First American Financial Corp

As noted above, our Company utilizes four main components of compensation: (1) base salary, (2) annual cash bonus, (3) annual equity bonus, and (4) long-term equity incentive. Each of the pay elements is described in detail below.

Base Salary

The Committee sets base salaries for executive officers based on the individual’s position within our Company and the individual’s current and sustained performance results. The Committee reviews executive officer base salaries each year and makes any adjustments it deems necessary based on, among other factors, the overall performance of our Company, new roles and/or responsibilities assumed by the executive officer, the general performance of the business units or departments over which the executive officer has responsibility, the significance of the executive officer’s impact on the achievement of our Company’s strategic goals, the executive officer’s length of service with our Company and the executive officer’s base salary relative to the base salaries of similar individuals in peer companies and market data. The Committee gives no specific weighting to any one factor in setting the level of base salary and the process ultimately relies on the subjective exercise of the Committee’s judgment. Based on our Company’s peer group and relevant compensation survey data, the Committee also takes into account the executive officer’s potential as a key contributor and amounts that may be required to recruit new executive officers.

Other than in the case of new hires or promotions, the Committee generally determines base salaries for executive officers around the beginning of each calendar year. As described below under “Employment Agreements,” Messrs. DeGiorgio and Seaton and Ms. Cornehl have employment agreements with our Company that specify their respective minimum base salaries. These amounts may be increased at the discretion of the Committee.

In February 2024, the Committee reviewed executive officer compensation, including base salaries. In response to our Company's broader expense management efforts and at the request of management, the Committee determined not to make adjustments to the base salaries of the executive officers for 2024, with the exception of Ms. Cornehl, whose base salary was increased by $30,000 to $450,000 and Mr. Adams, whose base salary was increased by $10,000 to $360,000. The Committee's determination to increase the base salaries of Ms. Cornehl and Mr. Adams reflected the Committee's assessment of their

48 | 2025 Proxy Statement First American Financial Corporation

Compensation Discussion and Analysis

individual performance in their roles and base salaries in comparison to relevant peer company and market data.

In summary, the base salaries of the executive officers as of December 31, 2024 and as of December 31, 2023 are as follows:

(1)

These base salaries do not reflect the temporary and voluntary reductions in base salary for Messrs. DeGiorgio and Seaton, as described below.

Beginning in June 2022, however, each of Messrs. DeGiorgio and Seaton voluntarily agreed to take a temporary 10% reduction in their base salary in connection with our Company’s broader expense management efforts. Those reductions were in effect through December 31, 2024 and ended thereafter.

In February 2025, the Committee reviewed the base salaries of our executive officers. The Committee determined that, based on its assessment of relevant peer company and market data, as well as the individual performance of the executive officers in their roles, the base salaries should be adjusted for the executive officers. As a result, the Committee increased Mr. DeGiorgio's base salary from $925,000 to $1,000,000; Mr. Seaton's from $700,000 to $725,000; Ms. Cornehl's from $450,000 to $460,000; Mr. Wajner's from $350,000 to $370,000; and Mr. Adams from $360,000 to $370,000.

Compensation Discussion and Analysis

Annual Incentive Compensation

The Committee considers annual incentive compensation to be a key component of our executive compensation program given it encourages our executive officers to strive for short-term results for our stockholders despite cyclical real estate market dynamics. Our AIP compensates relative to performance against annual pretax margin and return on equity targets set during our annual financial planning process (subject to the Discretionary Adjustment, as described below).AIP awards are paid utilizing the following two pay elements: cash bonus payouts and Bonus RSUs which vest over three years. The split between cash bonus payouts and Bonus RSUs depends on the particular employee's total compensation.

While the Committee believes that most companies’ annual incentive bonuses are paid solely in cash, the payment of a portion of our annual incentive bonuses in Bonus RSUs that vest over a three-year period reflects the Committee’s desire to align the interests of participating employees and our Company’s long-term stockholders. This structure furthers this goal by discouraging participating employees from excessive risk taking, focusing employees on creating long-term value for our stockholders and supporting employee retention. Accordingly, the Committee believes that an incentive structure with a meaningful portion of compensation tied to annual performance is most effective in addressing cyclicality in our business and motivating and rewarding executive officers to enhance long-term stockholder value.

As was the case in recent years, the Committee structured payouts under the 2024 AIP to be based on measurable performance against specific financial targets that the Committee believes to be key drivers of stockholder value. Like in 2023, financial targets collectively accounted for 100% of the 2024 AIP payouts to executive officers, with the resulting amount being subject to adjustment of up to 30 percentage points in the discretion of the Committee. The Discretionary Adjustment gives the Committee the ability to adjust the AIP payouts for unanticipated external factors, such as regulatory changes or meaningful changes in interest rates; success in strategic initiatives designed to create long-term stockholder value, such as technology projects, risk management efforts, employee engagement, or market share gains and losses in key markets; or talent, sustainability and governance actions, initiatives, or omissions.

