Document

DEF 14A 1 mdc-2022proxystatement.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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¨ Preliminary Proxy Statement

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x Definitive Proxy Statement

¨ Definitive Additional Materials

¨ Soliciting Material Pursuant to 240.14a-12

M.D.C. Holdings, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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			As highlighted at the outset, the year was not without its challenges as the homebuilding industry continued to face supply chain issues, material shortages and municipal delays. As a result, we have seen both our construction and land development times extend due to ongoing disruptions at various stages of the land development and build process. Our teams performed heroically with our trade suppliers to obtain solutions and maintain the build process. We continued to focus on expanding our homebuilding operations during the year through risk adjusted land acquisitions within our existing geographic footprint as well as through our strategic entry into the Boise, Nashville, Austin and Albuquerque markets. As of year-end, we controlled over 38,000 lots across 15 states, representing a 29% increase from the prior year. In total, we invested $1.90 billion in land acquisition and development during 2021, compared to $1.27 billion in the previous year. Our executive management team and Asset Management Committees were instrumental in guiding the growth while maintaining our strict underwriting criteria. Overall, 2021 was a remarkable year for our industry and in particular our Company.


BY ORDER OF THE BOARD OF DIRECTORS,

Joseph H. Fretz Secretary


			Page
PROXY SUMMARY			1
GENERAL INFORMATION			8
DELIVERY OF PROXY MATERIALS TO SHAREHOLDERS WITH SHARED ADDRESSES			12
ANNUAL REPORT ON FORM 10-K			12
PROPOSAL ONE – ELECTION OF DIRECTORS			13
BENEFICIAL OWNERSHIP OF COMMON STOCK			18
EXECUTIVE OFFICERS			20
PROPOSAL TWO – ADVISORY VOTE ON EXECUTIVE COMPENSATION			21
COMPENSATION DISCUSSION AND ANALYSIS			22
COMPENSATION COMMITTEE REPORT			38
SUMMARY COMPENSATION TABLE			39
GRANTS OF PLAN-BASED AWARDS IN 202 1			42
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 202 1			43
OPTION EXERCISES AND STOCK VESTED IN 202 1			45
PENSION BENEFITS AT DECEMBER 31, 202 1			45
NONQUALIFIED DEFINED CONTRIBUTION AND OTHER NONQUALIFIED DEFERRED COMPENSATION PLANS			45
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS			46
EMPLOYMENT AGREEMENTS			46
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			51
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES			53
202 1 DIRECTOR COMPENSATION			61
CEO PAY RATIO DISCLOSURE			64
COMPENSATION POLICIES AND PRACTICES AND RISK MANAGEMENT			64
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			64
AUDIT COMMITTEE REPORT			65
TRANSACTIONS WITH RELATED PERSONS			66
REVIEW OF TRANSACTIONS WITH RELATED PERSONS			67
DELINQUENT SECTION 16(A) REPORTS			67
PROPOSAL THREE – INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			68
OTHER MATTERS			69
SHAREHOLDER PROPOSALS			69
INCORPORATION BY REFERENCE			70


Virtual Meeting Site:			April 25, 2022
www.virtualshareholdermeeting.com/MDC2022			10:00 a.m. Mountain Time


	Proposal	Recommendation of the Board	For more information
1.	Election of Directors	FOR each of the nominees	Page 13
2.	Advisory vote to approve executive compensation (Say on Pay)	FOR	Page 21
3.	Selection of Auditor	FOR	Page 68


The approximate date on which this Proxy Statement and the form of Proxy are first being sent to shareholders is March 4, 2022.


						Liz Driggs Environmental, Social and Governance Manager Tenure: 2 years


Environmental Initiatives
Highlights
☑			Every Richmond American home comes standard with energy efficient features that help cut down on energy use.
☑			In 2021, our average HERS rating improved 7% to 51, seventy-nine percent more efficient than a typical resale home.
☑			Goal of decreasing our average HERS rating to 50 or less by 2025. Longer term, we are evaluating the implementation of a net-zero ready home strategy.
New Initiatives
☑			Conducted 2019 and 2020 GHG inventories to enable MDC to better understand our corporate carbon footprint. More information on these inventories can be found in our interim ESG Sustainability Report at ir.richmondamerican.com/esg.
☑			Expanded our solar offerings, previously limited to California and Colorado, to all our regions.
☑			Sought to manage our largest GHG emission source identified in our 2019 & 2020 GHG inventories, embodied carbon, by engaging our supply chain to obtain product-specific embodied carbon data.
☑			Progressed on our 2021 GHG inventory with plans to report to the CDP, formerly the Carbon Disclosure Project, fostering the transparency and accessibility of our climate-related data and management strategy.


