Forestar Group Inc.

The elements of our fiscal year 2025 compensation program are as follows:

•Base salaries;

•Semi-annual cash performance bonuses;

•Performance-based restricted stock units;

•Time-based restricted stock units;

•401(k) retirement plan benefits; 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.

2025 TOTAL COMPENSATION

(1) Equity includes the grant date fair value of both the RSUs and the 2027 PSUs granted in fiscal 2025 based upon the probable outcome of the applicable performance conditions at grant.

Fiscal 2025 Compensation

Recently, the Compensation Committee has shifted 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, Lockton Companies, 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 were 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 are paid semi-annually.

Long-Term Performance Stock Units:

•The Compensation Committee incorporated performance-based equity awards that are earned when the Company achieves pre-established 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 TSR, ROI and market share goals, with the ability to earn from 0% to 200% of the target number of granted PSUs. The three performance goals are weighted equally.

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

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 compensation, acknowledges the breadth of their responsibilities and recognizes effective leadership.

Each of the NEO’s base salaries was increased for fiscal 2025 after consulting with the Compensation Committee's independent consultant, reviewing an analysis of our peer group practices and to recognize each executive's performance in their role. The NEO's salary levels remained unchanged for fiscal 2026 from fiscal 2025 as the salaries remained aligned 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.

The annual base salaries of our NEOs for fiscal years 2024, 2025 and 2026 are set forth in the following table.

2025 Semi-Annual Cash Performance Bonuses

During fiscal 2025, in line with our compensation philosophy to award incentive bonuses that link pay with performance, Mr. Tomnitz, Mr. Oxley, Mr. Allen and Mr. Walker each had the opportunity to earn a performance bonus ("PTI Bonus") under the Cash Incentive Plan based on the Company’s pre-tax income earned during the year. "Pre-tax income" or "PTI" means consolidated income before income taxes, as publicly reported by the Company in its consolidated financial statements prepared in accordance with generally accepted accounting principles. The Compensation Committee believes that strong profitability increases the value of the Company, which benefits all of our long-term stockholders.

Amounts earned for the PTI Bonus are based on a percentage of the Company’s pre-tax income earned during each semi-annual period during the fiscal year subject to a maximum potential payout of 200% of the bonus that would be earned if 200% or more of the Company’s forecasted PTI target for the year were achieved. The payout percentages and maximum potential payout amounts for the PTI Bonus for each NEO in fiscal 2025 are included in the table below. The Compensation Committee set these percentages and maximum payouts at the beginning of fiscal 2025.

The Compensation Committee reserves the right to use its discretion to adjust downward, but not upward, the final earned PTI Bonus amounts. The threshold for achieving an annual incentive bonus was the attainment of positive pre-tax income. If no pre-tax income was attained, then no bonus would be earned under the PTI Bonus. The bonuses earned under the PTI Bonus program were as set forth in the tables below.

PTI Bonus Payout Rates and Maximum Potential Payouts

2025 PTI Bonus Results

The tables below set forth the Company’s PTI and PTI Bonuses paid for fiscal 2025 to Mr. Tomnitz, Mr. Oxley, Mr. Allen and Mr. Walker:

(1) PTI for the first semi-annual period ended March 31, 2025 was rounded to the nearest tenth-million for purposes of calculating each NEO's PTI Bonus.

2025 Long-Term Incentive Awards: Performance and Time-Based 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. 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. For fiscal 2025, our equity-based incentive awards for NEOs were granted in the form of performance-based and time-based restricted stock units.

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 determining the size of equity-based awards, our Compensation Committee may also consider 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 are not tied to any strict benchmark and may be below, at or above the mid-range of what other comparable companies may offer in any given year.

Our Compensation Committee believes that our executive compensation plans should include a mix of performance and time-based equity awards as the primary long-term components. We believe long-term equity awards align the financial interests of our executive officers with the interests of our stockholders by focusing more on the long-term performance of the Company. Each of our named executive officers has the opportunity to earn equity incentive awards based on Company performance over a three-year period. By awarding performance equity compensation over a longer performance period, our executives’ interests are better aligned with our stockholders’ long-term interests.

