitled to medical, vision, dental, life insurance, and long-term disability coverage. We also provide certain of our executive officers with a car allowance which varies based on level, term life insurance and long-term disability insurance. Lennar’s commitment to provide these employee benefits recognizes that the health and well-being of its associates contributes directly to a productive and successful work life that enhances results for Lennar and its stockholders.
Change ofin Control BenefitsEffects
Our equity plan2016 Equity Plan provides for accelerated vesting of outstanding equity awards if there is a combination of a change ofin control together with certain employment termination events (i.e., a “double trigger”). AYou can find a summary of potential payments relating toarising from a change ofin control can be found under the heading “Potential Payments Upon Termination afterChange-in-Control” on page 40. Change in Control” in the Executive Compensation section.
Executive and Director Stock Ownership Guidelines.
Our Board has adopted Stock Ownership Guidelines establishingstock ownership guidelines that set minimum equity ownership requirements for our executive officers and each member of our Board.officers. The purposes of the guidelines are designed to align the interests of thoseour executives and directors with the interests of stockholders and further promote our commitment to sound corporate governance. Under thoseour stock ownership guidelines, a personan executive is expected to own, by a date not later than five years after the person is elected as a director or isbeing appointed to his or her position as an executive officer, shares of our common stock with a value on that date equal to the followinga multiple (shown below) of the person’s annual directors fee orexecutive’s annual base salary:salary.
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Until the required stock ownership level is achieved, a personan executive is required to retain at least 50% of the restricted shares that become vested, and the shares the person acquires through exercise of stock options, other than shares sold to enable the person to pay taxes resulting from the vesting or exercise.vesting. If the required level is not achieved within five years after a person is elected as a Director or appointed to his or her position asthe five-year compliance period, an executive officer, until the required level is achieved, the person will be required to retain 100% of the restricted shares that become vested and the shares the person acquires through exercise of stock options, other(other than shares sold to enable the person to pay taxes resulting from the vesting or exercise.vesting) until the required level is achieved.
LENNAR CORPORATION 2021 PROXY STATEMENT | 27
Compensation Discussion and Analysis Other Compensation Practices
As of January 31, 2018,2021, all of our named executive officers and directors were in compliance with our Stock Ownership Guidelines. As indicated in the table below, our named executive officers had stock ownership levels well above their respective ownership requirements.requirements, as shown below.
MULTIPLE OF BASE SALARY AS OF JANUARY 31, 2021(1)
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| Stock ownership includes Class A common stock and Class B common stock beneficially owned by the |
Compensation Clawback Policy
ProhibitionOur Board adopted a compensation clawback policy that allows us, under certain circumstances, to recover from associates incentive-based compensation granted under our 2016 Equity Plan, our 2016 Incentive Compensation Plan, and other incentive-based compensation that is approved, awarded, or granted on or after April 11, 2018. The Compensation Committee will, in all cases it deems appropriate, require reimbursement and/or cancellation of any incentive-based compensation when the following factors are present: (a) the award was predicated upon the achievement of specified financial results that were subsequently the subject of a material restatement, (b) in the Compensation Committee’s view, the restatement was the result of fraud, intentional misconduct or significant negligence that was a substantial contributing cause to the need for the material restatement, and (c) a lower award would have been made to the associates based upon the restated financial results.
Hedging. and Pledging
Executive officers and directors are not permitted to enter into hedging arrangements with respect to shares of Lennar’s common stock. This prohibition on hedging does not apply to the Company’s Class A commonother associates. Directors and executive officers may only pledge shares held in excess of each individual’s share ownership requirements as set forth in our stock or Class B common stock.ownership guidelines.
Non-Solicitation Agreement.
In connection with receiving the annual cash bonus, each of our NEO’sNEOs signs an agreement that, for 12twelve months following termination of his or her employment with Lennar, hethe NEO will not offer employment to any of our associates or anybody who had been an associate during the preceding 3three months, and will not encourage any of our associates to terminate his or her employment with us.
Compliance with Internal Revenue Code Section 162(m). When reviewing and setting compensation awards for our executives, one of the things we consider is the potential effect of Section 162(m) of the Internal Revenue Code on the tax deductibility of their compensation. Section 162(m) generally does not allow a publicly-held company to deduct compensation over $1 million paid for any fiscal year to any of the executive officers required to be named in the company’s annual proxy statement, except for the chief financial officer. However, prior to the recent amendments to the Internal Revenue Code, Section 162(m) allowed deduction of qualified performance-based compensation if certain requirements were met. We generally have structured awards to our executive officers in ways that are intended to qualify for the performance-based compensation exemption under Section 162(m), subject to discretion to award compensation that does not qualify for tax deductibility under Section 162(m). The tax reform legislation passed in December 2017, generally referred to as The Tax Cuts and Jobs Act, substantially modifies Section 162(m) of the Internal Revenue Code and, among other things, eliminates the qualified performance-based exception to the $1 million deduction limit with respect to taxable years beginning after December 31, 2017. Effective for Lennar’s fiscal year beginning December 1, 2018, compensation paid to our named executive officers (including our Chief Financial Officer) will be subject to the limitations on deductibility under Section 162(m) of the Code and we will no longer be able to deduct performance-based compensation to our named executive officers (including our Chief Financial Officer) who receive annual compensation in excess of $1 million.
Each of our 2007 Equity Plan, our 2016 Equity Plan and our 2016 Incentive Compensation Plan includes lists of possible criteria that may be used as the basis for performance requirements with regard to compensation awards. The cash bonuses we have awarded to our executive officers during the last several years all have been subject to achievement of performance goals and the awards of restricted stock to Messrs. Miller, Beckwitt, Jaffe and Sustana, each of whom is one of the executive officers required to be named in this proxy statement, are subject to achievement of performance goals.
2018 Compensation Program
Shareholder Engagement
In fiscal 2017, in connection with the Say on Pay vote, we had discussions with a number of our shareholders regarding our executive compensation practices and our corporate governance policies. While the shareholders generally recognized that the Company was compensating its executives well during a time when the Company was performing well, they requested that we consider making changes to our compensation practices. The comments that we received included the following:
Messrs. Miller, Beckwitt and Jaffe Compensation Program
The shareholder feedback that we received led the Compensation Committee to request a full review of our executive compensation program. The Compensation Committee engaged FW Cook, and, throughout the rest of fiscal 2017 and the beginning of fiscal 2018, FW Cook had discussions with members of the Board and management, and performed a review and comparison of our executive compensation program. As a result, based on their recommendation and the approval of the Compensation Committee, it was determined that, the following changes would be made to the compensation of Messrs. Miller, Beckwitt and Jaffe:
Equity-Based Compensation
Annual Cash Incentive Compensation
Messrs. Gross and Sustana Compensation Program
In February 2018, the Compensation Committee decided, consistent with the prior year, that Mr. Gross and Mr. Sustana would have the opportunity to earn a target cash bonus of up to 100% of base salary based on the performance criteria set forth in the table below. In addition, Mr. Gross’ and Mr. Sustana’s target cash bonus could be increased by between 0% and 80% of the target cash bonus based on our achievement of certain goals as specified below, the satisfaction of which will be determined by the Compensation Committee.28 | LENNAR CORPORATION 2021 PROXY STATEMENT
Additionally, Mr. Gross is eligible to receive a sum equal to 1.00% of LFS Pretax Income. Any cash bonus awarded to the NEOs may be adjusted downward in the sole discretion of the Compensation Committee.
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Pledging of Company Stock
With respect to our policy to allow the pledging of stock, the Board and management discussed the policy and the current corporate climate that generally disfavors allowing pledging of Company stock, but determined that in light of the fact that the Company’s officers significantly exceed our Stock Ownership Guidelines, pledging is a way for the Company’s officers to derive a benefit from their equity compensation grants, while still maintaining alignment with shareholder interests.
CEO Pay Ratio
We note that the SEC recently issued a final rule implementing the chief executive officer pay ratio disclosure requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The disclosure requirements take effect for Lennar beginning with our 2019 proxy statement for the fiscal year beginning on December 1, 2017.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the disclosure set forth above under the heading “Compensation
“Compensation Discussion and Analysis” with management and, based on such review and discussions, it has recommended
to the Board that the “Compensation Discussion and Analysis” be included in this proxy statement.
Respectfully submitted by the Compensation Committee of the Board,
| The Compensation Committee |
| Steven L. Gerard, Chairperson |
| Tig Gilliam |
| Sherrill W. Hudson |
| Teri P. McClure |
Steven L. Gerard, Chairperson
Tig Gilliam
Sherrill W. Hudson
Teri P. McClure
Donna Shalala
February 20, 2018LENNAR CORPORATION 2021 PROXY STATEMENT | 29
The following table presents certain summary information for the fiscal years ended November 30, 2017, 20162020, 2019, and 20152018, concerning compensation earned for services rendered in all capacities by our Chief Executive Officer, our Chief Financial Officer and our other three most highly compensated executive officers for the fiscal year ended November 30, 2017. We refer to these officers collectively as our named executive officers, or NEOs.
