Form 4: Toll Brothers CEO Reports RSU Vesting, Share Transactions

Toll Brothers CEO Douglas C. Yearley Jr. reported the vesting of performance-based restricted stock units and related share transactions, including tax withholding, on December 17, 2025.

Summary

• Douglas C. Yearley Jr., CEO and Director of Toll Brothers, Inc. (TOL), reported changes in his beneficial ownership.
• On December 17, 2025, 37,915 shares of common stock were acquired due to the vesting of ROE-based performance restricted stock units (RSUs) originally granted on December 19, 2022.
• The Executive Compensation Committee certified the achievement of Return on Equity (ROE) performance metrics for the three-year period from November 1, 2022, to October 31, 2025.
• Concurrently, 15,409 shares of common stock were disposed of at a price of $138.67 per share, likely for tax withholding purposes related to the RSU settlement.
• Following these transactions, Mr. Yearley directly beneficially owns 321,627 shares of common stock.
• He also indirectly owns 1,547 shares in a 401(k) Plan, 500 shares in a Trust, and 80,500 shares by SLAT.
• Additionally, 22,789 performance-based restricted stock units were acquired, related to operational performance RSUs originally granted on December 19, 2024.
• These new RSUs will vest 25% annually on December 19, 2025, 2026, 2027, and 2028, with 100% settlement scheduled for December 19, 2028.

Sentiment

Score: 7

Explanation: The filing indicates successful achievement of performance targets for executive compensation, which is generally positive for the company's operational and financial health. The transactions are routine for executive incentive plans.

Positives

• Achievement of ROE-based performance metrics for the period November 1, 2022, to October 31, 2025, leading to the vesting of 37,915 shares for the CEO.
• Certification of operational performance metrics for 22,789 restricted stock units, indicating successful operational execution.

Negatives

• Disposition of 15,409 shares of common stock at $138.67 per share, likely for tax withholding, which reduces the CEO's direct beneficial ownership.

Future Outlook

The CEO's newly acquired operational performance restricted stock units are scheduled to vest 25% annually on December 19, 2025, 2026, 2027, and 2028, with full settlement of earned shares on December 19, 2028. This indicates a long-term incentive structure tied to future performance.

Industry Context

Executive compensation, particularly through performance-based restricted stock units, is a common practice in the homebuilding and broader corporate sectors. This filing reflects a standard mechanism for aligning executive incentives with company performance metrics like Return on Equity and operational goals, which are crucial for long-term value creation in capital-intensive industries like homebuilding.

Corporate Governance

Stakeholder Impact

• Shareholders: The vesting of performance-based RSUs aligns executive incentives with shareholder value creation through metrics like ROE. The disposition for tax withholding is a routine event and does not significantly impact the broader shareholder base.
• Management: The CEO received significant compensation through RSU vesting, reflecting successful performance against set targets.

Next Steps

• Future vesting of 25% of the operational performance RSUs on December 19, 2026, 2027, and 2028.
• Full settlement of the operational performance RSUs on December 19, 2028.

Key Dates

Keywords

Toll Brothers, TOL, SEC Form 4, Insider Transaction, Restricted Stock Units, RSU, Executive Compensation, Stock Vesting, Douglas C. Yearley Jr., Corporate Governance, Homebuilding