Proxy Statement (Form DEF 14A)
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Dear Stockholders:
You are cordially invited to attend the
Our board of directors has fixed the close of business on
The Notice of Annual Meeting of Stockholders and Proxy Statement, both of which accompany this letter, provide details regarding the business to be conducted at the meeting, including proposals for the election of the directors named in this Proxy Statement to serve until the 2026 Annual Meeting of Stockholders (Proposal 1), an advisory vote to approve the compensation of our named executive officers (Proposal 2) and the ratification of the appointment of
Our board of directors recommends that you vote "FOR" the director nominees named in this Proxy Statement and "FOR" each of Proposals 2 and 3. Each proposal is described in more detail in this Proxy Statement.
Your vote is very important. Please vote your shares promptly, whether or not you expect to attend the meeting. You may vote over the Internet, as well as by telephone, or, if you requested to receive printed proxy materials, by mailing a proxy card or voting instruction form, as applicable.
Sincerely,
Chairman of the Board of Directors, President and Chief Executive Officer
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Notice of Annual Meeting of Stockholders
To be Held on
The 2025 Annual Meeting of Stockholders of
1. |
To elect the directors named in this Proxy Statement and nominated by our board of directors to serve until the 2026 Annual Meeting of Stockholders; |
2. |
To conduct an advisory vote to approve the compensation of our named executive officers; |
3. |
To ratify the appointment of |
4. |
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting. |
Only holders of record of our common stock at the close of business on
This Notice of Annual Meeting of Stockholders and Proxy Statement are first being distributed or made available, as the case may be, on or about
By order of the board of directors, |
Executive Vice President, Chief Legal Officer and Secretary |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
THIS PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-KARE AVAILABLE AT: WWW.PROXYVOTE.COM
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Proposal 2: Advisory Vote to Approve the Compensation of our Named Executive Officers (Say on Pay) |
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Security Ownership of Certain Beneficial Owners, Directors and Management |
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Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement | TOC
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Forward-Looking Statements
This Proxy Statement includes certain forward-looking statements within the meaning of the federal securities laws regarding, among other things, our intentions, plans, beliefs, expectations or predictions of future events, which are considered forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business and operations strategy. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "can," "could," "might," "project," "target" or similar expressions. These statements are based upon assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read this Proxy Statement, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-Kfor the year ended
Our forward-looking statements made herein are made only as of the date of this Proxy Statement. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, except as required by applicable law.
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PROXY STATEMENT SUMMARY |
Proxy Statement Summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should review all of the information contained in the Proxy Statement before voting.
Annual Meeting of Stockholders
Date: |
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Time: |
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Virtual Meeting: |
This year's meeting is a virtual stockholders meeting at www.virtualshareholdermeeting.com/TMHC2025. |
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Record Date: |
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Voting: |
Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote per share. |
Proposals and Voting Recommendations
Board Recommendation |
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1. Election of the director nominees named herein |
For | 7 | ||
2. Advisory vote on the compensation of our named executive officers |
For | 61 | ||
3. Ratification of the appointment of our independent auditor for fiscal 2025 |
For | 62 |
Voting Methods
You can vote in one of four ways:
Visit www.proxyvote.com to vote VIA THE INTERNET |
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Call 1-800-690-6903to vote BY TELEPHONE |
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If you received printed proxy materials, sign, date and retuyour proxy card or voting instruction form, as applicable, in the prepaid enclosed envelope to vote BY MAIL |
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You may also vote ONLINE during the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/TMHC2025 and following the instructions. You will need the 16-digitcontrol number included on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials |
To reduce our administrative and postage costs and the environmental impact of the Annual Meeting, we encourage stockholders to vote prior to the meeting via the Internet or by telephone, both of which are available 24 hours a day, seven days a week, until
You will need to have your 16-digitcontrol number included on your Notice of Internet Availability of Proxy Materials or, if you received a printed copy of the proxy materials, your proxy card or the instructions that accompanied your proxy materials to join the Annual Meeting and to vote during the Annual Meeting.
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GENERAL INFORMATION |
Proxy Statement
For the 2025 Annual Meeting of Stockholders
General Information Concerning Proxies and Voting at the Annual Meeting
Why did I receive these proxy materials?
We are providing these proxy materials in connection with the solicitation by the board of directors of
Why is the Annual Meeting being webcast online?
The Annual Meeting will be conducted in an online, virtual format. We are pleased to continue to use the virtual meeting format to facilitate stockholder attendance, voting and questions by leveraging technology to communicate more effectively and efficiently with our stockholders. This format allows stockholders to participate fully from any location, without the cost of travel and will provide the same rights and advantages of a physical meeting. Stockholders will be able to present questions online during the meeting through www.virtualshareholdermeeting.com/TMHC2025, providing our stockholders with the opportunity for meaningful engagement with the Company.
How do I participate in the virtual meeting?
Our Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by live audio webcast. No physical in-personmeeting will be held.
To participate in the meeting, you must have your 16-digitcontrol number that is shown on your Notice or, if you received a printed copy of the proxy materials, on your proxy card or the instructions that accompanied your proxy materials. You may access the Annual Meeting by visiting www.virtualshareholdermeeting.com/TMHC2025. You will be able to submit questions during the meeting by typing in your question into the "ask a question" box on the meeting page. Should you require technical assistance, support will be available by dialing 1-800-586-1548(US) or 1-303-562-9288(international) during the meeting; these telephone numbers will also be displayed on the meeting webpage.
What information is included in this Proxy Statement?
The information in this Proxy Statement relates to the proposals to be voted on at the Annual Meeting, the voting process, our board of directors and board committees, corporate governance, the compensation of current directors and certain executive officers for the year ended
Who is entitled to vote?
Holders of our common stock at the close of business on the Record Date are entitled to vote at the Annual Meeting. As of the close of business on the Record Date, there were 100,539,960 shares of our common stock outstanding and entitled to vote.
How many votes do I have?
On any matter that is submitted to a vote of our stockholders, holders are entitled to one vote per share of common stock held by them on the Record Date. Holders of our common stock are not entitled to cumulative voting in the election of directors.
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Most stockholders hold their shares through a bank, broker or other nominee rather than directly in their own name.
If, on the Record Date, your shares were registered directly in your name with our transfer agent,
If, on the Record Date, your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in "street name," and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account.
Shares held in your name as the stockholder of record or beneficially in street name may be voted by you, while the polls remain open, at www.virtualshareholdermeeting.com/TMHC2025 during the meeting. You will need the 16-digitcontrol number included on your Notice or, if you received a printed copy of the proxy materials, on your proxy card or the instructions that accompanied your proxy materials in order to be able to enter the meeting and to vote online during the meeting.
Even if you plan to participate in the online meeting, we recommend that you also submit your proxy or voting instructions as described above so that your vote will be counted if you later decide not to participate in the online meeting.
What am I voting on?
We are asking you to vote on the following matters in connection with the Annual Meeting:
1. |
The election of the directors named in this Proxy Statement and nominated by our board of directors to serve until our annual meeting of stockholders to be held in 2026; |
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An advisory vote to approve the compensation of our named executive officers; and |
3. |
Ratification of the appointment of |
We will also consider any other business that may properly come before the Annual Meeting. At the date of this Proxy Statement, we know of no business that will be brought before the Annual Meeting other than the matters set forth above.
How do I vote?
Vote by Internet
Stockholders of record may submit proxies over the Internet by following the instructions on the Notice or, if you requested printed copies of the proxy materials, the instructions on the printed proxy card. Most beneficial stockholders may vote by accessing the website specified on the voting instruction forms provided by their banks, brokers or other nominees. Please check your voting instruction form for Internet voting availability.
Vote by Telephone
Stockholders of record may submit proxies by telephone or mobile device by dialing (800) 690-6903and following the recorded instructions. You will need the 16-digitcontrol number included on your Notice or, if you requested printed copies of the proxy materials, the instructions printed on the proxy card in order to vote by telephone. Most beneficial owners may vote using any telephone or mobile device from within
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GENERAL INFORMATION |
Vote by Mail
Stockholders of record may submit proxies by mail by requesting a printed proxy card and completing, signing and dating the printed proxy card and mailing it in the pre-addressedenvelopes that will accompany the printed proxy materials. Beneficial owners may vote by completing, signing and dating the voting instruction forms provided by their banks, brokers or other nominees and mailing them in the pre-addressedenvelopes accompanying the voting instruction forms.
If you are a stockholder of record and you retuyour signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by our board of directors. If you are a beneficial owner and you retuyour signed voting instruction form but do not indicate your voting preferences, please see "What are "broker non-votes"?"regarding whether your bank, broker or other nominee may vote your uninstructed shares on a particular proposal.
Vote Online at the Annual Meeting
All stockholders as of the close of business on the Record Date can vote online at the Annual Meeting. You may vote and submit questions while attending the meeting online via live audio webcast. Shares held in your name as the stockholder of record or beneficially in street name may be voted by you, while the polls remain open, at www.virtualshareholdermeeting.com/TMHC2025 during the meeting. You will need the 16-digitcontrol number included on your Notice or, if you received a printed copy of the proxy materials, on your proxy card or the instructions that accompanied your proxy materials in order to be able to vote and enter the meeting. Even if you plan to attend the Annual Meeting, we recommend that you also vote either by telephone, by Internet or by mail so that your vote will be counted if you decide not to attend.
Will I be able to participate in the virtual meeting on the same basis as I would be able to participate in a live meeting?
The virtual meeting format for the Annual Meeting will enable full and equal participation by all of our stockholders from any place in the world at little to no cost.
We designed the format of the virtual meeting to ensure that our stockholders who attend our Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-personmeeting and to enhance stockholder access, participation and communication through online tools. In order to ensure such an experience, we will provide stockholders with the ability to submit appropriate questions real-time via the meeting website, limiting questions to one per stockholder and will answer as many questions submitted in accordance with the meeting rules of conduct as possible in the time allotted for the meeting without discrimination.
Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Questions regarding personal matters, including those related to employment issues, are not pertinent to meeting matters and therefore will not be answered.
What does it mean if I receive more than one set of materials?
If you receive more than one set of materials, it means that your shares are registered in more than one name or are registered in different accounts. In order to vote all the shares you own, you must either sign and retuall of the proxy cards or follow the instructions for any alternative voting procedures on each of the proxy cards or Notices of Internet Availability of Proxy Materials you receive.
What can I do if I change my mind after I vote?
If you are a stockholder of record, you may revoke your proxy at any time before it is exercised at the Annual Meeting by (a) delivering written notice stating that the proxy is revoked, bearing a date later than the proxy, to
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Stockholders of record may also request a new proxy card by calling 1-800-579-1639.If you are a beneficial stockholder, you may revoke your proxy or change your vote by following the separate instructions provided by your bank, broker or other nominee. To change your vote or revoke your proxy during the Annual Meeting, you must have your 16-Digitcontrol number that is shown on your Notice or, if you received a printed copy of the proxy materials, on your proxy card or the instructions that accompanied your proxy materials.
What constitutes a quorum at the Annual Meeting?
Transaction of business at the Annual Meeting may occur only if a quorum is present. A quorum will be present if at least a majority of the voting power of our outstanding common stock entitled to vote at the meeting is present in person or represented by proxy. Your shares will be counted towards the quorum if you vote by mail, by telephone or through the Internet either before or during the Annual Meeting. Abstentions and shares represented by "broker non-votes"that are present and entitled to vote at the Annual Meeting are counted for purposes of determining a quorum.
If a quorum is not present, it is expected that the Annual Meeting will be adjourned or postponed in order to permit additional time for soliciting and obtaining additional proxies or votes, and, at any subsequent reconvening of the Annual Meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original convening of the Annual Meeting, except for any proxies that have been effectively revoked or withdrawn, as discussed above under the heading "What can I do if I change my mind after I vote?".
What are "broker non-votes"?
A broker non-voteoccurs when a nominee holding shares for a beneficial owner does not vote the shares on a proposal because the nominee does not have discretionary voting power for a particular item and has not received instructions from the beneficial owner regarding voting. Brokers who hold shares for the accounts of their clients have discretionary authority to vote shares if specific instructions are not given only with respect to "routine" items. If your shares are held by a bank, broker or other nominee on your behalf and you do not instruct the bank, broker or other nominee as to how to vote your shares on Proposals 1 or 2, the bank, broker or other nominee may not exercise discretion to vote on those proposals because these proposals are considered "non-routine"by the
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What are the voting requirements to elect directors and approve each of the other proposals described in this Proxy Statement?
The table below summarizes the vote required to approve each proposal described in this Proxy Statement, how votes are counted and how our board of directors recommends you vote:
Vote Required |
Voting Options(1) |
Board Recommendation |
Broker Discretionary Voting Allowed |
Impact of Broker Non-Vote |
Impact of Abstain Vote |
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Proposal 1:Election of directors | Affirmative vote of a majority of the votes cast in respect of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote on the matter | "FOR" "AGAINST" "ABSTAIN" |
"FOR" | NO | NONE | NONE | ||||||
Proposal 2:Advisory vote to approve the compensation of our named executive officers |
Affirmative vote of a majority of shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote on the matter |
"FOR" "AGAINST" "ABSTAIN" |
"FOR" | NO | NONE | "AGAINST" | ||||||
Proposal 3:Ratification of appointment of |
Affirmative vote of a majority of shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote on the matter |
"FOR" "AGAINST" "ABSTAIN" |
"FOR" | YES(2) | N/A | "AGAINST" |
(1) |
If you are a stockholder of record and just sign and submit your proxy card without voting instructions, your shares will be voted "FOR" the director nominees listed herein and on the other proposals as recommended by our board of directors and in accordance with the discretion of the holders of the proxy with respect to any other matters that may be voted upon. |
(2) |
As this proposal is considered a discretionary matter, brokers are permitted to exercise their discretion to vote uninstructed shares on this proposal. Therefore, there will be no broker non-votes. |
Who will count the votes?
Representatives of the Company will act as inspectors of election. Representatives of
Who will pay for the cost of this proxy solicitation?
We will bear the cost of the solicitation of proxies from our stockholders. In addition to solicitation by mail, our directors, officers and employees, without additional compensation, may solicit proxies from stockholders by telephone, by electronic communications, including by email, by letter, by facsimile, in person or otherwise. We will request banks, brokers or other nominees to forward copies of the proxy and other soliciting materials to persons for whom they hold shares of our common stock and to request authority for the exercise of proxies. In such cases, upon the request of the banks, brokers and other nominees, we will reimburse such holders for their reasonable expenses.
We will also bear the cost of retaining any proxy solicitation firm, should we choose to retain one. We would expect the expenses associated with retaining any such proxy solicitation firm not to exceed
Why did I receive a one-pagenotice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to rules adopted by the
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the voting instruction form) and request to receive an electronic copy or printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request an electronic copy or printed copy may be found in the Notice and in the proxy card (or, for beneficial holders, in the voting instruction form). In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the costs and environmental impact of the Annual Meeting.
When will we announce the results of the voting?
We expect to announce the final voting results by filing a Current Report on Form 8-Kwithin four business days after the Annual Meeting. If the final voting results are unavailable at that time, we will file a Current Report on Form 8-Kannouncing the preliminary results, followed by an amended Current Report on Form 8-Kwithin four business days of the day the final results are available.
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PROPOSAL 1: ELECTION OF DIRECTORS |
Proposal 1: Election of Directors
Board Composition
Our board of directors currently consists of nine members, eight of whom our board of directors has affirmatively determined to be independent under the NYSE listing standards and our corporate governance documents.
For more information on the current composition of our board of directors, see "Corporate Governance-Information About Our Board of Directors-Process for Identifying and Nominating Directors" and "Corporate Governance-Board Structure and Operations-Composition of Our Board of Directors."