Social Initiatives
Highlights
☑			Committed to fostering and promoting a diverse and inclusive work environment.
☑			Continued to promote a gender and ethnically diverse employee base; current employee base comprises 28% non-white employees and 45% female employees; 42% of employees in a position of manager and above are female.

☑			Competitive benefits package including medical coverage, paid time off and 401(k) match.
☑			The Company has donated over $13 million to the MDC/Richmond American Homes Foundation in the last five years.
☑			Continued to offer sustainable, more affordably priced homes to homebuyers. In 2021, 61% of the new homes we delivered were from one of our more affordable homes series. Since 2017, we have increased the number of more affordable homes delivered by nearly 300%.
☑			Maintained a job site Safety Policy and encouraged our superintendents to be trained on this policy in order to guard against safety infractions on the job site. Our Reportable Incidence Rate (TRIR)* for 2021 was 1.25%.
New Initiatives
☑			Strengthened our commitment to the communities in which we operate by increasing our donation to the MDC/Richmond American Homes Foundation to 1% of annual net income.
☑			Promoted the health and wellness of our employees through COVID-19 protocols and our gym and yoga discounts, among other initiatives.
☑			Explored opportunities to implement diversity training, particularly for management and the Board.


Governance Initiatives
Highlights
☑			Engaged and experienced Board of Directors actively participate in 12 regular meetings per year. Our non-management directors have an average tenure of 12.5 years.
☑			Our Code of Conduct training takes place for all employees at the time of hire, as well as for all employees and directors on an annual basis. Topics covered include business ethics, conflicts of interest and appropriate standards of workplace conduct.
☑			Focus on succession planning, including recent promotions of an increasingly diverse senior leadership team.
☑			Formal procedures in place for confidential reporting of any suspected violations of law.
New Initiatives
☑			Assigned a full-time internal leader to guide MDC’s ESG initiatives.
☑			Implemented a formal ESG Policy adopted by the Board, which is available on our investor relations website at www.mdcholdings.com.
☑			Amended Corporate Governance/Nominating Committee Charter and Corporate Governance Guidelines to expressly include diversity as a consideration in the search for new directors.
☑			Prioritized a diverse management team and Board that fosters a foundation of integrity and ethical company culture, highlighted by our third consecutive appointment of a diverse candidate.


			Sincerely,


Larry A. Mizel Executive Chairman M.D.C. Holdings, Inc.


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


National Average HERS Index by Year**
2013	2014	2015	2016	2017	2018	2019	2020	2021
65	63	61	60	62	60	59	55	51


			Natasha Gandhi, Sr. Division President, South and Central Colorado Tenure: 3 years						Nicole Bloom Division President, Las Vegas Tenure: 22 years


			Janice Sinden Director since: 2022						Courtney L. Mizel Director since: 2017


EMPLOYEE DIVERSITY: GENDER / UNDERREPRESENTED GROUPS



BOARD DIVERSITY: GENDER / UNDERREPRESENTED GROUP


MDC defines gender diversity as individuals identifying as female.

MDC defines underrepresented groups as including individuals who identify as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, or Native Hawaiian or Pacific Islander; individuals who identify as LGBTQ+; individuals who identify as underrepresented based on national, Indigenous, religious, or cultural identity; individuals with disabilities; and veterans.
*The employee diversity percentages are based primarily on those identifying as female, Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, or Native Hawaiian or Pacific Islander. Data on other underrepresented groups within the employee population is not collected by MDC.


