CSW INDUSTRIALS, INC.

Our AIP exists to provide employees with a short-term, performance-based cash incentive that promotes achievement of our annual operating budget and the financial metrics that we believe most strongly correlate to long-term shareholder value creation. This incentive most directly supports our “Align Long-Term Executive and Shareholder Interests” and “Reward Current Performance” compensation objectives.

AIP Target Opportunities

The Compensation Committee establishes an AIP target opportunity for each NEO consistent with the process described above under “The Compensation Decision Making Process.” The Compensation Committee also approves the AIP’s financial performance metrics at that same time.

Our NEO’s AIP target opportunities are expressed as a percentage of base salary. AIP target opportunities established for fiscal 2024 are presented in the following table.

The Compensation Committee did not make any changes to AIP target percentages for fiscal 2024. The Compensation Committee determined that, as adjusted for the market-driven base salary increases for fiscal 2024 discussed above, the AIP targets and resulting total target cash compensation for each NEO were within acceptable proximity to market benchmarks and provided incentives consistent with our objectives.

AIP Performance Metrics

The Compensation Committee, working with management and NFP, evaluates and approves the Company’s AIP performance metrics for each fiscal year when AIP target opportunities are established. The Compensation Committee weights performance metrics for each NEO—including business unit leaders—in proportions that ensure performance metrics are heavily weighted toward the Company’s consolidated performance. We believe it is important that all NEOs are primarily focused on setting the strategic direction of the Company (rather than only at the business unit level) and achieving overall Company results.

The Compensation Committee also believes that AIP payouts should reflect individual, non-financial performance metrics. This serves to mitigate the risks that objective factors can have on incentive pay when overused. Importantly, non-formulaic metrics provide the Compensation Committee with discretion to adjust compensation upward or downward based onhow an executive accomplished objectives and goals, thereby rewarding behaviors that are consistent with our business objectives and ACT. RISE. core values.

The Company’s fiscal 2024 AIP performance metrics are set forth below and are unchanged from fiscal 2023. The Compensation Committee selected these performance metrics, with input from management and NFP, because they support the key strategies that we believe drive sustainable and profitable Company growth and create shareholder value.

AIP Performance Calculation and Payout

When the Compensation Committee approves AIP performance metrics for the year, it also establishes a payout matrix for the AIP, which determines the percentage of AIP target that is paid for performance achieved. Achievement of financial-based performance metrics is objective and calculated as appropriate. Payout percentages for each NEO’s qualitative individual performance metric are determined by the Compensation Committee based on individual performance assessments, as discussed previously.

Fiscal 2024 AIP Payout Matrix and Performance Measurement

Payout Matrix. The fiscal 2024 payout matrix established for all AIP metrics was 0% to 200% of the target award opportunity, which was unchanged from fiscal 2023. The actual AIP payout percentage is calculated by comparing actual financial metric performance against the established targets. Payouts for each of the financial metrics are calculated on a straight-line basis between the applicable performance levels (“threshold,” “target,” and “maximum”).

Target Setting. In fiscal 2024, the Compensation Committee, with the support of NFP, continued to use a semi-annual target setting process for both our EBITDA and Operating Cash Flow (“OCF”) financial metrics. The Compensation Committee believed this approach remained appropriate based on continued uncertainty in overall business conditions. First fiscal half (“1H”) performance metric targets were established in early May 2023 (in the first quarter of fiscal 2024), and second fiscal half (“2H”) performance metric targets were established inmid-November 2023 (in the third quarter of fiscal 2024).

As the last four fiscal years have demonstrated, utilizing more frequent financial target setting intervals has a limiting effect on AIP payouts, as it mitigates the risk of overpayment resulting from annual targets being set too conservatively in the face of significant uncertainty. As the Compensation Committee has always done, it continued to adhere to our compensation objectives and principles, including ensuring that performance targets for the AIP’s financial metrics are set at objective, challenging levels that require significant effort and achievement by our NEOs for a target payout to occur.

Financial Performance Adjustments. For all financial metrics, the Compensation Committee may exercise its judgment, within parameters it establishes at the beginning of the year, about whether to exclude the effect of certain developments in measuring performance. These developments may include unanticipated changes in accounting principles or extraordinary, unusual, or unplanned events, such as the effects of restructurings, impairments, reorganizations, acquisitions, or dispositions.