Upon the recommendation of our nominating and governance committee, our board of directors has nominated Messrs. Lane, Merritt, Previn and Yip, and Mses. Mariucci, Ostis,
Directors for Election to a One-YearTerm Expiring at the 2026 Annual Meeting of Stockholders
PETER LANE AGE 60 |
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ANNE AGE 67 |
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PROPOSAL 1: ELECTION OF DIRECTORS |
DAVID AGE 70 |
As a seasoned director and audit committee chair with extensive accounting, financial reporting and audit committee experience, |
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HEATHER AGE 46 |
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ANDREA (ANDI) AGE 59 |
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PROPOSAL 1: ELECTION OF DIRECTORS |
SHERYL D. PALMER AGE 63 |
Under With We believe |
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FLETCHER AGE 51 |
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DENISE F. WARREN AGE 61 |
We believe |
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PROPOSAL 1: ELECTION OF DIRECTORS |
CHRISTOPHER YIP AGE 42 |
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In the vote on the election of the director nominees, stockholders may:
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vote FORthe nominee; |
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vote AGAINSTthe nominee; or |
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ABSTAIN. |
Unless you elect to vote differently by so indicating on your signed proxy, your shares will be voted FOR the board of directors' nominees. For each of the nine director nominees, the number of shares voted "FOR" at the Annual Meeting must exceed the total number of shares voted "AGAINST" such nominee for director in order to be elected. Proxies marked "ABSTAIN" and broker non-voteswill have no effect on the outcome of this proposal. In an uncontested election of directors, any incumbent nominee who does not receive the requisite majority vote in an uncontested election must promptly offer to tender her or his resignation in accordance with our Corporate Governance Guidelines. The board will then decide whether to accept the resignation, based on the recommendation of the nominating and governance committee.
If a nominee ceases to be a candidate for election by the time of the Annual Meeting (a contingency that the board does not expect to occur), such proxies may be voted by the proxyholders in accordance with the recommendation of our board of directors.
The Board of Directors Recommends a Vote "FOR" the Above-Named Director Nominees.
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CORPORATE GOVERNANCE |
Corporate Governance
We believe that effective corporate governance is critical to our ability to create long-term value for our stockholders. We have adopted and implemented charters, policies, procedures and controls that we believe promote and enhance corporate governance, accountability and responsibility and create a culture of honesty and integrity at our company. Our Corporate Governance Guidelines, Code of Conduct and Ethics, various other governance-related information and board committee charters are available on the Investor Relations page of our corporate website at www.taylormorrison.com.
Our board of directors consists of a majority of independent directors, and all of our standing committees are fully independent.
Governance Highlights
We believe that effective corporate governance is critical to our ability to create long-term value for our stockholders. We have adopted and implemented charters, policies, procedures and controls that we believe promote and enhance corporate governance, accountability and responsibility and create a culture of honesty and integrity at our company. Our Corporate Governance Guidelines, Code of Conduct and Ethics, various other governance-related information and board committee charters are available on the Investor Relations page of our corporate website at www.taylormorrison.com.
Our board of directors consists of a majority of independent directors, and all of our standing committees are fully independent.
Our commitment to strong governance practices is illustrated by the following:
✓ Annual election of directors with a majority voting standard in uncontested directors |
✓ Independent directors meet at least quarterly without management |
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✓ Independent Lead Director |
✓ Commitment to a diverse director candidate pool |
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✓ All directors are independent except for our CEO |
✓ No stockholder rights plan, also referred to as a |
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✓ Director mandatory retirement age (age 72) |
✓ Director over-boarding policy |
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✓ Annual Board and committee self-evaluations |
✓ Single class of voting stock |
Information About Our Board of Directors
Director Independence
Our board of directors consults with our legal counsel to ensure that the board's independence determinations are consistent with relevant securities and other laws and regulations regarding director independence. To assist in the board's independence determinations, each director completes materials designed to identify any relationships that could affect the director's independence. In addition, through discussions among our directors, an analysis of independence is undertaken by the nominating and governance committee, and an affirmative determination is made by the board of directors. The board of directors has determined that Mses. Mariucci, Ostis, Owen and Warren and Messrs. Lane, Merritt, Previn and Yip are "independent," as such term is defined by the applicable rules and regulations of the NYSE. Additionally, the board of directors previously determined that
Director Qualifications
The board of directors has delegated to the nominating and governance committee the responsibility of reviewing and recommending nominees for membership of the board of directors. The nominating and governance committee seeks candidates from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. The Company's Corporate Governance Guidelines reflect the policy of the nominating and governance committee that, when conducting a search to fill a vacancy on the Board, any candidate pool will include candidates who are diverse in terms of race, ethnicity and/or gender. The assessment of director
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candidates includes, among other factors, an individual's independence, which determination is based upon applicable NYSE rules, applicable
In the case of incumbent directors whose terms of office are set to expire, the nominating and governance committee reviews such directors' overall service to our Company during their respective term, including the number of meetings attended, level of participation, quality of performance and any relationships and transactions that might impair such directors' independence. In addition, pursuant to our Corporate Governance Guidelines, no person shall be nominated by the board of directors to serve as a director after he or she has passed his or her 72nd birthday, unless the nominating and governance committee has voted to waive the mandatory retirement age for such director at the time of nomination.
Summary of Individual Director Skills and Attributes
Our Board reflects a diverse, highly engaged group of directors with a wide range of relevant experience. The following matrix provides information about our director nominees, including certain types of knowledge, skills, experiences and attributes possessed by one or more of our directors, which our Board believes are relevant to our business and operations. The matrix does not encompass all of the knowledge, skills, experiences or attributes of our directors and does not suggest that a director who is not listed as having any particular knowledge, skills, experiences or attribute is unable to contribute to the decision-making process in such area.
Summary of Director Nominee Attributes and Experience |
Lane | Mariucci | Merritt | Ostis | Owen | Palmer | Previn | Warren | Yip | Total | ||||||||||||
Executive Leadership Experience.Directors with executive leadership experience at large organizations typically possess strong leadership qualities and the ability to identify and develop those qualities in others. |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 100% | ||||||||||||
Homebuilding / Real Estate Industry Experience. Directors with significant industry experience provide valuable perspective and insight into the company's risks and opportunities, regulatory environment and business strategies. |
✓ | ✓ | ✓ | ✓ | 44% | |||||||||||||||||
Technology / Cybersecurity.Directors with significant technology or cybersecurity related experience assist the board and the company at using technology to enhance our customer experience, implement digital strategies and oversee cyber security risk. |
✓ | ✓ | ✓ | 33% | ||||||||||||||||||
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✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 67% | |||||||||||||||
Public Company Board Experience. Directors with experience serving as a director of other public companies typically possess a strong understanding of effective corporate governance standards and practices. |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 78% |
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Summary of Director Nominee Attributes and Experience |
Lane | Mariucci | Merritt | Ostis | Owen | Palmer | Previn | Warren | Yip | Total | ||||||||||||
Risk Management.Experience with risk management is critical to foster an environment where risk management is an integral component of our strategy, culture and business operations and to ensure that policies and procedures are designed and implemented that are consistent with our risk appetite. |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 100% | ||||||||||||
Sustainability.Sustainability expertise strengthens the Board's oversight and assures that strategic business imperatives and long term value creation are achieved within a sustainable, environmentally focused model. |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 78% | ||||||||||||||
Global Experience.Global experience helps directors better understand and review our business and strategy in the context of the global economy and macroeconomic conditions. |
✓ | ✓ | ✓ | ✓ | ✓ | 56% | ||||||||||||||||
Finance / Accounting.An understanding of finance, financial statements and financial reporting processes enables our directors to better understand what drives our performance and develop financial strategies. |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 100% | ||||||||||||
Regulated Industry Experience.Directors with experience in large organizations facing diverse regulatory requirements provide valuable insight on strategies and practices to help the company navigate complicated compliance matters. |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 67% | |||||||||||||||
Marketing / Sales.Relevant to the Company as it seeks to identify and develop new marketing strategies, develop its brands, and monitor consumer trends. |
✓ | ✓ | ✓ | ✓ | ✓ | 56% | ||||||||||||||||
Tenure.Diversity with respect to tenure is important in order to provide for both fresh perspectives and deep experience and knowledge of the Company. |
13 | 11 | 12 | 1 | 7 | 18 | 1 | 7 | 4 | 8.2 Years Average Tenure |
||||||||||||
Age.Age diversity provides the board with new perspectives in combination more tenured directors with existing deep experience and knowledge of the Company. |
60 | 67 | 70 | 46 | 59 | 63 | 51 | 61 | 42 | 58 Years Average Age |
Process for Identifying and Nominating Directors
Nominees for our board of directors are recommended by the nominating and governance committee, which may utilize a variety of methods for identifying nominees for director. Candidates may come to the attention of the nominating and governance committee through current board members, management, professional search firms, stockholders or other persons. The nominating and governance committee uses the same criteria for evaluating candidates regardless of the source of the referral or recommendation. With respect to
The nominating and governance committee will consider nominees proposed by our stockholders in accordance with the provisions contained in our By-laws.Each notice of nomination submitted in this manner must contain the
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information specified in our By-laws,including, but not limited to, information with respect to the beneficial ownership of our common stock or derivative securities that have a value associated with our common stock held by the proposing stockholder and its associates and any voting or similar agreement the proposing stockholder has entered into with respect to our common stock. To be timely, the notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the date of the prior year's annual meeting of stockholders. If the annual meeting of stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the anniversary of the preceding year's annual meeting of stockholders, or if no annual meeting of stockholders was held in the preceding year, notice by the stockholder, to be timely, must be received no earlier than the 120th day prior to the annual meeting of stockholders and no later than the later of (1) the 90th day prior to the annual meeting of stockholders and (2) the tenth day following the day on which we notify stockholders of the date of the annual meeting of stockholders, either by mail or other public disclosure.
The foregoing description of the advance notice provisions of our By-lawsis a summary and is qualified in its entirety by reference to the full text of our By-laws.Accordingly, we advise you to review our By-lawsfor additional stipulations relating to the process for nominating directors, including advance notice of director nominations and stockholder proposals. See also "Additional Information-Submission of Stockholder Proposals at Next Year's Annual Meeting."
Board Tenure and Diversity
As noted above, consistent with the Company's Corporate Governance Guidelines, the nominating and governance committee seeks director candidates from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise. In addition, in furtherance of the Company's continuing commitment to board diversity, the Corporate Governance Guidelines of the Company reflect the policy of the nominating and governance committee that, when conducting a search to fill a vacancy on the Board, any candidate pool will include candidates who are diverse in terms of race, ethnicity and/or gender. The nominating and governance committee and the Board believe that considering diversity is consistent with the goal of creating a Board that best serves the needs of the Company and the interests of its stockholders, and it is one of the many factors that they consider when identifying individuals for Board membership.
We believe that diversity with respect to tenure is important in order to provide for both fresh perspectives and deep experience and knowledge of the Company. Therefore, we aim to maintain an appropriate balance of tenure across our directors. In furtherance of the Board's active role in Board succession planning, the Board has appointed eight new directors since 2018.
Board Fellowship Program
In
Board Structure and Operations
Composition of Our Board of Directors
In accordance with our Certificate of Incorporation and By-laws,the number of directors on our board is determined from time to time by our board of directors and is currently a nine-member board. Each director elected or appointed to the board will hold office for a term expiring at the annual meeting of stockholders following his or her election or appointment and until his or her successor has been duly elected and qualified, or until his or her earlier death, disqualification, resignation or removal. Subject to the special rights of the holders of one or more series of preferred stock, vacancies and newly created directorships on the board of directors may be filled at any time by the remaining directors.
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Board Leadership Structure
Our board of directors does not currently have a policy as to whether the role of Chairman of our board of directors and the Chief Executive Officer should be separate. Our board of directors believes that the Company and its stockholders are best served by maintaining the flexibility to determine whether the Chairman and Chief Executive Officer positions should be separated or combined at a given point in time in order to provide appropriate leadership for us at that time.
In addition, our Corporate Governance Guidelines provide that, in order to maintain the independent integrity of our board of directors, if the Chairman of the board is not an independent director, the board of directors may appoint an independent director as lead director.
The board of directors understands that no single approach to board leadership is universally accepted and that the appropriate leadership structure may vary based on several factors, such as a company's size, industry, operations, history and culture. Accordingly, our board of directors, with the assistance of the nominating and governance committee, assesses its leadership structure in light of these factors and the current environment to achieve the optimal model for us and for our stockholders. The board has determined that, at this time, it is in our and our stockholders' best interests that our President and Chief Executive Officer serve as Chairman and that
The board of directors believes that
Board's Role in Risk Oversight
The board of directors oversees the business and affairs of the Company and monitors the performance of management. The fundamental responsibility of the board is to lead the Company by exercising its business judgment to act in what each director reasonably believes to be the best interests of the Company and its stockholders. Although the Board is not involved in the Company's day-to-dayoperations, the directors keep themselves informed about the Company through meetings of the Board, reports from management and discussions with the Company's executive officers. Directors also communicate with the Company's outside advisors, as necessary. Our board of directors exercises oversight of risk management consistent with its duties to the Company and its subsidiaries.
The audit committee is responsible for discussing with management our major financial, credit, liquidity and other risk exposures, as well as our risk assessment and risk management policies. The audit committee works directly with members of senior management and our internal audit staff to review and assess our risk management initiatives, including our compliance programs and cybersecurity initiatives, and reports as appropriate to the board. In addition, the audit committee meets as appropriate (1) as a committee to discuss our risk management guidelines and policies and risk exposures and (2) with our independent auditors to review our internal control environment and other risk exposures.
The compensation committee oversees the management of risks relating to our executive compensation programs and employee benefit plans. In the fulfillment of its duties, the compensation committee reviews at least annually our executive compensation programs, meets regularly with management to understand the financial, human resources and stockholder implications of compensation decisions and reports as appropriate to the board.
The board of directors as a whole also engages in the oversight of risk in various ways.
• |
During the course of each year, the board of directors reviews the structure and operation of various departments and functions of our company, including its risk management and internal audit functions. In these reviews, the |
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board of directors discusses with management the risks affecting those departments and functions and management's approaches to mitigating those risks. |
• |
The board of directors reviews and approves each year's management operating plan. These reviews cover risks that could affect the management operating plan and measures to cope with those risks. |
• |
In its review and approval of our annual reports on Form 10-K,the board of directors reviews our business and related risks, including as described in the "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the document. The audit committee updates this review quarterly in connection with the preparation of our quarterly reports on Form 10-Q. |
• |
Management must obtain the approval of the board of directors before proceeding with any land acquisition above a pre-establishedthreshold. When the board of directors reviews particular transactions and initiatives that require board approval, or that otherwise merit the board of directors' involvement, the board of directors generally includes related risk analysis and mitigation plans among the matters addressed with management. |
In addition to the foregoing, the Company has an enterprise risk management ("ERM") committee. The ERM committee consists of members of our management team who work with other key members of management to identify, monitor and evaluate the Company's risks and develop an approach to address and mitigate each identified risk. Each quarter, and more frequently, if necessary, the ERM committee reports its findings and recommendations to the audit committee, which then reports to the board of directors.
As part of its risk oversight regarding cybersecurity, management conducts quarterly cyber risk reviews, maintains a cybersecurity risk register, authorizes risk mitigation budgets and activities, and ensures appropriate resources are devoted to protecting against rapidly evolving cyber threats. The Audit Committee and the Board of Directors are also regularly updated on cybersecurity risk assessments, policy changes, significant incidents, and preparedness levels. The Company's Chief Information Officer updates the Board of Directors biannually on the state of the cybersecurity program, which includes a discussion of the most important cybersecurity risks facing the Company, an update on notable cybersecurity incidents and recent threats, and a summary of the results of the Company's recent independent cybersecurity assessments, among other items. In addition, the Audit Committee of the Board of Directors receives quarterly cybersecurity updates, which include reports on key cybersecurity metrics, cybersecurity headlines, current risks and mitigation strategies.
The day-to-dayidentification and management of risk is the responsibility of our management. As market conditions, industry practices, regulatory requirements and the demands of our business evolve, management and the board of directors intend to respond with appropriate adaptations to risk management and oversight.