Summary Compensation Tableofficers.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||||
Stuart Miller | 2017 | 1,000,000 | - | 5,417,360 | 12,701,020 | 9,153 | 19,127,533 | |||||||||||||||||||
Chief Executive Officer | 2016 | 1,000,000 | - | 4,780,880 | 13,435,580 | 8,943 | 19,225,403 | |||||||||||||||||||
| 2015 | 1,000,000 | - | 5,096,000 | 11,805,133 | 8,560 | 17,909,693 | ||||||||||||||||||||
Rick Beckwitt | 2017 | 800,000 | - | 4,531,830 | 11,684,938 | 29,153 | 17,045,921 | |||||||||||||||||||
President | 2016 | 800,000 | - | 3,999,390 | 12,360,734 | 28,937 | 17,189,061 | |||||||||||||||||||
| 2015 | 800,000 | - | 4,263,000 | 10,922,090 | 28,560 | 16,013,650 | ||||||||||||||||||||
Jonathan M. Jaffe | 2017 | 800,000 | - | 2,578,455 | 11,684,938 | 29,153 | 15,092,546 | |||||||||||||||||||
Vice President and Chief | 2016 | 800,000 | - | 2,275,515 | 12,360,734 | 28,942 | 15,465,191 | |||||||||||||||||||
Operating Officer | 2015 | 800,000 | - | 2,425,500 | 11,187,215 | 28,560 | 14,441,275 | |||||||||||||||||||
Bruce Gross | 2017 | 650,000 | - | 2,083,600 | 2,400,000 | 17,553 | 5,151,153 | |||||||||||||||||||
Vice President and Chief | 2016 | 650,000 | 180,525 | 1,838,800 | 2,344,475 | 17,343 | 5,031,143 | |||||||||||||||||||
Financial Officer | 2015 | 650,000 | - | 1,960,000 | 2,206,152 | 16,960 | 4,833,112 | |||||||||||||||||||
Mark Sustana | 2017 | 465,000 | - | 989,710 | 800,000 | 9,153 | 2,263,863 | |||||||||||||||||||
Secretary and General | 2016 | 450,000 | 284,635 | 873,430 | 490,365 | 8,936 | 2,107,366 | |||||||||||||||||||
Counsel | 2015 | 450,000 | 32,400 | 931,000 | 642,600 | 8,560 | 2,064,560 | |||||||||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||||||
| Stuart Miller | 2020 | 1,000,000 | — | 12,904,795 | 11,255,756 | 9,385 | 25,169,936 | |||||||||||||||||||||
| Executive Chairman | 2019 | 1,000,000 | — | 12,131,959 | 7,737,307 | 9,252 | 20,878,518 | |||||||||||||||||||||
| 2018 | 1,000,000 | — | 9,451,218 | 9,610,800 | 9,153 | 20,071,171 | ||||||||||||||||||||||
| Rick Beckwitt | 2020 | 800,000 | — | 11,439,861 | 9,713,872 | 29,385 | 21,983,118 | |||||||||||||||||||||
| Co-Chief Executive Officer | 2019 | 800,000 | — | 10,772,927 | 6,677,402 | 29,252 | 18,279,581 | |||||||||||||||||||||
| and Co-President | 2018 | 800,000 | — | 8,459,292 | 8,294,252 | 29,922 | 17,583,466 | |||||||||||||||||||||
| Jonathan M. Jaffe | 2020 | 800,000 | — | 10,042,266 | 8,480,365 | 29,385 | 19,352,016 | |||||||||||||||||||||
| Co-Chief Executive Officer | 2019 | 800,000 | — | 9,459,992 | 5,829,478 | 29,252 | 16,118,722 | |||||||||||||||||||||
| and Co-President | 2018 | 800,000 | — | 7,440,302 | 7,241,013 | 29,922 | 15,511,237 | |||||||||||||||||||||
| Diane Bessette | 2020 | 750,000 | 500,000 | (4) | 1,749,981 | 1,500,000 | 16,585 | 4,516,566 | ||||||||||||||||||||
| Vice President, Chief Financial | 2019 | 750,000 | — | 1,499,980 | 1,500,000 | 16,452 | 3,766,432 | |||||||||||||||||||||
| Officer and Treasurer | 2018 | 750,000 | 1,250,005 | 999,995 | — | 16,630 | 3,016,630 | |||||||||||||||||||||
| Jeff McCall | 2020 | 750,000 | 500,000 | (4) | 1,499,932 | 1,500,000 | 9,385 | 4,259,317 | ||||||||||||||||||||
| Executive Vice President | 2019 | 750,000 | — | 1,249,959 | 1,500,000 | 9,252 | 3,509,211 | |||||||||||||||||||||
| 2018 | 629,808 | 1,000,000 | 749,997 | — | 3,091,537 | 5,471,342 | ||||||||||||||||||||||
| Mark Sustana | 2020 | 465,000 | — | 1,189,941 | 906,750 | 9,385 | 2,571,076 | |||||||||||||||||||||
| Vice President, General Counsel | 2019 | 465,000 | — | 1,189,973 | 900,000 | 9,252 | 2,564,225 | |||||||||||||||||||||
| and Secretary | 2018 | 465,000 | 163,000 | 989,673 | 837,000 | 9,153 | 2,463,826 | |||||||||||||||||||||
| (1) | The amounts in |
| (2) | The amounts reported in this column reflect cash incentive compensation earned under our incentive compensation program on the basis of performance in fiscal |
30 | LENNAR CORPORATION 2021 PROXY STATEMENT
Executive Compensation Grants of Plan-Based Awards
| (3) | All other compensation consists of the following: |
Name | Year | Car Allowance / Lease Payments($) | 401k Match($) | Term Life Insurance ($) | Long-Term Disability Insurance($) | Total All Other Compensation ($) | Year | Car Allowance / Lease Payments ($) | 401(k) Match ($) | Term Life ($) | Long-Term Disability Insurance ($) | Total All Other Compensation ($) | ||||||||||||||||||||||||||||||||||
Stuart Miller | 2017 | - | 8,100 | 792 | 261 | 9,153 | 2020 | — | 8,550 | 574 | 261 | 9,385 | ||||||||||||||||||||||||||||||||||
Rick Beckwitt | 2017 | 20,000 | 8,100 | 792 | 261 | 29,153 | 2020 | 20,000 | 8,550 | 574 | 261 | 29,385 | ||||||||||||||||||||||||||||||||||
Jonathan M. Jaffe | 2017 | 20,000 | 8,100 | 792 | 261 | 29,153 | 2020 | 20,000 | 8,550 | 574 | 261 | 29,385 | ||||||||||||||||||||||||||||||||||
Bruce Gross | 2017 | 8,400 | 8,100 | 792 | 261 | 17,553 | ||||||||||||||||||||||||||||||||||||||||
| Diane Bessette | 2020 | 7,200 | 8,550 | 574 | 261 | 16,585 | ||||||||||||||||||||||||||||||||||||||||
| Jeff McCall | 2020 | — | 8,550 | 574 | 261 | 9,385 | ||||||||||||||||||||||||||||||||||||||||
Mark Sustana | 2017 | - | 8,100 | 792 | 261 | 9,153 | 2020 | — | 8,550 | 574 | 261 | 9,385 | ||||||||||||||||||||||||||||||||||
| (4) | This amount consists of special bonuses awarded for performance in fiscal 2020 in recognition of Ms. Bessette’s and Mr. McCall’s exceptional performance. These special bonuses are separate from the bonus awards under the 2020 cash incentive program. |
The following table provides information about cash(non-equity) and equity incentive compensation awarded to our named executive officers with regard to fiscal 2017.2020. The cash awards were granted under Lennar’s 2016 Incentive Compensation Plan and the restricted stockequity awards were granted under Lennar’s 2016 Equity Plan, which are discussed in greater detail in this proxy statement under the caption “Compensation Discussion and Analysis.”Plan.
| Estimated possible payouts under non-equity incentive plan awards | Estimated future payouts under equity incentive plan awards(4) (5) | All other | Grant date fair | |||||||||||||||||||||||||||||||
| Name | Type of award | Grant date | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
| Stuart Miller | AIC | — | 11,255,756 | (1) | — | — | — | — | — | — | ||||||||||||||||||||||||
| PS/RS | 2/28/20 | — | — | 53,467 | 106,934 | 213,868 | 106,934 | (6) | 12,904,795 | |||||||||||||||||||||||||
| Rick Beckwitt | AIC | — | 9,713,872 | (1) | — | — | — | — | — | — | ||||||||||||||||||||||||
| PS/RS | 2/28/20 | — | — | 47,398 | 94,795 | 189,590 | 94,795 | (6) | 11,439,861 | |||||||||||||||||||||||||
| Jonathan M. Jaffe | AIC | — | 8,480,365 | (1) | — | — | — | — | — | — | ||||||||||||||||||||||||
| PS/RS | 2/28/20 | — | — | 41,607 | 83,214 | 166,428 | 83,214 | (6) | 10,042,266 | |||||||||||||||||||||||||
| Diane Bessette | AIC | — | 750,000 | (2) | 1,500,000 | (2) | — | — | — | — | — | |||||||||||||||||||||||
| PS/RS | 2/28/20 | — | — | 7,251 | 14,501 | 29,002 | 14,501 | (6) | 1,749,981 | |||||||||||||||||||||||||
| Jeff McCall | AIC | — | 1,125,000 | (3) | 1,500,000 | (3) | — | — | — | — | — | |||||||||||||||||||||||
| PS/RS | 2/28/20 | — | — | 6,215 | 12,429 | 24,858 | 12,429 | (6) | 1,499,932 | |||||||||||||||||||||||||
| Mark Sustana | AIC | — | 465,000 | (8) | 906,750 | (8) | — | — | — | — | — | |||||||||||||||||||||||
| RS | 6/25/20 | — | — | — | — | — | 19,912 | (9) | 1,189,941 | |||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| AIC | - | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
AIC – Annual Incentive Compensation
PS – Performance Shares, shares of restricted stock earned based on achievement of company-wide operational and financial performance goals and which vest in equal installments over three years
RS – Service-Based Restricted Shares, shares of restricted stock which vest in equal installments over three years
| PS - | Performance-Based Restricted Shares, shares of restricted stock earned, if at all, based on achievement of performance goals over a three-year performance period |
| RS - | Service-Based Restricted Shares, shares of restricted stock that vest in equal annual installments over three years |
| (1) | Amounts in the Target column reflect the amounts of annual cash incentive compensation actually paid. Pursuant to the terms of their award agreements, Messrs. Miller, Beckwitt, and Jaffe could receive |
| (2) | Ms. Bessette had the opportunity to earn a target award of up to 100% of base salary based on |
| (3) | Mr. McCall had the |
|
| the |
LENNAR CORPORATION 2021 PROXY STATEMENT | 31
Executive Compensation Outstanding Equity Awards at Fiscal Year-End
| (5) | The performance-based restricted stock will vest, if at all, only to the extent Lennar meets specific performance goals with respect to relative gross profit percentage, relative return on tangible capital, relative total stockholder return, and debt/EBITDA multiple over a three-year performance period. For each performance goal, there is a threshold, target, and maximum performance level. |
| (6) | The shares of restricted stock granted to the named executive officer will vest in three equal annual installments on each of |
| (7) | The amounts represent the grant date fair value of the service-based restricted stock and of the target number of shares of performance-based restricted stock. If the threshold number of shares of performance-based restricted stock were used instead, the total grant date fair value of the awards |
| (8) | Mr. Sustana had the opportunity to earn a target award of up to 100% of base salary based on specified performance criteria, and to receive an additional cash bonus of up to 95% of the |
| (9) | The shares of restricted stock granted to Mr. Sustana will vest in three equal annual installments on each of July 2, 2021, July 2, 2022 and July 2, 2023. |
Outstanding Equity Awards at FiscalYear-End
The following table provides information concerning sharesthe outstanding equity awards of restricted Class A common stock and restricted Class B common stock held by each named executive officer at the end of theour fiscal year ended November 30, 2017.2020. Each grant of restricted stockan equity award is shown separately for each named executive officer.
