Table of ContentsSECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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| ☒ | Definitive Proxy Statement |
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| ☐ | Soliciting Material Pursuant to§240.14a-12 |
Green Brick Partners, Inc.
(Name of Registrant as Specified In Its Charter)
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£Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
S Definitive Proxy Statement
£ Definitive Additional Materials
£ Soliciting Material Pursuant to Section 240.14a-12
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GREEN BRICK PARTNERS, INC. |
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ABOUT GREEN BRICK PARTNERS
Green Brick Partners is committed to building strong communities designed for an exceptional quality of life. We believe that a company’s propensity for success is determined by choosing to do the right thing day after day, for our homebuyers, stockholders, and employees. This begins by following our guiding principles, a set of values we call HOME. This acronym, representing Honesty, Objectivity, Maturity, and Efficiency, allows us to build and design homes with a focus on quality craftsmanship, superior customer service, and an ongoing commitment to transparency. Green Brick Partners’ subsidiary and affiliated homebuilders can be found across four states through eight builder brands. Additionally, our affiliated mortgage and title operations make buying a home a seamless experience and provide timely visibility into our buyers.
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£Notice of Annual Meeting | Fee paid previously with preliminary materials. | Green Brick Partners, Inc. 2805 Dallas Parkway, Suite 400 Plano, TX 75093 |
DATE & TIME
Tuesday,
June 13, 2023
11:00 a.m., Eastern
LOCATION
www.virtualshareholder meeting.com/GRBK2023
RECORD DATE
April 24, 2023
How to Vote
BY INTERNET
www.proxyvote.com
BY TELEPHONE
1-800-690-6903
BY MAIL
Mark, sign and date your proxy card and return in the postage-paid envelope we have provided.
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£ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
| 1) | Amount Previously Paid:Items of Business | | |
| 1. | | Election of 7 directors to the Board | | |
| 2) | Form, Schedule or Registration Statement No.:Recommendation: FOR | | Page: 5 |
| 2. | | Advisory vote to approve the compensation of our named executive officers |
| 3) | Filing Party:Recommendation: FOR | | Page: 48 |
| 3. | | Advisory vote on the frequency of future advisory votes on executive compensation |
| 4) | Date Filed:Recommendation: FOR EVERY 3 YEARS | | Page: 49 |
| 4. | | To ratify appointment of RSM US LLP as our Independent Registered Public Accountants for 2023 |
| | Recommendation: FOR | | Page: 50 |
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2805 Dallas Parkway, Suite 400
Plano, TX 75093
April 29, 2020
Dear Green Brick Partners, Inc. Stockholder:
You are invitedDirectors is soliciting proxies from stockholders who wish to attend our 2020 Annual Meeting of Stockholders, which will be held at 10:00 a.m., Central Time, on June 23, 2020 at our executive offices located at 2805 Dallas Parkway, Suite 400, Plano, TX.
Details of the business to be conductedvote at the meeting are described in the attached Notice of Annual Meeting ofannual meeting. Stockholders and proxy statement.
Your vote is important, and we encourage you to vote whether or not you plan to attend the meeting. Please sign, date and return the enclosed proxy card in the envelope provided, or you may vote by telephone or on the Internetalso will transact such other business as described on your proxy card. If you plan to attend the meeting, you may vote in person.
Also enclosed is a copy of our Annual Report on Form 10-K for the year ended December 31, 2019. I encourage you to read the Annual Report on Form 10-K for information about our performance in 2019.
We look forward to seeing you at the meeting.
Sincerely,
James R. Brickman
Chief Executive Officer and Director
2805 Dallas Parkway, Suite 400
Plano, TX 75093
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 29, 2020
The 2020 Annual Meeting of Stockholders of Green Brick Partners, Inc. (the “Annual Meeting”) will be held at 10:00 a.m., Central Time, on June 23, 2020 at our executive offices located at 2805 Dallas Parkway, Suite 400, Plano, TX 75093* for the following purposes:
1. To elect seven directors to serve until our 2021 Annual Meeting of Stockholders;
2. To ratify the appointment of RSM US LLP as our independent registered public accounting firm for 2020;
3. To approve a non-binding advisory vote on executive compensation; and
4. To act upon any other matters that may properly come before the meetingAnnual Meeting and any adjournment(s) or postponement(s)adjournment thereof.
Only stockholdersWe are furnishing our proxy materials over the Internet as permitted by the rules of recordthe U.S. Securities and Exchange Commission. As a result, we are sending a Notice of common stock atInternet Availability of Proxy Materials rather than a full paper set of the close of business on April 28, 2020 (the “Record Date”) are entitledproxy materials unless you previously requested to receive this notice andprinted copies. The Notice of Internet Availability of Proxy Materials contains instructions on how to vote at the meeting.
To assure your representation at the meeting, please vote by telephone,access our proxy materials on the Internet,
using theas well as instructions on
how stockholders may obtain a paper copy of the proxy
card,materials. This process will reduce the costs associated with printing and distributing our proxy materials.All stockholders are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend, you are urged to vote as soon as possible by signing, dating and returning theInternet or mail so that your shares may be voted in accordance with your wishes. Granting a proxy carddoes not affect your right to revoke it later or to vote your shares in the postage-prepaid envelope provided.
event you attend the Annual Meeting.By Order of the Board of Directors,
Chief Financial Officer, Treasurer and Secretary
We mailed a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report for the year ended December 31, 2022 on or about May 4, 2020.
This1, 2023.Our proxy statement and annual report are available online at: www.proxyvote.com.
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TABLE OF CONTENTS
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PROXY SUMMARY
This proxy summary highlights information contained elsewhere in this proxy statement and does not contain all information that you should review and consider. Please read the entire proxy statement with care before voting.
2023 Annual Meeting of Stockholders
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| Date and Time: | | Tuesday, June 13, 2023, at 11:00 a.m. Eastern Time |
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| Place: | | Our meeting will be held in a virtual format only, conducted exclusively via www.virtualshareholdermeeting.com/GRBK2023. |
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| Record Date: | | April 24, 2023 |
Proposals and Board Recommendations
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| Proposal | | | | Board Recommendations |
Proposal 1: | | Election of Directors (page 5) | | FOR each nominee |
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Proposal 2: | | Advisory Vote on Executive Compensation (page 48) | | FOR |
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Proposal 3: | | Advisory Vote on the Frequency of Future Votes on Executive Compensation (page 49) | | For the option of EVERY
THREE YEARS |
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Proposal 4: | | Ratification of RSM US LLP as Auditors (page 50) | | FOR |
Delivering Stockholder Value
Our financial and operational performance has contributed to our 2019ability to create significant stockholder value as we delivered 114% Total Shareholder Return (“TSR”) over the five years ended December 31, 2022, or a 16.5% CAGR.
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Proxy Summary
2022 FINANCIAL AND OPERATIONAL HIGHLIGHTS
For more information relating to Green Brick Partners, Inc.’s financial performance, please review our Annual Report on Form 10-K are available at www.proxyvote.com.
*We currently intend to hold the Annual Meeting in person. However, we are actively monitoring the coronavirus, or COVID-19, pandemic and are sensitive to the public health and travel concerns that our stockholders may have, as well as protocols that federal, state, and local governments may impose. If it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include switching to a virtual or hybrid meeting format, or changing the time, date or location of the Annual Meeting. Any such change will be announced via a press release available at our website, www.greenbrickpartners.com, under “News” andfiscal year ended December 31, 2022, filed as additional proxy materials with the Securities and Exchange Commission.Commission (the “SEC”) on February 27, 2023.Proposal 1 – Election of Directors (page 5)
Board Composition
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Proxy Summary
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| Director Nominees | | | | | | | | | | |
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SINCE | | Audit | | Comp. | | G&S |
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| | David Einhorn, Chairman President Greenlight Capital, Inc. | | 54 | | 2006 | | | | | | |
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| | James R. Brickman Chief Executive Officer Green Brick Partners, Inc. | | 71 | | 2014 | | | | | | |
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| | Elizabeth K. Blake Retired General Counsel | | 71 | | 2007 | | | |  | |  |
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| | Harry Brandler Retired Chief Financial Officer | | 51 | | 2014 | | | | | | |
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| | Lila Manassa Murphy Chief Financial Officer, Dundee Corporation | | 51 | | 2022 | | | | | | |
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| | Kathleen Olsen Retired Chief Financial Officer Eminence Capital, LLC | | 51 | | 2014 | | | | | | |
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| | Richard S. Press Retired Senior Vice President Wellington Management | | 84 | | 2014 | | | | | | |
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Proxy Summary
Governance Highlights
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| | Annual election of directors | |
| | Independent directors meet in executive session without management present |
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| | 100% independent Board committees | |
| | Strong Board oversight of risk management process |
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| | 5 out of our 7 Board nominees are independent | | | | Policies prohibiting hedging and pledging of shares by executive officers and directors |
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| | Directors elected by majority vote | |
| | Proxy access allows stockholders to nominate directors and have nominees included in the proxy statement |
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| | Director resignation policy for all directors in uncontested elections | |
| | Addition of sustainability responsibilities to Governance committee |
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| | Regular stockholder engagement | |
| | Robust stock ownership guidelines applicable to directors and executive officers |
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TPROPOSAL NO. 1
ELECTION OF DIRECTORS
Seven individuals have been nominated to serve as our directors for the ensuing year and until their successors shall have been duly elected and qualified. All nominees are presently directors.
The persons named as proxies in the accompanying proxy card have advised management that unless authority is withheld in the proxy, they intend to vote for the election of the individuals identified as nominees below. We do not contemplate that any nominee named below will be unable or will decline to serve. However, if any nominee is unable to serve or declines to serve, the persons named in the accompanying proxy card may vote for another person, or persons, in their discretion, unless our Board chooses to reduce the number of directors serving on the Board of Directors (the “Board”).
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE BELOW DIRECTOR NOMINEES. |
Our Board and Our Director Nominees
Our Amended and Restated Bylaws allow our Board to set the size of the board and our Board has set the size of the board to be 7 directors. For the size and scope of our business and operations, our Board believes a board of approximately this size is appropriate as it is small enough to allow for effective communication among the members but large enough to bring a diverse set of perspectives and experiences to our board room.
Any nominee who does not receive a majority vote in an election that is not a contested election is expected to promptly tender his or her resignation to the Chairman of the Board following certification of the stockholder vote. Considering such factors as it deems relevant, the Governance & Sustainability Committee will make a recommendation to the Board as to whether to accept or reject the resignation, or whether other action should be taken. Considering the Governance & Sustainability Committee’s recommendation and such other factors as it deems relevant, the Board shall, exercising its business judgment, determine whether to accept or reject the resignation, or whether other action should be taken. Within 90 days from the date of the certification of the stockholder vote, we will promptly publicly disclose the Board’s decision and process (including, if applicable, the reasons for rejecting the tendered resignation) in a Form 8-K filed with the SEC.
If a director’s resignation is not accepted by the Board, the director will continue to serve until the next annual meeting of stockholders or until his or her successor is duly elected and qualified, or his or her earlier resignation, removal, or inability to serve for any reason. If a director’s resignation is accepted by the Board, then the Board may fill the resulting vacancy or decrease the number of directors comprising the Board in accordance with our Bylaws.
We believe that each of our nominees possesses the experience, skills, characteristics and qualities to fully perform his or her duties as a director and to contribute to our success. In addition, each of our nominees is being nominated because they each possess the highest standards of personal integrity, are accomplished in their field, have an understanding of the interests and issues that are important to our stockholders, and are able to dedicate sufficient time to fulfilling their obligations as a director. Our nominees as a group complement each other and each other’s respective experiences, skills, characteristics and qualities. For an additional discussion of Contents
the nomination process, see “Nominee Qualifications and the Nomination Process” beginning on page 9 of this proxy statement. | | | | |
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TABLE OF CONTENTS
Proposal 1 – Election of Directors
The following sets forth certain information with respect to each nominee standing for re-election to the Board. The biographies of each of the nominees and directors contain information regarding the individual’s service as a director, business experience, and the qualifications, characteristics or skills that led to the conclusion that the individual should serve as our director.
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DAVID EINHORN Chairman AGE: 54 DIRECTOR SINCE: 2006 | | BACKGROUND: Mr. Einhorn has served as one of our directors since May 2006. Mr. Einhorn has co-founded, and has served as the President of Greenlight Capital, Inc., since January 1996. Funds managed by Greenlight are some of our principal stockholders. Mr. Einhorn serves as Chairman of Greenlight Capital Re, Ltd., a public reinsurance holding company (Nasdaq: GLRE). Mr. Einhorn received a Bachelor of Arts degree in Government from Cornell University. Skills & Qualifications: Mr. Einhorn, our Co-Founder, brings to the Board crucial investment expertise and business experience. |
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JAMES R. BRICKMAN Chief Executive Officer & Director AGE: 71 DIRECTOR SINCE: 2014 | | BACKGROUND: Mr. Brickman has served as one of our directors since October 2014. Previously, Mr. Brickman was the founding manager and advisor of each of JBGL Capital LP since 2008 and JBGL Builder Finance LLC since 2010 (collectively “JBGL”) and is our Chief Executive Officer. Prior to forming JBGL in 2008, Mr. Brickman was a manager of various joint ventures and limited partnerships that developed/built low and high-rise office buildings, multifamily and condominium homes and single family homes, entitled land, and supervised a property management company. He previously also served as Chairman and Chief Executive Officer of Princeton Homes Ltd. and Princeton Realty Corporation that developed land, constructed single family custom homes and managed apartments it built. Mr. Brickman has over 40 years’ experience in nearly all phases of real estate construction, development and real estate finance property management. He received a B.B.A. and M.B.A. from Southern Methodist University Skills & Qualifications: Mr. Brickman, our Co-Founder, brings to the Board substantial experience in residential land development, the homebuilding industry and management, as well as intimate knowledge of Green Brick’s business and operations. |
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Proposal 1 – Election of Directors
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ELIZABETH K. BLAKE INDEPENDENT AGE: 71 DIRECTOR SINCE: 2007 COMMITTEES: • Compensation • Governance & Sustainability (Chair) | | BACKGROUND: Ms. Blake has served as one of our directors since September 2007. Before retiring, Ms. Blake served as Senior Vice President — Advocacy, Government Affairs & General Counsel of Habitat for Humanity International Inc. from 2006 to 2014. Ms. Blake served on the board of directors of Patina Oil & Gas Corporation from 1998 through its sale to Noble Energy in 2005. From March 2003 to 2005, Ms. Blake was the Executive Vice President — Corporate Affairs, General Counsel and Corporate Secretary for US Airways Group, Inc. From April 2002 through December 2002, Ms. Blake served as Senior Vice President and General Counsel of Trizec Properties, Inc., a public real estate investment trust. Ms. Blake served as Vice President and General Counsel of General Electric Power Systems from 1998 to 2002. From 1996 to 1998, Ms. Blake served as Vice President and Chief of Staff of Cinergy Corp. From 1982 to 1984, she was an associate with Frost & Jacobs, a law firm in Cincinnati, Ohio, and a partner from 1984 to 1996. From 1977 to 1982, she was with the law firm of Davis Polk & Wardwell in New York. Ms. Blake received a Bachelor of Arts degree with honors from Smith College and her Juris Doctor from Columbia Law School, where she was a Harlan Fiske Stone Scholar. Ms. Blake was awarded an Honorary Doctorate of Technical Letters by Cincinnati Technical College and an Honorary Doctorate of Letters from the College of Mt. St. Joseph. She is past Chair of the Ohio Board of Regents. Skills & Qualifications: Ms. Blake brings to the Board extensive executive leadership, corporate governance expertise, and risk management knowledge through her experience as a director and executive of public, private, and non-profit corporations as well as her knowledge of the homebuilding industry. |
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HARRY BRANDLER INDEPENDENT AGE: 51 DIRECTOR SINCE: 2014 COMMITTEES: • Governance & Sustainability | | BACKGROUND: Mr. Brandler has served as one of our directors since October 2014. Before retiring, Mr. Brandler served as the Chief Financial Officer of Greenlight Capital, Inc. from December 2001 to January 2019. Prior to joining Greenlight Capital, Inc., from 2000 to 2001, Mr. Brandler served as Chief Financial Officer of Wheatley Partners, a venture capital firm, where he oversaw the firm’s back-office operations and restructured the firm’s marketing, client relations and technology. From 1996 to 2000, Mr. Brandler served as a Manager at Goldstein, Golub & Kessler, where he provided audit, tax and consulting services to investment partnerships and other financial organizations and where he was promoted to Manager in January 1999. Mr. Brandler received a B.S. in Accounting from New York University in 1993. Mr. Brandler was admitted as a Certified Public Accountant in New York in 1996. Skills & Qualifications: Mr. Brandler brings to the Board a unique understanding of our strategies and operations through nine years of service as a member of the Board and 23 years of finance, accounting and management experience. |
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iProposal 1 – Election of Directors
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LILA MANASSA MURPHY AGE: 51 DIRECTOR SINCE: 2022 COMMITTEES: • Audit | | BACKGROUND: Ms. Manassa Murphy has served as one of our directors since April 2022. Since May 2021, Ms. Lila Manassa Murphy has served as EVP and Chief Financial Officer of Dundee Corporation, a public Canadian independent holding company listed on the Toronto Stock Exchange, which is focused on holding and managing investments in the energy, natural resources, agriculture and real estate industries. Ms. Manassa Murphy previously served on the board and audit committee of Dundee Corporation, from August 2018 to March 2021. Ms. Manassa Murphy founded Intrinsic Value Partners, LLC in 2018, a provider of consulting services to asset management firms and family offices. Previously, she was Vice President and Portfolio Manager at Federated Hermes, Inc., a Fortune 500, ESG focused investment firm. Prior to that, Ms. Manassa Murphy worked as an Analyst at David W. Tice & Associates Inc. with a dedicated focus on natural resources investing. She has more than 25 years of diverse investment management experience. She sits on the board and finance committee of Sustainable Development Strategies Group, a US-based independent non-profit research institute advancing best practices for sustainable management of natural resources. Ms. Manassa Murphy currently serves as a director of Gold Resource Corporation, a NYSE listed company, and sits on its Audit Committee, its Safety, Sustainability & Technical Committee and chairs its Nominating and Governance Committee. Ms. Manassa Murphy is a member of the Latino Corporate Directors Association. Skills & Qualifications: Ms. Manassa Murphy brings to the Board experience and skills developed as a capital markets’ executive officer and Chief Financial Officer focused on real estate finance, while her work as a public company director provides her with a strong background in matters related to sustainability, finance, accounting, and risk assessment. |
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KATHLEEN OLSEN INDEPENDENT AGE: 51 DIRECTOR SINCE: 2014 COMMITTEES: • Audit (Chair) • Compensation • Governance &
Sustainability | | BACKGROUND: Ms. Olsen has served as one of our directors since October 2014. Since 2011, Ms. Olsen has been a private investor. From 1999 through 2011, Ms. Olsen served as Chief Financial Officer of Eminence Capital, LLC, a long/short global equity fund. From 1993 to 1999, Ms. Olsen served as audit manager, specializing in investment partnerships, at Anchin, Block & Anchin LLP, a public accounting firm located in New York City. Since 2021, Ms. Olsen has been an adjunct professor at Fordham Gabelli School of Business. Ms. Olsen received a Bachelor of Science degree with honors from the State University of New York at Albany. Ms. Olsen is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants. Skills & Qualifications: Ms. Olsen brings to the Board an extensive knowledge of accounting, audit, and finance in addition to broad executive leadership experience. |
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GREEN BRICK PARTNERS, INC. PROXY STATEMENT
VOTING INFORMATION
A proxyDirectors | | | | | | | | | | | | |
RICHARD S. PRESS LEAD INDEPENDENT DIRECTOR AGE: 84 DIRECTOR SINCE: 2014 COMMITTEES: • Audit • Compensation (Chair) • Insurance (Chair) | | BACKGROUND: Mr. Press has served as one of our directors since October 2014. Before retiring, Mr. Press was a Senior Vice President at Wellington Management from 1994 to 2006, where he started and built the firm’s insurance asset management practice. Prior to that, Mr. Press was a Senior Vice President of Stein Roe & Farnham from 1982 to 1994 and Scudder Stevens and Clark from 1964 to 1982. Mr. Press sat on various committees of the Controlled Risk Insurance Company of The Harvard Risk Management Foundation from 2006 to 2017. Previously, Mr. Press was Chairman of the Board of Anaesthesia Associates of Massachusetts, and served as a board member and chairman of each of Transatlantic Holdings (NYSE: TRH) from August 2006 to March 2012 and Pomeroy IT Solutions (NASDAQ: PMRY) from July 2007 to November 2009. He served as a board member of the Housing Authority Insurance Group from 2008 to 2015. He was a founding member of the Board of Governors and the Advisory Board of the National Pediatric Multiple Sclerosis Center, Stony Brook University and Medical School, New York (2001 – 2013). He is currently a director of Millwall Holdings PLC and Millwall Football Club. Mr. Press earned a B.A. from Brown University in 1960, and after serving in the US Army, he received his M.B.A. from Harvard Business School in 1964. Skills & Qualifications: Mr. Press brings to the Board an extensive background in finance, insurance and risk management, as well as public company board and committee experience. |
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Director Nomination Process
Nominee Qualifications and the Nomination Process
The Governance & Sustainability Committee believes that the Board should collectively possess a broad range of skills, knowledge, business experience and diversity of backgrounds that provides effective oversight of our business. The Board’s objective is solicited on behalfto maintain a diverse membership that can best further the success of our business and represent stockholder interests through the exercise of sound judgment using its diversity of experience and perspectives. The Governance & Sustainability Committee periodically assesses the characteristics, skills, background and expertise of the Board as a whole and its individual members to assess those traits against the developing needs of Directors (the “Board”)the Board and Green Brick. This assessment enables the Governance & Sustainability Committee to update the skills, characteristics and experience it seeks in the Board, as a whole and in individual directors, as our needs evolve over time. As a result of such periodic assessment, the Governance & Sustainability Committee evaluates current directors and potential director nominees and will recommend any changes to Board size or composition that it believes are necessary to create a balanced and effective Board. Green Brick Partners, Inc. (“Green Brick,”is committed to seeking diversity and balance among directors of race, gender, geography, thought, viewpoints, backgrounds, skills, experience, and expertise.
To the “Company,” “we,” “us”extent that the Governance & Sustainability Committee believes that specific skills, characteristics or “our”) for use at the Annual Meetingexperience needs to be heldadded to the Board, the committee initiates a search for a Board nominee, seeking input from board members and senior management. In addition, the Governance & Sustainability Committee has the authority to retain professional search firms to identify director candidates if deemed necessary or appropriate.
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Proposal 1 – Election of Directors
As a result of this annual review, the Governance & Sustainability Committee has approved the following matrix of skills and experiences that it believes would be beneficial to have represented on June 23, 2020, beginning at 10:00 a.m., Central Time, at our executive offices located at 2805 Dallas Parkway, Suite 400, Plano, TX 75093,Board based on our current operating requirements, business strategy, and at any adjournment(s) or postponement(s) thereof.
Who May Vote/Voting Rights
Stockholdersthe long-term interests of record of Green Brick’s common stock, par value $0.01 per share (“Common Stock”), at the close of business on April 28, 2020 (the “Record Date”) are entitled to receive the Notice of Annual Meeting and vote their shares at the meeting. A holder of Common Stock is entitled to one vote for each share of Common Stock held on the Record Date forour stockholders. The matrix also sets forth each of our directors and the proposalsskills that they bring to the Board (additional details are set forth herein. There is no cumulative voting.
On the Record Date, 50,616,922 sharesin their individual biographies beginning on page 6 of Common Stock were outstanding.
Proposals and Board Recommendations
At the Annual Meeting you will be asked to vote on the following three proposals. Our Board recommendation for each of these proposals is set forth below.
