Board Committees

The Board has five standing Committees: the Audit Committee, the Compensation Committee, the NCG Committee, the Executive Committee and the Independent Directors Transactions Committee. A summary of the current composition of each Committee and its responsibilities is set forth below.

Copies of the Committee charters of each of the Audit Committee, the Compensation Committee and the NCG Committee setting forth the responsibilities of the Committees can be found under the Investors-Corporate GovernanceInvestors-Governance section of our website at www.lennar.com, and those charters are also available in print to any stockholder who requests them through our Investor Relations department. We periodically review and revise the Committee charters. The Board most recently adopted a revised Audit Committee Charter, Compensation Committee Charter and NCG Committee Charter on June 23, 2015 and a revised Compensation Committee Charter on October 31, 2014.27, 2018.

Audit Committee

Number of Meetings in fiscal 2017:2018: 11

Responsibilities. The Audit Committee is responsible for selecting our independent auditors and overseeing the engagement of our independent auditors;pre-approving all audit andnon-audit services provided to us by our independent auditors; reviewing our internal control environment, systems and performance; and overseeing the integrity of our financial statements, and our compliance with legal and regulatory requirements. The Audit Committee also discusses and reviews our policies with respect to risk assessment and risk management, including guidelines and policies governing our risk assessment and risk management processes. In addition, the Audit Committee is responsible for oversight of cybersecurity matters, including response planning, disaster recovery and business continuity considerations. The Audit Committee Chairman reports on Audit Committee actions and recommendations at Board of Directors meetings.

Independence and Financial Expertise. The Board of Directors has determined that each member of the Audit Committee meets the independence requirements under the NYSE’s corporate governance listing standards and the enhanced independence standards for audit committee members required by the SEC, and each member is financially literate, knowledgeable and qualified to review financial statements. In addition, the Board of Directors has determined that each of Mr. Gerard, Mr. Gilliam, Mr. Hudson and Mr. Olivera meets the requirements of an audit committee financial expert under SEC rules.

Compensation Committee

Number of Meetings in fiscal 2017:2018: 5

Responsibilities. The Compensation Committee is responsible for (i) designing our executive compensation philosophy, policies and plans, (ii) establishing salaries, targets and performance goals for annual incentive awards, terms of equity awards and other forms of compensation for our Chief Executive Officer (“CEO”), each of our other senior executives and our directors and (iii) administering our equity programs, including awards under our 2007 Equity Incentive Plan, as amended (the “2007 Equity Plan”), and 2016 Equity Incentive Plan (the “2016 Equity Plan”). The 2016 Equity Plan replaced our prior equity plan, the 2007 Equity Plan, in fiscal 2016. The Compensation Committee also reviews the results of the annual advisory stockholder vote on executive compensation and considers whether to recommend adjustments to the Company’s executive compensation policies and plans as a result of such votes. In addition, the Compensation Committee establishes performance goals and certifies that the performance goals have been attained. In prior years, the Compensation Committee certified that performance goals had been attained for purposes of Section 162(m) of the Internal Revenue Code, as amended (a function that no longer will be required with respect to taxable years beginning after December 31, 2017 because of(the “Code”), but such requirement generally would not apply under amendments to Section 162(m) that were part of amendments to the Internal Revenue Code enacted in December 2017).2017. The Compensation Committee Chairman reports on Compensation Committee actions and recommendations at Board of Directors’ meetings.

Independence. The Board of Directors has determined that each member of the Compensation Committee meets the independence requirements under the NYSE’s corporate governance listing standards, is an “outside director” pursuant to the criteria established by the Internal Revenue Service and meets the independence standards for Compensation Committee members established by the SEC.

Role of Compensation Consultants and Advisors. The Compensation Committee has the authority, pursuant to its charter, to engage the services of outside legal or other experts and advisors as it deems necessary and appropriate to assist the Compensation Committee in fulfilling its duties and responsibilities. The Compensation Committee has previously engaged, and may in the future engage, F.W. Cook & Co., Inc. (“FW Cook”), an independent management compensation consulting firm. During fiscal 2017 and the beginning of fiscal 2018, the Compensation Committee engaged F.W.FW Cook to perform a review of the compensation program for the Company’s executive officers. In doing so,deciding to engage FW Cook, the Compensation Committee considered the work previously performed by FW Cook and determined that no conflicts of interest were raisedexisted and that FW Cook was independent from management.

Role of Management and Delegation of Authority. As more fully discussed under “Compensation Discussion and Analysis — Compensation Setting Process — Role of Management,” our CEOExecutive Chairman and our PresidentCEO provide the Compensation Committee with (1)(i) evaluations of each named executive officer, including themselves, (2)(ii) recommendations regarding base salary levels for the upcoming year for each named executive officer, other than themselves, (3)(iii) an evaluation of the extent to which each named executive officer met his annual incentive plan target, and (4)(iv) recommendations regarding the aggregate value of the long-term incentive compensation that each named executive officer should receive. Our CEOExecutive Chairman and our PresidentCEO typically attend all regularly-scheduled Compensation Committee meetings to assist the Compensation Committee in its discussion and analysis of the various agenda items, and are generally excused from the meetings as appropriate, including for discussions regarding their own compensation.

Under the 2007 Equity Plan and the 2016 Equity Plan, the Compensation Committee has the authority to delegate all or a part of its duties with respect to awards under each plan to management (excluding any grandfathered awards intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code, awards made to individuals covered by Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and awards issued to any person delegated authority by the Compensation Committee). Under the Lennar Corporation 2016 Incentive Compensation Plan, which replaced the Lennar Corporation 2012

Incentive Compensation Plan, the Compensation Committee has the authority to delegate all or a part of its duties with respect to bonuses under the plan to management (excluding bonusesany grandfathered awards intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code).

