8-KLeadership ChangesExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Executive Changes (Nov 12, 2014)

Filed November 12, 2014For Securities:DHI

Summary

This 8-K filing by D.R. Horton, Inc. (DHI) on November 12, 2014, details the executive compensation decisions for the fiscal year 2014 and outlines the compensation programs for fiscal year 2015. Key information includes the cash performance bonuses awarded to senior executives for FY2014, which were tied to a percentage of consolidated pre-tax income. Additionally, the filing reports on the vesting of long-term performance restricted stock units (RSUs) awarded in 2011 to Donald R. Horton (Chairman) and Donald J. Tomnitz (Former CEO), based on performance goals achieved over a three-year period ending September 30, 2014. The filing also introduces the compensation structure for FY2015, including base salaries and performance bonus opportunities for key executives, as well as a new three-year performance RSU award for FY2017. Investors will find the details on executive payouts and the structure of future incentive compensation particularly relevant. The performance-based nature of a significant portion of compensation, tied to metrics like pre-tax income, relative total shareholder return, return on investment, SG&A containment, and gross profit, suggests a strong alignment between executive rewards and company performance. The consistent compensation levels for non-management directors in FY2015 compared to FY2014 are also noted.

Key Highlights

  • 1Cash performance bonuses for FY2014 were paid to Donald R. Horton, Donald J. Tomnitz, and David V. Auld, based on a percentage of consolidated pre-tax income.
  • 2Donald R. Horton and Donald J. Tomnitz received cash bonuses totaling $4,885,110 each for FY2014.
  • 3David V. Auld received a total cash bonus of $2,035,463 for FY2014.
  • 4Performance RSUs awarded in 2011 to Donald R. Horton and Donald J. Tomnitz vested based on relative TSR, ROI, SG&A, and GP performance goals over a three-year period.
  • 5Donald R. Horton received 325,000 shares of common stock valued at $6,669,000 from the vested 2011 RSU award.
  • 6Donald J. Tomnitz received 243,750 shares of common stock valued at $5,001,750 from the vested 2011 RSU award.
  • 7New FY2015 compensation programs were approved, including base salaries and performance bonus opportunities for Donald R. Horton, David V. Auld, and Michael J. Murray, along with a new three-year performance RSU award for these executives and Bill W. Wheat.

Frequently Asked Questions

For fiscal year 2014, D.R. Horton awarded cash performance bonuses to key executives based on a percentage of the company's consolidated pre-tax income. Additionally, long-term performance restricted stock units (RSUs) awarded in 2011 to Donald R. Horton and Donald J. Tomnitz vested based on the achievement of specific performance goals over a three-year period, resulting in the issuance of company stock to these executives.

For fiscal year 2015, base salaries were set for Donald R. Horton ($1,000,000), David V. Auld ($700,000), and Michael J. Murray ($500,000). They also have the opportunity to earn cash bonuses tied to consolidated pre-tax income. Furthermore, new three-year performance RSU awards were granted to these executives, contingent on meeting relative TSR, ROI, SG&A, and GP performance goals.

The RSUs awarded in 2011 had a three-year performance period ending September 30, 2014. Vesting was determined by evaluating performance against four 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). Performance was measured against a peer group of homebuilding companies.

No, the Board of Directors approved director fees, committee member fees, and committee chairperson fees for the fiscal year 2015, and all director fees remained at the same level as the prior fiscal year 2014. Board of Directors fees are set at $15,000 per meeting, not to exceed $60,000 annually.