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Proposal | | SKILLS AND QUALIFICATIONS | | DAVID EINHORN | | JAMES R. BRICKMAN | | ELIZABETH K. BLAKE | | HARRY BRANDLER | | LILA MANASSA
MURPHY | | KATHLEEN OLSEN | | RICHARD S. PRESS |
| | INDUSTRY EXPERIENCE Experience in homebuilding, land development, real estate brokerage and sales and financing and banking in the real estate industry or in analyzing or consulting in these key areas enables our Board to understand key operational aspects of our homebuilding business and provide important perspective from their relevant expertise. | | 
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| | EXECUTIVE LEADERSHIP Experience in positions that require strategic vision, leadership and decision making enables our Board to provide sound business judgment, leadership and strategic vision. | |
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| | ACCOUNTING/FINANCE/
CAPITAL MARKETS Experience in accounting, finance or capital markets enables our Board to provide insight and guidance on financial reporting, internal controls and our capital structure and to evaluate our investment and capital raising and allocation strategies. | |
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| | LEGAL/REGULATORY/
CORPORATE GOVERNANCE Experience in legal, regulatory and corporate governance provides our Board an understanding of the regulatory environment in which we operate, especially with our new captive insurance company and assists in the evaluation of risk. | | | | | |
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| | RISK MANAGEMENT Experience in in overseeing risk management matters strengthens the Board’s oversight of the risks facing Green Brick. | |
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| | PUBLIC COMPANY DIRECTORSHIP Experience advising or serving on other public company boards enables our Board to have a solid background and the knowledge necessary to understand its oversight and governance roles. | |
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| | | | Board Recommendations |
Proposal 1: | | To elect seven directors to serve until our 2021 Annual Meeting of Stockholders.2023 Proxy Statement | | FOR each director nominee |
Proposal 2: | | To ratify the appointment of RSM US LLP as our independent registered public accounting firm for the 2020 fiscal year. | | FOR |
Proposal 3: | | To approve, on an advisory basis, the compensation of our named executive officers, which we refer to as “Say on Pay.” | | FOR |
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WeProposal 1 – Election of Directors
Stockholder Nominations of Director Candidates
Our Governance & Sustainability Committee welcomes candidates recommended by stockholders and, assuming a submission is in proper form as provided under our Bylaws, it will also consider other business that properly comes beforeapply the same standards described above to the evaluation of a stockholder nominee as it applies to all nominees, including those recommended by current directors, employees and others.
Our Bylaws permit an eligible stockholder or group of eligible stockholders of any size to nominate up to 25% of our board of directors for inclusion in our proxy statement if they have continuously owned at least 3% of our common stock for a minimum of three years. However, candidates who were previously nominated by stockholders for any of the two most recent annual meetings and who received less than 25% of the total votes cast at any of those annual meetings are not eligible to be nominated utilizing the proxy access provisions. Stockholders who wish to nominate directors for inclusion in our proxy statement or directly at an annual meeting, in accordance with Delaware law andthe procedures in our Amended and Restated Bylaws.
How You May Vote
You are entitled to vote at the meeting if you are a stockholder of record of Common Stock on the Record Date. You may vote in person at the meeting, by automated telephone voting, on the Internet or by proxy.
To ensure that your shares are represented and voted at the Annual Meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the Annual Meeting in person, using one of the following three methods:
•Submit a Proxy via the Internet. Go to the web address www.proxyvote.com andBylaws, should follow the instructions for submitting a proxy via the Internet shown on the proxy card sent to you. You should be aware that there may be incidental costs associated with electronic access, such as your usage charges from your Internet access providersunder “Stockholder Proposals and telephone companies, for which you will be responsible.
•Submit a Proxy by Telephone. Dial 1-800-690-6903 and follow the instructions for submitting a proxy by telephone shown on the proxy card sent to you.
•Submit a Proxy by Mail. If you do not wish to submit your proxy by the Internet or by telephone, please complete, sign, date and mail the enclosed proxy card in the envelope provided. If you submit a proxy via the Internet or by telephone, please do not mail your proxy card.
The Internet and telephone proxy submission procedures are designed to authenticate your identity and to allow you to submit a proxy for your shares for the matters before our stockholders as describedDirector Nominations” in this proxy statement and confirm that your voting instructions have been properly recorded.
Proxies submittedstatement.In considering any candidate proposed by telephone or viaa stockholder, the InternetGovernance & Sustainability Committee will reach a conclusion based on the Board’s established criteria. The Governance & Sustainability Committee may seek additional information regarding the candidate. After full consideration, the stockholder proponent will be notified of the decision of the Governance & Sustainability Committee. A stockholder who wishes to nominate a person for the matters beforeelection of directors must ensure that the nomination complies with our stockholdersBylaw provisions on making stockholder nominations at an annual meeting of stockholders.
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CORPORATE GOVERNANCE
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines, which are amended from time to time to incorporate certain current best practices in corporate governance. The 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, among other things:
the role of the lead director;
director responsibilities, qualifications, functions and tenure;
director orientation and continuing education;
management development and succession planning;
stockholder and other interested parties’ communications with the Board;
director compensation; and
annual Board and committee self-evaluations.
Our Corporate Governance Guidelines are available on our website at investors.greenbrickpartners.com by clicking on ESG and then Governance Documents.
Board Committees
Our Board has three standing committees: the Audit Committee, the Compensation Committee and the Governance & Sustainability Committee. Each of the Board’s standing committees operates under a written charter adopted by our Board that addresses the purpose, duties and responsibilities of the committee. Each standing committee reviews its charter at least annually and recommends charter changes to the Board as described in this proxy statement mustappropriate. During 2022, each of the Audit Committee, Compensation Committee, and Governance & Sustainability Committee revised its charter. A current copy of each standing committee charter can be receivedfound on our website at investors.greenbrickpartners.com by 11:59 p.m., Eastern Time,clicking on June 22, 2020, or such later time as may be established byESG and then Governance Documents.
In addition to our standing committees, the Board.
How You May Revoke or Change Your Vote
Your proxy may be revoked or changed at any time before its exercise if you:
◦deliver a signed, written revocation letter, dated later thanBoard has created an Insurance Committee whose responsibility is to oversee the proxy, tocreation and operation of Green Brick Partners, Inc., 2805 Dallas Parkway, Suite 400, Plano, TX 75093, Attention: Secretary;
◦deliver a signed proxy, dated later than’s captive insurance subsidiary.The table below sets forth the prior proxy,current directors appointed to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717;
◦vote again by telephone or on the Internet prior to the meeting; or
◦attend the meeting and give notice to the inspector of election that you intend to vote in person rather than by proxy. Your attendance at the meeting will not revoke your proxy unless you choose to vote in person.
If your shares are held in street name by a broker, bank, trust or other nominee, you must contact such organization and follow its procedures to revoke your proxy.
Attending the Annual Meeting and Voting in Person
If you plan to attend the Annual Meeting and vote in person, you will be given a ballot at the Annual Meeting. Please note that admission to the Annual Meeting is limited to our stockholders as of the Record Date.
For stockholders of record, upon your arrival at the meeting location, you will need to present identification to be admitted to the Annual Meeting. If you are a stockholder who is an individual, you will need to present government-issued identification showing your name and photograph (i.e., a driver’s license or passport), or, if you are representing an institutional investor, you will need to present government-issued photo identification and professional evidence showing your representative capacity for such entity. In each case, we will verify such documentation with our Record Date stockholder list.
For stockholders holding shares in the name of a broker, or beneficial owners, in addition to providing identification as outlined for record holders above, you will need a valid proxy from your broker, bank or other nominee or a recent brokerage statement or letter from your broker reflecting your stock ownership as of the Record Date. Otherwise, you will not be permitted to attend the Annual Meeting. If your shares are held in the name of a broker, bank or other nominee you must obtain and bring to the Annual Meeting a proxy card issued in your name from the broker, bank or other nominee to be able to vote at the Annual Meeting.
Difference between a Stockholder of Record and a Beneficial Owner
If your shares are registered in your name with Green Brick’s transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are considered the “stockholder of record” of those shares. In such case, the Notice of Annual Meeting and proxy statement and any accompanying documents have been provided directly to you by Green Brick.
If your shares are not registered in your own name and, instead, your broker, bank, trust or other nominee holds your shares, you are a “beneficial owner” of shares held in “street name.” The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. The Notice of Annual Meeting and proxy statement and any accompanying documents have been forwarded to you by your broker, bank, trust or other nominee. As the beneficial owner, you have the right to direct your broker, bank, trust or other nominee how to vote your shares by using the voting instruction card or by following their 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 such materials.
Vote Required for Approval
Election of Directors (Proposal 1). The election of the seven director nominees to hold office until the 2021 Annual Meeting of Stockholders and the due election and qualification of their respective successors, or such director nominee’s death, removal or resignation, will be determined by a plurality vote of the shares voting thereon, meaning the director nominee with
the most affirmative votes for a particular slot is elected for that slot. Our certificate of incorporation does not permit stockholders to cumulate their votes. If you submit a properly executed proxy to us the Company and the proxy indicates that you “WITHHELD” your vote for one or more of the director nominees, the shares subject to the proxy will not be voted for that director nominee or those director nominees and will be voted “FOR” the remaining director nominee(s), if any. Shares not represented at the meeting have no effect on the election of directors.
Ratification of Appointment of Independent Registered Public Accounting Firm for 2020 (Proposal 2). The affirmative vote of holders of at least a majority of the shares of Common Stock issued, present and voting at the Annual Meeting with respect to this proposal is required for the approval of this proposal. You may vote “FOR” or “AGAINST” or you may “ABSTAIN” from voting on Proposal 2. Shares not represented at the meeting and proxies marked “ABSTAIN” with regard to this proposal have no effect on this proposal.
Approval of Advisory Vote on Executive Compensation (Proposal 3). Notwithstanding the advisory nature of this proposal, the resolution to approve, on an advisory basis, the overall executive compensation policies and procedures employed by Green Brick for its named executive officers, will be deemed approved and passed, upon the affirmative vote of holders of at least a majority of the shares of Common Stock issued, present and voting at the Annual Meeting. You may vote “FOR” or “AGAINST” or you may “ABSTAIN” from voting on Proposal 3. Shares not represented at the meeting and proxies marked “ABSTAIN” have no effect on this proposal. While the outcome of the vote on this proposal will not be binding on the Board, the Board will review and consider the voting resultswhen determining future executive compensation decisions.
Voting Procedures
Quorum – The presence at the Annual Meeting of stockholders, in person or by proxy, representing a majority of the outstanding shares entitled to vote will constitute a quorum for the transaction of business at the meeting. In general, shares of Common Stock either represented in person at the meeting or by a properly signed and returned proxy card, or properly voted by telephone or on the Internet, will be counted as present and entitled to vote at the meeting for purposes of determining the existence of a quorum. Proxies received but marked as abstentions (or “withhold authority” with respect to one or more directors) and broker non-votes (as defined below) will be included in the voting power considered to be present at the meeting for purposes of determining a quorum.
Delivery of Proxy Without Selection – Proxies will be voted as specified by the stockholder. If you sign and return your proxy without making any selections, your shares will be voted (i) “FOR” each of the Board’s director nominees, (ii) “FOR” the ratification of RSM US LLP (“RSM”) as our independent registered public accounting firm for 2020 and (iii) “FOR” approval of the say on pay resolution. If other matters properly come before the meeting, James R. Brickman and Richard A. Costello will have the authority to vote on those matters for you at their discretion. As of the date of this proxy, we are not aware of any matters that will come before the meeting other than those disclosed in this proxy statement. If a nominee cannot or will
not serve as a director, the proxy may be voted for another person as Mr. Brickman or Mr. Costello decide.
What is a Broker Non-Vote and what is its Impact– If you are a beneficial owner, and your shares are held in the name of a broker, your broker may not use discretionary authority to vote your shares on any matter that is not considered to be a “routine” matter. A broker non-vote occurs when a nominee who holds shares for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has not received instructions from the owner of the shares. Broker non-votes are not counted as votes cast with respect to a matter on which the nominee has expressly not voted. Please vote your proxy so your vote can be counted.
The table below reflects whether a broker can use discretionary authority to vote your shares on the proposal and the impact of such broker non-vote on the outcome of such proposal.
committees: | | | | | | | | |
ProposalIndependent Director | Can Brokers Vote Absent Instructions? | Impact of Broker Non-VoteAudit
Committee | | Compensation
Committee | | Governance and
Sustainability
Committee | | Insurance
Committee |
Election of DirectorsElizabeth K. Blake | No | None | | Member | | Chair | | |
Ratification of RSM as AuditorHarry Brandler | Yes | Not Applicable | | | | Member | | |
Say on PayLila Manassa Murphy | No | NoneMember |
BOARD OF DIRECTORS AND GOVERNANCE
Board Structure and Composition
Our Amended and Restated Bylaws provide that the number of directors will be fixed from time to time pursuant to a resolution adopted by our Board of Directors (the “Board”). Our Board currently has seven members. Directors are elected by plurality vote of the shares voting thereon. If a vacancy occurs, including as a result of an increase in the authorized number of directors, the vacant directorship may be filled by the affirmative vote of a majority of the remaining directors. Each director holds office until the next annual stockholder meeting or until the due election and qualification of his or her successor, or until such director’s death, removal or resignation.
Our current Board is comprised of:
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Kathleen Olsen | | Chair | | Member | | Member | | |
Richard S. Press | | Member | | Chair | | | | Chair |
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David Einhorn | John R. Farris | Richard S. Press |
Harry Brandler | | |
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AUDIT COMMITTEE |
Members: Kathleen Olsen (Chair) Richard S. Press Lila Manassa Murphy Meetings in 2022: 5 | | Responsibilities The Audit Committee’s responsibilities include: • assist Board oversight of the accounting and financial reporting processes of Green Brick, the integrity of the financial statements, and the audits of the financial statements of Green Brick; • assist the Board oversight of the Company’s compliance with legal and regulatory requirements, including reviewing and overseeing the Company’s information and technology risks, including cybersecurity; • oversee the assessment of financial risk and financial risk management programs; • evaluate the independence, qualifications, and performance of the independent auditors; • engage and oversee the independent auditors; • oversee the integrity and adequacy of internal controls and the quality and adequacy of disclosures to stockholders; • oversee the performance of Green Brick’s internal audit function; and • perform all other duties required under the Charter, assigned by the Board or required by regulation or law. |
| | Independence and Financial Expertise The Board reviewed the background, experience and independence of the Audit Committee members and based on this review; the Board determined that each member of the Audit Committee: • meets the New York Stock Exchange (“NYSE”) listing standards and SEC requirements for independence with respect to audit committee members; and • is financially literate, knowledgeable and qualified to review financial statements. Ms. Olsen and Ms. Manassa Murphy have been determined to be “audit committee financial experts” as such term is defined in the rules and regulations of the SEC. |
| | The charter provides that a member of the Audit Committee shall not simultaneously serve on the audit committees of more than two other public companies. None of the members of our Audit Committee currently serve on the audit committees of more than two other public companies. |
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EachCorporate Governance
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COMPENSATION COMMITTEE |
Members: Richard S. Press (Chair) Kathleen Olsen Elizabeth K. Blake Meetings in 2022: 5 | | Responsibilities The Compensation Committee’s responsibilities include: • discharge the responsibilities of the Board relating to the compensation of Green Brick’s Chief Executive Officer and other executive officers; • review and approve corporate goals and objectives relevant to the compensation of Green Brick’s Chief Executive Officer and other executive officers; • oversee the administration of Green Brick’s compensation plans, including any incentive compensation and equity-based plans; • assist the Board in establishing and administering fair and equitable compensation policies and practices designed to enhance Company performance, retain key employees and align the interests of executive officers and other employees with the interests of the stockholders; • recommend to the Board compensation for directors; • oversee the competency, qualifications and performance of executive officers; • review, assess and make reports and recommendations to the Board as appropriate on succession planning with respect to the executive officers; • produce a report on executive compensation each year for inclusion in the proxy statement; and • perform all other duties required under the Charter, assigned by the Board or required by regulation or law. |
| | Independence The Board reviewed the background, experience and independence of the Compensation Committee members and based on this review, the Board determined that each member of the Compensation Committee is independent and a non-employee pursuant to: • NYSE listing standards; and • Rule 16b-3 of the Exchange Act. |
Compensation Committee Interlocks and Insider Participation
None of the Company’s current directors is seeking re-election at the Annual Meeting. Information about the nominees is set forth in “Proposal 1: Election of Directors” in this proxy statement.
Director Independence
Under the Nasdaq Listing Standards, independent directors are required to constitute a majoritymembers of the
Board. Our Board makesCompensation Committee were a
formal determination each year as to whichformer officer of the Company or was at any time during 2022 an officer or employee of our
Company. None of our executive officers serve as a member of the board of directors
or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee.Role of Compensation Consultants and Advisors.
Pursuant to its charter, the Compensation Committee has the authority, in its sole discretion, to engage the services of compensation consultants, legal counsel or other advisors as necessary and appropriate to assist the Compensation Committee in fulfilling its duties and responsibilities. For 2022, the Compensation Committee selected and retained Pearl Meyer, an independent compensation consulting firm.
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Corporate Governance
Pearl Meyer assisted with structuring the 2022 compensation program for our named executive officers (“NEO compensation program”). Pearl Meyer provided the Compensation Committee with an NEO compensation and peer benchmarking report and made recommendations regarding the structure of our NEO compensation program based on such report.
Pearl Meyer also assisted in benchmarking the Company’s non-employeedirector nominees are independent. compensation against the Company’s then-current peer group, and worked directly with the Compensation Committee to prepare a proposal for the 2023 compensation of the non-employee directors. Pearl Meyer did not provide additional services to the Company or its affiliates.
The Board hasCompensation Committee reviewed the independence of Pearl Meyer in light of the NYSE listing standards and the SEC rules and regulations and determined that the following directors work provided by Pearl Meyer during 2022 did not raise any conflicts of interest and that Pearl Meyer was independent.
Delegation of Authority
The Compensation Committee may delegate to Green Brick’s management the authority to administer incentive compensation and benefit plans provided for employees as it deems appropriate and to the extent permitted by applicable laws, rules, regulations and NYSE Listing Standards.
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GOVERNANCE & SUSTAINABILITY COMMITTEE |
Members: Elizabeth K. Blake
(Chair)
Harry Brandler Kathleen Olsen Meetings in 2022: 5 | | Responsibilities The Governance & Sustainability Committee’s responsibilities include: • identify, review the qualifications of, and recommend candidates for Board membership, consistent with criteria set forth in the charter; • determine the composition of the Board and its committees; • develop corporate governance guidelines for Green Brick and oversee compliance with them; • monitor Board and management effectiveness; • assist the Board in overseeing and monitoring Green Brick’s development and integration of material corporate governance, social and environmental strategies; and • perform all other duties required under the Charter, assigned by the Board, or required by regulation or law. |
| | Independence The Board reviewed the background, experience and independence of the Governance & Sustainability Committee members and based on this review, the Board determined that each member of the Governance & Sustainability Committee meets the independence requirements of the NYSE’s listing standards. |
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Corporate Governance
Committee Rotation Following the 2023 Annual Meeting
In order to bring a fresh perspective to each committee, the Governance & Sustainability Committee recommended that the Board approve a rotation of committee chairs and/or director nominees are independent withinmembers, and in April 2023, the meaningBoard approved such rotation. Following their respective re-election at the 2023 Annual Meeting, each of the Nasdaq Listing Standards: Elizabeth K. Blake, John R. Farris, Kathleen Olsen(1) Mses. Manassa Murphy and Richard S. Press.
In making its determination regarding the independence of Mr. Brandler, Ms. Olsen and Mr. Press will be appointed to the Board considered that each of these individuals has invested in limited partnership interests in funds managed by Greenlight Capital, Inc. or its affiliates. We refer to these fundsAudit Committee with Ms. Manassa Murphy serving as the “Greenlight Funds”. However, because none of these directors has received any compensation fromchair, (2) Mr. Brandler and Mses. Manassa Murphy and Blake will be appointed to the Greenlight Funds,Compensation Committee with Mr. Brandler serving as the Board has determined that such interests would not interferechair, and (3) Messrs. Brandler and Press and Mses. Blake and Olsen will be appointed to the Governance & Sustainability Committee with Mr. Press serving as the exercise of independent judgment in carrying out the responsibilities of such directors.
Board Meetings/Attendance at Annual Meeting
The Board held six (6) meetings in 2019. Each director attended at least 75 percent of the aggregate number of meetings of the Board and meetings of the committees on which the director served. Under our Corporate Governance Guidelines, directors are expected to attend Board meetings and meetings of committees on which they serve. Director attendance is not
required at annual meetings of stockholders. Three (3) members of the Board attended the 2019 Annual Meeting of Stockholders.
chair.Board Leadership Structure
The positions of Chairman and CEO are held by two different individuals. David Einhorn serves as the Company’sGreen Brick’s Chairman and James R. Brickman serves as the Company’sGreen Brick’s CEO. Separating these positions allows our CEO to focus on our day-to-day business and operations, while allowing our Chairman to lead the Board in its fundamental role of providing advice to and oversight of management. The Chairman provides leadership to our Board and works with the Board to define its structure and activities in the fulfillment of its responsibilities. The Chairman sets the board agendas, in consultation with our CEO and the other officers and directors, facilitates communications among and information flow to directors, has the power to call special meetings of our Board and stockholders, and presides at meetings of our Board and stockholders. The Chairman also advises and counsels our CEO and other officers. Pursuant to our Corporate Governance Guidelines, the non-employee directors and independent directors meet in executive session, without management present, at each of the regularly scheduled meetings of the Board, and at such other times as may be determined by a majority of the independent directors. In addition, at least once a year, only independent, non-employee directors shall meet in executive session. The Company doesA lead director, elected from time to time, may serve as the presiding director for all such meetings of the independent directors and at all meetings at which the Chairman is not currently havepresent. If there is a lead director and the lead director is not present at any such meeting, the other independent director.directors will select a presiding director for that meeting.
Meetings
During 2022, the Board met 5 times. Each director attended at least 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by each of the Board committees on which he or she served. Director attendance is not required at annual meetings of stockholders. One member of the Board attended the 2022 Annual Meeting of Stockholders.
All of our independent directors meet in executive session (without management present) during each quarterly scheduled Board meeting and at other times as they may deem necessary. Mr. Brandler presided over all executive sessions held in 2022.
Director Independence
Our Corporate Governance Guidelines require that a majority of our directors meet the standards for independence required by the NYSE listing standards. In addition, members of our Audit Committee must meet the independence standards for audit committee members adopted by the SEC. Members of the Audit Committee must also have no relationship with us that interferes with their exercise of independent judgment. Members of our Compensation Committee must meet the definition of “non-employee director” contained in Rule 16b-3 of the Exchange Act, and meet the independence requirements under the NYSE listing standards.
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Corporate Governance
Our Board makes a formal determination each year as to which of our directors and director nominees are independent. The Board has determined that the following directors or director nominees are independent within the meaning of the NYSE Listing Standards: Harry Brandler, Elizabeth K. Blake, Lila Manassa Murphy, Kathleen Olsen and Richard S. Press. In making its determination regarding the independence of Mr. Brandler, Ms. Olsen and Mr. Press, the Board considered that each of these individuals has invested in limited partnership interests in funds managed by Greenlight Capital, Inc. or its affiliates. We refer to these funds as the “Greenlight Funds.” However, because none of these investments are material, none of the directors have any rights with respect to the management of the Greenlight Funds, and none of the directors has received any compensation from the Greenlight Funds, the Board has determined that such interests would not interfere with the exercise of independent judgment in carrying out the responsibilities of such directors.
Board and Committee Self-Evaluations
Each year, our Board and its committees conduct self-evaluations to ensure they are performing effectively and to identify opportunities to improve overall Board, individual, and committee performance. The Governance & Sustainability Committee annually reviews the format and scope of our Board’s evaluation process considering general corporate governance developments and best practices and recommends changes it believes are appropriate. Once the format and content of the evaluation is approved, a Board and committee self-assessment is conducted under the oversight of the Governance & Sustainability Committee. The feedback received from the evaluations is discussed during a review session led by the Governance & Sustainability Committee and the individual committees, as appropriate.
Stock Ownership Guidelines
We recognize the importance of aligning our directors’ and management’s interests with those of our stockholders. As a result, the Board has established stock ownership guidelines for all of our directors and officers. Under these guidelines, directors and executive officers are expected to accumulate over a designated period, shares of common stock having a fair market value equal to the multiple of their annual cash retainer, in the case of directors, or base salary, in the case of executive officers, as shown in the table below.