In making its determination whether to recommend that the Board of Directors nominate a candidate who has been recommended by a stockholder, the NCG Committee will consider, among other things, the appropriateness of adding another director to the Board and the candidate’s background and qualifications. The NCG Committee may conduct an independent investigation of the background and qualifications of a candidate recommended by a stockholder, and may request an interview with the candidate. The NCG Committee will not determine whether to recommend that the Board nominate a candidate until the NCG Committee completes what it believes to be a reasonable investigation, even if that causes its recommendation to be delayed until after it is too late for the candidate to be nominated for election at a particular meeting of stockholders. When the NCG Committee determines not to recommend that the Board nominate a candidate recommended by a stockholder, or the Board determines to nominate or not to nominate a candidate recommended by a stockholder, the NCG Committee will notify the recommending stockholder and the candidate of the determination.

Executive Committee

Pursuant to ourBy-Laws, our Board of Directors has established an Executive Committee which has the authority to act on behalf of the Board of Directors, except as that power is limited by the corporate laws of the State of Delaware, where our Company is incorporated, and as our Board of Directors has otherwise provided. The Executive Committee did not take anytook actions twice during fiscal 2017.2018.

Independent Directors Transactions Committee

Number of Meetings in fiscal 2017: 2

Pursuant to ourBy-Laws, our Board of Directors has established an Independent Directors Transactions Committee which has the authority to approve certain transactions between Lennar and Five Point Holdings, LLC (in which we own a substantial minority interest and have the right to designate three directors)interest), and to review and make recommendations to the Board with respect to matters referred to it by the Board. Only independent directors may serve on the Committee. The Independent Directors Transactions Committee did not take any action during fiscal 2018.

Corporate Governance Guidelines

Our Corporate Governance Guidelines describe our corporate governance practices and policies and provide a framework for our Board governance. The topics addressed in our Corporate Governance Guidelines include director qualifications, director responsibilities, management succession, director compensation and the annual performance evaluation of the Board. Our Corporate Governance Guidelines are available to view at our website, www.lennar.com, under the Investor Relations-Corporate GovernanceInvestors-Governance section.

Compensation Committee Interlocksand Insider Participation

None of the members who served on the Compensation Committee during the fiscal year ended November 30, 2017,2018, was, or ever had been, an officer or employee of Lennar. There were no transactions during the 20172018 fiscal year between us and any of the directors who served as members of the Compensation Committee for any part of the 20172018 fiscal year that would require disclosure by Lennar under the SEC’s rules requiring disclosure of certain relationships and related-party transactions.

Corporate Responsibility, Environmental and Sustainability Matters

We recognize the growing interest of our investors, customers, associates and business partners in environmental, social and governance issues and principles of responsible investing. The Company has had a long-standing commitment to our shareholders and communities to operate in an environmentally and socially responsible manner.

Corporate Citizenship

The Company takes seriously its responsibility to strengthen the communities in which we operate. In addition to division level initiatives that serve the community, Lennar Corporation annually donates one percent (1%) of its after tax income to The Lennar Foundation, Inc., a Floridanot-for-profit corporation (the “Foundation”). The primary mission of the Foundation is to find organizations that assist people who are less fortunate and provide those people an avenue to enter into mainstream society. Through our Focused Acts of Caring and other grants, the Lennar Foundation supports education,at-risk children, homeless rehabilitation, elder care, and medical research.

Environmental and Sustainability Initiatives

We are an industry leader in fostering new sustainability initiatives and working to protect the quality of our environment. Our efforts include implementing numerous programs to reduce energy consumption, such as our high-efficiency solar power systems program that generates much of a home’s annual expected energy needs, as well as upgrading various home systems to balance comfort with energy savings.

Code of Business Conduct and Ethics/Related Party Transaction Policy

Our Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all our directors, officers and employees. Its purpose is to promote our commitment to high standards for ethical business practices. The Code provides that it is our policy that our business be conducted with the highest level of integrity. It states that our reputation for integrity is one of our most valuable assets, and each director, officer and employee is expected to contribute to the care and preservation of that asset. Our Code addresses a number of issues, including conflicts of interest, corporate opportunities, fair dealing, confidential information and insider trading.

Pursuant to our Audit Committee Charter, all related person transactions as defined by SEC rules must be approved by our Audit Committee. Current SEC rules require disclosure of any transaction, arrangement or relationship in which (i) Lennar or its subsidiary is a participant, (ii) the amount involved exceeds $120,000, and (iii) any executive officer, director, director nominee, beneficial owner of more than 5% of Lennar’s common stock, or any immediate family member of any such persons,person, has or will have a direct or indirect material interest. A director must recuse herself or himself from any discussion or decision affecting her or his personal, business or professional interests.

Certain Relationships and Related Transactions

Except as described below, since December 1, 2016,2017, we have not had any relationships or transactions with any of our executive officers, directors, beneficial owners of more than 5% of our Class A common stock or Class B common stock or any immediate family member of such persons that are required to be described pursuant to Item 404(a) of SEC RegulationS-K.

In February 2015, Stuart Miller, currently our CEO,Executive Chairman, entered into a Time-Sharing Agreement with one of our subsidiaries, which replaced a prior agreement and provides that Mr. Miller cansub-lease aircraft leased by that subsidiary fornon-business or personal business purposes. Under that Agreement, Mr. Miller pays the subsidiary, out of a prepayment fund established under the terms of the agreement,Agreement, the aggregate incremental cost of each flight based on a list of expenses authorized by federal regulations. If at any time expenses exceed the amount in the prepayment fund, Mr. Miller would pay the expenses after they are billed. The subsidiary retains sole discretion to determine what flights may be scheduled by Mr. Miller, and under the Agreement the Company’s prior planned use of the aircraft takes precedence over Mr. Miller’snon-business or personal business use. Mr. Miller paid our subsidiary $266,000$279,000 under the agreement for his use of the aircraft during fiscal 20172018 (the cost reimbursed by Mr. Miller was calculated in accordance with Federal Aviation Administration regulations).