| Name | Stock Award Grant Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested($)(4) | Stock Award Grant Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(2) | Equity incentive units or other | ||||||||||||||||||||||||||||||||
| Class A | Class B(5) | Class A | Class B | |||||||||||||||||||||||||||||||||||||
Stuart Miller | 6/23/2015 | 20,124 | (1) | 402 | (1) | 1,263,385 | 20,631 | 2/14/2018 | 15,603 | (3) | 1,183,644 | 154,356 | (9) | 11,709,446 | ||||||||||||||||||||||||||
| 6/22/2016 | 40,248 | (2) | 804 | (2) | 2,526,769 | 41,261 | ||||||||||||||||||||||||||||||||||
| 6/27/2017 | 104,000 | (3) | 2,080 | (3) | 6,529,120 | 106,746 | ||||||||||||||||||||||||||||||||||
|
|
|
| 6/25/2019 | 50,864 | (4) | 3,858,543 | 251,596 | 19,086,073 | |||||||||||||||||||||||||||||||
| 164,372 | 3,286 | 10,319,274 | 168,638 | 2/28/2020 | 64,855 | (5) | 4,919,900 | 53,467 | 4,056,007 | |||||||||||||||||||||||||||||||
|
|
|
| 131,322 | 9,962,087 | 459,419 | 34,851,525 | |||||||||||||||||||||||||||||||||
Rick Beckwitt | 6/23/2015 | 29,000 | (1) | 580 | (1) | 1,820,620 | 29,766 | 2/14/2018 | 23,026 | (3) | 1,746,752 | 138,156 | (9) | 10,480,514 | ||||||||||||||||||||||||||
| 6/22/2016 | 58,000 | (2) | 1,160 | (2) | 3,641,240 | 59,531 | 6/25/2019 | 74,471 | (4) | 5,649,370 | 223,412 | 16,948,034 | ||||||||||||||||||||||||||||
| 6/27/2017 | 87,000 | (3) | 1,740 | (3) | 5,461,860 | 89,297 | 2/28/2020 | 94,795 | (5) | 7,191,149 | 47,398 | 3,595,612 | ||||||||||||||||||||||||||||
|
|
|
| 192,292 | 14,587,271 | 408,966 | 31,024,161 | |||||||||||||||||||||||||||||||||
| 174,000 | 3,480 | 10,923,720 | 178,594 | |||||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Jonathan M. Jaffe | 6/23/2015 | 16,500 | (1) | 330 | (1) | 1,035,870 | 16,936 | 2/14/2018 | 10,211 | (3) | 774,606 | 121,514 | (9) | 9,218,052 | ||||||||||||||||||||||||||
| 6/22/2016 | 33,000 | (2) | 660 | (2) | 2,071,740 | 33,871 | 6/25/2019 | 32,972 | (4) | 2,501,256 | 196,184 | 14,882,518 | ||||||||||||||||||||||||||||
| 6/27/2017 | 49,500 | (3) | 990 | (3) | 3,107,610 | 50,807 | 2/28/2020 | 41,956 | (5) | 3,182,782 | 41,607 | 3,156,307 | ||||||||||||||||||||||||||||
|
|
|
| 85,139 | 6,458,645 | 359,305 | 27,256,877 | |||||||||||||||||||||||||||||||||
| 99,000 | 1,980 | 6,215,220 | 101,614 | |||||||||||||||||||||||||||||||||||||
| Diane Bessette | 6/26/2018 | 3,917 | (6) | 297,144 | — | — | ||||||||||||||||||||||||||||||||||
|
|
|
| 6/25/2019 | 12,577 | (7) | 954,091 | — | — | |||||||||||||||||||||||||||||||
| 2/28/2020 | 8,794 | (5) | 667,113 | 7,251 | 550,061 | |||||||||||||||||||||||||||||||||||
Bruce Gross | 6/23/2015 | 13,334 | (1) | 266 | (1) | 837,109 | 13,651 | |||||||||||||||||||||||||||||||||
| 6/22/2016 | 26,667 | (2) | 533 | (2) | 1,674,154 | 27,354 | 25,288 | 1,918,348 | 7,251 | 550,061 | ||||||||||||||||||||||||||||||
| 6/27/2017 | 40,000 | (3) | 800 | (3) | 2,511,200 | 41,056 | ||||||||||||||||||||||||||||||||||
| Jeff McCall | 6/26/2018 | 4,844 | (6) | 367,466 | — | — | ||||||||||||||||||||||||||||||||||
|
|
|
| 6/25/2019 | 17,282 | (7) | 1,311,013 | — | — | |||||||||||||||||||||||||||||||
| 80,001 | 1,599 | 5,022,463 | 82,061 | 2/28/2020 | 12,429 | (5) | 942,864 | 6,215 | 471,470 | |||||||||||||||||||||||||||||||
|
|
|
| 34,555 | 2,621,342 | 6,215 | 471,470 | |||||||||||||||||||||||||||||||||
Mark Sustana | 6/23/2015 | 6,334 | (1) | 126 | (1) | 397,649 | 6,466 | 6/26/2018 | 6,392 | (6) | 484,897 | — | — | |||||||||||||||||||||||||||
| 6/22/2016 | 12,667 | (2) | 253 | (2) | 795,234 | 12,984 | ||||||||||||||||||||||||||||||||||
| 6/27/2017 | 19,000 | (3) | 380 | (3) | 1,192,820 | 19,502 | 6/25/2019 | 16,452 | (7) | 1,248,049 | — | — | ||||||||||||||||||||||||||||
|
|
|
| 6/25/2020 | 19,912 | (8) | 1,510,524 | — | — | |||||||||||||||||||||||||||||||
| 38,001 | 759 | 2,385,703 | 38,952 | 42,756 | 3,243,470 | — | — | |||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
| (1) | Based on stock price of $75.86 for the Class A common stock, which was the closing price of the stock on November 30, 2020. |
32 | LENNAR CORPORATION 2021 PROXY STATEMENT
Executive Compensation Option Exercises and Stock Vested
These shares are subject to performance-based vesting conditions measured over a three-year performance period and vest on the date on which the Compensation Committee certifies the achievement of the relevant performance goals following the completion of the applicable three-year performance period. For the performance-based shares granted on February 14, 2018 (the “2018 Grant”), the three-year performance period commenced on December 1, 2017 and ended on November 30, 2020. For the performance-based shares granted on June 25, 2019 (the “2019 Grant”), the three-year performance period commenced on December 1, 2018 and ends on November 30, 2021. For the performance-based shares granted on February 28, 2020 (the “2020 Grant”), the three-year performance period commenced on December 1, 2019 and ends on November 30, 2022. The performance shares were granted at target, and, with respect to the 2018 Grant and the 2019 Grant, appear in the table based on achieving maximum performance goals, and, with respect to the 2020 Grant, appear in the table based on achieving threshold performance goals. |
| (3) | The restricted stock vested on February 14, 2021. Mr. Miller’s and Mr. Jaffe’s 15,603 and 10,211 shares of Class A common stock, respectively, do not include the 30,370 and 20,083 shares of Class A common stock, respectively, that were surrendered to satisfy withholding obligations. For a discussion of our equity plans’ retirement provisions and related withholding obligations, see “Compensation Discussion and Analysis—Equity-Based Compensation.” |
| (4) | The restricted stock will vest in two equal installments on February 14, 2021, and February 14, 2022. Mr. Miller’s and Mr. Jaffe’s 50,864 and 32,972 shares of Class A common stock, respectively, do not include the 49,502 and 48,635 shares of Class A common stock, respectively, that were surrendered to satisfy a withholding obligation due to the grant of the restricted stock. |
| (5) | The restricted stock will vest in three equal installments on February 14, 2021, February 14, 2022, and February 14, 2023. Mr. Miller’s, Mr. Jaffe’s and Ms. Bessette’s 64,855, 41,956 and 8,794 shares of Class A common stock, respectively, do not include the 42,079, 41,258 and 5,707 shares of Class A common stock, respectively, that were surrendered to satisfy withholding obligations. |
| (6) | The restricted stock will vest on July 2, |
The restricted stock will vest in two equal installments on July 2, |
The restricted stock will vest in three equal installments on July 2, |
For the 2018 Grant, the three-year performance period ended on November 30, 2020, but those awards remain outstanding and have not vested because the peer group performance information necessary to determine the Company’s relative performance with respect to certain metrics will not be fully available until February 2021 and, therefore, the actual number of |
Option Exercises and Stock Vested
The following table provides information concerning the vesting of restricted Class A and Class B common stock and the value realized on such vesting on an aggregated basis during the fiscal year ended November 30, 2020, for each of the named executive officers.
| Stock Awards
| ||||||||||||
| Name |
Number of |
Number of | Value Realized on ($)(3) | |||||||||
Stuart Miller |
| 102,325 |
|
| 694 |
|
| 6,860,477 |
| |||
Rick Beckwitt |
| 89,261 |
|
| 580 |
|
| 6,010,345 |
| |||
Jonathan M. Jaffe |
| 69,448 |
|
| 330 |
|
| 4,732,520 |
| |||
Diane Bessette |
| 22,495 |
|
| 114 |
|
| 1,358,645 |
| |||
Jeff McCall |
| 13,484 |
|
| — |
|
| 811,332 |
| |||
Mark Sustana |
| 20,952 |
|
| 127 |
|
| 1,266,387 |
| |||
| (1) | Of these amounts, shares of |
On October 29, 2017, our Board declared a stock dividend of one share of Class B common stock for |
Option Exercises and Stock Vested
The following table provides information concerning vesting of restricted Class A common stock during the fiscal year ended November 30, 2017 and the value realized on such vesting of restricted stock on an aggregated basis for each of the named executive officers.
| Stock Awards | ||||||||
Name | Number of Shares Vesting (#)(1) | Value Realized on Vesting ($)(2) | ||||||
Stuart Miller(3) | 104,000 | 5,545,280 | ||||||
Rick Beckwitt | 87,000 | 4,638,840 | ||||||
Jonathan M. Jaffe | 49,500 | 2,639,340 | ||||||
Bruce Gross | 36,000 | 1,919,520 | ||||||
Mark Sustana | 17,333 | 924,196 | ||||||
Calculated based on the closing |
LENNAR CORPORATION 2021 PROXY STATEMENT | 33
Executive Compensation Potential Payments upon Termination after Change in Control
Potential Payments Uponupon Termination orChange-in-Controlafter Change in Control
Our named executive officers do not have employment agreements. Consequently, the only potential payments and benefits that our officersthey would receive upon a change in control would be the benefit resulting from the acceleration of theaccelerated vesting of their restricted stock.