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| Name | | Required Multiple | |
Chief Executive Officer | | | 3x | |
All Other NEOs | | | 2x | |
Directors | | | 5x | |
For purposes of calculating the stock ownership, we include all shares owned directly or indirectly, either because the individual has an economic interest in the shares or because the individual has the right to vote such shares, including (i) shares held by immediate family members residing in the individual’s household, (ii) shares beneficially owned in a trust or family limited partnership or similar estate planning vehicle, by immediate family members residing in the individual’s household, and (iii) any other shares that are beneficially owned that would be reportable for purposes of the stock ownership table in the Company’s proxy statement (excluding shares subject to a right to acquire such as unvested options, unvested restricted stock units or other unvested or unearned derivatives) or on Table 1 of Forms 3, 4 or 5 (as then promulgated pursuant to Section 16 of the Exchange Act). An executive or a director has five years to
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Corporate Governance
comply with our stock ownership guidelines. Until an executive or a director meets his or her required ownership, such executive or director shall retain one hundred percent (100%) of all net shares received from the settlement of restricted stock or restricted stock units under a Company incentive plan.
Risk Management
Board’s Role in Risk Oversight
The Governance and Nominating Committee is responsible for assisting the Board and its other committees that oversee specific risk-related issues and serves as a resource to management by overseeing the Company’s enterprise risk management function, including those related to information technology security.
The Governance and Nominating Committee meets periodically with key members of management to review the Company’s business and agree upon its strategy and the risks involved with such strategy. Management and the Governance and Nominating Committee discuss the amount of risk the Company is willing to accept related to implementing our strategy. On a periodic basis management meets directly with the Governance and Nominating Committee to provide an update on key risks and their processes and systems to manage the risks. The Governance and Nominating Committee reviews and approves management’s enterprise risk policies, procedures and practices and periodically reviews and reports to the Board (a) the magnitude of all material business risks, (b) the enterprise risk policies, procedures and practices in place to manage material risks and (c) the overall effectiveness of the risk management process.
The Board approves actions surrounding our capital structure, debt agreements, and legal settlements to the extent applicable, and approves the annual budget. Key finance and accounting management meet directly with the Board to provide an update on our financial results. The
Board regularly assesses management’s response to critical risks and recommends changes to management, including changes in leadership, where appropriate.
The Board delegates responsibility for overseeing certain financial risks to the Audit Committee. The Audit Committee monitors the quality and integrity of our financial statements and our compliance with legal and regulatory requirements. The Audit Committee is also responsible for understanding the Company’s financial risk assessment and risk management policies. The Audit Committee also reviews and approves the annual audit plan and regularly reports to the Board. For additional information with respect to the Audit Committee, see “Board of Directors and Governance — Board Committees — Audit Committee” in this proxy statement.
Board Committees
The Audit Committee, Compensation Committee and Governance and Nominating Committee have been established by the Board to comply with the applicable rules and regulations of the SEC and the Nasdaq Listing Standards. Each of our standing committees is comprised solely of independent directors. The table below sets forth the directors appointed to each of the committees:
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Independent Director | BOARD OF DIRECTORS Our Board is actively involved in the oversight and management of risks that could affect Green Brick. 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. Currently, the risk areas reported on to our Board on a regular basis relate to housing inventory and land supply, material and labor availability and costs, construction quality and warranty, our captive insurance company and other financial services business, human resources, legal (including regulatory and compliance issues), information technology (including cybersecurity), taxation and strategic investments. Our Board 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 the Audit Committee | Compensation Committee | Governance is to discuss and Nominating Committeereview policies with respect to risk assessment and risk management, including guidelines and policies governing risk assessment and risk management processes. |
Elizabeth K. Blake | | Member | Chair | | | |
John R. Farrisê | Member | | Member | ê | | | | ê | | | | ê |
Kathleen OlsenAUDIT | Chair | Member | Member | COMPENSATION | | | | GOVERNANCE & SUSTAINABILITY | | | | INSURANCE |
Richard S. PressOversees Risks related to: • Financial statements and financial reporting • Accounting and internal controls • Taxes and regulatory compliance • Internal ethics and compliance Programs • Information security and cybersecurity | Member | Chair | | Oversees Risks related to: • Compensation policies and practices • Talent development and retention • Management succession planning • Human Capital management, including diversity and inclusion | | | | Oversees Risks related to: • Corporate governance policies, including related party transactions • Environmental and sustainability policies • Public policy and corporate responsibility | | | | Oversees Risks related to: • Regulatory compliance, insurance strategy and structure, and investment policies and decisions of Green Brick’s captive insurance company |
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| ê | | | | ê | | | | ê | | | | ê |
| SENIOR MANAGEMENT |
Our senior management is responsible for assessing and managing Green Brick’s various exposures to risk on a daily basis, including the identification and management of risks through Green Brick’s robust enterprise risk management (“ERM”) process. Our ERM process provides us with a common framework to ensure consistency in identification, reporting and management of key risks. |
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Corporate Governance
Board Oversight of Strategy. One of the Board’s primary responsibilities is overseeing management’s establishment and execution of the Company’s strategy and the associated risks. The full Board oversees strategy and strategic risk through robust and constructive engagement with management, taking into consideration our key priorities, global trends impacting our business, regulatory developments, and disruptors in our businesses. The Board’s oversight of our strategy primarily occurs through deep-dive annual reviews of the Company’s long-term strategic plans. During these reviews, management provides the Board with its view of the key commercial and strategic risks faced by the Company, and the Board provides management with feedback on whether management has identified the key risks and is taking appropriate actions to mitigate risk. In addition to the annual deep-dive strategic review, because the Company’s strategic initiatives are subject to rapidly evolving business dynamics, the Board regularly receives updates on key strategic initiatives throughout the year to ensure progress is being made against goals, understand where adjustments or refinements to strategy may be appropriate and stay current on issues impacting the business.
Cybersecurity & Information Security Risk Management. Cybersecurity is an integral part of our overall ERM program. The Audit Committee
Independence – The Board has determined that each member oversees our cybersecurity and other information technology risks, controls, strategies and procedures. In addition, the Audit Committee periodically evaluates our information security strategies to ensure its effectiveness and, if appropriate, may also include a review from third-party experts. Our Vice President of IT reports to the Audit Committee as part of every regularly scheduled meeting of the Audit Committee is independent under the Nasdaq Listing Standards(or more frequently, as needed) regarding technological risk exposure and meets the enhanced independence standards for audit committee members required by the Nasdaq Listing Standards and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”).cybersecurity risk management strategy. In addition, our Board also may review and assess cybersecurity risks as part of its responsibilities for oversight of our broad ERM program.Our information security management systems are comprehensive and designed to drive our cybersecurity program. Our IT policies, procedures, controls, and risk assessments are based on the Board has determined that all membersCenter for Internet Security Cybersecurity Framework. The core functions of our framework aim to identify opportunities for improvement and risk mitigation. Key elements of our information security management systems include, among others:
Annual penetration testing
Adoption of an incident response plan
Employee email phishing campaigns
Email security monitoring
Realtime vulnerability scanning and intrusion detection
Employee cyber security awareness program
Real-time (offsite) backups of production systems
Regular audits & progress reports
Continuous improvement of the Audit Committee are financially literate under the Nasdaq Listing Standardsinformation security management system
We maintain a cyber incident response plan to timely, consistently, and Ms. Olsen has been determined to be an “audit committee financial expert” as such term is defined in the rulescompliantly address cybersecurity threats that may occur despite our safeguards. The response plan covers preparation, detection and regulations of the SEC.
Charter – The Audit Committee operates under a written charter adopted by the Board, which is evaluated annually. The charter of the Audit Committee is available in the Investors & Governance section of our website at www.greenbrickpartners.com. In accordance with its charter, the Audit Committee has responsibility for, among other things:
•retaining, compensating, overseeinganalysis, containment and terminating any registered public accounting firm in connection with the preparation or issuance of an audit report, and approving all audit services and any permissible non-audit services provided by the independent registered public accounting firm;
•receiving direct reports from any registered public accounting firm engaged to prepare or issue an audit report;
•reviewing and discussing annual audited and quarterly unaudited financial statements with management and the independent registered public accounting firm;
•reviewing with the independent registered public accounting firm any audit issues and management’s response;
•discussing earnings releases, financial information and earnings guidance provided to analysts and rating agencies;
•periodically meeting separately with management, internal auditors and the independent registered public accounting firm;
•establishing procedures to receive, retain and treat complaints regarding accounting, internal accounting controls or auditing matters and the confidential anonymous submission by employees of concerns regarding questionable accounting or auditing matters;
•obtaining and reviewing, at least annually, an independent registered public accounting firm report describing the independent registered public accounting firm internal quality-control procedures and any material issues raised by the most recent internal quality-control review of the independent registered public accounting firm or any inquiry by governmental authorities;
•approving and recommending to the Board the hiring of any employees or former employees of the independent registered public accounting firm;
•retaining independent counsel and other outside advisors, including experts in the area of accounting, as it determines necessary to carry out its duties; and
•reporting regularly to the full Board with respect to any issues raised by the foregoing.
The Audit Committee held four (4) meetings in 2019. For additional information regarding the responsibilities of the Audit Committee, see “Board of Directors and Governance — Board’s Role in Risk Oversight” in this proxy statement.
Compensation Committee
Independence – The Board has determined that each member of the Compensation Committee is independent under the Nasdaq Listing Standards and meets the enhanced independence standards for compensation committee members required by the Nasdaq Listing Standards.
Charter – The Compensation Committee operates under a written charter adopted by the Board, which is available in the Investors & Governance section of our website at
www.greenbrickpartners.com. In accordance with its charter, the Compensation Committee has responsibility for, among other things:
•reviewing key employee compensation policies, plans and programs;
•reviewing and approving the compensation of the Chief Executive Officer and other executive officers of the Company and its subsidiaries;
•reviewing and approving any employment contracts or similar arrangements between the Company and any executive officer of the Company;
•reviewing and consulting with the Chairman and Chief Executive Officer of the Company concerning performance of individual executives and related matters;
•reviewing and making recommendations to the Board regarding director compensation; and
•administering the Company’s stock plans, incentive compensation plans and other similar plans that the Boardinvestigation, notification (which may from time to time adopt and exercising all the powers, duties and responsibilities of the Board with respect to the plans.
The Compensation Committee held four (4) meetings in 2019.
Governance and Nominating Committee
Independence – The Board has determined that each member of the Compensation Committee is independent under the Nasdaq Listing Standards.
Charter – The Governance and Nominating Committee operates under a written charter adopted by the Board, which is available in the Investors & Governance section of our website at www.greenbrickpartners.com. The Governance and Nominating Committee has responsibility for, among other things:
•recommending to the Board proposed nominees for election to the Board by the stockholders at annual meetings, including an annual review as to the re-nominations of incumbents and proposed nominees for election by the Board to fill vacancies that occur between stockholder meetings;
•reviewing and approving or ratifying related party transactions under the Company’s Related Party Policy;
•making recommendations to the Board regarding corporate governance matters and practices; and
•assisting the Board and its other committees that oversee specific risk-related issues and serving as a resource to management by overseeing the Company’s enterprise risk management function, including risks related to information technology security.
The Governance and Nominating Committee held four (4) meetings in 2019.
Communications with the Board
Stockholders or other interested parties may communicate with one or more members of the Board by writing to the Board or a specific director at:
Board of Directors (or specific director)
Green Brick Partners, Inc.
2805 Dallas Parkway, Suite 400
Plano, TX 75093
Communications addressed to individual Board members will be forwarded by the Secretary to the individual addressee. Any communications addressed to the Board will be forwarded by the Secretary to the Chairman of the Board.
Stockholder Recommendations for Director Candidates and Director Qualifications
Directors are nominated by the Governance and Nominating Committee of the Board, or by the entire Board acting as such. Stockholders can suggest qualified candidates for director by giving writteninclude timely notice to our Secretary at Green Brick Partners, Inc.Board if deemed material or appropriate), 2805 Dallas Parkway, Suite 400, Plano, TX 75093.eradication and recovery, and incident closure and post-incident analysis. We retain a third-party cyber security firm to leverage in the event of a cyber security incident. Our response planning is reviewed annually and kept up to date. The notice should include the name and qualificationsscope of the candidate and any supporting material the stockholder feelsthis plan is appropriate. In considering any candidate proposed by a stockholder, the Governance and Nominating Committee will reach a conclusion based on the Board’s established criteria. The Governance and Nominating Committee may seek additional information regarding the candidate. After full consideration, the stockholder proponent will be notified of the decision of the Governance and Nominating Committee.
Although there are no minimum qualifications for nominees, the charter of the Governance and Nominating Committee requires that the Governance and Nominating Committee select nominees to become directors based on an assessment of the fulfillment of necessary independence requirements for the composition of the Board; the highest ethical standards and integrity; a willingness to act on and be accountable for Board decisions; an ability to provide wise, informed and thoughtful counsel to top management on a range of issues; and individual backgrounds that provide a diverse portfolio of experience and knowledge commensurate with the Company’s needs. Although no formal policy currently exists, the Governance and Nominating Committee seeks to promote through the nomination process an appropriate diversity of experience, expertise, education, perspective, age, gender and ethnicity,enterprise-wide and includes such diversity considerations when appropriate in connectionour business units and subsidiaries. We work with potential nominees.
A stockholder who wishesthird-party industry experts to
nominate a person for the election of directors must ensure that the nomination complies with our Bylaw provisions on making stockholder nominations at an annual meeting of stockholders. For information regarding stockholder proposals for our 2021 Annual Meeting of Stockholders, see the section entitled “Other Matters — Stockholder Proposals for the 2021 Annual Meeting” in this proxy statement.conduct regular vulnerability assessments and penetration testing. | | | | |
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OtherCorporate Governance
Additional Corporate Governance Matters
Corporate Governance Guidelines. The Board has voluntarily adopted Corporate Governance Guidelines. Our Corporate Governance Guidelines describe our corporate governance practices and policies and provide a framework for our Board governance. Corporate Governance Guidelines are available in the Investors & Governance section of our website at www.greenbrickpartners.com.
PoliciesCode of Business Conduct and Ethics
. The Company has adopted aAll of our employees, officers (including our principal executive, financial and accounting officers) and directors are held accountable for adherence to our Code of Business Conduct and Ethics that applies to our directors and to all of our employees, including the Chief Executive Officer and the Chief Financial Officer. This (“Code of BusinessConduct”). Our Code of Conduct is designed to help us meet our responsibility of conducting our business in compliance with laws and Ethicsgood ethical practice. Our Code of Conduct is postedavailable on our website at www.greenbrickpartners.com.investors.greenbrickpartners.com by clicking on ESG and then Governance Documents. Any waivers of, or amendments to, our Code of Business Conduct and Ethics will be posted on our website and reported as required by the SEC.
Vendor Code of Conduct. We have adopted a Vendor Code of Conduct outlining our standards and expectations of our suppliers and other business partners, which can also be found at investors.greenbrickpartners.com by clicking on ESG and then Governance Documents. The Vendor Code of Conduct outlines our expectation that our business partners, suppliers, vendors, and contractors demonstrate the highest standards of business conduct, integrity and adherence to the law. We also expect our vendors to follow best industry practices so that our homes are built in a manner that meets or exceeds the expectations of Green Brick and our customers. The Vendor Code of Conduct provides specific guidance regarding vendor’s responsibility to comply with all applicable laws and regulations and to have policies ensuring such compliance, their duty to escalate concerns, handle information properly and maintain accurate records, address potential conflicts of interest, and operate responsibly and in compliance with all anti-corruption, environmental, health and safety, social and human rights, child-labor, anti-slavery and other relevant laws.
Related Person Transaction Approval Policy
The Company. Green Brick has adopted a written policy for the review, approval and ratification of transactions with related persons. The policy covers related party transactions between us and any of our senior managersofficers and directors or their respective affiliates, director nominees, 5% or greater security holders or family members of any of the foregoing. Related party transactions covered by this policy are reviewed by our Governance and Nominating& Sustainability Committee to determine whether the transaction is in our best interests and the best interests of our stockholders. As a result, approval of related party business will be denied if, among other factors, it is determined that the proposed transaction is not fair and reasonable and on terms no less favorable to Green Brick than could be obtained in a comparable arms-length transaction with an unrelated third party.
All directors must recuse themselves from any discussion or decision affecting their personal, business or professional interests. All related person transactions will be disclosed in our applicable SEC filings as required under SEC rules.Transactions with Related Persons
Since January 1, 2019,. During 2022, Green Brick held a 90% membership interest and a 90% voting interest in CLH20, LLC (“CLH20”), the Company had related party transactions through the normal courseowner of business. These transactions include the following:
In 2012, we formed Centre Living Homes, LLC (“Centre Living”), a builder that focuses on
luxurysingle family residences and townhomes in the Dallas
Texasmetroplex market.
Trevor Brickman, the sonThe remaining 10% of
Green Brick’s Chief Executive Officer, is the President of Centre Living. From January 1, 2015 until December 31, 2019, Trevor Brickman’s ownership interest was 50% and Green Brick had 51% voting control over the operations of Centre Living. Effective December 31, 2019, we, through our wholly owned subsidiary, CLH20, LLC (“CLH20”), acquired the remaining membership and voting interests in
our subsidiary,CLH20 is held by Trevor Brickman, President of Centre Living and
son of our CEO, James R. Brickman.Insider Trading, Anti-Pledging Policy and Anti-Hedging Policy. Our Insider Trading Policy prohibits all directors, officers and employees from engaging in transactions in our common stock while in possession of material non-public information and restricts directors, officers and other “designated insiders” from engaging in most transactions involving our common stock during periods, for which we contributedhave determined those individuals are most likely to be aware of material, non-public information. Our Insider Trading Policy also prohibits any officer or director from entering into any transaction that has the effect of hedging or locking in the value of his or her stock holdings, such as zero-cost collars and
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Corporate Governance
forward sale contracts. Additionally, our Insider Trading Policy prohibits any officer, director or employee from, directly or indirectly, engaging in “short sales” of our common stock.
Our Insider Trading Policy prohibits pledging of our common stock as collateral for loans. In limited circumstances, however, the Board may approve an exception to this prohibition to an entity having 10% or more beneficial ownership of our common stock where the entity is able to clearly demonstrate the financial ability to repay the loan without resorting to the pledged securities. Our majority stockholder is a family of investment entities which holds certain real estate inventory assetsportfolio securities in margin accounts as part of its portfolio management. Our Board evaluated the ability of our majority stockholder to CLH20. Subsequently, Trevor Brickman, asrepay any leverage related to the prior owner of a portionmargin accounts. Mr. Einhorn does not pledge any of the membershipshares that are held by him individually.
Sustainability and voting interestsCorporate Responsibility
Management and Board Oversight
As we have progressed in Center Living, acquiredour approach to sustainability and corporate responsibility, our governance and oversight structure has also evolved. The Governance & Sustainability Committee has been assigned by the Board to provide oversight of our policies and programs related to corporate governance, environmental and social matters. This committee is also responsible for reviewing with management strategies, policies, programs, and practices relating to sustainability strategy and performance, including material environmental, social, and governance trends and related long and short-term Company impacts, as well as Green Brick’s public reporting on these topics in furtherance of Green Brick’s business, strategy, values, and purpose and provide recommendations to the Board as appropriate.
Commitments to Sustainability
As one of the fastest growing public companies in the country, we take very seriously our responsibility to grow in a ten percent membershipsustainable way that minimizes our impact on the environment.
Responsible Land Development
From site selection to design and voting interestdevelopment, our land strategy is rooted in CLH20responsibility. We conduct rigorous environmental impact studies and develop each neighborhood with sustainability in mind. This includes implementing stormwater management measures, earthwork strategies to minimize slope and soil disturbance, and making all efforts to rehome wildlife and protect the natural landscape.
Sustainable Homeownership
We strive to continuously improve the energy performance of our homes as we believe it is the most significant way that we can contribute to reducing carbon emissions. In 2022, we made significant progress in having many of our homes being designated as Energy Star® Certified, which means the home has met the energy efficiency requirements for $3.6 million. Asthis designation as set forth by the U.S. Environmental Protection Agency. We believe doing so will empower our purchasing and construction teams with the knowledge required to exceed expectations. In 2023, we intend to continue expanding on this commitment and growing our library of Energy Star® Certified homes.
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Corporate Governance
Many of our homebuilders partner with some of the most reputable manufacturers of cutting-edge, energy-efficient products to give our homebuyers a result,quality home that will not only stand the test of time, but deliver significant savings for years to come. For example, we are pleased to note that almost all of our homes now utilize LED lighting, which uses approximately 75% less energy and lasts up to 25 times longer than incandescent lighting.
Other areas of sustainable building practices we have focused on this past year include a streamlined construction approach utilized prefabricated trusses and pre-cut lumber, high-efficiency construction using spray foam insulation, low flow fixtures, and double pane insulated windows, and providing Energy Star® rated appliances in our homes.
Waste and Water Reduction
In 2022, we continued to implement strategies that would increase our operational efficiencies and minimize waste and our impact on the environment. We also install tankless water heaters in many of our homes, which are typically 20-30% more efficient than traditional 50-gallon water heater tanks. Our teams are consistently challenged to optimize our plan library and identify the most efficient ways to build our homes.
Our People
Our commitment to attracting and retaining the top talent across all departments begins and ends with creating a work environment that fosters inclusivity and empowers each of our team members to reach their full potential. A robust system of programs aimed at ensuring the health, well-being, and personal and professional development of our team coupled with community engagement and philanthropy ensures that we remain focused on what matters most – our employees and serving the communities where we build. In addition to a comprehensive medical, vision, and dental benefits package, employees are eligible to participate in our 401K program and have access to generous fitness and tuition reimbursement policies.
Health and Safety
Green Brick is committed to providing all employees and others who are on Company property with a safe and secure environment. Accordingly, all personnel will comply with all health and safety laws and regulations, as well as Green Brick policies governing health and safety. All personnel are responsible for immediately reporting accidents, injuries and unsafe equipment, practices or conditions to a supervisor or Green Brick officer.
Diversity and Inclusion
We respect the value that diverse life experiences bring to our team, from part time associates all the way to our Board of December 31, 2019, CLH20 wasDirectors, of which 60% of our independent directors are women and one is Hispanic. Investing in our employees is a top priority and we continually strive to provide an indirect subsidiaryenvironment that promotes learning, growth, and development to maximize our people’s potential. We always seek to attract, develop and retain the most qualified people for all our positions while focusing on embedding diversity inclusion to build a unique blend of cultures, backgrounds, skills and beliefs that mirror the world in which the Company owned a ninety percent membership interest and a ninety percent voting interest. During 2019, compensation paid to Trevor Brickman totaled approximately $160,000.
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TableCorporate Governance
Governance
Our values of Contents
HOME – Honesty, Objectivity, Maturity, and Efficiency – are intimately linked to our outlook on operating responsibly. We believe that through our values we can maintain policies and procedures that support ethical business practices, sound governance, and adherence to all regulatory requirements that result in promoting our stockholder, employee, and community interests.We are committed to operating our Company with integrity and the highest ethical standards, including comprehensive governance structures and practices that meet or exceed the requirements of applicable laws, regulations, and rules, including the NYSE’s listing standards.
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In March 2016, we purchased undeveloped land for an 83-lot community, Academy Street in Atlanta. Simultaneously, we entered into a partnership agreement with an entity affiliated with the president of The Providence Group of Georgia, LLC (“TPG”) to develop the community for sale of the lots to TPG under GRBK Academy LLC. Capital contributions, capital distributions and profits were shared 80% for us and 20% for the affiliated entity. As of December 31, 2019, the total capital contributions were $11.7 million. As of December 31, 2019, the total capital distributions paid from the partnership were $14.8 million. In 2018 the affiliated entity ceased its activity.
In March 2016, we purchased undeveloped land for a 73-unit townhome community, Suwanee Station in Atlanta. Simultaneously, we entered into a partnership agreement with an entity affiliated with the president of TPG to develop the land to sell the lots to TPG under GRBK Suwanee Station LLC. Capital contributions, capital distributions and profits were shared 50% for us and 50% for the affiliated entity. As of December 31, 2019, the total capital contributions were $2.5 million. As of December 31, 2019, total capital distributions paid from the partnership were $3.3 million. In 2019 the affiliated entity ceased its activity.
GRBK GHO Homes, LLC (“GRBK GHO”) leases office space from entities affiliated with the president of GRBK GHO. During the year ended December 31, 2019, GRBK GHO incurred a lease cost of $0.1 million under such lease agreements. As of December 31, 2019, there were no amounts due to the affiliated entities related to such lease agreements. In addition, GRBK GHO receives title closing services on the purchase of land and third-party lots from an entity affiliated with the president of GRBK GHO. During the year ended December 31, 2019, GRBK GHO incurred de minimus fees related to such title closing services. As of December 31, 2019, no amounts were due to the title company affiliate.