In February 2015, Rick Beckwitt, currently our President,Chief Executive Officer, entered into a Time-Sharing Agreement with one of our subsidiaries, which replaced a prior agreement and provides that Mr. Beckwitt cansub-lease aircraft leased by that subsidiary fornon-business or personal business purposes. The terms of that Time-Sharing Agreement are essentially the same as those in the Time-Sharing Agreement between the subsidiary and Mr. Miller, including the establishment of a prepayment fund for the cost of each flight. If at any time expenses exceed the amount in the prepayment fund, Mr. Beckwitt would pay the expenses after they are billed. Mr. Beckwitt paid our subsidiary $133,600$224,000 under the agreement for his use of the aircraft during fiscal 2017.2018.

In October 2017, Jonathan M. Jaffe, currently our President, entered into a Time-Sharing Agreement with one of our subsidiaries, which replaced a prior agreement and provides that Mr. Jaffe cansub-lease aircraft leased by that subsidiary fornon-business or personal business purposes. The terms of that Time-Sharing Agreement are essentially the same as those in the Time-Sharing Agreement between the subsidiary and Mr. Miller, including the establishment of a prepayment fund for the cost of each flight. If at any time expenses exceed the amount in the prepayment fund, Mr. Jaffe would pay the expenses after they are billed. Mr. Jaffe paid our subsidiary $662,000 under the agreement for his use of the aircraft during fiscal 2018.

Occasionally, a spouse or other guest may accompany Mr. Miller, Mr. Beckwitt or Mr. BeckwittJaffe when they are using corporate aircraft for business travel. As there is no incremental cost to Lennar for the spouse or other guest accompanying the executive on a flight, no amount has been included in the Summary Compensation Table with respect to that usage. Because there are special tax rules regarding personal use of business aircraft, Mr. Miller, Mr. Beckwitt or Mr. BeckwittJaffe may be treated as receiving taxable income when a spouse or guest accompanies one of them on a business trip.

We lease charter aircraft from time to time for business-related travel for Jonathan M. Jaffe, our Chief Operating Officer (“COO”). We also permit leased aircraft to be available for personal use by Mr. Jaffe, for which he pays the Company, out of a prepayment fund established in connection with the arrangement, an amount

Themother-in law of Jeff McCall, our Senior Vice President, obtained a $220,000 mortgage loan from Eagle Home Mortgage, a subsidiary of the Company, in June 2018. The loan was made in the ordinary course of Eagle’s mortgage lending business on the terms at which it was making mortgage loans at the time. Eagle sold the loan in July 2018.

Risk Management

Board Role in Management of Risk

Our Board is actively involved in the oversight and management of risks that could affect Lennar. Management, in consultation with the Board, identifies areas of risk that particularly affect us and assigns senior members of our management to report to the Board on each of those areas of risk on a rotating basis at the regularly scheduled quarterly Board meetings. The areas of risk reported to the Board change from time to time based on business conditions, advice of outside advisors, and review of risks identified by our competitors in their public filings. Currently, the risk areas reported on to our Board on a regular basis relate to joint ventures, housing inventory and land supply, construction costs and homebuilding overhead, construction quality and warranty, our multifamily business, our financial services business, associate retention and human resources, legal, natural disasters and information technology, including cybersecurity, taxation, strategic investments Rialto’s business, our multifamily business and our solar business.

Our Board of Directors also asks for and receives reports on other risks that affect the Company after review of business presentations made during regular Board reviews. In addition, one of the responsibilities of our Audit Committee is to discuss and review policies with respect to risk assessment and risk management, including guidelines and policies governing our risk assessment and risk management processes.

Compensation Related Risks

In early 2018, as part of our risk management process, we conducted a comprehensive review and evaluation of our compensation programs and policies. The assessment covered each material component of executive andnon-executive employee compensation. In evaluating our compensation components, we identified the following risk-limiting characteristics:characteristics, which include:

are required to hold the remaining 50% of the stock until the second anniversary of the grant date. Pursuant to this program, on April 18, 2017,11, 2018, eachnon-employee director at that time was granted 2,000 shares of Class A common stock, 50% of which may not be transferred until the second anniversary of the date of grant.

Retainer and Committee Fees Paid in Cash. Eachnon-employee director is entitled to receive an annual retainer of $130,000, payable on a quarterly basis, 50% in cash and 50% in shares of our Class A common stock. Those who serve on our Audit Committee are paid an additional retainer of $25,000 (or $30,000 for the committee Chairman); those who serve on our Compensation Committee are paid an additional retainer of $15,000 (or $20,000 for the committee Chairman); and those who serve on our NCG Committee are paid an additional retainer of $10,000 (or $15,000 for the committee Chairman). Committee retainers are paid quarterly in cash.Non-employee directors are also reimbursed for incidental expenses associated with each Board of Directors and/or committee meeting. Our Lead Director receives an additional $75,000 per year for his services in that capacity, paid quarterly in cash. Directors who are employees do not receive any additional compensation for their services as a director.

Compensation Deferral. A director may elect to defer payment of both the cash and stock portion of the annual and committee retainers until the year of the member’s separation from service as a director or the member’s death. If a director makes this election, a number of phantom shares of Class A common stock with a value equal to the amount of the deferred retainers is credited to the director’s deferred compensation account each quarter. Amounts equal to the dividends that would have been paid if the phantom shares had actually been outstanding are also credited to the director’s account and treated as though they were used to purchase additional shares of Class A common stock. Upon termination of a director’s deferred compensation account, the director will receive cash equal to the value of the number of phantom shares of Class A common stock or Class B common stock credited to the director’s account. The value of the phantom shares of Class A common stock and Class B common stock is determined by multiplying the phantom shares by the closing price of the applicable common stock on either the date of the director’s death or the date during the year of the director’s separation from service that the director sends a notice to the Company requesting the settlement of such director’s phantom share account.

The following table sets forth information regarding the compensation of ournon-employee directors for fiscal 2017.2018. Mr. Miller our CEO, is(our Executive Chairman), Mr. Beckwitt (our CEO) and Mr. Jaffe (our President) are omitted from the table as he doesthey do not receive any additional compensation for his servicestheir service as a director.directors.

This Compensation Discussion and Analysis describes our compensation philosophy, policies and plans and their objectives, our compensation-setting process, and the 20172018 compensation of our named executive officers, or NEOs. In addition, we explain why we believe that our executive compensation program is in the best interests of our Company and you, our stockholders.