Pursuant to the 2007 Equity Plan and the 2016 Equity Plan, unvested restricted stock will vest if there is a Change in Control (as defined in the 2016 Equity Plan) and, within twenty-four months after the Change in Control, (i) Lennar terminates the employment of the executive without Cause, or (ii) the executive terminates his employment with Lennar for Good Reason.Reason (as such capitalized terms are defined below). The value of this accelerationaccelerated vesting if sucha hypothetical Change in Control and qualifying termination had occurred on November 30, 20172020, is set forth in the table below:
Name | Value of Acceleration as of November 30, | |||
Stuart Miller | 33,471,860(2)(3) | |||
Rick Beckwitt | 35,492,694(3) | |||
Jonathan M. Jaffe | 24,821,544(2)(3) | |||
| 3,018,394(2) | |||
| 3,564,206 | |||
Mark Sustana | 3,243,470 | |||
| (1) | The value of the accelerated restricted stock is |
| (2) | With respect to Mr. Miller, Mr. Jaffe and |
| (3) | Includes 309,910, 275,579, 242,063, 14,501 and 12,429 shares of Class |
The definitions of “Change in Control,” “Cause” and “Good Reason” pursuant to the 2016 Equity Plan are below, and are substantially similar to the same definitions in the 2007 Equity Plan.below.
“Change in Control” means (i) a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of our assets to any person or group of related persons (as that term is defined for purposes of Section 13(d) of the Exchange Act) (a “Group”), other than a transaction with a majority ownedmajority-owned subsidiary of ours or a transaction in which the common stock that is outstanding immediately before the transaction constitutes, or entitles the holders to receive, a majority of the shares of the purchaser that are outstanding immediately after the transaction; (ii) the approval by the holders of our capital stock of any plan or proposal for the liquidation or dissolution of the Company;Lennar; (iii) the acquisition by any person or group (other than one or more of the wife, or lineal descendants of the late Leonard Miller, or trusts or entities of which they own a majority of the beneficial interests) of beneficial ownership (determined as provided in the rules under Section 13 of the Exchange Act) of more than 50% in voting power of the outstanding common stock; or (iv) a majority of the members of the Board being persons who were not Directors on the effective date of the plan2016 Equity Plan and whose election, or nomination for election, was not approved by a vote of at least a majority of the members of the Board of Directors who either were members of the Board on the effective date of the plan or whose election, or nomination for election, to the Board was approved by such a majority.
“Cause” means, unless otherwise provided in the participant’s award agreement, the participant’s: (i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect; (ii) repeatedly failing to adhere to the directions of superiors or the Board or the written policies and practices of the CompanyLennar or its subsidiaries or its affiliates; (iii) commission of a felony or a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the CompanyLennar or its subsidiaries, or any affiliate thereof; (iv) fraud, misappropriation or embezzlement; (v) material breach of the participant’shis or her employment agreement (if any) with the CompanyLennar or its subsidiaries or its affiliates; (vi) acts or omissions constituting a material failure to perform substantially and adequately the dutieshis or her assigned to the participant;duties; (vii) commission of an illegal act detrimental to the CompanyLennar or its subsidiaries or its affiliates; (viii) repeated failure to devote substantially all of the participant’shis or her business time and efforts to the CompanyLennar if required by the terms of the participant’s employment;an employment agreement; or (ix) violation of any Lennar rule or policy of the Company that states that violations may result in termination of employment; provided, however, that, ifemployment. If at any particular time the participant is subject to an effective employment agreement with the Company,Lennar, then, in lieu of the foregoing definition, “Cause” shall at that timewill have suchthe meaning with respect to thethat participant as may be specified in such employment agreement.
“Good Reason” means, with respect to a participant who is an employee of the CompanyLennar or one or more of its subsidiaries, (i) a reduction in the participant’s base salary (other than a reduction of not greater than 10% that applies to all executives of a comparable level); (ii) a reduction in the participant’s target cash annual incentive opportunity; (iii) a material reduction in the aggregate value of the participant’s benefits under theapplicable employee benefit plans, programs and policies in which the participant participates;policies; (iv) a material diminution in the participant’s reporting relationship, title or responsibilities; or (v) a requirement by the CompanyLennar or its subsidiary to which the participant does not consent that the participant move the principal place of business at or from which the participant works by more than 50 miles, if such relocation results in an increase in the participant’s daily commute by more than 10 miles each way.
34 | LENNAR CORPORATION 2021 PROXY STATEMENT
Executive Compensation CEO Pay Ratio
As required by SEC rules, we are providing the following information about the ratio of the annual total compensation of each of our Co-CEOs, Rick Beckwitt and Jon Jaffe, to that of our median associate.
To determine the median of the annual total compensation of all our associates (other than our Co-CEOs), we selected November 30, 2020, the last day of our fiscal year, as the determination date for identifying the median associate.
For purposes of identifying the median compensation, we considered the W-2 wages of all full-time, part time, seasonal and temporary associates of Lennar Corporation and its consolidated subsidiaries during the twelve-month period ended November 30, 2020. We analyzed the W-2 wages of all associates, whether employed on a full-time, part-time, or temporary basis as of November 30, 2020. We annualized the wages of permanent full or part-time associates who started after the beginning of the fiscal year. Using this methodology, we determined that the associate who received the median total compensation (excluding our Co-CEOs) was an Architectural Plans Manager. That associate received total compensation of $114,665 for the year ended November 30, 2020, calculated in accordance with the requirements of Item 402(c)(2)(x) of SEC Regulation S-K, which includes base pay, cash bonus, and Lennar’s matching contribution to the associate’s 401(k) plan. This calculation is the same calculation used to determine total compensation for purposes of the 2020 Summary Compensation Table with respect to each of the named executive officers.
Mr. Beckwitt’s annual total compensation as reported in the 2020 Summary Compensation Table was $21,983,118. Accordingly, for 2020, the ratio of Mr. Beckwitt’s compensation to the compensation of the median associate was 192 to 1.
Mr. Jaffe’s annual total compensation as reported in the 2020 Summary Compensation Table was $19,352,016. Accordingly, for 2020, the ratio of Mr. Jaffe’s compensation to the compensation of the median associate was 169 to 1.
Because of the complexity of determining the median of the annual compensation of all our associates, the pay ratio disclosure presented above is an estimate, but we believe that estimate is reasonable. Because the SEC rules for identifying the median associate and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates, and assumptions, the pay ratio we disclose may not be comparable to the pay ratios reported by some other companies.
LENNAR CORPORATION 2021 PROXY STATEMENT | 35
The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP (“D&T&T”) to continue to serve as our independent registered public accounting firm for the fiscal year ending November 30, 20182021, and the Board has directed that management submit the selection of D&T as Lennar’s independent registered public accounting firmthis appointment for ratification by the stockholders at the Annual Meeting. D&T has been Lennar’s independent public accounting firm since 1994.
Neither Lennar’sBy-Laws nor any other governing documents or law require stockholder ratification of the selection of Lennar’s independent registered public accounting firm. However, the Board is submitting the selectionbelieves that seeking stockholder ratification of D&T to the stockholders for ratification as a matter of what it believes to bethis appointment is good corporate practice. If theour stockholders fail to ratify the selection,appointment, the Audit Committee will reconsider whether to retain that firm.D&T. Even if the selectionappointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Lennar and its stockholders.
We expect a representative of D&T to attend the Annual Meeting. The representative will have an opportunity to make a statement if he or she desires and also will be available to respond to appropriate questions.
Fees Paid to D&T
The fees billed by D&T, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates for various types of professional services and related expenses during the years ended November 30, 20172020, and 20162019, were as follows:
| Years ended November 30, | Years ended��November 30, | |||||||||||||||
Services Provided | 2017 | 2016 | 2020 | 2019 | ||||||||||||
Audit Fees(1) | $ | 3,314,000 | $ | 3,506,000 | $3,118,000 | $3,218,000 | ||||||||||
Audit-Related Fees | 841,000 | 502,000 | 63,000 | 78,000 | ||||||||||||
Tax Fees | 493,000 | 392,000 | 451,000 | 520,000 | ||||||||||||
|
| |||||||||||||||
Total(3) | $ | 4,648,000 | $ | 4,400,000 | ||||||||||||
|
| |||||||||||||||
| Total | $3,632,000 | $3,816,000 | ||||||||||||||
| (1) | These professional services included fees associated with (i) the audit of our annual financial statements (Form10-K), and (ii) reviews of our quarterly financial statements (Forms10-Q). |
| (2) | These professional services included fees associated with (i) assistance in understanding and applying financial accounting and reporting standards, (ii) accounting assistance with regard to proposed transactions, and (iii) consents to |
| (3) |
| These professional services include fees associated with tax planning, tax compliance services, and tax return preparation. |
36 | LENNAR CORPORATION 2021 PROXY STATEMENT
Proposal 3: Ratification of Independent Registered Public Accountants Pre-Approval Policies and Procedures for Audit and Permitted Non-Audit Services
Pre-Approval Policies and Procedures for Audit and Permitted
Non-Audit Services
The Audit Committee has established policies and procedures requiring that itpre-approve all audit andnon-audit services to be provided to Lennar by the independent registered public accounting firm to our Company.firm. Under the policy, the Audit Committeepre-approves all services obtained from our independent auditor by category of service, including a review of specific services to be performed and the potential impact of such services on auditor independence. To facilitate the process, the policy delegates authority to one or more of the
Audit Committee’s members topre-approve services. The Audit Committee member to whom such authority is delegated must report, for informational purposes only, anypre-approval decisions to the Audit Committee at its next scheduled meeting. Consistent with these policies and procedures, the Audit Committee approved all of the services rendered by D&T during fiscal year 2017.2020.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “FOR” ratification of the appointment of D&T as our independent registered public accounting firm for the 2018 fiscal year.