The Committee also retains the ability to pay a participant a lower amount, including the discretion not to pay an annual incentive bonus. For 2024, the Committee did not make a Discretionary Adjustment.

The 2024 AIP payouts to each executive officer were determined by adjusting the applicable portion of the target incentive bonus amount (listed in the tables below under the column entitled “Weighting”) based on objective financial criteria in two areas (each listed in the table below under the column entitled “Metric”), with the result being subject to the Discretionary Adjustment as described above. Each financial metric had associated with it a threshold 50% payout level, a 100% payout level and a 200% payout level (listed in the table below under the columns entitled “Threshold”, “Target” and “Maximum”, respectively). With respect to both financial metrics (and subject to the Discretionary Adjustment), results below the threshold 50% payout level do not result in any payment and results above the maximum do not result in any additional payment. The percentage payout for results between the threshold and maximum are determined on a linear sliding scale basis between the two metric points on either side of the actual result (i.e., between the threshold and the target, or the target and the maximum, as applicable).

Consistent with recent years, for 2024 the two financial metrics utilized by the Committee were:

•

Pretax Margin: the pretax income of our Company divided by the gross revenue of our Company, excluding net gains/losses from the investment portfolio; net gains/losses from the venture investment portfolio; purchase-related amortization of intangible assets; and, in the

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Compensation Discussion and Analysis

discretion of the Committee, excluding the effects of non-operating items, such as asset impairments and legal settlements.

•

Return on Equity: net income attributable to our Company divided by average invested stockholders’ equity (total equity excluding accumulated other comprehensive income/loss and noncontrolling interests), excluding net gains/losses from the investment portfolio; net gains/losses from the venture investment portfolio; purchase-related amortization of intangible assets; and, in the discretion of the Committee, excluding the effects of non-operating items, such as asset impairments and legal settlements.

The Committee believes that retaining the two financial metrics utilized in the past, coupled with evaluation of a potential Discretionary Adjustment based on internal or external factors as described above, advances the objectives of our Company’s AIP program and properly balances the importance of (i) compensating based on objective short-term financial results that are important to stockholders, and (ii) retaining the ability to take into account the Committee’s subjective determination with respect to long-term value creation and overall performance.

The Committee set the target financial metric payout levels at the pretax margin and return on equity set forth in our Company’s 2024 financial plan, which was unanimously approved by our Company’s Board following the general process described on page 47. The Committee believes these metrics, and the related performance levels, are indicators as to whether our Company, given the environment in which it is operating, has generated value for stockholders. The Committee also believes these metrics are utilized by stockholders, potential stockholders and their advisors in determining the value of our Company.

The target performance levels and actual performance for 2024 with respect to the financial metrics were as follows:

(1)

For purposes of determining performance level achievement, the Committee uses preliminary results and only considers an adjustment to the AIP payout amounts if final results would result in a greater than 2% change in the amount. As a result of this practice and the non-GAAP adjustments discussed in the following footnote, the number in the “Actual 2024 Results” column may differ from the results reported in our Company’s financial statements.

(2)

These are non-GAAP financial measures. Please see Appendix A for the rationale behind the presentation of these measures and reconciliations to the nearest GAAP financial measures.

In determining the actual results for the financial metrics, $35.2 million in software impairment charges and $14.2 million related to an impairment of a real property salvage asset were elected to be excluded from both metrics by the Committee, as the effects of such impairments were non-operational in nature and were not included in the 2024 financial plan, which was the basis for the corresponding target financial metrics for the year.

For 2025, subject to the Committee’s ability to award a lower amount, including the ability not to award any bonus, the AIP payout amounts will again be determined based on our Company’s return on equity (weighted 50%) and pretax margin (weighted 50%). As was the case in 2024, actual performance could result in payouts ranging from 50% to 200% of target, or 0% if performance is below threshold levels. For 2025, based on its assessment of relevant peer company data and the advice of its compensation consultant, the Committee increased threshold performance from 70% to 75% of target and decreased maximum performance from 133% to 125% of target. The target 2025 AIP payout amounts will otherwise be adjusted in the same manner as in 2024, in that results below the threshold 50% payout level do not result in any payment and results above the maximum do not result in any additional payment. The percentage payout for results between the threshold and maximum will again be determined on a linear sliding scale basis between the two metric points on either side of the actual result (i.e., between the threshold and the target, or the target and the maximum, as applicable).

Compensation Discussion and Analysis

Annual Cash Bonus

As part of its review in early 2024, the Committee set target cash bonus amounts with details as follows:

•

Mr. DeGiorgio. Mr. DeGiorgio’s target cash bonus was set at $1,850,000;

•

Mr. Seaton. Mr. Seaton’s target cash bonus was set at $725,000;

•

Ms. Cornehl. Ms. Cornehl’s target cash bonus was set at $297,000;

•

Mr. Wajner. Mr. Wajner’s target cash bonus was set at $152,750; and

•

Mr. Adams. Mr. Adams’s target cash bonus was set at $152,750.