For fiscal 2017,2018, our named executive officers were:

As discussed in Proposal 3 - Advisory Vote on page 46,Executive Compensation, we are conducting a Say on Pay vote that requests your approval, on an advisory basis, of the compensation of our named executive officers as described in this section and in the tables and accompanying narrative contained in the discussion captioned “Executive Compensation.” In connection with that vote, you should review our compensation philosophies, the design of our executive compensation programs and how, we believe, these programs contribute to the strong financial performance that Lennar has provided toachieved for its stockholders.

Executive Summary

We Tie Our Executives’ Compensation to Performance.We believe that one of the best methods for aligning the interests of our senior executives with those of our stockholders is to tie a significant portion of their compensation to our financial and operational performance. With respect to our three named executive officers whose responsibilities are to growmanage the growth of our business, our Executive Chairman, our CEO, and our President, and our COO, this translates into:

With respect to our other two named executive officers,CFO, our SVP and our GC, we base their incentive awards on their individual performance in their areas of responsibility and the performance of the Company. As a result, with respect to our CFO, our SVP and our General Counsel,GC, whose principal responsibilities areinclude the establishment and maintenance of strong corporate controls and regulatory compliance, we baseapproximately 77% of their total direct compensation (base salary, annual cash incentive award targets on their individualawards, and service-based equity awards) for fiscal 2018 was performance or equity based. With respect to our former CFO, who has primary responsibility for the performance of the Company in its adherence to corporate governance, policies and procedures, the results of an annual internal audit evaluation and, in the case of our CFO, the pretax incomeoperations of our Lennar Financial Services segment, which he oversees. The bonus each executive is awarded is based on the extent to which the executive achievesbusiness, approximately 83% of his target and the Company’s financial performance, measured by our pretax income. Equity awards are service-based and vest over three years with respect to our CFO. With respect to our General Counsel, equity awards are earned only if the Company accomplishes certain financial and operational metrics and, upon being earned, the awards vest in three equal annual installments. As a result, 87% of our CFO’s total direct compensation (base salary, annual cash incentive awards, and 79% of our General Counsel’s total direct compensationservice-based equity awards) for 2017fiscal 2018 was performance or equity based.

2018 Executive Compensation Changes reflect increased Alignment with ShareholderStockholder Interests. Below are the highlights of the changes we made to our 2018 executive compensation program for Messrs. Miller, Beckwitt and Jaffe:

compensation of our senior executive officers take into account information about compensation being paid by other homebuilders or companies engaged in other activities of the type in which we are engaged, compensation being paid to other executives at Fortune 500 companies, as well as recommendations by our CEOExecutive Chairman and Presidentour CEO (except regarding themselves) and other members of our senior management, and any other factors the Compensation Committee believes to be applicable.

Role of the Independent Compensation Consultant

The Compensation Committee has the authority to engage compensation consultants. During fiscal 2017, the Compensation Committee engaged FW Cook to perform a review of the Company’s executive compensation program, including considering any changes that could be implemented in fiscal 2018. The Compensation Committee considered the work previously performed by FW Cook and determined that no conflicts of interest were raised and that FW Cook was independent from management.

Role of Management

Our CEOExecutive Chairman and our PresidentCEO provide written background and supporting materials for review at Compensation Committee meetings, attend Compensation Committee meetings at the Committee’s request, and provide information regarding, and make recommendations about, designs for and, if warranted, changes to our executive compensation programs. Our CEOExecutive Chairman and our PresidentCEO provide reviews of each executive officer’s performance and recommend compensation actions for executive officers other than themselves.

Use of Compensation Survey Data

We use compensation data regarding what we view as our peer group of publicly-traded homebuilding companies to analyze compensation decisions in light of current market rates and practices, and to help ensure that our compensation decisions are reasonable in comparison to the compensation paid by our peer group and in view of the value of particular executives to Lennar. In connection with setting fiscal 20172018 compensation, the Compensation Committee reviewed summaries of information disclosed in public filings by the following publicly traded homebuilders that the Compensation Committee views as our peer group (“Peer Group”), based on revenue and home closings::

⁽¹⁾ In February 2018, CalAtlantic Group, Inc. was acquired by the Company.

In addition, the Compensation Committee reviewed information about compensation levels generally paid by other Fortune 500 companies.companies given that the Company has only one peer close to its revenues, profitability and market capitalization. The Compensation Committee does not design our executive compensation programs to fit within a specific percentile of the executive compensation programs of the Peer Group companies, the Fortune 500 companies or any other peer group or survey. Rather, the Compensation Committee compares numerous elements of executive compensation, including base salaries, annual incentive compensation and long-term cash and equity based incentives to assist in determining whether proposed compensation programs are competitive, and then uses its experience and judgment to make final compensation decisions.

Stockholder Engagement

We regularly engage with our stockholders about our business and operations. In addition, in fiscal 2017 and 2018, in connection with the Say on Pay vote and the votes regarding stockholder proposals, we had discussions with a number of our stockholders regarding our executive compensation practices and our corporate governance policies. During fiscal 2018, we spoke with 21 of our largest stockholders, representing approximately 50% of our outstanding shares, about issues of concern to them. While the stockholders generally recognized that the Company was compensating its executives well during a time when the Company was performing well and did not earn cash bonuses during the 2008-2009 economic crisis, they requested that we consider making changes to our compensation practices. The stockholder feedback that we received led the Compensation Committee to request a full review of our executive compensation program. The comments that we received, and our response to the comments with respect to the compensation of our Executive Chairman, our CEO and our President, are below, and are discussed in this Compensation Discussion and Analysis.

Role of the Independent Compensation Consultant

The Compensation Committee has the authority to engage compensation consultants. During fiscal 2017 and 2018, the Compensation Committee engaged FW Cook to perform a review of the Company’s executive compensation. Thecompensation program, including considering any changes tothat could be implemented in fiscal 2018 executive compensation reflect2018. In connection with their review, FW Cook had discussions with members of the resultsBoard and management. Before engaging FW Cook, the Compensation Committee considered the work previously performed by FW Cook and determined that no conflicts of interest were raised and that review.FW Cook was independent from management.