Majority Voting and Director Resignation Policy
In
Human Capital
As of
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contractors for some architectural, engineering, advertising and legal services, and we strive to maintain good relationships with our subcontractors and independent consultants and contractors.
The people who work for our company are our most valuable resources and are critical to our continued success and execution of our strategies. Our People Services team focuses on attracting, promoting and retaining qualified employees with the expertise needed to manage and support our operations. Our top division and regional leaders average over 10 years of tenure with us. In addition, our executive leadership who are responsible for setting our overall strategy average approximately 16 years with us, and many of them have worked their entire careers in the homebuilding industry.
To attract and retain top talent in our industry, we offer our employees a broad range of company-paid benefits and highly competitive compensation packages. Our employees are eligible for medical, dental and vision insurance, a savings/retirement plan, life and disability insurance, various wellness programs and tuition reimbursement, along with other optional benefits designed to meet individual needs. We engage third party compensation and benefits consulting firms to evaluate our programs and benchmark them against our peers. We believe it is essential to provide opportunities for growth and development to recruit top talent in the labor environment. We offer over 6,000 online courses through our learning system, as well as various leadership programs designed for those in different stages of their leadership journey.
At
Meetings of our Board of Directors
Our board of directors and its committees meet periodically during the year, hold special meetings as needed and act by written consent from time to time as deemed appropriate. During 2024, our board of directors met six times.
During 2024, no incumbent director attended fewer than 75% of the aggregate of (a) the total number of meetings of the board of directors and (b) the total number of meetings held by all committees of the board of directors on which such director served.
Each of our directors is encouraged, but is not required, to attend our annual meetings of stockholders. All of our then serving directors attended our 2024 annual meeting of stockholders.
Executive Sessions of our Board of Directors
Generally, an executive session of the independent directors is held in conjunction with each regularly scheduled board meeting and at other times as deemed appropriate. Our lead independent director presides over such executive sessions.
Committees of Our Board of Directors
Our board of directors has three standing committees: an audit committee, a compensation committee and a nominating and governance committee. Each of the standing committees operates pursuant to a written charter, which is available on our corporate website at www.taylormorrison.com on the Investor Relations page. The following is a brief description of our committees, including their membership and responsibilities.
Audit Committee
Our audit committee assists the board in fulfilling its responsibilities by overseeing, among other things, (1) the integrity of financial information and other information provided to stockholders, investors and others; (2) the performance of our internal audit function and systems of internal controls; (3) our compliance with legal and regulatory requirements; and (4) risk management and oversight of our ERM committee. The audit committee also has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors and is responsible for the preparation of an audit committee report to be included in our annual proxy statement as required by the
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As of the date of this Proxy Statement, our audit committee was comprised of
Compensation Committee
Our compensation committee, among other things, reviews and recommends policies and plans relating to the compensation and benefits of our directors, employees and certain other persons providing services to our Company and is responsible for approving the compensation of our Chief Executive Officer and other executive officers. Our compensation committee also administers our clawback policies and stock ownership guidelines, as well as our incentive plans, our annual bonus plan and other benefit programs. The compensation committee has delegated authority to our Chief Executive Officer to issue equity awards to employees other than to executive officers and certain other senior members of our management. If at any time the compensation committee includes a member who is not a "non-employeedirector" within the meaning of Rule 16b-3under the
As of the date of this Proxy Statement, our compensation committee was comprised of
For additional discussion of the processes and procedures the compensation committee has used for the consideration and determination of executive officer and director compensation, please see "Compensation Discussion and Analysis."
Nominating and Governance Committee
Our nominating and governance committee, among other things, provides assistance to the board of directors in identifying and recommending individuals qualified to serve as directors of our Company, reviews the composition of the board of directors and periodically evaluates the performance of the board of directors and its committees. The nominating and governance committee also recommends our various board committee memberships based upon, among other considerations, a director's available time commitment, applicable regulatory considerations, background and/or the skill set it deems appropriate to adequately perform the responsibilities of the applicable committee. In addition, the nominating and governance committee develops and recommends corporate governance policies and procedures for us, including our Corporate Governance Guidelines, and monitors and reviews compliance with those policies. The nominating and governance committee is also responsible for reviewing and overseeing the overall adequacy of the Company's sustainability risk management, strategy, initiatives, and policies, including communications with employees, investors, and other stakeholders of the Company with respect to such sustainability matters. During 2024, the nominating and governance committee met three times.
As of the date of this Proxy Statement, our nominating and governance committee was comprised of Mr. Lane (Chair),
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|
None of our executive officers has served as a member of the board of directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our board of directors or compensation committee during 2024.
for the year ended
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The Company published its inaugural Corporate Sustainability and Belonging Report in
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DIRECTOR COMPENSATION |
Director Compensation
Annual Compensation
Directors who are our employees are not separately compensated by us for their service on our board of directors. For our other directors, referred to collectively as "non-employeedirectors," we pay an annual cash retainer for their service on our board, which is payable to such directors in quarterly installments in arrears. The amount of the annual cash retainer depends on whether the director serves as a member or as chairman on any committees of the board of directors.
For 2024, our non-employeedirectors were entitled to receive the following compensation:
• |
A base annual cash retainer of |
• |
An additional |
• |
An additional |
• |
An additional |
• |
In addition to cash retainers, our board of directors and compensation committee have determined that it is important to include an equity component in director compensation, because they believe it is vital for our directors who receive compensation from us to build and maintain a long-term ownership position in our business, to further align their financial interests with those of our stockholders and to encourage the creation of long-term value. In furtherance of this objective, each non-employeedirector receives an annual equity award of RSUs or, if they so elect as described below, deferred stock units ("DSUs"). For 2024, each non-employeedirector received an RSU or DSU grant with a grant date fair value of |
We also reimburse each of our directors for reasonable travel and other related expenses incurred to attend board and committee meetings.
Deferred Compensation Plan
Pursuant to the
DSUs in respect of the director's deferred cash compensation are fully vested as of the grant date and settle in a number of shares of our common stock equal to the amount of cash compensation deferred divided by the closing price of our common stock on the date the cash compensation is deferred. DSUs and dividend equivalents thereon have no voting rights until the common stock underlying such DSUs are delivered and are settled in shares of common stock upon the earlier of a separation from service or a change in control.
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DIRECTOR COMPENSATION |
Stock Retention Policy
Our board of directors has adopted a stock retention policy that requires non-employeedirectors to own shares of our common stock having an aggregate value no less than five times such director's annual base cash retainer. Generally, non-employeedirectors must achieve the required minimum retention level within five years from the date of their election to our board of directors. As of
2024 Director Compensation Table
The following table summarizes the compensation earned by, or awarded or paid to, those of our directors who, for the year ended
Name | Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2)(3) |
Total ($) |
|||||||||
|
157,000 | 174,998 | 331,998 | |||||||||
|
127,000 | 174,998 | 301,998 | |||||||||
|
135,000 | 174,998 | 309,998 | |||||||||
|
97,000 | 174,998 | 271,998 | |||||||||
|
7,083 | - | 7,083 | |||||||||
|
97,000 | 174,998 | 271,998 | |||||||||
|
- | 270,016 | 270,016 | |||||||||
|
77,917 | 174,998 | 252,915 |
Notes:
(1) |
For 2024, |
Name | Annual | Lead Independent Director |
Audit Committee |
Compensation Committee |
Nominating and Governance Committee |
||||||||||||||||||||
|
$ | 85,000 | 40,000 | 12,000 | 20,000 | ||||||||||||||||||||
|
$ | 85,000 | 12,000 | 30,000 | |||||||||||||||||||||
|
$ | 85,000 | 40,000 | 10,000 | |||||||||||||||||||||
|
$ | 85,000 | 12,000 | ||||||||||||||||||||||
|
$ | 7,083 | |||||||||||||||||||||||
|
$ | 85,000 | 12,000 | ||||||||||||||||||||||
|
$ | 85,000 | 10,000 | ||||||||||||||||||||||
|
$ | 77,917 |
(2) |
On |
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DIRECTOR COMPENSATION |
Accounting Standards Codification ("ASC") Topic 718. The assumptions used in the valuation of stock-based awards are discussed in Note 12 to our Audited Consolidated Financial Statements included in our Annual Report on Form 10-Kfor the fiscal year ended |
(3) |
As of |
Name | RSUs (#) |
DSUs (#) |
||||||||
|
- | 70,808 | ||||||||
|
3,075 | 21,994 | ||||||||
|
- | 59,202 | ||||||||
|
- | 35,501 | ||||||||
Fetcher F. Previn |
- | - | ||||||||
|
3,075 | 32,426 | ||||||||
|
- | 20,257 | ||||||||
|
- | - |
(a) |
The RSUs reported for Mses. Mariucci and Warren were unvested as of |
(b) |
Of the DSUs reported for each of Messrs. Yip, Lane and Merritt and |
(c) |
|
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EXECUTIVE OFFICERS |
Executive Officers
The executive officers of the Company as of the date hereof are listed below.
Name | Age | Position | ||
|
63 |
President, Chief Executive Officer and Chairman of the Board of Directors |
||
|
57 |
Executive Vice President and Chief Financial Officer |
||
|
60 |
Executive Vice President, Chief Legal Officer and Secretary |
SHERYL D. PALMER |
Under With |
|
CURT VANHYFTE |
|
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EXECUTIVE OFFICERS |
DARRELL C. SHERMAN |
|
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COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Discussion and Analysis
This compensation discussion and analysis discusses our executive compensation programs for our named executive officers for our fiscal year ending
In 2024, we delivered another year of milestone performance, including top-tierfinancial results, which we believe distinguished our team's execution and the merits of our diversified consumer strategy. We exceeded each of our key operational metrics set out early in the year, and our results were particularly notable recognizing that 2024 faced numerous headwinds from volatile interest rates, economic uncertainty and global political unrest.
At Taylor Morrison, our balanced approach and long-standing priority and emphasis on quality locations continue to serve our business well, as evidenced by the transformation in our financial strength-including our scale, margins, cash generation and returns, as illustrated below. Against the many market headwinds faced over the last several years, we have been able to pressure-test our diversified product portfolio against a variety of macro-economic conditions and can confidently say it makes Taylor Morrison unique and more resilient in varying market conditions. We contribute much of our success to the quality of our community locations in core submarkets and the diverse range of our targeted consumer groups. The diversification of our business helped to insulate our performance from the broader volatility experienced across our industry, in large part because of our limited exposure to tertiary markets that tend to attract an outsized share of first-time buyers who face the highest affordability constraints.
We enhanced the depth of our consumer research, allowing us to better serve our existing and future customers. Our suite of digital tools allows customers to design and build their future
We've taken our trusted reputation to new heights with our decade-long streak of being named America's Most Trusted® Home Builder by
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COMPENSATION DISCUSSION AND ANALYSIS |
We also continued our operational excellence as a Fortune 500 company for the fourth consecutive year with an eye for efficiencies and repeatability. With a strong platform in place, we invested
In total, we:
• |
Delivered 12,896 homes, up 12% year over year, at an average price of |
• |
Generated |
• |
Achieved adjusted earnings* of |
• |
Increased our net sales orders by 13%, to 12,248. |
• |
Generated approximately |
• |
Repurchased 5.6 million common shares for |
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COMPENSATION DISCUSSION AND ANALYSIS |
* Adjusted home closings gross margin and adjusted earnings per diluted share are non-GAAPfinancial measures. For a discussion of such measures and a reconciliation to the comparable GAAP measures see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAPMeasures" in our Annual Report on Form 10-Kfor the year ended
Consistent with the pay-for-performanceand stockholder alignment objectives of our compensation philosophy, which are discussed in further detail below in this compensation discussion and analysis, our compensation programs for 2024 have the following attributes:
• |
A balanced mix of short-term cash compensation and long-term equity-based compensation; |
• |
Use of multiple performance measures with no guaranteed incentive payouts; |
• |
Payouts in respect of performance awards under our executive compensation programs are capped; |
• |
A majority of the compensation paid to our executive officers is performance-based; |
• |
Limitations on the amount of awards that can be made under our equity incentive plans; |
• |
All programs are designed and overseen by an independent compensation committee that retains their own independent advisor; |
• |
An anti-hedging policy applicable to all employees (including our executive officers and directors) that prohibits purchases of our stock on margin, calls or similar options on our stock or selling our stock short; |
• |
Stock ownership and retention guidelines for our executive officers; |
• |
An appropriate level of severance protection to ensure continuity of service; |
• |
No single-trigger change in control features in any of our programs; |
• |
No gross ups for any excise or other penalty taxes related to compensation paid; |
• |
Forfeiture of equity awards upon violation of certain post-employment restrictive covenants; |
• |
Clawback of certain cash and equity incentive compensation; and |
• |
A modest use of perquisites, which do not make up a material portion of the compensation and benefits provided to our named executive officers. |
Prior Year's Annual Meeting of Stockholders-Advisory Vote to Approve the Compensation of our Named Executive Officers
At our 2024 annual meeting of stockholders, 96.0% of the shares voted were cast in favor of the 2023 compensation of our named executive officers and our compensation philosophy, policies and practices. We were pleased to receive this strong support and took it into account as part of our annual analysis of the effectiveness of our compensation programs for our named executive officers.
We recognize that business and executive compensation environments continue to evolve, and we are committed to having compensation programs and practices that support our business objectives, promote good corporate governance and align executive pay with our performance. The compensation committee will continue to consider the results from this year's and future advisory stockholder votes regarding our executive compensation programs. See "Proposal 2: Advisory Vote to Approve the Compensation of our Named Executive Officers (Say on Pay)" for additional information.
Our Named Executive Officers for 2024
President, Chief Executive Officer and Chairman of the Board of Directors |
|
|
Executive Vice President and Chief Financial Officer |
||
Executive Vice President, Chief Legal Officer and Secretary* |
* As previously disclosed,
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COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Objectives and Philosophy
Our compensation programs reflect our philosophy to pay all of our executives, including our named executive officers, in ways that support our primary objectives of:
• |
Encouraging a results-driven culture through a pay-for-performancestructure; |
• |
Balancing long-term and short-term compensation and cash and equity-based compensation to ensure our executives are focused on the appropriate short-term financial budget goals and long-term strategic objectives; |
• |
Aligning executives' interests with stockholder interests in creating long-term value for our stockholders; |
• |
Attracting, retaining and motivating key talent; and |
• |
Aligning total compensation levels with those paid by our direct competitors in the highly competitive homebuilding sector as well as companies of comparable size and scope in other industries. |
Our compensation structure is centered on a pay-for-performancephilosophy, which is designed to align the interests of our executives and our stockholders, motivate our executives to achieve our targeted financial and other performance objectives and reward them for their achievements when those objectives are met. To help achieve these objectives, a significant portion of our executive officers' compensation is at-riskand provided in the form of variable or performance-based compensation with upside potential for strong performance, as well as downside exposure for underperformance. We believe this is appropriate given our executive officers' ability to influence our overall performance.
We recognize the need for varied incentives to retain talent and encourage both present and future performance. To that end, we seek to provide a balance between short-term incentives, such as cash compensation through our annual incentive plan, and long-term incentives, such as equity-based compensation, which encourages focus on long-term strategic objectives by linking compensation to the satisfaction of our long-term performance goals. Having a long-term compensation component is also consistent with the long-term horizon inherent in the homebuilding industry for the realization of our assets that span over multiple years. In light of such objectives, we have determined that a significant portion of total compensation would be delivered in the form of long-term equity-based compensation using a mix of stock options and RSUs, with both service-based and performance-based vesting.
The overall level of total compensation for our executive officers is intended to be reasonable in relation to, and competitive with, the compensation paid by similarly situated peer leaders in the highly competitive homebuilding industry, subject to variation for factors such as the individual's experience, performance, duties, scope of responsibility, prior contributions and future potential contributions to our business. With these principles in mind, we structure our compensation programs as a competitive total pay package, which we believe allows us to attract, retain and motivate executives with the skill and knowledge we require and ensure the stability of our management team, which is vital to the success of our business. However, we do not have a policy of setting executive officer compensation levels within a fixed range of benchmarks of our peer companies.
