8-KLeadership ChangesExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Executive Changes (Nov 16, 2010)

Filed November 16, 2010For Securities:DHI

Summary

This 8-K filing by D. R. Horton, Inc. (DHI) on November 16, 2010, details executive compensation decisions made by the Compensation Committee. Key updates include the determination of fiscal year 2010 performance bonuses for Chairman and CEO Donald R. Horton and President and CEO Donald J. Tomnitz, where both received $1,989,755, representing 2% of the company's consolidated pre-tax income. The filing also addresses the performance outcomes of long-term incentive awards granted in fiscal year 2008, specifically performance units tied to relative ROI and net sales gains. Following the performance period, the Compensation Committee exercised discretion to reduce the maximum payouts, resulting in Mr. Horton vesting 262,500 shares and Mr. Tomnitz vesting 175,000 shares, valued at $11.12 per share as of September 30, 2010.

Key Highlights

  • 1Fiscal year 2010 performance bonuses for Chairman/CEO and President/CEO were determined, with each receiving $1,989,755 (2% of pre-tax income).
  • 2Fiscal year 2008 performance unit awards for Donald R. Horton and Donald J. Tomnitz were finalized, resulting in payouts of 262,500 and 175,000 shares, respectively, after a 50% discretionary reduction from maximum potential.
  • 3Performance for the 2008 awards was based on relative ROI and net sales gains against a peer group of nine homebuilding companies.
  • 4Compensation programs for fiscal year 2011 for the Chairman/CEO and President/CEO were approved with no changes to base salaries, annual bonus plans, or other benefits from the prior year.
  • 5New performance restricted stock units (Performance RSUs) were awarded to Donald R. Horton and Donald J. Tomnitz, with a target of 150,000 units each, for a three-year performance period (Oct 2010 - Sep 2013).
  • 6These Performance RSUs are tied to four key metrics: relative TSR, relative ROI, relative SG&A containment, and relative gross profit, with potential payouts ranging from zero to 300,000 units each.
  • 7Discretionary bonuses for other named executive officers, Bill W. Wheat (EVP & CFO) and Stacey H. Dwyer (EVP & Treasurer), for fiscal year 2010 were also approved.

Frequently Asked Questions

After evaluating performance against relative ROI and net sales gains compared to industry peers over a 33-month period, the Compensation Committee reduced the maximum payouts by 50%. This resulted in Donald R. Horton vesting 262,500 shares and Donald J. Tomnitz vesting 175,000 shares. The value of these shares was determined using the closing stock price of $11.12 on September 30, 2010.

The Performance RSUs awarded to Donald R. Horton and Donald J. Tomnitz have a three-year performance period (Oct 1, 2010 - Sep 30, 2013) and are contingent on achieving four performance goals: relative total shareholder return (TSR), relative return on investment (ROI), relative selling, general, and administrative expense containment (SG&A), and relative gross profit (GP). Each goal is weighted at 25% of the target award.

No, the filing indicates that the Compensation Committee approved the fiscal year 2011 compensation programs for Donald R. Horton and Donald J. Tomnitz. There were no changes to their base salaries, annual performance-based bonus plans, or other benefits compared to the prior fiscal year.

Bill W. Wheat (Executive Vice President and Chief Financial Officer) and Stacey H. Dwyer (Executive Vice President and Treasurer) each received discretionary bonuses totaling $400,000 for the fiscal year ended September 30, 2010. This bonus was composed of $175,000 for the first six months of the fiscal year and $225,000 for the second six months.