Compensation Plans

Our 2016 Equity Plan provides for the issuance of stock-based awards, such as options and restricted stock, to officers, directors, or associates of the Company and its subsidiaries, or individuals who provide significant services to the Company or its subsidiaries. The aggregate number of shares of Class A common stock

or Class B common stock that may be subject to awards granted under the 2016 Equity Plan is 15 million shares. The 2016 Equity Plan replaced our prior equity plan, the 2007 Equity Plan. While awards may no longer be issued under the 2007 Equity Plan, the 2007 Equity Plan still governs the outstanding awards that were issued under the 2007 Equity Plan. Our 2016 Incentive Compensation Plan enables the Compensation Committee to establish performance goals for officers and other associates of the Company and its subsidiaries and to determine bonuses which will be awarded on the basis of achievement of performance goals.

Executive Compensation Components and 20172018 Compensation Decisions

Our named executive officers do not have employment agreements. This gives the Compensation Committee flexibility to change the components of our executive compensation program in order to remain competitive in the market and address economic conditions. Our executive compensation program currently has three components of total direct compensation: (1) base salary, (2) annual cash incentive awards, and (3) equity-based incentive awards.

We do not have a formal policy relating to the allocation of total compensation among the various components. However, our Compensation Committee believes that the executives with more influence over our operating and financial performance should have a greater portion of their compensation dependent upon the achievement of the performance objectives. The Compensation Committee believes that those executives who are responsible for the management of growth should have the largest portion of their compensation from (i) annual cash

The chart below shows the allocation of total compensation among base salary, the annual cash incentive award and the equity-based incentive award for each of our NEO’s in fiscal 2018.

Compensation Pay Mix

Base Salaries

Why we pay base salaries. The Compensation Committee believes that payment of competitive base salaries is an important element in attracting, retaining and motivating our executives. In addition, the Compensation Committee believes that having a certain level of fixed compensation allows our executives to dedicate their full time business attention to our Company.

How base salaries are determined. When the Compensation Committee sets the base salaries for the NEOs, it considers a number of factors, including:

When setting base salaries, the Compensation Committee does not assign a specific weight to any individual factor or apply any specific formula as to how base salary should compare to that of similar employees of our Peer Group.

Except for theThe base salary of our General Counsel,Executive Chairman has remained unchanged since 2003, and the base salaries of our NEO’sCEO and our President have remained unchanged since 2010. The base salary of our CEO has remained unchanged since 2003.

20172018 Base Salary Decisions. We increased the base salary of Mr. Sustana by 3.2% to bring his base salary more in line with comparable market compensation. We did not increase the base salaries of our other NEOsExecutive Chairman, our CEO, our President or our GC in fiscal 2017.2018. We increased the base salary of Ms. Bessette in connection with her promotion in April 2018 to the additional position of Chief Financial Officer to $750,000, and the base salary of Mr. Gross in connection with his promotion in April 2018 to the position of CEO of Lennar Financial Services to $750,000. Mr. McCall started with the Company in February 2018, and his base salary was set at that time at $750,000.

Annual Cash Incentive Compensation

Why we pay annual cash incentive compensation. The Compensation Committee believes that annual cash incentive compensation encourages executive officers to contribute to the Company’s annual profitability. Our 20172018 annual cash incentive awards were made under our 2016 Incentive Compensation Plan.

How Fiscal 2018 Annual Incentive Compensation is determined.

Executive Chairman, CEO President and COOPresident. The cash bonus for our Executive Chairman, our CEO and our President and our COO is based on a percentage of our pretax income, which is net earnings attributable to Lennar plus/minus income tax expense/benefit (“Pretax Income”)., after a 10.96% capital charge on tangible equity. Pretax Income takes into account and adjusts for goodwill charges, losses or expenses on early retirement of debt, impairment charges, and impairment and similar charges.acquisition or deal costs related to the purchase or merger of a public company. The cash bonus for our Executive Chairman, our CEO and our President and our COO is not capped. We believe that our executives’ pay should be linked to the performance of Lennar and that linking the annual cash bonus to Pretax Income achieves this goal. As a result, there have been years, such as fiscal 2008 and 2009 during the economic downturn, when these executives did not receive a cash bonus, and other years, such as more recent years, when Lennar has returned to profitability, when the executives have received significant cash bonuses. At the time that the cash bonus formulas were set, Mr. Miller was our CEO, Mr. Beckwitt was our President and Mr. Jaffe was our Vice President and Chief Operating Officer. The cash bonus formulas were not changed when, in April 2018, Mr. Miller, Mr. Beckwitt and Mr. Jaffe were promoted to the positions of Executive Chairman, CEO and President, respectively.

In June 2016,fiscal 2017, the Compensation Committee engaged FW Cook to perform a full review of our executive compensation program. During fiscal 2017 and the beginning of fiscal 2018, FW Cook had discussions with members of the Board and management, and performed a review and comparison of our executive compensation program. In January 2018, our Compensation Committee reviewedconsidered the results of the FW Cook review, stockholder feedback and an analysis of the compensation Lennar paid to its senior executives compared with that paid by 11 other publicly-traded homebuilding companies. This included an analysis of the fiscal year 20152016 compensation paid to our CEOExecutive Chairman (formerly our CEO) with that paid in fiscal 20152016 to the chief executive officers of each of the 11 other homebuilding companies and with the fiscal 20152016 compensation of the chief executive officers of the companies in the Fortune 500. It also included an analysis of the fiscal 20152016 compensation paid to our PresidentCEO (formerly our President) and to our COOPresident (formerly our VP and COO) compared with the compensation paid in fiscal 20152016 to the persons in comparable positions by three of thein homebuilding companies and the compensation paid in fiscal 2015 to the presidents of theour peer group and companies in the Fortune 500. In January 2017,2018, the Compensation Committee reviewed a comparison of the fiscal 20162017 compensation of our Executive Chairman, our CEO and our President, and our COO, which included cash incentive bonuses equal to 1.00%, 0.92% and 0.92%, respectively, of Lennar’s fiscal 20162017 Pretax Income, with that of the persons in similar positions at the publicly traded homebuilding companycompanies that iswere most nearly comparable in size with Lennar and companies in the Fortune 500. Based on its review of those analyses, the results Lennar had achieved during fiscal 2016, and2017, the results Lennar was expected to achieve during fiscal 2017,2018 and the anticipated acquisition of CalAtlantic, the Compensation Committee decided to apply a formula for each of our Executive Chairman, our CEO, and our President and our COO which included cash incentive bonuses equal to 1.00%0.73%, 0.92%0.63% and 0.92%0.55%, respectively, of Lennar’s 2018 Pretax Income after a 10.96% capital charge on tangible equity.

