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Employee Benefit and Stock Plans | 12 Months Ended
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Nov. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Employee Benefit and Stock Plans | Employee Benefit and Stock Plans Most of our employees are eligible to participate in the KB Home 401(k) Savings Plan (“401(k) Plan”) under which we match employee contributions up to 6% of eligible compensation per payroll period. The aggregate cost of the 401(k) Plan to us was $8.8 million in 2024, $8.3 million in 2023 and $8.2 million in 2022. The assets of the 401(k) Plan are held by a third- party trustee, with an affiliate of the trustee managing some fund options offered by the 401(k) Plan. The 401(k) Plan participants may direct the investment of their funds among one or more of the several fund options offered by the 401(k) Plan. As of November 30, 2024, 2023 and 2022, approximately 6%, 5% and 3%, respectively, of the 401(k) Plan’s net assets at each period were invested in our common stock. Approval of the Amended and Restated KB Home 2014 Equity Incentive Plan. We maintain one active equity compensation plan, the Amended and Restated KB Home 2014 Equity Incentive Plan (“Amended and Restated 2014 Plan”), with an aggregate share grant capacity for stock-based awards to our employees, non-employee directors and consultants of 18,200,000 shares. In addition, if an award made under the Amended and Restated KB Home 2014 Equity Incentive Plan subsequently expires or is canceled, forfeited or settled for cash, then any shares associated with such award may, to the extent of such expiration, cancellation, forfeiture or cash settlement, be used again for new grants under the plan, and shares tendered or withheld to satisfy tax withholding obligations with respect to a full value award may be used again for new grants under the plan. Under the Amended and Restated 2014 Plan, grants of stock options and other similar awards reduce the share grant capacity on a 1-for-1 basis, and grants of restricted stock and other similar “full value” awards reduce the share grant capacity on a 1.78-for-1 basis. Any shares that again become available for grant will be added back to the equity incentive plan’s available grant capacity in the same manner in which they were initially deducted (i.e., 1-for-1 or 1.78-for-1). The Amended and Restated 2014 Plan provides stock options may be awarded for periods of up to 10 years, and enables us to grant other stock-based awards and cash bonuses. Stock-Based Compensation. With the approval of the management development and compensation committee, consisting entirely of independent members of our board of directors, we have provided compensation benefits to certain of our employees in the form of stock options, restricted stock and PSU s. Certain stock-based compensation benefits are also provided to our non-employee directors pursuant to the Non-Employee Directors Compensation Plan (“Director Plan”). Compensation expense related to equity-based awards is included in selling, general and administrative expenses in our consolidated statements of operations. The following table presents our stock-based compensation expense (in thousands):
| Years Ended November 30,
| 2024 |  | 2023 |  | 2022
Restricted stock | $10,699 |  | $9,659 |  | $8,743
PSUs | 22,296 |  | 23,065 |  | 18,757
Director awards | 1,475 |  | 1,888 |  | 1,964
Total | $34,470 |  | $34,612 |  | $29,464
Stock Options. Stock option transactions are summarized as follows:
| Years Ended November 30,
| 2024 |  | 2023 |  | 2022
| Options |  | Weighted Average Exercise Price |  | Options |  | Weighted Average Exercise Price |  | Options |  | Weighted Average Exercise Price
Options outstanding at beginning of year | 1,109,567 |  | $15.50 |  | 1,674,393 |  | $15.56 |  | 1,674,393 |  | $15.56
Granted | — |  | — |  | — |  | — |  | — |  | —
Exercised | (691,426) |  | 15.09 |  | (564,826) |  | 15.68 |  | — |  | —
Cancelled | — |  | — |  | — |  | — |  | — |  | —
Options outstanding at end of year | 418,141 |  | $16.17 |  | 1,109,567 |  | $15.50 |  | 1,674,393 |  | $15.56
Options exercisable at end of year | 418,141 |  | $16.17 |  | 1,109,567 |  | $15.50 |  | 1,674,393 |  | $15.56
Options available for grant at end of year | 7,794,922 |  |  |  | 8,245,553 |  |  |  | 3,260,585 |  |
There were no stock options granted in 2024, 2023 or 2022. We have not granted any stock option awards since 2016. The total intrinsic value of stock options exercised was $32.7 million in 2024 and $17.4 million in 2023. There were no stock options exercised in 2022. The aggregate intrinsic value of both stock options outstanding and stock options exercisable was $27.8 million at November 30, 2024, $40.6 million at November 30, 2023, and $26.5 million at November 30, 2022. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the price of the option. Stock options outstanding and stock options exercisable at November 30, 2024 are summarized as follows:
|  | Options Outstanding |  | Options Exercisable
Exercise Price |  | Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life |  | Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life
$14.92 |  | 14,000 |  | $14.92 |  | 0.9 |  | 14,000 |  | $14.92 |  |
$16.21 |  | 404,141 |  | 16.21 |  | 1.8 |  | 404,141 |  | 16.21 |  |
$14.92 to $16.21 |  | 418,141 |  | $16.17 |  | 1.8 |  | 418,141 |  | $16.17 |  | 1.8
At November 30, 2024, there was no unrecognized stock-based compensation expense related to stock option awards as all these awards were fully vested. Restricted Stock. From time to time, we grant restricted stock to various employees as a compensation benefit. During the restriction periods, these employees are entitled to vote and to receive cash dividends on such shares. The restrictions imposed with respect to the shares granted lapse in installments within, or in full at the end of, three years after their grant date if certain conditions are met. Restricted stock transactions are summarized as follows:
| Years Ended November 30,
| 2024 |  | 2023 |  | 2022
| Shares |  | Weighted Average per Share Grant Date Fair Value |  | Shares |  | Weighted Average per Share Grant Date Fair Value |  | Shares |  | Weighted Average per Share Grant Date Fair Value
Outstanding at beginning of year | 588,167 |  | $21.29 |  | 543,886 |  | $19.50 |  | 431,191 |  | $19.22
