Forestar Group Inc

The elements of our fiscal year 2024 compensation program are as follows:

•Base salaries;

•Discretionary semi-annual cash bonuses;

•Long-term time-based equity awards via restricted stock units;

•401(k) retirement plan contributions; and

•Health and welfare benefits.

Each element of compensation is evaluated independently to determine whether, in our Compensation Committee’s judgment, it is competitive within our industry. Our Compensation Committee balances the elements of compensation to attract executives with the appropriate level of experience and expertise, motivate executives to achieve superior individual and Company performance and retain executives that are creating value for our shareholders. Our Compensation Committee believes balancing short- and long-term compensation elements properly incentivizes our executives and mitigates risk. Our Compensation Committee reviews tally sheets that show all compensation elements on an aggregate basis over the previous three years. From year to year, the Compensation Committee may also choose to award all or only certain elements of compensation to an NEO.

2024 TOTAL COMPENSATION

Fiscal 2024 Compensation

Base Salaries

Base salaries are determined based on the executive’s responsibilities, performance, experience and the Compensation Committee’s judgment. In reviewing the executives' salaries, the Compensation Committee reviews publicly-available data from our peer group companies (see “Competitive Pay Analysis and Peer Group”). Base salaries provide our NEOs a foundation of fixed income, encourage retention and recognize effective leadership.

Each of the NEO’s base salaries moderately increased for fiscal 2024 to align their salaries with the salaries of similar executives of similar publicly-traded companies, including members of our peer group and other public companies within a range of our market capitalization and industrial classification code, and to recognize each executive’s performance in their role. After consulting with the Compensation Committee’s compensation consultant, Lockton Companies, and further analysis of our peer group, the Compensation Committee determined to further increase the salary levels of our NEOs for fiscal 2025 at a level to retain and motivate each NEO.

The annual base salaries of our NEOs for fiscal years 2023, 2024 and 2025 are set forth in the following table.

• Effective January 1, 2024, Mr. Bartok retired as President and Chief Executive Officer and Anthony W. Oxley was appointed to serve as the Company's President and Chief Executive Officer.

Semi-Annual Discretionary Bonuses

The Compensation Committee and the Board, as applicable, determined bonuses for fiscal 2024 at their discretion for our NEOs. The Committee's discretionary approach intends to reward the achievement of critical short-term financial and operational objectives that support our long-term financial and value creation goals for our stockholders. Consistent with the approach taken in prior years, the Compensation Committee and Board considered the following items, along with other relevant information, when determining the amount of discretionary bonuses for fiscal 2024 on a semi-annual basis:

•increase in margins;

•improvement of financial returns;

•management of inventory;

•extent of responsibilities;

•increase in the number of lots delivered;

•disciplined land acquisition;

•controlling selling, general and administrative costs;

•maintaining a strong balance sheet that provides operational flexibility; and

•maintaining strong financial internal controls, financial reporting systems and financial compliance.

For the first semi-annual period ended March 31, 2024, Mr. Tomnitz received a $500,000 bonus, Mr. Oxley received a $250,000 bonus (reflecting his partial period of service), and Mr. Allen and Mr. Walker each received a $275,000 bonus. For the second semi-annual period ended September 30, 2024, Mr. Tomnitz and Mr. Oxley each received a $1,250,000 bonus and Mr. Allen and Mr. Walker each received a $350,000 bonus. The increases in bonuses for fiscal 2024 were driven by improved financial metrics, the executive's strong individual performance, the achievement of multiple operational objectives at the Company level and the overall performance of the Company under each of the executive's leadership. The Compensation Committee and Board believe the total cash compensation paid in fiscal 2024 to each of our NEOs is appropriate based on our compensation philosophy, objectives and the compensation received by similar executives at our peer companies.

Given his retirement on January 1, 2024, Mr. Bartok did not receive any semi-annual discretionary bonus awards for fiscal 2024.

