STRATTEC SECURITY CORP

Executive Compensation Decision-Making Process

The Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program for our NEOs. The Committee is comprised solely of independent, non-employee directors. The Compensation Committee retains the ability to engage with outside advisors to assist in its efforts and works closely with its independent compensation consultant, outside counsel and management to examine the effectiveness of the Company’s executive compensation program and to ensure that the Committee is meeting the terms of its charter. The Compensation Committee determines the CEO’s compensation, including salary, bonus, incentive, and equity-based compensation, taking into account the goals and objectives of the Company, the performance evaluation of the CEO conducted by the Board in light of those goals and objectives, and the compensation of chief executive officers at comparable companies. The Compensation Committee also makes all final compensation and equity award decisions regarding our other NEOs, taking into account the CEO’s recommendations and evaluations of each officer’s performance, the Company’s overall performance, and comparable compensation paid to similarly situated executives in comparable companies.

The Role of Management. Members of our management team regularly attend Compensation Committee meetings to provide background information and additional context on the Company’s strategies, policies and practices; report financial results relating to the achievement of the Company’s financial goals; assist in the development of the Company’s incentive goals; and help in planning each meeting’s agenda and related materials. The CEO also provides the Committee recommendations pertaining to the compensation of the other NEOs and key executives. Only Compensation Committee members can vote on decisions regarding NEO compensation.

The Role of the Independent Consultant. In fiscal 2025, the Compensation Committee retained Pay Governance to provide it with market information, analysis and other advice relating to executive compensation. The Compensation Committee engaged Pay Governance to, among other things, assist in: developing an appropriate group of peer companies to use for pay benchmarking; assessing and recommending changes to the pay program for nonemployee directors; structuring the employment offers to new executives (including the CEO and CFO); determining competitive compensation levels (overall and by pay element) for our key executives; reviewing the structure of our incentive plans and proposing appropriate changes; recommending stock ownership guidelines for directors and key executives; and keeping the Company abreast of market trends and developments.

The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. For purposes of setting fiscal 2025 compensation levels, the Compensation Committee took into account publicly-available data for the group of peer companies listed below along with executive compensation survey data, where appropriate. Selection criteria for determining our compensation peer group focused on U.S.-based publicly-traded companies in similar industries (automotive parts & equipment; construction & heavy transportation equipment; industrial machinery parts & equipment; electronic parts & equipment), comparable revenues (between $100 million and $1 billion or roughly 0.4x to 2x our revenue) and market capitalization (less than 1.5x revenue).

www.strattec.com 23

Components of Executive Compensation. We seek to pay our executives fairly and competitively and to link their pay with objective performance measures. The main elements of total direct compensation are base salary, a short-term incentive in the form of an annual cash bonus, and long-term equity incentives in the form of stock-based awards which, for our CEO in fiscal 2025, one-half were subject to vesting according to continued service and one-half were subject to vesting based on achieving three-year financial performance objectives.

The Company’s annual pay program emphasizes incentive compensation opportunities that reward executives when they deliver targeted financial results that we believe will create value for our shareholders. For fiscal 2025, total direct compensation at risk included the annual cash bonus and equity incentive awards, which accounted for 75% of Ms. Slater’s target total compensation and 56% of the average target compensation opportunity of the other NEOs.

Base Salary. Base salaries are intended to compensate our NEOs based on their roles with the Company. For each NEO, base salaries are reviewed annually subject to adjustments based upon Company financial performance, the individual performance of the particular executive, and the competitiveness of their base salaries relative to market median results. Our Compensation Committee typically establishes base salaries for the new fiscal year for our executive officers at its regular meeting in August of each year. The new base salaries take effect on January 1 of the following year.

Salaries for Ms. Slater and Mr. Pauli were established at the time of their hires in July 2024 and November 2024, respectively and were unchanged for the rest of the fiscal year. Mr. Guillot received an annual merit increase of 3% for fiscal 2025. Aggregate base salaries for these officers reasonably approximate market medians, consistent with our approach to fixed compensation.

24 Strattec | 2025 Proxy Statement

Short-Term Incentive Plan (STIP). The Compensation Committee believes that performance-based annual cash incentives are an effective way to motivate executives and certain other non-executive employees to achieve short-term specific Company financial goals. To reinforce that philosophy, the Company, revised its approach to annual incentives to increase the focus on objective financial results and decrease the role of other factors, which historically had accounted for 50% of an individual’s annual bonus.

Participants in our STIP, including our NEOs and substantially all U.S. employees, have an opportunity to earn an annual cash bonus based on achievement of certain performance targets tied to achieving our annual operating budget. Actual annual bonuses paid can range from 0% to 200% of a participant’s target bonus opportunity to the degree actual performance fails to meet or exceeds our target expectations. Target bonus opportunities for our NEOs are intended to reflect market medians for executives in similar roles at companies of comparable size and are capable of producing median cash compensation (salary and bonus) when target goals are achieved.