LENNAR CORPORATION 2021 PROXY STATEMENT | 37
Management has the primary responsibility for producing the Company’sLennar’s financial statements and for implementing the Company’s financial reporting process, including the Company’sLennar’s system of internal control over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of the Company’sLennar’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing a report thereon. The Audit Committee’s responsibilities include assisting the Board of Directors in its oversight of the Company’sLennar’s financial statements. In fulfilling its responsibilities, the Audit Committee reviewed the Company’s audited financial statements for the year ended November 30, 20172020, with management, including a discussion of the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
During the course of fiscal 2017,2020, management undertook the testing and evaluation of the Company’sLennar’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act and related regulations. The Audit Committee was kept apprised of the progress of the evaluation and provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received periodic updates provided byfrom management and Deloitte & Touche LLP at each Audit Committee meeting. At the conclusion of the process, the Audit Committee reviewed the report of management contained in the Company’sLennar’s Annual Report on Form10-K for the fiscal year ended November 30, 20172020, that has been filed with the SEC, as well as Deloitte & Touche LLP’s Reports of Independent Registered Public Accounting Firm included in the Company’s Annual Report on Form10-K related to itsthat firm’s audits of: (i) the consolidated financial statements and scheduleschedules thereto, and (ii) the effectiveness of internal control over financial reporting. The Audit Committee continues to oversee the Company’sLennar’s efforts related to its internal control over financial reporting and management’s preparations for the evaluation in fiscal 2018.2021.
The Audit Committee has discussed with the Company’s independent registered public accounting firm the matters required to be discussed by PCAOB Auditing Standard No.16, Communication with Audit Committees, and Rule2-07 of SEC RegulationS-X. The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by the PCAOB Ethics and Independence Rule 3526, “Communication with Audit Committee Concerning Independence,” and has discussed with Deloitte & Touche LLP the firm’s independence. The Audit Committee has also considered whether the providing offact that Deloitte provides audit-related and othernon-audit services by Deloitte to the CompanyLennar is compatible with maintaining thethat firm’s independence.
The Audit Committee has evaluated the independent registered public accounting firm’s role in performing an independent audit of the Company’sLennar’s financial statements in accordance with the standards of the PCAOB and applicable professional and firm auditing standards, including quality control standards. The Audit Committee has received assurances from the independent registered public accounting firm that the audit was subject to its quality control system for its accounting and auditing practice in the United States. The independent registered public accounting firm has further assured the Audit Committee that its engagement was conducted in compliance with professional standards and that there was appropriate continuity of personnel working on the audit and availability of national office consultation to conduct the relevant portions of the audit.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors and the Company’s management that the audited financial statements be included in the Annual Report on Form10-K for the Company’s fiscal year ended November 30, 20172020, that was filed with the Securities and Exchange Commission. By recommending to the Board of Directors and the Company’s management that the audited financial statements be so included, the Audit Committee was not opining on the accuracy, completeness, or presentation of the information contained in the audited financial statements.
The Audit Committee
Sherrill W. Hudson, Chairperson
Irving Bolotin
Steven L. Gerard
Tig Gilliam
Armando Olivera
February 20, 2018
Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Exchange Act, or any future filings that might incorporate this proxy statement, in whole or in part, the Compensation Committee Report and the Audit Committee Report may not be incorporated by reference to this proxy statement.38 | LENNAR CORPORATION 2021 PROXY STATEMENT
Section 14A of the Exchange Act, which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires us to provide our stockholders with the opportunity to approve, on anon-binding, advisory basis, the compensation of our named executive officers. We provide our stockholders with the opportunity to cast an annual advisory vote on the compensation of our named executive officers as disclosed above in the Compensation Discussion and Analysis, the compensation tables and the narrative disclosures that accompany those tables. At our 2017 annual meeting, approximately 67% of the votes cast supported the Say on Pay proposal. At the 2018 Annual Meeting, we are asking our stockholders to approve, on an advisory basis, the 2017 compensation of our named executive officers as disclosed in this proxy statement.
We encourage stockholders to review the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosures on pages 20 to 41. We believe that the success of our Company is attributable in substantial part to our talented and committed executives. Therefore, the compensation of our NEOs is designed to enable us to retain, motivate and recruit high-quality, experienced executives who can help us achieve our short- and long-term corporate goals and strategies. We believe that our executive compensation program strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our executives to dedicate themselves fully to value creation for our stockholders. This balance is evidenced by the following:
In addition, we maintain strong corporate governance practices regarding executive compensation:
On the basis of the information in the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure on pages 20 to 41 of this proxy statement, we are requesting that our stockholders vote on the following resolution:
RESOLVED, that the stockholders of Lennar Corporation approve, on anon-binding, advisory basis, the compensation of Lennar’s named executive officers, as described in the Compensation Discussion and Analysis, the tabular disclosures regarding such compensation, and the accompanying narrative disclosures, set forth in Lennar’s 2018 Annual Meeting proxy statement.
Although this Say on Pay vote on executive compensation isnon-binding, the Board and the Compensation Committee will review the results of the vote and will take into account the outcome of the vote when determining future executive compensation arrangements.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “FOR” adoption of the resolution approving the compensation of our named executive officers.
We have received the following stockholder proposal from William Steiner, c/o Komlossy Law, PA, 4700 Sheridan St. Suite J, Hollywood, FL 33021.John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278. Mr. SteinerChevedden has represented that he will meet SEC Rule14a-8 requirements, including the requirement that he will continually own the required market value of our stock until after the date of the Annual Meeting. We have copied the text of the proposal (including title and stockholder-supplied emphasis) and the stockholder’s supporting statement as it was provided to us by the stockholder. Following the proposal we provide the Board’s statement in opposition and the Board’s recommendation to vote “AGAINST”“AGAINST” the proposal.
Proposal 4 — Director Tenure Limit
Shareholders request our Board of Directors to adopt as policy a15-year tenure limit for service on the Board of Directors. The Board of Directors would have discretion to determine the details of the definition of the15-year limit (with accompanying justification) such as allowing up to15-years and 364 days service. This would include a provision that management would have the discretion to implement an orderly transition to this requirement should there be a temporary deviation in meeting this requirement.
Long-tenure can impair the independence of a director no matter how well qualified. And independence is anall-important qualification for a Director. A director who lacks independence cannot protect the best interests of shareholders. At Lennar the following directors had excessive tenure:
Irving Bolotin43-years
Stuart Miller27-years
Sidney Lapidus20-years
Steven Gerard17-years
It is particularly import to have this policy at Lennar because the above directors are all but impossible to vote out of office because certain insider shares havesuper-sized voting power with10-votes per share compared to the toothlessone-vote per share for other shareholders.
Please vote to enhance the independence of our directors:
Director Tenure Limit — Proposal 4
Board’s Statement in Opposition to Stockholder Proposal
The Board opposes the proposal. The reason Mr. Steiner gives for wanting to impose a15-year limit on service on Lennar’s Board of Directors is his assertion that “long-tenure can impair the independence of a director” and “a director who lacks independence cannot protect the best interests of shareholders.” He gives no support for his assertion that a long-term director will be less zealous than other directors in protecting the best interests of shareholders, and that certainly is not the case with regard to Lennar’s directors.
The proposed arbitrary limit on how long a person could serve as a director would require that four important directors leave the Board. One of whom is Stuart Miller, Lennar’s Chief Executive Officer. Mr. Miller has never been an independent director, but is a critically important member of Lennar’s Board, and, as Lennar’s largest stockholder, has a major reason to act in the best interests of its stockholders. The15-year limit also would require Sidney Lapidus, Steven Gerard and Irving Bolotin to leave. These directors have accrued the expertise and standing to influence and effectively oversee the Company, and will often ask probing questions about why management is asking the Board to take particular actions. The Board believes that instead of an arbitrary15-year limit on service that would discriminate against some highly talented directors who contribute significantly to Lennar’s Board, the Board is better served by focusing on adding new directors so there will be new ideas and fresh evaluations of long term strategies. In line with its focus on Board refreshment, Lennar has
been regularly adding members to the Board, with four of the current eleven Lennar directors being added within the last five years. The Board has cultivated a culture that embraces open, informed, discussion, and directors feel free to challenge management. An arbitrary rule on tenure is contrary to the Board’s business judgement, and would deprive the Company of some of the members of the Board who contribute the most to its success. The Board believes that eligibility of a director to bere-nominated should be based on the director’s contributions to, and qualifications for, the Board, not on the number of years the director has served.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “AGAINST” this proposal.
We have received the following stockholder proposal from John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278. Mr. Chevedden has represented that he will meet SEC Rule14a-8 requirements, including the requirement that he will continually own the required market value of our stock until after the date of the Meeting. We have copied the text of the proposal (including title and stockholder-supplied emphasis) and the stockholder’s supporting statement as it was provided to us by the stockholder. Following the proposal we provide the Board’s statement in opposition and the Board’s recommendation to vote “AGAINST” the proposal.
Proposal 5 — 4—Equal Voting Rights for Each ShareholderShare
RESOLVED: Shareholders request that our Board take the steps necessary to ensure thateventually enable all of our company’s outstanding stock hasto have an equalone-vote per share in each voting situation. This would encompass all practicable steps including encouragement and negotiation with current and future shareholders, who have more than one vote per share, to request that they relinquish, for the common good of all shareholders, any preexisting rights, if necessary.
This proposal is not intendedtopic received majority support from all the non-insider Lennar shares in 2018. Dual-class stocks tend to unnecessarily limit our Board’s judgment in craftingunder-perform the requested change in accordance with applicable laws and existing contracts. stock market.
This proposal is important because certain shares havesuper-sized voting power with10-votes per share compared to the weaklingweak one-vote per share for otherretail shareholders. The holders of shares with super-sized voting power are getting a free ride at the expense of retail shareholders.
With stock having10-timesSuper-sized more voting power our company takes our shareholder money but does notshares give us in return an equalprivileged shareholders a disproportional voice in our company’s management.the management of the company compared to their money at risk. Without a voice in proportion to their money at risk, retail shareholders cannot hold management accountable.
There could be abuilt-in deficit in the Lennar stock price that would be released by equal voting rights for each share. The weakling voting rights of regular Lennar shareholders is a reminder that the S&P 500 .SPX started excluding companies that issue multiple classes of shares, a move that effectively bars Snap Inc (SNAP) after its decision to offer stock with no voting rights.
