KAISER ALUMINUM CORP

Introduction

This section provides:

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our 2024 performance highlights;

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a discussion of our 2024 capital allocation;

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an overview of the compensation committee;

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a discussion of the objectives of our comprehensive compensation structure;

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a discussion of the design of our overall 2024 compensation program for senior management;

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a discussion of all material elements of 2024 compensation for each of our named executive officers whose names and titles (during 2024) are set forth in the following table:

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a summary of the compensation committee’s consideration of the 2024 advisory vote to approve named executive officer compensation;

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a discussion of actions with respect to 2024 compensation;

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a summary of our stock ownership guidelines, securities trading policy and clawback policy; and

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a summary of our current employment contracts, termination of employment arrangements, and change-in-control arrangements with our named executive officers.

2024 Performance Highlights(1), (2)

In 2024, we delivered solid performance despite a highly complex and dynamic market environment. We continued to expand our margin and were nearing completion of significant growth investments at year end. We remain well positioned for sustainable, long-term growth.

The table below highlights our 2024 financial performance:

clarity of the impact of certain material items on the GAAP measure and are not intended to imply those terms should be excluded.

Balanced Capital Allocation Priorities

Our capital allocation strategy focuses on organic investment, external growth and returning cash to stockholders through dividends and share repurchases.

1 Excess cash is liquidity beyond the minimum required in contingency planning for an economic downturn.

Organic Investment Strategy

Inorganic Investment Strategy

We use a strategic filter to review all potential acquisitions. We will not engage in an acquisition unless it has a strategic rationale that passes the strategic filter.

Value Returned to Stockholders

We also expect to continue to pay regular dividends. Since 2007, we have returned approximately $1 billion to stockholders through quarterly dividends and share repurchases.

1 Return to shareholders from January 1, 2007 through December 31, 2024.

Overview of the Compensation Committee

The compensation committee of our board of directors is comprised entirely of independent directors. By design, members of the compensation committee also serve on other board committees, including the executive committee, the audit committee, the nominating and corporate governance committee and the sustainability committee. We believe this structure helps coordinate the efforts of the respective committees. The compensation committee's primary duties and responsibilities are to establish and implement our compensation policies and programs for senior management. While the nominating and corporate governance committee has the responsibility to evaluate the overall performance of our CEO, the compensation committee coordinates with and assists the nominating and corporate governance committee in that evaluation.

The compensation committee has the authority under its charter to engage the services of outside advisors, experts and others to assist it. Pursuant to that authority, the compensation committee engaged Meridian to advise it on all matters related to compensation of our CEO and other members of senior management, including the other named executive officers.

The compensation committee meets formally and informally throughout the year. Informal meetings frequently occur when our directors are together for meetings of our full board of directors and virtually at the request of one or more committee members. Our CEO, other members of our management and outside advisors may be invited to attend all or a portion of a compensation committee meeting depending on the nature of the agenda items; however, neither our CEO nor any other member of management votes on items before the compensation committee.

The compensation committee works with our senior management and Meridian to determine the agenda for its formal meetings and to prepare meeting materials. The compensation committee and our board of directors also solicit the views of our CEO on compensation matters, including, among others:

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our strategy and key strategic objectives, business plan, and underlying assumptions;

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objectives for our compensation programs;

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the structure of our compensation programs;

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the role of our compensation programs in management succession planning; and

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compensation of other members of senior management, including our other named executive officers.

Objectives of our Compensation Structure

Our compensation structure was developed to achieve the following objectives, which we believe are critical for enhancing stockholder value and to our long-term success and sustainability:

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creating alignment between our senior management and our stockholders by rewarding our senior management for achieving strategic goals that successfully drive our operations and enhance our stockholder return;

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attracting, motivating and retaining highly experienced executives vital to our short-term and long-term success, profitability and growth; and

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correlating our senior management compensation with our actual short- and long-term performance.

