DEF 14A of Toll Brothers, Inc., Jan 30, 2025

DEF 14A of Toll Brothers, Inc.

Filed Jan 30, 2025 · FY20240000794170-25-000011

Open on EDGAR

  1. PROPOSAL ONE—ELECTION OF DIRECTORS

    PROPOSAL ONE—ELECTION OF DIRECTORS

  2. Board Membership Criteria

    Board Membership Criteria Our Board believes that it is necessary for our directors to possess many diverse qualities and skills. The Nominating and Corporate Governance Committee of the Board of Directors (the "Governance Committee") is charged with identifying individuals qualified to become members of the Board of Directors consistent with criteria approved by the Board. In selecting, or in recommending the selection of, nominees for directors, the Governance Committee considers the evolving needs of our Board, as well as applicable legal and NYSE requirements, including, when appropriate, those applicable to membership on the Audit and Risk Committee and the Executive Compensation Committee (the "Compensation Committee"), as well as other criteria it deems appropriate. The Governance Committee will consider candidates nominated by stockholders, directors, officers and other sources. Stockholders wishing to recommend a prospective candidate for membership on the Board should follow the procedures described under "Procedures for Recommending Candidates for Nomination to the Board of Directors" on page 70. At a minimum, candidates must possess a background that includes a strong education, extensive business experience, and the requisite judgment, background, reputation, character, integrity, skills and temperament, which, in the view of the Governance Committee, have prepared them for dealing with the multi-faceted financial, business, governance, and other issues that confront a board of directors of a corporation with the size, complexity, reputation, and success of the Company. When evaluating director candidates, the Governance Committee first considers a candidate’s business experience and then considers other factors, including that candidate’s background, reputation, character, integrity, skills, temperament and other personal characteristics, including whether the candidate would add to the Board's diversity.

  3. Board Composition, Evaluation and Refreshment

    Board Composition, Evaluation and Refreshment The Governance Committee continually assesses the composition of the Board, including through a review of Board size, the skills and qualifications represented on the Board, and director tenure. In its review of the skills and qualifications of each director, the Governance Committee considers the characteristics that it believes should be represented on the Board as well as on each Committee of the Board. The findings of the Governance Committee's annual review of Board composition are reported to and discussed with the full Board. Based on its evaluation, the Governance Committee may recommend an increase or decrease in the size of the Board or changes in the composition of the Board to best reflect the objectives and needs of the Company and the desired skill sets of the directors. Similarly, the Governance Committee establishes processes for developing and recruiting candidates for Board membership and conducting searches for Board candidates. As part of its annual review of Board composition, the Governance Committee considers director age and tenure, as well as the diversity of the Board. The Governance Committee seeks to ensure an appropriate mix of age and tenure of the directors, taking into account the benefits of directors with longer tenures, including greater board stability, continuity of organizational knowledge and experience gained through prior real estate cycles, and the benefits of directors with shorter tenures, including fresh perspectives and viewpoints. Our Board views diversity in a broad sense, taking into consideration not only racial, ethnic and gender diversity, but also the mix of qualifications and personal characteristics of our existing directors including age, tenure, experience levels and types of experience, including both industry and subject matter expertise. Although we do not have a separate policy specifically governing diversity, when considering board candidates, the Governance Committee considers whether an individual would bring a diverse viewpoint to the Board, which includes a candidate’s gender, race and ethnicity. To assist in its review, the Lead Independent Director periodically meets individually with Board members to discuss Board composition and to determine whether each such director's future plans may assist the Governance Committee in its consideration of the issue of director tenure. Our Lead Independent Director leads the annual Board self-evaluation process to review the effectiveness of the Board and each of its committees and to identify any opportunities for improvement. As part of this process, on an annual basis, members of the Board complete an assessment form evaluating the performance of the Board as a whole and each committee on which they sit. Directors are asked about Board and committee composition, practices, accountability and standards of conduct. Each committee reviews the results of their questionnaire and determines whether the results warrant any action. Following completion of the full Board self-assessment and the compilation of results, the Lead Independent Director conducts one-on-one interviews with each Board member to solicit additional feedback on Board performance to supplement the results of the formal written process. The Lead Independent Director then presides over a full Board meeting during which the results of these processes are discussed, including any areas for improvement, and any proposed actions plans are approved. Each committee conducts its own annual self-evaluation and reports the results to the Board. The Board believes that, through its annual review of Board composition and the nomination process, coupled with its annual self-evaluation procedures, the Board has and will continue to evolve to meet the current and future needs of the Company. As illustrated below, over the past decade, the Governance Committee and the Board have focused a great deal of attention on renewing and refreshing the perspectives, skills and backgrounds that are represented on the Board.

  4. Board Composition, Evaluation and Refreshment

    | Select Board Statistics | | | | | | | | AGE | | | | TENURE | | | | | | March 2015 | March 2025 | | March 2015 | March 2025 | | | 45-55 | 10% | 9% | 0-5 years | 10% | 45% | | | 56-65 | —% | 55% | 6-15 years | 30% | 45% | | | 66+ | 90% | 36% | 16+ years | 60% | 10% | | RACIAL / ETHNIC DIVERSITY | | | | GENDER DIVERSITY | | | | | | March 2015 | March 2025 | | March 2015 | March 2025 | | | Diverse | 10% | 27% | Female | 10% | 36% | | | Non-Diverse | 90% | 73% | Male | 90% | 64% | | | Over the past six years, a majority of our Board has turned over | | | | | |

  5. Our Director Nominees

    Our Director Nominees Upon the recommendation of the Governance Committee, the Board has nominated 11 directors for reelection. Each director nominee is standing for election to hold office until the 2026 Annual Meeting of Stockholders and until his or her respective successor has been duly elected and qualified. Each nominee has indicated a willingness to serve as a director. Under our Bylaws, Board nominees are elected using a majority voting standard for uncontested elections. Under a majority voting standard, in uncontested elections, a nominee for director shall be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Directors are elected by plurality vote in the event of a contested election. In connection with our stockholder engagement efforts in recent years, we have had discussions with stockholders regarding the composition of our Board and the criteria the Governance Committee considers when nominating candidates for Board positions. The Governance Committee reviews the composition of the Board at least annually in an effort to provide a balance of skills, tenure and experience that best serves the Company and its stockholders. Our Board is now composed of a majority of directors that were first elected on or after March 2018, including two directors who joined the Board in December 2023 and were first elected by stockholders in March 2024. This process has added fresh perspectives and deepened the Board's diversity of composition, thought and experience. In connection with the appointments of Mses. Reinsdorf and Sandstrom in December 2023, the Governance Committee and the full Board recognized that Ms. Sandstrom's deep real estate industry experience, well developed financial and investment acumen and experience on other public company boards would be valuable additions to our Board. Likewise, the Governance Committee and the Board considered Ms. Reinsdorf's corporate governance expertise as well as her extensive management experience at large and complex U.S. public companies across multiple industries. In addition, both Mses. Sandstrom and Reinsdorf have significant transactional experience and are well versed in management succession planning and related activities, which the Board felt were valuable attributes to bolster on the Board. In recommending these candidates, the Governance Committee specifically considered each individual's current obligations, responsibilities and commitments made to other organizations, including with respect to service on other public company boards, and, following extensive diligence and conversations with each nominee, made an affirmative determination that each of them has sufficient capacity to fully participate in Board activities. The Board believes that, with the addition of Mses. Reinsdorf and Sandstrom, and combined with our existing directors’ deep experience and knowledge of the Company and home building industry, the Board is well positioned to continue leading Toll Brothers as it executes on its strategic priorities. In connection with the recruitment of Mses. Reinsdorf and Sandstrom, the Board reviewed and adopted a formal over-boarding policy, which is included in the Company's Corporate Governance Guidelines. The policy requires directors to obtain the consent of the Governance Committee before accepting an invitation to serve on another public company board. In such a situation, the Governance Committee will assess the individual circumstances to determine whether service on the other board would create unacceptable regulatory issues or conflicts of interest, impair the director’s ability to fully participate in all Board and committee activities to which the director has been assigned or to otherwise discharge his or her fiduciary duties as a Board member. The Board believes that, due to the substantial variation in time commitments and responsibilities that individuals undertake and that varying boards demand, a case-by-case assessment of individual circumstances is necessary when evaluating whether a director has sufficient capacity to serve on another public company board while remaining on the Board. In these circumstances, the Governance Committee will also take into consideration any over-boarding policies adopted by significant stockholders. The Governance Committee has reviewed the experience, qualifications and contributions of each of our incumbent director nominees and believes that each nominee continues to bring significant value to the Board and to the Company. Our directors' business experiences, their knowledge and understanding of the Company's operations, governance, personnel, and business ethics gained by them over time, and each of their unique perspectives, insights, and skill sets have led the Governance Committee and the Board to recommend that each director be re-elected to the Board for an additional term of office.

  6. 2025 Director Nominees

    2025 Director Nominees Set forth below is biographical information about our director nominees. Douglas C. Yearley, Jr. has been a member of our Board since June 2010. He joined us in 1990, specializing in land acquisitions and project finance. He has been an officer since 1994, holding the position of Senior Vice President from January 2002 until November 2005, and the position of Regional President from November 2005 until November 2009, when he was promoted to Executive Vice President. Since June 2010, he has been our Chief Executive Officer and, in October 2018, he was elected Chairman of the Board. Prior to joining us, Mr. Yearley practiced law in New Jersey as a commercial litigator. In 2024, Mr. Yearley was named to Barron's magazine's annual list of top 25 CEOs. He brings to the Board a deep understanding of our industry and our business as a result of his significant operational and executive roles with the Company, his managerial and leadership experience, and his legal background. Stephen F. East has been a member of our Board since March 2020. He is a member of the Audit and Risk Committee and the Compensation Committee and the Chair of the Public Debt and Equity Securities Committee. Prior to his retirement in July 2019, Mr. East served as a Managing Director and Senior Consumer Analyst at Wells Fargo & Company, heading the equity research team that covered the home building and building products sectors. Prior to joining Wells Fargo, he spent four years with Evercore ISI, an independent research firm, as a Partner and Senior Managing Director heading the firm's housing research efforts, and, prior to that, spent nearly two decades in equity research and investment management at various firms. Mr. East is a member of the board of directors of Sezzle Inc., a publicly traded financial technology company, where he chairs each of its audit and risk, nominating and corporate governance and compensation committees. Mr. East holds the Chartered Financial Analyst designation. Mr. East brings valuable experience to the Board in the form of his extensive knowledge of the home building industry, analytical abilities, financial acumen and strategic insights. Christine N. Garvey has been a member of our Board since September 2009. She is the Chair of the Audit and Risk Committee and a member of the Compensation Committee and Public Debt and Equity Securities Committee. Ms. Garvey was the Global Head of Corporate Real Estate Services at Deutsche Bank AG from 2001 to 2004. Prior to that, she served as Vice President of Worldwide Real Estate and Workplace Resources at Cisco Systems, Inc. and as Group Executive Vice President at Bank of America Corporation. She previously served on the boards of directors of Prologis, Inc. through May 2017, Hilton Hotels Corporation through October 2007 and Healthpeak Properties, Inc. through April 2024. Ms. Garvey brings to the Board her extensive knowledge of and background in real estate and banking and her experience in executive leadership positions and board memberships with various public entities in the national real estate market. Karen H. Grimes has been a member of our Board since March 2019. She is a member of the Audit and Risk Committee and the Governance Committee. She held the position of Senior Managing Director, Partner, and Equity Portfolio Manager at Wellington Management Company LLP, an investment management firm, from January 2008 through December 2018. Prior to joining Wellington Management Company in 1995, she held the position of Director of Research and Equity Analyst at Wilmington Trust Company, a financial investment and banking services firm, from 1988 to 1995. Before that, Ms. Grimes was a Portfolio Manager and Equity Analyst at First Atlanta Corporation from 1983 to 1986 and at Butcher and Singer from 1986 to 1988. She is a member of the Board of Directors of Tegna Inc., a publicly traded broadcast, digital media and marketing services company, as well as its audit committee and governance, public policy and corporate responsibility committee. She is also a member of the Board of Directors of Corteva, Inc., a publicly traded global agriculture company, where she serves on its audit committee and people and compensation committee. Ms. Grimes holds the Chartered Financial Analyst designation. Ms. Grimes' extensive executive-level experience, leadership abilities, financial acumen, investment expertise, and risk management experience reinforce the Board's abilities in these areas and bring a valuable investor-oriented perspective to the Board. Derek T. Kan has been a member of our Board since December 2021. He is a member of the Audit and Risk Committee. From December 2020 until its acquisition by Shopify Inc. in July 2022, he was Chief Business Officer at Deliverr, Inc., an e-commerce fulfillment technology company. He is now Vice President, Operations at Shopify. Previously, he held a number of senior positions in the U.S. federal government, including Deputy Director of the White House Office of Management and Budget from June 2019 through December 2020 and Under Secretary at the U.S. Department of Transportation from June 2017 through July 2019, where he served as a principal advisor to the Secretary and spearheaded initiatives involving technology and innovation in the transportation sector. He was also a founding member of the White House COVID Task Force and Operation Warp Speed. Mr. Kan currently serves on the United States Postal Service Board of Governors in a U.S. Senate-confirmed position. Prior to his recent public service, Mr. Kan held various positions focused on emerging technologies, including as the General Manager for Lyft. Earlier in his career, Mr. Kan was a policy advisor to the former Senate Majority Leader and was a Presidential Management Fellow at the White House Office of Management and Budget. Mr. Kan brings to the Board his familiarity and experience with the U.S. federal government, his financial and accounting acumen, and his extensive experience in the area of innovation and the implementation of new technologies. John A. McLean has been a member of our Board since March 2016. He is Chair of the Compensation Committee and a member of the Governance Committee. Prior to his retirement in 2024, Mr. McLean was a Senior Managing Director of New York Life Investment Management LLC, where he oversaw U.S. distribution. Before joining New York Life in June 2018, Mr. McLean was the Chief Executive Officer and Distribution Principal for Hartford Funds Distributors, a subsidiary of investment firm Hartford Funds, from January 2013 to April 2018. From April 2009 to May 2012, he was the Head of U.S. Retail and Offshore Sales at Eaton Vance Investment Managers, a financial services firm. Prior to that time, Mr. McLean held positions of increasing responsibility at brokerage firm MFS Fund Distributors. He serves on the Board of Trustees of The Gateway to Leadership Foundation. Mr. McLean brings to the Board his expertise in building and leading high performance sales and marketing organizations and his strategic and tactical leadership skills.