Based on our fiscal 2018 Pretax Income of $2.51 billion, and after taking into account the $1.05 billion capital charge, Messrs. Miller, Beckwitt and Jaffe would have been entitled to cash bonus payments of $10,678,666, $9,215,835 and $8,045,571, respectively. While the Company had a strong performance in 2018, including the successful integration of CalAtlantic, it did not meet its business plan. As a result, the Compensation Committee used its discretion to reduce by 10% Messrs. Miller’s, Beckwitt’s and Jaffe’s cash bonus payments to $9,610,800, $8,294,252 and $7,241,013, respectively.

As compared to fiscal 2017, Pretax Income. This reflectedthe following changes were made to Messrs. Miller’s, Beckwitt’s and Jaffe’s cash incentive awards in fiscal 2018:

CFO.In January 2019, the Compensation Committee determination thatapproved a discretionary bonus for Ms. Bessette of $1,250,005. The factors considered included the cash incentive bonusesfinancial and operating performance by the officers receivedCompany in fiscal 2016 were appropriate and a decision2018, which included higher levels of profitability in fiscal 2018 compared to keep the percentages the same to keep their fiscal 2017 and the individual performance of Ms. Bessette in her areas of responsibility. The discretionary bonus was not based on specific quantitative formulas, percentages or numerical weightings, but rather was based on the recommendations of our Executive Chairman and our CEO based on their subjective evaluations of Ms. Bessette’s job performance and her individual contributions to the Company’s improved financial and operating performance in fiscal 2018. The Board of Directors also reviewed a comparison of Ms. Bessette’s bonus and total compensation to the pay of similar executives at peer companies.

Ms. Bessette’s responsibilities within the Company were also considered when determining the amount of her discretionary bonus. As CFO and Treasurer, Ms. Bessette works closely with our Executive Chairman, our CEO and our President in linesetting operational and financial strategies for our operations, communicating and implementing those strategies across the Company, and analyzing and monitoring the Company’s performance. Ms. Bessette also has direct responsibility for the Company’s financial management and financial reporting process, including the Company’s financial projections and cash forecasts, the effectiveness and integrity of the Company’s financial, internal and disclosure controls and procedures, and compliance with all applicable financial reporting rules and regulations for public companies. Ms. Bessette is also directly responsible for providing executive management oversight of the Company’s accounting, management reporting, internal audit, finance, treasury, tax and payroll and compensation functions. Additionally, Ms. Bessette is directly involved in the Company’s investor relations process and is responsible for our discussions with the prior year compensation.debt rating agencies.

Senior Vice President. Mr. McCall became a Senior Vice President at Lennar upon the closing of our strategic combination with CalAtlantic on February 12, 2018. Prior to that, Mr. McCall was the Executive Vice President and CFO of CalAtlantic. In February 2018, a discretionary bonus target of $750,000 for fiscal 2018 was established for Mr. McCall. In January 2019, the Compensation Committee approved a discretionary bonus for Mr. McCall of $1,000,000. This was a 33% increase from the targeted amount. The discretionary bonus was not based on specific quantitative formulas, percentages or numerical weightings, but rather was based on the recommendations of our Executive Chairman and our CEO based on their subjective evaluations of Mr. McCall’s job performance and his individual contributions to the Company’s improved financial and operating performance in fiscal 2018.

Mr. McCall’s responsibilities within the Company were considered when determining the amount of his discretionary bonus. As our Senior Vice President, Mr. McCall is directly responsible for providing executive management oversight of the Company’s information technology, cyber security, and human resource management departments. Additionally, Mr. McCall led our Company-wide process improvement initiatives and spearheaded the revamp of our management operations systems. Mr. McCall also worked closely with our Executive Chairman, our CEO and our President in overseeing the integration of all of the CalAtlantic systems and operations into Lennar.

Former CFO and General Counsel. Mr. Gross, who had been the Company’s CFO since 1997, was promoted in April 2018 to the position of CEO of the Company’s Lennar Financial Services business, over which he also had responsibility while in his prior role as CFO. In January 2019, the Compensation Committee approved a discretionary bonus for Mr. Gross of $2,400,037. The factors considered included Mr. Gross’ direct responsibility for the financial and operating performance of Lennar Financial Services in fiscal 2018 and the individual performance of Mr. Gross in his areas of responsibility. The discretionary bonus was not based on specific quantitative formulas, percentages or numerical weightings, but rather was based on the recommendations of our Executive Chairman and our CEO based on their subjective evaluations of Mr. Gross’ job performance and his individual contributions to Lennar Financial Services’ strong financial and operating performance in fiscal 2018.

Mr. Gross’ success in propelling the Company forward in connection with its strategy to focus on its core homebuilding and related finance businesses, and to divest some of ournon-core businesses, was also considered in determining Mr. Gross’ cash bonus. During fiscal 2018 and the early part of 2019, Mr. Gross was instrumental in helping the Company divest the majority of our retail title business, our title insurance underwriting business, our Florida real estate brokerage business and our business of offering residential mortgages tonon-Lennar homebuyers.

GC. Mr. Sustana each had the opportunity to earn a target award of 100% of his base salary based on the performance criteria set forth below, and the opportunity to receive an additional cash bonus of up to 80% of their respectivehis target awardsaward based on achievement of the goals specified below.