The following table summarizes the fiscal 2025 annual bonus opportunity for named executive officers:

For fiscal 2025, 100% of each participant’s annual bonus payout was dependent on the achievement of our consolidated financial goals. This change increased the focus on accomplishment of our shared objectives, underscored the importance of transforming the Company, and supported our new CEO as she implemented a long-term strategy for the Company. STIP payments for fiscal 2025 were based on two equally weighted financial metrics that we consider critical to our long-term strategy to increase value for shareholders: EBITDA and Cash Flow from Operations.

The performance targets for each metric were approved by the Compensation Committee and were aligned with our annual operating budget, which takes into account our recent financial results, plans for the coming year, market conditions, and the general economic environment. Performance ranges around target hold management accountable for achieving goals, motivate them to exceed those expectations, reflect the practices of peers and other companies and consider the degree of difficulty of achieving threshold and maximum performance levels. The table below shows the Company’s fiscal 2025 STIP financial targets, actual results and the resulting annual incentive payout percentage (in millions, except percentages):

Based on these results, our annual bonuses for our NEOs for fiscal 2025 were paid at 200% of target.

Long-term equity incentive awards. We believe a significant portion of executive compensation should be made in the form of equity awards because of the strong alignment to the value created for shareholders. If the Company’s stock price declines, so does the value of this component of our NEOs’ compensation, and vice versa.

www.strattec.com 25

The Committee generally approves annual grants of long-term equity incentive awards to our NEOs and other employees on a single date each year (usually in late August following the Compensation Committee’s first regular meeting of each fiscal year after all material financial information is publicly available). While the vast majority of awards to NEOs and other employees have historically been made as part of the Company’s annual grant program, the Committee occasionally makes awards to NEOs or other employees at other times, such as in connection with hiring, promotions, or for retention purposes. This was the case with awards made at the time of hire for our CEO and CFO, which were intended to replace the value of similar equity awards they were forfeiting upon joining the Company from their former employers. The timing of equity award grants to our executive officers is not coordinated in a manner that intentionally benefits our executive officers. The Company does not grant stock options, stock appreciation rights, or similar instruments with option-like features and has no policies or practices to disclose pursuant to Item 402(x)(1) of Regulation S-K.

Historically, our annual long-term incentive program relied exclusively on modest grants of restricted stock awards ("RSAs") subject to vesting based entirely on continued services. As part of its review of our pay program, Pay Governance indicated that peers and other companies of our size are more likely to award RSAs in combination with other stock incentives that are subject to vesting based on achievement of long-term financial goals. As a result, we revised our approach to long-term incentives for awards to our CEO in fiscal 2025, which will be extended to other key executives in fiscal 2026.

In determining the annual long-term incentives for our CEO in fiscal 2025 (exclusive of one-time awards made at the time of hiring), the Committee considered the median long-term incentive opportunities awarded to CEOs of peer companies, the mix of time and performance-based equity awards, and the CEO’s new appointment to the role. Based on those considerations, one-half (50%) of our CEO’s target long-term incentive opportunities were delivered in RSAs which solely vest with the passage of time, and one-half (50%) were delivered in performance stock units ("PSUs") which will vest based on meeting certain long-term financial performance goals as well as continued service. This mix better reflected the practices of our peers, achieved balance between awards aimed at retaining executives (RSAs) and those intended to motivate them to achieve long-term results (PSUs) and also supported a performance-orientated culture. In contrast, awards granted to Mr. Guillot in fiscal 2025 continued to reflect our historical approach to equity awards and were similar in value to the RSAs he received in fiscal 2024. Awards made to Mr. Pauli were all associated with his employment offer.

Ms. Slater’s annual equity awards were as follows:

•

RSA: 50% of target opportunity or $650,000 (16,878 RSAs)

•

PSU: 50% of target opportunity or $650,000 (16,878 PSUs)

Restricted Stock. RSAs vest in one-third increments on each of the three anniversaries following the grant date, subject to continued service through the vesting date. The actual number of RSAs granted to participants are determined by dividing the target value by the average closing price of our stock over the 20 trading days immediately preceding the grant date. The amount ultimately earned with respect to RSAs will be a result of the performance of the Company’s stock price.

Performance Stock Units. PSUs have a three-year performance period, with vesting based on achievement of financial targets as well as the executive’s continued service through the end of the period. If the performance goals are met at the end of the performance period, PSUs are settled in an equivalent number of shares of our common stock. The amount ultimately earned for PSUs will be a result of the performance of the Company’s stock price, as well as the Company’s performance against pre-established financial goals for the three-year performance period. A new three-year performance cycle starts annually with grants made in the first quarter of each fiscal year. The financial metrics and performance goals to earn threshold, target and maximum awards also are determined by the Compensation Committee at the start of each cycle considering our historical performance, peer benchmarking, Company annual operating plan (as approved by the Board of Directors), the state of the automotive industry and other external economic factors.

