QXO, Inc.

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expense, net; loss on debt extinguishment; stock-based compensation; provision for (benefit from) income taxes; restructuring costs; transaction costs; transformation costs; and inventory fair value adjustments that we do not consider representative of our underlying operations.

For fiscal year 2025, the company did not achieve threshold performance for the Adjusted EBITDA target and achieved 95.4% of the revenue target. While these results would have resulted in a 38.5% of target payout for each NEO, management recommended to the Compensation and Talent Committee that it exercise negative discretion to reduce the payout for each NEO to zero. In reaching this determination, the committee considered management’s recommendation and the company’s overall financial performance for the year, including that Adjusted EBITDA performance did not meet the threshold level established for the incentive plan. The committee places significant emphasis on profitability as the primary driver of long-term value creation for our stockholders, and determined that reducing the payout to zero was appropriate to maintain alignment between executive compensation outcomes and overall company performance.

EQUITY-BASED LONG-TERM INCENTIVES

The third component of our compensation program is equity-based long-term incentives (“LTI”). LTI awards are designed to provide our NEOs with equity incentives tied to sustainable value creation and stockholder alignment.

In accordance with their respective employment agreements, in fiscal year 2024, Messrs. Jacobs and Essaid were awarded LTI awards. Their employment agreements stated that their respective LTI grants awarded in 2024 intended to cover a five-year equity package rather than recurring annual awards. Mr. Signorello was also awarded LTI grants in 2024 in connection with his offer of employment. While his employment terms differ from those of the company’s chief executive officer and chief financial officer and are set forth in an offer letter rather than a formal employment agreement, the structure of his equity awards is consistent with that of our other NEOs. Details of the fiscal year 2024 awards are set forth in the section titled “Overview of 2024 Executive Employment Agreements”. No additional LTI awards have been granted to Messrs. Jacobs or Essaid since that time.

Upon hire on April 21, 2025, Mr. Liborski received an LTI award consisting of time-vested restricted stock units (“RSU”) and performance-vested restricted stock units (“PSU”) with the type of performance goals similar to those granted to the other NEOs in 2024.

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RSU Vesting. The RSUs will vest in five annual installments. The initial vesting on December 31, 2026 will cover 15% of the award. The next two installments, on December 31, 2027 and December 31, 2028, will each cover 17.5%. The final two installments, on December 31, 2029 and December 31, 2030 will each cover 25% of the total RSUs.

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PSU Vesting. The PSUs will be earned based on performance goals relating to the company’s total shareholder return (“TSR”) compared to the TSR ranking of each company that is in the S&P 500 Index. The performance goals for 50% of the PSUs will be measured over a cumulative performance period that ends on December 31, 2028 (“Cliff Tranche PSUs”). The performance goals for the remainder of the PSUs will be measured based on three designated performance periods that occur within the cumulative period (“Annual Tranche PSUs”). The initial Annual Tranche PSUs, weighted at 25% of the award, will be eligible for vesting upon determination of performance from the grant date through December 31, 2026. The second and third Annual Tranche PSUs, each weighted at 12.5% of the award, will be eligible for vesting upon determination of performance for the annual periods ending on December 31, 2027 and December 31, 2028, respectively. The PSUs for each tranche may be earned at a level ranging from zero to 225% of the target level, depending upon the degree of achievement as shown in the following payout matrix:

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Linear interpolation would be applicable between specified levels above 55th percentile. No PSUs would be earned for performance below the 55th percentile.

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On July 16, 2025, Mr. Signorello received an LTI award consisting entirely of PSUs, in recognition of his performance during the Beacon acquisition and to further align his long-term incentive pay to market and internal equity levels. The performance goals for vesting are the same as those for Mr. Liborski’s PSU described above.