Our directors participate in our year-round shareholder engagement program that maintains transparency and solicits feedback.
60%	Outreach to investors holding over 60% of non-affiliated shares were offered the opportunity to meet	•Our independent directors participate in our shareholder engagements to solicit feedback directly from our investors. •Additionally, this ongoing dialogue provides an opportunity for shareholders to understand the process behind our strategy for increasing long-term shareholder value, governance practices and executive compensation design. •Our independent Lead Director primarily drives Board involvement in shareholder engagement. Feedback is then relayed to our entire Board and the management team. •Shareholder feedback is considered in establishing our governance practices and executive compensation design.
55%	Engaged with investors holding nearly 55% of non-affiliated shares
100%	All engagements included independent directors


Larry A. Mizel Executive Chairman			Larry A. Mizel founded the Company in 1972 and has served as a Director since its inception. He was appointed Chairman of the Board in 1972 and Chief Executive Officer of the Company in 1988. Then, in October 2020, he was appointed as Executive Chairman. Mr. Mizel has provided the Company with leadership and judgment, previously serving as the Chief Executive Officer and Chairman of the Board of Directors, and now as Executive Chairman, while advancing the long-term interests of the Company's shareholders. One of the most experienced leaders in the homebuilding industry, his knowledge and foresight provide the Board with invaluable guidance.

Director Since: 1972


Herbert T. Buchwald Lead Director			Herbert T. Buchwald is a principal in the law firm of Herbert T. Buchwald, P.A. and president and chairman of the Board of Directors of BPR Management Corporation, a property management company located in Denver, Colorado, positions he has held for more than the past five years. Mr. Buchwald has been engaged in the acquisition, development and management of residential and commercial real estate in Florida, Arizona, New Jersey and Colorado, through both publicly and privately held ventures for more than forty years. As an attorney, he has been admitted to practice before federal and state trial and appellate courts in Florida and Colorado. In addition, he holds an accounting degree and formerly was a practicing Certified Public Accountant. He has been a member of the Company's Board of Directors since March 1994. The combination of his knowledge, experience and skills provide the Company with strong oversight of accounting, financial, regulatory and legal matters, as well as the operation of the Company's real estate businesses. Mr. Buchwald is a veteran of the United States Navy.

Director Since: 1994 Committee Memberships: ●Legal Committee Chairman ●Audit Committee ●Compensation Committee ●Corporate Governance/ Nominating Committee


Michael A. Berman			Michael A. Berman has over thirty-five years of experience in the financial services industry. He is a member of Applied Capital Management, a private investment management firm located in Scottsdale, Arizona, and has served as its chairman from 2002 to date. From 2005 to 2006, he also served as the chief executive officer of First Ascent Capital, a financial services firm located in New York. From July 2006 until December 2008, he served as president and Chief Executive Officer of Real Estate Equity Exchange, Inc. (Rex & Co.), a financial services firm located in San Francisco, California. From January 1990 to March 1999, Mr. Berman was employed by The Nomura Securities Co., Ltd. (Tokyo) group of companies, where he held several senior executive positions, including that of President and CEO of Nomura Holding America Inc. and Chairman of Capital America, Nomura's commercial real estate lending subsidiary. In April 2006, Mr. Berman became a Director of the Company. Since 2006, he has been a director of HomeAmerican Mortgage Corporation, the Company’s mortgage lending subsidiary. Mr. Berman’s experience as a senior executive in corporate finance, in general, and the residential mortgage market, in particular, provide the Company with a valuable resource.

Director Since: 2006 Committee Memberships: ●Audit Committee


Janice Sinden			Janice Sinden has served as President and Chief Executive Officer of the Denver Center for the Performing Arts since 2016. Past positions include Chief of Staff for Denver Mayor Michael B. Hancock, where she managed 60 appointees and 26 departments. She currently serves on the non-profit boards of Citizens for Arts to Zoo, University of Northern Colorado, VISIT Denver, the American Transplant Foundation, Colorado Inclusive Economy and Denver Preschool Program. Ms. Sinden has been recognized by Titan 100 as one of Colorado's Top 100 CEO's, the Denver Business Journal as an Outstanding Woman in Business, 5280 Magazine as one of the 50 most influential persons in Denver, by the Colorado Women’s Foundation as one of the 25 most influential women in Colorado, by the Girl Scouts of Colorado as a Woman of Distinction, and by the University of Northern Colorado Department of Political Science and International Affairs as Distinguished Alumnus of the Year. Ms. Sinden was appointed to the Board in January 2022. Her operational and business knowledge, rich cultural experiences and community involvement provide the Company with a valuable resource and contribute to the business perspectives of the Board.

