Company: MGRC
Filing Date: 2025-04-22
Form Type: DEF 14A
Source: 0000950170-25-056711
Chunk: 45

Company: MCGRATH RENTCORP
Filing Date: 2025-04-22
Form: DEF 14A
Chunk 45
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 and quarterly reports. For a reconciliation of Adjusted EBITDA to the comparable GAAP measure, please reference the Original Annual Report. Division EBIT is calculated from results reported on the Company’s income statement disclosed by the Company in its annual and quarterly reports. We use a collaborative process between our Chief Executive Officer, Chief Financial Officer, and other executive officers to determine the annual profitability goal for each of the executive officers of the Company. The goals are then recommended to the Compensation Committee. The Compensation Committee then reviews each executive officer’s compensation history and performance before determining final levels for profitability goals. The annual profitability goals for each division and the Company are established at the beginning of each fiscal year based upon a “realistic stretch” philosophy. The Company’s management determines the potential annual financial performance for each division and the Company based on its outlook for the opportunity levels in the markets in which it operates, strategic and tactical initiatives, and other key factors and special circumstances, applying a “realistic stretch” view to what potentially can be accomplished. We expect that although it would take a significant amount of effort on the part of each individual, 100% of the target annual profitability level can be achieved for the year. We assume any amount in excess of the target annual profitability goal would be difficult to achieve without extraordinary effort or the occurrence of significant and unforeseen changes in the competitive landscape. Each executive officer has a designated percentage of base salary for the calendar year that can be earned for achieving 100% of his or her respective annual profitability goal. For 2024, based on input from Semler Brossy, and consistent with common practices in the market, the threshold for the 2024 Cash Bonus Plan is such that 90% achievement will result in 50% bonus eligibility. Achievement below 90% results in zero payout. At 110% achievement, the plan pays a maximum of two times the bonus target for profitability. Achievement and resulting bonus payouts for performance between Threshold and Target, and for performance between Target and Maximum, are determined based on straight-line interpolation.

|           |     | % of Goal 
 Achieved  |     | % of Bonus 
 Earned     |     |   |
| Below     |     | < 90%     |     |            |   — |   |
| Threshold |     | 90%       |     |            |  50 | % |
| Target    |     | 100%      |     |            | 100 | % |
| Maximum   |     | 110