Larry Mizel and David Mandarich, the top two honchos at Denver-based home-building giant MDC Holdings, were rewarded last year with pay days that topped $40 million.

During the same time, the company's stock dropped 5.7 percent.

While MDC was the third- worst performing major publicly traded home-building stock last year, Mizel and Mandarich pocketed the fourth-highest salary and bonuses in 2005 compared with 13 other executives from other U.S. home builders.

The duo topped the Rocky Mountain News' list last year, and in the past four years Mizel pulled in $109 million, and his counterpart Madarich pulled in $111 million.

Gerald Armstrong, a Denver- based shareholder activist said, "Something is out of balance" about the pay of the MDC executives.

It is not just home-building execs who are overpaid, Armstrong said.

"It is out of hand," he said, speaking generally of executive compensation. "It is unbelievably excessive. It is happening everywhere."

Ian McCarthy, the CEO of Beazer Homes, the top-performing home-building company last year, took home $8.8 million in salary and a bonus, though Beazer's stock price skyrocketed by 65 percent last year.

Still, Mizel's and Mandarich's compensation paled compared with that of Bruce Karatz, the CEO of KB Homes.

Karatz earned more than $30 million in salary and bonus last year and cashed in a whopping $118 million in stock. But shareholders were rewarded, too, as KB Homes' stock rose by 61 percent last year.

The Executive Compensation Committee for MDC outlined numerous reasons in the company's proxy statement to justify the pay for Mizel and Mandarich.

Indeed, the company had a stellar 2005 by most measures. Before stalling last year, MDC's stock, like that of most homebuilding companies, had been rising for years because of low interest rates and strong housing demand.

Gary Reece, chief financial officer of MDC, noted in an e-mail Friday that Mizel and Mandarich would have received larger bonuses under the shareholder- approved compensation plan, if the compensation committee, with the consent of both the executives, hadn't capped their bonus payments.

Reece pointed to a number of record-breaking milestones at MDC last year that contributed to their bonuses:

• Pretax income of $809 million, up 27% from 2004;

• Net income of $506 million, 29 percent higher than 2004;

• Revenues of $4.9 billion, 22 percent above 2004;

• A pretax return on average equity of 31 percent, one of the highest in the industry;

• A 117 percent year-over- year increases in quarterly dividends to share holders.

"The company has experienced exceptional growth in operating results and financial strength over the last decade," Reece noted.

Home builder boss pay

Stock Salary/change Builder Executive bonus* 2004-05

MDC Larry Mizel $21.5l -5.7%

MDC David Mandarich $21.33 -5.7%

Beazer Ian McCarthy $8.779 65%

Centex Tim Eller $5.86 6.2%

D.R. Horton Don Horton $13.2 47%

Hovnanian Kevork Hovnanian $6.29 25.8%

KB Homes Bruce Karatz $30.1 61%

Lennar Stuart Miller $22.52 30%

M/I Homes Robert Schottenstein $2.47 -26%

Meritage John Landon $9.50 11.74%

NVR Dwight Schar $4 -8.68%

Pulte Homes Bill Pulte $5.85 24%

Ryland Homes Chad Dreier $17.50 25.8%

Standard Pacific Steve Scarborough $16.91 15%

Toll Brothers Robert Toll $28.62 59%Sources: Proxy Statements Filed With Sec; Does Not Include Option Profits And Other Forms Of Compensation. *In Millions Of Dollars

Road to riches

The stories in this package tell how David Mandarich, Larry Mizel, Edward Labry, Mark Sexton and Aleron Larson made their 2005 riches. Here's a snapshot look at the rest of the top 10:

• Henry C. Duques returned to the job of First Data CEO in 2005 but was still getting compensated for his last turn at the wheel. A payment of $4.6 million was made from a long-term incentive plan that measured 2001 through 2004. He also made $15.6 million by exercising 600,000 options.

• R. Scot Sellers is the chairman and CEO of multibillion-dollar real estate investment trust Archstone Smith. While Sellers got a $1.75 million bonus, he also benefited from a $4.35 million payout from a long-term incentive plan. He also cashed in more than $7 million in options.

• John W. Seiple, before an August resignation, was the North America president and chief executive officer for ProLogis, one of the world's biggest owner-operators of distribution centers. He made $5.77 million from a long-term incentive plan and $6.56 million from option profits.

• Theodore Venners, former CEO of clean-coal company KFx, received a restricted-stock award of more than $9 million. He also made $3.38 million in option profits.

• Charles T. Fote resigned suddenly as CEO of money processor First Data, but he was still able to take home a healthy paycheck. The company gave him $4 million in restricted stock early in the year, and he got another $2.57 million from a long-term incentive plan. Option profits totaled $5.1 million.

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