VALERO ENERGY CORPTX

PEER GROUP AND BENCHMARKING DATA

The Human Resources and Compensation Committee uses peer group compensation data to assess benchmarks of base salary, annual incentive compensation, and long-term incentive compensation. The Committee uses the Compensation Comparator Peer Group (further described below) to benchmark compensation for our named executive officers. This reference is sometimes referred to in this proxy statement as “compensation survey data” or “competitive survey data.”

Compensation Comparator Peer Group

The Compensation Comparator Peer Group (applicable to 2023 salary, long-term incentive, and annual incentive bonus decisions) iscomposed of companies that either engage in U.S. domestic oil and gas operations or are large, complex companies from comparable industries that are representative of the scale and complexity of Valero’s operations.

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COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Comparator Peer Group is relevant to our business because we compete with the member companies for talent at every level from entry-level employees to senior executives. We believe that our pay comparisons are size-appropriate because the median revenues and market capitalization of the peer group are within a reasonable range of our revenues and market capitalization for the period covered in the competitive survey data. Our understanding of this group’s compensation programs and levels is vitally important in order to remain competitive in the market for employee and executive talent.

• Also a member of the Performance Peer Group as described below.

**In July 2023, Raytheon Technologies Corporation changed its name to RTX Corporation.

Given Valero’s size and complexity, our employees at all levels would be qualified candidates for similar jobs at any of the companies included in this group. The Compensation Comparator Peer Group was approved by the Human Resources and Compensation Committee in October 2022 when executive pay levels were initially considered and established according to the annual pay review process as further described under the caption “Process and Timing of Compensation Decisions.”

The Compensation Comparator Peer Group was also utilized in establishing 2023 long-term incentive targets and awards as further described under the caption “Long-Term Incentive Awards.” The Human Resources and Compensation Committee established the group after considering: (i) direct competitor companies with whom Valero would either seek out executive talent or must defend our own (includes independent refining and marketing and integrated oil and gas companies with large-scale refining operations, with some consideration for oil and gas exploration and production companies and oil field services companies if similar in scale and complexity); (ii) similarly complex organizations in comparable industries within an appropriate and comparable size based on revenues and market capitalization (generally within the range of 50% to 250% of Valero’s); and (iii) companies generally employing typical U.S.-based approaches to executive pay and within a reasonable geographic proximity. In establishing the Compensation Comparator Peer Group, the Committee looked to position Valero within a reasonable range of the peer group median revenues and market capitalization.

Our compensation and benefits staff, under supervision of the Human Resources and Compensation Committee, develops recommendations for base salary, bonuses, and other compensation arrangements using the compensation survey data with assistance from Exequity. Our use of the data is consistent with our philosophy of providing executive compensation and benefits that are competitive with companies that we compete with for executive talent. In addition, the compensation survey data and analyses assist the Committee in assessing our pay levels and targets relative to companies in the Compensation Comparator Peer Group. See also the disclosures under the caption “Elements of Executive Compensation—Benchmarking Competitive Pay Levels.”

In September 2022, the Committee prospectively approved changes to the Compensation Comparator Peer Group for use in making executive pay determinations applicable to fiscal year 2023. As we have previously disclosed, the changes include the removal of Ford Motor Company and the addition of LyondellBassell Industries N.V. (“LyondellBassell”), RTX Corporation (formerly known as Raytheon Technologies Corporation), and Lockheed Martin Corporation. The Compensation Comparator Peer Group for 2023 as described above reflects an expansion of the peer group from 2022 (from 12 to 14 companies) to ensure a more robust set of comparative data, inclusion of companies of similar scale and complexity from currently represented or additional comparable industries, and with consideration of evolving business strategies of current or potential peer companies, which may be converging or diverging from Valero’s.

Performance Peer Group

We use a different peer group for purposes of determining the relative performance of Valero’s TSR. We use this relative TSR metric in the performance share component of our LTI program (along with additional performance measures related to our Energy Transition modifier). The 2023 Performance Peer Group was selected based on the members’ engagement in U.S. domestic refining and marketing operations or comparable industries. In addition, we confirm the correlation of these companies’ stock price

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COMPENSATION DISCUSSION AND ANALYSIS

over time with Valero’s in order to ensure that we are making TSR comparisons against companies whose stock price can generally be expected to perform in consistent ways in relation to Valero’s. This testing helps confirm that Valero’s outperformance versus peers is attributable to the stewardship of our executives, as opposed to extraneous market conditions.

Our use of different peer groups for compensation and performance is based on our belief that when measuring business performance, companies with a similar business model (or with similar operations within such business model) should be included. But we also recognize that comparing the performance of Valero’s operations with those of upstream and integrated oil and gas companies, and similarly complex organizations in comparable industries, can result in anomalies due to the mismatch in how similar industry-specific events can impact companies with these varying business models. Broader events such as the COVID-19 pandemic and global geopolitical and other conflicts and tensions also affect companies differently, adding to the difficulty in formulating a peer group without anomalies in results. In addition, there are relatively few companies in our business against which clear comparisons can be drawn, rendering a peer group composition more challenging than in most industries.

In February 2023, the Committee established a peer group for TSR measurement applicable to the 2023 annual awards of performance shares (and established the same peer group in July 2023 for the transitional grants to Messrs. Riggs and Simmons). Included in the peer group is the Energy Select Sector SPDR Fund (XLE) index, which serves as a proxy for stock price performance of the energy sector and includes companies with which we compete for capital. The change in the XLE index price across the designated performance periods is measured as TSR. We are included in this peer group when results are calculated. In addition to Valero, the performance peer group for the 2023 awards is composed of the following ten companies and the XLE index.

*Also a member of the Compensation Comparator Peer Group as described previously.

LyondellBasell was added to the Performance Peer Group for the 2023 grants of performance shares because of its similarities to Valero in size, complexity, and exposure to commodity pricing volatility for both its products and feedstocks. LyondellBasell also helps balance the full portfolio of performance peers by helping ensure accountability of TSR performance both within the core downstream segment of the oil and gas industry, and also in adjacent segments that face similar challenges and opportunities. LyondellBasell was not added for the tranches of outstanding performance shares granted prior to 2023 (i.e., the third tranche of the 2021 grant and the second tranche of the 2022 grant).