DEF 14A 1 lkbh2023_def14a.htm KB HOME - DEF 14A KB HOME - DEF14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. )

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:
	Preliminary Proxy Statement
	Confidential, for Use of the Commission Only (as permitted by Rule 14A-6(E)(2))
	Definitive Proxy Statement
	Definitive Additional Materials
	Soliciting Material under §240.14a-12

KB HOME

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):
	No fee required.
	Fee paid previously with preliminary materials.
	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

Return on Equity

Diluted Earnings per Share

Book Value per Share

Dear Fellow
Stockholder

Together with the Board of Directors and the management team of KB Home, I am pleased to invite you to participate in our 2023 Annual Meeting of Stockholders. The meeting will be conducted virtually through an online webcast at 9:00 a.m. Pacific Time on Thursday, April 20, 2023.

2022 in Review

The KB Home team delivered outstanding results in 2022, one of the strongest years of financial performance in our Company’s history. In addition, we continued to take care of our customers, build our brand and move our sustainability initiatives forward. I am proud of our team’s commitment to our homebuyers and resilience through fluctuating market conditions during the year, while also keeping our Company’s long-term objectives in view.

Despite the volatile conditions during the year, we accomplished our primary financial objectives in 2022 of expanding our scale and profitability to drive higher returns. We generated total revenues of $6.9 billion, up 21% year over year, and a 51% year-over-year increase in diluted earnings per share to $9.09. As a result, our return on equity expanded by 470 basis points to 24.6% and our book value per share grew 27% to $43.59.

We started fiscal 2022 with continued momentum in demand for our homes. As we moved through the year, and the Federal Reserve lifted interest rates to combat inflation, we began to see customers move to the sidelines. By the end of the year, the combination of higher mortgage rates, inflationary pressures, and various other macroeconomic and geopolitical concerns weighed on buyers, and they became even more cautious about purchasing a home. Although there were many challenges our industry faced throughout the year, from ongoing supply chain and construction services shortages to municipal delays and slowing demand, our team at KB Home overcame these obstacles, finding creative solutions to progress homes through the construction cycle and working with buyers to close on their homes.

We continued to implement a capital allocation plan focused on producing the highest possible returns, as we positioned the Company for long-term growth while also returning capital to stockholders. In 2022, we invested $2.4 billion to acquire and develop land and returned over $200 million of cash to stockholders through share repurchases and dividends. Over the last two years, we have returned roughly $445 million of cash to our stockholders. Our land spend in 2022 was about $100 million lower as compared to the prior year, reflecting our investment strategy pivot in the second half as housing demand softened and we sought to gain better clarity on the direction of the economy and its impact on homebuyers.

KB Home ■ 2023 Proxy Statement

We ended the year with roughly 69,000 lots owned or controlled—a level we believe is sufficient to achieve our delivery projections for the next few years. In addition, our lot position is expected to fuel community count growth in 2023, building on last year’s 13% year-over-year increase in communities, helping to support our net orders this year.

Ours is a people business and we have among the best and most diverse talent in the industry. We were again named to The Wall Street Journal’s “Management Top 250,” list in 2022, a ranking developed by the Drucker Institute, based on excellence across five dimensions: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength. What is striking to me about this recognition is that every one of our employees impacts at least one of these five areas. As a result, the award reflects strength across our entire company, as one of the best-managed U.S. companies and the only national homebuilder on the list for two consecutive years.

Building for the Future

Driving high levels of customer satisfaction is one of the most effective ways we can build our Company for the future. Our vision is to be the most customer-obsessed homebuilder in the world, giving our customers the ability to purchase a new home that reflects what they value and how they want to live, at a price they can afford. This vision comes to life through our Built to Order^®approach and the close partnership we form with our customers throughout the construction of their home and beyond. Our Company is “Built on Relationships,” as every aspect of our business is relationship driven—whether we are interacting with customers, business partners, stockholders or employees. I am proud that in 2022 we maintained our status as the #1 customer-ranked national homebuilder, based on buyer satisfaction surveys from TrustBuilder^®, a third-party, industry-specific homeowner review site. The ranking is based entirely on direct responses from our customers, reinforcing that our distinct homebuying experience resonates with them.