Director Since: 2022


David D. Mandarich			David D. Mandarich has been associated with the Company since 1977. He was a Director from September 1980 until April 1989, and has been a Director continuously since March 1994. He was appointed President and Chief Operating Officer of the Company in June 1999. Then, in October 2020, he was appointed President and Chief Executive Officer. A skilled and experienced leader in the homebuilding industry, Mr. Mandarich provides the Board with the benefit of his judgment and his knowledge and understanding of the Company's homebuilding business and operations. Mr. Mandarich is a veteran of the United States Army.

Director Since: 1994


Paris G. Reece III			Paris G. Reece III was formerly the Company’s Chief Financial Officer and Principal Accounting Officer, and retired on August 1, 2008. Since his retirement, Mr. Reece has performed consulting work and served in a volunteer position as the President of Cancer League of Colorado, a leading non-profit organization that was established over fifty years ago to raise money for cancer research and patient care. He joined the Company's Board of Directors in May 2013. As a Certified Public Accountant (Texas, non-practicing), a former Chief Financial Officer and a highly respected person within the homebuilding industry, Mr. Reece is uniquely qualified to provide the Company with strong oversight of accounting and financial matters, as well as the operation of the Company's homebuilding and financial services businesses.

Director Since: 2013 Committee Memberships: ●Audit Committee Chairman


David Siegel			David Siegel was a partner in the law firm of Irell & Manella LLP for more than thirty years, where he led that firm's securities litigation practice and was the firm's Managing Partner. He retired from the active practice of law in 2019. Mr. Siegel's law practice, for which he is nationally recognized, was concentrated on securities class actions, corporate governance, risk management, SEC reporting standards and regulatory compliance. Mr. Siegel has chaired and has been a frequent speaker at various seminars on securities litigation, class actions, and trial techniques. He has been named by his peers as one of the "Best Lawyers in Commercial Litigation" in The Best Lawyers in America guide. Mr. Siegel has been a member of the Company's Board of Directors since June 2009. Mr. Siegel's knowledge and experience in corporate governance and litigation matters provide the Company with significant guidance and oversight.

Director Since: 2009 Committee Memberships: ●Corporate Governance/ Nominating Committee Chairman ●Legal Committee


Raymond T. Baker			Raymond T. Baker has served as President of Gold Crown Management Company, a real estate asset management company, from 1978 to 2013, then as Vice President and Secretary to present. He is the founder and has served as Co-Director of the Gold Crown Foundation since 1986. He also is a member of the Board of Directors of Alpine Banks of Colorado and Land Title Guarantee Company. Mr. Baker is currently serving as Chairman of the Board of the Metropolitan Football Stadium District (Denver). From February 2004 until May 2007, he served as a director of Central Parking Corporation. He has over thirty-five years of experience in the real estate and banking industries. Mr. Baker became a member of the Company's Board of Directors in January 2012. His experience and knowledge of the real estate and banking industries directly complement and support the Company’s real estate activities and the financing of those activities.

Director Since: 2012 Committee Memberships: ●Compensation Committee Chairman


David E. Blackford			David E. Blackford has over forty-five years experience in the banking industry. He is employed by California Bank & Trust (CB&T), a leading California banking institution and a division of Zions Bancorporation, National Association. Between 1998 and 2001, he was CB&T’s managing director, serving on the Board of Directors and the Senior Loan Committee for Real Estate Finance. In May 2001 he was appointed chairman, president and chief executive officer of CB&T, and currently serves as executive chairman. He also is an executive vice president of Zions Bancorporation, National Association. Prior to 1998, he served as an executive officer in several financial institutions, including Bank One and Valley National Bank. He joined the Company's Board of Directors in April 2001. His experience and knowledge of historic and current institutional real estate lending practices, the regulatory process and the volatility of the credit markets provide a unique perspective to the Board.