  7. 2025 Director Nominees

    Wendell E. Pritchett has been a member of our Board since March 2018. He is a member of the Governance Committee and the Compensation Committee. He is the James S. Riepe Presidential Professor of Law and Education at the University of Pennsylvania. Dr. Pritchett previously served as the Interim President of the University of Pennsylvania from February 2022 to June 2022 and as the University Provost from 2017 to 2021. Dr. Pritchett first joined the University of Pennsylvania Law faculty in 2002 and served as Interim Dean and Presidential Professor from 2014 to 2015 and as Associate Dean for Academic Affairs from 2006 to 2007. A Professor at the University of Pennsylvania Carey School of Law from 2001 to 2009, Dr. Pritchett also served as Chancellor of Rutgers-Camden from 2009 to 2014, and in 2008 served as Deputy Chief of Staff and Director of Policy for Philadelphia Mayor Michael Nutter, who also appointed him to the School Reform Commission, where he served from 2011 to 2014. Dr. Pritchett served as Chair of the Redevelopment Authority of Philadelphia and as President of the Philadelphia Housing Development Corporation from 2008 to 2011. Dr. Pritchett serves on the board of directors of Clarivate plc, a publicly traded information services company, and 26North BDC, Inc., an alternative asset management firm. He also serves as Chair of the Board of Trustees of College Unbound and is a board member of Philadelphia Foundation, LifePoint Health, Minerva University and Reinvestment Fund. He brings to the Board his leadership and administrative skills, expertise in real estate and housing law, and experience as policymaker, political advisor, and leader in nonprofit organizations with a particular focus on urban development. Judith A. Reinsdorf has been a member of our Board since December 2023. She most recently served as executive vice president and general counsel of Johnson Controls International plc, a global leader in building products and technology and integrated solutions, from September 2016 to November 2017, following its merger with Tyco International plc, where she served as executive vice president and general counsel from March 2007 until September 2016. Prior to that, Ms. Reinsdorf served as General Counsel and Secretary of C.R. Bard, Inc., Vice President and Associate General Counsel of Pharmacia Corporation and Chief Legal Counsel of Monsanto Company. She currently serves on the board of directors of EnPro Inc., an industrial technology company, where she is chair of the nominating and corporate governance committee and a member of each of its board’s other committees, and Nurix Therapuetics, Inc., a biopharmaceutical company, where she is a member of the audit committee and chair of the nominating and corporate governance committees. She is a member of the Board of Trustees of the University of Rochester and is on the board of the New Jersey chapter of the National Association of Corporate Directors. Ms. Reinsdorf’s qualifications to serve on our Board of Directors include her extensive management experience at large and complex U.S. public companies across multiple industries, her expertise in corporate governance, risk management and legal matters, and her transactional experience in areas including acquisitions, divestitures, integrations and management transitions. Katherine M. Sandstrom has been a member of our Board since December 2023. She is the chair of the board of Healthpeak Properties, Inc., a leading owner, operator and developer of real estate for healthcare discovery and delivery. She served as an advisor from July 2018 to March 2019 and as senior managing director and global head of Heitman LLC’s public real estate securities business from 2013 to 2018. Ms. Sandstrom joined Heitman, a real estate management firm, in 1996 and held several senior leadership positions across multiple facets of the institutional real estate investment industry. Additionally, she served on the firm’s global management committee, the board of managers and the allocation committee. Ms. Sandstrom also serves on the boards of EastGroup Properties, Inc., a REIT, since July 2020 and Urban Edge Properties, also a REIT, since October 2022. She is a certified public accountant. Ms. Sandstrom’s qualifications to serve on our Board of Directors include her substantial leadership positions at Heitman LLC and her more than 20 years of real estate finance and investment experience. She has an extensive background overseeing buy-side investment teams for real estate securities, strategies and assets. In addition, she has extensive experience on boards of other public companies. Paul E. Shapiro has been a member of our Board since December 1993. He is Chair of the Governance Committee and a member of the Audit and Risk Committee. Mr. Shapiro is the former Chairman of the board of directors of Q Capital Holdings LLC, an investment management firm he joined in 2004. From January 2004 to June 2004, Mr. Shapiro was Senior Vice President of MacAndrews & Forbes Holdings, Inc., a private holding company of operating businesses. Beginning in 1994, Mr. Shapiro held positions as Chief Administrative Officer of each of Revlon, Inc. and Sunbeam Corporation, and general counsel of each of Coleman Company, Inc. and Marvel Entertainment, Inc. Prior to that, he practiced corporate and securities law as a managing shareholder of the Palm Beach County office of Greenberg Traurig LLP and was a partner in Wolf, Block, Schorr and Solis-Cohen LLP. He brings to the Board his extensive business experience in executive positions with various nationally known companies, which he has served in a wide variety of capacities that have drawn upon his legal and entrepreneurial skills, including those in the areas of corporate governance and the corporate regulatory environment. Scott D. Stowell has been a member of our Board since November 2021. He is Lead Independent Director and a member of the Governance Committee. He is the President and Chief Executive Officer of Capital Thirteen LLC, a company he founded that specializes in advisory, real estate investment, and angel investing. From 2015 to 2018, he served as executive chairman of CalAtlantic Group, Inc., the 5th largest U.S. home builder in 2017, and oversaw the merger of CalAtlantic with Lennar Corporation. Mr. Stowell served on the Board of Directors of Lennar from 2018 until April 2021. From 2012 to 2015, he served as Chief Executive Officer of Standard Pacific Homes, which he joined in 1986, and oversaw its merger in 2015 with the Ryland Group, resulting in the creation of CalAtlantic. Mr. Stowell serves on the Board of Pacific Mutual Holding Company, where he currently serves on the compensation and personnel committee (as Chair) and the governance and nominating committee. In November 2024, he was appointed to the Board of Directors of Federal National Mortgage Association (Fannie Mae). He also serves on the executive committees of HomeAid America and the First Point Volleyball Foundation. Mr. Stowell brings to the Board a wealth of experience in the home building industry, as well as significant leadership abilities and managerial experience gained from his years as a Chief Executive Officer and Chairman of publicly traded home builders. The table below summarizes certain key qualifications, characteristics and skills of each director nominee that were relevant to the decision to nominate him or her to serve on the Board. The lack of a mark does not mean the director does not possess that qualification or skill; rather, a mark indicates a specific area of focus or expertise on which the Board relies most heavily.

  8. 2025 Director Nominees

    | | Key Qualifications, Characteristics and Skills of Our Director Nominees | | | | | | | | Name | Leadership | Industry | Operating and Investment | Accounting and Financial | Business Development and Marketing | Corporate Governance and Law | Other Boards | | Douglas C. Yearley, Jr. | ● | ● | ● | | ● | ● | | | Stephen F. East | ● | ● | ● | ● | ● | | ● | | Christine N. Garvey | ● | ● | ● | ● | | ● | ● | | Karen H. Grimes | ● | | ● | ● | | | ● | | Derek T. Kan | ● | | ● | ● | ● | ● | ● | | John A. McLean | ● | | ● | ● | ● | | | | Wendell E. Pritchett | ● | ● | ● | | ● | ● | ● | | Judith A. Reinsdorf | ● | | | | ● | ● | ● | | Katherine M. Sandstrom | ● | ● | ● | ● | | | ● | | Paul E. Shapiro | ● | ● | ● | ● | ● | ● | ● | | Scott D. Stowell | ● | ● | ● | | ● | | ● | | Gender diversity: | | 36% women | | | | | | | Racial / ethnic diversity: | | 27% diverse | | | | | |

  9. 2025 Director Nominees

    Each director nominee is elected by a majority of the votes cast at the Meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” ALL NOMINEES.

  10. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  11. Director Compensation Program

    Director Compensation Program The Governance Committee is responsible for evaluating and recommending compensation for non-executive members of the Board. Our non-executive directors are compensated in cash and equity for their service as directors. Equity awards granted in fiscal 2024 were issued under the Toll Brothers, Inc. 2019 Omnibus Incentive Plan (the "Omnibus Incentive Plan"). The compensation program in effect for fiscal 2024 for non-executive directors consisted of the following components: •Board Retainer. The principal form of compensation for non-executive directors for their service as directors is an annual retainer (the "Board Retainer"), consisting of a combination of cash and RSUs ("Director RSUs"). For fiscal 2024, the aggregate value of the Board Retainer was $260,000 and was comprised of: •Cash. Each non-executive director receives approximately one-third ($85,000) of the Board Retainer in cash. •Equity. Each non-executive director receives Director RSUs with a grant date fair value equal to approximately two-thirds ($175,000) of the Board Retainer, vesting on the first anniversary of the grant date. Director RSUs are typically granted on a date within the last 15 days of December that is determined in advance by the Board. New non-executive directors are first granted Director RSUs in the December following the fiscal year of their appointment to the Board and receive a pro-rated grant reflecting their service during the prior fiscal year. •Committee Retainer. Each member of the Audit Committee receives annually a combination of cash and equity with a grant date fair value of $25,000, and each member of the Compensation Committee and the Governance Committee receives annually a combination of cash and equity with a grant date fair value of $20,000. In each case, one-third of these amounts are delivered in cash and two-thirds of these amounts are delivered in Director RSUs. The Chair of each of these committees receives an additional annual cash retainer of $10,000. For any fiscal year in which the Public Debt and Equity Securities Committee meets or takes official action, each member of the Public Debt and Equity Securities Committee receives, for service on such Committee, a combination of cash and equity with a grant date fair value of $10,000. One-third of this amount is delivered in cash and two-thirds of this amount is delivered in Director RSUs. The Chair of the Public Debt and Equity Securities Committee receives an additional cash retainer of $5,000 for any fiscal year in which the Committee meets or takes official action. •Attendance at Board and Committee Meetings. Directors, Committee Chairs and Committee members do not receive any additional compensation for attendance at Board or Committee meetings. •Lead Independent Director. The Lead Independent Director receives annually $35,000 in cash for his services in that capacity.