“Companies with multiple share class structuresDual-class stocks tend to have corporate governancecreate an inferior class of shareholders and hand over power to a privileged few, who are then allowed to pass the financial risk onto others. With few constraints placed upon them, managers holding super-class stock can spin out of control. Families and senior managers can entrench themselves into the operations of the company, regardless of their abilities and performance. Dual-class structures that treat different shareholder classes unequallymay allow management to make bad decisions with respect to voting rights and other governance issues,”few consequences.
Hollinger International presented a sad example of the index provider said. In regard to the 2017 SNAP initial public offering, some investors were taken aback bynegative effects of dual-class shares. Former CEO Conrad Black controlled all of the company’s unusual decisionclass-B shares, which gave him 30% of the equity and 73% of the voting power. He ran the company as if he were the sole owner, exacting huge management fees, consulting payments and personal dividends. Hollinger’s board of directors was filled with Black’s friends who were unlikely to offer new investorsforcefully oppose his authority.
Holders of publicly traded shares of Hollinger had almost no power to have any influence in terms of executive pay, mergers and acquisitions, board composition or poison pills. Hollinger’s financial and share performance suffered under Black’s control.
The Council for Institutional Investors (CII) recommends a 7-year phase-out of dual class of common stock withshare offerings. The International Corporate Governance Network supports CII’s recommendation to require a time-based sunset clause for dual class shares to revert to a traditional one-share/one-vote structure in no voting rights.
FTSE Russell said it planned to exclude SNAP from its stock indexes. The decision likely means that funds like $243 billion SPDR S&P 500 ETF will not buy SNAP any time soon.
Although the weakling voting rights of regular Lennar shareholders are not as bad as SNAP, SNAP is a reminder of a toughening stance by index firms and investors who increasingly emphasize the importance of corporate governance rights.more than 7-years.
Please vote to protect shareholder value:yes:
Equal Voting Rights for Each Shareholder — Share—Proposal 54
LENNAR CORPORATION 2021 PROXY STATEMENT | 39
Proposal 4: Equal Voting Rights for Each Share Board’s Statement in Opposition to Stockholder Proposal
Board’s Statement in Opposition to Stockholder Proposal
The Board opposes the proposal. The only difference between our two classes of common stock is that the Class A common stock has one vote per share while the Class B common stock has ten votes per share. This dual class voting structure has twice been approved by our stockholders—once in 1987 when they initially
authorized us to issue multiple voting Class B common stock, and again in 2003 when they approved an increase in the number of shares of Class B common stock we could issue and changes to the terms of the Class B common stock that enabled it to be listed on the New York Stock Exchange. The Board originally believed this voting structure had value, and our Board continues to believe this voting structure benefits Lennar.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “AGAINST” this proposal.
40 | LENNAR CORPORATION 2021 PROXY STATEMENT
We have received the following stockholder proposal from GAMCO Asset Management Inc., One Corporate Center, Rye, NY 10580-1422. GAMCO Asset Management Inc. has represented that it will meet SEC Rule14a-8 requirements, including the requirement that it will continually own the required market value of our stock until after the date of the Meeting. We have copied the text of the proposal (including title and stockholder-supplied emphasis) and the stockholder’s supporting statement as it was provided to us by the stockholder. Following the proposal we provide the Board’s statement in opposition and the Board’s recommendation to vote “AGAINST” the proposal.
STOCKHOLDER PROPOSAL
RESOLVED: that the stockholders of Lennar Corporation ( the “Company” or “Lennar”) request the Board of Directors take all necessary steps (other than steps that must be taken by stockholders), including, but not limited to, amending the Company’s Certificate of Incorporation and/or Bylaws, to provide the Company’s Class B Common Stockholders with the right to annually convert 1% of the Company’s outstanding Class B Common Stock into the Company’s Class A Common Stock.
SUPPORTING STATEMENT
GAMCO’s clients and related entities own 10.75% of Lennar’s outstanding Class B Common Stock.
As of the close of trading on November 2, 2017, the Company’s Class B Common Stock ( 10 votes per share) was trading at an eight dollar discount to the Company’s Class A Common Stock (1 vote per share).
Given that the Miller family owns approximately 68% of the Class B Common Stock GAMCO believes the implementation of a limited conversion right will not significantly alter the ownership structure at Lennar; a dynamic of exchangeability that the NYSE has focused on.
WE URGE ALL STOCKHOLDERS TO VOTE “FOR” THIS PROPOSAL
Board’s Statement in Opposition to Stockholder Proposal
The Board opposes this proposal for a number of reasons.
Enabling 1% of the Class B stock to be converted into Class A stock would be expensive and would be contrary to what the Board believes is in the best interest of the Company and its stockholders.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “AGAINST” this proposal.
Security Ownership of Officers and Directors
The following table shows beneficial ownership information as of February 14, 201816, 2021, for (1) each of our current Directors,directors, (2) each of our “named executive officers” who are listed in the “SummarySummary Compensation Table”Table, and (3) all of our current Directorsdirectors and executive officers as a group. As of February 14, 2018,16, 2021, we had 287,440,099274,495,551 shares of Class A common stock and 37,669,20337,621,152 shares of Class B common stock outstanding.
| Class A Common Stock | Class B Common Stock | Class A Common Stock | Class B Common Stock | |||||||||||||||||||||
Name | Number Of Shares Beneficially Owned (1) (2) | Percent Of Class | Number Of Shares Beneficially Owned (3) | Percent Of Class | Number of Beneficially Owned(1) | Percent Of Class | Number of Beneficially Owned(2) | Percent Of Class | ||||||||||||||||
| Amy Banse(3) | 0 | * | 0 | * | ||||||||||||||||||||
| Rick Beckwitt | 1,299,337 | * | 23,222 | * |
| 1,574,946 |
| * |
| 21,848 |
| * | ||||||||||||
Diane Bessette |
| 238,577 |
| * |
| 7,091 |
| * | ||||||||||||||||
| Irving Bolotin | 32,503 | * | 3,994 | * |
| 34,364 |
| * |
| 3,993 |
| * | ||||||||||||
| Steven L. Gerard | 38,652 | * | 1,584 | * |
| 45,702 |
| * |
| 1,584 |
| * | ||||||||||||
| Tig Gilliam | 24,119 | * | 432 | * |
| 28,030 |
| * |
| 432 |
| * | ||||||||||||
| Bruce Gross | 507,780 | * | 73,347 | * | ||||||||||||||||||||
| Sherrill W. Hudson | 30,000 | * | 5,650 | * |
| 33,500 |
| * |
| 5,650 |
| * | ||||||||||||
| Jonathan M. Jaffe | 646,364 | * | 47,612 | * |
| 612,615 |
| * |
| 48,501 |
| * | ||||||||||||
| Sidney Lapidus | 130,159 | * | 43,347 | * |
| 136,159 |
| * |
| 43,347 |
| * | ||||||||||||
Jeff McCall |
| 149,781 |
| * |
| 2,883 |
| * | ||||||||||||||||
| Teri McClure | 16,253 | * | 275 | * |
| 20,250 |
| * |
| 275 |
| * | ||||||||||||
| Stuart Miller(4) | 1,594,826 | * | 21,865,066 | 58.0% |
| 1,841,610 |
| * |
| 21,861,358 |
| 58.1% | ||||||||||||
| Armando Olivera | 9,617 | * | 142 | * |
| 13,117 |
| * |
| 142 |
| * | ||||||||||||
| Donna Shalala | 6,871 | * | 132 | * | ||||||||||||||||||||
| Jeffrey Sonnenfeld | 32,072 | * | 591 | * |
| 35,977 |
| * |
| 591 |
| * | ||||||||||||
| Scott Stowell | 547,965 | * | 10,623 | * |
| 23,325 |
| * |
| 0 |
| * | ||||||||||||
| Mark Sustana | 65,720 | * | 3,814 | * |
| 67,168 |
| * |
| 3,514 |
| * | ||||||||||||
| All current directors and executive officers as a group (18 persons)(5) | 5,623,040 | 2.0% | 22,100,702 | 58.7% | ||||||||||||||||||||
All current directors and executive officers as a group (17 persons)(5) |
| 4,901,924 |
| 1.8% |
| 22,004,747 |
| 58.5% | ||||||||||||||||
| * |
|
The address of each person named in this table is c/o Lennar Corporation, 700 NW 107th Avenue, Miami, Florida 33172. To the best of our knowledge, except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all the shares of common stock shown as beneficially owned by them.
| (1) |
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
| ||||
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| Includes shares held through a trust or an ESOP, as follows: Mr. Beckwitt, 17,382 shares held in family trusts; Mr. |
Includes shares held through a trust or an ESOP, as follows: Mr. Beckwitt, 347 shares held in family trusts; Mr. |
On February 18, 2021, Ms. Banse became a member of the Board and received a prorated annual director equity grant of 260 shares of Class A common stock. |
| (4) | Of the shares reflected in the table, Mr. Miller has shared voting and investment power, and no pecuniary interest, with respect to |
LENNAR CORPORATION 2021 PROXY STATEMENT | 41
SecurityOwnership SecurityOwnership of Principal Stockholders
| fund. Mr. Miller, his brother and his sister are trustees and beneficiaries of trusts that directly or indirectly hold substantial limited partner interests in two partnerships (Mr. Miller, his brother and his sister also directly own minor limited partnership interests in the two partnerships) |
| (5) | Includes |
Each outstanding share of Class A common stock entitles the holder to one vote and each outstanding share of Class B common stock entitles the holder to ten votes. As of February 14, 2018,16, 2021, Mr. Miller had the power to cast 220,245,486220,455,190 votes which(which is 33.2%33.9% of the combined votes that could be cast by all the holders of Class A common stock and Class B common stock,stock), and all of our directors and executive officers as a group had the power to cast 226,579,740224,949,394 votes which(which is 34.1%34.6% of the combined votes that could be cast by all the holders of Class A common stock and Class B common stock.