Long-Term Incentive Awards

Our 2018 Stock Incentive Plan gives us the ability to provide our eligible employees, including each of our NEOs, awards based on shares of our common stock. For fiscal 2024, our equity-based incentive awards for NEOs were granted in the form of time-based restricted stock units (“RSUs”). Our Compensation Committee grants equity awards to align interests of the executives with the interests of our stockholders, to remain competitive with market practices and to support executive retention.

In making decisions regarding annual equity-based awards, including determining the size of awards, our Compensation Committee considers previous grants made to the executive, the value and experience the executive brings to their role, retention incentives and the responsibilities of the executive. In the case of a new executive, or an executive assuming new responsibilities, an initial grant may be made above usual annual targeted levels. The size of equity-based awards may be determined based on input from a compensation consultant regarding market practices, recommendations of the Executive Chairman or the CEO (except the CEO and Executive Chairman do not make recommendations regarding their own awards) or the judgment of our Compensation Committee. The dollar value of the awards may be below, at or above the mid-range of what other comparable companies may offer in any given year.

Time-based RSUs, which are the primary equity incentive we grant under our 2018 Stock Incentive Plan, may be granted at any time. Each RSU represents the right to receive one share of our common stock upon vesting. All other terms and conditions of the RSUs are determined at the time of award.

On March 28, 2024, the Compensation Committee awarded Mr. Tomnitz and Mr. Oxley each 14,930 RSUs, and awarded 9,953 RSUs to both Mr. Allen and Mr. Walker. The RSU grants to Mr. Tomnitz and Mr. Oxley vest in three equal annual installments and Mr. Allen and Mr. Walker’s RSUs vest in five equal annual installments. Additionally, Mr. Oxley was granted 2,010 D.R. Horton RSUs on December 20, 2023 while he was still in service at D.R. Horton. These RSUs vest based on Mr. Oxley's continued service with D.R. Horton or its subsidiaries, including Forestar, in five equal annual installments and will settle in shares of D.R. Horton common stock. Due to his retirement in January 2024, Mr. Bartok was not granted any equity awards in fiscal 2024.

Fiscal 2025 Compensation:

In recent years, the Compensation Committee has considered moving to a more formulaic incentive-based compensation program for its NEOs, consistent with its commitment to pay-for-performance. The Compensation Committee's philosophy and guidelines for considering such an incentive-based program included the following:

•the program should not encourage excessive risk taking.

•the program should offer an opportunity for greater compensation for superior performance, balanced by the risk of lower compensation when performance is below expectations.

•compensation levels should be closely tied to the performance and success of the Company as well as the executive's contribution to the Company's performance and success.

After a thorough review of the Company’s executive compensation program, including consultation with its independent compensation advisor in October of 2024, the Compensation Committee approved the following changes for the Company’s fiscal 2025 executive incentive compensation program to further reinforce the Company’s pay for performance compensation philosophy:

Short-Term Cash Incentive Plan:

•The Committee adopted the Forestar Group Inc. Executive Cash Incentive Plan (the “Cash Incentive Plan”), pursuant to which the Company may grant cash incentive awards to eligible participants, including executive officers of the Company, that are payable based on the achievement of pre-established performance goals. Replacing our historic discretionary bonuses, the fiscal 2025 annual cash incentive award granted to the Company’s executive officers under the Cash Incentive Plan will be earned based on the Company’s pre-tax income performance, with the ability to earn from 0% to 200% of a specified target opportunity. Earned cash incentive awards will be paid semi-annually.

Long-Term Performance Stock Units:

•The Compensation Committee determined to incorporate performance-based restricted stock units that are earned when the Company achieves preset long-term performance goals into the Company’s executive equity award program through the grant of performance-based restricted stock units (“PSUs”) as a portion of the fiscal 2025 equity awards granted to the Company’s executive officers. Fiscal 2025 PSUs granted will be earned after a three-year performance period covering fiscal years 2025 through 2027, subject to the achievement of relative total stockholder return, return on inventory and market share goals, with the ability to earn from 0% to 200% of granted PSUs. The three performance goals are weighted equally.

The Compensation Committee believes that these updates will further strengthen the alignment of executive incentives with the interests of the Company’s stockholders.