  12. Director Compensation Table

    Director Compensation Table The following table sets forth information concerning the fiscal 2024 compensation awarded to, or earned by, our non-executive directors. Mr. Yearley is not compensated for his service as an executive director, and the compensation received by him for his services as an employee of the Company is reported in the Summary Compensation Table on page 50.

  13. Director Compensation during Fiscal 2024

    Director Compensation during Fiscal 2024

  14. Director Compensation during Fiscal 2024

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Stephen F. East | 100,000 | 205,000 | — | — | — | 305,000 | | Christine N. Garvey | 110,000 | 205,000 | — | — | — | 315,000 | | Karen H. Grimes | 100,000 | 205,000 | — | — | — | 305,000 | | Derek T. Kan | 93,300 | 186,133 | — | — | — | 279,433 | | Carl B. Marbach | 101,667 | 205,000 | — | — | — | 306,667 | | John A. McLean | 108,400 | 201,600 | — | — | — | 310,000 | | Wendell E. Pritchett | 98,400 | 201,600 | — | — | — | 300,000 | | Judith A. Reinsdorf | 77,917 | — | — | — | — | 77,917 | | Katherine M. Sandstrom | 77,917 | — | — | — | — | 77,917 | | Paul E. Shapiro | 121,667 | 205,000 | — | — | — | 326,667 | | Scott S. Stowell | 115,033 | 183,867 | — | — | — | 298,900 |

  15. Director Compensation during Fiscal 2024

    (1)Amounts shown include the cash portion of each non-executive director's Board Retainer and applicable committee, chair and lead director retainers. Amounts are pro-rated to reflect applicable service periods. Mr. Marbach retired from the Board effective March 12, 2024. (2)Director RSUs are typically granted on a date within the last 15 days of December that is determined in advance by the Board. For grants made prior to December 2023, Director RSUs vest in equal annual installments over two years, and shares underlying Director RSUs are generally deliverable 30 days after the vesting of the second installment. For grants made starting in December 2023, Director RSUs will vest on the first anniversary of the grant date. Director RSUs earn dividend equivalents at the same time and in the same amount as dividends paid on the Company’s common stock; dividend equivalents are subject to the same vesting, settlement, and other terms and conditions as the Director RSUs to which the dividend equivalents relate. Upon the death, disability, or retirement (after reaching age 62) of a director, Director RSUs will vest immediately, and shares underlying Director RSUs will be deliverable 30 days after vesting (subject to a six-month delay in delivery if required to comply with Section 409A of the tax code). Beginning with Director RSUs granted in December 2024, awards will vest if a director accepts or runs for a qualifying role in government service. Upon a change of control of the Company, accelerated vesting of Director RSUs occurs only upon the director ceasing to be a director of the Company. For purposes of determining the number of Director RSUs that were awarded in fiscal 2024, the grant date fair value per share was the closing price of the Company's common stock on December 20, 2023, the grant date of the Director RSUs in fiscal 2024. Fractional Director RSUs are not granted. (3)The non-executive directors held the following amounts of outstanding unvested RSUs at October 31, 2024: Mr. East, 3,953 units; Ms. Garvey, 3,953 units; Ms. Grimes, 3,953 units; Mr. Kan, 3,331 units; Mr. Marbach, 0 units; Mr. McLean, 3,886 units; Dr. Pritchett, 3,886 units; Ms. Reinsdorf, 0 units; Ms. Sandstrom, 0 units; Mr. Shapiro, 3,953 units; and Mr. Stowell, 3,446 units. The non-executive directors held the following amounts of outstanding vested RSUs at October 31, 2024: Mr. East, 1,945 units; Ms. Garvey, 1,945 units; Ms. Grimes, 1,945 units; Mr. Kan, 1,509 units; Mr. Marbach, 0 units; Mr. McLean, 1,911 units; Dr. Pritchett, 1,911 units; Ms. Reinsdorf, 0 units; Ms. Sandstrom, 0 units; Mr. Shapiro, 1,945 units; and Mr. Stowell, 1,646 units. (4)The following non-executive directors held unexercised stock options to acquire the following amounts of the Company's common stock at October 31, 2024: Mr. McLean, 2,313 shares and Mr. Shapiro, 11,614 shares.

  16. Fiscal 2024 Performance Relative to Fiscal 2024 CEO Compensation

    Fiscal 2024 Performance Relative to Fiscal 2024 CEO Compensation At the outset of each fiscal year, the Compensation Committee assesses the incentive structure of the Company's executive compensation program to confirm that the program continues to be aligned with the Company's operational goals and overall strategy and that it is reasonably designed to pay our executive officers for Company and individual performance consistent with the creation of long-term stockholder value. As part of this review, the Compensation Committee determined that the metrics used in the program in recent years — which are based on pre-tax income, units delivered, gross margin and return on equity — continued to be the most appropriate metrics to drive desired outcomes. A description of the rationale underlying the selection of each of these metrics is included on page 35. In establishing performance metric targets, the Compensation Committee considers historical financial results as a reference point, but focuses on setting targets that would drive an appropriate pay-for-performance outcome in light of the then-current business and operating environment, which is especially important for an economically sensitive industry like home building. It also considers management's forward-looking guidance provided to investors at the outset of the year, which it generally considers the baseline for annual performance metrics, as well as analyst consensus forecasts. These forecasts are evaluated and considered in light of the macroeconomic environment and the level of uncertainty prevailing at the time targets are set. Similar to the target setting process for one-year metrics, in setting the three-year return-on-equity ("ROE") based target, the Compensation Committee takes into account historical financial results, forecasted results and the current business and operating environment. However, it also considers the greater degree of uncertainty inherent in projecting returns over a three-year period for a highly cyclical industry. Based on the results described above and the Company's three-year ROE through October 31, 2024: •Annual Incentive Bonus: Performance with respect to the formulaic portion of the annual incentive bonus (70% of the award) was achieved at 117.5% of the performance target, resulting in a payout of 143.8% of the targeted formulaic portion of the bonus. Based on an assessment of NEO and Company performance over the course of the year, including our NEO's key roles in setting and executing on the strategies described above, as well as the results achieved under the formulaic portion, the Compensation Committee used its judgment to pay out the qualitative portion of the annual incentive bonus (30% of the award) for each NEO at 130%, resulting in a full bonus payout of 139.6% of target - a result the Compensation Committee deemed appropriate in light of all circumstances (see page 38 for more details); •Operational PRSUs: The number of shares earned in respect of PRSUs based on the operational goals of unit deliveries and adjusted gross margin ("Ops PRSUs") was 111.0% of the target number of shares awarded, which was based on achievement relative to performance targets of 107.1% for unit deliveries and 101.7% for adjusted gross margin. These earned shares vest pro-rata over a four-year period with delivery of 100% of such shares on or about the four-year anniversary of the grant date (see page 40 for more details). •Return on Average Equity PRSUs: PRSUs granted in December 2020 that were based on the Company's average ROE ("ROE PRSUs") over the three-year performance period ended on October 31, 2024 paid out at 126.5% of target as the Company's average ROE was 22.1%, or 110.5% of target, at the conclusion of the measurement period (see page 41 for more details). We believe these outcomes demonstrate a strong link between Company performance, the compensation earned by our CEO and other NEOs in fiscal 2024, and returns experienced by our stockholders over time.

  17. CEO Realizable Compensation

    CEO Realizable Compensation Over time, both the Company's performance relative to the performance metrics included in the annual and long-term incentive programs, as well as the Company's stock price performance, have a direct and material impact on executive compensation. For this reason, realizable pay, which captures compensation earned, as well as the impact of the Company’s share price performance on previously granted long-term incentive awards by valuing those equity awards based on the fiscal year-end stock price, is an important tool in assessing the effectiveness of the Company’s executive compensation program and whether it aligns the interests of executives with those of stockholders. As shown below, the value of realizable pay for our CEO generally follows performance results, and is most heavily impacted by our stock price performance. This is due to the heavy weighting of at-risk incentive-based compensation and equity awards in our CEO's targeted total direct compensation. We believe this demonstrates the strong link between Company performance and executive pay, as well as the alignment of interests between our executives and stockholders.

  18. How Target and Realizable Total Direct Compensation are Calculated

    How Target and Realizable Total Direct Compensation are Calculated Target Total Direct Compensation ("TDC") is the sum of (i) the annual base salary for the corresponding calendar year, (ii) target bonus for the applicable fiscal year and (iii) the target dollar value of all equity awards granted in the applicable fiscal year, in each case as approved by the Compensation Committee at the outset of the fiscal year. The values of equity award grants included in the charts above is greater than the accounting values reported in the Grants of Plan Based Awards Table due primarily to the application of an illiquidity discount that reduces the accounting value of the award because they include post-vesting transfer restrictions that effectively prevent retirement eligible employees from selling vested shares immediately upon retirement. The Compensation Committee ignores this accounting convention when setting TDC. Realizable TDC ("Realizable TDC") for each year is the sum of (i) base salary earned during the fiscal year, (ii) actual cash bonus earned for the fiscal year, and (iii) the value of equity awards granted at the beginning of the applicable fiscal year as of October 31, 2024. RSUs and PRSUs are valued by multiplying the October 31, 2024 closing share price of $146.44 by (a) in the case of RSUs, the number of shares granted, (b) in the case of Ops PRSUs, the number of shares earned based on actual performance through the end of the applicable fiscal year, and (c) in the case of ROE PRSUs, the target number of shares granted (for awards granted in fiscal 2024 and 2023) or the actual number of shares earned (for awards granted in fiscal 2022 and earned in fiscal 2024).

  19. Description of Our Executive Compensation Program

    | | Element | Time Horizon | FY2024 Performance Measure | | Fixed | Base Salary | Short (1 year) | Individual Performance | | At Risk | Annual Incentive Bonus | Short (1 year) | 70% Quantitative Component: Pre-tax Income (PTI Metric) 30% Qualitative Component: Individual/Company Performance | | | PRSUs | Medium (3-4 years) | Units Delivered (Units Metric) (1/3) Gross Margin (Margin Metric) (1/3) Return on Average Equity (1/3) | | | RSUs | Medium (4 years) | Stock Price Performance | | Fixed | Retirement Benefits (SERP) | Long (payable following retirement) | Individual Performance |

  20. Fiscal 2024 Performance Metrics

    Fiscal 2024 Performance Metrics As described above, approximately 65% of our CEO's annual targeted TDC in fiscal 2024 was in the form of performance-based awards. Performance was measured under these awards based on the metrics described in the table below.