Design of our 2024 Compensation Program

Our 2024 compensation program for our senior management, including our named executive officers, was designed to reinforce performance and accountability at the corporate, operational and individual levels through the use of:

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a short-term annual cash incentive plan, which pays only if performance thresholds are met; and

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an equity-based, long-term incentive consisting of (1) restricted stock units with three-year cliff vesting to promote senior management retention, and (2) performance shares, 60% of which vest, if at all, based on our TSR compared to a group of peer companies and 40% of which vest, if at all, based on our Adjusted EBITDA margin performance, each over a three-year performance period (2024 through 2026).

As previously discussed, effective January 1, 2025, we elected to change our method of accounting for certain inventory from the LIFO method to the WAC method to improve the comparability of our operational results between periods. This accounting change was not retrospectively applied to the financial results with respect to Adjusted EBITDA and Adjusted

EBITDA margin for purposes of our short-term annual cash incentive awards and our 2022-2024 LTI Plan. Therefore the reconciliation of Adjusted EBITDA on Appendix A of this Proxy Statement is not applicable.

In addition to focusing on "pay for performance," our 2024 compensation program:

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balanced short-term and long-term goals, with:

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more than 60% of the target total compensation of our CEO being delivered through long-term incentives; and

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approximately 35% to 50% of the target total compensation for our other named executive officers being delivered through long-term incentives;

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delivered a mix of fixed and at-risk compensation directly related to our overall performance and the creation of stockholder value, with:

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approximately 50% of the target compensation of our CEO being at-risk compensation payable only if certain corporate performance levels are achieved; and

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approximately 45% of the target total compensation for our other named executive officers being at-risk compensation payable only if certain corporate performance levels are achieved;

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provided compensation that is competitive with our compensation peer group recommended by the compensation committee's independent compensation consultant;

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provided annual cash incentives linked to achievement of financial, corporate, operational and individual performance while emphasizing the importance of safety, quality, delivery and cost performance;

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utilized equity-based awards, including performance shares that vest only if we achieve a certain relative TSR and Adjusted EBITDA margin performance; and

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utilized forfeiture provisions that can result in the loss of awards and resulting benefits if we determine that a recipient, including any of our named executive officers, has engaged in certain activities detrimental to us.

Periodically, but not less than annually, each element of compensation is reviewed and considered by the compensation committee and our board of directors both individually and collectively with the other elements of compensation to ensure that each element is consistent with the objectives of both our comprehensive compensation structure and that particular element of compensation. The compensation committee and our board of directors share suggestions or concerns identified in the course of that review with senior management and Meridian, who address the suggestions or concerns in a manner that is satisfactory to the compensation committee and our board of directors. This process occurs over a series of meetings of the compensation committee and our board of directors and executive sessions of the independent directors without members of management present.

In designing the overall compensation program and each individual element of compensation for senior management, including our named executive officers, the compensation committee considers the following factors, among others:

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The external challenges to our near- and long-term ability to attract and retain strong senior management;

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Each individual's contributions to our overall results;

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Our historical and anticipated operating and financial performance compared with targeted goals; and

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Our size and complexity compared with companies in our compensation peer group.

The compensation committee generally uses tally and other summary sheets that provide a summary of the compensation history of our CEO and those members of our senior management reporting to our CEO. These tally and information sheets include a historical summary of base salary, annual bonus and equity awards.

In reviewing and deliberating our 2024 compensation program, the compensation committee considered, among other things:

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the Company's key strategic initiatives, business plan and underlying assumptions;

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the goal of maintaining alignment between our senior management and our stockholders through the use of short- and long-term, performance-based compensation;

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the benefits of maintaining a consistent approach to compensation and the structure of our programs through business cycles;

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the anticipated performance of the Company's compensation programs based on the Company's business plan and current financial position;

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the economic conditions in the United States and abroad; and

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stockholder feedback.

The review included discussions with Meridian and management regarding existing and contemplated market practices, as well as the structure and objectives of each component of our compensation program.

The compensation committee also reviews the compensation and benefit practices, as well as levels of pay, of a compensation peer group of companies. Working with Meridian, the compensation committee selects for inclusion in our compensation peer group companies that are determined to:

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be of a similar size;

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have positions of similar complexity and scope of responsibility; and/or

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compete with us for talent.