2022 Compensation
Annual Retainer
Cash Retainer.For the first quarter of 2019, all non-employee2022, our independent directors, other than our Chairman, received compensation based on an annual cash retainer of $100,000 that is paid quarterly in arrears. For 2022, our Chairman’s compensation package consisted of an annual cash retainer equal to $140,000. The annual retainer was allocated 50% to cash ($70,000) and 50% to shares of restricted Common Stock ($70,000). In March 2019, the Board increased the annual retainer for all non-employee directors, other than to Mr. Einhorn, to $170,000. The cash portion of the annual retainer increased to $80,000, effective April 1, 2019, paid quarterly in arrears, and the non-cash portion was increased to $90,000 in shares of restricted Common Stock, effective upon reelection to the Board.$125,000. Each independent director, except our Chairman, has the option prior to the annual meeting to elect to receive all or a portion of his or her cash compensation payable during the year to beretainer in the form of shares of restricted Common Stock. The option to elect all orstock.Annual Equity Grant. For 2022, each independent director received an award of restricted stock with an aggregate grant date value of $110,000, calculated at the fair market value as defined in the plan. As a portionresult, on June 7, 2022, each independent director received an award of their compensation payable during the year must be made by December 31
st immediately preceding the next annual meeting. To the extent a director elects to receive4,544 shares of restricted Common Stockstock for the annual equity retainer. In addition, Ms. Blake elected to receive all of her cash retainer in shares of restricted stock. Each of these restricted stock awards, including the equity received in lieu of cash, such restricted stock is grantedwill vest on the annual meeting date upon the director’s election and vests on the earlier of the first anniversary of the grant date or the date of the Company’s next annual meeting of stockholders, provided that the director is then serving on the Board. If the director’s service terminates prior to the vesting date due to death, the shares of restricted Common Stock will become fully vested on the date of the director’s death. Mr. Brandler, who previously served as the Chief Financial Officer of Greenlight Capital, Inc. from December 2001 to January 2019, received cash compensation based on annual retainer rate of $50,000 through the first quarter 2019. Commencing second quarter 2019, Mr. Brandler was compensated on the same basis as all of our other non-employee independent directors. For 2019, Mr. Einhorn received an annual cash retainer equal to $50,000 and did not receive any equity.
Board Committee Fees
During 2019, each of the Board committee chairs received an additional annual committee chair retainer of $20,000, $10,000 and $10,000 for the Audit Committee, Compensation Committee and Governance and Nominating Committee, respectively, payable quarterly.
2019 Director Compensation
The following table sets forth information regarding the compensation of our directors for 2019.
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| Name | | Fees Earned or Paid in Cash ($)(1) | | Stock Awards ($)(2) | | Total ($) | |
| David Einhorn | | 50,000 | | - | | 50,000 | |
James R. Brickman(3) | | - | | - | | - | |
Elizabeth K. Blake (4) | | 1,426 | | 179,199 | | 180,625 | |
| Harry Brandler | | 72,509 | | 89,595 | | 154,604 | |
| John R. Farris | | 77,509 | | 89,595 | | 164,604 | |
Kathleen Olsen(5) | | 97,509 | | 89,595 | | 184,604 | |
Richard S. Press(6) | | 71,842 | | 89,595 | | 148,937 | |
(1)Amount reflects the amount of annual retainer paid in cash and the cash received in lieu of partial shares for the equity portion of the annual retainer. As discussed above, directors may elect to receive shares of restricted Common Stock in lieu of the cash portion of the annual retainer.
(2)On May 22, 2019, each of our non-employee directors, other than Mr. Einhorn, was awarded shares of restricted Common Stock to pursuant to the 2014 Equity Plan. The restricted stock awards become fully vested on the earlier to occur of (i) the first anniversary of the grant date, or (ii) the date of our 20202023 Annual Meeting. IfMeeting, provided that the director’s service terminates priordirector is then serving on the Board.Committee Chair Fees. For 2022, each of the Board committee chairs were entitled to an additional annualcommittee chair retainer of $20,000 for the Audit Committee and Insurance Committee and $10,000 for the Compensation Committee and Governance and Sustainability Committee, payablequarterly in arrears.
2023 Compensation.
In 2022, upon consultation with its independent compensation consultant, the Compensation Committee reviewed our non-employee director compensation policies based on benchmark information from our then-current peer companies. Based on such review, the Compensation Committee recommended, and the Board approved, the following changes to the vesting date due to death,2023 board compensation:
annual cash retainer remained the same at $100,000, paid quarterly in arrears;
annual equity grant of shares of restricted Common Stock will become fully vested onstock increased to $140,000, and the grant date was changed to March to be aligned with the date that the named executive officers receive equity awards;
Chairman’s annual cash retainer was increased to $150,000; however, he will still not receive an equity award; and
| • | Committee chair fees were increased as follows: Audit Committee was increased to $25,000; Compensation Committee increased to $20,000; and Governance and Sustainability Committee was increased to $20,000, while the Insurance Committee chair fee remained at $20,000. |
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Director Compensation
2022 Director Compensation Table
The following table sets forth information regarding the compensation of the director’s death. The grant date fair value of the restricted stock awardsour non-employee directors for 2022. Mr. Brickman, our Chief Executive Officer, is included inomitted from the table in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions regarding the restricted stock unit awards and the option awards, refer to Note 9 to our financial statements for the year ended December 31, 2019, which are included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC. As of December 31, 2019, these were the only outstanding equity awards held by our non-employee directors.
(3)As an employee of the Company, Mr. Brickmanas he does not receive any additional compensation for his serviceservices as a director.
(4)Ms. Blake elected to receive the cash portion of her annual retainer in shares. As deferral elections can only be made annually, cash received reflects the portion of the increased annual retainer which was not deferred. Includes $10,000 for her service as Chair of the Governance and Nominating Committee.
(5)Includes $20,000 for her service as Chair of the Audit Committee.
(6) For more information on Mr. Press elected to receive a portion of his 2018-2019 annual retainer in shares of restricted Common Stock, which was awarded in May 2018 and fully vested at the 2019 Annual Meeting. Amount includes $10,000 for his service as Chair of the Compensation Committee.
PROPOSAL 1: ELECTION OF DIRECTORS
Director Nominees — Qualifications and Background
The following individuals are nominated as directors for terms expiring at the 2021 Annual Meeting of Stockholders: David Einhorn, James R. Brickman, Elizabeth K. Blake, Harry Brandler, John R. Farris, Kathleen Olsen and Richard S. Press. Each of these individuals is currently serving as a director of the Company. Each of the nominees has consented to being named in this proxy statement and to serve as a director if elected. Each nominee elected as a director will continue in office until the 2021 Annual Meeting of Stockholders and the due election and qualification of their respective successors, or such nominee’s death, removal or resignation. If any nominee is unable to serve, proxies will be voted in favor of the remaining nominees and may be voted for another person nominated by the Board. In making its recommendation to the Board for a slate of directors for election by the Company’s stockholders, the Governance and Nominating Committee considered the criteria described in “Board of Directors and Governance — Stockholder Recommendations for Director Candidates and Director Qualifications” in this proxy statement. The biographies of each of the director nominees below contain information regarding age, the year they first became directors, business experience, other public company directorships held currently or at any time during the last five years, involvement in certain legal or administrative proceedings, if applicable, and the experience, qualifications, attributes or skills that caused the Governance and Nominating Committee to determine that they should serve as directors of the Company.
David Einhorn — Mr. Einhorn, age 51, has served as one of our directors since May 2006. Since 1996, Mr. Einhorn has been the President of Greenlight Capital, Inc., which along with its affiliates is investment advisor to our principal stockholders. Mr. Einhorn serves as Chairman of Greenlight Capital Re, Ltd., a public reinsurance holding company (Nasdaq: GLRE). Mr. Einhorn received a Bachelor of Arts degree in Government from Cornell University.
The Board has nominated Mr. Einhorn because he provides the Board with crucial investment expertise and business experience.
James R. Brickman — Mr. Brickman, age 68, has served as one of our directors since October 2014, was the founding manager and advisor of each of JBGL Capital LP since 2008 and JBGL Builder Finance LLC since 2010 (collectively “JBGL”), and is our Chief Executive Officer. Prior to forming JBGL in 2008, Mr. Brickman was a manager of various joint ventures and limited partnerships that developed/built low and high-rise office buildings, multifamily and condominium homes, single family homes, entitled land and supervised a property management company. He previously also served as Chairman and Chief Executive Officer of Princeton Homes Ltd. and Princeton Realty Corporation that developed land, constructed single family custom homes and managed apartments it built. Mr. Brickman has over 40 years’ experience in nearly all phases of real estate construction, development and real estate finance property management. He received a B.B.A. and M.B.A. from Southern Methodist University.
The Board has nominated Mr. Brickman because of his substantial experience in residential land development, the homebuilding industry and management, as well as intimate knowledge of the Company’s business and operations.
Elizabeth K. Blake — Ms. Blake, age 68, has served as one of our directors since September 2007. Before retiring, Ms. Blake served as Senior Vice President — Advocacy, Government Affairs & General Counsel of Habitat For Humanity International Inc. from 2006 to 2014. Ms. Blake served on the board of directors of Patina Oil & Gas Corporation from 1998 through its sale to Noble Energy in 2005. From March 2003 to 2005, Ms. Blake was the Executive Vice President — Corporate Affairs, General Counsel and Corporate Secretary for US Airways Group, Inc. From April 2002 through December 2002, Ms. Blake served as Senior Vice President and General Counsel of Trizec Properties, Inc., a public real estate investment trust. Ms. Blake served as Vice President and General Counsel of General Electric Power Systems from 1998 to 2002. From 1996 to 1998, Ms. Blake served as Vice President and Chief of Staff of Cinergy Corp. Ms. Blake received a Bachelor of Arts degree with honors from Smith College and her Juris Doctor from Columbia Law School, where she was a Harlan Fiske Stone Scholar. Ms. Blake was awarded an Honorary Doctorate of Technical Letters by Cincinnati Technical College and an Honorary Doctorate of Letters from the College of Mt. St. Joseph. From 1982 to 1984, she was an associate with Frost & Jacobs, a law firm in Cincinnati, Ohio and a partner from 1984 to 1996. From 1977 to 1982, she was with the law firm of Davis Polk & Wardwell in New York. She is past Chair of the Ohio Board of Regents.
The Board has nominated Ms. Blake because she provides the Board with extensive executive, managerial and leadership and corporate governance and risk management experience, her experience as a director of public, private and non-profit corporations and her knowledge of the homebuilding industry.
Harry Brandler — Mr. Brandler, age 48, has served as one of our directors since October 2014. Before retiring, Mr. Brandler served as the Chief Financial Officer of Greenlight Capital, Inc. from December 2001 to January 2019. Prior to joining Greenlight Capital, Inc., from 2000 to 2001, Mr. Brandler served as Chief Financial Officer of Wheatley Partners, a venture capital firm, where he oversaw the firm’s back office operations and restructured the firm’s marketing, client relations and technology. From 1996 to 2000, Mr. Brandler served as a Manager at Goldstein, Golub & Kessler, where he provided audit, tax and consulting services to investment partnerships and other financial organizations and where he was promoted to Manager in January 1999. Mr. Brandler received a B.S. in Accounting from New York University in 1993. Mr. Brandler was admitted as a Certified Public Accountant in New York in 1996.
The Board has nominated Mr. Brandler because of his substantial knowledge and experience in the areas of finance, accounting and management.
John R. Farris — Mr. Farris, age 47, has served as one of our directors since October 2014. Since 2007, Mr. Farris has been the founder and President of Commonwealth Economics, LLC. Prior to forming Commonwealth Economics, LLC, from 2006 to 2007, Mr. Farris served as Secretary of the Finance and Administration Cabinet for the Commonwealth of Kentucky. From 2008 to 2012, Mr. Farris served as an adjunct Professor of Economics and Finance at Centre College in Danville, Kentucky. Mr. Farris previously worked at the Center for Economics
Research at the Research Triangle Institute, the World Bank and the International Finance Corporation. He currently sits on the board of directors for Kentucky Employers Mutual Insurance and the Kentucky Retirement System and previously served on the board of directors for Farmers Capital Bank Corporation, a financial holding company (Nasdaq: FFKT), from 2011 to 2016. Mr. Farris received a B.S. from Centre College in 1995 and a M.P.A. from Princeton University in 1999.
The Board has nominated Mr. Farris because he brings to the Board a wealth of knowledge and experience in economics and finance and his experience with other boards.
Kathleen Olsen — Ms. Olsen, age 48, has served as one of our directors since October 2014. Since 2011, Ms. Olsen has been a private investor. From 1999 through 2011, Ms. Olsen served as Chief Financial Officer of Eminence Capital, LLC, a long/short global equity fund. From 1993 to 1999, Ms. Olsen served as audit manager, specializing in investment partnerships, at Anchin, Block & Anchin LLP, a public accounting firm located in New York City. Ms. Olsen received a Bachelor of Science degree with honors from the State University of New York at Albany. Ms. Olsen is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants.
The Board has nominated Ms. Olsen because she has extensive knowledge of accounting and a background in finance which enables her to make valuable and important contributions to the Board.
Richard S. Press — Mr. Press, age 81, has served as one of our directors since October 2014. Before retiring, Mr. Press was a Senior Vice President at Wellington Management from 1994 to 2006, where he started and built the firm’s insurance asset management practice. Prior to that, Mr. Press was a Senior Vice President of Stein Roe & Farnham from 1982 to 1994 and Scudder Stevens and Clark from 1964 to 1982. Mr. Press has been a board member of Millwall Holdings PLC and Millwall Football Club, London since 2010; and has served as a member of the Board of Overseers of Beth Israel Deaconess Medical Center (Boston) since 2007. Previously, he served on various committees of the Controlled Risk Insurance Company and the Risk Management Foundation from 2006 to 2017; served as a board member of the Housing Authority Insurance Group from 2008 to December 2014; and served as a board member and Chairman of each of Transatlantic Holdings, a reinsurance holding company (NYSE: TRH), from August 2006 to March 2012 and Pomeroy IT Solutions, an information technology company (Nasdaq: PMRY), from July 2007 to November 2009. He was a founding member of the Board of Governors and the Advisory Board of the National Pediatric Multiple Sclerosis Center, Stony Brook University and Medical School, New York (2001 – 2013). Mr. Press currently serves as Chairman of the Anesthesia Associates of Massachusetts (“AAM”) and has been a member of its board of directors since December 2015 and in 2017 was elected to the board of directors of GMPCI Insurance, Ltd., a wholly-owned subsidiary of AAM. Mr. Press earned a B.A. in Economics from Brown University in 1960; and after serving in the US Army, he received his M.B.A. from Harvard Business School in 1964.
The Board has nominated Mr. Press because of his extensive background in finance and his public company board and committee experience.
Board Voting Recommendation
The Board recommends that stockholders vote “FOR” the election of each director nominee.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020
The Audit Committee is directly responsible for the appointment,Brickman’s compensation, retention and oversight of our independent registered public accounting firm. The Audit Committee of our Board has appointed RSM to continue to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2020.
RSM has served as the Company’s independent registered public accounting firm since August 2016. The Audit Committee considers RSM to be well qualified and believes that the continued retention of RSM is in the best interests of us and our stockholders. We are asking our stockholders to ratify the selection of RSM as our independent registered public accounting firm for 2020. Although stockholder ratification of the selection of RSM is not required by our Bylaws or otherwise, the Board is submitting the appointment of RSM to our stockholders for ratification as a matter of good corporate practice. In the event our stockholders do not ratify the selection of RSM, the Audit Committee may in its discretion reconsider the selection of RSM. Ratification of the selection of RSM will not limit the Audit Committee’s authority to terminate the engagement of RSM or 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 us and our stockholders.
We expect a representative of RSM to be present at the Annual Meeting with the opportunity to make a statement if he or she desires and will also be available to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees
Fees for professional services provided by RSM for the fiscal years ended 2019 and 2018, including related expenses, are as follows:
| | | | | | | | | | | | | | |
| | 2019 | | 2018 |
Audit fees (1) | | $ | 759,839 | | | 736,275 |
Audit-related fees (2) | | — | | 210,437 |
| Tax fees | | — | | — |
| All other fees | | — | | — |
| Total fees | | $ | 759,839 | | | $ | 946,712 | |
(1)Audit fees for 2019 and 2018 include fees for professional services rendered by RSM for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, review of the Company’s condensed consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, and audit of the Company’s internal control over financial reporting.
(2)Audit-related fees for 2018 include fees for audits of the financial statements of GRBK GHO Homes, LLC, as well as fees related to consents and a comfort letter related to our secondary offering.
Audit Committee Approval of Audit and Non-Audit Services
The Audit Committee pre-approves all audit, audit-related and permitted non-audit services provided by the independent registered public accounting firm, including the fees and terms for those services. The Audit Committee has adopted a policy and procedures governing the pre-approval process for audit, audit-related and permitted non-audit services. The Audit Committee pre-approves audit and audit-related services in accordance with its review and approval of the engagement letter and annual service plan with the independent registered public accounting firm. Any tax consultation or other consulting services proposed to be provided by RSM are considered for approval by the Audit Committee on a project-by-project basis. Non-audit and other services provided by the independent registered public accounting firm will be considered by the Audit Committee for pre-approval based on business purpose, reasonableness of estimated fees and the potential impact on the firm’s independence.
Board Voting Recommendation
The Board recommends that stockholders vote “FOR” ratification of the appointment of RSM as our independent registered public accounting firm for the fiscal year ending December 31, 2020.
AUDIT COMMITTEE REPORT
The Audit Committee selects, evaluates and, where deemed appropriate, replaces Green Brick’s independent registered public accounting firm. The Audit Committee also pre-approves all audit services, engagement fees and terms and all permitted non-audit services.
The Audit Committee also oversees the accounting and financial reporting processes of Green Brick on behalf of the Board. Management is primarily responsible for Green Brick’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of Green Brick’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), evaluating and reporting upon the effectiveness of internal controls and issuing a report on Green Brick’s consolidated financial statements.
In fulfilling its responsibilities, the Audit Committee reviewed Green Brick’s audited financial statements for fiscal 2019 and held discussions with management and the Company’s independent registered public accounting firm, RSM US LLP (“RSM”) regarding the quality of the accounting principles reflected in the financial statements. In the discussions related to Green Brick’s consolidated financial statements for fiscal year 2019, management represented to the Audit Committee, and RSM concurred, that Green Brick’s consolidated financial statements for fiscal 2019 were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee discussed the consolidated financial statements with RSM.
The Audit Committee discussed with RSM matters required to be discussed by American Institute of Certified Public Accountants Auditing Standard No. 114. RSM also provided to the Audit Committee the written disclosures and letter required by applicable requirements of the PCAOB’s Independence Standards Board Standard No. 1 regarding RSM’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with RSM the accounting firm’s independence.
Based upon the Audit Committee’s review and discussions with management and the independent auditors, the Audit Committee recommended to the Board that the audited consolidated financial statements for the fiscal year ended December 31, 2019 be included in Green Brick’s annual report for filing with the SEC.
The Audit Committee:
Kathleen Olsen, Chair
John R. Farris
Richard S. Press
April 18, 2020
PROPOSAL 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, referred to herein as the Dodd- Frank Act and with Section 14A of the Exchange Act, the Board is providing stockholders with a non-binding advisory vote on the Company’s executive compensation as reported in this proxy statement. Stockholders are being asked to vote on the following resolution:
“RESOLVED, that the stockholders of Green Brick Partners, Inc. hereby approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, under the section of this proxy statement entitled “Executive Compensation Information.”
Stockholders are encouraged to carefully review thesee “Executive Compensation Information”
section of this proxy statement, which includes scaled executive compensation disclosure and the executive compensation tables. Our executive compensation programs play a key rolebeginning on page 36. | | | | | | | | | | | | |
| Name | | Fees Earned or
Paid in Cash
($)(1) | | | Stock Awards
($)(2)(3) | | | Total ($) | |
David Einhorn | | | $125,000 | | | | - | | | | $125,000 | |
Elizabeth K. Blake(4) | | | - | | | | $220,020 | | | | $220,020 | |
Harry Brandler | | | $100,000 | | | | $110,010 | | | | $210,010 | |
John R. Farris(5) | | | $75,000 | | | | $110,010 | | | | $185,010 | |
Kathleen Olsen(6) | | | $120,000 | | | | $110,010 | | | | $230,010 | |
Richard S. Press(7) | | | $130,000 | | | | $110,010 | | | | $240,010 | |
Lila Manassa Murphy(8) | | | $70,330 | | | | $110,010 | | | | $180,340 | |
| (1) | Amount reflects the amount of annual retainer paid in cash. As discussed above, directors may elect to receive shares of restricted stock in lieu of the annual cash retainer. |
| (2) | Amount reflects the aggregate grant date fair value of the shares of restricted stock granted on June 7, 2022 as the Annual Equity Award and the shares of restricted stock granted to Ms. Blake in lieu of her annual cash retainer as computed in accordance with FASB ASC Topic 718. These amounts reflect our accounting expense for these awards and do not necessarily correspond to the actual value that may be realized for these awards by our independent directors. For additional information on the valuation assumptions regarding the restricted stock awards, refer to Note 10 to our financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. |
| (3) | The following table sets forth the aggregate number of shares of restricted stock outstanding as of December 31, 2022 for each of our independent directors. Please see Beneficial Ownership Table for the total number of shares held by our directors. |
| | | | |
Name | | Restricted
Stock | |
Elizabeth K. Blake | | | 9,088 | |
Harry Brandler | | | 4,544 | |
John R. Farris | | | — | |
Kathleen Olsen | | | 4,544 | |
Richard S. Press | | | 4,544 | |
Lila Manassa Murphy | | | 4,544 | |
| (4) | Ms. Blake elected to receive the cash portion of her annual retainer in restricted shares, including $10,000 for her service as Chair of the Governance & Sustainability Committee. |
| (5) | Mr. Farris resigned from the Board on October 21, 2022 and forfeited his restricted shares. |
| (6) | Includes $20,000 for her service as Chair of the Audit Committee. |
| (7) | Includes $10,000 for his service as Chair of the Compensation Committee and $20,000 for his service as Chair of the Insurance Committee. |
| (8) | Ms. Manassa Murphy’s annual cash retainer was prorated for the 2022 fiscal year as she joined the Board in April 2022. |
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EXECUTIVE OFFICERS
Set forth below is certain information relating to our ability to attract and retain a highly experienced, successful team to manage our Company and deliver strategic and financial results. We have designed our executive compensation programs utilizing a pay-for-performance philosophy and primarily compensate our namedcurrent executive officers through a combination of base salary, short-term incentives, in the form of discretionary annual cash bonuses, and long-term incentives, in the form of equity-based compensation. We believe our executive compensation programs are structuredkey employees. Biographical information with respect to support our business objectives.
While the vote on executive compensation is non-binding and solely advisory in nature, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.
Board Voting Recommendation
The Board recommends that stockholders vote “FOR” adoption of the resolution approving the compensation of our named executive officers.
EXECUTIVE COMPENSATION INFORMATION
Commencing in 2018, the Company qualified as a “smaller reporting company” under new rules adopted by the SEC. Accordingly, the Company has elected to now provide scaled executive compensation disclosure that satisfies the requirements applicable to the Company in its new status as a smaller reporting company. Under the scaled disclosure obligations, the Company is not required to provide, among other things, Compensation Discussion and Analysis and certain other tabular and narrative disclosures relating to executive compensation.
The Company’s named executive officers (“NEOs”) for 2019 are:
•James R. Brickman, Chief Executive Officer of the Company;
•Richard A. Costello, Chief Financial Officer of the Company; and
•Jed Dolson, President of Texas Region of the Company.
Mr. Brickman is
an NEO based on his position as the Company’s Chief Executive Officer. Messrs.set forth above under “Proposal 1 – Election of Directors.” | | | | |
| Name | | Age | | Position |
James R. Brickman | | 71 | | Chief Executive Officer |
Richard A. Costello | | 64 | | Chief Financial Officer |
Jed Dolson | | 45 | | Chief Operating Officer and Executive Vice President |
Neal Suit | | 47 | | Executive Vice President, General Counsel, and Chief Risk and Compliance Officer |
Richard A. Costello and Dolson are NEOs by reason of being the Company’s two most highly compensated executive officers other than its Chief Executive Officer who were serving as executive officers as of December 31, 2019.