  21. Fiscal 2024 Performance Metrics

    | Metric | | Weight | Performance Period | Vesting / Hold Period | | Annual Incentive Bonus | | | | | | PTI Metric | The PTI metric is used because it captures the overall profitability of the enterprise before taxes and includes the results of our joint ventures and non-home building activities, as well as SG&A expense. Certain adjustments are made to GAAP pre-tax income for compensation purposes (see page 38). | 100% | 1 Year | 1 Year | | Long Term Incentive Award | | | | | | Units Metric | Units delivered measures the number of homes that are delivered to home buyers during the fiscal year. It is a measure of our ability to efficiently convert our backlog, execute on our spec strategy and generate revenue in our core business. | 1/3 | 1 Year | 4 Years | | Margin Metric | The home building margin metric measures the gross margin of our home building operations and reflects our ability to profitably and efficiently execute on this core business. Certain adjustments are made to GAAP gross margin for compensation purposes (see page 41). | 1/3 | 1 Year | 4 Years | | ROE Metric | The ROE metric measures our return on average equity over three consecutive fiscal years. It is a measure of the return that our shareholders receive on investment. Certain adjustments are made to ROE for compensation purposes (see page 41). | 1/3 | 3 Years | 3 Years |

  22. Compensation Philosophy and Objectives

    Compensation Philosophy and Objectives We face competition for talent from many other home builders in the markets in which we operate. It is vital to our success and long-term viability that our business continues to be managed by highly experienced, focused, and capable executives who possess the experience and vision to anticipate and respond to market developments. The Compensation Committee’s primary objectives in setting compensation for our NEOs are: •Incentivize executives to manage risks appropriately while improving our financial results, performance, and condition over both the short-term and the long-term. The Compensation Committee, by seeking a balance of short- and long-term compensation, seeks to motivate and reward our NEOs for decisions made today that may not produce immediate or short-term results, but are intended to have a positive long-term effect. •Align executive and stockholder interests. The Compensation Committee believes that the use of equity compensation, including the use of PRSUs as a key component of executive compensation, is a valuable tool for aligning the interests of our NEOs with those of our stockholders and to reward actions that demonstrate long-term vision. •Set compensation levels that are competitive to attract, motivate, and reward the highest quality individuals to contribute to our goals and overall financial success. By keeping compensation competitive during times of growth as well as contraction, the Compensation Committee attempts to retain executives through all phases of the home building market cycle. •Retain executives and encourage continued service. It is important that we concentrate on retaining and developing the capabilities of our current leaders and emerging leaders to ensure that we continue to have an appropriate depth of executive talent. •Use pay practices that support good governance. ◦We employ our NEOs at will and do not enter into individualized employment agreements. ◦We regularly engage with stockholders to receive input on executive compensation matters. ◦We do not provide excise tax gross-ups. ◦We do not provide guaranteed incentive payments. ◦Perquisites are limited, and we do not provide tax gross ups on perquisites. ◦Incentive compensation, including stock-based compensation, is subject to a clawback policy that complies with SEC and NYSE rules. ◦Incentive awards are subject to individual caps. ◦Unvested equity awards include double-trigger vesting protections. ◦Our Omnibus Incentive Plan prohibits option repricing without stockholder approval. ◦We prohibit NEOs from hedging and pledging Company shares. ◦We have stock ownership guidelines under which our NEOs are expected to acquire and hold a meaningful level of stock ownership in the Company. ◦We have an independent Compensation Committee consultant.

  23. Incentive Awards

    Incentive Awards

  24. Fiscal 2024 Performance Targets

    Fiscal 2024 Performance Targets In setting performance metric target levels for both the annual incentive bonus and for long-term incentive compensation awards, at the beginning of each fiscal year, the Compensation Committee considers the Company's historical performance, management and analyst consensus forecasts, macroeconomic and industry conditions, and the level of performance required by our NEOs to deliver against target levels. The Compensation Committee focuses on setting targets that would drive an appropriate pay-for-performance outcome in light of the business and operating environment at the time, which is especially important for an economically sensitive industry like home building, with the goal of appropriately aligning payout opportunities with performance expectations. At the outset of fiscal 2024 when the Compensation Committee approved the performance metrics applicable to short-term and long-term incentive awards for the fiscal year, the Company was experiencing solid demand for its homes, despite mortgage rates that remained elevated and well above the 3% to 4% range that had predominated for much of the preceding decade. The overall economy and the home building industry were also dealing with the continuing impacts of high inflation. In addition, the Company's fiscal 2023 year-end backlog of 6,578 homes and $6.95 billion was down 19% in units and 22% in dollars compared to the prior year end, which would require successful execution of the Company's spec strategy to meet forecast results. Within this economic environment, and in light of the importance of efficiently converting the Company's year-end backlog and execution of the spec strategy, the Compensation Committee approved targets that were aligned with management's guidance for fiscal year 2024 results provided at the time, including one year deliveries of 10,100 units, an adjusted gross margin of 27.9% and adjusted pre-tax income of $1.72 billion. The Compensation Committee considered these targets challenging yet achievable, with management being rewarded with target payouts for achieving results aligned with guidance.

  25. Fiscal 2024 Annual Incentive Bonus

    Fiscal 2024 Annual Incentive Bonus Based on the Compensation Committee's review of the fiscal year 2023 performance of each executive, including each NEO's contributions to the successful execution of the Company's strategies in fiscal 2023, and a review of each executive's annual incentive bonus opportunity relative to peers, the Compensation Committee approved increases for fiscal 2024 in the total target bonus opportunities for each NEO. The total target bonus opportunity for fiscal 2024 was $5,700,000 for Mr. Yearley, $2,400,000 for Mr. Connor, and $2,730,000 for Mr. Parahus. Payout of 70% of the bonus was targeted to achievement of the formulaic PTI Metric target described below. The remaining 30% of the bonus was to be determined based on the Compensation Committee's qualitative assessment of individual and Company performance for fiscal 2024. As detailed below, based on the formulaic results and qualitative assessment, the total annual bonuses paid to Messrs. Yearley, Connor and Parahus for fiscal 2024 were approximately 140% of their respective targets. Formulaic Bonus Component. The Compensation Committee met in early fiscal 2025 and certified that the PTI Metric was achieved at 117.5% of target for fiscal 2024 performance, as set forth in the table below. The Compensation Committee, in agreement with management, reduced actual results achieved with respect to the PTI Metric by approximately $150 million in recognition of the unbudgeted pre-tax impact that the Company's sale of a parcel of land to a data center operator had in the second quarter of fiscal 2024. Although not technically required by the exclusions described below, both management and the Compensation Committee agreed that such an adjustment was in the spirit of the approved exclusion categories and that making the adjustment would result in more equitable payouts.

  26. Fiscal 2024 Annual Incentive Bonus

    | | 2024 Annual Incentive Bonus Formulaic Bonus Component (in '000s) | | | | | | Minimum (80%) | Target (100%) | Maximum (120%) | Actual | | PTI Metric(1): | $1,373,976,000 | $1,717,470,000 | $2,060,964,000 | $2,018,108,000 |

  27. Fiscal 2024 Annual Incentive Bonus

    (1) The PTI Metric is calculated in accordance with U.S. generally accepted accounting principles, subject to the exclusions listed below to the extent not budgeted, and disclosed in a press release or conference call. These exclusion categories were approved by the Compensation Committee on the date the annual incentive bonus award was approved by the Compensation Committee: •Restructuring and severance costs pursuant to a plan approved by the Board, CEO and/or President and Chief Operating Officer; •Gains or losses from litigation or claims, natural disasters, or terrorism; •Effect of changes in laws, regulations, or accounting principles; •The gain or loss from the sale or discontinuance of a business segment, division, or unit and the corresponding budgeted, unrecognized pre-tax income and margin for this business segment, division, or unit. The following exclusion categories, to the extent not budgeted, were also approved by the Compensation Committee on the approval date: •Write-down or impairment of assets or joint venture investments; •Stock-based compensation overages or underages; •Expense of an acquisition; and •Gains or losses from derivative transactions or the early retirement of debt. Based on the performance level achieved of 117.5% of the PTI Metric target, the formulaic component of the annual incentive bonus for fiscal 2024 for each NEO was earned at 143.8% of targeted award amounts, as follows:

  28. Fiscal 2024 Annual Incentive Bonus

    | | Target Formulaic Bonus Component Amount | Actual Formulaic Bonus Component Award | | Douglas C. Yearley, Jr. | $3,990,000 | $5,736,096 | | Martin P. Connor | $1,680,000 | $2,415,198 | | Robert Parahus | $1,911,000 | $2,747,288 |

  29. Fiscal 2024 Annual Incentive Bonus

    Qualitative Assessment Bonus Component. In its qualitative evaluation of performance for fiscal 2024, the Compensation Committee considered the performance of each NEO during a year in which we delivered the highest home sales revenue, unit deliveries, net income and earnings per share in the Company's history. In assessing performance, the Compensation Committee considered the significant financial accomplishments of the Company during the year. It also considered the key role that each NEO played in shaping and executing upon the strategies described above under "Toll Brothers Strategy and Fiscal 2024 Performance," which included the success of the Company's strategic pivot to increase its supply of spec homes and the substantial progress the Company has made in becoming more capital efficient in its land acquisition process, sustaining attractive gross margins and low SG&A expense, as a percentage of home sales revenue, increasing community count by 10%, and continued improvement in customer and employee satisfaction levels as evidenced through various survey results. The Compensation Committee also considered the level of performance bonuses achieved at other levels of the organization. Accordingly, the Compensation Committee used its judgment to approve the payout of the qualitative portion of the annual incentive award at 130% of target for each NEO.

  30. Fiscal 2024 Annual Incentive Bonus

    | | Target Qualitative Assessment Bonus Component Amount | Actual Qualitative Assessment Bonus Component Award | | Douglas C. Yearley, Jr. | $1,710,000 | $2,223,000 | | Martin P. Connor | $720,000 | $936,000 | | Robert Parahus | $819,000 | $1,064,700 |

  31. Total Fiscal 2024 Cash Compensation

    | | Base Salary (1) | | Annual Incentive Bonus | | Total Cash Compensation | | | Douglas C. Yearley, Jr. | | 1,200,000 | | 7,959,096 | | 9,159,096 | | Martin P. Connor | | 1,025,000 | | 3,351,198 | | 4,376,198 | | Robert Parahus | | 1,000,000 | | 3,811,988 | | 4,811,988 |

  32. Fiscal 2024 Long-Term Incentive Compensation

    Fiscal 2024 Long-Term Incentive Compensation The design and structure of our long-term incentive compensation program is reviewed annually to ensure that it remains appropriate to drive the operational and strategic actions deemed by the Compensation Committee to be key to the long-term success of the Company. In fiscal 2024, the Compensation Committee awarded equity compensation to the NEOs in the form of RSUs and PRSUs based on a fixed-dollar approach. For awards granted in fiscal 2024 to each NEO, the mix of equity awards was fixed at 50% RSUs and 50% PRSUs. Based on the Compensation Committee's review of the fiscal year 2023 performance of each executive, including each NEO's contributions to the successful execution of the Company's strategies in fiscal 2023, and a review of each executive's equity grants relative to peers, the Compensation Committee approved increases for fiscal 2024 in the targeted grant date value of equity awards (disregarding the impact of an illiquidity discount applied to the awards for accounting purposes) for each NEO. As it has done in the past, for fiscal 2024, the Compensation Committee continued to include a one-year performance period for awards of Ops PRSUs, although the awards generally vest on a pro-rata basis over four years and shares underlying the award are delivered at the end of such period, subject to continued service. For retirement-eligible individuals, including each NEO, awards immediately vest upon a qualified retirement, but remain subject to delivery on or about the fourth anniversary of the grant date. The Compensation Committee believes that a one-year performance period is appropriate for these awards due to the highly cyclical nature of the residential home building industry and the challenges inherent in making long-term forecasts. A one-year performance period also provides executives a clear line of sight linking pay and performance. ROE PRSUs generally vest and shares underlying such awards are delivered at the end of the three-year performance period. For retirement-eligible individuals, such awards would vest, but remain subject to the applicable performance metric and be delivered at the end of the performance period. In fiscal 2024, all equity awards for our NEOs, and substantially all those for other employees and our non-executive directors, were granted on December 20, 2023. By practice, the grant date selected for our annual equity award is in the last 15 days of December, which follows the release of our fourth quarter and full year earnings (generally in the first week of December). The specific date that is chosen is a date on which we believe it is unlikely that economic data will be released that will significantly impact the home building industry.

  33. Fiscal 2024 Performance Based RSUs

    Fiscal 2024 Performance Based RSUs In fiscal 2024, the Compensation Committee approved the grant of PRSUs to each NEO consisting of Ops PRSUs (2/3 of the award) and ROE PRSUs (1/3 of the award).

  34. Fiscal 2024 Ops PRSU Performance Metrics

    Fiscal 2024 Ops PRSU Performance Metrics Ops PRSUs are designed to align NEO compensation with the achievement of pre-established growth and profitability goals and accomplish this through the following operational performance metrics. •Units Metric, which measures the number of homes that are delivered to home buyers during the fiscal year and is a measure of our ability to efficiently convert our backlog, execute on our spec strategy and generate revenue in our core business; and •Margin Metric, which measures the adjusted gross margin of our home building operations and reflects our ability to profitably and efficiently execute on this core business. As noted above, when considering appropriate performance metric targets at the beginning of fiscal 2024, the Compensation Committee considered a variety of factors, including forecasted results and historical performance, economic and industry conditions, and the level of performance required by our NEOs to deliver against target levels, with the goal of appropriately aligning payout opportunities with performance expectations.

