First American Financial Corp

Our Company's financial performance is largely realized through providing title insurance, settlement services and related products and services in support of real estate transactions. This links our performance to cyclical real estate market dynamics. Fluctuations in interest rates, real estate inventory levels, real estate pricing and general economic conditions, among other factors, impact the real estate market and, therefore, demand for our products and services. The ongoing downturn in the real estate

Compensation Discussion and Analysis

market made 2024 a challenging year, particularly in the residential purchase and refinance markets. A prolonged lack of affordability in the housing market, driven by relatively low inventory, elevated home prices, and high mortgage rates, produced a home sales market that was at the lowest level since the mid 1990s. High mortgage rates also kept refinance volumes at trough levels.

The Committee believes that in the face of these market headwinds, the Company delivered strong results for 2024, including growing adjusted earnings per share by 15.8% compared with the prior year, generating pretax earnings in the title insurance and services segment of $246.2 million, increasing commercial revenues by 16% to $761 million and generating total revenues of over $6.1 billion. Furthermore, the Committee believes that management’s effectiveness is reflected in its significant achievements in execution against its strategic objectives, while remaining focused on expense management.

Execution on Company StrategyOur Company continued executing on our strategic goals this year in the face of generally challenging market conditions. The Company's accomplishments described below, among others, continue to validate our Company's strategy, including our focus on continued improvement of our customers’ experience with our products and services, as well as through the digital transformation of the process for transacting real estate. Our vision remains to be the premier title insurance and settlement services company. Highlights for 2024 include:

Financial Results

•Generated earnings per diluted share of $1.26, or $4.40 on an adjusted basis, an increase of 15.8% compared with last year •Maintained total revenues of over $6.1 billion, or $6.5 billion on an adjusted basis•Generated pretax earnings in the title insurance and services segment of $246.2 million, or $624.2 million on an adjusted basis•Achieved a pretax margin in the title insurance and services segment of 4.3%, or 10.3% on an adjusted basis•Grew commercial revenues by 16% compared with last year to $761 million•Delivered a return on equity of 2.7%, or 8.2% on an adjusted basis•Executed a strategic investment portfolio rebalancing initiative, which resulted in an increase in net investment income and tax savings during the year •Generated investment income in the title insurance and services segment of $534 million•Delivered cash flow from operations of $897 million •Home Warranty segment achieved a pretax margin of 15.1%, or 14.8% on an adjusted basisNote: See Appendix A for the rationale behind the presentation of all non-GAAP financial measures referred to above and reconciliations to the nearest GAAP financial measures.

Execution on Strategic Objectives

•Mitigated the impact of generally challenging market conditions, largely through continued focus on expense management•Successfully launched a pilot of Sequoia, our automated underwriting platform for instant, insurable title decisions in purchase transactions

38 | 2025 Proxy Statement First American Financial Corporation

Compensation Discussion and Analysis

•Launched new initiatives that improve the customer experience, make our business more efficient and mitigate risk•Scaled and grew strategic products and capabilities, such as the DataTrace Starter XchangeTM program for title policy starters and GalileoTM, a modern, digital capability helping underwriters make better, faster coverage decisions for our customers•Maintained leadership in title data coverage in all data asset categories, including leveraging our proprietary data extraction technology to increase our title plant footprint •Successfully executed on compliance and risk management efforts, including effective management of underwriting risk, legal and regulatory compliance

Talent, Sustainability and Governance Initiatives

•Named to the Fortune 100 Best Companies to Work For® list for the ninth consecutive year and Fortune Best Workplaces for Women® list for the eighth consecutive year•Named one of the 100 Best Workplaces for Innovators by Fast Company for the second consecutive year•Named to People® Magazine's Companies that Care list for the third consecutive year•Earned a top score of 100 on the Human Rights Campaign Foundation’s 2023-2024 Corporate Equality Index (CEI) for the sixth consecutive year•Published our 2023 annual sustainability report, which was aligned to Sustainability Accounting Standards Board (SASB) standards

Stockholder Outcomes

•Returned $68 million to stockholders through the repurchase of 1.2 million shares at an average price of $55.76•Raised the quarterly dividend by 1.9%, returning $220.7 million to stockholders through dividends in 2024•Total shareholder return of 0.4%, 4.9% and 9.8% for the one-, five- and ten-year periods ending December 31, 2024, respectively, compared to the total shareholder return of the S&P MidCap 400 Index of 13.9%, 10.3%, and 9.7% over the same respective periods

2024 Performance Metric Results

Our named executive officers' AIP cash and equity bonuses paid out at 133% of target for 2024. These payout amounts reflect the results of the two financial metrics utilized by the Committee: return on equity and pretax margin. Target and actual results of these metrics for 2024 were as follows.

(1) Note: The Committee’s definitions of pretax margin and return on equity are described on page 50 below. Actual results set forth above have been adjusted to exclude current year net investment gains/losses from the investment portfolio, certain current year net investment gains/losses from our Company’s venture investment portfolio, purchase related amortization of intangible assets, and, in the discretion of the Committee, the effects of certain non-operating items. Return on equity also excludes accumulated other comprehensive income/loss and noncontrolling interests. These are non-GAAP financial measures. Please see Appendix A for the rationale behind the presentation of these measures and reconciliations of these amounts to the nearest GAAP financial measures.

Compensation Discussion and Analysis

The AIP gives the Committee discretion to adjust the metric-driven payout amounts by up to 30 percentage points to account for unanticipated external factors, performance against strategic initiatives designed to create long-term stockholder value, or talent, sustainability or governance actions or initiatives (the "Discretionary Adjustment"), which factors and their application are further described in the Annual Incentive Compensation section beginning on page 50 below. For 2024, the Committee did not make any Discretionary Adjustments.