James R. Brickman – Mr. Brickman’s biographical information is set forth in “Proposal 1: Election of Directors” in this proxy statement.
Richard A. Costello – Mr. Costello, age 61, has been our Chief Financial Officer since April 2015. From January 2015 until his appointment as Chief Financial Officer, Mr. Costello served as our Vice President of Finance. Mr. Costello has over 25 years of financial and operational experience in all aspects of real estate management. Since 2007, Mr. Costello has beenworked as a private investor.investor until he joined Green Brick. Previously, he worked for 16 years at GL Homes of Florida, one of the largest private developers and homebuilders in Florida. There he served as Chief Financial Officer and Chief Operating Officer as well as in other senior financial management roles. Prior to joining GL Homes, Mr. Costello worked for six years as AVP-Finance of Paragon Group, a regional commercial real estate developer, and for four years as an auditor for KPMG LLP. Mr. Costello received a B.S. in Accounting from the University of Central Florida and his M.B.A. from Kellogg School of Northwestern University.
Jed Dolson
– Mr. Dolson age 42, has been our Chief Operating Officer and Executive Vice President since September 2020. He previously served from October 2017 as the President of Texas Region of the Company since October 2017.Company. Prior to that time, he was Head of Land Acquisition and Development from September 2013. From March 2010 to September 2013, Mr. Dolson served as a managing member of Pecos One LLC, a consulting firm that provided services to JBGL. Prior to joining the Company, Mr. Dolson worked for three years at Jones & Boyd Engineering and later he served five years as Director of Development for a local private residential developer. Mr. Dolson received a B.S. degree in Civil Engineering from Texas A&M University and a M.S. in Civil Engineering from Stanford University.Neal Suit – Mr. Suit joined Green Brick in 2021 and has been our Executive Vice President, General Counsel, and Chief Risk and Compliance Officer since October 2022. Mr. Suit has approximately 20 years of legal experience, much of that experience focused on the real estate and construction industries. He served as the Executive Vice President, General Counsel, and Corporate Secretary of Legacy Housing Corporation, where he played a key role in Legacy’s successful IPO in December 2018. Prior to going in-house, Mr. Suit worked at various law firms in the Dallas area, including a decade at the law firm of Carrington, Coleman, Sloman & Blumenthal, LLP, where he was a partner and the co-chair of the firm’s Real Estate and Construction section. Mr. Suit earned a B.A. degree from Baylor University and J.D. from Harvard Law School.
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23COMPENSATION DISCUSSION AND ANALYSIS
Our named executive officers for 2022 are the executive officers listed below:
| | |
James R. Brickman | | Chief Executive Officer |
Richard A. Costello | | Chief Financial Officer |
Jed Dolson | | Chief Operating Officer |
Neal Suit | | General Counsel and Chief Risk and Compliance Officer |
Compensation Philosophy and Objectives
The Compensation Committee believes that the caliber, motivation and alignment of all of our employees with the interests of our stockholders, and especially our executive leadership, are essential to Green Brick’s performance. The Compensation Committee believes our management compensation programs contribute to our ability to differentiate our performance from others in the marketplace and thereby deliver stockholders superior value. Moreover, we believe that Green Brick’s overall executive compensation philosophy and programs are market competitive, performance-based and stockholder aligned. The three principles of our compensation philosophy are as follows:
| | |
| |
| Principles | | Implementation |
| Total direct compensation levels should be sufficiently competitive to attract, motivate and retain the highest quality executives | | The Compensation Committee seeks to establish target total direct compensation (salary plus annual incentive), providing our executives the opportunity to be competitively rewarded for our financial and operational growth. Total direct compensation opportunity (i.e., maximum achievable compensation) should increase with position and responsibility. |
| Performance-based and “at-risk” incentive compensation should constitute a substantial portion of total compensation | | We seek to foster a pay-for-performance culture, with a significant portion of total direct compensation being performance-based and/or “at risk.” Accordingly, such portion should be tied to, and vary with, our financial, and operational performance, as well as individual performance. Executives with greater responsibilities and the ability to directly impact our strategic and operational goals and long-term results should bear a greater proportion of the risk if these goals and results are not achieved. Therefore, the more senior the executive, the greater the percentage of total compensation is in the form of performance-based compensation. |
| Compensation programs should align executives’ interests with our stockholders’ interests to further the creation of long-term stockholder value | | By awarding a portion of each year’s annual incentive payout in the form of stock, we encourage executives to focus on our long-term growth and prospects. This incentivizes our executives to manage our company from the perspective of owners with a meaningful stake, and encourage them to remain with us for long and productive careers. Equity-based compensation also subjects our executives to market risk, a risk also borne by our stockholders. |
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Compensation Discussion and Analysis
The overall level of total compensation for our named executive officers as described herein is intended to be reasonable and competitive, taking into account factors such as the individual’s experience, performance, duties and scope of responsibilities, prior contributions and future potential contributions to our business. With these principles in mind, we structured our compensation program to offer competitive total pay packages that we believe enable us to retain and motivate executives with the requisite skill and knowledge and ensure the stability of our management team, which is vital to the success of our business.
Our Financial and Operational Metrics are Aligned with Long-Term Growth
We believe our compensation program provides an appropriate balance between operational metrics that all team members can impact and that are aligned with successfully implementing our long-term growth strategy and financial metrics and rewarding executives upon the achievement of annual results. We measure our operational and financial metrics, on a relative basis, to ensure that our compensation program rewards performance that is above that of our peers.
| | |
| |
| 2022 Metric | | Why It Contributes to Alignment with Stockholder Value |
| Homebuilding Gross Margin | | Homebuilding Gross Margin is a metric most analysts and investors use to determine how effectively a builder is operating relative to peers. |
| Home Closings Revenue Growth | | Revenue Growth is a metric most analysts and investors use to determine how effectively a builder is operating relative to peers. |
| Pre-Tax Income Growth | | Pre-Tax Income Growth is a metric most analysts and investors use to determine how effectively a builder is operating relative to peers. |
| Return on Assets | | Return on Assets is a metric most analysts and investors use to determine how effectively a builder is operating relative to peers. |
Compensation Setting Process
Pay for Performance Compensation Philosophy
Our compensation philosophy is rooted in our values of ownership and meritocracy and aims to foster long-term value creation for our stockholders by:
| › | attracting and retaining top talent; |
| › | connecting executive outcomes to company performance; |
| › | tying wealth creation to significant, long-term equity ownership; and |
| › | mitigating compensation-related retention risk. |
As described in further detail below, consistent with these goals, our compensation program is designed to provide a clear link between what we pay our NEOs and Green Brick’s performance. Our NEO’s compensation package for 2022 reflects this commitment. For 2022, 80% of our CEO’s total direct compensation and an average of 77% of our other NEOs’ total direct compensation was performance-based or equity-based. Based on his current holdings of over 1.5 million shares of our common stock, and 500,000 shares in stock options at a $7.49 strike price, along with additional shares owned by family members that are not controlled by Mr. Brickman and therefore not reported to
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TableCompensation Discussion and Analysis
the SEC, the Compensation Committee believes that Mr. Brickman is already materially aligned with our stockholders.
Oversight of Contents
Executive Compensation ProgramsRole of Compensation Committee
The Compensation Committee is responsible for establishing and overseeing our compensation philosophy and setting our executive compensation and benefits policies and programs generally. Commencing in 2022, the Compensation Committee, utilized a group of comparative homebuilders for informing the design of our executive compensation program and the target opportunities available to our named executive officers. In developing the comparative peer group, the Compensation Committee took into consideration revenue, income, homes delivered, operating model and geographic scope. For 2022, the comparative peer group was
|
|
Beazer Homes USA |
Century Communities, Inc. |
Hovnanian Enterprises, Inc. |
M/I Homes, Inc. |
Tri-Point Homes |
While the Compensation Committee does not formally benchmark against this comparative group, the Compensation Committee believes that this comparative group is one factor to consider, together with individual factors regarding the value of each executive to the Company, industry factors, and general compensation trends.
Consideration of Stockholder Advisory Vote
As part of its compensation setting process, the Compensation Committee also reviews the results of the prior stockholder advisory vote on NEO compensation. In accordance with our stockholder say-on-frequency vote, we hold our stockholder advisory vote every three years. Our last stockholder advisory vote was held at the 2021 annual meeting of stockholders. In evaluating our executive compensation program our Compensation Committee took into consideration that 98% of the votes cast were voted in favor of Green Brick’s executive compensation at the 2021 annual meeting. The
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Compensation Discussion and Analysis
Compensation Committee intends to review the results of each advisory vote and will consider this feedback as well as the feedback obtained from stockholder engagement as it completes its annual review of each pay element and the total compensation packages of our NEOs.
Role of Executives in Establishing Compensation
Annually, the CEO proposes the financial and operational metrics and threshold, target and maximum performance levels for the Annual Incentive Program, subject to approval by the Compensation Committee. The CEO also proposes the strategic objectives that will determine individual achievement under our Annual Incentive Program. These individual strategic objectives are then approved by the Compensation Committee for all NEOs. At the end of each year, the CEO provides an evaluation of each NEO’s performance, including himself, and recommends the extent to which each other NEO (other than himself) has met their strategic objectives. The Compensation Committee then evaluates the performance of the CEO and each other NEO and determines the CEO’s and each other NEOs’ final individual achievement and the incentive payout for each NEO. Our incentive opportunities are set in each NEO’s employment agreement, however, in connection with the renewal of each NEO employment agreement (other than his own), the CEO provides the Compensation Committee with recommendations regarding base salary and annual incentive opportunity for the employment agreement.
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Compensation Discussion and Analysis
Executive Compensation Components
For 2022, to achieve its compensation philosophy and objectives, the Compensation Committee used (1) base salary and (2) an annual incentive award plan pursuant to which performance is evaluated against three criteria (a) absolute pre-tax income growth, (b) operational and financial performance relative to peers and (c) strategic objectives that are established at the beginning of the year based on the respective NEO’s responsibilities. As discussed further below, each element of our 2022 compensation program is intended to encourage and foster the following results and behaviors.
We designed our compensation program to provide executives the appropriate incentives to pursue quality long-term growth without encouraging inappropriate risk taking. As discussed below, under our annual incentive compensation program, the Compensation Committee annually approves a threshold (50% of target opportunity), target (100% of target opportunity) and maximum (200% of target opportunity) levels of performance for each of our named executive officers.
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Compensation Discussion and Analysis
2022 Compensation Design and Decisions
Base Salaries
Why we pay base salaries. The Compensation Committee believes that payment of competitive base salaries is an important element for attracting, retaining and motivating our executives. In addition, the Compensation Committee believes that having a certain level of fixed compensation allows our executives to dedicate their full-time business attention to our company. Each executive’s base salary is designed to provide the executive with a fixed amount of annual compensation that is competitive with the marketplace.
How base salaries are determined. In connection with the negotiation and execution of each NEO’s employment agreement, the Compensation Committee reviews and sets the base salaries for the three-year term of the employment agreement. In setting the base salaries for the NEOs, a number of factors will be considered, including the position’s complexity and level of responsibility, the position’s importance in relation to other executive positions, and the assessment of the executive’s performance and other circumstances, including, for example, time in position. In addition, the Compensation Committee takes into consideration evaluations of each individual NEO, market changes and the economic and business conditions affecting Green Brick at the time of the evaluation.
2022 Base Salaries. Based on the respective NEO’s employment agreements, the 2022 base salaries for each of our NEOs was as follows:
| | | | |
| | |
| Name | | 2022 Base Salary | |
| | |
James R. Brickman | | $ | 1,500,000 | |
| | |
Richard A. Costello | | $ | 450,000 | |
| | |
Jed Dolson | | $ | 600,000 | |
| | |
Neal Suit(1) | | $ | 279,166 | |
| (1) | Represents pro-rated salary based on Mr. Suit’s appointment to General Counsel and Chief Risk and Compliance Officer on October 31, 2022. In connection with his appointment to EVP, General Counsel and Chief Risk Officer, Mr. Suit’s annual base salary was increased from $275,000 to $300,000 effective October 31, 2022. |
Annual Incentive Compensation Plan
Why we pay annual incentive compensation. Our Annual Incentive Compensation Plan is the key component of our executive compensation program. Our Annual Incentive Compensation Plan seeks to incentivize and reward our NEOs for annual financial and operational performance on those metrics and strategic objectives that the Compensation Committee believes will drive short-term and long-term stockholder value.
How annual incentive compensation bonus opportunities are determined. In connection with the negotiation and execution of each NEO’s employment agreement, the Compensation Committee reviewed and set a target bonus opportunity for each of the three years of the employment agreement term. In setting the target bonus opportunity for the NEOs, a number of factors will be considered,
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Compensation Discussion and Analysis
including the position’s complexity and level of responsibility, the position’s importance in relation to other executive positions, and the assessment of the executive’s performance and other circumstances, including, for example, time in position. In addition, the Compensation Committee takes into consideration evaluations of each individual NEO, market changes and the economic and business conditions affecting Green Brick at the time of the evaluation.
Based on the respective NEO’s employment agreements, the 2022 incentive opportunities for each of our NEOs was as follows:
| | | | |
| Name | | 2022 Bonus
Opportunity | |
James R. Brickman | | $ | 3,100,500 | |
Richard A. Costello | | $ | 550,000 | |
Jed Dolson | | $ | 1,700,000 | |
Neal Suit(1) | | $ | 167,500 | |
| (1) | For 2022, Mr. Suit’s incentive opportunity was prorated based on his appointment in October 2022. |
In accordance with the terms of each NEOs respective employment agreement, the Compensation Committee may elect to pay up to 50% of any annual incentive compensation payout in shares of common stock.
For 2022, the annual incentive compensation program was revised to include a maximum incentive payment of up to 200% of the target bonus opportunity, rather than solely relying on the Compensation Committee’s discretion to award additional performance bonuses for exceptional financial and operational performance.
How annual incentive compensation performance is evaluated. Our Compensation Committee annually reviews and revises, if necessary, the appropriateness of each of the performance metrics, their correlation to Green Brick’s overall growth strategy, and the impact of such performance metrics on long-term stockholder value. For 2022, there were three components of our Annual Incentive Compensation Program and each component had a component opportunity calculated as a % of the respective NEO’s bonus opportunity:
| • | | Absolute Pre-Tax Net Income, with a component opportunity equal to 33.33% of the bonus opportunity; |
| • | | Operational and Financial Performance Relative To Peers, with a component opportunity equal to 33.33% of the bonus opportunity; and |
| • | | Strategic Objectives established at the beginning of the year based on the respective NEO’s responsibilities, with a component opportunity equal to 33.34% of the bonus opportunity. |
2022 Annual Incentive Plan Metrics and Performance
Absolute Pre-Tax Net Income Growth. For 2022, up to 33.33% of each NEO’s target bonus opportunity could be earned based on Green Brick’s pre-tax income for the year. The Compensation Committee set performance levels of (1) threshold, at which there was a payout of 50% of the component opportunity, (2) target, at which there was a payout of 100% of the component opportunity,
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33
Compensation Discussion and Analysis
and (3) maximum, at which there was payout of 200% of the component opportunity. Below the threshold performance level, no payout is earned. For amounts earned between each performance level, the payout is calculated on a linear basis.
| | | | | | |
| | | |
| | | Pre-Tax Income ($M) | | Earned % | |
Threshold | | $234.6 (85% target) | | | 50 | % |
Target | | $276.0 | | | 100 | % |
Maximum | | $296.7 (107.5% target) | | | 200 | % |
ACTUAL | | $396.4 | | | 200 | % |
2022 Results. Based on our exceptional performance, we materially exceeded the target and each NEO earned 200% of his respective component opportunity.
Operational and Financial Performance Relative To Peers. For 2022, the Compensation Committee selected five homebuilding peers against which our relative performance would be evaluated. If we met or exceeded the peer growth in 25% of the cells, the payout would equal 50% of the component opportunity, if we met or exceeded the peer growth in 50% of the cells, the payout would equal 100% of the component opportunity and if we meet or exceed the peer growth in 75% of the cells, the payout would equal 200% of the component opportunity. For amounts earned between each performance level, the payout is calculated on a linear basis.
| | | | | | | | | | | | |
| | | | |
| Builder | | Homebuilding
Gross Margin
% | | | Home Closings Revenue Growth % | | | Return on
Assets (Annualized) | |
| | | | |
Green Brick Partners | | | 29.8 | % | | | 30 | % | | | 18.8 | % |
Beazer Homes | | | 22.8 | % | | | 7.0 | % | | | 9.9 | % |
Century Communities | | | 24.5 | % | | | 8.9 | % | | | 14.4 | % |
M/I Homes | | | 25.7 | % | | | 10.5 | % | | | 14.1 | % |
Hovnanian | | | 21.5 | % | | | 6.2 | % | | | 8.8 | % |
Tri Pointe Homes | | | 27.1 | % | | | 1.2 | % | | | 11.2 | % |
2022 Results. Based on our performance, we met or exceeded the growth of our peers in 100% of the cells (or 12 of the 12 cells) and each of the NEOs earned 200% of his respective component opportunity.
Strategic Objectives. The individual strategic objectives component of our Annual Incentive Compensation Plan is intended to reward managerial decision-making, behavioral interaction, and overall contribution. At the beginning of the year, the Compensation Committee approves for each NEO multiple quantitative and qualitative strategic objectives. These strategic objectives correspond to relevant business goals depending on the role. None of the individual strategic objectives is material to understanding the Annual Incentive Compensation Plan nor how the payout under our Annual Incentive Compensation Plan was determined in 2022. For amounts earned between each performance level, the payout is calculated on a linear basis.
At the end of each year, the Compensation Committee, with recommendations from the CEO, evaluates the individual performance of each NEO against his respective strategic objectives. As discussed above, for each of our NEOs, achievement of the strategic objectives represented 33.34% of
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34
Compensation Discussion and Analysis
each NEOs’ respective bonus opportunity. In evaluating, the performance of each NEO, the Compensation Committee considered the following achievements for each NEO:
| | |
| |
| NEO | | Key Performance Highlights |
James R. Brickman Chief Executive Officer | | • Decreased our debt to total capital ratio, effectively managing our financial risk. • Planned a long-range strategy for prudent growth of our business. • Built management bench and Board strength. |
Richard A. Costello Chief Financial Officer | | • Extended and improved our lender relationships. • Supervised and improved cash flow and net income forecasting with our new accounting software. • Assisted our CEO in planning a long-range strategy for prudent growth of our business. |
Jed Dolson Chief Operating Officer | | • Successfully operated our Trophy division in the DFW area while growing our land and lot positions in the Austin area. • Managed and established positive relationships between our NEOs and other employees and built a positive work environment. • Recruited and developed highly skilled members of senior management. |
Neal Suit General Counsel and Chief Risk and Compliance Officer | | • Implemented and managed our captive insurance program and strategy. • Managed litigation brought against and on behalf of Green Brick and its affiliated homebuilders. • Effectively collaborated with outside counsel, management and the Board to improve our corporate governance and legal and regulatory compliance. |
2022 Results. Based on each NEOs respective performance, Messrs. Brickman and Suit earned 200% of their respective component opportunity, Mr. Dolson earned approximately 150% of his respective component opportunity and Mr. Costello earned approximately 75% of his respective component opportunity. In addition to the bonus under the AIP, the Compensation Committee awarded Mr. Suit a transaction bonus in connection with the successful regulatory approval from the relevant insurance regulatory body and launch of our captive insurance program, which saved significant expenses during 2022 and is expected to continue to provide savings to the Company in future fiscal years. The implementation of the captive insurance program was completed during 2022 prior to his appointment as Executive Vice President, General Counsel, and Chief Risk and Compliance Officer.
2022 Payouts. In early 2023, the Compensation Committee reviewed each of the components of the Annual Incentive Compensation Plan and the performance levels achieved as discussed above. Consistent with prior experience, the Compensation Committee elected to pay 50% of the annual bonuses, including the transaction bonus, in shares of fully vested common stock.
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Compensation Discussion and Analysis
Employee Benefits and Perquisites
We provide a number of benefit plans to all eligible employees, including our named executive officers. These benefits include programs such as medical, dental, life insurance, short- and long-term disability coverage and a 401(k) defined contribution plan. We also provide a gym membership for our executive officers and provide our Chief Operating Officer, similar to other senior employees whose responsibilities are primarily in the field, a car and cell phone allowance. While perquisites help to provide our named executive officers a benefit with a high perceived value at a relatively low cost, we do not generally view perquisites as a material component of our executive compensation program.
Other Compensation Practices
Prohibition on Pledging and Hedging. Officers, directors and employees and their respective family members are not permitted to enter into hedging and pledging arrangements with respect to shares of our common stock that they beneficially own.
Tax Deductibility of Compensation
Code Sections 280G and 4999. Sections 280G and 4999 of the Code limit a public company’s ability to take a tax deduction for certain “excess parachute payments” and impose excise taxes on these payments in connection with a change in control. The Compensation Committee considers the adverse tax liabilities imposed by Sections 280G and 4999, among other competitive factors, when it structures certain post-termination compensation payable to our NEOs. However, the potential adverse tax consequences to our company and/or the executive are not necessarily determinative in such decisions.
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COMPENSATION COMMITTEE REPORT
Compensation Committee Report on 2022 Executive Compensation
The Committee is responsible for establishing and administering the executive compensation programs of Green Brick. The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement on Schedule 14A.
Richard S. Press (Chair)
Kathleen Olsen
Elizabeth K. Blake
April 27, 2023
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the total compensation awarded to, earned by, or paid to each“total compensation” of the Company’sour NEOs duringfor the fiscal years ended December 31, 20192022, 2021, and December 31, 2018.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Year | | Salary ($)(1) | | Bonus ($)(2) | | Stock Awards ($)(3)(4) | | Non-Equity Incentive Plan Compensation ($)(4) | | All Other Compensation ($)(5) | | Total ($) |
| James R. Brickman, Chief Executive Officer | | 2019 | | 1,416,667 | | — | | 700,000 | | 750,137 | | 10,400 | | 2,877,204 |
| | 2018 | | 1,400,000 | | — | | 700,000 | | 700,000 | | 2,922 | | 2,802,922 |
| Richard A. Costello, Chief Financial Officer | | 2019 | | 400,000 | | — | | 160,000 | | 200,000 | | 9,400 | | 769,400 |
| | 2018 | | 400,000 | | — | | 150,000 | | 160,000 | | 10,042 | | 720,042 |
| Jed Dolson, President of Texas Region | | 2019 | | 550,000 | | 100,000 | | 550,000 | | 550,000 | | 20,600 | | 1,770,660 |
| | 2018 | | 550,000 | | 275,000 | | 263,288 | | 275,000 | | 21,837 | | 1,385,125 |
1
(1)In connection with his new employment agreement, Mr. Brickman’s base salary was increased effective November 1, 2019 from $1,400,0002020 according to $1,500,000.
