Robert Dillard
KB HOMEAbout Robert Dillard
Robert R. “Rob” Dillard, age 50, is Executive Vice President and Chief Financial Officer of KB Home, appointed effective March 31, 2025. He joined from Sonoco Products Company, where he served as CFO (June 2022–January 2025), following roles as Chief Strategy Officer (April–June 2022) and VP, Strategy & Corporate Development (2018–March 2022); earlier, he led divisions at Domtar (President, Personal Care Europe) and Stanley Black & Decker (President, Stanley Hydraulics) . During 2024, KB Home delivered 8% revenue growth to $6.93 billion and ~61% one-year TSR at the 75th percentile of peers; long-term PSUs paid at 180% of target for the 2021 grant, underscoring a strong performance-pay link he now inherits as CFO .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sonoco Products Company | Chief Financial Officer | Jun 2022 – Jan 2025 | Led finance for a $5.3B revenue industrial and consumer packaging company . |
| Sonoco Products Company | Chief Strategy Officer | Apr 2022 – Jun 2022 | Corporate strategy leadership prior to CFO appointment . |
| Sonoco Products Company | VP, Strategy & Corporate Development | 2018 – Mar 2022 | Led strategy and M&A/corporate development . |
| Domtar Corporation | President, Personal Care Europe | Not disclosed | Division leadership (personal care) . |
| Stanley Black & Decker | President, Stanley Hydraulics | Not disclosed | Division P&L leadership (industrial) . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No public company directorships or related-party ties disclosed; no Item 404(a) related-party transactions reported . |
Fixed Compensation
| Component | Terms | Source |
|---|---|---|
| Base Salary | $750,000 initial base salary | |
| Target Annual Bonus | 140% of base salary (prorated for FY2025 start date) | |
| Maximum Annual Bonus | 3x base salary (prorated for FY2025) | |
| Sign‑On Equity | Time‑vesting restricted stock valued at $1,000,000 | |
| Annual LTI Target | Recommended $1,500,000 (form to be determined with annual grants later in year) | |
| Relocation | Reimbursement under company policy | |
| Benefit Eligibility | Executive benefits and life insurance programs; Deferred Compensation Plan; 401(k); Change in Control Severance Plan (immediate); Executive Severance Plan (after 1 year of employment) |
Performance Compensation
Annual Incentive (Design and 2025 approach)
- Structure: Two components — (1) API (Adjusted Pretax Income) vs. target, capped at 100% of individual target for this component; and (2) Asset Efficiency performance pool funded only above a minimum asset efficiency hurdle, then allocated by individual performance via a structured scorecard (Financial, Execution, Strategic Planning, Leadership) .
- 2024 program specifics (for context): Asset efficiency hurdle at 3% return on inventory; pool funding at 2.25% of API above hurdle up to 110% of API target, and 3.25% above 110% of API target . 2025 program is similar, with API target set considering current-year conditions .
| Annual Incentive Metric | Weighting | Target/Threshold | Payout Mechanics | Vesting/Form |
|---|---|---|---|---|
| Adjusted Pretax Income (API) | Formula-driven; capped at 100% of target for this component | Company-set annual API target (2025 target not disclosed) | Pays 50% at threshold (75% of target), 100% at target; above-target requires asset efficiency hurdle be met | Paid in cash up to plan cash caps; excess as time-vesting restricted stock per plan design |
| Asset Efficiency (Return on Inventory) + Scorecard (IPF) | Variable pool | Hurdle: 3% return on inventory (2024); pool funded as API exceeds hurdle | Pool allocated by scorecard-derived IPF ranges by role | Cash with equity in lieu of cash above caps per plan |
Long‑Term Incentives (PSUs)
- Design: PSUs only for regular LTI; three-year performance period; payout 0–200% of target based on three measures .
- Metrics and goals: AEPS (40%), AROIC (35%), Relative revenue growth vs. peer group (25%); 2024 grant goal levels for 2025–2027 performance shown below .
| PSU Metric | Weight | Threshold Goal | Target Goal | Max Goal | Payout scale |
|---|---|---|---|---|---|
| Cumulative Adjusted EPS (AEPS) | 40% | $12.40 | $15.50 | $18.60 | 0–200% (linear between levels) |
| Average Adjusted ROIC (AROIC) | 35% | 7.5% | 9.4% | 11.3% | 0–200% (linear) |
| Relative Revenue Growth vs. Peers | 25% | 25th percentile = 25% payout | 50th percentile = 100% | 75th percentile = 200% | 0–200% rank-based |
Note: 2021 PSU cycle certified at 180% of target for NEOs based on AEPS above max, AROIC above max, and relative revenue growth ~55th percentile .