Establishing and Evaluating Executive Compensation
Role of the Independent Compensation Consultant
For 2024, the compensation committee retained
• |
Advised on trends and best practices in the areas of executive compensation; |
• |
Provided and reviewed market data on executive compensation levels and practices at our competitors; |
• |
Reviewed and advised on our compensation risk assessment procedures; |
• |
Evaluated our compensation discussion and analysis; and |
• |
Provided independent advice on director compensation. |
Semler Brossy does not provide any other services to us, except at the direction of the compensation committee. We did not have any other relationships with Semler Brossy, and the compensation committee determined that Semler Brossy was independent and the work it performed in 2024 raised no conflicts of interest with us. The compensation committee has the sole authority to retain or terminate advisors to the compensation committee that assist in the evaluation of the compensation to our executive officers and directors.
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COMPENSATION DISCUSSION AND ANALYSIS |
Process-Role of
The compensation committee is responsible for all compensation decisions for our executive officers. The Chairman of the compensation committee establishes compensation committee meeting agendas and works with
The compensation committee, after consultation with
Process-Factors Considered in Setting Compensation
The compensation committee believes that compensation decisions for our executive officers are complex and require consideration of many factors, including the overall competitive market environment, industry compensation levels, the officer's individual performance and the Company's performance.
Market Data (Competitors and General Industry). As mentioned above, the compensation committee does not set compensation levels for our executive officers within a fixed range of benchmarks of our peer companies; however, the compensation committee reviews such peer company information and market data to better assess the range of compensation needed to attract, retain and motivate executive talent in our highly competitive industry.
In connection with setting compensation, the compensation committee reviews data from the annual proxy statements of publicly traded homebuilders, as well as data from other published compensation survey sources, including
• Beazer Homes |
• Lennar Corporation |
• PulteGroup Inc. |
||
• D. |
• M.D.C. Holdings Inc.* |
• Toll Brothers, Inc. |
||
• Hovnanian Enterprises, Inc. |
• Meritage Homes Corporation |
• TRI Pointe Homes, Inc. |
||
• KB Home |
• M/I Homes, Inc. |
• NVR, Inc. |
*
Individual Performance. As mentioned above, in addition to considering market data, the compensation committee considers each executive officer's individual performance in determining executive compensation levels, including the nature and scope of the executive's responsibilities and the executive's prior performance and expected future contributions. The compensation committee's review of individual performance is general and subjective in nature and specific individual performance elements are tailored to the executive.
Company Performance. The compensation committee also considers the Company's performance, financial plans and budget in setting executive officer compensation levels for any given year taking into account general economic challenges as well as any specific challenges facing our business.
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COMPENSATION DISCUSSION AND ANALYSIS |
The primary elements of our compensation structure are base salary, short-term incentive bonuses, long-term equity-based incentive awards and certain employee benefits and perquisites. A brief description of the objectives of each principal element of our executive compensation programs for 2024 are summarized in the following table and described in more detail below.
Key Elements of Our Compensation Programs - Overview
Compensation Element |
Brief Description |
Objectives |
||
Base Salary |
Fixed compensation | Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled executives | ||
Short-Term Incentives - Annual Bonus |
Variable, performance-based compensation, most often paid in cash, earned based on achieving pre-establishedannual goals |
Motivate executives to achieve or exceed our current-year financial goals and reward them for their achievements Aid in retention of key executives in a highly competitive market for talent |
||
Long-Term Incentives - Equity Based |
Variable, equity-based compensation to promote achievement of longer-term goals and align with shareholder value creation |
Align executives' interests with those of our stockholders and encourage executive decision-making that maximizes growth and stockholder value creation over the long-term Aid in retention of key executives and ensure continuity of management in a highly competitive market for talent |
||
Employee Benefits and Perquisites (discussed below under "Other Program Attributes") |
Participation in all the Company's broad-based employee health and welfare programs and retirement plans Employee benefits vary based on individual elections and auto allowances are the only perquisites provided to our named executive officers |
Aid in retention of key executives in a highly competitive market for talent by providing overall benefits package competitive with industry peers |
Base Salary
The base salary component of executive officer compensation is intended to provide a competitive, stable level of minimum compensation to each executive officer commensurate with the executive's role, experience and duties. The compensation committee annually reviews and approves base salaries for our executive officers based on several factors, including the individual's experience, responsibilities, performance, expected future contribution, our expected financial performance and salaries of similarly situated executives of our public peers in the homebuilding industry and in general industries.
Based on its review of peer data and the factors cited above, the compensation committee determined that the only necessary change to the base salaries for our named executive officers from 2023 was a
Short-Term Incentives
The second component of executive officer compensation is short-term incentive annual bonuses based on Company performance. Tying a portion of total compensation to Company annual performance permits us to adjust the performance measures each year to reflect changing objectives and those that may be of special importance for a particular year. Through our short-term incentive compensation program, we seek to provide an appropriate amount of pre-establishedshort-term cash compensation that is at-riskand tied to the achievement of certain short-term performance goals. For 2024, our annual short-term incentive bonus program included two components: our 2024 annual incentive plan and our 2024 profit sharing bonus.
In
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COMPENSATION DISCUSSION AND ANALYSIS |
incentive plan and achieved maximum stretch performance under the 2024 profit sharing bonus. In addition, each of the named executive officers had the opportunity to eaan additional bonus payout equal to one times their base salary to the extent the Company achieved maximum "extreme" performance under the 2024 profit sharing bonus. Set forth below is the allocation of each named executive officer's bonus opportunity under the short-term incentive compensation program.
A | B | C | D | E | F | |||||||||||||||||
Name | Base Salary | Total Maximum Incentive Opportunity as Multiple of Base Salary |
Total (A x B) |
2024 Annual Incentive Plan Multiple of Base Salary |
Maximum (A x D) |
Maximum (C - E) |
||||||||||||||||
|
1,075,000 |
7.5 times |
8,062,500 |
1 times |
1,075,000 |
6,987,500 |
||||||||||||||||
|
600,000 |
4.9 times |
2,940,000 |
1 times |
600,000 |
2,340,000 |
||||||||||||||||
|
500,000 |
4.9 times |
2,450,000 |
1 times |
500,000 |
1,950,000 |
2024 Annual Incentive Plan
Target/Maximum Amounts. The actual 2024 annual cash incentive bonus amounts were calculated based on a combination of objective performance measures and using the following formula:
2024 Base Salary Paid During Performance Period |
x |
Actual Attainment Percentage |
= |
Bonus Payout |
Our "Actual Attainment Percentage" is an aggregated measure of the attainment of specific financial and operational performance goals for the Company as a whole expressed in the table below as a percentage. These performance goals are based on corporate and business objectives and are not tied to individual performance. Each goal (1) has an associated "threshold" and "target / maximum" percentage attainment level, with straight-line interpolation for attainment between levels, and (2) is weighted to reflect the compensation committee's assessment of the goal's importance in relation to our overall business objectives. Specifically, the percentage attainment of each goal is applied to the weighting factor (itself a percentage), and these numbers are totaled to set the Actual Attainment Percentage for the applicable performance period.
Establishing Performance Goals for 2024 Annual Incentive Plan. The approach to goal setting involved reviewing our prior year's financial performance and our short-term and long-term strategic objectives, among other things. The compensation committee also took into account the need for setting challenging goals that drive favorable performance outcomes and are reasonably rigorous to prevent unintended risks and behaviors, as well as to provide a competitive pay package necessary for the retention of our talent. The target / max payout level was designed to be achievable with strong management performance and aligned with the internal budget and the midpoint of external guidance.
Each performance metric and goal selected in our 2024 annual incentive plan targeted performance across multiple levels of our business. The table below sets forth each of the performance metrics used in our 2024 incentive plan and the objective for selecting each metric.
Metric | Objectives | |
• Homes Closed |
• Operational metric that measures our ability, and incentivizes our executives, to grow our core business |
|
• Adjusted Home Sales Gross Margin |
• Encourages our executives to balance the price of our homes with costs and the pace at which we sell and construct them |
|
• Operation Stabilization Composite Score |
• Encourages improvement in key metrics that have impacted the homebuilding industry in recent years |
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COMPENSATION DISCUSSION AND ANALYSIS |
Achievement of Corporate Performance Goals. The 2024 annual incentive plan performance goals applicable to our named executive officers were based 100% on total Company performance. The total actual attainment percentage for the 2024 bonus program was 97.4%.
For the period commencing
Performance Period: |
||||||||||||||||||||||||||||||
Performance Goals | Weight | Threshold |
Target/ Max |
Actual Attainment |
Actual Achievement Percentage |
Actual Attainment Percentage |
||||||||||||||||||||||||
Attainment level percentage |
60 | % | 100 | % | ||||||||||||||||||||||||||
Homes Closed(1) |
40 | % | 11,900 | 12,400 | 12,896 | 104.0 | % | 100 | % | |||||||||||||||||||||
Home Closings Gross Margin(2) |
40 | % | 21.0 | % | 22.0 | % | 24.5 | % | 111.4 | % | 100 | % | ||||||||||||||||||
Operation Stabilization Composite Score(3) |
20 | % | 17.4 | % | 87 | % | ||||||||||||||||||||||||
Actual Attainment Percentage Performance Period |
97.4 | % |
(1) |
Homes Closed is calculated based on full fiscal 2024 performance. |
(2) |
Homebuilding Gross Margin is Homebuilding Gross Margin calculated in accordance with GAAP. |
(3) |
"Operation Stabilization Composite Score" is based on improvement of construction cycle times, a qualitative evaluation of improvement of customer experience scores (home readiness and overall experience) as well as improvement in flash forecast accuracy. |
2024 Annual Incentive Plan Payments
Actual cash bonus paid to each of our named executive officers was based on actual achievement
2024 Annual Bonus Program | |||||||||||||||||||||||||
2024 Target Bonus Opportunity | 2024 Bonuses Paid | ||||||||||||||||||||||||
Executive Officer | Aggregate Base Salary Paid in Performance Period ($) |
% Base Salary |
Annual Target Bonus ($) |
Performance Period Actual Attainment Percentage |
Earned Annual Bonus ($) |
||||||||||||||||||||
Sheryl D Palmer |
$ | 1,075,000 | 100 | % | $ | 1,075,000 | 97.4 | % | $ | 1,047,050 | |||||||||||||||
|
$ | 588,462 | 100 | % | $ | 588,462 | 97.4 | % | $ | 573,162 | |||||||||||||||
|
$ | 500,000 | 100 | % | $ | 500,000 | 97.4 | % | $ | 487,000 |
2024 Profit Sharing Bonus
The second component of our short-term incentive program was our 2024 profit sharing bonus which provided participants with a bonus opportunity based on achievement of earnings before taxes ("EBT") and retuon net assets ("RONA") targets; a dynamic design incentivizing profitable growth with a focus on returns. The EBT goals and RONA tiers were based on our annual growth objectives and approved by the compensation committee after the full board approved the 2024 business plan and budget.
Target/Maximum Amounts. The compensation committee re-allocatedthe bonus opportunity for each named executive officer, placing a heavier emphasis on the Profit Sharing Bonus in 2024. The maximum opportunity under the profit sharing program was calculated by determining the maximum dollar value of each named executive officer's incentive opportunity for 2024, then reducing the amount by the opportunity on the annual incentive plan. Similar to 2023, for 2024, our compensation committee approved the profit sharing program to further motivate and to provide an additional meaningful compensation opportunity to our corporate and field leadership teams, including our named executive officers for delivering extraordinary results by exceeding our profit and retugoals.
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COMPENSATION DISCUSSION AND ANALYSIS |
Establishing Performance Goals for 2024 Profit Sharing Bonus. The compensation committee established baseline, stretch and extreme EBT using the midpoint of our guidance for baseline, and established five separate RONA tier modifiers to provide incentive for growing RONA responsibly over multiple years, as set forth below.
RONA Tier | Baseline Plan EBT ( |
Stretch EBT ( |
Extreme EBT ( |
||||||||||||
RONA Modifier | |||||||||||||||
Tier 5 RONA (30.00% or more) |
166.7 | % | 166.7 | % | 166.7 | % | |||||||||
Tier 4 RONA (22.55-29.90%) |
133.3 | % | 133.3 | % | 133.3 | % | |||||||||
Tier 3 RONA (15.05-22.54%) |
100 | % | 100 | % | 100 | % | |||||||||
Tier 2 RONA (7.55-15.04%) |
66.7 | % | 66.7 | % | 66.7 | % | |||||||||
Tier 1 RONA (0-7.54%) |
33.3 | % | 33.3 | % | 33.3 | % |
Stretch EBT was set as 115% of Baseline Plan EBT and Extreme EBT was set as 125% of Baseline Plan EBT and above Stretch EBT. For 2024, RONA could not be achieved in excess of Tier 3 (i.e., the RONA Modifier for 2024 could not exceed 100%), even if RONA exceeded 22.54%, although RONA could be achieved below Tier 3. For the named executive officers to receive a maximum bonus opportunity under the profit sharing bonus for 2024, the Company had to exceed its baseline plan EBT of
The actual 2024 profit sharing bonus program payouts were calculated as a multiple of base salary using the following formula:
Baseline Plan EBT Achievement Percentage |
x | NEO's
Baseline Salary Multiple |
+ | Stretch Plan
EBT Achievement Percentage |
x | NEO's
Stretch Salary Multiple |
+ | Extreme Plan
EBT Achievement Percentage |
x | NEO's
Extreme Salary Multiple |
= | Unmodified
Profit Sharing Salary Multiple |
Each named executive officer's profit sharing salary multiple was then multiplied by the applicable RONA modifier set forth in the table above to arrive at the officer's total profit sharing salary multiple, which was then multiplied by the officer's base salary to arrive at the officer's 2024 profit sharing bonus payout. The Achievement Percentages for Baseline, Stretch and Extreme performance goals reflect the Company's achievement against the EBT targets set forth in the table above, with straight-line interpolation for attainment within a particular level.
For 2024, each named executive officer's Baseline, Stretch and Extreme Salary Multiple is set forth below:
Named Executive officer | Base Salary | Baseline Plan EBT Salary Multiple |
Baseline Plan EBT Incentive Opportunity |
Stretch EBT Salary |
Stretch EBT Incentive Opportunity |
Extreme EBT Salary |
Extreme EBT Incentive Opportunity(2) |
|||||||||||||||
|
$ | 1,075,000 | 1 times | $ | 1,075,000 | 4.5 times | $ | 4,837,500 | 1 times | $ | 1,075,000 | |||||||||||
|
$ | 588,462 | 1 times | $ | 588,462 | 1.9 times | $ | 1,118,078 | 1 times | $ | 588,462 | |||||||||||
|
$ | 500,000 | 1 times | $ | 500,000 | 1.9 times | $ | 950,000 | 1 times | $ | 500,000 |
(1) |
Each named executive officer's profit sharing stretch EBT Salary Multiple is equal to their 2024 total maximum incentive opportunity less their maximum opportunity on the annual incentive plan opportunity (1 times salary), Baseline Plan EBT opportunity (1 times salary), and Extreme EBT opportunity (1 times salary). |
(2) |
The compensation committee elected to pay out any Extreme portion of the profit sharing plan earned by the named executive officers in the form of restricted stock units that vest equally over a two-yearperiod. |
Achievement of Corporate Performance GoalsFor 2024, the Company realized EBT of
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COMPENSATION DISCUSSION AND ANALYSIS |
Long-Term Incentives-Equity Based
Philosophy. As mentioned earlier, we believe that equity awards are an important component of our executive compensation programs. Equity compensation aligns our executives' and stockholders' interests by linking rewards with achievement of retuto our stockholders based on our long-term growth plan. Our equity compensation programs are designed to foster a long-term commitment to the Company by our named executive officers, provide a balance to the short-term cash components of our compensation programs and reinforce our pay-for-performancestructure.
