Standard Pacific Rewards Its CEO
Standard Pacific Corp., an Irvine-based home builder whose operating profit rose more than 50% last year, awarded its top executive $12.5 million in compensation in 2004, a 50% increase, according to a government filing Wednesday.
Chairman and Chief Executive Stephen Scarborough earned an $11.5-million bonus on top of a salary of $956,000, according to the company’s proxy filing with the Securities and Exchange Commission. That was considerably higher than the $8.3-million salary and bonus package he earned the previous year.
Scarborough’s total compensation is expected to keep him among the highest-paid CEOs in California. He also is among the ranks of home builder executives earning generous compensation packages as reward for their industry’s stellar performance of recent years. Bruce Karatz, chief executive of Westwood-based KB Home, landed $20 million in compensation last year.
At Standard Pacific, the nation’s 12th-largest home builder by revenue, the CEO receives a bonus equal to 2.25% of the company’s pretax operating profit, the filing said. In 2004, operating profit totaled $513 million, a 50% increase from the year before.
Scarborough also received an award of 70,000 restricted company shares valued at about $5.4 million and was granted an option to purchase 30,000 shares of the company’s common stock.
Shares of Standard Pacific stock fell 10 cents to $71.10 on the New York Stock Exchange. Its shares rose 32% in 2004 and have gained 11% this year.
All major U.S. home builders have richly benefited from rising housing prices in recent years. Standard Pacific operates in six major real estate markets, including three of the hottest: California, Florida and Arizona. In California, the company’s 2004 average home sales price was $646,000, a 24% jump over 2003.
The industry maintains that demand for new homes will continue to push builders’ profits and revenues higher this year, even as interest rates creep up and push up the cost of financing a home. Builders in California expect to begin construction this year on about 200,000 units, about the same as last year.
On Wednesday, the Construction Industry Research Board reported that in February, 13,915 housing permits were issued in the state. That was up 1.9% from January, though down 6.9% from the same month a year earlier, a fact the industry group blamed on this winter’s storms.