The decisions on the 2024 target cash bonus amounts for each executive officer were based on the Committee’s assessment of relevant peer company and/or market data, as well as the individual performance of the executives in their roles. Based on its assessment, the Committee determined that the target cash bonuses of Mr. DeGiorgio and Ms. Cornehl warranted an adjustment. Consequently, the Committee increased Mr. DeGiorgio's target cash bonus from $1,750,000 to $1,850,000 and Ms. Cornehl's from $192,500 to $297,000 for 2024. The Committee maintained the target cash bonuses of Messrs. Seaton, Adams and Wajner for 2024.

Each executive officer's AIP cash bonus payout for 2024 was determined by adjusting the target cash bonus amount by the level of achievement on the financial metrics described above. The following table summarizes the computation of the 2024 AIP cash bonuses for each executive officer. It also provides the 2023 AIP cash bonus amounts for comparison purposes. The amounts in the table below are reflected in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.”

(1)

The target performance levels and actual performance with respect to the financial metrics are set forth in the metric summary table on page 51.

In February 2025, the Committee reviewed the target cash bonus amounts of our executive officers. The Committee determined, based on its assessment of relevant peer company and market data, as well as the strong individual performance of the executive officers in their roles, the target cash bonuses should be adjusted for each of the executive officers. As a result, the Committee increased Mr. DeGiorgio's target cash bonus from $1,850,000 to $2,000,000; Mr. Seaton's from $725,000 to $750,000; and each of Messrs. Wajner's and Adams' from $152,750 to $159,250. Although Ms. Cornehl's total target AIP bonus increased overall by $35,000 for 2025, her target cash bonus decreased from $297,000 to $287,500 on account of her cash and equity split moving from 55% cash and 45% equity in 2024 to an equal split in 2025 in accordance with Company policy.

Annual Equity Bonus

As part of its review in early 2024, the Committee set target Bonus RSU amounts with details as follows:

•

Mr. DeGiorgio. Mr. DeGiorgio’s target Bonus RSU amount was set at $1,850,000;

•

Mr. Seaton. Mr. Seaton’s target Bonus RSU amount was set at $725,000;

•

Ms. Cornehl. Ms. Cornehl’s target Bonus RSU amount was set at $243,000;

•

Mr. Wajner. Mr. Wajner’s target Bonus RSU amount was set at $82,250; and

•

Mr. Adams. Mr. Adams’s target Bonus RSU amount was set at $82,250.

52 | 2025 Proxy Statement First American Financial Corporation

Compensation Discussion and Analysis

The decisions on the 2024 target Bonus RSU amounts for each executive officer were based on the Committee’s assessment of relevant peer company and market data, as well as the individual performance of the executives in their roles. Based on its assessment, the Committee determined that the target Bonus RSU amounts of Mr. DeGiorgio and Ms. Cornehl warranted an adjustment. Consequently, the Committee increased Mr. DeGiorgio's target Bonus RSU amount from $1,750,000 to $1,850,000 and Ms. Cornehl's from $157,000 to $243,000 for 2024. The Committee maintained the target Bonus RSU amounts of Messrs. Seaton, Adams and Wajner for 2024.

Each executive officer's Bonus RSU payout amount for 2024 was determined by adjusting the target Bonus RSU amount by the level of achievement on the 2024 AIP financial metrics described above.

The following table summarizes the computation of the 2024 Bonus RSU amounts for each executive officer. It also provides the 2023 Bonus RSU amounts for comparison purposes.

(1)

The target performance levels and actual performance with respect to the AIP financial metrics are set forth in the metric summary table on page 51.

In February 2025, the Committee reviewed the target Bonus RSU amounts of our executive officers. The Committee determined, based on its assessment of relevant peer company and market data, as well as the strong individual performance of the executive officers in their roles, the target Bonus RSU amounts should be adjusted for each of the executive officers. As a result, the Committee increased Mr. DeGiorgio's target Bonus RSU amount from $1,850,000 to $2,000,000; Mr. Seaton's from $725,000 to $750,000; Ms. Cornehl's from $243,000 to $287,500 (a portion of such increase resulting from Ms. Cornehl's cash and equity split moving from 55% cash and 45% equity in 2024 to an equal split in 2025 in accordance with Company policy); and each of Messrs. Wajner's and Adams' from $82,250 to $85,750.

Bonus RSUs are denominated in units of our Company’s common stock. In accordance with Company policy, the number of units granted to an executive officer in 2025 in connection with 2024 performance was determined by dividing the dollar amount of the Bonus RSUs that the Committee determined to be granted by the fair market value of our Company’s stock on February 24, 2025, the second day on which the New York Stock Exchange was open for trading following the submission of our Company’s Annual Report on Form 10-K. Our Company’s 2020 Incentive Compensation Plan defines the fair market value as the last sale price reported for a share of our Company’s common stock on the New York Stock Exchange on the last trading day preceding the grant date. These underlying shares, plus any dividend equivalent shares accrued during the vesting period, are generally distributed to the executive officer upon vesting.