Overview. Equity-based compensation awards to our named executive officers in 2024 consisted of the following:
• |
Options to purchase our common stock, upon satisfaction of service vesting conditions, granted under the 2013 Omnibus Plan. Stock options are intended to reward absolute stock appreciation and have no value unless the Company's stock price increases above the stock price on the grant date; |
• |
Service-vesting RSUs, representing the right to receive, upon satisfaction of service vesting conditions, shares of our common stock, granted under the 2013 Omnibus Plan. The ultimate value of RSUs is tied to the future value of the Company's stock price at future service-vesting dates, providing alignment with stockholder expectations for value creation over time. We also believe that service vesting RSUs provide a strong retention device for our key leaders; and |
• |
Performance-vesting RSUs, representing the right to receive, upon satisfaction of performance conditions, shares of our common stock, granted under the 2013 Omnibus Plan. These conditional RSUs may only be earned if the Company successfully executes on multi-year performance objectives that encourage long-term stockholder value creation and the named executive officer remains with the Company over the entire performance period. |
A more detailed discussion of the terms of these awards follows.
Equity Awards
All equity awards issued to our named executive officers have been made pursuant to the terms of the 2013 Omnibus Plan. Awards granted under the 2013 Omnibus Plan are subject to the terms and conditions established by the compensation committee in the applicable award agreement and need not be the same for each participant. To date, all stock options granted under the 2013 Omnibus Plan have a term of ten years. Generally, equity awards are granted to our eligible employees, including our named executive officers, in connection with our annual award process. Equity awards are generally made in the first quarter of the year, on a consistent schedule shortly following the public release of our annual earnings.
2024 Equity Awards
The compensation committee determined that, like previous years, the annual equity grant for 2024 should include a mix of stock options and RSUs, a portion of which RSUs are subject to service vesting conditions and a portion of which are subject to performance vesting conditions. For 2024, the mix of equity awards remained highly performance-based thus providing alignment with stockholders on long-term value creation and also continuing to encourage retention.
In
The Performance RSUs are eligible to vest based on performance during the final year of a three-year performance period beginning on
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COMPENSATION DISCUSSION AND ANALYSIS |
Performance RSUs based on a RONA performance goal are eligible to vest based upon our achievement of RONA during the final year of the three-year performance period beginning on
Performance RSUs based on a Revenue performance goal are eligible to vest based upon our Revenue during the final year of the three-year performance period beginning on
The 2024 Performance RSUs are also subject to an additional adjustment of -20%or +20%, based on the Company's relative TSR performance (the "TSR Modifier"), as shown in the following chart:
Relative TSR Performance | TSR Modifier | |
≥75th percentile |
+20% (Payout Factor increased by 20%) |
|
≥25th percentile, but <75th percentile |
0% (No adjustment to the Payout Factor) |
|
<25th percentile |
-20% (Payout Factor decreased by 20%) |
After the end of the performance period, we will (i) calculate the total shareholder retu("TSR") for the Company and for each company included in our peer group (as described above), (ii) rank each such company by TSR (lowest to highest), and (iii) determine the percentile rank of the Company's TSR in such ranking to come up with our relative TSR performance for the performance period.
The TSR Modifier is applied at the end of the three-year performance period. Notwithstanding the preceding, if our TSR is negative, then the maximum PSU payout factor that may be achieved is "target" (i.e., not more than a 100% adjusted payout factor). The number of earned PSUs will not be determinable until the conclusion of the performance period when the TSR Modifier has been calculated.
The compensation committee selected these performance measures, RONA, Revenue and relative TSR for our 2024 long-term incentive program as it believes they best align with our current stockholder interests of strong financial performance and increased profitability per share. The equal emphasis on RONA and Revenue incentivizes profitable growth aligning with our strategic plan. Additionally, RONA and Revenue are assessed from absolute measurement approach, thereby providing an internal performance perspective. Relative TSR provides an external performance perspective and encourages our executives to drive Company growth, stimulate high performance, and build long-term stockholder value. Finally, the measures assess performance at the conclusion of a three-year performance period, linking compensation opportunity to performance over an extended period. The approach to setting the RONA and Revenue performance goals involved a process of reviewing, among other things, our prior year's financial performance and our short-term and long-term strategic objectives. The compensation committee also took into account the need for setting goals that are challenging yet reasonably achievable so as to provide a competitive pay package necessary for the retention of our talent. The target payout level was designed to be achievable with strong management performance and is generally aligned with the internal budget and midpoint of external guidance. The maximum level was designed to encourage and reward our named executive officers for outstanding performance.
The Service RSUs granted as part of the 2024 long-term incentive compensation program vest over a three-year period, with approximately 33 1/3% of the RSUs granted vesting on each of the first, second and third anniversaries of the grant date, subject to continued employment through the applicable vesting date, and will be payable in shares of our common stock.
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COMPENSATION DISCUSSION AND ANALYSIS |
The nonqualified stock options granted as part of the 2024 long-term incentive compensation program vest over a four-year period, with approximately 25% of the stock options granted vesting on each of the first, second, third, and fourth anniversaries of the grant date, subject to continued employment through the applicable vesting date. Stock options are granted at an exercise price equal to the fair market value (the closing price on the NYSE) of our common stock on the grant date.
The table below shows the long-term incentive award opportunities established by the compensation committee relating to the 2024 long-term incentive compensation program. The compensation committee determined, following a review of peer data, that no changes to the target long-term incentive opportunities for
Award Opportunity Under 2024 Long-Term Incentive Program
Name | Base Salary |
Target as % of Base Salary |
Target Long-Term Incentive Opportunity |
||||||||||||
|
$ |
1,075,000 |
600% |
$ |
6,450,000 |
||||||||||
|
$ |
550,000 |
225% |
$ |
1,237,500 |
||||||||||
|
$ |
500,000 |
160% |
$ |
800,000 |
On
Name | Options (#)(1) |
Service- based RSUs (#) |
RONA Performance RSUs (#) |
Revenue Performance RSUs (#) |
||||||||||||||||
|
41,592 |
45,680 |
22,840 |
22,840 |
||||||||||||||||
|
7,980 |
8,764 |
4,382 |
4,382 |
||||||||||||||||
|
5,159 |
5,666 |
2,833 |
2,833 |
||||||||||||||||
(1) Stock options have an exercise price of |
The actual number of awards granted were calculated by dividing the target long term incentive opportunity by the fair market value on grant date for both Service RSUs and Performance RSUs and the calculated Black Scholes value for stock options. For further information on the 2024 long-term incentive awards granted to our named executive officers, see the "Grants of Plan-Based Awards" table below.
2024 Performance Determinations With Respect to Outstanding Equity Awards
2022 Performance RSUs
In fiscal 2022, we granted our named executive officers Performance RSUs, which vested based on the achievement of RONA goals.
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COMPENSATION DISCUSSION AND ANALYSIS |
Performance RSUs based on a RONA performance goal were eligible to vest based upon our achievement of RONA over a three-year performance period beginning on
2022(1) Performance Level | RONA PSU Performance Goal |
Attainment Percentage(2) |
||
Threshold |
22% | 50% | ||
Target |
24% | 100% | ||
Maximum |
26% | 200% |
(1) |
In |
(2) |
The number of shares earned is calculated by multiplying the attainment percentage by one-thirdof the target number of shares subject to award. |
2023(1) Performance Level | RONA PSU Performance Goal |
Attainment Percentage(2) |
||
Threshold |
20% | 50% | ||
Target |
22% | 100% | ||
Maximum |
24% | 200% |
(1) |
In |
(2) |
The number of shares earned is calculated by multiplying the attainment percentage by one-thirdof the target number of shares subject to award. |
2024(1) Performance Level | RONA PSU Performance Goal |
Attainment Percentage(2) |
||
Threshold |
20% | 50% | ||
Target |
22% | 100% | ||
Maximum |
24% | 200% |
(1) |
In |
(2) |
The number of shares earned is calculated by multiplying the attainment percentage by one-thirdof the target number of shares subject to award. |
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COMPENSATION DISCUSSION AND ANALYSIS |
Based on these results, our named executive officers earned the number of Performance RSUs set forth in the following table, before application of the TSR Modifier, described below:
Name | 2022 Tranche Target RONA-Based Performance RSUs |
2022 Tranche Earned RONA-Based Performance RSUs |
2023 Tranche Target RONA-Based Performance RSUs |
2023 Tranche Earned RONA-Based Performance RSUs |
2024 Tranche Target RONA-Based Performance RSUs |
2024 Tranche Earned RONA-Based Performance RSUs |
||||||||||||||||||||||||
|
25,217 | 50,435 | 25,218 | 25,218 | 25,218 | 0 | ||||||||||||||||||||||||
|
2,785 | 5,571 | 2,785 | 2,785 | 2,786 | 0 | ||||||||||||||||||||||||
|
3,668 | 7,336 | 3,668 | 3,668 | 3,668 | 0 |
For the avoidance of doubt, while performance is measured with respect to each fiscal year during the performance period, the Performance RSUs based on RONA that are earned generally will not vest until the third anniversary of the grant date. The 2022 Performance RSUs based on RONA earned by our named executive officers were settled on
The 2022 Performance RSUs were also subject to an additional adjustment of -20%or +20%, based on the Company's relative TSR performance (the "TSR Modifier"), as shown in the following chart:
Relative TSR Performance | TSR Modifier | |
≥75th percentile |
+20% (Payout Factor increased by 20%) |
|
≥25th percentile, but <75th percentile |
0% (No adjustment to the Payout Factor) |
|
<25th percentile |
-20% (Payout Factor decreased by 20%) |
In February, 2025 our compensation committee certified our relative TSR for the 2022-2024 performance period was equal to the 75th percentile, resulting in a TSR Modifier of +20%. To determine the number of 2022 Performance RSUs actually earned, the target number of RSUs was multiplied by the payout factor, which number was further adjusted by applying the TSR Modifier. Based on these results, our named executive officers earned the number of Performance RSUs set forth in the following table:
Name | Earned RONA- Based Performance RSUs |
TSR Modifier |
RONA-Based Performance RSUs Actually Earned |
||||||||||||
|
75,653 | 20 | % | 90,784 | |||||||||||
|
8,356 | 20 | % | 10,027 | |||||||||||
|
11,004 | 20 | % | 13,205 |
2023 Performance RSUs
The 2023 Performance RSUs are eligible to vest based on the Company's Revenue and RONA performance (following application of a TSR Modifier) during the final year of a three-year performance period beginning on
2024 Performance RSUs
As discussed above, the 2024 Performance RSUs are eligible to vest based on the Company's Revenue and RONA performance (following application of a TSR Modifier) during the final year of a three-year performance period beginning on
Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement | 39
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COMPENSATION DISCUSSION AND ANALYSIS |
Other Program Attributes
Stock Ownership & Retention Requirements (Executive Officers)
The compensation committee believes it is important for key members of our senior management team and directors to build and maintain a long-term ownership position in our Company, to further align their financial interests with those of our stockholders and to encourage the creation of long-term value. Our compensation structure for these individuals provides for a significant percentage of compensation to be equity-based, which places a substantial portion of compensation at risk over a long-term period.
In
Position | Share Ownership Guideline | |
Chief Executive Officer |
6 x annual base salary |
|
Other Executive Officers |
2 x annual base salary |
Generally, our executive officers must achieve the required ownership level within four years from the date that he or she first became an executive officer; however, with respect to our executive officers who were serving as of
See "Director Compensation-Stock Retention Policy" for additional information relating to our equity ownership policy for non-employeedirectors.
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COMPENSATION DISCUSSION AND ANALYSIS
|
earnings. The compensation committee may make limited grants of long term incentives on other dates in connection with a promotion or to compensate newly hired executives for equity or other benefits forfeited upon termination of previous employment or to otherwise induce them to join our Company. Equity awards, including options, are not granted in anticipation of the release of material
information, and the release of material
information is not timed on the basis of option or other equity grant dates.
Form
or Form
that disclosed material
information, and ending one business day after the filing or furnishing of such reports, and (2) the Company did not time the disclosure of material
information for the purpose of affecting the value of executive compensation.
to which they are subject. The executive would also be responsible for damages suffered by us in connection with any such breach. In addition, pursuant to the terms of our equity awards, in the event an equity plan participant has engaged in or engages in activity that constitutes "cause" under our equity plan or is in conflict with or adverse to the interest of the Company as determined by the compensation committee in its sole discretion, then (i) any outstanding, vested or unvested, earned or unearned portion of the equity award, may at the compensation committee's discretion, be canceled without payment and (ii) the compensation committee, in its discretion, may require participant to forfeit and pay to the Company, on demand, all or any portion of the compensation, gain or other value (whether or not taxable) realized upon on the exercise or settlement of such equity awards, or the subsequent sale of acquired shares. We view this recovery of awards feature as a necessary element of our equity-based program as it deters activities that would likely cause significant harm to our business.
The policy provides for mandatory recoupment of any excess incentive-based compensation received by current and former executive officers (including the named executive officers) on or after
with any financial reporting requirement under federal securities laws. The policy applies to all "incentive compensation," which includes any compensation received by our executive officers that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure, as defined in the listing standards.
COMPENSATION DISCUSSION AND ANALYSIS
|
long-term disability coverage, a 401(k) defined contribution plan and a home purchase rebate program providing employees with a 5.5% rebate on purchases of homes built by us.
COMPENSATION DISCUSSION AND ANALYSIS
|
benefit would exceed what the net
benefit would have been if such reduction were not made, and the executive paid the applicable excise tax. We do not provide any gross ups for excise or other penalty taxes related to compensation paid to any of its executives, including our named executive officers.
for the year ended
COMPENSATION COMMITTEE
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($) |
Stock
Awards ($) (1)
|
Option
Awards ($) (2)
|
Non-Equity
Incentive Plan (3)
|
Change in
Pension Value and
Nonqualified Deferred Compensation Earnings ($)
(4)
|
All Other
Compensation ($) (5)
|
Total
($) |
|||||||||||||||||||||||
Sheryl D. Palmer
|
2024 | 1,075,000 | - | 5,160,013 | 1,290,184 | 7,853,951 | 4,655 | 31,290 | 15,415,093 | |||||||||||||||||||||||
President, Chief Executive | 2023 | 1,057,692 | 370,648 | 4,800,052 | 1,199,996 | 6,845,958 | 6,842 | 69,924 | 14,351,112 | |||||||||||||||||||||||
Officer and Chairman of the
Board of Directors |
2022 | 1,000,000 | - | 4,399,978 | 1,100,001 | 2,250,000 | - | 45,592 | 8,795,572 | |||||||||||||||||||||||
Curt VanHyfte
|
2024 | 593,077 | - | 989,981 | 247,540 | 2,769,301 | - | 25,684 | 4,625,583 | |||||||||||||||||||||||
Executive Vice President and | 2023 | 515,096 | - | 880,097 | 219,985 | 1,988,059 | - | 24,732 | 3,627,969 | |||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||||||||
Darrell C. Sherman
|
2024 | 500,000 | - | 640,031 | 160,032 | 2,353,000 | 552 | 23,835 | 3,677,451 | |||||||||||||||||||||||
Executive Vice President, Chief | 2023 | 500,000 | 261,194 | 640,060 | 159,996 | 1,941,750 | 1,588 | 22,932 | 3,527,520 | |||||||||||||||||||||||
Legal Officer and Secretary | 2022 | 500,000 | - | 639,993 | 159,998 | 675,000 | - | 21,891 | 1,996,882 |
(1) |
The amounts shown in this column are the aggregate grant date fair values, assuming no risk of forfeiture, calculated in accordance with FASB ASC Topic 718 for Performance RSUs and Service RSUs granted during the applicable year using the assumptions discussed in Note 12 to our Audited Consolidated Financial Statements included in our Annual Report on Form
10-K
for the fiscal year ended |
(2) |
The stock-based compensation
amounts
shown in this column reflect the aggregate grant date fair value, assuming no risk of forfeiture, of stock option awards calculated in accordance with FASB ASC Topic 718. We use the Black-Scholes option pricing model to estimate the fair value of stock options granted, which requires the input of both subjective and objective assumptions. The assumptions used in the valuation of stock-based awards are discussed in Note 12 to our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K
for the fiscal year ended |
(3) |
For 2024, the amounts reported in this column were earned under our annual cash incentive bonus program and profit sharing bonus program, which are described above (see "Compensation Discussion and Analysis-Key Elements of Our Executive Compensation Programs-Overview-Annual Cash Incentive Bonuses"). A portion of the reported amounts were issued in RSUs, which will vest in two equal annual installments on the first and second anniversary of the grant date. The following is the grant date fair value for the profit sharing portion of the annual bonus issued in equity:
|
(4) |
These amounts do not represent realized compensation; rather, they represent an actuarial adjustment to the present value of accumulated benefits under our Taylor Morrison Cash Balance Pension Plan from the pension plan measurement date used for financial statement reporting purposes with respect to our audited financial statements for the applicable fiscal year to the pension plan measurement date used for financial statement reporting purposes with respect to our audited financial statements for the applicable fiscal year.