The compensation committee, working with Meridian, reviews, evaluates and updates our compensation peer group, which includes companies in both similar and different industries, at least annually. For 2024, the compensation committee approved a 23-company peer group. Compared to the peer group used for 2023, Arconic Corporation and Resolute Forest Products Inc. were removed, as they were taken private and acquired, respectively, and, as a result, would no longer publish compensation information. As of November 2023, the new custom peer group had (1) market capitalization ranging from approximately $240 million to approximately $21.2 billion and a median market capitalization of approximately $4.4 billion, and (2) trailing 12 months revenues ranging from $2.0 billion to approximately $8.8 billion and median revenue of approximately $3.6 billion. Our market capitalization and revenue, both as of December 31, 2023, were $1.1 billion and $3.1 billion, respectively.

Due to the differences in size among the companies in our peer group, Meridian uses a regression analysis to adjust survey data results based on our revenue as compared to the revenue of other companies in our peer group. Importantly, the compensation committee recognizes that we compete for talent with companies much larger than us. These larger companies, including Arconic Corporation, Constellium SE, Novelis Inc. and Norsk Hydro ASA, aggressively recruit talent in critical functions. As a result, to attract and retain talent, the compensation committee may from time to time determine that it is in the best interests of our company and our stockholders to provide compensation packages that deviate from targeted pay levels. For 2024, in addition to data obtained from publicly disclosed proxy statements, Meridian also provided data obtained from Equilar Executive Compensation Survey. We did not select the constituent companies comprising this survey group, however, and the component companies’ identities were not a material factor in the applicable compensation analysis.

For 2025, the compensation committee approved the same peer group as 2024, except for the removal of Howmet Aerospace, Inc. due to its outpaced growth in 2024 compared to the other peers.

Principal Elements of 2024 Compensation

The table below summarizes the key elements of our named executive officers' compensation in 2024:

Each compensation element is discussed in detail below.

2024 base salary

The compensation committee annually reviews base salaries for our CEO and other executive officers, including our other named executive officers, and determines whether a change is appropriate. In reviewing base salaries, the compensation committee considers factors, including, among others:

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level and scope of responsibility;

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prior experience;

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base salaries paid for comparable positions by our compensation peer group; and

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the relationship among base salaries paid within our company.

Our intent is to fix base salaries at levels consistent with the design of our overall compensation program for the particular year. In 2024, the base salary of each of our named executive officers, other than Mr. Harvey, was increased by 4%, principally to align such base salary more closely with market and survey information. Pursuant to his request, Mr. Harvey's 2024 base salary remained the same as his salary in 2023 despite his target compensation lagging his peers in our compensation peer group.

Base salary rates for our named executive officers in 2024, effective April 1, 2024, were as follows:

2024 short-term incentive

The table below summarizes the performance metrics under our 2024 STI Plan:

• Safety performance is measured using our TCIR and LCIR. Quality performance is measured using our no-fault claim rate. Delivery performance is measured by our on-time delivery rate. As noted, the individual modifier is discretionary and only used in exceptional instances approved by the compensation committee based on actual performance, including individual, facility and/or functional area performance, as well as performance against other strategic initiatives. Individual awards for each named executive officer may be adjusted up or down 100% in recognition of exceptional performance, including individual, facility, and/or functional area performance.

The following summarizes the key features of our 2024 STI Plan:

Our 2024 STI Plan was an annual cash incentive plan designed to reward participants for achieving certain Adjusted EBITDA, safety, quality and delivery performance goals. Similar to the short-term incentive plan approved by the compensation committee in 2023, our 2024 STI Plan also permitted adjustments to individual payouts, in exceptional instances, based on actual performance, including individual and/or functional area performance as well as performance against other strategic initiatives, subject to the maximum payout opportunity described above. The structure, terms and metrics of the 2024 STI Plan applicable to the named executive officers were generally consistent with those of the short-term incentive plan approved by the compensation committee in 2023, except for (i) the elimination of productivity as a performance metric, (ii) the re-allocation of the other performance metrics so that the individual target payouts under the proposed STI plan are based 85.0% on Adjusted EBITDA performance, 2.5% on TCIR performance, 2.5% on LCIR performance, 5% on quality performance, and 5% on delivery performance, and (iii) the potential impact of the individual modifier for the named executive officers from up to +/- 25% to +/- 100%, in each case subject to a maximum final award multiplier of 2.5 times target.