Director Since: 2001 Committee Memberships: ●Corporate Governance/ Nominating Committee ●Legal Committee


Courtney L. Mizel			Courtney L. Mizel is a Principal at Mizel Consulting where she has worked for over twenty years. In this role, Ms. Mizel consults with companies in various industries on matters relating to their business management and strategy, including operations, business development, marketing, as well as legal matters. She is also a Founding Director of The Counterterrorism Education Learning Lab, an organization dedicated to preventing terrorism through education, empowerment, and engagement. She is active in a number of other non-profit activities, including serving on the Boards of Directors of Zimmer Children’s Museum, Sharsheret National, and JQ International. Ms. Mizel received her Bachelor of Science in Economics with honors from The Wharton School of the University of Pennsylvania and her Juris Doctor from the University of Southern California Gould School of Law. Ms. Mizel became a member of the Company's Board of Directors in June 2017. She is the daughter of the Company’s Executive Chairman, Larry A. Mizel. Ms. Mizel’s professional and business achievements, intellect and diverse experiences contribute to the business, governance and legal perspectives of the Board.

Director Since: 2017 Committee Memberships: ●Legal Committee


NON-EMPLOYEE DIRECTOR	JOINED BOARD	TENURE1
Raymond T. Baker	2012	9.9 years
Michael A. Berman	2006	15.7 years
David E. Blackford	2001	20.8 years
Herbert T. Buchwald	1994	27.9 years
Courtney L. Mizel	2017	4.6 years
Paris G. Reece III	2013	8.6 years
David Siegel	2009	12.5 years
Janice Sinden	2022	0 years


Our Board is committed to active refreshment, and balancing fresh perspectives with continuity and institutional knowledge.


Name of Executive Officer/Director	Number of Shares of Common Stock Owned Beneficially 1		Percent of Class 2
Raymond T. Baker	109,914		*
Michael A. Berman	34,529		*
David E. Blackford	22,748		*
Herbert T. Buchwald	31,401		*
Rebecca B. Givens	6,880		*
David D. Mandarich	6,578,943		9.0%
Robert N. Martin	253,154		*
Courtney L. Mizel	39,517		*
Larry A. Mizel	10,915,795	3	15.0%
Paris G. Reece III	67,202	3	*
David Siegel	23,019	3	*
Janice Sinden	—		*
All current executive officers and Directors as a group (12 persons)	18,083,102		24.2%


Name and Address of Beneficial Owner	Number of Shares of Common Stock Owned Beneficially		Percent of Class 1
BlackRock, Inc. 55 East 52nd Street New York, NY 10055	12,145,873	2	17.1	%
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355	6,320,031	3	8.9	%
Dimensional Fund Advisors LP 6300 Bee Cave Road Austin, TX 78746	4,185,499	4	5.9	%


			Robert N. Martin SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER TENURE: 19 YEARS
			REBECCA B. GIVENS SENIOR VICE PRESIDENT AND GENERAL COUNSEL TENURE: 9 YEARS


Executive Summary			23
Nearly 5 0 Years of Shareholder Value Creation			23
Executive Compensation Program Structure: Aligning Pay with Performance			25
202 1 Pay Performance Metrics and Outcomes Summarized			26
Compensation Governance Best Practices			27
202 1 Say-on-Pay Vote			27

Executive Compensation Program: Plan Design & Components			28
Key Goals and Objectives			28
Components of Executive Compensation			28
Fixed Compensation			29
Base Salary			29
Performance-Based Compensation			29
202 1 Chief Executive Officer and Chief Operating Officer Annual Incentive Bonus			29
202 1 CFO and General Counsel Annual Incentive Bonus			32
Long-Term Incentive Compensation			33
Peer Data			34
Role of Compensation Committee and Management			35
Role of the Independent Compensation Consultant			35

Other Compensation Considerations			36
Stock Ownership Guidelines			36
Anti-Hedging and Anti-Pledging Policies			36
Clawback Policy			36
Compensation and Risk Management			36
Medical Insurance Benefits			36
Other Compensation			37

SEC Form DEF 14A filed by M.D.C. Holdings Inc.