|
(5) |
For each of our named executive officers, "All Other Compensation" for 2024 consists of the payments that are shown in the table below:
|
Name
|
401(k)
Company Match ($) |
Company Paid
Life Insurance Premiums ($)
|
Auto
Allowance ($) |
Total
($) (a)
|
||||||||||||||||
|
2024 | $ | 15,897 | $ | 882 | $ | 14,511 | $ | 31,290 | |||||||||||
|
2024 | $ | 15,733 | $ | 882 | $ | 9,069 | $ | 25,684 | |||||||||||
|
2024 | $ | 15,698 | $ | 882 | $ | 7,255 | $ | 23,835 |
(a) |
In addition to the perquisites identified in this footnote, guests of
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name and
Type of Award
|
Committee
Approval Date |
Estimated Future
Payouts Under
Non-Equity
Incentive Plan Awards
(1)
|
Estimated Future
Payouts Under
Equity Incentive
Plan Awards
(2)
|
All
Other Stock Awards: Number of Shares of Stock or Units (#) |
All Other
Option Awards: Number of Securities Underlying Options (#)
|
Exercise or
Base Price of Option Awards ($/sh) |
Grant Date
Fair Value of Stock and Option Awards ($) (3)
|
|||||||||||||||||||||||||||||||||||||||||
Grant
Date
|
Threshold
($) |
Target
($) |
Maximum
($) |
Threshold
(#) |
Target
(#)
|
Maximum
(#) |
||||||||||||||||||||||||||||||||||||||||||
Sheryl D. Palmer
|
||||||||||||||||||||||||||||||||||||||||||||||||
2024 Annual Bonus Program
|
258,000 | 1,075,000 | 1,075,000 | |||||||||||||||||||||||||||||||||||||||||||||
2024 Profit Sharing Program
(4)
|
6,987,500 | |||||||||||||||||||||||||||||||||||||||||||||||
Options
(5)
|
41,592 | 56.48 | 1,290,184 | |||||||||||||||||||||||||||||||||||||||||||||
Service RSUs
(5)
|
45,680 | 2,580,006 | ||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs
(5)(6)
|
10,382 | 22,840 | 50,248 | 1,290,003 | ||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs
(5)(7)
|
10,382 | 22,840 | 50,248 | 1,290,003 | ||||||||||||||||||||||||||||||||||||||||||||
Curt VanHyfte
|
||||||||||||||||||||||||||||||||||||||||||||||||
2024 Annual Bonus Program
|
141,231 | 588,462 | 588,462 | |||||||||||||||||||||||||||||||||||||||||||||
2024 Profit Sharing Program
(4)
|
2,340,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Options
(5)
|
7,980 | 56.48 | 247,540 | |||||||||||||||||||||||||||||||||||||||||||||
Service RSUs
(5)
|
8,764 | 494,991 | ||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs
(5)(6)
|
1,992 | 4,382 | 9,640 | 247,495 | ||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs
(5)(7)
|
1,992 | 4,382 | 9,640 | 247,495 | ||||||||||||||||||||||||||||||||||||||||||||
Darrell C. Sherman
|
||||||||||||||||||||||||||||||||||||||||||||||||
2024 Annual Bonus Program
|
120,000 | 500,000 | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||
2024 Profit Sharing Program
(4)
|
1,950,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Options
(5)
|
5,159 | 56.48 | 160,032 | |||||||||||||||||||||||||||||||||||||||||||||
Service RSUs
(5)
|
5,666 | 320,016 | ||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs
(5)(6)
|
1,288 | 2,833 | 6,233 | 160,008 | ||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs
(5)(7)
|
1,288 | 2,833 | 6,233 | 160,008 |
(1) |
Under our 2024 annual bonus program, each named executive officer is eligible to receive an annual cash incentive bonus for the fiscal year, the amount of which will vary depending on the degree of attainment of certain performance goals, as described in "Compensation Discussion and Analysis-Key Elements of Our Executive Compensation Programs-Overview-Annual Cash Incentive Bonuses-2024 Annual Bonus Program."
|
COMPENSATION DISCUSSION AND ANALYSIS
|
maximum; accordingly, no threshold or target amounts are listed for these awards.
(2) |
Amounts reflect the Performance RSUs granted under our 2024 long-term incentive program. Performance RSUs will be eligible to vest at the end of the three-year performance period based upon the Company's performance against RONA and Revenue goals, subject to the named executive officer's continued employment through the date after the performance period that the compensation committee determines and certifies the applicable level of performance achieved. The threshold amounts shown reflect the number of shares which will be delivered assuming that threshold attainment is met for the performance goals, including application of a
-20%
TSR modifier. The maximum amounts shown reflect the number of shares which will be delivered assuming maximum attainment against performance goals, including application of a +20% TSR modifier. Please refer to the "Compensation Discussion and Analysis-Key Elements of Our Executive Compensation Programs-Overview-Long-Term Incentives-Equity Based-2024 Equity Awards" for additional information. |
(3) |
Amounts in this column show the grant date fair value of the stock options, Service RSU awards and Performance RSU awards granted to our named executive officers using the assumptions discussed in Note 12 to our Audited Consolidated Financial Statements included in our Annual Report on Form
10-K
for the fiscal year ended |
(4) |
Represents the payout opportunity under the 2024 Profit Sharing Program, which is equal to a multiple of each named executive officer's base salary as described in "Compensation Discussion and Analysis-Key Elements of Our Executive Compensation Programs-Overview-Annual Cash Incentive Bonuses-2024 Profit Sharing Bonus Program." For 2024, each NEO received a portion of the annual Profit Sharing Program bonus in issued RSUs. The following is the grant date fair value for the portion of the Profit Sharing Bonus settled in RSUs:
|
(5) |
Amounts represent grants of stock options, Service RSUs and Performance RSUs with respect to our annual long-term incentive plan.
|
(6) |
Represents Performance RSUs which vest subject to achievement of RONA performance goals with a relative TSR Modifier.
|
(7) |
Represents Performance RSUs which vest subject to achievement of Revenue performance goals with a relative TSR Modifier.
|
COMPENSATION DISCUSSION AND ANALYSIS
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Grant Date
|
Number of
Securities Underlying Unexercised Options Exercisable (#) |
Number of
Securities Underlying Unexercised Options Unexercisable (#) (1)
|
Option
Exercise Price ($) |
Option
Expiration Date |
Number of
Units That Have Not Vested (#)
(1)
|
Market Value
of Units That
Have Not Vested ($)
(2)
|
Equity
Incentive Plan Awards: Number of Unearned Units That
Have Not Vested (#) (1)
|
Equity
Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($) (2)
|
|||||||||||||||||||||||||||
Sheryl D. Palmer
|
||||||||||||||||||||||||||||||||||||
Options
(3)
|
2/19/2019 | 140,122 | - | 18.18 | 2/19/2029 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/10/2020 | 112,360 | - | 26.28 | 2/10/2030 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/16/2021 | 113,480 | 37,827 | 28.32 | 2/16/2031 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/11/2022 | 55,781 | 55,781 | 29.08 | 2/11/2032 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/11/2022 | 25,218 | 1,543,594 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/11/2022 | 75,653 | 4,630,720 | |||||||||||||||||||||||||||||||||
Options
(3)
|
2/21/2023 | 20,876 | 62,631 | 34.75 | 2/21/2033 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/21/2023 | 46,044 | 2,818,353 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/21/2023 | - | - | 69,066 | 4,227,530 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/23/2024 | - | 41,592 | 56.48 | 2/23/2034 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/23/2024 | 45,680 | 2,796,073 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/23/2024 | - | - | 45,680 | 2,796,073 | |||||||||||||||||||||||||||||||
Curt VanHyfte
|
||||||||||||||||||||||||||||||||||||
Options
(3)
|
2/10/2020 | - | 1,501 | 26.28 | 2/10/2030 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/16/2021 | 3,562 | 3,563 | 28.32 | 2/16/2031 | |||||||||||||||||||||||||||||||
Options
(3)
|
5/04/2021 | 564 | 564 | 31.55 | 5/04/2031 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/11/2022 | 3,081 | 6,162 | 29.08 | 2/11/2032 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/11/2022 | 2,786 | 170,531 | |||||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/11/2022 | - | - | 8,356 | 511,471 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/21/2023 | 2,992 | 8,977 | 34.75 | 2/21/2033 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/21/2023 | 6,600 | 403,986 | |||||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/21/2023 | - | - | 9,899 | 605,979 | |||||||||||||||||||||||||||||||
Options
(3)
|
7/31/2023 | 571 | 1,712 | 48.42 | 7/31/2033 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
7/31/2023 | 1,322 | 80,920 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
7/31/2023 | - | - | 1,983 | 121,441 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/23/2024 | - | 7,980 | 56.48 | 2/23/2034 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/23/2024 | 8,764 | 536,444 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/23/2024 | - | - | 8,764 | 536,444 | |||||||||||||||||||||||||||||||
Darrell C. Sherman
|
||||||||||||||||||||||||||||||||||||
Options
(3)
|
2/12/2018 | - | - | 23.84 | 2/12/2028 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/10/2020 | - | - | 26.28 | 2/10/2030 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/16/2021 | - | 5,502 | 28.32 | 2/16/2031 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/11/2022 | - | 8,114 | 29.08 | 2/11/2032 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/11/2022 | 3,668 | 224,518 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/11/2022 | - | - | 11,004 | 673,555 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/21/2023 | - | 8,352 | 34.75 | 2/21/2033 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/21/2023 | 6,140 | 375,829 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/21/2023 | - | - | 9,210 | 563,744 | |||||||||||||||||||||||||||||||
Options
(3)
|
2/23/2024 | - | 5,159 | 56.48 | 2/23/2034 | |||||||||||||||||||||||||||||||
Service RSUs
(4)
|
2/23/2024 | 5,666 | 346,816 | - | - | |||||||||||||||||||||||||||||||
Performance RSUs
(5)
|
2/23/2024 | - | - | 5,666 | 346,816 |
COMPENSATION DISCUSSION AND ANALYSIS
|
(1) |
For additional information on vesting upon specified termination events or a change in control, see "-Potential Payments Upon Termination of Employment or Change in Control."
|
(2) |
Calculated using the NYSE closing price of $61.21 per share of our common stock on December 31, 2024, the last trading day of 2024.
|
(3) |
These stock options vest and become exercisable ratably in four substantially equal installments of 25% of the stock options granted on each of the first, second, third and fourth anniversaries of the grant date, subject to continued employment through the applicable vesting date.
|
(4) |
Service RSUs vest ratably in three substantially equal installments of 33 1/3% of the RSUs granted on each of the first, second and third anniversaries of the grant date, subject to continued employment through the applicable vesting date.
|
(5) |
Performance RSUs vest based on the achievement of performance goals over a three-year performance period, generally subject to continued employment through the final date that the compensation committee determines and certifies the level of performance achieved under the applicable performance measures at the end of each year in the three-year performance period; provided that the number of earned Performance RSUs will not be finally determinable until the end of the three-year performance period when the compensation committee certifies the extent to which the TSR modifier (upward or downward) is required to be applied.
|
Option Awards
(1)
|
Stock Awards
(2)
|
|||||||||||||||
Name
|
Number of
Shares Acquired on Exercise (#)
|
Value
Realized on
Exercise
($)
|
Number of
Shares Acquired on Vesting (#)
|
Value
Realized on
Vesting
($)
|
||||||||||||
|
-
|
-
|
229,502
|
12,789,305
|
||||||||||||
|
-
|
-
|
26,518
|
1,485,055
|
||||||||||||
|
68,433
|
2,994,173
|
33,102
|
1,844,702
|
(1) |
Computed by determining the spread value per share of the shares acquired based on the difference between: (a) the closing price of our common stock on the NYSE on the date of exercise and (b) the exercise price of the stock options.
|
|
Award
|
Exercise
Date |
Number of
Options Exercised |
Closing Price
per Share on
at Exercise
|
Exercise Price per
Share |
||||||||
2018 Option Award
|
10/30/2024 | 19,683 | $70.50 | $23.84 | ||||||||
2020 Option Award
|
10/30/2024 | 21,348 | $70.50 | $26.28 | ||||||||
2021 Option Award
|
10/30/2024 | 16,506 | $70.50 | $28.32 | ||||||||
2022 Option Award
|
10/30/2024 | 8,113 | $70.50 | $29.08 | ||||||||
2023 Option Award
|
10/30/2024 | 2,783 | $70.50 | $34.75 |
COMPENSATION DISCUSSION AND ANALYSIS
|
(2) |
The value realized on vesting was based on the closing price of our common stock on the NYSE on the applicable vesting dates as set forth below for each of our named executive officers.
|
a. |
|
Award
|
Vesting
Date |
Number of
RSUs Vested/Settled |
Closing Price
per Share on
Vesting Date
|
|||||
2021 RONA Performance RSUs
|
2/26/2024 | 155,368 | $56.21 | |||||
2021 Service RSU
|
2/16/2024 | 25,895 | $54.75 | |||||
2022 Service RSU
|
2/9/2024 | 25,218 | $53.91 | |||||
2023 Service RSU
|
2/21/2024 | 23,021 | $55.55 |
b. |
|
Award
|
Vesting
Date |
Number of
RSUs Vested/Settled |
Closing Price
per Share on
Vesting Date
|
|||||
2021 RONA Performance RSUs
|
2/26/2024 | 16,948 | $56.21 | |||||
2021 Service RSU
|
2/16/2024 | 2,825 | $54.75 | |||||
2022 Service RSU
|
2/9/2024 | 2,785 | $53.91 | |||||
2023 Service RSU
|
2/21/2024 | 3,299 | $55.55 | |||||
2023 Service RSU
|
7/31/2024 | 661 | $67.08 |
c. |
|
Award
|
Vesting
Date |
Number of
RSUs Vested/Settled |
Closing Price
per Share on
Vesting Date
|
|||||
2021 RONA Performance RSUs
|
2/26/2024 | 22,598 | $56.21 | |||||
2021 Service RSU
|
2/16/2024 | 3,767 | $54.75 | |||||
2022 Service RSU
|
2/9/2024 | 3,668 | $53.91 | |||||
2023 Service RSU
|
2/21/2024 | 3,069 | $55.55 |
Name
|
Plan
|
Number of
Years Credited Service (#) (1)
|
Present
Value of Accumulated Benefit ($)
(2)
|
Payments
During Last
Fiscal Year
($)
|
||||||||||||
Sheryl D. Palmer
|
19.0 | 125,279 | - | |||||||||||||
Darrell C. Sherman
|
16.0 | 25,478 | - |
(1) |
As of December 31, 2024, each participating named executive officer was fully vested in his or her respective retirement plan benefit. Pursuant to the terms of the Taylor Morrison Cash Balance Pension Plan, a year of service is credited once a participant has worked 1,000 hours in that year.