Consistent with our objective of aligning senior management and our stockholders by rewarding our senior management for achieving strategic goals that successfully drive our operations and enhance our stockholder value, our 2024 STI Plan provided that Adjusted EBITDA performance in excess of the threshold level would result in an increase in payouts up to the maximum payout opportunity with respect to such metric. Under our 2024 STI Plan, potential payouts between the threshold and target levels and between the target and maximum levels for Adjusted EBITDA were linearly interpolated.

The table on the right illustrates our annual Adjusted EBITDA performance multiplier for the last three years under our short-term incentive plans before the application of modifiers or other metrics. As previously discussed, effective January 1, 2025, we elected to change our method of accounting for certain inventory from the LIFO method to the WAC method to improve the comparability of our operational results between periods. This accounting change has not been retrospectively applied to the figures in the chart. Therefore, the reconciliation of Adjusted EBITDA on Appendix A of this Proxy Statement is not applicable.

The final multipliers of our 2022 and 2023 short-term incentive plans, after the application of modifiers and including the impact of other performance metrics, were 0.00x and 0.86x, respectively. As discussed below, the final multiplier under our 2024 STI Plan, after taking into consideration all the performance metrics, was 0.95x.

The final multiplier of our 2024 STI Plan was 0.95x. The table below summarizes the performance metrics and payout potential under our 2024 STI Plan and our performance against each of the metrics:

• Total may not sum due to rounding.

The performance required at each performance level for each performance metric and our actual performance are summarized in the table below:

• Total may not sum due to rounding.

The table below sets forth the possible payouts that could have been earned by our named executive officers at each performance level and the actual amounts earned by them under the 2024 STI Plan. In 2024, the short-term incentive targets of our named executive officers, other than Mr. Harvey, were increased by 4%, principally to align their targets more closely with market and survey information. Pursuant to his request, the short-term incentive target of Mr. Harvey remained the same as his target in 2023 despite his target compensation lagging his peers in our compensation peer group.

2024-2026 long-term incentives

The table below summarizes the performance metrics for the performance shares granted under our 2024-2026 LTI Plan:

The following summarizes the key features of our 2024-2026 LTI plan:

We believe that consistent execution of our strategy over multi-year periods will lead to an increase in our TSR. We use equity awards to provide our named executive officers with an incentive to focus on long-term stockholder value creation. Our 2024-2026 LTI Plan for key employees, including our named executive officers, was approved by the compensation committee on March 5, 2024, and the structure, terms and metrics of the 2024-2026 LTI Plan were generally consistent with those of the long-term incentive plan approved by the compensation committee in 2023 for our named executive officers.

Since 2014, we have implemented long-term incentive programs with a performance metric based on TSR. In 2020, we expanded our TSR peer group from companies in the S&P SmallCap 600 Materials Index to companies in both the S&P SmallCap 600 Materials and S&P MidCap 400 Materials Indices. We added Adjusted EBITDA margin as a performance metric in 2020.

Our 2024-2026 LTI Plan provides, with respect to the restricted stock units granted to our named executive officers, that, subject to limited exceptions, such units will vest on March 5, 2027. Each restricted stock unit that becomes vested entitles the participant to receive one share of our common stock.

The 2024-2026 LTI Plan provides, with respect to the performance shares:

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a threshold performance level up to which no performance shares will vest or be earned;

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a target performance level at which the target number of performance shares will vest and be earned;

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a maximum performance level at or above which the maximum number of performance shares (equal to two times the target number of performance shares) will vest and be earned; and

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pro rata vesting between the threshold and maximum performance levels.

For 60% of the performance shares granted under our 2024-2026 LTI Plan, the payout will be determined based on our TSR relative to the TSR of our peer companies in the S&P SmallCap 600 Materials and S&P MidCap 400 Materials Indices as follows:

In considering constituents for the S&P SmallCap 600 Materials and S&P MidCap 400 Materials Indices, S&P Dow Jones Indices currently looks for companies (1) with market capitalization of between $1.1 billion and $7.4 billion and between $7.4 billion and $20.5 billion, respectively, (2) meeting certain float requirements, (3) with a U.S. domicile, (4) required to file SEC annual reports, and (5) listed on a major U.S. exchange, among other factors. The materials sector includes companies that manufacture chemicals, construction materials, glass, paper, forest products and related packaging products, and metals, minerals and mining companies.

