Company: LGIH
Filing Date: 2025-03-14
Form Type: DEF 14A
Source: 0001580670-25-000028
Chunk: 76

Company: LGI Homes, Inc.
Filing Date: 2025-03-14
Form: DEF 14A
Chunk 76
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 measure of net income is correlated with the measure pre-tax net income (which is net income before income taxes). As further discussed in the section that follows, the determination as to the amount of the total Annual Bonus payment earned by each participating NEO under the Annual Bonus Plan is significantly influenced by the pre-tax net income generated for the year as compared to target.

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Relationship Between Compensation Actually Paid and Pre-Tax Net Income

As demonstrated by the following graph, the amount of compensation actually paid to the CEO and the average amount of compensation actually paid to the Non-CEO NEOs has generally aligned with the Company’s pre-tax net income over the five-year period presented in the table. While the Company uses TSR, earnings per share, home closings and pre-tax net income for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that pre-tax net income over the long-term is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the NEOs to Company performance. The Compensation Committee’s determination as to the amount of the total Annual Bonus payment earned by each participating NEO under the Annual Bonus Plan is significantly influenced by the pre-tax net income generated for the year as compared to target. For 2024, 2023, 2022, 2021 and 2020, the total Annual Bonus payment to be earned by each participating NEO was based (i) 75% on the pre-tax net income during the year as compared to target and (ii) 25% on the number of home closings during the year as compared to the target. The payouts could range from 0% - 200% of the target annual bonus amount depending on the results achieved as compared to the threshold, target, and maximum for each measure, calculated and awarded independently, such that one portion of the award may be earned even if the threshold level of performance for the other measure is not achieved. The performance targets and payout terms applied to each NEO based on the Compensation Committee’s determination that each is integral to the overall success of the Company. See “What We Paid and Why - Compensation for NEOs - Annual Cash Bonus - Short-term Incentive Compensation” for more information.

Relationship Between Cumulative TSR of the Company and Cumulative TSR of the Peer Group

As demonstrated by the following graph, the Company’s cumulative TSR over the