Another way in which we build for the future is through our focus on sustainability—an area in which we have led our industry for 16 years. We call it “doing well by doing good,” and we believe we are doing good for both our customers and our planet. Our results are meaningful. We were the first national homebuilder to build 100% ENERGY STAR^® certified new homes and have delivered over 175,000 of these homes since 2000, more than any other homebuilder. Our homes are estimated to have cumulatively saved our homeowners more than $1 billion in utility bills and lowered carbon emissions by a level that equates to removing over 674,000 cars from the road for one year.

KB Home ■ 2023 Proxy Statement

Water conservation is another area of priority for our Company, and we provide several features in our homes to reduce usage of this critical resource, which, in turn, also helps lower our customers’ costs of homeownership. We estimate that the more than 1.0 million water-efficient fixtures we have installed in our homes and over 19,000 WaterSense^® labeled and Water Smart homes we have built to date have conserved approximately 1.7 billion gallons of water annually. Last year, we became the first national homebuilder to commit to the Environmental Protection Agency’s (“EPA”) highest water-efficiency standards for new homes in drought-affected Arizona, California and Nevada. Every home built in our new communities in those states since July 2022 has been WaterSense labeled to ensure they meet the EPA’s requirements.

In addition to our progress in energy and water efficiency, we have advanced our efforts in renewable energy and healthier indoor air environments. The breadth and depth of our sustainability initiatives and achievements resulted in, among other things, our Company being named to Newsweek’s 2023 list of America’s Most Responsible Companies—the third consecutive year we have been recognized for demonstrating leading Environmental, Social and Governance practices. For more details about what we are doing to drive a more sustainable future, I hope you will read our 16th Annual Sustainability Report, the longest-running publication of its kind for a national homebuilder, which is slated for publication in May.

Closing Thoughts

We believe the long-term outlook for the housing market remains favorable, driven by demographic factors, primarily the first-time and first move-up customer segments we serve, and a prolonged undersupply of homes, particularly at our targeted price points. Although we do not have certainty on the near-term direction of the economy or housing market, we are confident in our ability to navigate the challenging conditions. We have an experienced and tenured team, and a durable Built to Order business model, centered on providing significant choice and flexibility to customers through a personalized approach, which have led us through prior homebuilding cycles. In addition, we are well positioned with a strong balance sheet, and expect to generate another year of healthy cash flow in 2023.

The KB Home team is committed to managing our business to drive long-term stockholder value, and along with our Board of Directors, we sincerely thank you for your investment and continued support.