For the remaining 40% of the performance shares granted under our 2024-2026 LTI Plan, the payout will be determined based on our Adjusted EBITDA margin using performance goals approved by the compensation committee.

For 2024, the compensation committee determined that each named executive officer should receive time-based restricted stock units having an economic value equal to approximately 50% of his target monetary value and a target number of performance shares having an economic value equal to approximately 50% of his target monetary value. In addition, the target monetary values under the 2024-2026 LTI Plan for our named executive officers, other than Mr. Harvey, were increased by 4%, principally to align their targets more closely with market and survey information. Pursuant to his request, the target monetary value for Mr. Harvey remained the same as the value in 2023 despite his target compensation lagging his peers in our compensation peer group.

The table below sets forth the target monetary value under our 2024-2026 LTI Plan and the number of restricted stock units and performance shares granted to our named executive officers during 2024:

(1)

The restricted stock units granted will vest on March 5, 2027 or earlier if the named executive officer's employment terminates as a result of disability or death or in the event of a change in control. If the named executive officer’s employment is terminated by us without cause or the named executive officer’s employment is terminated by him for good reason, in either case before March 5, 2027, the restricted stock units will remain outstanding and vest on March 5, 2027 (or earlier in the event of his disability or death or a change in control). The number of restricted stock units granted was calculated by dividing (A) the applicable percentage (50%) of the target monetary value by (B) an amount equal to the average of the closing prices of our company's common stock for the 20 trading days prior to the grant date, which was $67.34 per share.

(2)

The table below sets forth the number of performance shares that will vest and be earned for each of Messrs. Harvey, West, Donnan, Walsh and Tiffany under our 2024-2026 LTI Plan at each performance level:

The number of performance shares, if any, earned based on the level of performance achieved during the three-year performance period will vest on the later to occur of March 5, 2027 and the date on which the compensation committee certifies the performance level achieved during the three-year performance period, which will be no later than March 15, 2027. If, prior to December 31, 2026, the named executive officer's employment terminates as a result of disability or death, the target number of performance shares will vest and be earned. If, prior to the vesting date, the named executive officer's employment is terminated by us without cause or is voluntarily terminated by him for good reason, the performance shares granted to him will remain outstanding and the number of performance shares, if any, earned will be determined based on the performance level achieved during the three-year performance period. If, prior to December 31, 2026, a change in control occurs, the performance shares granted to him will vest and the number of performance shares, if any, earned will be determined based on the performance level achieved during the performance period through the change in control date.

The threshold, target and maximum number of performance shares that may be earned, if at all, in 2027 under our 2024-2026 LTI Plan are determined as follows:

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the threshold number of performance shares reflects that no performance shares will be earned in 2027 under our 2024-2026 LTI Plan unless our company's performance meets or exceeds at least one of the applicable threshold performance levels required for each metric over the 2024 through 2026 performance period;

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the target number of performance shares was calculated by dividing (A) the applicable percentage (50%) of the target monetary value by (B) an amount equal to the average of the closing prices of our company's common stock for the 20 trading days prior to the grant date, which was $67.34 per share; and

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the maximum number of performance shares for each metric is approximately twice the target number of performance shares for that metric.

Upon a change in control, all the restricted stock units will vest. However, the number of performance shares earned upon change in control, if any, will be determined based on the performance level achieved against the underlying metrics applicable to the outstanding performance shares during the performance period through the date of the change in control ensuring that our named executive officers will only be rewarded for performance supporting strategic goals that successfully drive our operations and enhance our stockholder returns. We believe this structure (1) aligns the interests of our named executive officers with our stockholders, and (2) drives the performance required to meet our strategic initiatives and enhances stockholder alignment, particularly when considering that the performance shares granted to our named executive officers have an economic value equal to 50% of each named executive officer's long-term incentive target, and that the performance shares earned, if any, upon a change in control will only be earned if the required performance level is achieved.