  35. Fiscal 2024 Ops PRSU Performance Metrics

    | | Ops PRSU Metric(1) Performance Compared to Target | | | | | | | Threshold | Target | Maximum | Actual | % of Target | | Units Metric | 8,080 | 10,100 | 12,120 | 10,813 | 107.1% | | Margin Metric (2) | 22.3% | 27.9% | 33.5% | 28.4% | 101.7% |

  36. Fiscal 2024 Ops PRSU Performance Metrics

    (1) Each performance metric had a threshold, target and maximum level that, if achieved, would earn 75%, 100% and 150%, respectively, of the Ops PRSUs allocated to that metric. To the extent that actual performance results fell between these levels, the Ops PRSUs earned would be determined by linear interpolation between those levels. If the minimum threshold performance level of 80% of target performance was not achieved for any individual metric, none of the Ops PRSUs would have been earned for that metric. (2) The Margin Metric is calculated in accordance with U.S. generally accepted accounting principles (revenue and cost of home sales revenues), subject to certain exclusions. The exclusions consist of the items listed below to the extent not budgeted, disclosed in a press release or conference call and to the extent included in cost of home sales revenues. These exclusion categories were approved by the Compensation Committee on the grant date of the award: •Restructuring and severance costs pursuant to a plan approved by the Board, CEO and/or President and Chief Operating Officer; •Gains or losses from litigation or claims, natural disasters, or terrorism; •Effect of changes in laws, regulations, or accounting principles; and •The gain or loss from the sale or discontinuance of a business segment, division, or unit and the corresponding budgeted, unrecognized pre-tax income and margin for this business segment, division, or unit. The following exclusion categories, to the extent not budgeted, were also approved by the Compensation Committee on the grant date: •Write-down or impairment of assets or joint venture investments; •Stock-based compensation overages or underages; •Expense of an acquisition; •Gains or losses from derivative transactions or the early retirement of debt; and •Interest expense in home sales cost of revenues. Based on fiscal 2024 performance, the Compensation Committee certified that the blended average percentage of target shares earned for these metrics was 111.0% of target. One-fourth of the earned 2024 Ops PRSUs vested on December 20, 2024, the first anniversary of the grant date, and the remaining three-fourths are subject to service-based vesting over the next three anniversaries of the grant date. In general, no shares will be delivered until the fourth anniversary of the grant date.

  37. ROE PRSUs

    ROE PRSUs ROE PRSUs are calculated by dividing the Company's average GAAP net income over a three-year period by the Company's average GAAP stockholder's equity over the same timeframe, with vesting and settlement of the awards occurring upon the conclusion of the three-year performance period. For ROE PRSUs granted in December 2022 and thereafter, GAAP net income and stockholder's equity are adjusted to add back inventory impairments and write-downs. In all cases, following the conclusion of the performance period, the number of ROE PRSUs earned is determined by comparing actual results to targeted performance. If targeted performance is achieved, 100% of shares granted are earned. If the minimum threshold performance level of 80% of targeted performance is achieved, 75% of the shares granted would be earned (and no ROE PRSUs are earned below the 80% threshold level). If 120% or more of targeted performance is achieved, a maximum of 150% of shares granted may be earned. To the extent that actual performance results fall between these levels, ROE PRSUs are earned based on a linear interpolation between those levels.

  38. Terms Applicable to All PRSUs

    Terms Applicable to All PRSUs All PRSUs earn dividend equivalents at the same time and in the same amount as dividends paid on the Company’s common stock; dividend equivalents are subject to the same vesting, settlement, and other terms and conditions as the PRSUs to which the dividend equivalents relate. Shares subject to PRSUs held by an NEO fully vest and all restrictions immediately lapse upon an NEO’s termination of employment due to death or disability. In addition, PRSUs will vest in connection with a change of control of the Company only if there is an actual or constructive termination of the executive (i.e., a "double trigger") within the time periods set forth in the applicable award agreement. In the event of an NEO's qualifying retirement, which is defined as a voluntary resignation after achieving either (i) age 58 and ten years of service or (ii) age 62 and five years of service, PRSUs remain subject to their performance conditions and continue to vest and are delivered in accordance with the normal schedule. All vested and unvested PRSUs are subject to forfeiture in the event that, after the NEO retires or otherwise leaves the Company, the NEO breaches certain post-termination restrictive covenants.

  39. Terms Applicable to Service-Based RSUs

    Terms Applicable to Service-Based RSUs All RSUs earn dividend equivalents at the same time and in the same amount as dividends paid on the Company’s common stock; dividend equivalents are subject to the same vesting, settlement, and other terms and conditions as the RSUs to which the dividend equivalents relate. RSUs granted to our NEOs generally vest in equal annual installments over a four-year period beginning on or about the first anniversary of the grant date. Although the awards vest over a four-year period, shares underlying vested RSUs generally are not delivered until the fourth anniversary of the grant date. In the event of an executive's qualifying retirement, RSUs continue to vest and are delivered in accordance with the normal schedule. Upon the death or disability of an executive, all RSUs are immediately vested and delivered. RSUs will vest in connection with a change of control of the Company only if there is an actual or constructive termination of the executive (i.e., a "double trigger") within the time periods set forth in the applicable award agreement. All vested and unvested RSUs granted to NEOs are subject to forfeiture in the event that, after the NEO retires or otherwise leaves the Company, the NEO breaches certain post-termination restrictive covenants.

  40. Use of Independent Compensation Consultant

    Use of Independent Compensation Consultant The Compensation Committee engaged Compensation Advisory Partners LLC (“CAP”) to serve as its independent compensation consultant for fiscal 2024. CAP received instructions from, and reported to, the Compensation Committee on an independent basis. The Compensation Committee requested CAP’s advice on a variety of matters, such as the amount and form of executive compensation, compensation strategy, market comparisons, pay and performance alignment versus industry peers, compensation levels for peers, executive pay trends, compensation best practices, compensation-related regulatory developments, and potential compensation plan designs and modifications. The Compensation Committee consulted with CAP, both with and without management, on several occasions during fiscal 2024, and also in early fiscal 2025 with respect to compensation decisions for fiscal 2024 performance. During fiscal 2024, CAP did not provide any services to the Company or its affiliates other than advising on executive compensation, as approved by the Compensation Committee. The Compensation Committee conducts a formal evaluation of the independence of CAP annually in the first quarter of the fiscal year. Based on this review, the Compensation Committee did not identify any conflict of interest raised by the work CAP performed in fiscal 2024. When conducting this evaluation, the Compensation Committee took into consideration the factors set forth in Rule 10C-1 under the Exchange Act and the NYSE’s listing standards.

  41. Market Comparisons

    Market Comparisons Although the Compensation Committee does not believe that it is appropriate to establish compensation levels based solely on market comparisons or industry practices, it believes that information regarding pay practices at other companies is useful in three respects. First, marketplace information is one of many factors considered in assessing the reasonableness of compensation. Second, our compensation practices must be generally competitive for executive talent in the home building industry and in the overall market. Third, marketplace information reflects emerging and changing components and forms of compensation. While the Compensation Committee considers peer compensation levels and practices when making its compensation decisions, it does not target compensation at any particular point within a range established by a comparison of the compensation levels of our peer companies. For fiscal 2024, the Compensation Committee did not make any changes to the peer group, which was previously determined by identifying publicly-traded home builders with revenues above $3.0 billion. However, for fiscal 2025 and beyond, the Compensation Committee has removed M.D.C. Holdings, Inc. from the peer group as its equity is no longer publicly listed following its acquisition in April 2024. The Compensation Committee determined that it would add M/I Homes, Inc. (NYSE:MHO) going forward to replace M.D.C. Holdings, Inc. M/I Homes, Inc. is one of the nation's leading builders of single family homes with over $4.0 billion of revenue in each of its past two fiscal years. For fiscal 2024 the Company's peer group consisted of the following companies:

  42. Market Comparisons

    | FY '24 Peer Group | | | D. R. Horton, Inc. | NVR, Inc. | | KB Home | PulteGroup, Inc. | | Lennar Corporation | Taylor Morrison Home Corporation | | M. D. C. Holdings, Inc. | Tri Pointe Group, Inc. | | Meritage Homes Corporation | |

  43. Executive Severance Plan

    Executive Severance Plan The Company maintains the Toll Brothers, Inc. Executive Severance Plan (the "Severance Plan"), which provides certain cash severance benefits to eligible employees of the Company who experience a “covered termination” of employment, both in the context of a “change of control” transaction and otherwise. A “covered termination” under the Severance Plan means a participant’s employment is terminated by the Company without “cause” or the participant resigns with “good reason,” in each case as described below, and subject to the limitations described therein. Under the terms of the Severance Plan, “Cause” includes a participant’s (i) substantial failure or refusal to perform the duties or responsibilities of his job, (ii) material violation of any fiduciary duty, (iii) conviction of (including a plea of nolo contendere) a felony, (iv) conviction of (including a plea of nolo contendere) a misdemeanor which involves dishonesty, fraud or morally repugnant behavior, (v) dishonesty, (vi) theft, (vii) material violation of Company rules or policy, or (viii) other egregious or morally repugnant conduct that has, or could have, a serious and detrimental impact on the Company. “Good Reason” includes (i) a material diminution in the participant’s authorities, duties, job responsibilities, status or reporting relationships, (ii) (A) a reduction in base salary or target bonus opportunity, (B) failure to pay base salary or the applicable bonus when due, or (C) for the two-year period following a change of control, a reduction in equity compensation opportunity, (iii) the relocation of the principal place of employment by more than fifty miles, (iv) the material breach of an existing agreement between the participant and the Company, or (v) the failure of any purchaser to assume any agreement between the participant and the Company. If one of our NEOs experiences a “covered termination” not in connection with a change of control of the Company (as defined in the Severance Plan), the Company will provide certain severance payments and benefits, subject to the NEO’s continued compliance with the Non-Interference Agreement, as described below, and the execution and non-revocation of a release of claims. These payments and benefits are as follows: (i) an amount equal to 1.5 times (2.0 times for the CEO) the sum of the participant’s annual base salary and target annual incentive bonus, (ii) a prorated annual incentive bonus for the year of termination based on actual performance, (iii) an amount equal to 18 months (24 months for the CEO) of the NEO’s monthly COBRA premium for continued health insurance coverage, and (iv) reasonable outplacement services for a period corresponding to the time period that is the lesser of (x) 18 months (24 months for the CEO) and (y) the period beginning on the date of the covered termination and ending on the two-year anniversary of the covered termination. If a participant in the Severance Plan, including our NEOs, experiences a “covered termination” within two years after the occurrence of a change of control of the Company or within six months prior to a change of control of the Company, and such termination is reasonably demonstrated to be in connection with or in anticipation of a change of control or is at the request of a third party who has reasonably calculated or intended to effect a change of control of the Company, the Company will provide the participant with certain severance payments and benefits, subject to his or her continued compliance with the Non-Interference Agreement and the execution and non-revocation of a release of claims. For our NEOs, these payments and benefits are as follows: (i) an amount equal to 2.0 times (2.5 times for the CEO) the sum of the participant’s annual base salary and target annual incentive bonus, (ii) a prorated target annual incentive bonus for the year of termination, (iii) an amount equal to 24 months (30 months for the CEO) of the participant’s monthly COBRA premium for continued health insurance coverage, and (iv) reasonable outplacement services for a period equal to the lesser of (x) 24 months (30 months for the CEO) or (y) the period beginning on the date of the covered termination and ending on the two-year anniversary of the covered termination. Participants who receive severance benefits under the Severance Plan will be bound by certain restrictive covenants in favor of the Company, including the confidentiality, non-disparagement, non-competition and non-solicitation covenants included in the Non-Interference Agreement attached to the Severance Plan. Pursuant to the Non-Interference Agreement (which each NEO has executed), each executive officer of the Company is subject to non-compete and non-solicitation periods of one year following the executive officer's termination of employment for any reason. The Severance Plan also provides that if payments and benefits provided to the participant would constitute an “excess parachute payment” for purposes of Section 280G of the tax code, the participant will either have his or her payments and benefits reduced to the highest amount that could be paid without triggering Section 280G or receive the after-tax amount of his or her payment and benefits, whichever results in the greater after-tax benefit, taking into account the excise tax imposed under Section 4999 of the tax code and any applicable federal, state and local taxes. The severance benefits available to our NEOs under the Severance Plan as of the end of fiscal 2024 are set forth in the tables beginning on page 56 under “Potential Payments upon Termination or Change of Control.”