The Bonus RSUs issued to executive officers in or after 2023, based on the level of achievement in the prior respective year, vest over three years at a rate of 33 1/3% on each anniversary of the date of grant. The Bonus RSUs issued to executive officers in 2022 in connection with 2021 performance vest over four years at a rate of 25% on each anniversary of the date of grant. Vesting accelerates in certain circumstances, including death, disability, normal retirement, and termination by our Company without cause. In addition, vesting of the Bonus RSUs accelerates in connection with early retirement. Early retirement means the termination of the recipient’s employment, other than for cause, after having reached age 55 and 10 years of service. Normal retirement means the termination of the recipient’s employment, other than for cause, after having reached age 60, irrespective of the number of years of service. In the case of death or disability, delivery of the underlying shares is made as soon as administratively practicable. In the case of normal retirement or early retirement or termination by our Company without cause, delivery of the underlying shares is made one year after the termination date. A holder of RSUs has none of the rights of a stockholder unless and until shares are actually delivered to

Compensation Discussion and Analysis

the holder. In the case of disability, early retirement, normal retirement and termination by our Company without cause, the executive officer shall also be required to sign a separation agreement.

The Bonus RSUs issued in 2024 and 2025 to our Company’s executive officers, based on the level of achievement in 2023 and 2024, respectively, provided that, except in the case of death, disability or certain change-in-control scenarios, none of the Bonus RSUs would be eligible to vest unless certain performance criteria were met. In particular, Bonus RSUs would not vest unless the net income of our Company in the year of grant was at least $25 million, excluding Extraordinary Items. For purposes of this calculation, “Extraordinary Items” means (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary, unusual and/or nonrecurring items of gain or loss and (f) foreign exchange gains and losses. The Committee determined that this target was met for 2024, with the result that the Bonus RSUs granted in 2024 to the executive officers would vest, subject to satisfaction of other applicable conditions.

It should be noted that, as required by applicable rules, the Summary Compensation, Grants of Plan-Based Awards and Outstanding Equity Awards at Fiscal Year End tables in this proxy statement reflect Bonus RSUs issued to the executive officers in 2024 for performance in 2023. Similarly, the Bonus RSUs issued in 2025 for performance in 2024 are not reflected in those tables contained in this proxy statement. Applicable rules require that these tables only reflect equity awards granted to the executive officers in 2024.

Long-Term Equity Incentive Compensation

The Committee has continued its practice of tying a meaningful portion of the executive officers' total compensation to long-term incentives through the issuance of long-term incentive awards under the LTI Plan ("LTI Awards"). The Committee again elected to issue LTI Awards to executive officers in 2025 (in connection with 2024 performance) in equal 50% allocations of LTI PRSUs with longer-term performance metrics and LTI RSUs with multi-year vesting periods. This is consistent with the Committee's decision to increase the percentage of the LTI Awards granted as LTI PRSUs from 25% to 50% for 2023, with the remaining 50% being granted as LTI RSUs, which modification was based on stockholder feedback and changes in market compensation practices.

The Committee believes that LTI Awards are effective in aligning the interests of executive officers with those of its long-term stockholders. The Committee believes that LTI Awards, particularly being coupled with the AIP Bonus RSU pay element, discourage executive officers from taking excessive risk for short-term gains, focus executive officers on increasing long-term stockholder value and increase retention.

The approximate dollar values of the LTI Awards granted by the Committee to each of the executive officers in 2025 in connection with 2024 performance are provided in the following table, together with the comparable amounts granted in 2024 for 2023 performance.

(1)

The actual grant date dollar value of the LTI Awards may differ slightly from these dollar amounts in the table due to rounding. The LTI Awards granted in 2025 in connection with 2024 performance were granted on February 24, 2025, and the LTI Awards granted in 2024 in connection with 2023 performance were granted on February 22, 2024, in both cases pursuant to our Company’s policy of granting RSUs to executive officers on the second day on which the New York Stock Exchange is open for trading following the submission of the Annual Report on Form 10-K.

(2)

The dollar amount reflects the target value of the LTI PRSU award approved by the Committee. The actual value of the award and the number of shares ultimately received by a recipient will vary based on our total shareholder return over the three-year performance period relative to the companies in the S&P MidCap 400 Index at the beginning of the performance period, plus any dividend equivalent shares accrued prior to delivery. The grant date fair values of the awards, as determined under applicable accounting guidance for

54 | 2025 Proxy Statement First American Financial Corporation

Compensation Discussion and Analysis

financial reporting purposes, are as follows: $2,452,389 for Mr. DeGiorgio, $1,226,149 for Mr. Seaton, $396,701 for Ms. Cornehl, $173,099 for Mr. Wajner and $126,165 for Mr. Adams.