Results for 2022-2024 Performance Period

Similar to the 2024-2026 LTI Plan, our 2022-2024 LTI Plan utilized time-based restricted stock unit and performance share awards. The payout of the performance share awards under 2022-2024 LTI Plan was based 60% on our TSR performance relative to the TSR performance of our peers in the S&P SmallCap 600 Materials and S&P MidCap 400 Materials Indices and 40% on our Adjusted EBITDA margin performance. On March 5, 2025, the three-year vesting period applicable to the grant of restricted stock units under our 2022-2024 LTI Plan ended and shares were issued in accordance with the terms of the underlying grants. In addition, in early 2025 our compensation committee determined that 44% of the performance shares granted under the 2022-2024 LTI Plan had been earned based on our performance over the 2022 through 2024 performance period as a result of our TSR performance. The remaining performance shares granted under the 2022-2024 LTI Plan were forfeited.

As previously discussed, despite the significant challenges during the three-year performance period, the compensation committee, based on management’s recommendation, did not make any adjustments to the 2022-2024 LTI Plan to mitigate the impact on the payout. While our end markets remained strong in 2022 and commercial aerospace demand continued to strengthen, we experienced operational challenges related primarily to (i) the continuation of our supply chain disruptions, such as the continuing impact of the declaration of force majeure by Warrick’s primary magnesium supplier and ultimately the cessation of all magnesium deliveries from that supplier that led to our declaration of force majeure at Warrick, (ii) molten metal supply issues that negatively impacted Warrick, (iii) the inflationary environment and significant corresponding increases in costs, and (iv) a planned outage at Trentwood, all of which negatively impacted our financial performance. Despite our solid performance in 2023 and 2024 , it was not sufficient to overcome the impact of the challenges in 2022 and reach the threshold performance required for a payout under the Adjusted EBITDA margin performance metrics under the 2022-2024 LTI Plan.

Our TSR is calculated based on the return of the 20-trading-day average closing prices between the beginning and the end of the applicable performance period, using the formula below. The average prices are based upon daily asset values, which represent adjusted stock prices for dividends reinvested throughout the period.

The calculation for the 2022 - 2024 TSR is as follows:

The beginning average price of $94.23 is based upon the 20-trading-day average closing stock prices of our common stock, assuming all dividends are reinvested as of the ex-dividend date, from December 3, 2021 to December 31, 2021. The ending average price of $84.85 is based upon the 20-trading-day average closing stock prices of our common stock, assuming all dividends are reinvested as of the ex-dividend date, from December 3, 2024 to December 31, 2024 . We paid out $9.24 per share of dividends during the 2022 - 2024 performance period.

Our TSR of -9.95% for the 2022 through 2024 performance period ranked #35 out of the 55 companies in the S&P SmallCap 600 Materials and S&P MidCap 400 Materials Indices, or the 37 th percentile, resulting in a payout of 74% of the performance shares with a relative TSR metric.

The chart below illustrates the performance share award payouts based on our relative TSR performance for the 2020-2022, 2021-2023 and 2022-2024 long-term incentive programs:

For the remaining 40% of the performance shares granted under the 2022 - 2024 LTI Plan, the payout was determined based on our Adjusted EBITDA margin performance, calculated by our Adjusted EBITDA as a percentage of conversion revenue over the three-year performance period. Our conversion revenue is calculated as our net sales less the hedged cost of alloyed metals. Our average Adjusted EBITDA margin for 2022 through 2024 was 13.3%, which did not meet the 19% threshold required for a payout. A payout at the target level under the 2022 - 2024 LTI Plan required an average adjusted EBITDA margin of 22%, and a payout at the maximum level under the 2022 - 2024 LTI Plan required an average adjusted EBITDA margin equal to or greater than 25%.

Retirement benefits

We do not maintain a defined benefit pension plan or retiree medical program that covers members of senior management. Retirement benefits to our senior management, including our named executive officers, are currently provided through a defined contribution retirement program consisting of the following two principal plans:

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the Kaiser Aluminum Savings and Investment Plan, a tax-qualified profit-sharing and 401(k) plan (which we refer to as our Savings Plan); and

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a nonqualified and unsecured deferred compensation plan (which we refer to as our Restoration Plan) intended to restore benefits that would be payable to designated participants in our Savings Plan but for the limitations on benefit accruals and payments imposed by the Code.