  44. Employment Agreements, Severance Payments and Change of Control Provisions

    Employment Agreements, Severance Payments and Change of Control Provisions We employ our NEOs at will and do not have individualized employment agreements. As described above, we maintain a Severance Plan that provides for cash severance payments and other benefits to certain eligible employees of the Company, including our NEOs, who experience a termination of employment under certain conditions. For a description of the severance benefits available under the Severance Plan to our NEOs, see "Benefits and Perquisites - Executive Severance Plan" on page 45 and "Potential Payments upon Termination or Change of Control" beginning on page 56. In addition, our equity award agreements and the SERP include provisions relating to the occurrence of a change of control of the Company. Under our Omnibus Incentive Plan, unvested awards will vest in connection with a change of control only if there is an actual or constructive termination of the executive (i.e., a "double trigger") within the time periods set forth in the applicable award agreement. Under the SERP, if there is a change of control of the Company (as defined under the SERP), all participants become fully vested in their SERP benefits and become eligible for a lump sum payout. See “Potential Payments upon Termination or Change of Control” beginning on page 56.

  45. Tax and Accounting Implications

    Tax and Accounting Implications When making decisions about executive compensation, the Compensation Committee considers both tax and accounting implications of the various elements of our compensation program, including the impact on our financial results and the dilutive impact to stockholders of various forms of compensation. For equity compensation grants, ASC 718 requires us to recognize compensation expense for all share-based payment arrangements based upon the grant date fair value of those awards and period of vesting. The aggregate expense estimated to be recognized over the period of vesting is included in the Summary Compensation Table contained in this proxy statement as part of the NEOs’ total compensation in the fiscal year of the grant. This number, while required by the SEC rules and important for understanding the impact of granting equity on our financial statements, does not represent the value ultimately realized by the NEO.

  46. EXECUTIVE COMPENSATION TABLES Summary Compensation Table

    | Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | | Douglas C. Yearley, Jr. | 2024 | 1,200,000 | 6,818,804 | — | 7,959,096 | 447,786 | 39,471 | 16,465,157 | | President and Chief Executive Officer | 2023 | 1,204,716 | 5,977,623 | — | 7,800,000 | 132,041 | 38,516 | 15,152,896 | | | 2022 | 1,190,384 | 5,951,774 | — | 4,029,100 | 9,227 | 59,724 | 11,240,209 | | Martin P. Connor | 2024 | 1,025,000 | 1,776,917 | — | 3,351,198 | 346,086 | 33,278 | 6,532,479 | | Chief Financial Officer | 2023 | 1,147,212 | 1,415,687 | — | 2,362,500 | 7,330 | 31,538 | 4,964,267 | | | 2022 | 1,020,192 | 1,372,414 | — | 1,358,650 | 7,201 | 31,304 | 3,789,761 | | Robert Parahus | 2024 | 1,000,000 | 1,708,593 | — | 3,811,988 | 355,232 | 32,419 | 6,908,232 | | President and Chief Operating Officer | 2023 | 1,003,846 | 1,179,799 | — | 3,150,000 | 21,260 | 30,555 | 5,385,460 | | | 2022 | 987,019 | 793,570 | — | 1,874,000 | 20,383 | 30,809 | 3,705,781 |

  47. Grants of Plan-Based Awards During Fiscal 2024

    Grants of Plan-Based Awards During Fiscal 2024

  48. Grants of Plan-Based Awards During Fiscal 2024

    | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exer- cise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | Name/ Award Type | Grant Date | Approval Date(1) | Thres- hold ($) | Target ($)(2) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Douglas C. Yearley, Jr. | | | (5) | 5,700,000 | 9,000,000 | | | | | | | | | Ops PRSUs | 12/20/2023 | 12/18/2023 | | | | 20,809 | 27,745 | 41,618 | | | | 2,239,299 | | ROE PRSUs | 12/20/2023 | 12/18/2023 | | | | 10,404 | 13,872 | 20,808 | | | | 1,220,597 | | RSUs | 12/20/2023 | 12/18/2023 | | | | | | | 41,617 | | | 3,358,908 | | Martin P. Connor | | | (5) | 2,400,000 | 9,000,000 | | | | | | | | | Ops PRSUs | 12/20/2023 | 12/18/2023 | | | | 5,423 | 7,230 | 10,845 | | | | 583,533 | | ROE PRSUs | 12/20/2023 | 12/18/2023 | | | | 2,711 | 3,615 | 5,423 | | | | 318,084 | | RSUs | 12/20/2023 | 12/18/2023 | | | | | | | 10,845 | | | 875,300 | | Robert Parahus | | | (5) | 2,730,000 | 9,000,000 | | | | | | | | | Ops PRSUs | 12/20/2023 | 12/18/2023 | | | | 5,214 | 6,952 | 10,428 | | | | 561,096 | | ROE PRSUs | 12/20/2023 | 12/18/2023 | | | | 2,607 | 3,476 | 5,214 | | | | 305,853 | | RSUs | 12/20/2023 | 12/18/2023 | | | | | | | 10,428 | | | 841,644 |

  49. Grants of Plan-Based Awards During Fiscal 2024

    (1)The Compensation Committee took final action on December 18, 2023 with respect to equity award grants for our NEOs for fiscal 2024. All grants of equity compensation under our annual long-term incentive compensation program were made on December 20, 2023. Our equity award compensation practices are described under “Fiscal 2024 Long-Term Incentive Compensation” on page 40. (2)The annual incentive bonuses for fiscal 2024 were earned based on actual performance relative to target bonus amounts established by the Compensation Committee on December 18, 2023 related to pre-tax income (70% of bonus amount) and its qualitative assessment of individual and Company performance (30% of bonus amount), as more fully described under “Fiscal 2024 Annual Incentive Bonus” on page 38. (3)Reflects PRSUs the Compensation Committee awarded to our NEOs under the Omnibus Incentive Plan. PRSUs earn dividend equivalents at the same time and in the same amount as dividends paid on the Company’s common stock; dividend equivalents are subject to the same vesting, settlement, and other terms and conditions as the PRSUs to which the dividend equivalents relate. See “Fiscal 2024 Long-Term Incentive Compensation—Fiscal 2024 Performance-Based RSUs” on page 40 for further information. (4)Amount represents the aggregate grant date fair value of PRSUs and RSUs granted in fiscal 2024, calculated in accordance with ASC 718 utilizing the assumptions discussed in Note 10 in the Notes to Consolidated Financial Statements in the Company's Annual Report on Form 10-K. The calculation of these amounts disregards the estimate of forfeitures related to time-based vesting conditions and reflects an illiquidity discount for post-vesting transfer restrictions applicable to retirement eligible employees. With respect to PRSUs, the estimate of the grant date fair value is determined in accordance with ASC 718 assuming the vesting of 100% of the PRSUs awarded. (5)See "Fiscal 2024 Annual Incentive Bonus" on page 38. The formulaic portion of the annual incentive award had a threshold, target and maximum level that, if achieved, would earn 75%, 100% and 150% of target, respectively. To the extent that actual performance results fell between these levels, the amount earned would have been determined by linear interpolation between those levels. If the minimum threshold performance level of 80% of target was not achieved, no amount would have been earned with respect to the formulaic portion of the award.

  50. Outstanding Equity Awards at October 31, 2024

    Outstanding Equity Awards at October 31, 2024

  51. Outstanding Equity Awards at October 31, 2024

    | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Douglas C. Yearley, Jr. | 12/20/2016 | 150,087 | | 31.61 | 12/20/2026 | | | | | | | 12/18/2017 | 80,351 | | 47.84 | 12/18/2027 | | | | | | | 12/20/2018 | 130,197 | | 32.42 | 12/20/2028 | | | | | | | 12/21/2020 | | | | | 13,130(3) | 1,922,757 | | | | | 12/21/2020 | | | | | 19,014(4) | 2,784,410 | | | | | 12/20/2021 | | | | | 16,943(5) | 2,481,133 | | | | | 12/20/2021 | | | | | 27,923(6) | 4,089,044 | | | | | 12/19/2022 | | | | | 46,969(7) | 6,878,140 | 37,915(11) | 5,552,273 | | | 12/19/2022 | | | | | 56,875(8) | 8,328,775 | | | | | 12/20/2023 | | | | | 27,745(9) | 4,062,978 | 20,808(12) | 3,047,124 | | | 12/20/2023 | | | | | 41,617(10) | 6,094,393 | | | | Martin P. Connor | 12/18/2017 | 20,055 | | 47.84 | 12/18/2027 | | | | | | | 12/20/2018 | 33,350 | | 32.42 | 12/20/2028 | | | | | | | 12/21/2020 | | | | | 3,123(3) | 457,332 | | | | | 12/21/2020 | | | | | 4,523(4) | 662,348 | | | | | 12/20/2021 | | | | | 3,896(5) | 570,530 | | | | | 12/20/2021 | | | | | 6,422(6) | 940,438 | | | | | 12/19/2022 | | | | | 11,123(7) | 1,628,852 | 8,979(11) | 1,314,885 | | | 12/19/2022 | | | | | 13,470(8) | 1,972,547 | | | | | 12/20/2023 | | | | | 7,230(9) | 1,058,761 | 5,422(12) | 793,998 | | | 12/20/2023 | | | | | 10,845(10) | 1,588,142 | | | | Robert Parahus | 12/21/2020 | | | | | 1,219(3) | 178,510 | | | | | 12/21/2020 | | | | | 1,766(4) | 258,613 | | | | | 12/20/2021 | | | | | 2,259(5) | 330,808 | | | | | 12/20/2021 | | | | | 3,723(6) | 545,196 | | | | | 12/19/2022 | | | | | 9,270(7) | 1,357,499 | 7,483(11) | 1,095,811 | | | 12/19/2022 | | | | | 11,226(8) | 1,643,935 | | | | | 12/20/2023 | | | | | 6,952(9) | 1,018,051 | 5,214(12) | 763,538 | | | 12/20/2023 | | | | | 10,428(10) | 1,527,076 | | |

  52. Outstanding Equity Awards at October 31, 2024

    Generally, unvested equity awards are canceled upon termination of employment with the Company, and the right to exercise vested stock options terminates within a specified period of time after termination of employment; however, under specified circumstances, such as retirement, death, disability, or a change of control, special vesting rules apply, as described below under "Potential Payments upon Termination or Change of Control." (1)Stock options that are reflected as fully exercisable vested in equal installments on the first four anniversaries of the grant date. (2)Market value was calculated based on the closing price of the Company's common stock on the NYSE on October 31, 2024 of $146.44 per share. (3)100% of these earned Ops PRSUs (performance has been determined) vested on December 21, 2024. (4)100% of these service-based RSUs vested on December 1, 2024. (5)50% of these earned Ops PRSUs (performance has been determined) vested or are scheduled to vest on each of December 20, 2024, and 2025. (6)50% of these service-based RSUs vested or are scheduled to vest on each of December 1, 2024, and 2025. (7)33.33% of these earned Ops PRSUs (performance has been determined) vested or are scheduled to vest on each of December 19, 2024, 2025, and 2026. (8)33.33% of these service-based RSUs vested or are scheduled to vest on each of December 1, 2024, 2025, and 2026. (9)25% of these earned Ops PRSUs (performance has been determined) vested or are scheduled to vest on each of December 20, 2024, 2025, 2026, and 2027. (10)25% of these service-based RSUs vested or are scheduled to vest on each of December 1, 2024, 2025, 2026, and 2027. (11)100% of these unearned ROE PRSUs (performance has not been determined) are scheduled to vest on October 31, 2025. Based on performance through October 31, 2024, amounts are shown assuming the maximum number of shares (150% of target) are delivered. (12)100% of these unearned ROE PRSUs (performance has not been determined) are scheduled to vest on October 31, 2026. Based on performance through October 31, 2024, amounts are shown assuming the maximum number of shares (150% of target) are delivered.