In addition, Mr. Gross, who oversees our Lennar Financial Services segment, had the opportunity to earn 1.00% of our Lennar Financial Services pretax income, which is the operating earnings of our Lennar Financial Services segment (“LFS Pretax Income”).

2017 Annual Incentive Compensation Decisions.

CEO, President and COO. Based on our Pretax Income of $1.27 billion, Messrs. Miller, Beckwitt and Jaffe were entitled to cash bonus payments of $12,701,020, $11,684,938 and $11,684,938, respectively.

CFO and General Counsel. With respect to Mr. Gross, in determining the score earned for individual performance, the following were highlighted: overall contribution to strong financial and accounting controls

results, leadership in response to legal and governance challenges during the year and overall contribution to continuing development of corporate governance programs and policies. No specific weight was given to any particular factor in the evaluations and no one factor was material. Mr. Sustana was deemed to meet the “excellent” performance level with respect to both performance criteria, and received 100% of his target award, or $465,000.

The Compensation Committee determined that Mr. Sustana was entitled to 72%80% of the potential 80% of his target award, or $335,000,$372,000, based on achievement of specified performance goals, of whichincluding the following were highlighted:

synergies. No specific weight was given to any particular factor in the evaluations and no one factor was material. Accordingly, Mr. Sustana received a cash bonus payment of $800,000$837,000 under the incentive program. In recognition of his exceptional performance during fiscal 2018, the Compensation Committee also granted an award of $163,000 to Mr. Sustana. This award is separate from the 2018 target bonus incentive award program.

Equity-Based Compensation

Why we pay equity-based compensation. The Compensation Committee’s philosophy is that a significant component of a senior executive’s compensation should be long-term incentive compensation in the form of restricted stock so as to align the financial interests of our senior executives with those of our

In June 2018, with the approval of the Compensation Committee, in June 2017, the Company awarded grants of restricted stock to other members of our senior management, including our CFO, our SVP, our GC, our Regional Presidents, our Division Presidents our key Regional Managers and other key associates (323 persons)(465 people).One-third of the restricted stock awarded to an associate in June 20172018 will vest in equal installments on each of July 2, 2018,2019, July 2, 2019,2020 and July 2, 20202021 and unvested shares will, under most circumstances, be forfeited if the associate ceases to be employed by us.

The numbers of shares of restricted stock to be awarded to members of our senior management were based upon recommendations by our CEO,Executive Chairman, our PresidentCEO and other members of our senior management, recommendations by FW Cook in the case of Messrs. Miller, Beckwitt and Jaffe, followed by a review by our Compensation Committee of the total compensation our senior management had received over the last five years, a comparison of their 20152016 compensation with that of similarly positioned executives at the Peer Group companies and other Fortune 500 companies, a review of total potential compensation for fiscal 2017,2018, as well as consideration of each executive’s responsibilities and expected contributions to our company. When considering the number of shares to award, the Compensation Committee did not assign a specific weight to any individual factor, or consider any policy as to how the compensation should compare to that of employees performing similar functions for our Peer Group.Group or other Fortune 500 companies.

20172018 Equity Based Compensation DecisionsDecisions.

Executive Chairman, CEO and President. In June 2017,February 2018, the Compensation Committee approved the followingbelow awards of service-based restricted Class A common stock for our NEOs under the 2016 Equity Incentive Plan:

operational metrics which reflect growth. Mr. Sustana’s award was also tied towill be calculated by linear interpolation. The number of shares of performance-based restricted stock earned is determined independently for each component (e.g., maximum achievement for the relative gross profit percentage component, target achievement for the relative return on tangible capital component, and threshold achievement for debt/EBITDA multiple component results in 100% payout). The Company performance criteria in order to take advantagegoals and their relative weightings were as follows:

*Relative Gross Profit Percentage and Relative Return on Tangible Capital are determined using Lennar’s peer group consisting of Beazer Homes USA, Inc., Meritage Homes Corporation, M.D.C. Holdings, Inc., Century Communities, Inc., NVR, Inc., D.R. Horton, Inc., PulteGroup, Inc., Hovnanian Enterprises, Inc., Toll Brothers, Inc. and KB Home.

The Compensation Committee selected these performance goals because they deemed these goals effective long-term measures of performance and align our executives’ interests with the tax benefits resulting from his grant becoming qualified performance-based compensation deductible under Section 162(m).

interests of our stockholders. In January 2018,addition, the Compensation Committee determinedselected these goals because they are important internal and external operating metrics. Gross profit percentage is an industry standard that fourresearch analysts and investors use to gauge the strength of our business as a measure that costs are being managed effectively. A high gross profit percentage target incentivizes our executives to maximize our sales prices and control sales incentives and minimize costs of sales, which include the costs of land, labor, materials and products used in building our homes. Return on tangible capital encourages our executives to focus on our returns and the efficient use of our assets and resources while also driving earnings. Debt/EBITDA multiple encourages our executives to maximize cash flow and reduce our leverage. This metric was particularly important given that the Company’s leverage increased when we closed the CalAtlantic transaction.

The threshold performance levels outlined above are designed to be reasonably achievable, yet uncertain to be met under expected market and business conditions at the time of grant. Target performance levels are designed to require significant management effort to achieve, and maximum performance levels are designed to be measurably more difficult to achieve than target performance levels.

As a result of the five performance goals had been achieved.pay mix changes in fiscal 2018, the equity portion of Messrs. Miller’s, Beckwitt’s and Jaffe’s compensation increased.

CFO, Former CFO, SVP and GC. The equity award granted toIn June 2018, Ms. Bessette, Mr. Gross, in June 2017 wasMr. McCall and Mr. Sustana were granted service-based restricted stock, which will vest in equal installments on each of July 2, 2018,2019, July 2, 20192020 and July 2, 2020.2021. The Compensation Committee awarded service-based restricted stock to Mr. Gross because the Committee believes that his responsibility for the establishment and maintenance of strong corporate controls and regulatory compliance translates into the stability of service-based vesting.grants were as follows:

director or is appointed to his or her position as an executive officer, shares of our common stock with a value on that date equal to the following multiple of the person’s annual directors fee or annual base salary:

Until the required stock ownership level is achieved, a person is required to retain at least 50% of the restricted shares that become vested and the shares the person acquires through exercise of stock options, other than shares sold to enable the person to pay taxes resulting from the vesting or exercise. If the required level is not achieved within five years after a person is elected as a Directordirector or appointed to his or her position as an executive officer, until the required level is achieved, the person will be required to retain 100% of the restricted shares that become vested and the shares the person acquires through exercise of stock options, other than shares sold to enable the person to pay taxes resulting from the vesting or exercise.

