Company: KMX
Filing Date: 2025-05-08
Form Type: DEF 14A
Source: 0001170010-25-000073
Chunk: 28

Company: CARMAX INC
Filing Date: 2025-05-08
Form: DEF 14A
Chunk 28
---
-year period. Depending on the Company’s achievement of the performance goal, PSUs represent the right to receive between 0% and 200% of a targeted number of shares of our common stock. The threshold multiplier for the cumulative pre-tax income goal is 50%. The target multiplier is 100% and the maximum multiplier is 200%. The multiplier is determined using straight-line interpolation for performance that falls between the threshold and the target or between the target and the maximum. If the threshold performance goal is not achieved, none of the shares will be paid. The number of shares ultimately delivered to each PSU holder will be determined based upon actual performance against the three-year goal.

The Committee considered PSUs to be a key component of our pay-for-performance philosophy in fiscal 2025 because the PSUs directly tie equity payments to a measure of CarMax’s cumulative pre-tax income that the Committee believes to be an appropriate reflection of the Company’s performance. In addition, similar to our stock options, a PSU’s multi-year vesting schedule operates as a retention tool and ensures that our executives are appropriately focused on CarMax’s long-term strategic and financial goals.

In addition to establishing three-year goals for the fiscal 2025 PSUs, the Committee set goals for PSUs awarded in prior years, namely, the one-third of the fiscal 2024 and fiscal 2023 PSU awards applicable to fiscal 2025 performance. For year two of the fiscal 2024 PSUs and year three of the fiscal 2023 PSUs, the Committee set a one-year goal that applies to one-third of the granted PSUs based on one year of pre-tax income. Despite the annual performance goals for the fiscal 2024 and fiscal 2023 PSUs, no shares are paid out until the PSUs vest, which generally occurs on the three-year anniversary of the grant date.

#### Award Determinations
In determining the value of long-term equity awards to grant, the Committee considered the named executive officer’s role at CarMax; benchmarking data; our recent financial performance; the performance of our common stock; the fair market value, expense and dilutive effect of any potential award; succession planning; and the importance of retaining the officer’s services. The Committee solicits the advice of Semler Brossy and, except with respect to the awards to the CEO, the opinion of the Company’s CEO. The CEO generally gives the Committee an initial recommendation for long-term equity awards for the other named executive officers. The Committee reviews this recommendation and makes its