Performance Stock Units FY25-27 Cycle. The potential vesting for the PSUs granted in fiscal 2025 is based on the Company’s achievement of performance goals for EBITDA margin (percentage) over a three-year period ending June 27, 2027. In this manner, the fiscal 2025-27 PSU cycle balances the focus of the annual bonus, which focuses on the dollars of EBITDA as opposed to EBITDA margin which assesses how well we convert a dollar of revenue into profits which we believe is a key factor impacting the value of our common stock. At the start of the cycle, the Committee approved an EBITDA margin target for the first year of the cycle (fiscal 2025) based on the Company’s annual operating plan. In addition, the Committee approved annual levels of margin improvement that would be applied to the prior year’s results to determine the performance targets for the two subsequent years (2026 based on actual results for 2025 and 2027 based on actual results for 2026). The target rates of improvement are 100 basis points over the prior year’s result for each of the final two years of the cycle (2026 and 2027). Average achievement of each year’s target results determines the final vesting of the PSUs which can range from 50% (threshold) to 200% (maximum) of target, predicated on achieving 80% to 120% of the target EBITDA margin.

26 Strattec | 2025 Proxy Statement

The following table summarizes threshold, target and maximum share opportunities for the PSUs granted to our NEOs in fiscal 2025:

During fiscal 2025, the Company achieved an actual EBITDA margin of 6.6%, which results in above target performance in the first year of the three-year performance cycle for PSU awards granted in fiscal 2025. Based on these results, the target EBITDA margin for year two of the fiscal 2025-27 PSU cycle will equal 7.6% (EBITDA margin of 6.6% in fiscal 2025 plus 100 basis points of improvement).

Other Awards. Both Ms. Slater & Mr. Pauli received one-time equity awards associated with their joining the Company and enabling us to secure the services of two leaders who have already produced benefits to shareholders. These awards were intended to “make them whole” with similar types of awards they were forfeiting from their former employers. These awards and the factors that lead to them need to be considered when determining their regular, target compensation opportunities. Excluding the sign-on awards described below, Ms. Slater's target compensation opportunity for fiscal 2025 was as follows:

Ms. Slater received the following sign-on awards:

•

Cash sign-on bonus of $550,000

•

Cash retention bonus of $300,000 payable in two equal installments on the first two anniversaries of her hiring, and

•

Sign-on equity awards equal in value to $1,000,000 which vest in three equal installments on each of the first three anniversaries of her hire date, beginning on July 1, 2025

The valuation of Ms. Slater’s onboarding RSAs was based on the average closing price of our stock over the twenty business days immediately preceding Ms. Slater’s hire date of July 1, 2024, the preferred grant date for her onboarding award. However, Ms. Slater’s award could not be fulfilled under the Company’s prior stock incentive plan, and had to be deferred until the Board adopted, and our shareholders approved, a new stock incentive plan. Promptly following approval of our new stock incentive plan at our annual meeting of shareholders held on October 23, 2024, Ms. Slater was granted 37,854 RSAs based on the foregoing valuation.

These awards replaced most but not the full value in cash bonuses, unvested restricted shares, and unvested or unearned performance shares she was highly likely to receive if she had remained employed by her former company. Based on these factors, the Committee believed the structure of these awards was reasonable.

Mr. Pauli received a sign-on equity award of $200,000 that will vest in three equal installments on each of the first three anniversaries of his hire date beginning on November 13, 2025. The valuation of Mr. Pauli’s onboarding RSAs was based on the average closing price of our stock over the twenty business days immediately preceding his hire date of November 13, 2024, resulting in an award of 5,191 RSAs. This was Mr. Pauli’s only equity award in fiscal 2025 and was intended to make-up for benefits he was forfeiting from his former employer.

Finally, the Committee provided a cash retention award to Mr. Guillot equal to 30% of his salary ($108,000) intended to retain his services through the first half of fiscal 2025 to assist in an orderly and successful transition of our new CEO as well as with other members of the new executive management team. With the completion of these services, Mr. Guillot has announced his intent to retire from the Company effective September 30, 2025, after 35 years of dedicated service.

Retirement and Other Benefits. The Company also provides additional benefit programs to its employees, including NEOs, to attract and retain them as well as to provide a competitive total compensation program.

www.strattec.com 27

Our NEOs participate in other benefit plans generally available to all employees on the same terms as similarly situated employees, including participation in medical, health, including health savings accounts, dental, disability, life insurance and 401(k) plans. The Company match in our 401(k) plan is 100% on the first 5% of an employee’s annual wages, up to the federal limit.

In addition, our NEOs each receive at least two times their annual base salary, up to $500,000, of group term life insurance coverage and participate in a supplemental executive retirement plan ("SERP"). Under the SERP, which has a five year vesting schedule, participant accounts are credited with 8% of base salary and cash bonus each December 31, plus accrued interest at 120% of the long-term applicable Federal Rate published by the Internal Revenue Service. A lump-sum benefit is the only distribution option available under the SERP.

Tax Deductibility. Section 162(m) of the Internal Revenue Code generally places an annual limit of $1 million on the amount of compensation paid to certain “covered employees” (which include our named executive officers) that may be deducted by the Company. The Compensation Committee believes that shareholder interests are best served if it retains discretion and flexibility in awarding executive compensation. Even though some compensation awards may result in non-deductible compensation expenses, the Compensation Committee intends to maintain strong pay-for-performance alignment of executive compensation arrangements.