The defined contribution retirement program has the following three primary components, which are discussed more fully below:

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A company match of the employee's pre-tax deferrals under our Savings Plan;

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A company contribution to the employee's account under our Savings Plan; and

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A company contribution to the employee's account under our Restoration Plan.

Under the terms of our Restoration Plan, cash balances are maintained in a "rabbi trust" where they remain subject to the claims of our creditors and are otherwise invested in funds designated by each individual from a menu of possible investments. In addition, the cash balances maintained in the rabbi trust are forfeited if the individual is terminated for cause.

The compensation committee believes the Savings Plan and the Restoration Plan support the objectives of our comprehensive compensation structure, including the ability to attract and retain senior and experienced mid- to late-career executives for critical positions within our organization. Each of these plans is discussed more fully below.

Perquisites

Our use of perquisites as an element of compensation is very limited and largely based on business-related entertainment needs. We do not view perquisites as a significant element of our comprehensive compensation structure but do believe that they can be used in conjunction with base salary to attract, motivate and retain individuals in a competitive environment. During 2024, all of our named executive officers received a vehicle allowance.

Our salaried employees, including the named executive officers, are also eligible to receive benefits in connection with qualified relocations requested by the Company, including the reimbursement of certain moving expenses, temporary living expenses, and normal closing costs up to the lesser of two points or 2% of the loan value, and, if applicable, a payment intended to offset costs incurred to close the home sale in the origin location equal to 7% of the contract price for relocations within the United States.

Consideration of the 2024 Advisory Vote to Approve Named Executive Officer Compensation

We provide our stockholders with the opportunity to cast an annual vote to approve our named executive officer compensation. At our 2024 annual meeting of stockholders, approximately 98.5% of shares of our common stock voted on the proposal were voted to approve the compensation of our named executive officers as disclosed in the proxy statement relating to such meeting. The compensation committee has considered the outcome of the vote on executive compensation at our 2024 annual meeting of stockholders, as well as the feedback received through our stockholder engagement, and believes they affirm our stockholders' support of our overall approach to executive compensation. Therefore, we did not make any changes to our executive compensation program as a direct result of the vote. The compensation committee expects to continue to consider the outcome of the annual vote to approve named executive officer compensation when making future compensation decisions for the named executive officers.

Stock Ownership Guidelines

In order to further align the interests of senior management, including our named executive officers, with those of our stockholders, we have stock ownership guidelines, which are set forth in our corporate governance guidelines. Under those guidelines, members of our senior management are expected to hold common stock having a value equal to a multiple of their base salary as determined by their position. The guidelines provide for a target multiple of six times base salary for our President and CEO and three times base salary for the other named executive officers. Each member of senior management covered by our stock ownership guidelines is expected to retain at least 75% of the net shares resulting from equity compensation awards until the applicable ownership level required by the stock ownership guidelines is achieved. The ownership guidelines are expected to be met within five years. Each of our named executive officers has satisfied the applicable stock ownership requirements under the stock ownership guidelines.

For purposes of measuring compliance with our stock ownership guidelines (1) restricted stock and restricted stock units are valued at the closing price of the Company's common stock on the grant date, (2) performance shares are valued using the target number of performance shares and the closing price of our common stock on the grant date, and (3) all other shares of common stock purchased or acquired by members of our senior management are valued at the purchase price of the shares.

Securities Trading Policy

Our securities trading policy prohibits our directors, employees, including our named executive officers, and independent contractors, and members of their immediate families, from purchasing financial instruments, including options and other derivative arrangements, to hedge or offset, or otherwise engaging in transactions designed to hedge or offset, decreases in the market value of our equity securities, whether granted as part of compensation to, or otherwise held directly or indirectly by, such director, employee, or independent contractor. Prohibited transactions include short sales, options, puts, calls and derivative instruments such as swaps, forwards, collars and futures. Our securities trading policy also prohibits our directors, employees, including our named executive officers, and independent contractors from buying our securities on margin (other than purchases where the related margin borrowings are effected solely for the purpose of paying the option exercise price upon the exercise of an option to purchase shares from the Company, which are typically referred to as “cashless exercises”), holding our securities in a margin account, pledging our securities as collateral for a loan or any other obligations or entering into share lending programs.