In determining the amount of LTI RSUs and target LTI PRSUs ("Target PRSUs") to grant to executive officers, the Committee reviewed the performance of our Company and the executive officers along with compensation levels at peer companies and market data. The Committee's decision further reflected the Committee's assessment of the individual performance of these executive officers during the year, including, their notable achievements and challenges faced, as summarized in the “Performance Overview” section beginning on page 37. Among other considerations, the award increase for Mr. DeGiorgio reflected his commendable leadership throughout the year, enabling the Company to deliver strong results despite generally challenging market conditions, and successes in strategic initiatives that drove long-term value creation for our

stockholders. The award increases for Messrs. Seaton, Wajner and Adams further demonstrated their ongoing strength in leading the Company’s financial function through difficult market conditions. The executive officers' contributions were also reflected in the Company's achievements against talent initiatives, leading to the Company's continued recognition on notable workplace lists, including the Fortune 100 Best Companies to Work For® list for the ninth consecutive year, the Fortune Best Workplaces for Women® list for the ninth consecutive year and People® Magazine's Companies that Care list for the third consecutive year.

In accordance with Company policy, the number of LTI RSUs granted to an executive officer in 2025 in connection with 2024 performance, and the number of Target PRSUs granted to an executive officer in 2025 in connection with 2024 performance, was determined by dividing the dollar amount of the LTI RSUs and Target PRSUs that the Committee determined to be granted by the fair market value of our Company’s stock on February 24, 2025, the second day on which the New York Stock Exchange was open for trading following the submission of our Company’s Annual Report on Form 10-K. Our Company’s 2020 Incentive Compensation Plan defines the fair market value as the last sale price reported for a share of our Company’s common stock on the New York Stock Exchange on the last trading day preceding the grant date. A holder of LTI PRSUs has none of the rights of a stockholder unless and until shares are actually delivered to the holder.

LTI PRSUs Granted in 2025 in Connection with 2024 Performance

LTI PRSUs represent the right to receive shares of common stock of our Company in an amount from 0% to 200% of the Target PRSUs. The number of shares earned will be determined based on relative total shareholder return ("rTSR") over a three-year performance period as compared to the companies in the S&P MidCap 400 Index at the beginning of the performance period (the “Index”) with the number of delivered shares equal to the number of Target PRSUs multiplied by the applicable percentage set forth in the following table (“Earned PRSUs”). The shares underlying the Earned PRSUs, plus any dividend equivalent shares accrued prior to delivery, generally become earned upon satisfaction of the service requirement. The service requirement is satisfied if the recipient does not experience a termination of employment prior to the third anniversary of the date of grant.

(1)

rTSR Rank is calculated based on our Company’s total shareholder return relative to the total shareholder return of each company in the Index.

(2)

For performance between threshold and target and between target and maximum, the percentage of the Target PRSUs that become Earned PRSUs will be determined on straight line interpolation.

LTI PRSUs granted in 2025 have a performance period of January 1, 2025 through December 31, 2027.

Compensation Discussion and Analysis

The service requirement is also deemed satisfied in certain circumstances, including death, disability and normal retirement. Normal retirement means the termination of the executive officer’s employment, other than for cause, after having reached age 60 irrespective of the number of years of service. In the case of disability, normal retirement and termination by our Company without cause, the executive officer shall also be required to sign a separation agreement. In the case of death or disability, the executive officer shall receive shares equal to the number of Target PRSUs as soon as administratively practicable. In the case of normal retirement, the executive officer shall receive shares equal to the number of Earned PRSUs (as defined in our Company’s 2020 Incentive Compensation Plan) after the end of the performance period.

In addition, the service requirement is deemed satisfied in connection with termination by our Company without cause, but only for the portion of the three-year vesting period actually completed, with payout based on actual performance at the end of the performance period.

Other than the early retirement provisions, the terms of the LTI RSUs are identical to the terms of the Bonus RSUs described above beginning on page 53. Like Bonus RSUs, LTI RSUs for executive officers are also tied to a performance-vesting condition.

As indicated above with respect to Bonus RSUs, as required by applicable rules, LTI Awards granted in 2025 in connection with 2024 performance are not reflected in the Summary Compensation table, the Grants of Plan-Based Awards table or the Outstanding Equity Awards at Fiscal Year End table contained herein. Those tables reflect LTI Awards granted in 2024 in connection with 2023 performance.

Vesting of 2022 LTI PRSUs

The LTI PRSUs granted to executive officers in 2022 with respect to 2021 performance were earned based on the Company's rTSR performance relative to the Index during the performance period of January 1, 2022 through December 31, 2024, subject to vesting upon satisfaction of the service requirement. Performance was certified by the Compensation Committee on February 5, 2025 based on results which were provided by a third party equity administration consulting firm. The following table sets forth the performance levels and the corresponding payouts applicable to the 2022 LTI PRSUs, the Company's rTSR performance during the performance period and the resulting payout.