SecurityOwnership of Principal Stockholders
The following table shows stock ownership information as of February 14, 201816, 2021, with respect to each of our stockholders who is known by us to be a beneficial owner of more than 5% of either class of our outstanding common stock. To the best of our knowledge, and except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
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| Name | Title of Class | Amount and of Beneficial Ownership | Percent Of Class(1) | |||||||||
Stuart Miller 700 Northwest 107th Avenue Miami, FL 33172 | Class B Common Stock | 21,861,358 | (2) | 58.1% | ||||||||
GAMCO Investors, Inc. One Corporate Center Rye, NY 10580-1435 | Class B Common Stock | 2,665,074 | (3) | 7.1% | ||||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | Class A Common Stock | 28,599,421 | (4) | 10.4% | ||||||||
FMR LLC 245 Summer Street Boston, MA 02210 | Class A Common Stock | 23,330,796 | (5) | 8.5% | ||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055
| Class A Common Stock | 21,702,129 | (6) | 7.9% | ||||||||
| (1) | Percent of Class is determined based on the total issued and outstanding shares of the applicable class on February |
| (2) | Of the shares reflected in the table, Mr. Miller has shared voting and investment power, and no pecuniary interest, with respect to 105,507 shares of Class B common stock, which are held in a charitable family foundation. In addition, of the shares reflected in the table, Mr. Miller has sole voting and investment power, and no pecuniary interest, with respect to 2,994 shares of Class B common stock, which are held in a charitable foundation. Additionally, of the shares reflected in the table, Mr. Miller has sole voting and investment power with respect to 531,810 shares of Class B common stock held in a charitable fund. Mr. Miller, his brother and his sister are trustees and beneficiaries of trusts that directly or indirectly hold substantial limited partner interests in two partnerships (Mr. Miller, his brother and his sister also directly own minor limited partnership interests in the two partnerships) |
| (3) | Based on Amendment No. |
| (4) | Based on Amendment No. |
| (5) | Based on Schedule 13G filed on February 8, 2021. FMR LLC has sole voting power with respect to 5,176,372 shares, and sole investment power with respect to 23,330,796 shares. Abigail P. Johnson, a Director, the Chairman and the Chief Executive Officer of FMR LLC, has sole investment power with respect to 23,330,796 shares. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the |
42 | LENNAR CORPORATION 2021 PROXY STATEMENT
SecurityOwnership Security Ownership of Principal Stockholders
| majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company LLC (“FMR Co. LLC”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. FMR Co. LLC carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. |
| (6) | Based on Amendment No. 12 to the stockholder’s Schedule 13G filed on January |
LENNAR CORPORATION 2021 PROXY STATEMENT | 43
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
Why did I receive this proxy statement?
You are receiving this proxy statement because you beneficially own shares of Lennar Class A or Class B common stock (or both) that entitle you to vote at the Exchange Act requires our directors and executive officers, and persons who own more than 10%2021 Annual Meeting of a registered classStockholders. Our Board of Directors is soliciting proxies to ensure that all of our equity securities,stockholders can vote at the meeting, even if they cannot attend the meeting.
Who can attend the Annual Meeting?
The Annual Meeting will be held virtually. Only stockholders and our invited guests can attend the virtual Annual Meeting. If you are eligible, you can attend . To attend the meeting at www.virtualshareholdermeeting.com/LEN2021, you must enter the control number on your Notice of Proxy Materials, proxy card or voting instruction form. The virtual meeting room will open at 10:45 a.m. Eastern Time. If you are a beneficial stockholder, you may contact the bank, broker or other institution where you hold your account if you have questions about obtaining your control number.
We encourage you to filelog in to the website and access the webcast early, beginning approximately 15 minutes before the Annual Meeting start time. If you experience technical difficulties, please contact the technical support telephone number posted on the virtual stockholder meeting log in page.
If I plan to attend the Annual Meeting, should I still vote by proxy?
Yes. Casting your vote in advance does not affect your right to attend the virtual Annual Meeting, or even to vote at the meeting. If you vote in advance and then attend the meeting, you do not need to vote again at the meeting unless you want to change your vote with regard to a matter.
How many votes may I cast?
For each matter presented at the SECmeeting, you are entitled to one vote for each share of our Class A common stock, and ten votes for each share of our Class B common stock, that you owned at the NYSE reportsclose of ownershipbusiness on February 16, 2021, the record date. On the record date, 274,495,551 shares of our Class A common stock and changes in ownership37,621,152 shares of our Class B common stock were outstanding and are entitled to be voted at the meeting. Holders of our Class A common stock and Class B common stock. Executive officers, directorsstock have different voting rights, but vote together as a single class.
What constitutes a quorum for the Annual Meeting?
We must have a quorum of stockholders present to conduct business at the Annual Meeting. Under our By-laws, a majority in voting power, and greaternot less than 10% stockholders are required by SEC regulation to furnish us with copiesone-third in number, of all Section 16(a) forms they file.
Based on the review of copies of such reports furnished to us and written representations by our directors and officers that no other reports by them were required, we believe that, during the 2017 fiscal year, our executive officers, directors and greater than 10% beneficial owners complied with all Section 16(a) filing requirements applicable to them, except that Mr. Olivera’s Section 16 reports did not timely report a purchase and sale because Mr. Olivera’s investment advisor purchased and sold shares of Class A common stock on his behalfand Class B common stock entitled to vote, represented in error, and the purchase and sale were only later discoveredperson or by Mr. Olivera.
Stockholder Proposals for 2019 Annual Meeting
Stockholder proposals should be sent to the Office of the General Counsel at Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida 33172. To be considered for inclusion in Lennar’s proxy, statement for the 2019 Annual Meeting of Stockholders, the deadline for submission of stockholder proposals, pursuant to Rule14a-8 of the Exchange Act, is October 31, 2018. Additionally, pursuant to ourBy-Laws, Lennar must receive notice of any stockholder proposal, including the nomination of any stockholder candidates for the Board, to be submitted at the 2019 Annual Meeting of Stockholders, but not required towill constitute a quorum. All shares represented by proxy, even if marked as abstentions, will be included in the calculation of the number of shares considered to be present for quorum purposes. If we do not have a quorum, we will be forced to reconvene the Annual Meeting at a later date.
Am I a stockholder of record or a beneficial owner?
If your shares are registered directly in your name with Lennar’s transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, the “stockholder of record.”
If your shares are held by a brokerage firm, bank, trustee or other agent (known as a “nominee”), you are considered the “beneficial owner” of these shares even though you are not the stockholder of record. As the beneficial owner, you have the right to direct how your shares will be voted. Your nominee will give you instructions for voting by telephone or online or, if you specifically request a copy of printed proxy materials, you may use a proxy card or instruction card provided by your nominee.
44�� | LENNAR CORPORATION 2021 PROXY STATEMENT
Other Matters
How do I vote?
If you are a stockholder of record, you may vote:
online before the meeting;
by telephone;
by mail, if you received a paper copy of the proxy materials; or
online at the meeting.
Detailed instructions for Internet voting are set forth in the Notice Regarding the Availability of Proxy Materials (“Notice of Proxy Materials”), which also contains instructions on how to access our proxy statement no earlier than December 12, 2018 and no later than January 11, 2019. OurBy-Laws andannual report online.
If you are a beneficial owner, you must follow your nominee’s voting procedures.
If your shares are held in our NCG Committee Charter set forth401(k) plan, your proxy will serve as a voting instruction for the information that is requiredtrustee of our 401(k) plan, who will vote your shares as you instruct. If the trustee does not receive your instructions by the prescribed date, the trustee will vote the shares you hold through our 401(k) plan in a written notice of a stockholder proposal.the same proportion as it votes the shares in our 401(k) plan for which voting instructions are received.
List of Stockholders Entitled to VoteMay stockholders ask questions at the Annual Meetingmeeting?
The namesYes. Representatives of stockholdersLennar will answer stockholders’ questions of record entitled to votegeneral interest at the end of the meeting and questions may also be submitted in advance. You may submit a question in advance of the meeting at www.proxyvote.com after logging in with your control number. Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/LEN2021.
What proposals will be available at our corporate office for a period of 10 days prior topresented and what is the required vote?
At the Annual Meeting you will be asked to vote on four proposals. Your options, and continuing through the Annual Meeting.
Expenses Relating to this Proxy Solicitation
We will pay all expenses relating to this proxy solicitation. Our officers, directors, and employees may solicit proxies by telephone or personal call without extravoting requirements, are set forth below. The Board recommends you vote FOR each nominee in Proposal 1, FOR our executive compensation for that activity. We will reimburse banks, brokers and other persons for reasonableout-of-pocket expenses in forwarding proxy materials to beneficial ownersProposal 2, FOR ratification of our stockselection of independent auditors in Proposal 3 and obtaining proxies from those owners.
Communication with Lennar’s Board of Directors
Anyone who wishes to communicate with our Board of Directors, a committee of the Board, the independent Directors as a group or any member of the Board, may send correspondence to the Office of the General Counsel at Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida 33172. The General Counsel will compile and submit on a periodic basis all stockholder correspondence to the entire Board of Directors, or, if and as designatedAGAINST Equal Voting Rights for Each Share in a particular communication, to a committee of the Board, the independent Directors as a group or an individual Director, as applicable.
As set forth in our Code of Business Conduct and Ethics, we require our associates to maintain the highest level of integrity in their dealings on behalf of our Company and its subsidiaries. We are dedicated to
the utmost ethical standards and through our corporate charters and guidelines, we remain committed and accountable to our stockholders, associates, customers and the communities in which we operate. Concerns or complaints regarding financial, accounting, auditing, code of conduct or related matters can be submitted by stockholders, associates, customers and any other interested persons, and concerns regarding questionable accounting or auditing matters can be submitted by associates, confidentially and anonymously to the Audit Committee of our Board of Directors in the following manner:Proposal 4.
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Also, concerns about our operations, our financial reporting, our business integrity, or any other matter related to our Company, can be submitted by anyone to thenon-management directors of our Board of Directors in the following manner:
| Proposal | Voting options |
adopt the proposal | abstentions | |||||||
| Can brokers vote without instructions? | non-votes”* | ||||||||
| 1. To elect eleven directors to serve until the 2022 Annual Meeting of Stockholders. | For, against or abstain on each nominee | A nominee for director will be elected if the votes cast for such nominee exceed the votes cast against such nominee | No effect | No | No effect | |||||
| 2. To approve, on an advisory basis, the compensation of our named executive officers. | For, against or abstain | A majority of the votes cast with respect to the proposal | No effect | No | No effect | |||||
| 3. To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending November 30, 2021. | For, against or abstain | A majority of the votes cast with respect to the proposal | No effect | Yes | Not applicable | |||||
| 4. To vote on a stockholder proposal regarding Equal Voting Rights for Each Share. | For, against or abstain | A majority of the votes cast with respect to the proposal | No effect | No | No effect | |||||
All communications will automatically be submitted to our Lead Director, who will distribute such communications.