  53. Option Exercises and Stock Vested During Fiscal 2024

    Option Exercises and Stock Vested During Fiscal 2024

  54. Option Exercises and Stock Vested During Fiscal 2024

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | | Douglas C. Yearley, Jr. | 177,584 | 17,277,458 | 140,346 | 14,256,037 | | Martin P. Connor | 37,673 | 4,306,456 | 33,619 | 3,406,890 | | Robert Parahus | 13,250 | 774,138 | 18,292 | 1,859,967 |

  55. Option Exercises and Stock Vested During Fiscal 2024

    (1)“Value Realized on Exercise” equals the difference between the closing price of the Company's common stock on the NYSE on the various dates of exercise and the exercise price, multiplied by the number of shares of common stock acquired upon exercise of the stock options. (2)With the exception of ROE PRSUs, all RSUs, whether or not performance-based, generally vest in equal annual installments on or about the first four anniversaries of the grant date, with delivery of the shares underlying such RSUs deferred until the fourth anniversary (subject to a potential delay in delivery if required to comply with Section 409A of the tax code). Accordingly, the "Number of Shares Acquired on Vesting" for Messrs. Yearley, Connor and Parahus includes (a) the portion of Ops PRSUs granted in fiscal 2020 that vested and were delivered on December 18, 2023, (b) the portion of Ops PRSUs granted in fiscal 2021 that vested on December 21, 2023 (which were delivered on December 21, 2024), (c) the portion of Ops PRSUs granted in fiscal 2022 that vested on December 20, 2023 (which are not scheduled to be delivered until December 20, 2025), (d) the portion of Ops PRSUs granted in fiscal 2023 that vested on December 19, 2023 (which are not scheduled to be delivered until December 19, 2026), (e) the ROE PRSUs granted in fiscal 2022 that vested on October 31, 2024 and were delivered on December 11, 2024, (f) the portion of RSUs granted in fiscal 2020 that vested and were delivered on December 1, 2023, (g) the portion of RSUs granted in fiscal 2021 that vested on December 1, 2023 (which were delivered on December 2, 2024), (h) the portion of RSUs granted in fiscal 2022 that vested on December 1, 2023 (which are not scheduled to be delivered until December 1, 2025), and (i) the portion of RSUs granted in fiscal 2023 that vested on December 1, 2023 (which are not scheduled to be delivered until December 1, 2026). (3)“Value Realized on Vesting” is based on the number of shares of the Company's common stock underlying the RSUs that vested during fiscal 2024 multiplied by the closing price of the Company's common stock on the NYSE on the vesting date.

  56. Pension Benefits During Fiscal 2024

    Pension Benefits During Fiscal 2024 The following table provides information regarding the pension benefits for our NEOs under the SERP.

  57. Pension Benefits During Fiscal 2024

    | Name | Plan Name(1) | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | | Douglas C. Yearley, Jr. | SERP | 34.5 | 3,038,130 | — | | Martin P. Connor | SERP | 15.8 | 2,050,738 | — | | Robert Parahus | SERP | 38.5 | 2,050,738 | — |

  58. Pension Benefits During Fiscal 2024

    (1)In order to be vested in benefits under the SERP, participants generally must have reached age 58, except participants will be vested in SERP benefits in the event of death or disability prior to age 58 after five years of service and in the event of a change in control of the Company. The number of years of credited service does not impact SERP benefits, except for the five-year service requirement for vesting in death or disability benefits prior to age 58. (2)The material assumptions used to calculate the present value of the accumulated benefit under the SERP include the discount rate and the expected date of retirement. We use the FTSE pension discount curve as the discount rate for calculating the actuarial present value of accumulated SERP benefits. This rate was 5.27% for fiscal 2022, 5.83% for fiscal 2023, and 4.97% for fiscal 2024. At fiscal year end, each of our NEOs was retirement eligible under the SERP. As a result, retirement was assumed to occur on the last day of the fiscal year (October 31, 2024). For each NEO, the increase in the actuarial present value of the SERP benefit was primarily driven by an increase in the annual benefit such NEO is entitled to (a $20,000 increase for Mr. Yearley and $17,000 increases for each of Messrs. Connor and Parahus), as well as a decrease in the discount rate. Mr. Yearley's annual benefit increase was triggered under the terms of the SERP because Mr. Yearley completed an additional full year of service to the Company beyond age 62 during fiscal 2024.

  59. Supplemental Executive Retirement Plan

    Supplemental Executive Retirement Plan The SERP, which is an unfunded plan, generally provides for an annual cash benefit payable for 20 years following retirement once a participant has reached “normal retirement age,” which is age 58 under the SERP. In the event of the death of the executive during such 20 year period, benefits are payable to the participant's designated beneficiary or estate over the remainder of the payment period. The SERP does not have a service requirement, except that a participant must have five or more years of service in order to be vested in a death or disability benefit prior to age 58. The SERP provides for increases in the annual retirement benefit for each of Mr. Yearley and Mr. Connor in the event that he continues to be employed by the Company beyond age 62 (up to a maximum of three increases). In such event, for each full year completed beyond age 62, the annual retirement benefit is increased by 10% of the value at age 62. In fiscal 2024, Mr. Yearley completed one additional year of service beyond age 62. Accordingly, his annual benefit increased by $20,000. In fiscal 2024, the Compensation Committee approved a $17,000 increase to the annual benefits for each of Messrs. Connor and Parahus. The annual benefits to our NEOs under the SERP as of the end of fiscal 2024 are set forth in the table below:

  60. Supplemental Executive Retirement Plan

    | Participant | Annual Benefit Amount at October 31, 2024 | | Douglas C. Yearley, Jr. | $240,000 | | Martin P. Connor | $162,000 | | Robert Parahus | $162,000 |

  61. Supplemental Executive Retirement Plan

    Each of our NEOs has reached normal retirement age and is fully vested in his benefits under the SERP.

  62. Nonqualified Deferred Compensation During Fiscal 2024

    Nonqualified Deferred Compensation During Fiscal 2024 The Deferred Compensation Plan was frozen with respect to compensation earned after December 31, 2011. Until January 1, 2015, no new contributions to the Deferred Compensation Plan by employees or NEOs were allowed for compensation earned after December 31, 2011. In December 2014, the Company reinstated the Deferred Compensation Plan in the form of the 2015 Plan to enable employees to defer a portion of their annual cash compensation starting on January 1, 2015. Under the 2015 Plan, participants, including each NEO, can elect, at least six months prior to the end of the calendar year for which any bonus may be earned, to defer a portion of their cash compensation. Compensation that is deferred under the 2015 Plan earns various rates of return, depending on the length of time of the deferral. Interest rates are established by the board of directors of a wholly owned subsidiary that administers the 2015 Plan and are reviewed and adjusted annually for new deferrals. When establishing interest rates, the directors of the subsidiary review the rates charged to us for borrowings, as well as interest rates generally available in the market. During fiscal 2024, interest rates for amounts deferred under the 2015 Plan ranged from 2.5% to 5.5%, based upon when the compensation was deferred and the length of time it had been or was to be deferred. For more information on the Deferred Compensation Plan and the 2015 Plan, see “Benefits and Perquisites—Deferred Compensation Plan” on page 47. The table below provides information regarding contributions, earnings, and balances for our NEOs. Messrs. Yearley, Connor and Parahus participate in the 2015 Plan and Mr. Parahus also participates in the Deferred Compensation Plan. The table below also includes performance- and service-based RSUs granted to our NEOs that vested during fiscal 2024, but the delivery of which was deferred pursuant to the terms of the awards and the Omnibus Incentive Plan (the "SIP").

  63. Nonqualified Deferred Compensation During Fiscal 2024

    | Name | Plan | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($)(1) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | | Douglas C. Yearley, Jr. | SIP | — | 13,815,846 | 11,091,926 | — | 28,486,095 | | | DCP | 780,000 | — | 34,523 | 387,770 | 811,069 | | Martin P. Connor | SIP | — | 3,326,786 | 2,613,532 | — | 6,696,994 | | | DCP | 210,770 | | 30,805 | | 781,461 | | Robert Parahus | SIP | — | 1,365,754 | 1,307,633 | — | 3,550,877 | | | DCP | 230,769 | — | 73,144 | — | 2,111,988 |

  64. Nonqualified Deferred Compensation During Fiscal 2024

    (1)The "Registrant Contributions in Last FY" column includes the value of PRSUs and RSUs that vested during fiscal 2024, but the delivery of which was deferred to a later date, including, the value of: a.the portion of Ops PRSUs granted in fiscal 2021 that vested on December 21, 2023 (which were delivered on December 21, 2024); b.the portion of Ops PRSUs granted in fiscal 2022 that vested on December 20, 2023 (which are not scheduled to be delivered until December 20, 2025); c.the portion of Ops PRSUs granted in fiscal 2023 that vested on December 19, 2023 (which are not scheduled to be delivered until December 19, 2026); d.the ROE PRSUs granted in fiscal 2022 that vested on October 31, 2024 and were delivered on December 11, 2024; e.the portion of RSUs granted in fiscal 2021 that vested on December 1, 2023 (which were delivered on December 1, 2024); f.the portion of RSUs granted in fiscal 2022 that vested on December 1, 2023 (which are not scheduled to be delivered until December 1, 2025); and g.the portion of RSUs granted in fiscal 2023 that vested on December 1, 2023 (which are not scheduled to be delivered until December 1, 2026). In each case above, the value was based on the closing price of the Company's common stock on the applicable vesting date.The grant date fair value of these awards was reported in the "Stock Awards" column of the Summary Compensation Table in the fiscal year granted (if an executive was a named executive officer in the year of grant). (2)“Aggregate Earnings in Last FY” column includes unrealized gains/(losses), including dividends, on performance- or service-based RSUs granted in fiscal 2020, 2021 and 2023 that had vested as of fiscal year end, but are not or were not scheduled to be delivered until the fourth anniversary of their respective grant dates. This column also includes unrealized earnings on Messrs. Yearley's, Connor's and Parahus' account balances in the Deferred Compensation Plan, of which $4,026, $5,274 and $14,420, respectively, represents above-market earnings and was accordingly reported as compensation in fiscal 2024 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 50. (3)“Aggregate Balance at Last FYE” column includes the value, based on the closing price of the Company's common stock on October 31, 2024, of performance- and service-based RSUs granted in fiscal years 2021, 2022 and 2023 that had vested as of fiscal year end, but which are not scheduled to be delivered until the fourth anniversary of their respective grant dates. This column also includes the ROE PRSUs granted in fiscal 2021 that vested as of fiscal year end but were not delivered until December 11, 2024. The grant date fair value of these awards was reported in the "Stock Awards" column of the Summary Compensation Table in the fiscal year granted (if an executive was an NEO in the year of grant). This column also includes the net balance of compensation that was earned and deferred by Messrs. Yearley, Connor and Parahus under the Deferred Compensation Plan and the interest accrued on such amounts. In addition to the above-market earnings for fiscal 2024, above-market earnings in fiscal 2023 and 2022 in the amounts of $6,946 and $9,227, respectively, for Mr. Yearley, $7,330 and $7,201, respectively, for Mr. Connor, and $21,260 and $20,383, respectively, for Mr. Parahus, are reported as compensation for the applicable fiscal year in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 50.

  65. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control In addition to the Severance Plan, we currently maintain equity compensation plans and retirement plans that provide for the continuation or acceleration of benefits in the event of specified termination of employment with us or a change of control of the Company. The dollar amounts or dollar values of the potential payments or benefits to the NEOs in the event of a termination of employment or change of control of the Company under each of these plans are disclosed in the tables below. The amounts and values shown assume that such termination of employment or change of control occurred on the last day of fiscal 2024, or October 31, 2024, and are based on a share price of $146.44, the closing price of the Company's common stock on the NYSE on October 31, 2024. These amounts and values are for illustrative purposes only and do not necessarily reflect the amounts and values that would be paid to the NEOs upon termination of employment or a change of control in the future. The actual amounts and values can only be determined at the time of such NEO’s termination of employment or a change of control. The descriptions of the payments and benefits below are qualified by reference to the applicable plan documents and, unless otherwise noted, are applicable to all of the tables. In accordance with SEC regulations, we do not report in the tables below any amount to be provided to an NEO under any arrangement which does not discriminate in scope, terms or operation in favor of our NEOs and which is available generally to all salaried employees. We also do not report in the tables below any items disclosed in the Nonqualified Deferred Compensation table above, or any distributions of plan balances under our 401(k) Plan. See “Benefits and Perquisites” on page 45 for information about the 401(k) Plan.

