8-KLeadership ChangesExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Executive Changes (Nov 20, 2009)

Filed November 20, 2009For Securities:DHI

Summary

This Form 8-K filing from D.R. Horton, Inc. (DHI) on November 20, 2009, details the compensation arrangements for its key executives and directors for the fiscal year 2009 and upcoming fiscal year 2010. Notably, the Compensation Committee approved performance bonuses for Chairman Donald R. Horton and President/CEO Donald J. Tomnitz for fiscal year 2009. While they met performance targets for cash and equity components, the Committee exercised discretion to reduce their potential bonuses from $4 million each to $2 million each, citing consolidated financial results and industry challenges. Additionally, discretionary semi-annual bonuses were approved for other named executive officers, including the CFO and Treasurer. The filing also outlines approved compensation programs for these officers for fiscal year 2010 and adjustments to board and committee fees for non-management directors in fiscal year 2010, with an increase in per-meeting director fees.

Key Highlights

  • 1D.R. Horton's Compensation Committee awarded performance bonuses to Chairman Donald R. Horton and CEO Donald J. Tomnitz for fiscal year 2009.
  • 2The executives earned bonuses for achieving performance goals related to adjusted pre-tax income, cash flow, and SG&A containment.
  • 3Despite meeting performance targets that could have yielded up to $4 million each, the Compensation Committee reduced the bonuses for Messrs. Horton and Tomnitz to $2 million each, citing company performance and industry conditions.
  • 4A portion of the executive bonuses was paid in cash (for cash flow performance) and equity (for SG&A containment).
  • 5Semi-annual discretionary bonuses were also approved for other named executive officers, including the CFO and Treasurer, totaling $175,000 each for fiscal year 2009.
  • 6Fiscal year 2010 compensation programs for the CFO and Treasurer were established.
  • 7Non-management director fees for fiscal year 2010 were adjusted, including an increase in per-meeting fees.

Frequently Asked Questions

The Compensation Committee exercised its discretion to reduce the performance bonuses for Donald R. Horton and Donald J. Tomnitz from a potential $4 million each to $2 million each. This decision was made after considering the company's consolidated financial results and the ongoing challenges within the homebuilding industry.

Their bonuses were based on two components: a 'First Cash Component' related to adjusted pre-tax income and a 'Second Cash and Equity Component' tied to cash flow generation and selling, general, and administrative (SG&A) expense containment, benchmarked against industry peers.

No. While a 'First Cash Component' bonus of $340,014 was paid to each executive based on first-quarter adjusted pre-tax income, no bonuses were paid for the remaining three quarters of fiscal year 2009 because positive adjusted pre-tax income was not achieved during those periods.

For fiscal year 2010, non-management directors will receive increased cash fees. The per-meeting director fee increased from $10,000 to $15,000, with an annual cap of $60,000. Committee member and chairperson fees were also adjusted.