Fort Worth-based D.R. Horton Inc., the fourth-largest U.S. homebuilder, slashed bonuses for its chief executive officer and chairman after posting the company's first annual net loss since going public in 1992. Bonuses for Chairman Donald Horton and Chief Executive Officer Donald Tomnitz were cut to $1.59 million each in the fiscal year ended Sept. 30, from $12.1 million a year earlier, as the company lost $713 million, compared with net income of $1.2 billion in fiscal 2006.
The company's share price fell 47 percent in that period. "That's a big drop," said Drew Hambly, assistant vice president at Moody's Investors Service in New York, who specializes in corporate governance. "So the board obviously made some adjustments and really looked over the pay packages going into '07."
The base salaries for Horton and Tomnitz remained the same in 2007 compared with 2006, at $400,000 and $300,000, respectively, the company said Tuesday in a regulatory filing. For fiscal 2008, their base salaries will remain the same.
D.R. Horton's board said it didn't award any "equity awards or discretionary bonuses" to either official in fiscal 2007. Donald Horton is the company's second-largest shareholder, with 26.8 million shares, worth $395.8 million, according to Bloomberg data. Tomnitz owns 932,168 shares, worth $13.8 million.
The bonuses were based on pretax income generated quarterly by the company. Horton and Tomnitz received money for the first two quarters of the company's fiscal year. They didn't get any bonuses based on pretax income for the last two quarters.
For the full year, the company had a net loss before taxes of $951.2 million, according to its annual report filing with the U.S. Securities and Exchange Commission. The previous year it reported income before taxes of $1.99 billion.
Source: DallasNews.com