Sincerely,

JEFFREY T. MEZGER
Chairman, President and Chief Executive Officer
March 10, 2023

KB Home ■ 2023 Proxy Statement

Table of Contents

2023 Annual Meeting Summary

Annual Meeting Information

Meeting Agenda

Participating in the Annual Meeting Webcast

Sustainability at KB Home

Board and Corporate Governance Overview

Board and Committee Governance Structure

Our Board’s Risk Oversight Role

Board Experience and Skills

Director Compensation

Non-Employee Director Compensation

Director Compensation During Fiscal Year 2022

Election of Directors

Ownership of KB Home Securities

Stock Ownership Requirements

Compensation Discussion and Analysis

Financial Performance and Compensation Highlights

Pay For Performance — 2022 Fiscal Year CEO Compensation

Engaging With Our Stockholders

Compensation Governance

Pay Program Overview

NEO Compensation Components

Executive Compensation Decision-Making Process and Policies

Management Development and Compensation Committee Report

Executive Compensation

Summary Compensation Table

Grants of Plan-Based Awards During Fiscal Year 2022

Outstanding Equity Awards at Fiscal Year-End 2022

Option Exercises and Stock Vested During Fiscal Year 2022

Pension Benefits During Fiscal Year 2022

Non-Qualified Deferred Compensation During Fiscal Year 2022

Potential Payments Upon Termination of Employment or Change in Control

Advisory Vote to Approve Named Executive Officer Compensation

Ratify Ernst & Young LLP’s Appointment as Independent Auditor

Independent Auditor Services and Fees

Audit Committee Report

Approve the Amended and Restated KB Home 2014 Equity Incentive Plan

Advisory Vote on the Frequency of the Named Executive Officer Compensation Advisory Vote

Annual Meeting Voting Matters and Other Information

Voting Your Shares

Voting Procedures

Board Record Date Ratification

Proxy Solicitation Costs

Internet Availability of Proxy Materials

Stockholder Proposals for Our 2024 Annual Meeting of Stockholders

Annex 1:

Corporate Governance Processes and Procedures

Director Independence Determinations

Related Party Transactions

Director Qualifications and Nominations

Board Evaluation Process

Audit Fee Pre-Approval Policy; Audit Committee Designation

Annex 2:

Reconciliation of Non-GAAP Financial Measures

Exhibit A:

Amended and Restated KB Home 2014 Equity Incentive Plan

Back to Contents

Notice
of 2023 Annual Meeting
of Stockholders

Thursday, April 20, 2023

9:00 a.m., Pacific Time

Webcast Meeting Location:
meetnow.global/MTDGK2M

Items of Business

Elect 11 directors for a one-year term.

Advisory vote to approve named executive officer compensation.

Ratify Ernst & Young LLP’s appointment as KB Home’s independent registered public accounting firm for the fiscal year ending November 30, 2023.

Approve the Amended and Restated KB Home 2014 Equity Incentive Plan.

Advisory Vote on the Frequency of the Named Executive Officer Compensation Advisory Vote.

The accompanying Proxy Statement describes these items in more detail. We have not received notice of any other matters that may be properly presented at the meeting.

Record Date

You are entitled to vote at the meeting and any adjournment or postponement of the meeting if you were a stockholder as of the close of business on February 24, 2023.

By order of the Board of Directors,

WILLIAM A. (TONY) RICHELIEU

Vice President, Corporate Secretary and
Associate General Counsel

Los Angeles, California

March 10, 2023

Voting

Please vote as soon as possible to ensure your shares will be represented. Holders of record may vote via the Internet, telephone or mail. Stockholders whose shares are held by an intermediate broker or financial institution, also called beneficial holders, must vote in the way their intermediary provides. Holders with a control number from our transfer agent can vote at the meeting.

Virtual Meeting Format

The meeting will be conducted online through an audio-only webcast. The accompanying Proxy Statement contains information about participating in the meeting. The meeting will have no physical location.

Annual Report

Our Annual Report on Form 10-K for the fiscal year ended November 30, 2022 (“Annual Report”), including audited financial statements, is being made available to stockholders concurrently with the accompanying Proxy Statement on or about March 10, 2023.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on April 20, 2023: Our Proxy Statement and Annual Report are available at www.kbhome.com/investor/proxy.

KB Home ■ 2023 Proxy Statement

Back to Contents

2023 Annual Meeting Summary

Your Board is furnishing this Proxy Statement and a proxy/voting instruction form or Notice of Internet Availability to solicit your proxy for KB Home’s 2023 Annual Meeting of Stockholders (“Annual Meeting”). We anticipate these proxy materials will be made available to stockholders on or about March 10, 2023. Below is summary information about the Annual Meeting. Please review the information in this Proxy Statement before voting.

Annual Meeting Information

Date & Time	Location:
Thursday, April 20, 2023

Dear Fellow Stockholder

2023 Annual Meeting Summary

Annual Meeting Information

Dear Fellow
Stockholder