As of January 31, 2018,2019, all of our named executive officers and directors were in compliance with our Stock Ownership Guidelines. As indicated in the table below, our named executive officers had stock ownership levels well above their respective ownership requirements.

Compensation Clawback Policy. Our Board adopted a Compensation Clawback Policy that allows us to recover from employees incentive-based compensation granted under our 2016 Equity Plan, our 2016 Incentive Compensation Plan and incentive-based compensation not under those plans that is approved, awarded or granted to an employee on or after April 11, 2018. The Compensation Committee will, in all appropriate cases as determined by the Committee, require reimbursement and/or cancellation of any cash bonus or other incentive-based compensation where all of the following factors are present: (a) the award was predicated upon the achievement of specified financial results that were subsequently the subject of a material restatement, (b) in the Compensation Committee’s view, the restatement was the result of fraud, intentional misconduct or significant negligence that was a substantial contributing cause to the need for the material restatement, and (c) a lower award would have been made to the associate based upon the restated financial results.

Prohibition on Hedging. Executive officers and directors are not permitted to enter into hedging arrangements with respect to shares of the Company’s Class A common stock or Class B common stock.

Pledging of Company Stock. We allow officers to pledge Lennar stock. The Board and management has discussed the current corporate climate that generally disfavors allowing pledging of Company stock, but has determined that in light of the fact that the Company’s officers significantly exceed our Stock Ownership Guidelines, pledging is a way for the Company’s officers to derive a benefit from their equity compensation grants, while still maintaining alignment with stockholder interests.

Non-Solicitation Agreement. In connection with receiving the annual cash bonus, each of our NEO’s signs an agreement that for 12 months following termination of his or her employment with Lennar, he or she will not offer employment to any of our associates or anybody who had been an associate during the preceding 3 months, and will not encourage any of our associates to terminate his or her employment with us.

Compliance with Internal Revenue Code Section 162(m). When reviewing and setting compensation awards for our executives, one of the things we considerhave historically considered is the potential effect of Section 162(m) of the Internal Revenue Code on the tax deductibility of their compensation. Section 162(m) generally does not allow a publicly-held company to deduct compensation over $1 million paid for any fiscal year to any of the executive officers required to be named in the company’s annual proxy statement, except for the chief financial officer. However,individual considered “covered employees” as defined by Section 162(m). In prior to the recent amendments to the Internal Revenue Code,years, Section 162(m) allowed deduction of qualified performance-based compensation over $1 million if certain requirements were met. We generally haveAccordingly, we had historically structured awards to our executive officers in ways that arewere intended to qualify for the performance-based compensation exemption under Section 162(m), subject to discretion to award compensation that does not qualify for. However, tax deductibility under Section 162(m). The tax reform legislation passedenacted in December 2017, generally referred to as The Tax Cuts and Jobs Act, substantially modifiesmodified Section 162(m) of the Internal Revenue Code and,, whereby, among other things, eliminates the qualified performance-based exception to the $1 million deduction limitlimitation was eliminated with respect to taxable years beginning after December 31, 2017. Effective for Lennar’s fiscal year beginning December 1, 2018, compensation paid to our named executive officers (including our Chief Financial Officer) will be subject to the limitations on deductibility under Section 162(m) of the Code and we will no longer be able to deduct performance-based compensation to our named executive officers (including our Chief Financial Officer) defined as “covered employees” under Section 162(m) who receive annual compensation in excess of $1 million.

Each of our 2007 Equity Plan, our 2016 Equity Plan and our 2016 Incentive Compensation Plan includes lists of possible criteria that may be used as the basis for performance requirements with regard to compensation awards. TheFor fiscal 2018, the cash bonuses we have awarded to our executive officers during the last several years all have been subject to achievement of performance goals and the awards ofperformance-based restricted stock that we awarded to Messrs. Miller, Beckwitt Jaffe and Sustana,Jaffe, each of whom is one of the executive officers required to be named in this proxy statement, arewere subject to achievement of performance goals.

2018 Compensation Program

Shareholder Engagement

In fiscal 2017, in connection with the Say on Pay vote, we had discussions with a number of our shareholders regarding our executive compensation practices and our corporate governance policies. While the shareholders generally recognized that the Company was compensating its executives well during a time when the Company was performing well, they requested that we consider making changes to our compensation practices. The comments that we received included the following:

Executive Compensation Tables

The following table presents certain summary information for the fiscal years ended November 30, 2018, 2017 2016 and 20152016 concerning compensation earned for services rendered in all capacities by our Chief Executive Officer, our Chief Financial Officer and our other three most highly compensated executive officers for the fiscal year ended November 30, 2017. We refer to these officers collectively as our named executive officers, or NEOs.

Summary Compensation Table

*With respect to Mr. McCall, he was employed as the Chief Financial Officer of CalAtlantic until its acquisition by the Company on February 12, 2018, at which time Mr. McCall became SVP of the Company. Mr. McCall received the payments in the “Merger Related Payments” column in connection with agreements and arrangements related to his service at CalAtlantic. The payments were made to Mr. McCall after the effective date of the merger.

Grants of Plan-Based Awards

The following table provides information about cash(non-equity) and equity incentive compensation awarded to our named executive officers with regard to fiscal 2017.2018. The cash awards were granted under Lennar’s 2016 Incentive Compensation Plan and the restricted stockequity awards were granted under Lennar’s 2016 Equity Plan, which are discussed in greater detail in this proxy statement under the caption “Compensation Discussion and Analysis.”