SUPPLEMENT TO OUR PROXY STATEMENT
FOR THE 2019 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 6, 2019
This proxy statement supplement, dated January 24, 2019 (Proxy Supplement), supplements the definitive proxy statement (which we refer to as
our Proxy Statement) of the Board of Directors of Beazer Homes USA, Inc. (the Company, we, our or us) filed with the Securities and Exchange Commission (SEC) on
December 21, 2018, relating to the Companys 2019 Annual Meeting of Shareholders (the Annual Meeting), which will be held at 8:30 a.m., Eastern Time, on Wednesday, February 6, 2019, at our principal executive offices at
1000 Abernathy Road, Suite 260, Atlanta, Georgia 30328. This Proxy Supplement should be read in conjunction with our Proxy Statement, the contents of which remain important for you to review.
PAY FOR PERFORMANCE
Our
Compensation Committee is committed to ensuring that our executive compensation program reinforces key business and strategic objectives in support of long-term shareholder value creation and appropriately aligns pay for performance. This is
demonstrated by the heavy emphasis placed on variable, performance-based incentives for our Named Executive Officers (representing 64% of target total compensation for our CEO and averaging 58% of target total compensation for other senior executive
officers), use of challenging financial performance hurdles, and realized pay relative to target opportunity.
We have a long history of strong
shareholder support for our executive compensation program, which has not materially changed over the past several years, with Say on Pay support levels averaging over 95% since 2012. Our Compensation Committee believes that our executive
compensation program is rigorous and appropriately aligns pay for performance.
Performance Share Metrics Background
In order to facilitate pay for performance, our core compensation philosophy continues to be focused on providing incentive compensation to our management team
when they achieve challenging financial and
non-financial
goals that the Compensation Committee and our Board of Directors believe are critical to enhancing long-term shareholder value. As part of that
philosophy, the Committee believes that a significant portion of equity awards should be performance-based, with failure to reach such goals resulting in no compensation under a particular plan or metric. Accordingly,
two-thirds
of our management teams overall long-term incentive awards are comprised of performance shares, which reflect a target number of shares that may be issued to the award recipient at the end of
a three-year award cycle based on the achievement of rigorous performance targets established at the time of grant.
When determining awards, the
Committee utilizes performance metrics consisting of a variety of challenging financial goals aligned with key strategic objectives. In addition, in order to ensure the awards align with enhancing shareholder value, any awards earned at the end of
the three-year performance period are subject to adjustment (by up to +/- 20%) based on our relative total shareholder return (TSR) compared to industry peers.
The chart below sets forth the Committees performance share metrics for awards granted in fiscal 2015 through 2018, which we believe illustrate the
Committees rigorous approach:
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Performance Period
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3-Year
Target Performance Metric
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Pre-Tax
Income ($)
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Return on Assets (%)
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Net Debt to Adjusted EBITDA
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2015
-2017
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83.1 million
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N/A
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N/A
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20162018
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140.0 million
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9*
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6x**
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20172019
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160.0 million
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10
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5x
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20182020
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200.0 million
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10
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N/A
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*
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Return on Assets was 5.9% for fiscal 2015.
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**
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Net Debt to Adjusted EBITDA was 8.8x as of September 30, 2015.
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