Big fat bonus checks
In 2010, several home builders awarded their top executives with big fat bonus checks despite slowing in the new home construction sector. 2011 is an exception to any year in the sector’s history as sales and permits hit their lowest recorded level.
Although companies like Sprint and Disney are awarding their CEOs more than generously, home builders are thus far not following suit.
Why the change in attitude?
Typically, a down economy doesn’t mean CEOs don’t get bonuses and even under performing companies are usually generous with their executives, but 2011 comes with new rules.
This year, the financial overhaul law went into effect wherein a business whose stock market value is over $75 million must allow investors to vote on bonuses in their annual meetings.
Enter Beazer homes whose board voted big bonuses down. Will other home builders follow suit given the screeching halt in their sector or will they follow the lead of bankers who are now out of business?