  66. Retirement

    Retirement Vesting of Long-Term Incentive Compensation Awards. With respect to awards granted prior to December 2019 that remain outstanding (which now only consist of vested stock option awards), retirement means a voluntary resignation by, or termination without cause of, an executive who has reached age 62 and who has a minimum of ten years of service. These awards generally provide that if an executive retires, the executive is entitled to continued exercisability of for the full term of the option award. Generally, these awards did not automatically vest upon retirement, but continued to vest on their normal vesting schedule as if the executive were still employed by us. This continued vesting and exercisability is conditioned upon the executive complying with certain post-termination restrictive covenants in the applicable award agreement. Starting with grants made in December 2019, all awards (consisting solely of RSUs and PRSUs, as the Company last granted stock options to NEOs in December 2018) will continue to vest if any of our NEOs retire after reaching either (i) age 62 with at least five years of service or (ii) age 58 with at least ten years of service. As of October 31, 2024, each of our NEOs was retirement-eligible with respect to all of his outstanding awards. The tables below do not reflect an amount for unvested awards that continue to vest post-retirement because vesting is not accelerated at retirement. Vesting of SERP Benefits. For purposes of the SERP, retirement means a voluntary resignation by, or termination without cause of, an executive who has reached normal retirement age of 58. Except as described below in the case of death or disability, the SERP does not have a service requirement. As of October 31, 2024, each of our NEOs had reached age 58 and, as a result, was fully vested in his respective SERP benefits. See "Pension Benefits During Fiscal 2024" on page 54. Involuntary Termination of Employment Not for Cause (Not in Connection with a Change of Control). Severance Plan Benefits. Under the terms of the Severance Plan, if an NEO experiences a “covered termination” not in connection with a change of control of the Company, the Company will provide certain severance payments and benefits, subject to the executive's continued compliance with the Non-Interference Agreement and the execution and non-revocation of a release of claims. These payments and benefits include (i) a cash payment equal to 1.5 times (2.0 times for Mr. Yearley) the sum of the NEO's annual base salary and target annual incentive bonus, (ii) a prorated annual incentive bonus for the year of termination based on actual performance, (iii) an amount equal to 18 months (24 months for Mr. Yearley) of the NEO's monthly COBRA premium for continued health insurance coverage, and (iv) reasonable outplacement services for a period up to 18 months (24 months for Mr. Yearley). For more information about the Severance Plan, see “Benefits and Perquisites — Executive Severance Plan” on page 45. Treatment of Long-Term Incentive Compensation Awards. Generally, unvested equity awards are canceled upon any termination of employment with the Company by any employee and the right to exercise vested stock options terminates within a specified period of time (depending on the terms of the applicable grant documents) after a termination of employment. With respect to retirement-eligible executives, see "Potential Payments Upon Termination or Change of Control — Retirement — Vesting of Long-Term Compensation Awards" on page 57. Vesting of SERP Benefits. If a participant in the SERP were terminated by the Company without cause, if not already fully vested, the participant would become fully vested in his SERP benefits, and the benefits would be paid in bi-weekly installments over a 20-year period following the date on which he would have reached age 58. Because all of our NEOs are retirement-eligible under the SERP, payments would begin upon termination (subject to any delay that may be required by 409A of the tax code).

  67. CEO PAY RATIO DISCLOSURE

    CEO PAY RATIO DISCLOSURE As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following disclosure about the relationship of the median of the annual total compensation of our employees to the annual total compensation of Mr. Yearley, our Chairman and Chief Executive Officer. Our CEO pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u), based on the Company's payroll and employment records. However, because Item 402(u) permits companies to calculate the ratio using different methodologies, our CEO pay ratio may not be comparable to the ratio presented by other companies. For 2024, our last completed fiscal year: •The median of the annual total compensation of all of our employees, other than Mr. Yearley, was $115,589. •Mr. Yearley's annual total compensation, as reported in the Total column of the 2024 Summary Compensation Table on page 50, was $16,465,157. Accordingly, for fiscal 2024, the ratio of the total compensation of Mr. Yearley, our CEO, to the total compensation of the median employee, as described below was 142 to 1. Identification of Median Employee We selected October 31, 2024, the last business day of our fiscal year, as the date on which to determine our median employee. As of that date, we had 4,835 employees. For purposes of identifying the median employee, we considered total compensation paid to all employees (excluding Mr. Yearley), as recorded by our payroll department, in the Company’s employee population in the twelve-month period ended October 31, 2024. We annualized the compensation of employees who were employed as of October 31, 2024 and who received compensation but did not work the full twelve-month period ended October 31, 2024. In determining the annual total compensation of the median employee, we calculated such employee’s compensation in accordance with Item 402(c)(2)(x) of Regulation S-K as required pursuant to SEC executive compensation disclosure rules. This calculation is the same calculation used to determine total compensation for purposes of the 2024 Summary Compensation Table with respect to each of the NEOs.

  68. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The Company’s executive compensation philosophy is to pay for performance by providing compensation opportunities designed to align executives’ pay with the Company’s and individual performance. A key component of our pay for performance strategy is to align executive’s interests with the interests of our stockholders through equity award grants which make up a substantial component of our executive compensation program. As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation disclosed in the Summary Compensation Table and executive compensation “actually paid” (as defined in Item 402(v) of Regulation S-K) and certain measures of our financial performance.

  69. Pay versus Performance Disclosure Table

    Pay versus Performance Disclosure Table The following table sets forth information for fiscal years 2021, 2022, 2023 and 2024 regarding the Company’s performance and the compensation “actually paid” to our principal executive officer, who is our CEO, and average compensation “actually paid” to our other non-CEO NEOs, as calculated in accordance with SEC disclosure rules, alongside total shareholder return ("TSR") and net income metrics, as well as the Company selected most important performance measure of adjusted pre-tax income (“APTI”):

  70. Pay versus Performance Disclosure Table

    | | | | Average Summary Compensation Table Totals for non-PEO NEOs ($)(1) | Average Compensation Actually Paid to non-PEO NEOs ($)(3) | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | | | Total Shareholder Return ($)(4) | Peer Group Total Shareholder Return ($)(5) | Net Income (in '000s) ($)(6) | Adjusted Pre-tax Income (in 000'S) ($)(7) | | 2024 | 16,465,157 | 40,881,983 | 6,720,356 | 11,546,933 | 363.18 | 264.42 | 1,571,195 | 2,018,108 | | 2023 | 15,152,896 | 28,762,626 | 5,174,864 | 7,637,138 | 174.05 | 159.00 | 1,372,071 | 1,884,788 | | 2022 | 11,240,209 | 7,058,901 | 3,747,771 | 2,906,054 | 104.66 | 112.87 | 1,286,500 | 1,618,048 | | 2021 | 12,195,409 | 18,785,663 | 3,669,027 | 4,823,954 | 143.95 | 132.63 | 833,627 | 1,162,409 |

  71. Pay versus Performance Disclosure Table

    (1) Mr. Yearley has served as the Principal Executive Officer (“PEO”) for the entirety of 2024, 2023, 2022 and 2021 and our other named executive officers for the applicable years were as follows: •2024: Martin P. Connor and Robert Parahus •2023: Martin P. Connor and Robert Parahus. •2022: Martin P. Connor and Robert Parahus. •2021: James W. Boyd, Martin P. Connor and Robert Parahus. (2) The dollar amounts reported in this column represent the amount of compensation "actually paid" to Mr. Yearley, as computed in accordance with Item 402(v) of Regulation S-K, and do not reflect the total compensation actually paid, realized or received by Mr. Yearley. In accordance with these rules, compensation "actually paid" reflects the “Total” as set forth in the Summary Compensation Table for each fiscal year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

  72. Pay versus Performance Disclosure Table

    | Compensation "Actually Paid" to PEO | 2024 | 2023 | 2022 | 2021 | | Summary Compensation Table Total | $16,465,157 | $15,152,896 | $11,240,209 | $12,195,409 | | Pension Value Adjustments | | | | | | Minus: Change in Pension Value in Summary Compensation Table | (443,760) | (125,095) | — | — | | Plus: Pension Service Cost | — | 235,852 | — | — | | Equity Value Adjustments | | | | | | Minus: Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | (6,818,804) | (5,977,623) | (5,951,774) | (5,592,937) | | Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | 11,368,569 | 10,353,644 | 3,847,860 | 8,217,781 | | Plus/(Minus): Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | 15,462,680 | 5,330,335 | (3,008,848) | 4,135,786 | | Plus: Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | — | — | — | — | | Plus/(Minus): Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 4,848,141 | 3,792,617 | 931,454 | (170,376) | | Minus: Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | — | | Compensation Actually Paid | $40,881,983 | $28,762,626 | $7,058,901 | $18,785,663 |

  73. Pay versus Performance Disclosure Table

    (3) The dollar amounts reported in this column represent the average amount of compensation "actually paid” to the Non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rules, these amounts reflect the average of the “Total” set forth in the Summary Compensation Table for each fiscal year for each Non-PEO NEO, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. All amounts presented in this table are averages for the group of Non-PEO NEOs.

  74. Pay versus Performance Disclosure Table

    | Average Compensation "Actually Paid" to Non-PEO NEOs | 2024 | 2023 | 2022 | 2021 | | Summary Compensation Table Total | $6,720,356 | $5,174,864 | $3,747,771 | $3,669,027 | | Pension Value Adjustments | | | | | | Minus: Change in Pension Value in Summary Compensation Table | (340,812) | — | — | (98,197) | | Plus: Pension Service Cost | — | — | — | 107,091 | | Plus: Above-Market Non-Qualified Deferred Compensation | — | — | — | — | | Equity Value Adjustments | | | | | | Minus: Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | (1,742,755) | (1,297,743) | (1,082,992) | (794,561) | | Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | 2,905,591 | 2,247,774 | 802,448 | 1,372,147 | | Plus/(Minus): Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | 3,134,679 | 933,951 | (669,733) | 576,307 | | Plus: Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | — | — | — | — | | Plus/(Minus): Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 869,874 | 578,292 | 108,560 | (7,860) | | Minus: Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | — | | Compensation Actually Paid | $11,546,933 | $7,637,138 | $2,906,054 | $4,823,954 |

  75. Pay versus Performance Disclosure Table

    (4) TSR is calculated by assuming that a $100 investment was made on October 31, 2020 and all dividends were reinvested until the last day of each reported fiscal year. (5) For purposes of this peer group TSR disclosure, we have used the S&P Homebuilders Select Industry Index, which is the peer group used in the Company’s stock performance graph in our annual report on Form 10-K for the most recent fiscal year. (6) The dollar amounts reported in this column are the net income reflected in the Company’s audited financial statements for the applicable fiscal year. (7) The dollar amounts reported in this column are the amount of pre-tax income reflected in the Company’s audited financial statements for the applicable fiscal year, as adjusted for compensation purposes. See page 38 for a description of this metric and adjustments that are made for compensation purposes. We selected adjusted pre-tax income as our company-selected financial measure because this metric governs payouts under the largest single component of our NEOs' incentive compensation awards.

  76. Relationship Between Compensation Actually Paid and Performance

    Relationship Between Compensation Actually Paid and Performance We believe the compensation "actually paid” in each of the years reported above and over the four-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay for performance” as the compensation "actually paid” fluctuated year-over-year, primarily due to the result of our stock performance and our varying levels of achievement against pre-established performance goals under our annual incentive plan and our long-term equity incentive compensation program, including our adjusted pre-tax income performance. The following graphics reflect the relationship between the compensation "actually paid" to our PEO and non-PEO NEOs and our TSR, net income and APTI, respectively, as well as our TSR versus the TSR of the Peer Group noted above.

  77. Toll Brothers & Peer TSR vs. Compensation Actually Paid

    Toll Brothers & Peer TSR vs. Compensation Actually Paid

  78. Toll Brothers Net Income & APTI vs. Compensation Actually Paid

    Toll Brothers Net Income & APTI vs. Compensation Actually Paid