2017 Executive Compensation Report | Report | FTI Consulting

2017 Executive Compensation Report: Homebuilders Annual and Long-Term Incentive Practices

Annual and Long Term Incentive Practices for Executives in the Homebuilder Industry

Real Estate | Corporate Finance & Restructuring

September 7, 2018

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The FTI Consulting, Inc. Homebuilders Annual and Long-Term Incentive report provides a summary of annual incentive plan (“AIP”) and long-term incentive (“LTI”) compensation practices at publicly-traded homebuilders.

The information in this report is based on our extensive review and analysis of compensation-related disclosure obtained through public documents filed with the Securities and Exchange Commission.

Key Study Findings

Annual Incentive Plans
The majority of homebuilders (95%) include a formulaic component as part of the AIP, with payouts determined based on pre-established goals. Only one homebuilder uses a completely discretionary plan, under which no awards were made for 2016. Most annual incentive plans use three performance metrics...

Long-Term Incentive Plans
The majority of homebuilders (95%) grant equity compensation to their executive officers. Homebuilders generally implement a balanced LTI program with the majority of companies utilizing a combination of two or more equity compensation vehicles. Performance shares are the most commonly...

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