The number of 2022 LTI PRSUs earned for each executive officer:

(1)

Reflects the 2022 LTI PRSUs which were earned, plus dividend equivalent shares accrued during the vesting period.

Summary of Base Salary, Cash Bonus and Equity Incentive Compensation Paid or Granted for 2024

The following table summarizes for each executive officer the amount paid or awarded in connection with 2024 performance in the form of total base salary, cash bonus (paid in 2025 for 2024 performance), Bonus RSUs (granted in 2025 for 2024 performance) and LTI Awards (granted in 2025 in connection with 2024 performance). This table is not a substitute for the compensation tables required by the Securities

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Compensation Discussion and Analysis

and Exchange Commission and included under the heading “Executive Compensation Tables” herein, but it provides a more accurate picture of how the Committee viewed its compensation actions for the executive officers in connection with performance in 2024:

(1)

Base salary paid in 2024 is equal to the corresponding amount reflected in the Summary Compensation Table under the column entitled “Salary”. Unlike the tables presented earlier in this section, the figures for base salaries paid, as reflected in this table above, account for the temporary and voluntary reductions in base salary for Messrs. DeGiorgio and Seaton, as described above.

(2)

The dollar amount reflects the target value of the LTI PRSU award approved by the Committee. The actual value of the award and the number of shares ultimately received by a recipient will vary based on our total shareholder return over the three-year performance period relative to the companies in the S&P MidCap 400 Index at the beginning of the performance period, plus any dividend equivalent shares accrued prior to delivery. The grant date fair values of the awards, as determined under applicable accounting guidance for financial reporting purposes, are as follows: $2,452,389 for Mr. DeGiorgio, $1,226,149 for Mr. Seaton, $396,701 for Ms. Cornehl, $173,099 for Mr. Wajner and $126,165 for Mr. Adams.

(3)

For purposes of the calculation of the total, base salary paid in 2023 is equal to the corresponding amount reflected in the Summary Compensation Table under the column entitled “Salary”.

Consideration of Prior Amounts Realized

Our Company’s philosophy is to incentivize and reward executive officers for future performance. Accordingly, prior stock compensation gains (the realized or realizable value of RSUs awarded in prior years) generally are not considered in setting future compensation levels.

Stock Ownership Guidelines

Our Company has adopted guidelines requiring our chief executive officer to hold Company stock with a value equal to at least six times the chief executive officer’s base salary and each of the other executive officers to hold stock with a value equal to at least three times their respective base salaries, or one-time their respective base salaries if that base salary is below $500,000.

What Counts Toward the Guideline:

•

shares owned personally or by a spouse

•

shares issued or held through a Company-sponsored plan such as the First American Financial Corporation 401(k) Savings Plan or the First American Financial Corporation Employee Stock Purchase Plan

•

unvested (and vested but deferred) restricted stock units

•

shares held in trust for the benefit of the executive officer or a spouse

What Does Not Count Toward the Guideline:

•

stock options

•

unvested LTI PRSUs

The Committee annually reviews compliance with the ownership guidelines. All of the executive officers meet or exceed our ownership guidelines.

Clawback Policy

Our Company has adopted a clawback policy applicable to all executive officers that is intended to comply with, and to be administered and interpreted consistent with the requirements of Listing Standard 303A.14 adopted by the New York Stock Exchange to implement Rule 10D-1 under the Securities Act. The policy generally provides for the recoupment of excess incentive compensation received during the

Compensation Discussion and Analysis

three full fiscal years prior to the date that the Company is required to prepare an accounting restatement of the Company’s financial statements. The description of the Company’s clawback policy provided herein is qualified in its entirety by reference to the Policy Governing the Recovery of Certain Incentive Compensation that is attached as an exhibit to the Form 10-K filed by our Company on February 21, 2025. In addition, under Section 304 of the Sarbanes-Oxley Act of 2002, if our Company is required to restate our financial statements due to material noncompliance with any financial reporting requirements as a result of misconduct, the chief executive officer and chief financial officer may be required to reimburse our Company for any bonus or other incentive-based or equity-based compensation received during the 12 months following the first public issuance of the non-complying document and any profits realized from the sale of securities of our Company during that twelve-month period. Further, our Company’s 2020 and 2010 Incentive Compensation Plans and the employee form of Restricted Stock Unit Award Agreement and form of Performance Restricted Stock Award Agreement provide for the forfeiture or recoupment of previously awarded compensation under certain circumstances if an executive officer’s misconduct causes loss or damage to our Company or our reputation.