We maintain an internet website at www.lennar.com. Copies of the Committee charters of each of the Audit Committee, Compensation Committee and NCG Committee, together with certain other corporate governance materials, including our Code of Business Conduct and Ethics, can be found in the Investor Relations-Corporate Governance section of our website at www.lennar.com, and such information is also available in print to any stockholder who requests it through our Investor Relations department at the address below.
| * | See “What if I am a beneficial owner and I do not give my nominee voting instructions?” |
We will furnish without charge to each person whosealso consider any other business that may come before the meeting in a manner that is proper under Delaware law and our By-Laws.
What happens if additional matters are presented at the Annual Meeting?
Other than the items of business described in this proxy is being solicited, upon requeststatement, we are not aware of any such person,matter that will be presented for action at the Annual Meeting. If any additional matters are presented and you have granted a copyproxy, the individuals named as proxy holders—Stuart Miller, Diane Bessette, and Mark Sustana, or any of them—will be able to vote your shares in their discretion on those additional matters.
What if I sign and return my proxy without making any selections?
If you sign and return your proxy without making any selections, your shares will be voted “FOR” all of the fiscal 2017 Formdirector nominees, “FOR” proposals 2 and 3, and “AGAINST” proposal 4.
10-KLENNAR CORPORATION 2021 PROXY STATEMENT | 45
Other Matters
What if I am a beneficial owner and I do not give my nominee voting instructions?
If you are a beneficial owner, your nominee has only limited discretionary authority to vote without your instructions. For Lennar’s forthcoming annual meeting, your nominee would only be able to vote your shares with respect to Proposal 3, the ratification of auditors, without your instruction. A “broker non-vote” as filed withoccurs when a nominee does not vote a beneficial owner’s shares on a particular item because the SEC, including the financial statementsnominee does not have discretionary voting authority for that item and schedules included in it, butdid not the exhibits. In addition, that report is available, free of charge, through the Investor Relations-Corporate Governance section of our internet website at www.lennar.com. A request for a copy of the report should be directed to Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida 33172, Attention: Investor Relations. A copy of any exhibit to the fiscal 2017 Formreceive voting instructions. Broker 10-Knon-votes will be forwarded following receiptincluded in the calculation of the number of votes considered to be present at the meeting for purposes of determining the presence of a written requestquorum, but are not counted as votes cast with respect to it addresseda matter on which the nominee has expressly not voted.
What if I abstain on a proposal?
If you sign and return your proxy or voting instruction marked “abstain” with regard to Investor Relations.any proposal, your shares will not be voted on that proposal and will not be counted as votes cast in the final tally of votes with regard to that proposal. However, your shares will be counted for purposes of determining whether a quorum is present.
Electronic DeliveryCan I change my vote after I have delivered my proxy?
This year we again have elected to take advantageYou may revoke your proxy and change your vote at any time before the taking of the SEC’s rule that allows usvote at the Annual Meeting. You also may revoke your proxy by delivering a later-dated proxy. If you are a beneficial owner, you must contact your nominee to change your vote or obtain a proxy to vote your shares at the meeting.
Why didn’t I receive a printed proxy statement?
We have elected to furnish proxy materials to youmost of our stockholders online. We believe using electronic delivery rather than printing and mailing full sets of proxy materials will expedite stockholders’your receipt of these materials while lowering costs and reducing the environmental impact of ourthe Annual Meeting by reducing printing and mailing of full sets of materials.Meeting. We mailed the Notice of Internet AvailabilityProxy Materials containing instructions on how to access our proxy statement and annual report online on or about February 28, 2018.25, 2021. If you would like to receive a paper copyprinted copies of the proxy materials, the Notice of Internet Availability contains instructions onProxy Materials explains how to obtaindo so.
If you want a paper copy.
HouseholdingI live with other Lennar stockholders. Why did we only receive one Notice Regarding the Availability of Proxy Materials?
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, stockholders of record who have the same address and last name will receive only one copy of our Notice of Internet Availability,Proxy Materials unless one or more of these stockholders notifies us that they wish to continue receiving individual copies. This procedure will reduce our printing costs and postage fees.
If you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the Notice of Internet Availability,Proxy Materials, or if you hold stock in more than one account, and in either case you wish to receive only a single copy of the Noticefuture Notices of Internet AvailabilityProxy Materials for your household, please contact our transfer agent, Computershare Trust Company, N.A. (in writing: P.O. Box 505000 Louisville, KY 40233-5000, or by telephone: in the U.S., (800)733-5001; outside the U.S.,(781) 575-2879).
If you participateand other stockholders in householding andyour home wish to receive a separate copy of the Notice of Internet Availability, or if you do not wish to participate in householding and prefer to receive separate copies of the Notice of Internet AvailabilityProxy Materials in the future, please contact Computershare as indicated above.
Beneficial stockholders can request information about householding from their nominees.
46 | LENNAR CORPORATION 2021 PROXY STATEMENT
Other Matters
Where can I find the voting results of the Annual Meeting?
We will announce the results with respect to each proposal voted upon at the Annual Meeting, and publish final detailed voting results in a Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting.
Who should I call with questions?
If you have questions about this proxy statement or the Annual Meeting or would like additional copies of this proxy statement or our annual report, please contact: Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida 33172, Attention: Investor Relations, Telephone: (305) 485-2038.
What if I want to present a proposal or nominate a candidate for the Board of Directors for the 2022 Annual Meeting?
Stockholder proposals should be sent to the Office of the General Counsel at Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida 33172. If you want your proposal considered for inclusion in Lennar’s proxy statement for the 2022 Annual Meeting of Stockholders, we must receive it by October 28, 2021.
Pursuant to our By-Laws, Lennar must receive advance notice of any stockholder proposal, including the nomination of any stockholder candidates for the Board, to be submitted at the 2022 Annual Meeting of Stockholders that is not presented for inclusion in our proxy statement. We must receive such notice between December 8, 2021, and January 7, 2022. Our By-Laws and our NCG Committee charter set forth the information that is required in a written notice of a stockholder proposal.
Where can I find a list of stockholders entitled to vote at the Annual Meeting?
A list of stockholders of record as of the record date will be available for examination by stockholders on the meeting website during the meeting.
Who is paying for this proxy solicitation?
We will pay all expenses relating to this proxy solicitation. Our officers, directors, and associates may solicit proxies by telephone or personal interview without extra compensation for that activity. We will reimburse banks, brokers, and other nominees for reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of our stock and obtaining proxies from those owners.
LENNAR CORPORATION 2021 PROXY STATEMENT | 47
LENNAR CORPORATION ATTN: LEGAL DEPARTMENT 700 N.W. 107TH AVENUE MIAMI, FL 33172 | VOTE BY INTERNET Before The Meeting -Go towww.proxyvote.com | |||||
| Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the | ||||||
During The Meeting - Go to www.virtualshareholdermeeting.com/LEN2021 | ||||||
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. | ||||||
VOTE BY PHONE - 1-800-690-6903 | ||||||
| Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the | ||||||
VOTE BY MAIL | ||||||
| Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||||||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS | ||||||
| If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in |
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||||
| KEEP THIS PORTION FOR YOUR RECORDS | ||||
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| LENNAR CORPORATION | ||||||||||||||
| The Board of Directors recommends you vote FOR each of the following: | ||||||||||||||
| 1. | Election of Directors | |||||||||||||
| Elect eleven directors to serve until the 2022 Annual Meeting of Stockholders. | For | Against | Abstain | |||||||||||
| 1a. | Amy Banse | ☐ | ☐ | ☐ | ||||||||||
| 1b. | Rick Beckwitt | ☐ | ☐ | ☐ | ||||||||||
| 1c. | Steven L. Gerard | ☐ | ☐ | ☐ | ||||||||||
| 1d. | Tig Gilliam | ☐ | ☐ | ☐ | ||||||||||
| 1e. | Sherrill W. Hudson | ☐ | ☐ | ☐ | ||||||||||
| 1f. | Jonathan M. Jaffe | ☐ | ☐ | ☐ | ||||||||||
| 1g. | Sidney Lapidus | ☐ | ☐ | ☐ | ||||||||||
| 1h. | Teri P. McClure | ☐ | ☐ | ☐ | ||||||||||
| 1i. | Stuart Miller | ☐ | ☐ | ☐ | ||||||||||
| 1j. | Armando Olivera | ☐ | ☐ | ☐ | ||||||||||
| 1k. | Jeffrey Sonnenfeld | ☐ | ☐ | ☐ | ||||||||||
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| The Board of Directors recommends you vote FOR proposals 2 and 3: | For | |||||||||||||||||||||||||||||
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| Approval, on an advisory basis, of the compensation of | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
| 3. | Ratifcation of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending November 30, 2021. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||
| The Board of Directors recommends you vote AGAINST proposal 4: | For | Against | Abstain | |||||||||||||||||||||||||||
| 4. | Approval of a stockholder proposal regarding our common stock voting structure. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
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| NOTE:Transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. | |||||||||||||||||||||||||||||
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Please sign your name exactly as it appears above. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer. | ||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice, Proxy Statement and Annual Report are available atwww.proxyvote.com.
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E36541-P02679D32066-P49614
LENNAR CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF LENNAR CORPORATION
ANNUAL MEETING OF STOCKHOLDERS ON APRIL 11, 20187, 2021
The undersigned appoint(s) Stuart Miller, Bruce GrossDiane Bessette and Mark Sustana, or any of them, as proxies, each with the power to appoint a substitute, and authorize(s) them to represent the undersigned and to vote, as designated on the reverse side of this proxy card, all of the shares of Class A common stock (LEN) and Class B common stock (LEN-B) of Lennar Corporation that the undersigned is/are entitled to vote at the Annual Meeting of Stockholders of Lennar Corporation to be held at11:at 11:00 a.m. Eastern Time on Wednesday, April 11, 20187, 2021 virtually at 700 Northwest 107th Avenue, Miami, Florida 33172,www.virtualshareholdermeeting.com/LEN2021, and any adjournment or postponement of that meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL THE BOARD OF DIRECTOR NOMINEES, FOR PROPOSAL 2 AND FOR PROPOSAL 3, AND AGAINST PROPOSALSPROPOSAL 4, 5 AND 6, AND IN THE DISCRETION OF THE PROXY HOLDERS WITH REGARD TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS OF THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
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(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