Any adjustments approved by the Compensation Committee in measuring financial metric performance are fully disclosed below. Concerning acquisitions in particular, the Compensation Committee has consistently applied a policy to exclude the impact of acquisitions consummated during a performance period on AIP financial metrics, ensuring AIP payouts never benefit from acquired, unbudgeted EBITDA and cash flow impacts.

Performance Measurement and Payout. The following graphics show the fiscal 2024 AIP’s performance metrics, targets, payout matrixes, performance results, and percentage payouts.

In fiscal 2024, the Company delivered $198.3 million of measured EBITDA, a record performance and 13.9% increase over fiscal 2023. The EBITDA target for fiscal 2024 1H was a 6.0% increase over fiscal 2023 1H actual results, and the EBITDA target for fiscal 2024 2H was a 12.6% increase over fiscal 2023 2H actual results. Consistent with our objectives and historical approach to acquisitions, the fiscal 2024 measured performance excluded all EBITDA impacts from acquisitions, as well as all associatedone-time transactional expenses. For the full fiscal 2024 year, the net EBITDA adjustments reduced the AIP’s measured EBITDA by $1.7 million compared to reported EBITDA.

In fiscal 2024, the Company delivered $165.8 million of measured OCF, a record performance and 39.7% increase over fiscal 2023. The OCF target for fiscal 2024 1H was a 67.4% increase over fiscal 2023 1H actual results, and the OCF target for fiscal 2024 2H was a 4.8% decrease over fiscal 2023 2H actual results. The fiscal 2024 measured performance excluded all operating cash impacts from acquisitions, as well as all cash used (net of tax benefit) to fund associatedone-time transactional expenses. For the full fiscal 2024 year, the net OCF adjustments increased the AIP’s measured OCF by $1.6 million compared to reported operating cash flow.

In fiscal 2024, the Company’s Contractor Solutions segment delivered $174.4 million of measured EBITDA, a record performance and 13.5% increase over fiscal 2023. These results are used in calculating Mr. Sullivan’s Business Unit EBITDA metric payout percentage. Contractor Solutions’ EBITDA target for fiscal 2024 1H was a 6.2% increase over fiscal 2023 1H actual results, and the EBITDA target for fiscal 2024 2H was an 11.7% increase over fiscal 2023 2H actual results. As with consolidated results, this measured performance excluded all EBITDA impacts from businesses acquired during a performance period, as well as allone-time transactional expenses associated with the acquisitions. For the full fiscal 2024 year, the net business unit EBITDA adjustments increased the AIP’s measured business unit EBITDA by $0.8 million compared to reported business unit EBITDA.

These results are used in calculating Mr. Sullivan’s Business Unit OCF metric payout percentage. The Company has chosen not to disclose the Threshold, Target, Maximum and Measured Performance data for Contractor Solutions’ OCF metric, as this metric corresponds to financial data that is not publicly disclosed and is used primarily to assess compensation. The Company believes that disclosing such information would cause competitive harm to the Company without adding meaningfully to the understanding of its business.

The Compensation Committee believes that all performance targets for all financial metrics used in our AIP are set at definitive, challenging, and objective levels that require significant effort and achievement by our NEOs for a target payout to occur. Despite the inherent challenges of establishing performance targets in fiscal 2024 due to continued uncertainty in overall business conditions, particularly in light of the inflationary environment and significant volatility in actual and forecasted freight costs, the Compensation Committee believes the AIP target-setting approach used in fiscal 2024 ensured these intentions were met.

While AIP results for any given year will vary, the Compensation Committee believes that appropriate performance target setting,

when combined with strong Company and individual NEO performance, should result in AIP financial metric payouts that average close to target levels over a five-year period. For additional context, the following table summarizes the Company’s actual financial metric payout percentages under the AIP over the last five years.

Individual Performance

In determining individual performance payouts for our NEOs, the Compensation Committee consideredpre-established individual performance goals and objectives for each NEO, which addressed the following topics:

Additionally, the Compensation Committee considered the leadership acumen demonstrated by each NEO in addressing the unique challenges of fiscal 2024, and how each NEO performed and delivered results in a manner consistent with our ACT. RISE. core values: Accountability, Citizenship, Teamwork, Respect, Integrity, Stewardship, and Excellence.

The payout percentages for the 25%-weighted individual performance metric for each NEO is set forth in the final AIP payments table below. The total AIP award earned by each NEO for fiscal 2024 is reported in the “Summary Compensation Table” under the“Non-Equity Incentive Plan Compensation” column.