(2)Reflects the 50% cash component of the discretionary bonuses awarded to Mr. Dolsonrules promulgated by the SEC. | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal
Position | | Year | | | Salary
($) | | | Bonus
($)(2) | | | Stock
Awards
($)(3)(4) | | | Non-Equity
Incentive Plan
Compensation ($)(6) | | | All Other
Compensation
($)(7) | | | Total ($) | |
James R. Brickman, Chief Executive Officer | | | 2022 | | | | 1,500,000 | | | | - | | | | 1,349,988 | | | | 3,100,500 | | | | 10,350 | | | | 5,960,838 | |
| | | 2021 | | | | 1,500,000 | | | | 1,000,000 | | | | 1,225,000 | | | | 1,350,000 | | | | 12,182 | | | | 5,087,182 | |
| | | 2020 | | | | 1,500,000 | | | | 225,000 | | | | 750,137 | | | | 1,000,000 | | | | 8,550 | | | | 3,483,687 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Richard A. Costello, Chief Financial Officer | | | 2022 | | | | 450,000 | | | | - | | | | 399,998 | | | | 439,000 | | | | 5,178 | | | | 1,294,176 | |
| | | 2021 | | | | 447,900 | | | | 125,000 | | | | 262,500 | | | | 275,000 | | | | 8,700 | | | | 1,119,100 | |
| | | 2020 | | | | 400,000 | | | | 62,500 | | | | 200,000 | | | | 200,000 | | | | 4,205 | | | | 866,705 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jed Dolson,
Chief Operating Officer, EVP | | | 2022 | | | | 600,000 | | | | - | | | | 1,152,997 | | | | 1,558,500 | | | | 20,550 | | | | 3,332,047 | |
| | | 2021 | | | | 600,000 | | | | 400,000 | | | | 736,150 | | | | 753,000 | | | | 21,094 | | | | 2,510,244 | |
| | | 2020 | | | | 559,103 | | | | 150,000 | | | | 650,000 | | | | 586,151 | | | | 20,718 | | | | 1,965,972 | |
Neal Suit,
EVP, General Counsel, & Chief Risk & Compliance Officer | | | 2022 | | | | 279,166 | (1) | | | 37,500 | | | | 20,013 | (5) | | | 167,500 | | | | 8,925 | | | | 513,104 | |
| (1) | In connection with his appointment to EVP, General Counsel and Chief Risk and Compliance Officer, Mr. Suit’s annual base salary was increased from $275,000 to $300,000 effective October 31, 2022. Actual pay levels for Mr. Suit were pro-rated based on his promotion. |
| (2) | With respect to Mr. Suit, reflects the 50% cash component of a transaction bonus awarded to him by the Compensation Committee. |
| (3) | This amount includes 50% of the Annual Incentive Bonus awarded in the form of Common Stock to the following NEOs in March 2022 with respect to their performance during the year ended December 31, 2021. |
| (4) | The amounts in this column represent the aggregate grant date fair value of the Common Stock issued to Messrs. Brickman, Costello, Dolson and Suit in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions regarding stock awards, refer to Note 9 to our financial statements which are included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. |
| (5) | Represents an equity award received prior to becoming EVP, General Counsel and Chief Risk and Compliance Officer. For a discussion of equity awards for 2022 performance please see the “Compensation Discussion and Analysis” section of this proxy statement. |
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Executive Compensation Committee with respect to his performance in each of 2019 and 2018. The 50% stock component of each of the discretionary bonuses is included in the Stock Awards column in the year in which the stock was awarded. See note 4 below for the full amount of the discretionary bonuses.
(3)The amounts in this column represent the aggregate grant date fair value of the Common Stock issued to Messrs. Brickman, Costello and Dolson in accordance with FASB ASC Topic 718 in each of 2019 and 2018. For additional information on the valuation assumptions regarding the restricted stock unit awards and the option awards, refer to Note 9 to our financial statements for the year ended December 31, 2019, which are included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC. With respect to Mr. Brickman and Mr. Dolson, the amount in “2019 Stock Awards” includes $700,000 and $550,000, respectively, in stock-based compensation that was granted in March 2019 as the 50% portion of the bonus for 2018 performance which was inadvertently included in the reported amounts for “2018 Stock Awards” in last year’s proxy statement. Shares are fully vested upon issuance. Amounts for 2018 have been revised accordingly.
(4)On March 12, 2019, the Compensation Committee approved (i) the following annual incentive bonuses to the NEOs for 2018 performance, which was payable 50% in cash and 50% in stock: Mr. Brickman - $1,400,000; Mr. Dolson - $550,000; and Mr. Costello - $320,000 and (ii) a discretionary bonus to Mr. Dolson of $550,000, which was payable 50% in cash and 50% in stock. On March 13, 2020, the Compensation Committee approved (i) the following annual incentive bonuses to the NEOs for 2019 performance, which was payable 50% in cash and 50% in stock: Mr. Brickman - $1,500,274; Mr. Dolson - $1,100,000; and Mr. Costello - $400,000 and (ii) a discretionary bonus to Mr. Dolson of $200,000, which was payable 50% in cash and 50% in stock. | (6) | On March 6, 2023, the Compensation Committee approved the following Annual Incentive Bonuses to the NEOs for 2022 performance. The Compensation Committee elected to pay 50% of the Annual Incentive Bonus to each of the NEOs in shares of our Common Stock. |
| | | | | | | | |
| | | Annual Incentive Bonus | | Total($) | |
| | | Cash($) | | Stock($) | | | |
James R. Brickman | | 3,100,500 | | 3,100,500 | | | 6,201,000 | |
Richard A. Costello | | 439,000 | | 439,000 | | | 878,000 | |
Jed Dolson | | 1,558,500 | | 1,558,500 | | | 3,117,000 | |
Neal Suit | | 167,500 | | 167,500 | | | 335,000 | |
In accordance with the SEC rules, (i) the cash component of the annual incentive bonusAnnual Incentive Bonus is reflected in the “Non-Equity“Non-Equity Incentive Plan Compensation” column in the year for which compensation was awarded, and (ii) the cash component of the discretionaryMr. Suit’s transaction bonus to Mr. Dolson is reflected in the “Bonus” column in the year for which compensation was awardedawarded. The stock component of the Annual Incentive Bonus and the stock component istransaction bonus will reflected in the “Stock Awards” column in the year in which the stock was awarded.
(5)The table below includes items of All Other Compensation paid toawarded (i.e. the NEOs in 2019. Amounts from prior year have been revised to reflect that each of the NEOs only participates in group life, health, hospitalization and disability plans that do not discriminate in scope, terms or operation in favor of executive officers or directors of the company and that are available generally to all salaried employees.
All Other Compensation
| | | | | | | | | | | | | | |
| Name | HSA Employer Contribution ($) | 401(k) Employer Match ($) | Car and Cell Phone Allowance ($) | Total |
| James R. Brickman | 2,000 | 8,400 | — | 10,400 |
| Richard A. Costello | 1,000 | 8,400 | — | 9,400 |
| Jed Dolson | 2,000 | 8,400 | 10,200 | 20,600 |
Narrative Accompanying Summary Compensation Table
Employment Agreements
We have entered into an employment agreement with each of our NEOs, as described below.
James R. Brickman
In connection with the consummation of our acquisition of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies and JBGL Capital Companies on October 27, 2014, Mr. Brickman entered into an employment agreement with us pursuant to which Mr. Brickman was engaged to serve as our Chief Executive Officer and as a member of the Board. The initial term of the Brickman Employment Agreement was five years. On July 22, 2019, we entered into a new employment with Mr. Brickman for a term of an additional five years (the “Brickman Employment Agreement”) which was effective upon expiration of his prior employment agreement. The new Brickman Employment Agreement is materially consistent with the expired agreement, with the exception that (i) it increased Mr. Brickman’s base salary to $1,500,000 as of November 1, 2019, (ii) increased his annual bonus targets and (iii) provided a new change of control payment provision (see discussion under “Potential Payments Upon Termination of Employment or Change in Control – Brickman Employment Agreement” below). The annual bonus target award will equal (i) 133% of Mr. Brickman’s base salary for November and December 2019 (in addition to his target under his prior employment agreement) and for 2020, (ii) 180% of his base salary for 2021, (iii) 206.7% of his base salary for 2022, (iv) 220% of his base salary for 2023 and (v) 233% of his base salary for 2024. However, if the Employment Agreement is not renewed at the end of the employment period, Mr. Brickman will be entitled to a prorated bonus for 2024 based on the actual performance results for that year. The annual bonus may be payable partially in cash and partially in equity, as determined by the Board. During the employment period, Mr. Brickman is also eligible to participate in all retirement, compensation and employee benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to senior executives of the Company (other than severance plans, policies, practices or programs).
Richard A. Costello
On December 11, 2018, in connection with the expiration of Mr. Costello’s prior employment agreement, we entered into a new employment agreement, effective January 15, 2019, with Mr. Costello (the “Costello Employment Agreement”). The Costello Employment Agreement extends Mr. Costello’s employment as the Chief Financial Officer for an additional two years, subject to possible further extensions thereafter. The Costello Employment Agreement establishes Mr. Costello’s annual base salary at $400,000. He is also eligible to receive an annual bonus with a target amount equal to 100% of his annual base salary contingent upon achievement of performance goals, such as EBITDA targets, established by the Compensation Committee and assessed solely in the discretion of the Compensation Committee. Any annual bonus is payable partially in cash and partially in equity, as determined by the Compensation Committee in its sole discretion. During the employment period, Mr. Costello is also eligible to participate in all retirement, compensation and employee benefit plans, practices, policies and programs provided
by the Company to the extent applicable generally to senior executives of the Company (other than severance plans, policies, practices or programs).
Jed Dolson
In connection with Mr. Dolson’s promotion and the expiration of his prior employment agreement, the Company entered into a new employment agreement (the “Dolson Employment Agreement”) with Mr. Dolson, effective as of October 27, 2017. The term of the Dolson Employment Agreement is three years, subject to further extensions thereafter, and the terms of the Dolson Employment Agreement are largely consistent with the expired agreement. The Dolson Employment Agreement increased Mr. Dolson’s annual base salary to $550,000. He is eligible to receive an annual bonus, awarded under the 2014 Equity Plan, with a target award equal to 200% of his base salary and will be based upon and subject to the achievement of annual performance goals established under the 2014 Equity Plan within the first 90 days of each fiscal year during the employment period. The bonus may be payable partially in cash and partially in equity, as determined by the Board. Under the Dolson Employment Agreement, Mr. Dolson may also become eligible for a special bonus in connection with his performance, payable partially in cash and partially in equity, or a combination thereof, as determined by the Board. The special bonus may be subject to a vesting and/or payment schedule, as determined by the Board. During the employment period, Mr. Dolson is also eligible to participate in all retirement, compensation and employee benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to senior executives of the Company (other than severance plans, policies, practices or programs). Mr. Dolson also continues to be eligible to receive a car, cell phone and toll road allowance.
Annual Incentive Awards
Target Annual Bonus Awards – For 2019, our NEOs had the following target annual bonus awards: Mr. Brickman - $1,500,274; Mr. Dolson - $1,100,000; and Mr. Costello - $400,000 asamounts set forth in their respective employment agreements.
Performance Metrics – For 2019, the annual bonus awardtable above will be included in the 2023 summary compensation table).| (7) | Amounts for 2022 include a 401(k) match of (i) $9,150 for each of Messrs. Brickman and Dolson, (ii) $4,500 for Mr. Costello, and (iii) $8,422 for Mr. Suit, gym memberships, and, for Mr. Dolson a car and cell phone allowance. |
Grants of Plan Based Awards Table
The following table provides additional information about stock awards and equity and non-equity incentive plan awards granted to our NEOs was based partially uponduring the Company’s attainment of quantitative metrics and partially upon the executive’s attainment of Compensation Committee approved qualitative metrics. For Mr. Brickman and Mr. Costello, the Compensation Committee established company-wide pre-tax income (“Company Pre-Tax Income“) as the quantitative metric and allocated $560,000 for Mr. Brickman and $160,000 for Mr. Costello of his respective target award for achievement of the quantitative metric. For Mr. Dolson, the Compensation Committee established pre-tax income by the Company’s Texas controlled builders (“Texas Pre-Tax Income”) as the quantitative metric and allocated $550,000 of his target award for achievement of the quantitative metric. With respect to each of the quantitative metrics (Company Pre-Tax Income and Texas Pre-Tax Income), the Compensation Committee set three performance levels: (i) a minimum performance level, below which no portion of the quantitative bonus would be earned, (ii) a second performance level, which would earn 33% of the portion of the quantitative bonus and (iii) a target performance level, above which 100% of the quantitative bonus would be earned. The target performance level was set at a challenging level that was reasonably attainable if the Company met its performance objectives.
26year ended December 31, 2022. | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(1) | | | All other stock
awards: Number of shares
of stock (#)(3) | | | Grant date fair
value of stock
awards(3) | |
| | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | |
James R. Brickman | | | 07/28/2022 | | | | 1,550,250 | | | | 3,100,500 | | | | 6,201,000 | | | | - | | | | - | |
| | | | 03/04/2022 | | | | | | | | | | | | | | | | 58,340 | | | | $1,349,988 | |
Richard A. Costello | | | 07/28/2022 | | | | 275,000 | | | | 550,000 | | | | 1,100,000 | | | | - | | | | - | |
| | | | 03/04/2022 | | | | | | | | | | | | | | | | 17,286 | | | | $399,998 | |
Jed Dolson | | | 07/28/2022 | | | | 850,000 | | | | 1,700,000 | | | | 3,400,000 | | | | - | | | | - | |
| | | | 03/04/2022 | | | | | | | | | | | | | | | | 49,827 | | | | $1,152,997 | |
| | | | 10/31/2022 | | | | 83,750 | | | | 167,500 | | | | 335,000 | | | | - | | | | - | |
Neal Suit(2) | | | 03/01/2022 | | | | - | | | | - | | | | - | | | | 863 | | | | $20,013 | |
| (1) | As discussed earlier in the Compensation Discussion and Analysis, our Annual Incentive Plan establishes a threshold, at which there is a 50% payout, a target, at which there is a 100% payout and a maximum, at which there is a 200% payout. The Compensation Committee retains the discretion to pay out up to 50% of the Annual Incentive Plan payout in shares of Common Stock. If the Compensation Committee decides to pay a portion of the Annual Incentive Plan in shares of Common Stock, the number of shares is determined based on the fair market value of a share of Common Stock as set forth in our 2014 Omnibus Plan. For the 2022 Annual Incentive Plan, the Compensation Committee decided to pay 50% of the payout in share of Common Stock. |
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In March 2020, theExecutive Compensation Committee reviewed the performance of the Company and, based on the audited financial statements filed with the Company’s Form 10-K, determined that each of the Company Pre-Tax Income for 2019 and the Texas Pre-Tax Income for 2019 exceeded the target performance level set at the beginning of the year. The Compensation Committee then reviewed the performance of each NEO against the qualitative metrics previously approved. Based on these two evaluations, the Compensation Committee awarded each of Messrs. Brickman, Costello and Dolson 100% of his respective target award, payable 50% in cash and 50% in shares of stock. The portion that was payable in stock was granted as an “Other Stock-Based Award” under the 2014 Equity Plan, calculated at the Fair Market Value (as defined in the 2014 Equity Plan) of stock as of the award date and the shares were fully vested upon grant.
Dolson Discretionary Bonus
For 2019 performance, the Compensation Committee also approved an additional discretionary bonus of $200,000 to Mr. Dolson, payable 50% in shares of Common Stock and 50% in cash, in recognition of Mr. Dolson’s successful efforts in growing the Company’s Texas operations and oversight of the Company’s land development.
| (2) | Mr. Suit’s annual target bonus amount commencing October 31, 2022 is $450,000 and was set to a target bonus amount of $167,500 for the 2022 fiscal year in connection with his appointment to EVP, General Counsel and Chief Risk and Compliance Officer. |
| (3) | With respect to Messrs. Brickman, Costello and Dolson, the number of shares of stock and the grant date fair value of stock awards relate to the 50% of the 2021 Annual Incentive Plan and the 2021 Additional Bonuses that were paid 50% in cash and 50% in shares of Common Stock. With respect to Mr. Suit, amount represents an award made in March 2021, as part of the overall employee award program, prior to his being an NEO. For the number of shares of stock and the fair value of such shares of stock issued as part of the 2022 Annual Incentive Plan, please see the “Compensation Discussion & Analysis.” |
Outstanding Equity Awards at Fiscal Year End
The following table sets forth the outstanding equity awards for the Company’s NEOs as of December 31, 2019.2022.
| | | | | | | | | | | | | | | | |
| | | Option Awards | |
| Named Executive Officers | | Number of Securities Underlying Unexercised Options | | | Option
Exercise
Price ($/
Share) | | | Option Expiration Date | |
| | Exercisable (#) | | | Unexercisable (#) | |
James R. Brickman | | | 500,000 | (1) | | | | | | $ | 7.4861 | | | | 10/27/2024 | |
Richard A. Costello | | | | | | | | | | | | | | | | |
Jed Dolson | | | | | | | | | | | | | | | | |
Neal Suit | | | | | | | | | | | | | | | | |
| (1) | These options are fully vested. |
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| | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | | | | | | |
| Named Executive Officers | Number of Securities Underlying Unexercised Options Exercisable (#)(1) | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | Option Exercise Price ($/Share) | | Option Expiration Date |
| James R. Brickman | 500,000 | | | | $7.4861 | | 10/27/2024 |
| Richard A. Costello | | | | | | | |
| Jed Dolson | | | | | | | |
(1)On October 27, 2014, Mr. Brickman was granted stock options to purchase 500,000 shares of Common Stock, which vest and became exercisable in five substantially equal installments on each of the first five anniversaries of the date of grant.
Executive Compensation
Potential Payments Upon Termination of Employment or Change in Control
The Company’s NEOs are eligible for severance payments under certain circumstances as set forth inPursuant to their respective employment agreements, as described in the following narrativeeach of Messrs. Brickman, Costello, Dolson and illustrated in the accompanying table below.
Brickman Employment Agreement
In the event that Mr. Brickman’s employmentSuit are entitled to receive a severance payment if he is terminated by the Companyus without Cause (as defined in the Brickman Employment Agreement), other than due to death or Disability (as defined in the Brickman Employment Agreement), or Mr. Brickmanif he resigns for Good Reason, (as defined in the Brickman Employment Agreement),each case, subject to Mr. Brickman’s
the executive’s (i) execution of a release of claims in a form reasonably
determined byacceptable to us and
(ii) compliance with the material terms of his employment agreement or any other agreement between us and
the executive.Termination With Cause, Without Good Reason or Due to Death or Disability
In accordance with their respective employment agreements, upon a termination by us for Cause, by the NEO without Good Reason or upon death or Disability, each of Messrs. Brickman, Costello, Dolson and Suit will only be entitled to receive any previously accrued obligations.
Impact of Change in Control Upon Severance Payments
None of our NEOs are entitled to a payment solely due to a Change in Control. In accordance with Mr. Brickman, weBrickman’s employment agreement, to the extent that he is terminated without Cause, other than due to death or disability, or resigns for Good Reason within 24 months following a Change in Control, his severance amount will provide Mr. Brickman with severance in an amount equal tobe increased from two times (2x) to three times (3x) the sum of his base salary and his target bonus for the year of termination. However, ifIn accordance with Mr. Brickman’sCostello’s employment agreement, to the extent that he is terminated by the Company without Cause, other than due to death or by Mr. Brickmandisability, or resigns for Good Reason within two years24 months following a Change in Control, (as defined in the Brickman Employment Agreement), his severance amount will be three timesincreased by two hundred and fifty thousand dollars ($250,000). Mr. Dolson and Mr. Suit do not receive any additional amounts if their termination occurs following a Change in Control.
For purposes of the sumpotential payments to Mr. Brickman or Mr. Costello, a “Change in Control” will be deemed to have occurred when: (i) any person is or becomes the beneficial owner, directly or indirectly, of his base salaryour securities representing 50% or more of the combined voting power of our then-outstanding securities; (ii) a majority of our Board is not constituted of (A) individuals who were on our Board as of the date of the respective employment agreement and his target(B) any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest) whose appointment or election by our Board or nomination for election by our stockholders was approved or recommended by a vote of at least two-thirds of the incumbent directors; (iii) a merger or consolidation of our company is consummated, other than (A) a merger or consolidation which would result in our voting securities outstanding immediately prior to such merger or consolidation continuing to represent at least 50% of the combined voting power of the surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of our company (or similar transaction) in which no person is or becomes the beneficial owner, directly or indirectly, of our securities representing 50% or more of the combined voting power of our then outstanding securities; or (iv) a liquidation or dissolution of our company.
General Provisions
Clawback Provision. Pursuant to the employment agreement for each NEO, we may claw back from the NEO any bonus for theand equity-based compensation received in a prior year of termination. The Brickman Employment Agreementif we are required to restate financial results due to material non-compliance with applicable financial reporting requirements.
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41
Executive Compensation
Restrictive Covenants. Each employment agreement provides for a (i) 12-month post-termination non-competition covenant relating to our competitors, (ii) 12-month post-termination non-solicitation covenant in respect of our employees, consultants, vendors, customers and similar business relationships and (iii) perpetual confidentiality and non-disparagement covenants.
Excise Tax. Pursuant to the employment agreements of Mr. Costello, Mr. Dolson and Mr. Suit, in the event that any payments made in connection with a termination of employment would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, then, subject to limitations, the payments would be reduced to the minimum extent necessary to ensure no portion of such payment is subject to the excise tax. Mr. Brickman’s employment agreement requires a “best net” approach, in the event that severance and other payments and benefits in connection with a Change in Control result in “excess parachute payments” under Internal Revenue Code Section 280G. Under a “best net” approach, Mr. Brickman’swhich payments and benefits will be reduced to avoid triggering excise tax if the reduction would result in a greater after-tax amount for Mr. Brickman compared to the amount he would receive net of the excise tax if no reduction were made. Mr. Brickman will not be entitled to severance upon the expiration of the term of employment. We may require repayment of any bonus and equity-based compensation paid by us in a prior fiscal year if we are required to restate financial results with respect to such fiscal year due to material non-compliance with applicable financial reporting requirements. Mr. Brickman is subject to (1) a 12-month post-termination non-competition covenant relating to competitors of the Company, (2) a 12-month post-termination non-solicitation covenant in respect of our employees, consultants, vendors, customers and similar business relationships and (3) perpetual confidentiality and non-disparagement covenants.
Costello Employment Agreement
In the event that Mr. Costello’s employment is terminated by the Company without Cause (as defined in the Costello Employment Agreement) (other than due to death or Disability (as defined in the Costello Employment Agreement)) or Mr. Costello’s resignation for Good Reason (as defined in the Costello Employment Agreement), subject to Mr. Costello’s (i) execution of a release of claims in a form reasonably determined by the Company and (ii) compliance with the material terms of the Costello Employment Agreement or any other agreement between the Company and Mr. Costello, in addition to certain accrued obligations, the Company will provide Mr. Costello with severance in an amount equal to $400,000, which amount is payable in a lump sum cash payment, and a pro-rated bonus for the year in which termination occurs based on actual performance results for such year, which amount is payable in the year immediately following the year in which the termination occurs when the bonus would have otherwise been paid in accordance with the terms of the applicable plan (the “Pro-Rated Bonus”). If Mr. Costello’s employment terminates by reason of the expiration of the term of employment, Mr. Costello will be entitled to receive the Pro-Rated Bonus, subject to Mr. Costello’s (i) execution of a release of claims in a form reasonably determined by the Company and (ii) compliance with the material terms of the Costello Employment Agreement or any other agreement between the Company and Mr. Costello. The Company may require repayment of any bonus and equity-based compensation paid by the Company in a prior Company fiscal year if the Company is required to restate financial results with respect to such fiscal year due to material non-compliance with applicable financial reporting requirements. Mr. Costello is subject to a (i) 12-month post-termination non-competition covenant relating to competitors of the Company, (ii) 12-month post-termination non-solicitation covenant in respect of employees, consultants,
vendors, customers and similar business relationships of the Company and (iii) perpetual confidentiality and non-disparagement covenants.
Dolson Employment Agreement
In the event that Mr. Dolson’s employment is terminated by the Company without Cause (as defined in the Dolson Employment Agreement) (other than due to death or Disability (as defined in the Dolson Employment Agreement)) or Mr. Dolson resigns for Good Reason (as defined in the Dolson Employment Agreement), subject to Mr. Dolson’s (i) execution of a release of claims in a form reasonably determined by the Company and (ii) compliance with the material terms of the Dolson Employment Agreement or any other agreement between the Company and Mr. Dolson, in addition to certain accrued obligations, the Company will provide Mr. Dolson with severance in an amount equal to one and one half times the sum of (x) his base salary and (y) his annual bonus in respect of the year preceding the year of termination. Mr. Dolson will not be entitled to severance upon the expiration of the term of employment. The Company may require repayment of any bonus and equity-based compensation paid by the Company in a prior Company fiscal year if the Company is required to restate financial results with respect to such fiscal year due to material non-compliance with applicable financial reporting requirements. Mr. Dolson is subject to a (i) 12-month post-termination non-competition covenant relating to competitors of the Company, (ii) 12-month post-termination non-solicitation covenant in respect of employees, consultants, vendors, customers and similar business relationships of the Company and (iii) perpetual confidentiality and non-disparagement covenants.
