The family’s all here…

February 8, 2006

On Monday, homebuilder MDC Holdings filed their preliminary proxy which was chock-full of interesting things. Among them were the enormous bonuses given to both Chairman Larry Mizel and COO David Mandarich, the second year in a row that both men’s bonuses were over $20 million. Indeed, both men saw their bonuses increase modestly in 2005 (if the word modest could be applied to a $20 million cash bonus), despite the fact that the company’s stock declined and alsounderperformed MDC’s self-described peer group.

Equally interesting was the long list of related party transactions, including the new disclosure that Mandarich’s son, Christopher took home nearly $800K last year between salary, bonus, and restricted stock, as the company’s regional president for So. Cal and Nevada. David’s sister, Carol, also is a new addition to the filing, and drew a salary of $80K and another $30K in bonuses. It’s not clear from the filings how long both have been on MDC’s payroll or how their salaries compare to prior years. The proxy does note, however that Larry Mizel’s wife, Carol, who I highlighted in this post last year, had her decorating fee cut to $120K a year, down from $240K. There was also the fact that in addition to paying longtime director Gilbert Goldstein $252K in consulting fees in 2005, it also provided $17K worth of office space. Goldstein’s contract is set to expire at the end of this month.

A few other interesting tidbits had to do with Mizel pre-paying for his personal use of the corporate jet (a good thing that may one day rub-off on other CEOs) and that the MDC/Richmond American Homes Foundation has a net worth of $26 million and has paid out $2.24 million since its inception in 1999.

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