Vital Farms, Inc.

To achieve our compensation objectives, we historically have provided our executive officers, including our NEOs, with a compensation package consisting of the following elements:

We do not have any formal policies for allocating compensation among base salary, annual performance-based cash incentives and long-term equity grants, short-term and long-term compensation or among cash andnon-cash compensation. Instead, our Compensation Committee uses its judgment to establish a total compensation program for each NEO that is a mix of current, short-term incentive and long-term incentive compensation, and cash andnon-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, a significant portion of the NEOs’ total target compensation is comprised of performance-based bonus opportunities and long-term equity awards, in order to align the executive officers’ incentives with the interests of our stockholders and our stated corporate goals.

Base Salary

Base salaries for our NEOs are set annually by our Compensation Committee. Base salary is informed by peer group data, and the Compensation Committee generally targets base salary within a competitive range of the median for equivalent officer positions within our peer group.

The Compensation Committee considers annually (or upon a material change in an officer’s position or responsibilities) whether any changes should be made to the base salaries of our executive officers. We do not provide formulaic or guaranteed base salary increases; instead, the Compensation Committee considers factors that include Company and individual performance, national salary increase levels, talent development and retention, peer group competitiveness, internal pay equity and (with respect to NEOs other than the CEO) the recommendation of the CEO.

In 2024, the Compensation Committee reviewed the base salaries of our NEOs and approved increases to base salaries in amounts ranging from approximately 3.5% to 5.0% for each of our NEOs. Based on its subjective judgement, our Compensation Committee approved these increases were appropriate in light of each executive’s individual performance and as acost-of-living adjustment informed by competitive market data provided by FW Cook.

For fiscal 2024, our NEO base salaries were as follows:

Annual Performance-Based Cash Incentives

Each of our NEOs participates in our annual performance-based incentive program. Each year, the Compensation Committee establishes for each NEO an incentive program target, expressed as a percentage of the NEO’s base salary. The incentive program targets are based on peer group data and the role and responsibilities of the individual NEO. The Compensation Committee also determines the relevant financial performance metrics used to determine whether the annual incentives have been earned.

For fiscal 2024, our NEO annual incentive program targets were as follows:

The fiscal 2024 annual incentive program was based on achievement of established net revenue and Adjusted EBITDA targets for the full fiscal year. The targets were the result of a goal-setting process that involved the Company’s management team and Compensation Committee and reflected the Company’s expectations for continued growth. The Compensation Committee approved for fiscal 2024 a net revenue target of $560.0 million and an Adjusted EBITDA target of $61.4 million. Adjusted EBITDA is anon-GAAP financial measure and is reconciled to net income, its closest comparable GAAP measure, in Annex B.

The Compensation Committee also approved an incentive payout mechanism based on these targets. In addition to establishing net revenue and Adjusted EBITDA targets, the Compensation Committee also established threshold and maximum achievement levels for each metric. The tables below further set forth the payment methodology upon achievement or failure to achieve each of the net revenue and Adjusted EBITDA targets:

Payment Methodology – Net Revenue Metric (50%)

Payment Methodology – Adjusted EBITDA Metric (50%)

Based on the Company’s actual results for fiscal year 2024, the Compensation Committee determined that the payment methodology for the net revenue and Adjusted EBITDA portions of the annual incentive plan would be calculated as follows:

Despite a calculated bonus achievement percentage of 178%, management proposed (and the Compensation Committee approved) payouts to our NEOs at a percentage of 175% to allow for an additional bonus payment to be made to crew members at our egg washing and packing facility in Springfield, Missouri in recognition of these crew members’ significant contributions to the Company’s performance over the previous year.

Based the approved achievement percentage of 175%, the Compensation Committee approved annual incentive payouts in February 2025 as follows:

Long-Term Equity Incentive Program

We provide long-term equity incentives to our executive officers through annual grants made pursuant to our 2020 Equity Incentive Plan (“2020 Plan”). Our Compensation Committee believes such grants are essential to meeting our compensation objectives of paying for performance, attracting and retaining top talent and balancing short-term and long-term interests. Equity awards under this program are granted by the Compensation Committee at the time of an executive officer’s initial hire, during our annual grant process in the first quarter of each year and at other times based on the Compensation Committee’s discretion. Our practice is to provide annual grants with a grant date of at least two business days after the date we publicly release our full fiscal year earnings for the previous fiscal year.

For fiscal year 2024, the Compensation Committee approved awards to our executives consisting of performance-vesting restricted stock units (“PSUs”) and time-vesting restricted stock units (“RSUs”). Based on individual and Company performance, market and peer group data provided by FW Cook, and internal pay equity, each NEO is provided a targeted dollar value of equity awards, with the total dollar value allocated between PSUs and RSUs as determined by the Compensation Committee.

For fiscal year 2024, the Compensation Committee determined that equity awards made to our NEOs would consist of 50% PSUs and 50% RSUs, a mix that the Compensation Committee believes strikes the right balance between the retentive nature of RSUs and the variable, performance-based nature of PSUs. While previous years’ equity grants consisted of a mix of RSUs and stock options, for fiscal year 2024, the Compensation Committee decided to utilize PSUs in lieu of stock option grants to further reinforce our commitment to align executive pay with the Company’s performance and with the long-term financial goals deemed most important to the Company’s business.

The Compensation Committee annually considers the appropriate mix of equity awards and incorporates performance-based equity awards when it determines that important milestones should form the basis of a performance-based equity grant and that such a grant would not promote excessive risk taking that could adversely impact the Company.