|
(2) |
These amounts represent the actuarial present value of the total retirement benefit that would be payable to each respective named executive officer under the Taylor Morrison Cash Balance Pension Plan as of December 31, 2024. The following key actuarial assumptions and methodologies were used to calculate the present value of accumulated benefits under the Taylor Morrison Cash Balance Pension Plan: a discount rate of 5.53% and
Pri-2012
Mortality Tables with MP-2021
projection scale. |
COMPENSATION DISCUSSION AND ANALYSIS
|
Pension Plan
|
||
Purpose
|
To provide a retirement benefit for eligible employees in recognition of their contributions to the overall success of our business.
|
|
Eligibility
|
|
|
Retirement Date & Early Retirement Date
|
Normal Retirement:
The first day of the month coinciding with or next following the participant's 65th birthday, or if later the participant's fifth anniversary of joining the Pension Plan. Early Retirement:
The first day of the month coinciding with or next following the participant's 50th birthday and has completed at least five years of service with us. |
|
Pension Formula
|
Normal Retirement:
Quarterly credits based on the employee's age and eligible compensation (including regular compensation for services, commissions, bonuses, leave cash-outs, deferred compensation, but excluding separation payments), with the size of our contributions increasing based on the participant's age. Our contributions range from 2% to 4% of eligible compensation, plus 1% of eligible compensation over the social security wage base. As of December 31, 2010, the Pension Plan was frozen with regard to pay credits. Early Retirement:
Same as normal retirement, however, if the participant elects to receive payments as of the early retirement date, the benefit will be equal to the actuarial equivalent of the normal retirement benefit. |
|
Form of Benefit
|
Normal Retirement
: Paid as a monthly pension commencing on the participant's retirement date and continuing for the participant's life, with survivor benefits following the participant's death continuing to the participant's spouse during the spouse's life at a rate equal to 50% of the rate at which such benefits were payable to the participant (i.e., a joint and 50% survivor annuity). A participant who is unmarried at the time benefits become payable under the Pension Plan shall be entitled to a monthly pension continuing for the participant's life. However, the form of distribution of such benefit shall be determined pursuant to the provisions of the pension plan (i.e., one lump-sum
cash payment, monthly pension payable over the life of the participant, etc.). Early Retirement:
Same as normal retirement. |
COMPENSATION DISCUSSION AND ANALYSIS
|
. Under the employment agreements with our named executive officers, upon a termination without "cause" or a resignation for "good reason" (each as defined in the employment agreements and referred to herein as a "Qualifying Termination"), in addition to receiving the executive's accrued but unpaid base salary, benefits, vacation pay, reimbursable expenses, and annual bonus earned but not paid in respect of a prior year (together, the "Accrued Benefits"), each named executive officer would be entitled to receive, subject to execution of a release of claims:
(a) |
An amount of cash severance equal to a specified multiple of the sum of the named executive officer's base salary and the higher of his or her target bonus or average annual bonus paid in or payable in respect of (whichever results in a higher average) the three completed calendar years that preceded the date of termination. For
30-month
period following such termination of employment. For Messrs. VanHyfte and Sherman the severance multiple is 1.5 and his aggregate severance payment is paid in equal installments in accordance with our customary payroll practices over the 18-month
period following such termination of employment; |
(b) |
a COBRA subsidy (up to 30 months for
|
(c) |
a prorated annual bonus for the year of termination, based on actual performance; and
|
(d) |
up to 12 months of outplacement assistance.
|
post-employment
and
of customers and employees in connection with certain terminations of employment; however, for Messrs. VanHyfte and Sherman, if termination is without cause by us or the executive resigns for good reason, the covenants apply only through the duration of the period in which the executive is receiving severance. In addition to the restrictive covenant agreements, each employment agreement includes restrictive covenants pertaining to confidential information, nondisparagement and intellectual property, and, in addition, Messrs. VanHyfte and Sherman have a
post-termination
of employees and
of customers and suppliers.
COMPENSATION DISCUSSION AND ANALYSIS
|
period to cure such breach or failure if reasonably susceptible to cure); (ii) the named executive officer's gross negligence or willful misconduct, which is injurious to us (subject to up to a
period to cure such breach or failure if reasonably susceptible to cure); or (iii) the named executive officer's conviction of, or guilty plea (or plea of nolo contendere) or confession to, a felony or other crime involving dishonesty, fraud, breach of any fiduciary obligation to our board of directors or any of our equity holders, or unethical business conduct.
period to cure such fact or circumstance.
.
Under the terms of our 2013 Omnibus Plan and the award agreements for awards issued thereunder, generally, upon any termination of employment, whether with or without "cause" or "good reason," or by reason of an employee's death or disability, unvested stock options and RSUs (both Service RSUs and Performance RSUs) are forfeited for no consideration. Vested stock options may be exercised for a period of 90 days following a termination without "cause" or for "good reason," and for a period of one year following a termination by reason of death or disability. If an employee is terminated for cause, all of the employee's stock options, whether vested or unvested, expire immediately upon termination.
. For each of our named executive officers, upon an Eligible Retirement, any equity awards received at least 12 months prior to such Eligible Retirement (other than Service RSUs received in respect of our Profit Sharing Bonus Program, which are eligible upon grant) will be treated as follows:
•
|
Performance RSUs will continue to be eligible to vest at the end of the applicable three-year performance period (based on actual performance); and
|
•
|
Service RSUs and stock options will vest in full, and our named executive officers will generally be permitted to exercise such vested stock options during the one year following such Eligible Retirement.
|
. Pursuant to the terms of our named executive officer's employment agreements, upon a termination of employment by the Company as a result of the named executive officer's death or disability (as defined in their respective employment agreements) with respect to any equity awards granted to the named executive officer:
•
|
All equity awards subject to performance conditions, will continue to be eligible to vest at the end of the applicable performance period (based on actual performance); however, the executive will only be eligible to vest in a prorated portion of each such award. Such proration will be based on a fraction, the numerator of which is the number of completed months in the applicable performance period (or term of similar meaning) at the time of such termination and the denominator of which is the number of months in the applicable performance period, multiplied by the number of shares of common stock which are finally determined to be earned and subject to the performance award following the completion of the performance period; and
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
All equity awards subject to service-based vesting conditions only, will vest in full as of the date of such termination, and our named executive officers (or their beneficiaries, if applicable) will generally be permitted to exercise such vested stock options during the one year following such termination.
|
benefit would exceed what the net
benefit would have been if such reduction were not made and the named executive officer paid the applicable excise tax. No named executive officer has any right to receive a "gross up" for any excise tax imposed by Section 4999 of the
COMPENSATION DISCUSSION AND ANALYSIS
|
Name and Form of Compensation
|
Qualifying
Termination ($) |
Retirement
($) |
CIC
Qualifying Termination ($) |
Death/
Disability ($) |
||||||||||||
Sheryl D. Palmer
|
||||||||||||||||
Base Severance
|
11,880,638 |
(1)
|
- | 14,850,798 |
(7)
|
- | ||||||||||
Prorated Bonus
|
1,047,050 |
(2)
|
- | 1,047,050 |
(2)
|
- | ||||||||||
Profit Sharing Bonus
|
6,806,901 | |||||||||||||||
Continued Benefits
|
28,845 |
(3)
|
- | 28,845 |
(3)
|
- | ||||||||||
Outplacement Services
|
10,000 |
(4)
|
- | 10,000 |
(4)
|
- | ||||||||||
Accelerated Vesting of Equity Awards
(10)
|
23,559,020 |
(5)
|
23,559,020 |
(5)
|
27,785,841 |
(8)
|
20,129,100 |
(9)
|
||||||||
Retirement Bonus
|
- | 1,000,000 |
(6)
|
- | - | |||||||||||
Total
|
36,525,553
|
24,559,020
|
50,529,435
|
20,129,100
|
||||||||||||
Curt VanHyfte
|
||||||||||||||||
Base Severance
|
3,123,699 |
(1)
|
- | 4,164,932 |
(7)
|
- | ||||||||||
Prorated Bonus
|
573,162 |
(2)
|
- | 573,162 |
(2)
|
- | ||||||||||
Profit Sharing Bonus
|
2,196,139 | |||||||||||||||
Continued Benefits
|
36,276 |
(3)
|
- | 36,276 |
(3)
|
- | ||||||||||
Outplacement Services
|
10,000 |
(4)
|
- | 10,000 |
(4)
|
- | ||||||||||
Accelerated Vesting of Equity Awards
(10)
|
(5)
|
3,217,818 |
(5)
|
4,162,949 |
(8)
|
2,663,926 |
(9)
|
|||||||||
Total
|
3,743,137
|
3,217,818
|
11,143,458
|
2,663,926
|
||||||||||||
Darrell C. Sherman
|
||||||||||||||||
Base Severance
|
3,089,625 |
(1)
|
- | 4,119,500 |
(7)
|
- | ||||||||||
Prorated Bonus
|
487,000 |
(2)
|
- | 487,000 |
(2)
|
- | ||||||||||
Profit Sharing Bonus
|
1,866,000 | |||||||||||||||
Continued Benefits
|
36,276 |
(3)
|
- | 36,276 |
(3)
|
- | ||||||||||
Outplacement Services
|
10,000 |
(4)
|
- | 10,000 |
(4)
|
- | ||||||||||
Accelerated Vesting of Equity Awards
(10)
|
3,297,506 |
(5)
|
3,297,506 |
(5)
|
3,788,391 |
(8)
|
2,812,817 |
(9)
|
||||||||
Total
|
6,920,407
|
3,297,506
|
10,307,167
|
2,812,817
|
(1) |
Under her employment agreement,
|
(2) |
Pursuant to their respective employment agreements, each of our named executive officers is entitled to a prorated annual bonus for the fiscal year in which employment terminates based on actual performance. For purposes of this table, we have calculated the bonuses assuming that the executive would have received his or her annual bonus based on the actual performance results under our 2024 annual bonus program. We have assumed that the financial targets in the 2024 annual bonus program were able to be determined as of December 31, 2024.
|
(3) |
These amounts reflect the estimated COBRA premiums for the executives and their respective eligible dependents enrolled (if any) in any then-existing group health plans for one year (or in the case of
|
(4) |
This amount reflects the value of 12 months of outplacement services.
|
(5) |
As of December 31, 2024,
|
COMPENSATION DISCUSSION AND ANALYSIS
|
RSUs and stock options will vest in full and retirement eligible Performance RSUs remain outstanding and eligible to be earned and vest as if the named executive officer had remained employed through the end of the performance period. For purposes of this table, we have included the estimated value of the outstanding Performance RSUs that were retirement eligible as reported in the Outstanding Equity Awards at Fiscal
Year-End
above. See the Outstanding Equity Awards at Fiscal Year-End
above for additional information with respect to outstanding unvested options, Service RSUs and Performance RSUs. |
(6) |
Pursuant to the terms of her employment agreement, in the event
|
(7) |
Pursuant to their respective employment agreements,
|
(8) |
Represents the
in-the-money
value of unvested stock options, unvested Service RSUs, and unvested Performance RSUs (at target-level of performance) associated with the acceleration of the vesting of such equity awards under the terms of each named executive officer's respective employment agreement. |
(9) |
Pursuant to their respective employment agreements, if
Year-End
above, but have excluded any value attributable to the shares allocable to the 2023 and 2024 tranches of the outstanding Performance RSU awards. See the Outstanding Equity Awards at Fiscal Year-End
above for additional information with respect to outstanding unvested options, Service RSUs and Performance RSUs. |
(10) |
For RSUs, the values in the table above were based on the NYSE closing price of $61.21 per share of our common stock on December 31, 2024, the last business day of 2024, and, in the case of stock options, were based on the difference between such closing price and the exercise price of the stock option.
|
we are providing the following information about the ratio of the annual total compensation, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation
(the "Annual Total Compensation") of our median employee and the Annual Total Compensation of our CEO,
•
|
The median Annual Total Compensation of all employees of our Company (other than our CEO), was $137,923.
|
•
|
The Annual Total Compensation of
|
Table of Contents
PAY VERSUS PERFORMANCE DISCLOSURE
|
under the 1934 Act ("Item 402(v)") and does not necessarily reflect value actually realized by the named executive officers or how the Compensation Committee evaluates compensation decisions in light
named executive officers (collectively, the
NEOs") as presented in the Summary Compensation Table on page 44, (ii) the "compensation actually paid" ("CAP") to our PEO and our
NEOs, as calculated pursuant to Item 402(v), (iii) certain financial performance measures, and (iv) the relationship of the CAP to those financial performance measures.
Year
(a) |
Summary
Compensation Table Total for PEO ($) (b) |
Compensation
Actually Paid to PEO ($) (c) |
Average
Summary Compensation Table Total for Non-PEO
NEOs |
Average
Compensation Actually Paid to Non-PEO
NEOs |
Value of Initial Fixed $100
Investment on Dec. 31, 2019 Based On: |
Net Income
($) (thousands) (h) |
EBT
(Millions) (i) |
|||||||||||||||||||||||||||||||||
Total
Shareholder Return (f) |
Total Shareholder Return (g) |
|||||||||||||||||||||||||||||||||||||||
2024
|
$ | 15,415,093 | $ | 23,902,046 | $ | 4,151,517 | $ | 5,618,936 | $ | 280 | $ | 230 | $ | 883,309 | $ | 1,156.1 | ||||||||||||||||||||||||
2023
|
14,351,112 | 25,040,704 | 3,828,426 | 5,415,176 | 244 | 209 | 768,929 | 1,017.8 | ||||||||||||||||||||||||||||||||
2022
|
8,795,572 | 6,860,620 | 2,340,574 | 1,922,659 | 139 | 133 | 1,052,800 | 1,392.7 | ||||||||||||||||||||||||||||||||
2021
|
12,063,477 | 17,731,294 | 3,826,353 | 4,513,478 | 160 | 188 | 663,026 | 863.1 | ||||||||||||||||||||||||||||||||
2020
|
10,377,789 | 11,110,852 | 2,466,903 | 3,375,772 | 117 | 127 | 243,439 | 324.1 |
NEOs (Column (b); Column (c); Column (d); Column (e))
PEO:
;
NEOs:
PEO:
;
NEOs:
PEO:
;
NEOs:
PEO:
;
NEOs:
PEO:
;
NEOs:
PAY VERSUS PERFORMANCE DISCLOSURE
|
NEOs
NEOs (Column (d)). The SCT Total and CAP Amounts do not reflect the actual amount of compensation earned by or paid to our executives during the applicable years, but rather are amounts determined in accordance with Item 402(v).
2024
|
||||||||
Adjustments
|
PEO
|
Non-PEO
NEOs* |
||||||
SCT Total
|
15,415,093
|
4,151,517
|
||||||
Adjustments for defined benefit pension plans
|
||||||||
(Deduct): Aggregate change in actuarial present value included in SCT Total for the covered fiscal year
|
(4,655 | ) | (276 | ) | ||||
Add: Service cost for the covered fiscal year
|
0 | 0 | ||||||
Add: Prior service cost for the covered fiscal year
|
0 | 0 | ||||||
Adjustments for stock awards and option awards**
|
||||||||
(Deduct): Aggregate value for stock awards and option awards included in SCT Total for the covered fiscal year
|
(6,450,197 | ) | (1,018,793 | ) | ||||
Add: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end
|
6,565,167 | 1,036,952 | ||||||
Add (Deduct): Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end
|
3,592,981 | 834,148 | ||||||
Add: Vesting date fair value of awards granted and vested during the covered fiscal year
|
0 | 0 | ||||||
Add (Deduct): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year
|
4,783,657 | 615,388 | ||||||
(Deduct): Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year
|
0 | 0 | ||||||
Add: Dividends or other
earnings
paid on awards in the covered fiscal year prior to vesting if not otherwise included in the SCT Total for the covered fiscal year |
0 | 0 | ||||||
CAP Amounts (as calculated)
|
23,902,046
|
5,618,936
|
* |
Amounts presented are averages for the entire group of
Non-PEO
NEOs in 2024. |
** |
To determine the value of Market-Based Awards included in CAP, the
|
PAY VERSUS PERFORMANCE DISCLOSURE
|
Tabular List
|
||||
EBT
|
||||
Revenue
|
||||
RONA
|
NEOs to (i) EBT, (ii) the Company's net income and (iii) TSR of both the Company and the S&P Homebuilding Index.