Anti-Hedging Policy

Our Company has also adopted policies prohibiting executive officers and certain other employees from holding Company securities in a margin account or pledging Company securities as collateral. These policies further prohibit all directors, executive officers and certain other employees with access to sensitive information—as well as anyone living with such persons, family members whose transactions in our Company’s stock or derivatives are directed by such persons, or those who are subject to the influence or control of such persons—from hedging their ownership of Company securities by engaging in zero-cost collars, forward sale contracts, short sales or trading in option contracts involving Company securities.

Equity Grant Timing

Our Company has adopted a policy of only granting equity awards, including Bonus RSUs, LTI RSUs, and LTI PRSUs, to executive officers (except with respect to new executive officers) on the second day on which the New York Stock Exchange is open for trading following the submission of the Annual Report on Form 10-K. This policy is intended to prevent material nonpublic information from being taken into account when determining the timing and terms of equity awards or timing the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The Company does not currently grant stock options as part of its equity awards; however, eligible employees may elect to purchase common stock at a discount on the last day of fixed quarterly offering periods through accrued payroll contributions under the First American Financial Corporation Employee Stock Purchase Plan.

Benefits and Perquisites

Executive officers are entitled to employee benefits generally available to all full-time employees of our Company (subject to fulfilling any minimum service requirement), such as health and welfare benefits. The executive officers are also eligible to receive an incremental long-term disability insurance benefit and an executive health examination benefit that are not available to all employees. In designing these elements, our Company seeks to provide an overall level of benefits that is competitive with the level of benefits offered by similar companies in the markets in which it operates.

Employment Agreements

Messrs. DeGiorgio and Seaton and Ms. Cornehl are parties to employment agreements with our Company. Mr. DeGiorgio originally entered into his employment agreement in 2008, Mr. Seaton originally entered into his employment agreement in 2014, and Ms. Cornehl originally entered into her employment agreement in 2022. Each of the agreements for Messrs. DeGiorgio and Seaton and Ms. Cornehl were most recently renewed in 2025 and the term of each of those agreements now expires on December 31, 2027. The decision to renew the agreements reflected the Committee’s favorable evaluation of the

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Compensation Discussion and Analysis

performance of these executive officers, its view that the contracts provide an important retention incentive and the potential benefit to our Company from the non-competition, non-solicitation and other covenants in the contracts, provided that those provisions do not apply to the extent they are inconsistent with or violate any federal or state law or specific government mandate, order, injunction, consent, assurance of discontinuance, or decree. The agreements specify minimum base salaries equal to the base salaries paid to such individuals at the time of execution thereof, namely $1,000,000, $725,000 and $460,000 for Messrs. DeGiorgio and Seaton and Ms. Cornehl, respectively. Determinations regarding bonus amounts, long term incentive awards and any increases in base salary remain at the discretion of the Committee.

The agreements provide that if our Company terminates the executive officer’s employment without cause, the executive officer is entitled to an amount representing twice the sum of the executive officer’s base salary and the second largest of the prior three years’ bonuses. Half of this sum would be paid over the first year following termination in twelve equal monthly installments, and the other half would be paid at the end of this one-year period. The executive officer’s receipt of these amounts would be contingent on our Company’s receipt of a release from the executive officer as well as the executive officer’s compliance with certain non-solicitation and confidentiality provisions contained within the agreement, provided that those provisions do not apply to the extent they are inconsistent with or violate any federal or state law or specific government mandate, order, injunction, consent, assurance of discontinuance, or decree. In addition, with respect to an executive officer who participates in the First American Financial Corporation Executive Supplemental Benefit Plan (the “SERP”), if the executive officer's employment is terminated without cause and they would otherwise during the term of the agreement have reached their “early retirement date” under the SERP, which is discussed in further detail below, then their benefit will be deemed vested on the early retirement date notwithstanding the termination. No additional benefits are payable in the event that the executive officer voluntarily terminates or termination is on account of death or disability or is for cause.

Under the agreements, cause is defined to include (1) embezzlement, theft or misappropriation of Company property, (2) willful breach of any fiduciary duties owed to our Company, (3) willful failure or refusal to comply with applicable rules and regulations, (4) commission of a felony or of any crime involving moral turpitude, fraud, or misrepresentation, (5), refusal to perform job duties or reasonable directives from the executive officer’s superior or the Board and (6) any gross negligence or willful misconduct resulting in loss or damage to the reputation of our Company.

The agreements are attached or referenced as an exhibit to the Form 10-K filed by our Company with the Securities and Exchange Commission on February 21, 2025.

Change-in-Control and Post-Termination Arrangements

Award agreements evidencing all outstanding awards provide that vesting will not accelerate as a result of a change-in-control that has been approved by our Company’s Board. The LTI PRSU award agreements further provide that the performance goal will be measured based on actual performance through the date of such change of control, with the final price based on the stock price immediately prior to the consummation of such change of control. Absent the specific language in the award agreements, vesting in the event of a change-in-control would be governed by the terms of our Company’s 2020 and 2010 Incentive Compensation Plans.

