Investigation Overview
An investigation on behalf of current long term investors in shares of NVR, Inc. (NYSE:NVR) concerning possible breaches of fiduciary duties related to potential excessive compensation that was awarded to certain senior officers and executives at NVR, Inc. was announced.
The investigation by a law firm focuses on whether the directors and officers of NVR, Inc. harmed the company by breaching their fiduciary duties to shareholders. In particular the investigation on behalf of current long term investors in NVR, Inc. (NYSE NVR) focuses on possible shareholder claims that certain of NVRs senior officers and executive were unjustly enriched through their receipt of unwarranted, excessive or unearned compensation in past years.
The NVR CEOs pay rose substantially from roughly $4.69million in 2008 to $30.879million in 2010. One of highest compensation in the home-building sector and among the highest paid CEOs of a publicly traded company overall. The NVR Principal Financial Officers pay increased from about $2.5million in 2008, respectively $719,000 in 2009 to $13.287million in 2010 and the Principal Accounting Officers compensation rose from $1.159million in 08, respectively $366,000 in 09 to $6.063million in 2010.
However, NVRs shareholders recently expressed their disdain for executive pay packages by voting no on NVR, Inc's say on pay provision. NVR, Inc. received only about 44% support for its pay practices at its May 3 annual meeting, according to a company filing.
The investigation concerns possible claims that the prior compensation awarded at NVR, Inc is improper based upon its current operating condition.
NVRs 12months Revenue fell from $5.156billion in 07 to $3.057billion in 2010. Its Net Income fell from $333.95million in 2007 to $206million in 2010. For the first quarter in 2011 NVR, Inc. reported lower quarterly Revenue of $517.12million compared to $593.50million a year earlier and lower quarterly Net Income of $15.17million compared to $32.09million one year earlier.
The investigation seeks to determine whether certain senior officers and executives at NVR, Inc were awarded salaries, bonuses, stock options and other forms of long-term, incentive or retirement compensation that were excessive or unwarranted based on the NVRs performance as compared to what senior officers and executives at comparable companies were making and/or results that were fraudulent, misleading or not long-lasting.
Finally the investigation focuses also on possible shareholder claims that would allow NYSE: NVR stockholders to more efficiently influence or control future compensation decisions at NVR, Inc.