Paul J. Borden, has served as a director and President of HomeFed Corp (HOFD-$47.00), a developer of residential real estate projects in Southern California, specifically in the San Diego area, since May 1998. Although executive offices are in Carlsbad, California, located thirty miles north of San Diego, Borden maintains his primary residence in New Jersey.
In 1998, Borden, then a Vice-President of Leucadia National Corp (LUK-$48.43), signed an Administrative Services Agreement to steward the San Elijo Hills project, a master-planned community in San Diego County, California, of approximately 3,400 homes and apartments as well as commercial properties.
Leucadia, a holding company with interests in a broad range of businesses, from gaming entertainment to timber, plastics and prepaid calling services, owns 29.9% of HomeFed.
HomeFed and Leucadia are developing a 700-acre non-adjoining acres of land located within the larger 22,900 acre Otay Ranch master-planned community south of San Diego, California, too.
All my bags are packed,
I'm ready to go
I'm standing here outside your door
I hate to wake you up to say goodbye
But the dawn is breakin, its early morn
The taxis waiting, hes blowin his horn
Already Im so lonesome I could cry.
HomeFed maintains a "temporary residence" in California and reimburses Borden for airfare to and from his primary residence, according the Company’s annual proxy filing. Albeit the definition of temporary is "lasting or existing only for a short time," the real-estate concern arranged this temporary allowance starting in 2002—first detailing the remuneration in its 2005 proxy statement.
So kiss me and smile for me
Tell me that youll wait for me
Hold me like youll never let me go.
I'm leavin on a jet plane
I don't know when Ill be back again
Oh, babe, I hate to go. ~ Folk singers Peter, Paul & Mary
For 2007, Borden received $29,838, $43,787, and $62,579, respectively for his housing allowance, airfare to and from his primary residence in New Jersey, and tax-gross-ups.
Unlike the lyrics in the song, Borden knew when he’d be back home again—more times than he left!
HomeFed is not immune to the turmoil in the mortgage markets. The Company estimated that total home sales (both new and re-sales) at the San Elijo Hills project were approximately 227 in 2007 and 300 in 2006, as compared to 470 in 2005 and 860 in 2004. In addition, HomeFed has not sold any new residential lot sales at the San Elijo Hills project or Otay Ranch since June 2006.
As business is non-existent these days, why even bother flying Borden back and forth from New Jersey?
Given Borden’s past history with Leucadia, the 10Q Detective can understand the disingenuous housing allowance perquisite. The $307, 000 paid to Borden in cash bonuses for each of fiscal 2006 and 2007—now that’s a blatant disregard for shareholder common interests.
Editor David J. Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.