Options Earn $59.4 Million for Schar
Thursday, March 22, 2007
Dwight C. Schar, chairman of Reston-based home builder NVR, gained $59.4 million on paper last year from exercising stock options, the company reported yesterday.
A downturn in the housing market took a pinch out of Schar's potential paycheck. Because the company fell short of a profit target by almost a third, neither he nor three other top executives received cash bonuses last year, according to a report NVR filed with the Securities and Exchange Commission yesterday.
Nor were the top executives awarded any new options last year, NVR said.
Schar's wealth over the years has made him a part owner of the Washington Redskins, a major donor to the Republican Party and the buyer of one of the nation's most expensive personal residences -- a Palm Beach, Fla., estate, as well as nearby land, reportedly acquired at a cost of $92 million.
Schar, who led NVR into and out of bankruptcy reorganization in the early 1990s, gained $61.3 million on paper from exercising options in 2005. Options give executives the right to buy stock at a set price. If the market value of the stock rises above that fixed price, the options can be converted into stock at a gain.
Schar ended 2006 still holding NVR options worth $182.4 million, most of which he was not yet allowed to exercise. At year end, he also owned NVR stock worth about $350 million, including about $160 million in deferred compensation that he would receive after he leaves the company.
Schar took home $1.5 million in salary in 2006, but at his request, that was reduced to zero for 2007, NVR said.
Schar, who customarily declines interview requests, did not return a call yesterday. Dan Malzahn, an NVR vice president and spokesman, declined to comment.
Schar sold $25.1 million worth of NVR stock last year, according to Thomson Financial.
NVR bought back $287.1 million of its own shares last year. Such repurchases help boost the stock price, which can benefit sellers. Repurchases also boost earnings per share, a measure to which NVR has pegged the vesting of some options.
Schar's political donations have made him prominent in national Republican circles. He gave $200,000 in soft money to Republicans in 2000 and has been a "Pioneer" for President Bush's campaigns, a designation for those who raise at least $100,000. Bush visited Schar's Palm Beach home in January 2006 for a reception with Republican contributors.
Schar purchased the ocean-facing Palm Beach estate in late 2004 from billionaire Ron Perelman and Ellen Barkin, who was then married to Perelman.
Schar owns about 15 percent of the Redskins, which he has purchased in stages starting in 2003, according to people familiar with the team who spoke on the condition of anonymity because it is a private enterprise. His original investment in the Redskins was around $70 million, those sources said.
Last July, Schar and Snyder formed a limited private partnership that seeks to raise $750 million to fund new business ventures. The fund, called Red Zone Capital Partners II, has $126 million from investors and is a continuation of Snyder's previous investment funds.
The earlier funds were created to help the Redskins owner and his close associates acquire such businesses as a radio station and the Six Flags chain of amusement parks. Snyder and Schar sit on the Six Flags board.
Last summer, Snyder and Schar cut a two-year deal with Tom Cruise's production company to pay $3 million to $10 million annually for development and overhead costs for the opportunity to finance film projects and to profit from any hit movies.