ARGAN INC

We assessed our pay-versus-performance alignment pursuant to Item 402(v) of the SEC’s Regulation S-K for the five years ended January 31, 2026, and we have provided the table below, which presents total compensation for our NEOs, compensation actually paid to our NEOs, and certain performance metrics. In this table, total compensation presented for our NEOs is determined by two methods.

First, each total compensation amount agrees with the amount presented above in the SCT for the applicable year. Second, the amount of Compensation Actually Paid (“CAP”) is calculated pursuant to SEC rules and adjusts amounts presented in the SCT by year-over-year changes in the fair value of unvested equity awards that are outstanding at the end of the respective year, that vest during the respective year, or that are forfeited during the respective year.

Also presented for each year are our TSR over the respective period and the TSR for a chosen peer group of the Company. The table also presents the amounts of our annual net income for the five years ended January 31, 2026, as well as our consolidated EBITDA, expressed as percentages of corresponding consolidated revenues, which are financial performance measures that we find most important in determining the compensation for our NEOs.

For further information concerning our philosophy relating to the alignment of compensation for our NEOs with certain performance metrics, refer to the “Executive Compensation Discussion and Analysis” section of this Proxy Statement.

Fiscal 2022 – Mr. Watson (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary), Mr. Collins (Chief Executive Officer, Gemma) and Mr. Trebilcock (President, Gemma).

Fiscal 2023 and Fiscal 2024 – Mr. Deily (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary) and Mr. Collins (Chief Executive Officer, Gemma).

Fiscal 2025 - Mr. Baugher (Senior Vice President, Chief Financial Officer and Treasurer, effective September 16, 2024), Mr. Deily (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary through September 15, 2024) and Mr. Collins (Chief Executive Officer, Gemma).

Fiscal 2026 - Mr. Baugher (Senior Vice President, Chief Financial Officer and Treasurer) and Mr. Collins (Chief Executive Officer, Gemma).

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PAY VERSUS PERFORMANCE

The two tables below provide reconciliations of the amounts of total compensation that are presented in the SCT for the CEOs and the Other NEOs to the amounts of compensation actually paid that are determined pursuant to SEC rules. As such, the amounts of compensation actually paid that are presented in the tables below are determined by adjusting totals presented in the SCT by year-over-year changes in the fair value of unvested equity awards that are outstanding at the end of the respective year, vest during the respective year, or are forfeited during the respective year.

PAY VERSUS PERFORMANCE

As described further in the “Executive Compensation Discussion and Analysis” section of this Proxy Statement, our executive compensation is assessed using a variety of quantitative and qualitative factors. The list below presents the financial performance measures that are included for the most important factors in the determination of NEO compensation.

We believe that EBITDA is a meaningful presentation that enables us to assess our operating performance by removing from our operating results the impacts of our capital structure, the effects of the accounting methods used to compute depreciation and amortization and the effects of operating in different income tax jurisdictions. Further, we believe that EBITDA is widely used by investors and analysts as a measure of performance. In general, EBITDA, expressed as a percent of revenues, reflects our ability to convert revenue dollars into earnings, which is primarily driven by maintaining strong gross margins. Likewise, SG&A, expressed as a percent of revenues, is a meaningful measure of the effectiveness of our cost containment efforts. The return on equity metric measures our profitability based on the amount of dollars invested. Our reported amount of project backlog at a point in time represents the success of our business development efforts, as it measures the total value of projects awarded to us that we consider to be firm less the amount of revenues recognized to date related to the corresponding projects.

Net income increased 286% from $35.7 million in Fiscal 2022 to a record $137.8 million in Fiscal 2026. EBITDA grew 202% from $53.8 million in Fiscal 2022 to a record $162.8 million in Fiscal 2026, with EBITDA margin expanding from 10.6% of revenues in Fiscal 2022 to 17.2% in Fiscal 2026.

As presented in the table above, our cumulative TSR over the five-year period ending in Fiscal 2026 was approximately 886%, with the majority of returns driven by our strong stock performance in Fiscal 2026 and Fiscal 2025. Our cumulative TSR outpaced that of our peer group, which was approximately 440 % over the same five-year period. The CAP for our CEOs and other NEOs fluctuated over the same five-year time period based substantially on the timing of vesting associated with stock unit awards. In Fiscal 2026 and Fiscal 2025, however, CAP for our CEOs and NEOs aligned closely with our stock price and annual financial performance, as several performance-based stock awards vested in accordance with the achievement of applicable performance objectives of those stock-based awards.

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