Performance-Based Equity. Beginning in fiscal 2025, we granted our executive officers equity awards in the form of PSUs, which are earned based on the Company’s achievement with respect to key performance goals over a three-year performance period. The primary purpose of these awards is to motivate our executives to drive the Company to achieve a superior level of performance for each of these performance metrics which we believe will drive long-term value to our stockholders.

Time-Based Equity. We continued to grant our executive officers equity awards in the form of time-based restricted stock units ("RSUs") that vest over a three- or five-year time period based on continued employment with the Company. The primary purpose of these awards is to align the interests of our executives with those of long-term stockholders as well as to retain the services of our executive officers who have significant experience and have demonstrated superior performance in the homebuilding industry.

For fiscal 2025, the Compensation Committee reviewed the value and number of PSUs to be awarded for the three-year performance period and the number and value of RSUs to be granted. In such review, the Compensation Committee considered the target number of PSUs, the maximum number of PSUs that could be earned and the expected value of the PSU and RSU awards, as well as all other components of each executive’s compensation.

2025 Fiscal Year Equity Awards - Time Based RSUs and Target 2027 PSUs

In fiscal 2025, the Compensation Committee awarded the following target number of PSUs (the "2027 PSUs") and RSUs to each of the named executive officers:

(1) In October 2024, the Compensation Committee approved the target number 2027 PSUs which can be earned based on the Company’s achievement with respect to Relative TSR, ROI and market share performance goals, as defined and further described and discussed below. The grant date was established in October when the target number of shares and performance goals were approved. The grant date fair value of the October 30, 2024 PSUs is $35.20 per unit as determined in accordance with accounting guidance for share-based payments. Additional information regarding the Company's equity awards is included in Note 11 to the consolidated financial statements in the Company's Annual Report on Form 10-K filed with the SEC on November 19, 2025.

(2) The grant date fair value of the November 20, 2024 RSUs vesting in three years and five years is $28.91 per unit as determined in accordance with accounting guidance for share-based payments. Additional information regarding the Company's equity awards is included in Note 11 to the consolidated financial statements in the Company's Annual Report on Form 10-K filed with the SEC on November 19, 2025.

2027 PSUs - Potential Vesting at September 30, 2027

The 2027 PSUs include three performance goals of relative TSR, return on inventory and market share (each weighted at 1/3 of the total award opportunity). The awards are subject to a threshold for each performance goal and will vest at 0% to 200% of the target number of units granted based on the final performance rankings after the completion of the three-year performance period from October 1, 2024 through September 30, 2027 (the "2027 Performance Period"). Relative TSR is measured as the Company's TSR performance as compared to the TSR of the S&P Small Cap 600 Index over the 2027 Performance Period. Return on Inventory is (i) the Company’s average pre-tax income over the 2027 Performance Period, where average pre-tax income is the sum of the Company’s pre-tax income for the trailing three fiscal years from the end of the 2027 Performance Period divided by three (ii) divided by average real estate over the 2027 Performance Period, where average real estate is the sum of the ending real estate balances of the trailing thirteen fiscal quarters immediately preceding the end of the 2027 Performance Period divided by thirteen, as reported in the Company’s audited financial statements and as may be adjusted by the Compensation Committee in its sole discretion. Finally, market share is measured as the number of residential lots sold by the Company divided by the sum of the privately owned "built for sale – fee simple" single-family housing units started, as defined, and in accordance with the data provided, by the U.S. Census Bureau, in each case during the four fiscal quarters immediately preceding the end of the 2027 Performance Period.

When determining the target number of 2027 PSUs to grant in October 2024, the Compensation Committee reviewed the estimated value of these awards in relation to the Company’s consolidated revenue, pre-tax income and other operating results. The Compensation Committee chose to further incentivize these executive officers by including a maximum payout at two times the target amounts in the event that maximum performance is achieved on each of the three performance goals. When the 2027 PSUs were granted, the target and maximum amounts were subjective determinations and not based on any formulaic method or benchmark. Additional information on the grant date fair value of the 2027 PSUs is set forth in the "Summary Compensation Table" on page 35 and the "Fiscal 2025 Grants of Plan-Based Awards" table on page 37.