8-KLeadership ChangesExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Executive Changes (Nov 15, 2012)

Filed November 15, 2012For Securities:DHI

Summary

This Form 8-K filing from D.R. Horton, Inc. (DHI) on November 15, 2012, primarily details executive and board compensation decisions for the 2012 and 2013 fiscal years. Key information includes the performance-based cash bonuses awarded to Chairman Donald R. Horton and President & CEO Donald J. Tomnitz for fiscal year 2012, totaling $2,429,907 each, which represented 1% of consolidated pre-tax income. This filing also outlines the vesting of previously granted performance restricted stock units (RSUs) for these executives, with each vesting in 162,500 shares based on specific performance goals over the 2010-2012 period. Furthermore, the report establishes the compensation framework for fiscal year 2013, confirming unchanged base salaries for Messrs. Horton and Tomnitz, and outlining their opportunity to earn cash bonuses up to 1% of consolidated pre-tax income. New performance RSU awards for the 2015 Performance Period (2012-2015) were also granted to these executives. Compensation for other named executive officers and non-management directors for both fiscal years are also detailed, including cash fees and equity retainers for directors.

Key Highlights

  • 1D.R. Horton's Chairman and CEO each received a total cash bonus of $2,429,907 for fiscal year 2012, representing 1% of consolidated pre-tax income, a reduction from the maximum potential bonus of 2%.
  • 2Previously awarded performance restricted stock units (RSUs) for the 2010-2012 performance period vested for the Chairman and CEO, with each receiving 162,500 shares of common stock.
  • 3For fiscal year 2013, base salaries for the Chairman ($1,000,000) and CEO ($900,000) remain unchanged.
  • 4A new performance RSU award for the 2015 Performance Period (October 1, 2012 - September 30, 2015) was granted to the Chairman (target 200,000 RSUs) and CEO (target 150,000 RSUs), with vesting tied to relative Total Shareholder Return (TSR), Return on Investment (ROI), SG&A containment, and Gross Profit (GP).
  • 5Discretionary bonuses were awarded to other named executive officers, Bill W. Wheat (CFO) and Stacey H. Dwyer (EVP and Treasurer), totaling $450,000 each for fiscal year 2012.
  • 6Cash director fees for non-management directors remained unchanged for fiscal year 2013, with an additional annual restricted stock retainer awarded.

Frequently Asked Questions

For the fiscal year ended September 30, 2012, both Donald R. Horton, Chairman, and Donald J. Tomnitz, President and CEO, each received a total cash bonus of $2,429,907. This amount represented 1% of the company's consolidated pre-tax income for the fiscal year.

For fiscal year 2013, the base annual salaries for Donald R. Horton and Donald J. Tomnitz remain unchanged at $1,000,000 and $900,000, respectively. They also have the opportunity to earn cash bonuses of up to 1% of consolidated pre-tax income, based on semi-annual performance periods.

The Compensation Committee evaluated the performance over the period of October 1, 2010, to September 30, 2012, against four goals: relative Total Shareholder Return (TSR), relative Return on Investment (ROI), relative Selling, General & Administrative (SG&A) expense containment, and relative Gross Profit (GP). Based on the company's peer group rankings for these goals, both Mr. Horton and Mr. Tomnitz each vested in 162,500 Performance RSUs, which were paid out in the form of shares of common stock.

The new performance RSUs, granted on November 8, 2012, for the period ending September 30, 2015, are also tied to four performance goals: relative Total Shareholder Return (TSR), relative Return on Investment (ROI), relative Selling, General & Administrative (SG&A) expense containment, and relative Gross Profit (GP). Vesting is determined by the company's relative ranking against a peer group of ten other homebuilding companies, with additional checks against the S&P 500 Index for TSR.