Potential Payments Upon Termination Table
Assuming a termination of employment (including due to expiration of the term) occurred as of December 31, 2019,2022, each of Messrs. Brickman, Costello, Dolson and DolsonSuit would be entitled to receive the payment and benefits set forth in the following table. As discussed above, if either Mr. Brickman, Costello, Dolson or DolsonSuit was terminated by the Companyus for Cause, if such NEO terminated without Good Reason, or if their employment was terminated due to death or Disability, such NEO would only be entitled to accrued obligations.
| | | | | | | | | | | |
| | James R. Brickman | | Richard A. Costello | | Jed Dolson | | Neal Suit |
| Termination by the Company without Cause/Resignation by Executive for Good Reason | | • A cash severance payment equal to $6,000,548,$9,201,000, calculated as two times (2x) the sum of (i) base salary ($1,500,000) plus (ii) target bonus for year of termination ($1,500,274)3,100,500). • Full acceleration of outstanding unvested stock options on a termination without Cause only. (1)
| | • A cash severance payment equal to $400,000.
• A pro-rata$1,000,000, calculated as the sum of (i) base salary ($450,000) plus (ii) target bonus for the year of termination ($400,000)550,000). | | • A cash severance payment equal to $1,650,000,$3,159,000, calculated as one and one-half times (1.5x) the sum (i) base salary ($550,000)600,000) plus (ii) bonus in respect of prior year $1,506,000. | | • A cash severance payment equal to $701,250, calculated as one and one-half times (1.5x) the sum (i) base salary ($1,100,000).300,000) plus (ii) target bonus for year of termination $167,500. |
| Termination by the Company without Cause/Resignation by Executive for Good Reason following a Change in Control | | • A cash severance payment equal to $9,000,822,$13,801,500, calculated as three times (3x) the sum (i) base salary $1,500,000 plus (ii) target bonus for year of termination ($1,500,274)3,100,500).
• Full acceleration | | A cash severance payment equal to $1,250,000, calculated as the sum of outstanding unvested stock options on a termination without Cause only. | • Same as above. | • Same as above. |
Expiration of Term | • Accrued Obligations only. | • A pro-rata(i) base salary ($450,000) plus (ii) target bonus for the year of termination ($320,000).550,000), plus (iii) $250,000. | • Accrued Obligations only. | Same as above | | Same as above |
(1)Based on the closing price per share of the Common Stock on December 31, 2019, the last business day of the year, which was equal to $11.48, the acceleration of Mr. Brickman’s unvested stock options would have been worth $1,996,950.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about our Common Stock that may be issued as of December 31, 2019 under the 2014 Equity Plan, which is our only existing equity compensation plan.
| | | | | | | | | | | | | | | | | | | | |
Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | Weighted-average exercise price of outstanding options, warrants and rights (b) | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
Equity compensation plans approved by security holders | | — | | | — 2023 Proxy Statement | | |
42
Executive Compensation
For purposes of the severance payments discussed above, the relevant definitions are as follows:
• “Cause,” shall mean the executive’s: (i) commission of a felony or a crime of moral turpitude, (ii) engaging in conduct that constitutes fraud or embezzlement, (iii) engaging in conduct that constitutes gross negligence or willful misconduct that results or could reasonably be expected to result in harm to our business or reputation, (iv) breaching any material terms of the executive’s employment or (v) continued willful failure to substantially perform executive’s duties.
• “Good Reason,” means any of the following actions taken by us without the executive’s written consent: (i) any material failure by us to fulfill our obligations under the respective employment agreement, (ii) a material and adverse change to, or a material reduction of, the executive’s duties and responsibilities or, following a Change in Control, a change in the executive’s reporting position such that the executive no longer reports directly to the board of directors of the parent corporation in a group of controlled corporations and other entities, (iii) a material reduction in executive’s then current Annual Base Salary (not including any broader compensation reductions by the Board that are not limited to the executive specifically and do not reduce the executive’s salary by more than 10% in the aggregate) or (iv) the relocation of executive’s primary office to a location more than fifty (50) miles from the prior location, which materially increases executive’s commute to work.
| 1,656,703 | | | |
Equity compensation plans not approved by security holders | | — | | | — 2023 Proxy Statement | | |
43
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median annual total compensation of our employees and the annual total compensation of our Chief Executive Officer, James R. Brickman.
As of December 31, 2022, our employee population consisted of approximately 540 individuals working at Green Brick and our subsidiaries all within the United States. We selected December 31, 2022, the last day of our fiscal year, as the determination date for identifying the median employee.
In 2022, we identified the median employee by calculating the amount of annual total cash compensation (salary plus bonus, commissions) paid to all of our employees (other than our CEO). We did not make any cost-of-living or other adjustments in identifying the median employee. Based on this methodology, the median employee in 2022 was a full-time, salaried employee.
Once we identified our 2022 median employee, we then calculated the 2022 annual total compensation for such employee in accordance with the requirements of the executive compensation rules for the Summary Compensation Table (Item 402(c)(2)(x) of Regulation S-K). Under this calculation, the median employee’s annual total compensation in 2022 was $112,194. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of the Summary Compensation Table included in this proxy statement. The resulting ratio of the annual total compensation of our CEO to the annual total compensation of the median employee was 53 to 1.
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As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of RegulationS-K,
we are providing the following information about the relationship between executive “Compensation Actually Paid” (or “CAP”), as defined by SEC rules, and certain of our financial performance metrics. For further information concerning our variablephilosophy and how we align executive compensation with our performance, refer to the “Compensation Discussion and Analysis” section of this proxy statement. | | | | | | | | | | | | | | | | | |
| | Summary
Compensation
Table Total for
PEO | | Compensation
Actually Paid
to PEO | | Average Summary Compensation Table Total for Non-PEO NEOs | | Average Compensation Actually Paid to Non-PEO NEOs | | Value of Initial Fixed $100
Investment Based On: | | | | Home
Closings
Revenue (in
thousands) |
| | | | Peer Group
Total
Shareholder
Return |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) |
| | | | | | | | | |
2022 | | $5,960,838 | | $5,960,838 | | $1,538,111 | | $1,538,410 | | $211.06 | | $132.08 | | $313,997 | | $1,696,911 |
| | | | | | | | | |
2021 | | $5,087,182 | | $5,087,182 | | $1,814,672 | | $1,814,672 | | $264.20 | | $187.73 | | $204,381 | | $1,305,620 |
| | | | | | | | | |
2020 | | $3,483,687 | | $3,483,687 | | $1,416,339 | | $1,416,339 | | $200.00 | | $126.16 | | $117,797 | | $923,901 |
. Reflects compensation amounts reported in the “Summary Compensation Table” or “SCT” for our CEO, James R. Brickman, for the respective years shown. . CAP for our CEO in each of 2022, 2021 and 2020 reflects the respective amounts set forth in column (b), adjusted as set forth in the table below, as determined in accordance with SEC rules. The dollar amounts reflected in column (c) do not reflect the actual amount of compensation earned by or paid to our CEO during the applicable year. For information regarding decisions made by our Compensation Committee with respect to the CEO’s compensation for each fiscal year, please see the “Compensation Discussion and Analysis” section of this proxy statement and the proxy statement for the 2022 annual meeting of stockholders and the “Executive Compensation Information” section of the proxy statement for the 2021 annual meetings of stockholders. | | | | | | |
| | | | |
| | | | | | |
| | | | |
| CEO | | Mr. Brickman | | Mr. Brickman | | Mr. Brickman |
| | | | |
SCT Total Compensation ($) | | $ 3,483,687 | | $ 5,087,182 | | $ 5,960,838 |
| | | | |
| Less: Stock and Option Award Values Reported in SCT for the Covered Year on Grant Date ($) | | $750,137 | | $1,225,000 | | $1,349,988 |
| | | | |
| Plus: Fair Value of Stock Awards Granted and Vested in the Covered Year (on Vest Date) | | $750,137 | | $1,225,000 | | $1,349,988 |
| | | | |
Fair Value for Stock and Option Awards Granted in the Covered Year at Year-End ($) | | - | | - | | - |
| | | | |
| Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | | - | | - | | - |
| | | | |
| Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | | - | | - | | - |
| | | | |
| Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | | - | | - | | - |
| | | | |
| Compensation Actually Paid ($) | | $3,483,687 | | $5,087,182 | | $5,960,838 |
45
. The followingnon-CEO
named executive officers are included in the average figures shown for the 2020 and 2021 covered years: Richard A. Costello and Jed Dolson; and for the 2022 covered year: Richard A. Costello, Jed Dolson and Neal Suit. . Average CAP for ournon-CEO
NEOs in each of 2022, 2021 and 2020 reflects the respective amounts set forth in column (d), adjusted as set forth in the table below, as determined in accordance with SEC rules. The dollar amounts reflected in column (e) do not reflect the actual amount of compensation earned by or paid to ournon-CEO
NEOs during the applicable year. For information regarding the decisions made by our Compensation Committee with respect to thenon-CEO
NEOs’ compensation for each fiscal year, please see the “Compensation Discussion and Analysis” section of this proxy statement and the proxy statement for the2022
annual meeting of stockholders and the “Executive Compensation Information” section of the proxy statement for the 2021 annual meetings of stockholders. | | | | | | |
| | | | |
| | | | | | |
| | | | |
| | See column (d)
note | | See column (d)
note | | See column (d)
note |
| | | | |
| SCT Total Compensation ($) | | $1,416,339 | | $1,814,672 | | $1,538,111 |
| | | | |
| Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | | $425,000 | | $499,325 | | $524,336 |
| | | | |
| Plus: Fair Value of Stock Awards Granted and Vested in the Covered Year (on Vest Date) | | $425,000 | | $499,325 | | $524,635 |
| | | | |
Fair Value for Stock and Option Awards Granted in the Covered Year at Year-End ($) | | - | | - | | $299 |
| | | | |
| Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | | - | | - | | - |
| | | | |
| Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | | - | | - | | - |
| | | | |
| Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | | - | | - | | - |
| | | | |
| Compensation Actually Paid ($) | | $1,416,339 | | $1,814,672 | | $1,538,410 |
. For the relevant fiscal year, represents the cumulative total shareholder return (TSR) of Green Brick for the measurement periods ending on December 31 of each of 2022, 2021 and 2020, respectively. ). For the relevant fiscal year, represents the cumulative TSR of the S&P Homebuilders Select Industry Index for the measurement periods ending on December 31 of each of 2022, 2021 and 2020, respectively. . Reflects “Net Income” in our consolidated income statements included in our Annual Reports on Form10-K
for each of the years ended December 31, 2022, 2021 and 2020. . Company-selected Measure is Home Closings Revenue Growth, which is described below. Relationship between Pay and Performance
one-year,
two-year
and three-year TSR as compared to theone-year,
two-year
and three-year TSR of its TSR Peer Group.CAP, as required under SEC rules, reflects adjusted values to unvested and vested equity awards during the years shown in the tables above based onyear-end
stock prices, various accounting valuation assumptions, and projected performance modifiers but does not reflect actual amounts paid out for those awards. CAP generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals. In 2022, CAP for both our CEO and the average of other NEOs is a negative number, reflecting the impact of the change in our stock price between December 31, 46
2021 and December 31, 2022 because of the significant portion of our executives’ compensation tied to equity with fair values based in part on stock price. For a discussion of how our Compensation Committee assessed our performance and our named executive officers’ pay each year, see “Compensation Discussion and Analysis” in this proxy statement and in the proxy statement for the 2022 annual meetings of stockholders and the “Executive Compensation Information” section of the proxy statement for the 2021 annual meetings of stockholders.
Listed below are the financial andnon-financial
performance measures which in our assessment represent the most important financial performance measures we used for 2022 to link CAP to our named executive officers to company performance. | | | | |
| | |
Total | | — | | | — | | |
Income | 1,656,703 | Financial measure | | Metric of profitability before taxes that can vary due to factors outside of the control of the company. |
Home Closings Revenue Growth | | Financial measure | | Increase, period over period, in revenue from home closings. |
Homebuilding Gross Margin | | Financial measure | | Homebuilding gross margin is calculated as Home Closings Revenue minus Cost of Homebuilding units. |
Return on Assets | | Financial measure | | Return on assets is calculated by dividing net income by total assets. |
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30PROPOSAL NO. 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, referred to herein as the Dodd- Frank Act and with Section 14A of the Exchange Act, the Board is providing stockholders with an advisory vote on the Company’s executive compensation as reported in this proxy statement. Stockholders are being asked to vote on the following resolution:
“RESOLVED, that the stockholders of Green Brick Partners, Inc. hereby approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, under the section of this proxy statement entitled “Executive Compensation Information.”
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE RESOLUTION APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Additional Information
Stockholders are encouraged to carefully review the “Executive Compensation” section of this proxy statement, which includes executive compensation disclosure and the executive compensation tables. Our executive compensation programs play a key role in our ability to attract and retain a highly experienced, successful team to manage our Company and deliver strategic and financial results. We have designed our executive compensation programs utilizing a pay-for-performance philosophy and primarily compensate our named executive officers through a combination of base salary, short-term incentives, in the form of discretionary annual cash bonuses, and long-term incentives, in the form of equity-based compensation. We believe our executive compensation programs are structured to support our business objectives.
While the vote on executive compensation is non-binding and solely advisory in nature, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO CONDUCT AN ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY “THREE YEARS”
Background
In 2017, in light of the voting results at our 2017 annual meeting of stockholders with respect to the interval at which to seek stockholder’s approval of compensation of the named executive officers, our Board determined to hold the say on pay vote every three years. We believe that a non-binding advisory stockholder vote on the compensation of our named executive officers should occur every three years. We note that a substantial majority of our stockholders approved the compensation of our named executive officers at the 2020 annual meeting of stockholders, with approximately 99.3%, of the votes cast in favor of the respective say on pay resolutions. While we are pleased with our strong stockholder support, we will continue to actively evaluate our executive compensation program.
After thoughtful consideration and ongoing input from our stockholders, the Board believes that holding an advisory vote on the compensation of our named executive officers every three years is the most appropriate policy for our stockholders and the Company at this time. The three-year voting cycle allows stockholders to review compensation over a longer period of time, providing sufficient time to evaluate the impact of changes made in one year where outcomes may not be immediately known.
Although the vote on this Proposal is advisory and non-binding, the Board will carefully consider the voting results. If none of the alternatives receives the affirmative vote of holders of at least a majority of the shares of Common Stock issued, present and voting at the Annual Meeting, the frequency receiving the greatest number of votes (every one, two or three years) will be considered the frequency recommended by the stockholders. The next scheduled say-on-pay vote will occur at the 2026 annual meeting of stockholders.
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PROPOSAL NO. 4
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANT
The Audit Committee appoints, compensates, retains and oversees our auditors. The Committee engages in an annual evaluation of the independent registered certified public accounting firm, or “independent auditor,” qualifications, performance and independence and considers the advisability and potential impact of selecting a different independent registered certified public accounting firm.
The Audit Committee has selected RSM US LLP to serve as our independent auditor for 2023. RSM has served as our independent registered public accounting firm since August 2016.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF RSM AS GREEN BRICK’S INDEPENDENT PUBLIC ACCOUNTANT
Background
The Audit Committee has selected RSM US LLP to serve as our independent auditor for 2023. In accordance with SEC rules and RSM policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to us. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of our lead audit partner pursuant to this rotation policy includes meetings between the Chairman and the members of the Audit Committee and the candidates for the role, as well as discussion by the full committee with input from management.
The Audit Committee and the Board believe that the continued retention of RSM as our independent auditor is in our best interests and those of our stockholders, and we are asking our stockholders to ratify the selection of RSM as our independent auditor for 2023. Although the Board is submitting the selection of RSM to our stockholders for ratification, the Audit Committee is not required to take any action as a result of the outcome of the vote on this proposal. If our stockholders do not ratify the selection of RSM as our independent registered certified public accounting firm, other independent registered certified public accounting firms will be considered by our Audit Committee, but the Audit Committee may nonetheless choose to engage RSM. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered certified public accounting firm at any time during the year if it determines that such a change would be in the best interest of us and our stockholders.
Representatives of RSM are expected to be present at the Annual Meeting and they will have an opportunity to make a statement if desired and will be available to respond to questions.
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Proposal 4 – Ratification of Independent Public Accountant
Fees and Services of RSM US LLP
Fees for professional services provided by RSM for the fiscal years ended 2022 and 2021, including related expenses, are as follows:
| | | | | | | | |
| | | |
| Services Provided | | 2022 | | | 2021 | |
Audit Fees(1) | | $ | 790,400 | | | $ | 728,463 | |
Audit-Related Fees(2) | | | — | | | | 46,800 | |
Tax Fees | | | — | | | | — | |
All Other Fees(3) | | | 13,874 | | | | 7,620 | |
| | | | | | | | | |
Total | | $ | 804,274 | | | $ | 782,883 | |
| | | | | | | | | |
| (1) | Includes fees for professional services rendered by RSM for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, review of the Company’s condensed consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, and audit of the Company’s internal control over financial reporting. |
| (2) | Includes fees related to consents and comfort letters related to offerings of our common stock and preferred stock in 2021. |
| (3) | Includes fees related to an unclaimed property audit. |
Audit Committee Pre-Approval Policy
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (“PCAOB”) regarding auditor independence, the Audit Committee (i) appoints, (ii) negotiates and sets the compensation of and (iii) oversees the performance of the independent registered public accounting firm. The Audit Committee pre-approves all audit, audit-related and permitted non-audit services provided by the independent registered public accounting firm, including the fees and terms for those services. The Audit Committee has adopted a policy and procedures governing the pre-approval process for audit, audit-related and permitted non-audit services. The Audit Committee pre-approves audit and audit-related services in accordance with its review and approval of the engagement letter and annual service plan with the independent registered public accounting firm. Any tax consultation or other consulting services proposed to be provided by RSM are considered for approval by the Audit Committee on a project-by-project basis. Non-audit and other services provided by the independent registered public accounting firm will be considered by the Audit Committee for pre-approval based on business purpose, reasonableness of estimated fees and the potential impact on the firm’s independence.
Additionally, in October 2022, the Audit Committee delegated its pre-approval authority to the Chair of the Audit Committee to approve audit or permitted non-audit services for which estimated fees do not exceed $50,000.
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AUDIT COMMITTEE REPORT
Report of the Audit Committee
The Audit Committee has reviewed and discussed with management and with the independent registered certified public accounting firm the audited consolidated financial statements for the 2022 fiscal year. The Audit Committee has also performed the other reviews and duties set forth in its charter. The Audit Committee discussed with the independent registered certified public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communication with Audit Committees, as adopted by the PCAOB.
Additionally, the Audit Committee has: (i) received the written disclosures and the letter from the independent registered certified public accounting firm required by the applicable requirements of the PCAOB regarding the independent registered certified public accounting firm’s communications with the Audit Committee concerning independence; (ii) considered whether the provision of tax and accounting research and other non-audit services by our independent registered certified public accounting firm is compatible with maintaining their independence; and (iii) discussed with the independent registered certified public accounting firm their independence from us and our management.
In reliance on the foregoing reviews and discussions, the Audit Committee recommended to the Board that the audited consolidated financial statements referred to above be included in our Annual Report on Form 10-K for the 2022 fiscal year for filing with the SEC.
In determining whether to reappoint RSM as our independent registered certified public accounting firm for 2023, the Audit Committee considered the qualifications, performance and independence of the firm and the audit engagement team, together with the following factors:
RSM’s capabilities to handle the breadth and complexity of our operations;
RSM’s familiarity with our industry, accounting policies, financial reporting process, and internal control over financial reporting;
the quality and candor of RSM’s communications with the Audit Committee and management;
external data on the firm’s audit quality and performance, including recent PCAOB reports on RSM and its peer firms;
the performance of the lead engagement partner and the other professionals on our account; and
the appropriateness of RSM’s fees based on the scope of activities.
In light of the Audit Committee’s views on the performance of RSM, it is the Audit Committee’s belief that continuing to retain RSM is in our best interest and those of our stockholders. Consequently, the Audit Committee has appointed RSM as our independent registered certified public accounting firm for fiscal year 2023 and recommends that stockholders ratify the appointment at the Annual Meeting.
Kathleen Olsen (Chair)
Lila Manassa Murphy
Richard S. Press
April 27, 2023
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 that might incorporate future filings, including this proxy statement, in whole or in part, the Report of the Audit Committee and the Compensation Committee Report above shall not be incorporated by reference into this proxy statement.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of Green Brick’s Common Stockour common stock, as of April 15, 2020, by:
•24, 2023, by (i) each person who is known by the Companyto us to beneficially own more than 5% or more of theour outstanding shares of Common Stock;
•each current member of the Board and director nominees;
•each of the Company’scommon stock; (ii) our named executive officers included infor the Summary Compensation Table;fiscal year ended December 31, 2022; (iii) each director and
• nominee for director and (iv) all current members of the Boardexecutive officers and the Company’s current executive officersdirectors as a group.
For purposes of this table, the number of shares beneficially owned is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. To the Company’s knowledge, except as otherwise indicated in the footnotes below, the reporting person has sole voting and dispositive power with respect to all shares beneficially owned.
As of April 15, 2020, there were 50,616,92224, 2023, we had 45,556,308 shares outstanding.
| | | | | | | | | | | | | | | | | | | | | | | |
| Beneficial Owner | | Number of Shares of Common Stock | | Total Number of Shares Beneficially Owned | | Percentage of Common Stock Outstanding | |
James R. Brickman (1) | | 1,781,074 | | 2,281,074 | | 4.5 | % |
| Richard A. Costello | | 68,584 | | 68,584 | | | * |
| Jed Dolson | | 185,010 | | 185,010 | | | * |
David Einhorn (2) | | 8,922 | | 24,127,590 | | 47.7 | % |
| Elizabeth K. Blake | | 138,366 | | 158,167 | | | * |
Harry Brandler (3) | | 39,076 | | 39,076 | | | * |
| John R. Farris | | 128,870 | | 128,870 | | | * |
| Kathleen Olsen | | 57,164 | | 57,164 | | | * |
| Richard S. Press | | 68,623 | | 78,523 | | | * |
All Directors and Executive Officers as a group, 9 persons (4) | | 2,465,390 | | 27,084,058 | | 53.1 | % |
Greenlight Capital Inc. and its affiliates (2) 2 Grand Central Tower 140 East 45th Street, 24th Floor New York, NY 10017 | | 24,127,590 | | 24,127,590 | | 47.7 | % |
* Less than 1% of outstanding shares.
common stock outstanding. | | | | | | | | |
Name of Beneficial Owner | | Number of Shares of
Common Stock
Beneficially Owned(1) | | | Percent | |
Holders of more than 5% | | | | | | | | |
Greenlight Capital Inc. and its affiliates(2) | | | 16,600,508 | | | | 36.4% | |
BlackRock, Inc.(3) | | | 4,526,263 | | | | 9.9% | |
Named Executive Officers and Directors | | | | | | | | |
James R. Brickman(4) | | | 2,115,246 | | | | 4.6% | |
Richard A. Costello | | | 96,049 | | | | * | |
Jed Dolson | | | 269,128 | | | | * | |
Neal Suit | | | 9,016 | | | | * | |
David Einhorn(5) | | | 17,427,590 | | | | 38.3% | |
Elizabeth K. Blake | | | 194,693 | | | | * | |
Harry Brandler(6) | | | 130,235 | | | | * | |
Lila Manassa Murphy | | | 8,785 | | | | * | |
Kathleen Olsen | | | 88,023 | | | | * | |
Richard S. Press(7) | | | 99,682 | | | | * | |
All Executive Officers and Directors as a group (10 persons)(8) | | | 20,434,207 | | | | 44.4% | |
Unless otherwise indicated, the address for all beneficial ownersof each of our directors and officers identified is c/o Green Brick Partners, Inc., 2805 Dallas Parkway, Suite 400, Plano, TX 75093.
| (1) | In determining the number and percentage of shares beneficially owned by each person, shares that may be acquired by such person within 60 days after April 24, 2023 are deemed outstanding for purposes of determining the total number of outstanding shares for such person and are not deemed outstanding for such purpose for all other stockholders. To our knowledge, except as otherwise indicated, beneficial ownership includes sole voting and dispositive power with respect to all shares. |
| (2) | Based on Amendment 18 to the Schedule 13D filed by David Einhorn and Greenlight Capital, Inc. et al. on August 5, 2022 and the Form 4 filed on January 4, 2023. Mr. Einhorn is the president of Greenlight Capital, Inc. (“Greenlight Inc.”) and the senior manager of DME Advisors GP, LLC (“DME GP”). DME GP is the general partner of DME Advisors, LP (“DME”) and DME Capital Management, LP (“DME CM”). Greenlight Inc. controls the voting and disposition of 8,291,545 shares of Common Stock held for the account of Greenlight Capital Offshore Partners, Ltd. of which Greenlight Inc. acts as investment advisor. DME CM controls the voting and disposition of 4,718,773 shares of Common Stock held for the account of Greenlight Capital Offshore Master, Ltd., of which DME CM acts as investment advisor. DME controls the voting and disposition of 2,740,190 shares of Common Stock held for the account of Solasglas Investments, LP (“SILP”). DME CM controls the voting and disposition of 850,000 shares of Common Stock held for the |
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(1) Includes (i) 500,000 shares issuable upon exercise of vested stock options and (ii) 40,000 shares held by the Brickman Living Trust (the “Living Trust”), of which Mr. Brickman is a trustee and potential beneficiary. Mr. Brickman | account of a private investment fund for which DME CM manages a portfolio (the “Sub-Account”). By virtue of his roles at Greenlight Inc., DME, DME CM and DME GP, Mr. Einhorn may be deemed to have voting and dispositive power over 16,600,508 shares of common stock held by these affiliates of Greenlight, Inc. The 16,600,508 shares includes 7,658,703 shares of common stock which are pledged or held in one or more margin accounts. Each of Mr. Einhorn, Greenlight Inc., DME, DME CM and DME GP disclaims beneficial ownership of these shares of common stock, except to the extent of any pecuniary interest therein. The principal business address of each of Greenlight Inc., DME GP, DME, DME CM and Mr. Einhorn is 2 Grand Central Tower, 140 East 45th Street, 24th Floor, New York, NY 10017. |
| (3) | According to the Schedule 13G/A filed on January 24, 2023, by BlackRock, Inc. (“BlackRock”), of the 4,526,263 shares beneficially owned, BlackRock has (i) sole voting power with respect to 4,471,976 shares, and (ii) sole investment power with respect to all 4,526,263 shares. The principal business address of BlackRock is 55 East 52nd Street, New York, NY 10055. |
| (4) | Includes 500,000 shares issuable upon exercise of vested stock options. |
| (5) | In addition to the amounts held by Greenlight Capital, et al, Mr. Einhorn owns 827,082 shares of Common Stock directly. |
| (6) | Includes 74,176 shares held by Brandler LLC for which Mr. Brandler is a manager. Mr. Brandler disclaims beneficial ownership of the shares of common stock directly held by Brandler LLC, except to the extent of his pecuniary interest therein. |
| (7) | Includes 20 shares held indirectly by Mr. Press as the custodian for a UGMA Account for a minor. |
| (8) | Includes (i) 500,000 shares issuable upon exercise of vested stock options held by Mr. Brickman and (ii) 16,600,508 shares held by Greenlight Capital, Inc., and its affiliates described in Note 2, for which one of our directors, David Einhorn, may be deemed to beneficially own due to his indirect voting and dispositive power over such shares. |
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QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING
What is the date, time and place of the sharesAnnual Meeting?
