8-KLeadership ChangesExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Executive Changes (Nov 16, 2011)

Filed November 16, 2011For Securities:DHI

Summary

This Form 8-K filing from D.R. Horton, Inc. (DHI) on November 16, 2011, details executive compensation decisions made on November 9, 2011. The report outlines performance-based bonuses for the fiscal year 2011 for Chairman Donald R. Horton and President & CEO Donald J. Tomnitz, totaling $240,798 each. It also provides an update on a long-term performance unit award granted in 2008, which concluded in September 2011. After a 65% reduction by the Compensation Committee, Mr. Horton received 306,250 performance units (split between cash and stock) and Mr. Tomnitz received 245,000 units. Furthermore, the filing discloses the compensation program for fiscal year 2012 for these key executives, maintaining their base salaries and outlining bonus opportunities tied to pre-tax income. Crucially, it announces a new performance restricted stock unit (RSU) award for Mr. Horton and Mr. Tomnitz, with a three-year performance period ending September 30, 2014. These RSUs are tied to four performance goals: relative total shareholder return (TSR), relative return on investment (ROI), relative selling, general and administrative (SG&A) expense containment, and relative gross profit (GP), with vesting contingent on meeting specific performance metrics against a peer group. The filing also covers discretionary bonuses for other named executive officers for FY 2011 and details the compensation structure for non-management directors for FY 2012, noting that director fees remain unchanged.

Key Highlights

  • 1D.R. Horton approved performance bonuses for FY 2011 for Chairman Donald R. Horton and President & CEO Donald J. Tomnitz, each receiving $240,798.
  • 2A 2008 long-term performance unit award to Messrs. Horton and Tomnitz concluded, with payouts significantly reduced (65%) by the Compensation Committee.
  • 3 Messrs. Horton and Tomnitz received 306,250 and 245,000 performance units, respectively, paid 50% in cash and 50% in common stock.
  • 4The base salaries for Messrs. Horton ($1,000,000) and Tomnitz ($900,000) remain unchanged for FY 2012.
  • 5A new performance-based RSU award was granted to Messrs. Horton and Tomnitz for the 2012-2014 performance period, tied to relative TSR, ROI, SG&A, and GP.
  • 6Discretionary bonuses were awarded to other named executive officers, including CFO Bill W. Wheat and Treasurer Stacey H. Dwyer, for FY 2011.
  • 7Director fees for non-management directors were affirmed at prior year levels for FY 2012.

Frequently Asked Questions

For FY 2011, Chairman Donald R. Horton and President & CEO Donald J. Tomnitz received performance bonuses tied to a percentage of consolidated pre-tax income. They also received payouts from a long-term performance unit award granted in 2008. For FY 2012, their base salaries remain unchanged, with opportunities for bonuses based on pre-tax income in two semi-annual periods. Additionally, a new performance RSU award was granted for the 2012-2014 period, with vesting contingent on achieving specific relative performance metrics against peers.

The performance period for the 2008 long-term performance units ended on September 30, 2011. While Mr. Horton and Mr. Tomnitz initially qualified for maximum payouts based on relative ROI and net sales gains, the Compensation Committee exercised its discretion to reduce the payout by 65%. This resulted in Mr. Horton receiving 306,250 units and Mr. Tomnitz receiving 245,000 units, with each payout being 50% cash and 50% common stock based on the stock price of $9.04 on September 30, 2011.

The new Performance RSUs granted to Messrs. Horton and Tomnitz are tied to four equally weighted (25% each) performance goals over a three-year period ending September 30, 2014. These goals are relative total shareholder return (TSR) compared to the S&P 500 Index, and relative performance in return on investment (ROI), selling, general and administrative (SG&A) expense containment, and gross profit (GP) compared to a peer group of ten other homebuilding companies.

For FY 2011, other named executive officers, including the CFO and Treasurer, received discretionary bonuses consistent with past practices. For FY 2012, their compensation programs were established. Non-management director fees (board and committee fees) for FY 2012 remained unchanged from the prior year.