The SERP provides additional benefits to participants under age 55 if they are involuntarily terminated within 36 months of a change-in-control. In that circumstance, benefits commence as if the participant had attained early retirement age, subject to an actuarial reduction.

The document evidencing the SERP is attached as an exhibit to the Form 10-K filed by our Company on March 1, 2011 and Amendment No. 1 thereto is attached as an exhibit to the Form 10-K filed on February 23, 2015.

Compensation Discussion and Analysis

Change-in-Control Agreements.

As part of our Company’s efforts to retain key employees, it has entered into agreements with each of the executive officers to provide for certain benefits in the event the executive officer is terminated following a change-in-control. As described below, the severance payment is primarily two times the sum of base salary and target bonus. In the opinion of the Committee, this structure reflects current best practices with respect to such agreements.

Under the agreement, a “change-in-control” means any one of the following with respect to our Company:

•

a merger or consolidation of our Company in which our Company’s stockholders end up owning less than 50% of the voting securities of the surviving entity;

•

the sale, transfer or other disposition of all or substantially all of our Company’s assets or the complete liquidation or dissolution of our Company;

•

a change in the composition of our Company’s Board over a two-year period as a result of which fewer than a majority of the directors are incumbent directors, as defined in the agreement; or

•

the acquisition or accumulation by any person or group, subject to certain limited exceptions, of at least 25% of our Company’s voting securities.

If the termination of the executive officer’s employment occurs without cause or if the executive officer terminates such employment for good reason within 36 months following the change-in-control, our Company is required to pay the following benefits in one lump sum within ten business days:

•

the executive officer’s base salary through and including the date of termination and any accrued but unpaid annual incentive bonus;

•

an annual incentive bonus for the year in which the termination occurs in an amount equal to the target bonus for the year of termination (or if there is no target annual incentive bonus or under certain other specified circumstances, the average of the annual incentive bonuses paid for the three prior years), prorated through the date of termination;

•

accrued and unpaid vacation pay;

•

unreimbursed business expenses;

•

two times the executive officer’s annual base salary in effect immediately prior to the termination; and

•

two times the executive officer’s target bonus (or if there is no target annual incentive bonus or under certain other specified circumstances, two times the average of the annual incentive bonuses paid for the three prior years).

In addition, for a period of 24 months following the date on which the executive officer’s employment terminates, our Company will provide the same level of benefits and perquisites that the executive officer received at the time of termination or, if more favorable to the executive officer, at the time at which the change-in-control occurred. These benefits include tax-qualified and nonqualified savings plan benefits (excluding, however, any supplemental benefit plans), medical insurance, disability income protection, life insurance coverage and death benefits. To the extent that the executive officer cannot participate in the plans previously available, our Company will provide such benefits (or a cash equivalent) on the same after-tax basis as if they had been available. These obligations are reduced by any welfare benefits made available to the executive officer from subsequent employers.

If the amount payable under the agreements, together with other payments and benefits, would constitute an “excess parachute payment” under the Internal Revenue Code and, consequently, be subject to excise tax, the change-in-control agreements provide for a reduction in the amount payable to that amount that would result in the elimination of the excise tax, provided that the reduced amount exceeds the net amount the executive officer would receive if the excise tax had been applied.

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Compensation Discussion and Analysis

The change-in-control agreements automatically extend for additional one-year periods unless either party notifies the other not later than the preceding January 1 that it does not wish to extend the term.

The form change-in-control agreement is attached as an exhibit to the Form 10-Q filed by our Company on November 1, 2010.

Payments due Upon Termination and/or a Change-in-Control.

Calculations and further explanation of the payments due the executive officers upon termination of employment and/or a change-in-control are found under the portion of the “Executive Compensation Tables” section of this document entitled “Potential Payments Upon Termination or Change-in-Control.”

Retirement Benefits

Executive officers may participate in several benefit plans that provide benefits upon retirement. Such retirement benefits include:

• Further explanation of these plans can be found in the Pension Benefits and Nonqualified Deferred Compensation sections in the “Executive Compensation Tables” section.

Our Company believes that these plans provide a valuable recruiting and retention mechanism for our executive officers and enable it to compete more successfully for qualified executive talent.

Effective January 1, 2011, the Committee closed the SERP to new participants and, as part of the amendments described above, fixed as of December 31, 2010 the compensation used to determine benefits payable under the SERP. The amendments also capped the annual benefit to a maximum of $500,000 for our Company’s chief executive officer and $350,000 for other participants.

Conclusion

The final level and mix of compensation determined by the Committee is considered within the context of both the objective data from a competitive assessment of compensation and performance, as well as discussion of the subjective factors as outlined above. The Committee believes that each of the compensation packages for the executive officers is within the competitive range of practices when compared to the objective comparative data even where qualitative factors have influenced the compensation decisions.

Compensation Discussion and Analysis