PSUs: Each PSU represents a right to receive between 0% and 200% of a target number of shares of our common stock upon vesting. Subject to the applicable NEO’s continued service, PSUs granted for fiscal year 2024 will vest at the end of a performance period ending December 27, 2026 (the last day of our fiscal year 2026) based on the achievement of financial performance metrics determined by the Compensation Committee in February 2024. We believe this vesting period helps ensure that we retain top executive talent and align the interests of our NEOs with the long-term interests of the Company and its stockholders.

Our fiscal year 2024 PSUs are tied to the achievement of net revenue (50% weighting) and Adjusted EBITDA Margin (50% weighting) performance metrics, measured based on our net revenue and Adjusted EBITDA Margin in our existing product categories for fiscal year 2026. The net revenue and Adjusted EBITDA Margin performance targets established by the Compensation Committee are intended to be challenging and are aligned with the Company’s ambitious long-term vision, reflecting the Compensation Committee’s desire to reward exceptional performance. Adjusted EBITDA Margin is anon-GAAP financial measure and is reconciled to net income margin, its closest comparable GAAP measure, in Annex B.

In addition to establishing net revenue and Adjusted EBITDA targets, the Compensation Committee also established threshold and maximum achievement levels for each metric. If a metric is below the established threshold, zero shares will be issued for the portion of the PSUs attributable to that metric. If a metric is above the established maximum, two shares will be issued for each of the PSUs attributable to that metric. The payout calculation for our fiscal year 2024 PSUs is summarized below:

For amounts between the threshold and maximum, shares will be awarded based on straight line interpolation. We believe disclosing specific targets while the performance period is ongoing could cause competitive harm. However, such targets will be disclosed in our fiscal year 2027 following the determination of achievement of the financial performance metrics by the Compensation Committee.

As soon as practicable following the end of our fiscal year 2026, the Compensation Committee will determine the achievement of each of the net revenue and Adjusted EBITDA Margin goals and will, in its discretion, make a final determination of the PSUs that will vest and number of shares of our common stock that will be issued.

RSUs: Each RSU represents the right to receive one share of our common stock upon vesting. Subject to the applicable NEO’s continued service, our fiscal year 2024 RSUs will vest in three substantially equal annual installments beginning on the first anniversary of the grant date. We believe that a three-year vesting schedule for RSUs is appropriate for the retention of talent and strikes a balance between short-term and long-term incentives, in line with our overall compensation strategy.

RSU awards encourage retention through vesting over the recipient’s continued employment with us, cover fewer shares than stock options, minimize dilution to stockholders, are straightforward and understandable to our crew members, and are the predominant type of equity award utilized by the peer companies with whom we compete for talent.

Based on individual and Company performance, market and peer group data provided by FW Cook and internal pay equity, each NEO is provided a targeted dollar value of equity awards, with the total dollar value allocated between PSUs and RSUs as determined by the Compensation Committee.

A summary of the equity awards granted to our NEOs for fiscal year 2024 is below:

Health and Welfare and Retirement Benefits; Perquisites

All of our current NEOs are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees.

Perquisites

Other than a monthly automobile allowance provided to Mr. Diez-Canseco, we generally do not provide perquisites or personal benefits to our NEOs. We do not view perquisites as a significant component of our overall compensation strategy, such that perquisites are not generally provided, except in situations where it is appropriate to assist an executive in the performance of duties or for recruitment and retention purposes on acase-by-case basis.

401(k) Plan

Our NEOs are eligible to participate in a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on apre-tax orafter-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Internal Revenue Code of 1986, as amended (the “Code”). Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. We currently make matching contributions into the 401(k) plan on behalf of participants equal to 100% on participant contributions up to 3% of their compensation. Participants are immediately and fully vested on all contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As atax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Our Board may elect to adopt qualified or nonqualified benefit plans in the future, if it determines that doing so is in our best interests.

Employment Arrangements with NEOs

We have entered into offer letters or employment agreements with each of our NEOs. These agreements provide for the NEO’s initial base salary, reflecting the scope of such NEO’s anticipated responsibilities and the individual experience they bring to us. The employment of each of our NEOs is “at-will” and may be terminated at any time. In addition, each of our NEOs has executed a form of our standard proprietary information and inventions agreement. For additional information about our employment arrangements with NEOs, please see the section titled “Executive Officer and Director Compensation—Employment Arrangements” below.

Severance and Change of Control Benefits

Regardless of the manner in which a NEO’s service terminates, each NEO is entitled to receive amounts earned during the term of service, including unpaid salary. Pursuant to our employment agreement with Mr. Diez-Canseco and our Change in Control Severance Plan (the “Severance Plan”) for all other NEOs, our NEOs are entitled to certain severance benefits upon an involuntary termination without cause (and not due to death or disability) or upon a resignation for good reason, either alone or immediately before or within 12 months following a change in control of our Company, subject to specific requirements, including signing and not revoking a separation agreement and release of claims. For Mr. Diez-Canseco, cause, change in control, disability and good reason are defined in his employment agreement, and such terms are defined for our other NEOs in our Severance Plan.

The Compensation Committee believes that that these severance benefits are necessary to provide stability among our NEOs, to focus our NEOs on our business operations and to encourage continued attention and dedication to duties without distractions in connection with a potential change in control transaction or period of uncertainty.

For a detailed description of the severance provisions contained in Mr. Diez-Canseco’s employment agreement and the Severance Plan, see “Executive Officer and Director Compensation—Employment Arrangements” and “Executive Officer and Director Compensation—Potential Payments upon Termination or Change of Control” below.