Clawback Policy

As required by Dodd-Frank, in October 2022, the SEC adopted final rules directing the national securities exchanges and national securities associations that list securities, including The Nasdaq Stock Market, to establish clawback listing standards. These clawback listing standards require the Company to adopt a written compensation recovery (clawback) policy providing for the recovery, in the event of a triggering accounting restatement, of incentive-based compensation received by current or former executive officers that is based on erroneously reported financial information. In October 2023, the Nasdaq clawback listing standards became effective. Accordingly, in October 2023, we amended our then existing clawback policy to meet the requirements of clawback listing standards of the Nasdaq Stock Market.

The revised clawback policy provides for the reasonably prompt recovery (or clawback) of certain excess incentive-based compensation received during an applicable three-year recovery period by current or former executive officers in the event we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. Excess incentive-based compensation for these purposes generally means the amount of incentive-based compensation received (on or after October 2, 2023) by such executive officer that exceeds the amount of incentive-based compensation that would have been received by such executive officer had it been determined based on the restated amounts, without regard to any taxes paid. Incentive-based compensation potentially subject to recovery under the clawback policy is generally limited to any compensation granted, earned or vested based wholly or in part on the attainment of one or more financial reporting measures.

The clawback policy does not condition the clawback on the fault of the executive officer, but we are not required to recoup amounts in limited circumstances set forth in the clawback policy where the compensation committee has made a determination that recovery would be impracticable. Operation of the clawback policy is subject to a brief phase-in process during the first few years after its effectiveness. We may not indemnify any such executive officer against the loss of such recovered compensation in the event of a mandatory accounting restatement.

In addition to our clawback policy, our short-term incentive plan and equity award agreements provide for the recovery of payments or awards received during the applicable one-year recovery period by plan participants in the event that the plan participant engaged in a triggering detrimental activity.

Employment Contracts, Termination of Employment Arrangements and Change-in-Control Arrangements

As discussed more fully below, on July 31, 2020, we entered into an amended and restated severance agreement with Mr. Harvey in connection with his appointment as CEO. The severance agreement, among other things, (i) eliminated our obligation to make excise tax gross up payments to Mr. Harvey in the event of his termination in connection with a change in control of our company, (ii) added severance benefits and (iii) increased Mr. Harvey’s termination benefits in connection with a change in control. In lieu of the gross up payment, the Severance Agreement provides that if any payments to Mr. Harvey upon his termination would be subject to a federal excise tax, then such payments would be reduced to the minimum extent necessary so that no portion of such payments, as so reduced, is subject to such tax, except that such a reduction will be made only if and to the extent such reduction would result in an increase in the aggregate payment on an after-tax basis. In the event Mr. Harvey’s employment is terminated without cause or terminated by Mr. Harvey for good reason, Mr. Harvey will be entitled to receive a lump-sum payment of two times the sum of his base salary and short-term incentive target, plus the continuation of benefits for two years and a prorated short-term incentive payment for the program then in effect. In the event Mr. Harvey’s employment is terminated without cause or terminated by Mr. Harvey for good reason within the period beginning ninety (90) days prior to a change in control and ending on the second anniversary of such change in control, Mr. Harvey will be entitled to receive a lump sum payment of two and half times the sum of his base salary and short-term incentive target, plus the continuation of benefits for three years and a prorated short-term incentive payment for the program then in effect. The compensation committee, working with Meridian, determined that the negotiated terms of the amended agreement were consistent with market practice and in the best interests of our company and stockholders.

Also as discussed more fully below, in December 2024, we adopted a key employee severance benefit plan (the "Key Employee Severance Benefit Plan") to streamline the severance protection offered to certain key employees and replace the individual change of control agreements with Messrs. Donnan and West and the severance benefits provided under the salaried employee severance plan to certain key employees, including Messrs. Donnan, West, Walsh and Tiffany.