PAY VERSUS PERFORMANCE DISCLOSURE
|
Table of Contents
PROPOSAL 2: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS (SAY ON PAY) |
Proposal 2: Advisory Vote to Approve the Compensation of our Named Executive Officers (Say on Pay)
Pursuant to Section 14A of the Exchange Act, we are asking our stockholders to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers, commonly referred to as the "say-on-pay"vote. In accordance with the requirements of the
As described in more detail in the Compensation Discussion and Analysis, our executive compensation programs are designed to have the following attributes:
• |
A balanced mix of short-term cash compensation and long-term equity-based compensation; |
• |
Use of multiple performance measures with no guaranteed incentive payouts; |
• |
Payouts in respect of performance awards under our executive compensation programs are capped; |
• |
Limitations on the amount of awards that can be made under our equity incentive plans; |
• |
All programs are designed and overseen by an independent compensation committee that retains their own independent advisor; |
• |
An anti-hedging policy applicable to all employees (including our executive officers and directors) that prohibits purchases of our stock on margin, calls or similar options on our stock, or selling our stock short; |
• |
An appropriate level of severance protection to ensure continuity of service; |
• |
No single-trigger change in control features in any of our programs; |
• |
No gross ups for any excise or other penalty taxes related to compensation paid; |
• |
Forfeiture of equity awards upon violation of certain post-employment restrictive covenants; |
• |
Clawback of certain cash and equity incentive compensation; and |
• |
A modest use of perquisites, which do not make up a material portion of the compensation and benefits provided to our named executive officers. |
We encourage stockholders to read the Compensation Discussion and Analysis in this Proxy Statement, which describes the processes our compensation committee used to determine the structure and amounts of the compensation of our named executive officers in 2024 and how our executive compensation philosophy, policies and procedures operate and are designed to achieve our compensation objectives. The compensation committee and our board of directors believe that our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to value creation for our stockholders.
Accordingly, we ask our stockholders to vote "FOR" the following resolution at the Annual Meeting:
"RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed pursuant to Item 402 of Regulation S-K,including the Compensation Discussion and Analysis, the compensation tables and any other related disclosure in this Proxy Statement."
The proposal will be approved by the affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the effect of voting against the proposal, and broker non-voteswill have no effect on the outcome of the proposal.
The Board of Directors Recommends a Vote "FOR" the Advisory Vote to Approve the Compensation of our Named Executive Officers.
Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement | 61
Table of Contents
PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Proposal 3: Ratification of the Appointment of
The audit committee has appointed
Our board of directors is submitting the appointment of
The following table provides information regarding the fees billed by
2024 |
2023 |
|||||||
Audit Fees |
$ | 2,167,525 | $ | 2,112,200 | ||||
Audit-Related Fees |
- | - | ||||||
Tax Fees |
741,282 | 783,688 | ||||||
All Other Fees |
5,685 | 5,685 | ||||||
Total |
$ | 2,914,492 | $ | 2,901,573 |
Audit Fees
This category includes the aggregate fees during 2024 and 2023 for audit services provided by the independent registered public accounting firm or its affiliates, including for the audits of our annual consolidated financial statements, reviews of each of the quarterly financial statements included in our Quarterly Reports on Form 10-Qand certain subsidiary financial statement audits.
Audit-Related Fees
This category includes the aggregate fees during 2024 and 2023 for services related to the performance of the audits and reviews described in the preceding paragraph that are not included in the Audit Fees category, including fees associated with (i) assistance in undertaking and applying financial accounting and reporting standards, (ii) accounting assistance with regard to actual and proposed transactions, (iii) services rendered in connection with registration statements and similar securities offering materials and (iv) the preparation and review of documents related to our securities offerings.
Tax Fees
This category includes the aggregate fees during 2024 and 2023 for professional tax services provided by the independent registered public accounting firm or its affiliates, including for tax compliance and tax advice.
All Other Fees
Other fees include fees to the independent registered public accounting firm or its affiliates for annual subscriptions to online accounting and tax research software applications and data.
62 | Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement
Table of Contents
PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Audit Committee Review and Pre-Approvalof Independent Registered Public Accounting Firm's Services
Our audit committee's policy is to pre-approveall audit and non-auditservices (including the fees and terms thereof) to be performed by our independent registered public accounting firm. The audit committee's authority to pre-approvesuch services is set forth in the charter of the audit committee, which is available on the Investor Relations page of our corporate website, www.taylormorrison.com. The audit committee considered whether the non-auditservices rendered by and fees paid to
The proposal will be approved by the affirmative vote of the majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the effect of voting against the proposal. Brokers may vote shares with respect to this proposal in the absence of client instructions and, thus, there will be no broker non-voteswith respect to this proposal.
The Board of Directors Recommends a Vote "FOR" the Ratification of the Appointment of
Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement | 63
Table of Contents
AUDIT COMMITTEE REPORT |
Audit Committee Report
The audit committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2024 with our management and
The audit committee has discussed with
Based on its reviews and discussions referred to above, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form 10-Kfor the fiscal year ended December 31, 2024 for filing with the
AUDIT COMMITTEE |
|
64 | Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement
Table of Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT |
Security Ownership of Certain Beneficial Owners, Directors and Management
The following table sets forth certain information known to us, based on filings made under Section 13(d) and 13(g) of the Exchange Act, regarding the beneficial ownership of our common stock as of the Record Date by:
• |
each person who is known by us to be the beneficial owner of more than 5% of any class or series of our capital stock; |
• |
each of our directors and each executive officer who has been deemed a "named executive officer" pursuant to |
• |
all of our directors and executive officers as a group. |
The amounts and percentages of common stock beneficially owned are reported on the basis of the regulations of the
The percentages included in the following table are based on 100,539,960 shares of common stock outstanding as of the Record Date.
Common Stock |
||||||||
Name and Address of Beneficial Owner(1) |
Number |
Percentage |
||||||
Beneficial Owners of More than 5% |
||||||||
|
15,881,973 | 15.8 | % | |||||
The Vanguard Group(4) |
11,382,031 | 11.3 | % | |||||
|
8,347,792 | 8.3 | % | |||||
Named Executive Officers and Directors |
||||||||
|
967,810 | * | ||||||
|
38,244 | * | ||||||
|
122,849 | * | ||||||
|
70,808 | * | ||||||
|
95,104 | * | ||||||
|
59,202 | * | ||||||
|
- | * | ||||||
|
35,501 | * | ||||||
|
- | * | ||||||
|
31,830 | * | ||||||
|
15,953 | * | ||||||
All Current Directors and Executive Officers as a group (11 persons)(8) |
1,437,301 | 1.4 | % |
* |
Less than 1%. |
(1) |
Unless otherwise indicated, the address of each beneficial owner in the table above is: 4900 N. Scottsdale Road, Suite 2000, |
(2) |
The number of shares reported under "Common Stock Beneficially Owned" represents as of the Record Date: (a) shares of common stock; (b) vested stock options; (c) vested DSUs; and (d) unvested stock options, unvested RSUs and unvested DSUs that, in each case, will vest within 60 days of the Record Date (such collective amount in (a)-(d), the "Holder's Beneficial Ownership," and such collective |
Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement | 65
Table of Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT |
amount in (b)-(d), the "Holder's Vested and Vesting Equity"). The percentage reported under "Common Stock Beneficially Owned" reflects the Holder's Beneficial Ownership divided by the sum of (x) the shares of common stock outstanding as of the Record Date and (y) the Holder's Vested and Vesting Equity. |
The Holders' Vested and Vesting Equity as of the Record Date for each of our directors, named executive officers and directors and executive officers as a group is as follows: |
Name |
Options |
RSUs |
DSUs |
|||||||||
|
539,611 | - | - | |||||||||
|
24,465 | - | - | |||||||||
|
13,632 | - | - | |||||||||
|
- | - | 70,808 | |||||||||
|
- | 3,075 | 21,994 | |||||||||
|
- | - | 59,202 | |||||||||
|
- | - | - | |||||||||
|
- | - | 35,501 | |||||||||
|
- | - | - | |||||||||
|
- | 3,075 | 28,755 | |||||||||
|
- | - | 11,181 | |||||||||
All Current Directors and Executive Officers as a group (11 persons)(8) |
577,708 | 6,150 | 227,441 |
(3) |
As reported in a Schedule 13G/A filed with the |
(4) |
As reported in a Schedule 13G/A filed with the |
(5) |
As reported in a Schedule 13G/A filed with the |
(6) |
Includes 19,211 shares of our common stock held by the Sheryl D. Palmer Trust, of which |
(7) |
Includes 10,917 shares of our common stock held in a family trust, of which |
(8) |
Reflects security ownership of our current directors and executive officers. |
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS |
Certain Relationships and Related Person Transactions
Indemnification of Directors and Officers
We enter into customary indemnification agreements with our executive officers and directors that provide, in general, that we will provide them with customary indemnification in connection with their service to us or on our behalf.
Related Person Transaction Policy
We have adopted a written Related Person Transaction Policy, which sets forth our policy with respect to the review, approval, ratification and disclosure of all related person transactions by our audit committee. In accordance with our Related Person Transaction Policy, our audit committee has overall responsibility for the implementation and compliance with this policy.
For the purposes of our Related Person Transaction Policy, a "related person transaction" is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we were, are or will be a participant and in which any related person (as defined in our Related Person Transaction Policy) had, has or will have a direct or indirect material interest, in excess of $120,000. A "related person transaction" does not include any employment relationship or transaction involving an executive officer and any related compensation resulting solely from that employment relationship which has been reviewed and approved, or recommended to the board of directors for approval, by our board of directors or compensation committee (or group of independent directors performing a similar function).
Our Related Person Transaction Policy requires that notice of a proposed related person transaction be provided to our legal department prior to entering into such transaction. If our legal department determines that such transaction is a related person transaction, the proposed transaction will be submitted to our audit committee for consideration. Under our Related Person Transaction Policy, only our audit committee or audit committee chair will be permitted to approve those related person transactions that are in, or not inconsistent with, our best interests. In the event we become aware of a related person transaction that has not been previously reviewed, approved or ratified under our Related Person Transaction Policy and that is ongoing or is completed, the transaction will be submitted to our audit committee so that it may determine whether to ratify, rescind or terminate the related person transaction. Our Related Person Transaction Policy also provides that our audit committee or audit committee chair will review certain previously approved or ratified related person transactions that are ongoing to determine whether the related person transaction remains in our best interests and the best interests of our stockholders.
In reviewing a related person transaction for ratification, or a previously approved or ratified related person transaction for rescission or termination, the audit committee will consider the relevant facts and circumstances, including (i) the importance and fairness of the transaction both to the Company and to the related person; (ii) the business rationale for engaging in the transaction and the benefits to the Company of the proposed related person transaction; (iii) whether the transaction would likely impair the judgment of a director or executive officer to act in the best interest of the Company; (iv) the impact on a director's independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, stockholder or executive officer; (v) whether the value and the terms of the transaction are substantially similar as compared to those of similar transactions previously entered into by the Company with non-relatedpersons or are on terms no less favorable than would have been obtained in an arm's length transaction with an unaffiliated third party; (vi) if applicable, the availability of other sources of comparable products or services; and (vii) any other matters that the audit committee (or audit committee chair) deems appropriate.
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ADDITIONAL INFORMATION |
Additional Information
List of Stockholders of Record
In accordance with
Submission of Stockholder Proposals at Next Year's Annual Meeting
To be considered for inclusion in next year's proxy statement and form of proxy, stockholder proposals for the 2026 Annual Meeting of Stockholders must be received at our principal executive offices no later than the close of business on December 12, 2025, unless the date of the 2026 Annual Meeting of Stockholders is more than 30 days before or after May 22, 2026, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials.
For any proposal or director nomination that is not submitted for inclusion in next year's proxy statement pursuant to the process set forth above, but is instead sought to be presented directly at the 2026 Annual Meeting of Stockholders, stockholders are advised to review our By-lawsas they contain requirements with respect to advance notice of stockholder proposals and director nominations. To be timely, the notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the date of the prior year's annual meeting of stockholders. Accordingly, any such stockholder proposal or director nomination must be received between January 22, 2026 and February 21, 2026 for the 2026 Annual Meeting of Stockholders. In the event that the 2026 Annual Meeting of Stockholders is convened more than 30 days prior to or delayed by more than 60 days after May 22, 2026, notice by the stockholder, to be timely, must be received no earlier than the 120th day prior to the 2026 Annual Meeting of Stockholders and no later than the later of (1) the 90th day prior to the 2026 Annual Meeting of stockholders and (2) the tenth day following the day on which we notify stockholders of the date of the 2026 Annual Meeting of Stockholders, either by mail or other public disclosure.
All proposals should be sent to our principal executive offices at 4900 N. Scottsdale Road, Suite 2000,
We advise you to review our By-lawsfor additional stipulations relating to the process for identifying and nominating directors, including advance notice of director nominations and stockholder proposals. Copies of the pertinent by-lawprovisions are available on request to the Office of the Secretary at the address set forth above.
Consideration of Stockholder-Recommended Director Nominees
Our nominating and governance committee will consider director nominee recommendations submitted by our stockholders. Stockholders who wish to recommend a director nominee must submit their suggestions in the manner set forth in our By-lawsas described above to our principal executive offices at 4900 N. Scottsdale Road, Suite 2000,
As required by our By-laws,stockholders should include the name, biographical information and other relevant information relating to the recommended director nominee, including, among other things, information that would be required to be included in the proxy statement filed in accordance with applicable rules under the Exchange Act and the written consent of the director nominee to be named as a nominee and to serve as a director if elected, among other requirements set forth in our By-laws.Evaluation of any such recommendations is the responsibility of the nominating and governance committee. In the event of any stockholder recommendations, the nominating and governance committee will evaluate the persons recommended in the same manner as other candidates.
Communications with the Board of Directors
Any stockholder or other interested party may contact our board of directors as a group, our non-employeedirectors as a group, or any individual director by sending written correspondence to the following address: Board of Directors,
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ADDITIONAL INFORMATION |
Delivery of Materials to Stockholders with Shared Addresses
Any stockholder, including both stockholders of record and beneficial holders who own their shares through a broker, bank or other nominee, who shares an address with another such holder of our common stock is only being sent one Notice or set of proxy materials, unless such holder has provided contrary instructions. If you wish to receive a separate copy of these materials or if you are receiving multiple copies and would like to receive a single copy, please contact our investor relations department by telephone at (480) 734-2060,by email at investor@taylormorrison.com or by writing to Investor Relations,
Executive Vice President, Chief Legal Officer and Secretary
We make available, free of charge on our website, all of our filings that are made electronically with the
Office of the Secretary
4900 N. Scottsdale Road
Suite 2000
Taylor Morrison Home Corporation Notice of 2025 Annual Meeting of Stockholders and Proxy Statement | 69
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SCAN TO VIEW MATERIALS & VOTE TAYLOR MORRISON HOME CORPORATION (TMHC) VOTE BY INTERNET 4900 N. SCOTTSDALE ROAD, SUITE 2000 Before The Meeting-Go to www.proxyvote.com or scan the QR Barcode above
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report and Notice and Proxy Statement are available at www.proxyvote.com. V70594-P28510
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Proxy Statement (Form DEF 14A)
Proxy Statement (Form DEF 14A)
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