| Small & micro cap project

Nobility Homes: Owner-operator

by | Jan 11, 2020

Nobility Homes designs, manufactures and sells a broad range of manufactured and modular homes through its own retail sales centers throughout Florida.

Terry E. Trexler founded Nobility Homes, Inc. in 1967. He is currently serving as the CEO of the company and holds 53.8%. His son works as CFO and owns 10.3%. Together, the father-son duo owns 64.1%.

(1) No base salary hike for decades

The CEO’s base salary has remained fixed (at his request) for over twenty fiscal years and the CFO’s base salary has remained fixed since 2005. The company’s proxy filing reads, “A major incentive for his performance is the value of his substantial stock ownership in Nobility”.

(2) Independent directors earn minuscule board fees

  • Barberie: $8,000/ annum
  • Saltsman: $13,000/ annum

(3) Other highlights

  • With the exception of the CEO and CFO, no other executive earns more than $100K.
  • No employment agreements or change of control/severance agreements.
  • In order to reduce expenses, the company avoids retaining an outside compensation consultant. The compensation committee performs this role. Kudos!
  • The company has not granted any stock options, restricted stock awards or other equity-based awards to the named executive officers since it became public.

Related party transaction

TLT, Inc. develops manufactured housing communities in Central Florida. TLT Communities have purchased manufactured homes exclusively from the company since 1990. The CEO and CFO are majority owners of TLT, Inc. To know the history, we dug out filings for the past 12 years. In 1994, sales to TLT accounted for 6% of net sales. Sales subsequently declined to less than 1% within 5 years. Since 2007, TLT has not accounted for any revenue.

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