Granted | 181,287 |  | 74.46 |  | 329,209 |  | 41.78 |  | 347,131 |  | 27.49
Vested | (292,217) |  | 37.48 |  | (268,696) |  | 42.12 |  | (192,840) |  | 29.09
Cancelled | (20,097) |  | 35.88 |  | (16,232) |  | 32.24 |  | (41,596) |  | 38.58
Outstanding at end of year | 457,140 |  | $50.45 |  | 588,167 |  | $21.29 |  | 543,886 |  | $19.50
As of November 30, 2024, we had $20.0 million of total unrecognized compensation cost related to restricted stock awards that will be recognized over a weighted average period of approximately three years. Performance-Based Restricted Stock Units. On October 10, 2024, we granted PSUs to certain employees. Each PSU grant corresponds to a target amount of our common stock (“Award Shares”). Each PSU entitles the recipient to receive a grant of between 0% and 200% of the recipient’s Award Shares, and will vest based on our achieving, over a three-year period commencing on December 1, 2024 and ending on November 30, 2027, specified levels of (a) cumulative adjusted earnings per share; (b) average adjusted return on invested capital; and (c) revenue growth performance relative to a peer group of high- production public homebuilding companies. The grant date fair value of each such PSU was $79.81. Upon vesting, each PSU recipient is entitled to receive a proportionate amount of credited cash dividends that are paid in respect of one share of our common stock with a record date between the grant date and the date the compensation committee of our board of directors determines the applicable performance achievements, if any. On October 5, 2023, we granted PSUs to certain employees with similar terms as the 2024 PSU grants, except that the applicable performance period commenced on December 1, 2023 and ends on November 30, 2026. The grant date fair value of each such PSU was $44.10. On November 14, 2022, we granted PSUs to certain employees with similar terms as the 2024 PSU grants, except that the applicable performance period commenced on December 1, 2022 and ends on November 30, 2025. The grant date fair value of each such PSU was $30.12. PSU transactions are summarized as follows:
| Years Ended November 30,
| 2024 |  | 2023 |  | 2022
| Shares |  | Weighted Average per Share Grant Date Fair Value |  | Shares |  | Weighted Average per Share Grant Date Fair Value |  | Shares |  | Weighted Average per Share Grant Date Fair Value
Outstanding at beginning of year | 1,225,415 |  | $21.18 |  | 1,273,157 |  | $19.70 |  | 1,392,864 |  | $23.48
Granted | 450,270 |  | 70.66 |  | 554,523 |  | 39.80 |  | 650,077 |  | 33.34
Vested | (519,636) |  | 40.06 |  | (602,265) |  | 35.20 |  | (674,677) |  | 38.00
Cancelled | — |  | — |  | — |  | — |  | (95,107) |  | 38.55
Outstanding at end of year | 1,156,049 |  | $44.12 |  | 1,225,415 |  | $21.18 |  | 1,273,157 |  | $19.70
The number of shares of our common stock actually granted to a recipient, if any, when a PSU vests will depend on the degree of achievement of the applicable performance measures during the applicable three-year period. The shares of our common stock that were granted under the terms of PSUs that vested in 2024 included an aggregate of 259,818 additional shares above the target amount awarded to the eligible recipients based on our achievement of certain levels of the three above- described metrics over the three-year period from December 1, 2020 through November 30, 2023. Similarly, the shares of our common stock that were granted under the terms of PSUs that vested in 2023 included an aggregate of 267,674 additional shares above the target amount based on our achievement of certain levels of the three above-described metrics over the period from December 1, 2019 through November 30, 2022, and the shares of our common stock that were granted under the terms of PSUs that vested in 2022 included an aggregate of 265,782 additional shares above the target amount based on our achievement of certain levels of the three above-described metrics over the period from December 1, 2018 through November 30, 2021. The PSUs do not have dividend or voting rights during the performance period. Compensation cost for PSUs is initially estimated based on target performance achievement and adjusted as appropriate throughout the performance period. Accordingly, future compensation costs associated with outstanding PSUs may increase or decrease based on the probability and extent of achievement with respect to the applicable performance measures. At November 30, 2024, we had $47.1 million of total unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted-average period of approximately three years. Director Awards. We have granted deferred common stock awards to our non-employee directors pursuant to the terms of the Director Plan and elections made by each director. At November 30, 2024, 2023 and 2022, the aggregate outstanding deferred common stock awards granted under the Director Plan were 86,504, 271,683 and 409,648, respectively. In addition, we have granted common stock on an unrestricted basis to our non-employee directors on the grant date pursuant to the Director Plan and elections made by each director. Grantor Stock Ownership Trust. At November 30, 2023, we had a grantor stock ownership trust (“Trust”), which was established in 1999 and administered by a third-party trustee, that held and distributed the shares of common stock acquired to support certain employee compensation and employee benefit obligations under our existing stock option plan, the 401(k) Plan and other employee benefit plans. For financial reporting purposes, the Trust was consolidated with us, and therefore any dividend transactions between us and the Trust were eliminated. Acquired shares held by the Trust were valued at the market price on the date of purchase and shown as a reduction to stockholders’ equity in the consolidated balance sheets. The difference between the Trust share value and the market value on the date shares were released from the Trust was included in paid-in capital. Common stock held in the Trust was not considered outstanding in the computations of earnings per share. The Trust terminated on September 30, 2024. The 6,705,247 shares held by the Trust were transferred to treasury stock.

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