Our Annual Meeting will be held in a virtual format only, on Tuesday June 13, 2023, at 11:00 a.m. Eastern Time. As a stockholder, you can attend, vote and submit questions at our Annual Meeting by accessing www.proxyvote.com using the 16-digit control number on your proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials.
What am I being asked to vote on and what is the Company directly held byBoard recommendation?
At the Living Trust, exceptAnnual Meeting you will be asked to the extent of his pecuniary interest therein.
(2) The shares owned by Greenlight Capital Inc. et al. is based solelyvote on the
Schedule 13D (Amendment No. 14) filed withfollowing four proposals. Our Board recommendation for each of these proposals is set forth below: | | |
| |
| Proposal | | Board Recommendation |
To elect seven directors each for a term expiring at the next annual meeting or until his or her successor has been duly elected and qualified | | FOR each Director Nominee |
To approve, on an advisory basis, the compensation of our named executive officers | | FOR |
To approve, as a non-binding advisory vote, the frequency of future advisory votes on the compensation of our named executive officers | | For the option of EVERY THREE YEARS |
To ratify the appointment of RSM US LLP (“RSM US” or “independent auditors”) as our independent registered certified public accounting firm for the 2023 fiscal year. | | FOR |
You will also be asked to consider and act upon such other business as may properly come before the SEC on July 5, 2018 by Greenlight Capital Inc. and DME Advisors GP, LLC. Greenlight Capital, Inc.Annual Meeting.
Who is entitled to vote at the investment manager for Greenlight Capital Qualified, L.P., Greenlight Capital, L.P. and Greenlight Capital Offshore Partners, and as such has shared voting and dispositive power over: (i) 4,731,203 shares held by Greenlight Capital Qualified, L.P., (ii) 869,410 shares held by Greenlight Capital, L.P. and (iii) 7,232,208 shares held by Greenlight Capital Offshore Partners. DME Capital Management, LP (“DME Management”) is the investment manager for Greenlight Capital (Gold), LP, Greenlight Capital Offshore Master (Gold) Ltd., and as such has shared voting and dispositive power over (i) 3,708,995 shares held by Greenlight Capital (Gold), LP and (ii) 4,110,059 shares held by Greenlight Capital Offshore Master (Gold), Ltd. DME Advisors GP, LLC (“DME GP”) is the general partnerAnnual Meeting?
Only holders of DME Advisors, LP and DME Management, and as such has shared voting and dispositive power over 11,285,847 shares. David Einhorn, onerecord of our directors, is the principal of Greenlight Capital, Inc., DME Advisors, LP, DME Management and DME GP, and as such has voting and dispositive power over 24,118,668 shares held by these affiliates of Greenlight Capital, Inc. Mr. Einhorn disclaims beneficial ownership of these shares, except to the extent of any pecuniary interest therein.
(3) Includes 29,176 shares held by Brandler LLC, of which Mr. Brandler is a manager. Mr. Brandler disclaims beneficial ownership of the shares of the Company directly held by Brandler LLC, except to the extent of his pecuniary interest therein.
(4) Includes (i) 500,000 shares issuable upon exercise of vestedcommon stock options held by Mr. Brickman and (ii) 24,118,668 shares held by Greenlight Capital, Inc., and its affiliates described in Note 2, for which one of our directors, David Einhorn may be deemed to beneficially own due to his indirect voting and dispositive power over such shares.
OTHER MATTERS
Stockholder Proposals for the 2021 Annual Meeting
In order to be considered for inclusion in the Company's proxy statement for the 2021 Annual Meeting of Stockholders, the deadline for submission of stockholder proposals, pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, isat the close of business on
April 24, 2023, the record date for the Annual Meeting, are entitled to notice of, and to attend and vote at the Annual Meeting, or any postponements or adjournments of the meeting. At the close of business on the record date, 45,556,308 shares of our common stock were outstanding.What is the difference between a stockholder of record and a beneficial owner?
If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are considered, with respect to those shares, the “stockholder of record.”
If your shares are held by a brokerage firm, bank, trustee, other agent or record holder, each sometimes referred to as a “nominee,” you are considered the “beneficial owner” of shares held in
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Questions and Answers About Our Annual Meeting
“street name.” The Notice has been forwarded to you by your nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your nominee on how to vote your shares by following their 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 such materials.
What are the voting rights of our stockholders?
Our stockholders have one vote per share of our common stock owned on the record date for each matter properly presented at the Annual Meeting.
What constitutes a quorum?
A quorum will be present at the Annual Meeting if holders of a majority of outstanding shares of our common stock on the record date are represented at the Annual Meeting by virtual attendance or by proxy. If a quorum is not present at the Annual Meeting, we expect to postpone or adjourn the Annual Meeting to solicit additional proxies. Abstentions and broker non-votes (as described below) will be counted as shares present and entitled to vote for the purpose of determining the presence or absence of a quorum.
What are “broker non-votes” and how are they treated?
A “broker non-vote” occurs when a bank, broker, trustee, agent or other holder of record holding shares for a beneficial owner withholds its vote on a particular proposal because that holder does not have discretionary voting power for such proposal and has not received instructions from the beneficial owner. If your broker is the stockholder of record, your broker is required to vote your shares in accordance with your instructions. If you do not give instructions to your broker, the rules of the NYSE allow brokers the discretionary authority to vote your shares with respect to “routine” matters but not “non-routine” matters.
The table below sets forth, for each proposal on the ballot, whether a broker can exercise discretion and vote your shares absent your instructions. If they cannot, such broker non-vote will not be counted as a vote cast and will therefore have no impact on the approval of the proposal.
| | |
| |
Proposal | | Can Brokers Vote
Absent Instructions? |
Election of Directors | | No |
Approval of Executive Compensation | | No |
Approval of Frequency of Advisory Votes on Executive Compensation | | No |
Ratification of Independent Registered Certified Public Accounting Firm | | Yes |
If other matters are properly brought before the Annual Meeting and they are not considered routine under the applicable NYSE rules, shares held by a bank, broker or other holder of record holding shares for a beneficial owner will not be voted on such non-routine matters by that holder unless that holder has received voting instructions. As stated above, broker non-votes are counted as present for the purpose of determining whether a quorum is present.
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Questions and Answers About Our Annual Meeting
How are abstentions treated?
Abstentions will not be counted as votes cast in the final tally of votes with regard to either proposal. Therefore, abstentions will have no effect on the outcome of these proposals.
Will my shares be voted if I do not provide my proxy?
If your shares are held in the name of a bank, broker or other holder of record, they may be voted by the bank, broker or other holder of record with respect to “routine” matters (as described above under the caption “What are “broker non-votes” and how are they treated?”) even if you do not give the bank, broker or other holder of record specific voting instructions. If you are a stockholder of record and hold your shares directly in your own name, your shares will not be voted unless you provide a proxy or vote at the Annual Meeting.
How do I vote?
To Vote by Internet, Telephone or Mail:
You can vote by proxy whether or not you attend the Annual Meeting. To vote by proxy, you have a choice of voting over the Internet, by telephone or by using a traditional proxy card.
| • | | To vote by Internet, go to www.proxyvote.com and follow the instructions there. You will need the 16-digit control number included on your proxy card, voter instruction form or Notice. |
| • | | To vote by telephone, dial the number listed on your proxy card, your voter instruction form or Notice. You will need the 16-digit control number included on your proxy card, voter instruction form or Notice. |
If you received a Notice and wish to vote by traditional proxy card, you can request a full set of materials at no charge through one of the following methods:
| 1) | By Internet: by visiting www.proxyvote.com |
| 2) | By phone: by using the phone number listed on the Notice |
To reduce our administrative and postage costs, we ask that you vote through the Internet or by telephone, both of which are available 24 hours a day prior to the Annual Meeting. To ensure that your vote is counted, please remember to submit your vote by 11:59 p.m. Eastern Time on June 12, 2023.
To Vote at the Annual Meeting:
If your shares are registered in your name, you must use the 16-digit control number on your proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials in order to log in and complete your ballot electronically when prompted during the Annual Meeting.
If you hold your shares in “street name,” you will need to obtain the 16-digit control number assigned to your holdings with your bank, broker or other nominee and enter it when prompted by the website hosting the Annual Meeting to vote the shares that are held for your benefit.
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Questions and Answers About Our Annual Meeting
If I plan to virtually attend the Annual Meeting, should I still vote by proxy?
Yes. Casting your vote in advance does not affect your right to virtually attend the Annual Meeting. If you vote in advance and also virtually attend the Annual Meeting, you do not need to vote again at the Annual Meeting unless you want to change your vote.
What vote is required for the proposals?
| | |
| |
Proposal | | Description of Votes Needed |
| Election of Directors | | The seven nominees for election as directors will be elected by a majority of the votes cast at the Annual Meeting. |
Approval of Executive
Compensation | | The affirmative vote of a majority of the votes cast on the proposal. |
Approval of Frequency of Advisory
Votes on Executive
Compensation | | The affirmative vote of a majority of the votes cast for the option. |
Ratification of Independent
Registered Certified Public
Accounting Firm | | The affirmative vote of a majority of the votes cast on the proposal is required for the ratification of the appointment of RSM US as our independent auditor for the 2023 fiscal year. |
How will my proxy holder vote?
The enclosed proxy designates James R. Brickman and Richard A. Costello to hold your proxy and vote your shares. James R. Brickman and Richard A. Costello will vote all shares of our common stock represented by properly executed proxies received in time for the Annual Meeting in the manner specified by the holders of those shares. James R. Brickman and Richard A. Costello intend to vote all shares of our common stock represented by proxies that are properly executed by the record holder but that otherwise do not contain voting instructions as follows:
| | |
| |
| Proposal | | Board Recommendation |
Election of Directors | | FOR each Director Nominee |
To approve, on an advisory vote, the executive compensation. | | FOR |
To approve, as a non-binding advisory vote, the frequency of future advisory votes on executive compensation. | | For the option of EVERY THREE YEARS |
Ratification of Independent Registered Certified Public Accounting Firm | | FOR |
What happens if additional matters are presented at the Annual Meeting?
Other than the items of business described above, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy to the proxy holders named in the attached proxy card, such persons will vote in accordance with the recommendation of our Board, “FOR” or “AGAINST” such other matters.
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Questions and Answers About Our Annual Meeting
Can I change my vote after I have voted?
Voting by telephone, over the Internet or by mailing a proxy card does not preclude a stockholder from voting during the Annual Meeting. A stockholder may revoke a proxy, whether submitted via telephone, the Internet or mail, at any time prior to its exercise by (i) filing a duly executed revocation of proxy with our Corporate Secretary, (ii) properly submitting, either by telephone, mail or Internet, a proxy to our Corporate Secretary bearing a later date or (iii) attending the Annual Meeting and voting when prompted during the meeting. Attendance at the virtual meeting will not itself constitute revocation of a proxy.
How do I virtually attend the Annual Meeting?
The Annual Meeting will be held virtually and you will not be able to attend the Annual Meeting in person. To attend the Annual Meeting virtually, please log in to www.proxyvote.com using the control number on your proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials and follow the instruction prompts on the virtual meeting site.
Where can I find voting results of the Annual Meeting?
We will announce the results for the proposals voted upon at the Annual Meeting and publish final detailed voting results in a Form 8-K filed with the SEC within four business days after the Annual Meeting.
Who should I call with other questions?
If you have additional questions about this proxy statement or the Annual Meeting or would like additional copies of this proxy statement or our annual report, please contact:
Green Brick Partners, Inc.
2805 Dallas Parkway, Suite 400
Plano, TX 75093,
Attention: Corporate Secretary.
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OTHER MATTERS
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and certain officers, and persons who own more than 10% of our common stock, to file with the SEC reports of ownership and changes in ownership of our common stock and other equity securities. Based on a review of our records and certain written representations received from our executive officers and directors, we believe that all required filings during the year ended December 30, 2020.31, 2022 were made on a timely basis, except that each of Messrs. Brandler, Brickman, Costello and Dolson were late filing one report on Form 4.
Stockholder Proposals and Director Nominations
Proposals for Inclusion in the Proxy Statement. The date by which stockholder proposals must be received by us for inclusion in proxy materials relating to the 2024 annual meeting of stockholders, or the “2024 Annual Meeting,” is January 2, 2024, pursuant to Rule 14a-8 of the Exchange Act. Eligible stockholders who seek to submit a proposal for inclusion in the Company’sour proxy statement must comply with all applicable Bylaws and SEC regulations regarding the inclusion of stockholder proposals in company-sponsored proxy materials.
Additionally, pursuant Upon receipt of any such proposal, we will determine whether or not to
include such proposal in the proxy materials in accordance with SEC regulations governing the solicitation of proxies.Proposals not Included in the Proxy Statement and Nominations for Director. Stockholder proposals not included in our proxy statement and stockholder nominations for director may be brought before an annual meeting of stockholders in accordance with the advance notice provisionprocedures described in our Bylaws,Bylaws. In general, notice must be received by the Corporate Secretary not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting (i.e., February 14, 2024) and must contain specified information concerning the matters to be brought before such meeting and concerning the stockholder proposing such matters. For the 2024 Annual Meeting, the Corporate Secretary must receive notice of any stockholderthe proposal on or nomination for election as director to be submitted atafter the 2021 Annual Meetingclose of Stockholders, but not required to be included in our proxy statement, no earlier thanbusiness on February 23, 202114, 2024 and no later than the close of business on March 25, 2021.15, 2024. Stockholder proposals must be in proper written form and must meet the detailed disclosure requirements set forth in our Bylaws, including a description of the proposal, the name of the stockholder and beneficial owner, if any, and such parties’ stock holdings and derivative positions in our securities, if any. If we hold the 2024 Annual Meeting more than 30 days earlier or more than 60 days later than such anniversary date, we must receive your notice not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made.
Our Bylaws also require that stockholder proposals concerning nomination of directors provide additional disclosure, including information we deem appropriate to ascertain the nominee’s qualifications to serve on the Board, disclosure of compensation arrangements between the nominee, the nominating stockholder and the underlying beneficial owner, if any, and other information required to comply with the proxy rules and applicable law. The specific requirements of these advance notice provisions are set forth in Sections 2.071.13 and 3.041.14 of our Bylaws, set fortha copy of which is available upon request. In addition, to be included on our universal proxy card in connection with the 2024 Annual Meeting, the notice must also include the information that is required in any written notice of a stockholder proposal or director nomination. The persons named in the proxies solicited by management may exercise discretionary voting authority with respect to such stockholder proposals.Rule 14a-19(b)(2) and
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OTHER MATTERS
Rule 14a-19(b)(3).All stockholder proposals and director nominations pursuant to the advance notice provision or proxy access provision in our Bylaws should be sent to the Secretary at 2805 Dallas Parkway, Suite 400, Plano, TX 75093.
CostsList of Stockholders Entitled to Vote at the Annual Meeting
The names of stockholders of record entitled to vote at the Annual Meeting will be available at our corporate office for a period of 10 days prior to the Annual Meeting and continuing through the Annual Meeting.
Expenses Relating to this Proxy Solicitation
The costs of solicitation, if any, will be borne by Green Brick. Proxies may be solicited on our behalf by directors, officers or employees, in person or by telephone, electronic transmission and facsimile transmission. No additional compensation will be paid to such persons for such solicitation. Green Brick will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to beneficial owners of shares.
Electronic Delivery
This year we have elected to take advantageCommunication with Green Brick’s Board of Directors
Stockholders or other interested parties may communicate with one or more members of the SEC's rule that allows usBoard by writing to furnish proxy materialsthe Board or a specific director at:
Board of Directors (or specific director)
Green Brick Partners, Inc.
2805 Dallas Parkway, Suite 400 Plano, TX 75093
Communications addressed to you online. We believe electronic deliveryindividual Board members will expedite stockholders' receipt of materials, while lowering costs and reducingbe forwarded by the environmental impact of our Annual MeetingCorporate Secretary to the individual addressee. Any communications addressed to the Board will be forwarded by reducing printing and mailing of full sets of materials. If you would likethe Corporate Secretary to receive a paper copythe Chairman of the proxy materials, the Notice of Internet Availability of Proxy Materials contains instructions on how to receive a paper copy.
Reducing Duplicate Mailings
Because stockholders may hold shares of our Common Stock in multiple accounts or share an address with other stockholders, stockholders may receive duplicate mailings of notices or proxy materials. Stockholders may avoid receiving duplicate mailings as follows:
•Stockholders of Record. If your shares are registered in your own name and you are interested in consenting to the delivery of a single notice or single set of proxy materials, you may contact Broadridge Householding Department by phone at 1-800-542-1061 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
•Beneficial Stockholders. If your shares are not registered in your own name, your broker, bank, trust or other nominee that holds your shares may have asked you to consent to the delivery of a single notice or single set of proxy materials if there are other Green Brick stockholders who share an address with you. If you currently receive more than one copy of the notice or proxy materials at your household and would like to receive only one copy in the future, you should contact your nominee.
•Right to Request Separate Copies. If you consent to the delivery of a single notice or single set of proxy materials but later decide that you would prefer to receive a separate copy of the Notice of Annual Meeting or proxy materials, as applicable, for each stockholder sharing your address, then please notify Broadridge Householding Department or your nominee, as applicable, and they will promptly deliver the additional notices or proxy materials. If you wish to receive a separate copy of the Notice of Annual Meeting or proxy materials for each stockholder sharing your address in the future, you may also contact Broadridge Householding Department by phone at 1-800-542-1061 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
Board.Available Information
We will furnish without charge to each person whose proxy is being solicited, upon request of any such person, a copy of the 20192022 Form 10-K as filed with the SEC, including the financial statements and schedules thereto, but not the exhibits. In addition, such report is available, free of charge, on the Internet at www.greenbrickpartners.com. Stockholders who wish to obtain a paper copy of our 20192022 Form 10-K may do so without charge by writing to Green Brick Partners, Inc., 2805 Dallas Parkway, Suite 400, Plano, TX 75093, Attention: Investor Relations. A copy of any exhibit to the 20192022 Form 10-K will be forwarded following receipt of a written request with respect thereto addressed to Investor Relations.
Electronic Delivery
This year we have elected to take advantage of the SEC’s rule that allows us to furnish proxy materials to you online. We believe electronic delivery will expedite stockholders’ receipt of materials, while lowering costs and reducing the environmental impact of our Annual Meeting by reducing printing and
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OTHER MATTERS
mailing of full sets of materials. If you would like to receive a paper copy of the proxy materials, the Notice of Internet Availability of Proxy Materials contains instructions on how to receive a paper copy.
Householding
We utilize 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 the Notice, unless one or more of these stockholders notifies us that they wish to continue receiving individual copies. This procedure reduces duplicative 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, or if you hold shares of our Common Stock in more than one account, and in either case you wish to receive only a single copy of the Notice for your household, please contact Broadridge Householding Department by phone at 1-800-542-1061 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717. If you participate in householding and wish to receive a separate copy of the Notice, or if you do not wish to participate in householding and prefer to receive separate copies of the Notice in the future, please contact Broadridge as indicated above.
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SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET—www.proxyvote.com or scan the QR Barcode above GREEN BRICK PARTNERS, INC. Use the Internet to transmit your voting instructions and for electronic delivery of C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS information. Vote by 11:59 P.M. ET on 06/12/2023. Have your proxy card in hand when P.O. BOX 1342 BRENTWOOD, NY 11717 you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/GRBK2023 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. Vote by 11:59 P.M. ET on 06/12/2023. Have your proxy card in hand when you call and then follow the instructions. 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. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. For Withhold For All To withhold authority to vote for any All All Except individual nominee(s), mark “For All Except” and write the number(s) of the The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0 1. Election of Directors Nominees 01) Elizabeth K. Blake 02) Harry Brandler 03) James R. Brickman 04) David Einhorn 05) Kathleen Olsen 06) Richard S. Press 07) Lila Manassa Murphy The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 2. To approve, on an advisory basis, the compensation of our named executive officers. 0 0 0 The Board of Directors recommends you vote 3 YEARS on the following proposal: 1 year 2 years 3 years Abstain 3. To approve, on an advisory basis, the frequency of future advisory votes on executive compensation. 0 0 0 0 The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 4. To ratify the appointment of RSM US LLP as the Independent Registered Public Accounting Firm of the Company to 0 0 0 serve for the 2023 fiscal year. NOTE: Any other matters that may come before the meeting or any adjournments thereof will be voted in the best judgment of the proxies. . 6 . 0 . 0 R1 _ 1 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or 0000611857 partnership, please sign in full corporate or partnership name by 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 and Proxy Statement and Annual Report are available at www.proxyvote.com GREEN BRICK PARTNERS, INC. Annual Meeting of Stockholders June 13, 2023 at 11:00 A.M. Eastern Time This proxy is solicited by the Board of Directors. The stockholder(s) hereby appoint(s) James R. Brickman and Richard A. Costello,
Chief Financial Officer, Treasurer or either of them, as proxies, each with the power to appoint his substitute, and Secretary
Green Brick Partners, Inc.
2805 Dallas Parkway, Suite 400
Plano, TX 75093
Dated: April 29, 2020
33hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of GREEN BRICK PARTNERS, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 11:00 A.M. Eastern Time on June 13, 2023 in virtual only format at www.virtualshareholdermeeting.com/GRBK2023, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations and will be voted in the best judgment of the proxies on any other matters that may come before the meeting or any adjournments thereof. Continued and to be signed on reverse side