Equity Ownership & Alignment
- Stock ownership guidelines: CEO 6x salary; COO 3x; Other NEOs 2x; achieve within five years of appointment/promotion and maintain thereafter. Vested net shares must be retained until compliant. Each NEO (as of proxy) was in compliance; Dillard will be subject to 2x salary guideline and five-year compliance window .
- Hedging/pledging: Prohibited — no hedging, no pledging/margin accounts for employees and directors .
- Equity grant practices: Grants approved only by Board/Comp Committee; no delegation; grant price ≥ closing price; avoid blackout periods; no options granted since 2016 .
- Beneficial ownership: As of Feb 24, 2025, NEO ownership table did not yet include Dillard (appointment effective March 31, 2025); no related-party transactions per Item 404(a) were disclosed for Dillard .
Employment Terms
- Start date and role: Appointed EVP & CFO effective March 31, 2025 .
- Severance plan (after 1 year of service): If terminated without cause, cash severance equals 2.0x (base salary + average bonus per plan formula), plus up to 2 years of health coverage; subject to release and post-termination covenants (two-year non-solicitation, confidentiality, non‑disparagement) .
- Change-in-control (CIC) plan: Double-trigger equity vesting; if terminated without cause or resigns for good cause within 18 months post‑CIC, severance equals 2.0x (average base salary + average actual cash bonus for prior three fiscal years), with health coverage continuation; no expansion of Section 280G tax gross-ups beyond limited legacy group (policy does not extend gross-ups to other NEOs) .
- Clawback: NYSE-compliant incentive compensation recovery policy adopted in 2023; applies to executive officers; dividends/dividend equivalents not paid on performance awards before vesting .
Company Performance Context (for pay‑for‑performance)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $6,880,362,000 | $6,381,106,000 | $6,902,239,000 |
| EBITDA ($USD) | $1,142,904,000* | $806,068,000* | $854,667,000* |
Values retrieved from S&P Global.
Additional performance and capital allocation under Dillard’s early tenure: guidance and commentary highlighted capital returns (Q3’25 repurchased 3.3M shares at $57.12; FY25 YTD ~11% of shares; new $1B authorization announced Oct 27, 2025), targeted debt-to-capital near 30%, liquidity ~$1.2B, and emphasis on built‑to‑order mix to support margins .
Say‑on‑Pay & Peer Group
- Say‑on‑pay: 2024 annual meeting support for NEO compensation was 81%, up from prior year, following outreach and plan refinements (cash caps, higher equity mix, scorecard rigor) .
- Compensation peer group (high‑production homebuilders) includes DHI, LEN, PHM, TOL, NVR, MTH, TMHC, BZH, TPH, plus Century Communities and M/I Homes; used both for benchmarking and PSU relative revenue metric .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited across employees/directors (mitigates alignment risk) .
- Equity vesting on CIC: Double trigger (mitigates windfall risk) .
- Excess severance policy: No new severance >2.99x salary+target bonus without stockholder approval (adopted 2008) .
- Related parties: None disclosed for Dillard; no 404(a) transactions; Board reports no director related‑party transactions in 2024 .
Performance & Execution Notes (early tenure signals)
- Capital returns and balance sheet: CFO Dillard guided to Q4’25 repurchases of $50–$150M, with FY25 YTD repurchases of ~7.8M shares; debt-to-capital targeted near 30%; liquidity strong ($331M cash; $832M revolver availability) .
- Margin and mix: Emphasis on shifting mix back toward built‑to‑order (historically 70%+) to support higher margins; margin differential of ~250–400 bps vs. spec homes depending on community .
- Outlook commentary: FY25 housing revenue guide $6.1–$6.2B; FY25 SG&A 10.2–10.3%; full-year housing gross margin 19.2–19.3% ex‑charges; operating margin ~8.9% (ex‑charges) .
Investment Implications
- Alignment: Dillard’s package tilts toward at‑risk pay (annual target 140% of salary; recommended annual LTI $1.5M in PSUs), consistent with KBH’s PSU‑only LTI and API/asset efficiency annual plan; this supports pay‑for‑performance linkage already demonstrating 180% PSU outcomes on prior cycles .
- Retention vs. supply overhang: Sign‑on time‑vesting RS ($1M) aids retention but can add incremental vesting supply; KBH mitigates selling pressure via ownership guidelines and required net‑share retention until guidelines are met; hedging/pledging bans further enhance alignment .
- Downside protections: Executive Severance Plan (2x salary+bonus) and double‑trigger CIC benefits reduce transition risk and potential distraction, though investors should monitor aggregate severance exposure and adherence to the 2.99x policy .
- Execution focus: Early commentary from Dillard emphasizes disciplined capital allocation (buybacks authorized to $1B; leverage targets), margin mix improvement via BTO, and cost control — supportive of FCF durability and potential for sustained above‑peer returns if housing demand normalizes .
All document references use [document_id:chunk] citations from SEC filings and earnings materials. EBITDA values marked with * are retrieved from S&P Global.