TheRealReal Inc

Elements of Our 2024 Compensation Program

For 2024, the material elements of our executive compensation program were base salary, annual cash bonuses and equity-based LTI compensation in the form of both time-based restricted stock unit (“RSU”) awards and performance-based restricted stock unit awards (“PSU”) awards. “At risk,” incentive-based compensation in the form of an annual cash bonus and equity-based compensation represents the majority of each NEO’s total target direct compensation mix.

As of the last measurement date, the Company qualified as a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K, and is permitted to provide scaled compensation disclosure as a result. However, we have chosen not to avail ourselves of the scaled disclosure and to provide fulsome disclosure in this CD&A and the compensation tables that follow.

Base Salary

Base salaries provide a level of fixed compensation sufficient to attract and retain a high-performing leadership team, when considered in combination with the other elements of our executive compensation program. The relative levels of base salary for our NEOs are established after considering market-competitive levels and are intended to reflect each NEO’s scope of responsibility.

Annual Cash Bonuses

Annual cash bonuses may be earned by our NEOs under our annual cash bonus program. In support of our “pay-for-performance” philosophy, this program is designed to motivate our NEOs and reward them based on their achievement of performance goals established by our Board each fiscal year.

Long-Term Incentive Compensation

Equity awards under our LTI program are a key element of our executive compensation program, which is designed to align the interests of our NEOs with the long-term interests of our stockholders and to motivate our NEOs to achieve our long-term business objectives. A significant portion of the total target direct compensation of each NEO is provided in the form of RSU awards, the value of which fluctuates directly with our stock price performance, and PSU awards, the value of which fluctuates with our stock price and performance against pre-defined long-term financial goals.

2024 Say-On-Pay Vote and Executive Compensation Updates

In 2024, we held a non-binding advisory vote on the compensation of our NEOs (a “Say-on-Pay” vote), and we received approximately 88% support from our investors. Following this vote, we conducted an extensive engagement campaign with our stockholders, which we describe in detail below.

Our Approach

Our Board recognizes the value of regular, two-way dialogue with our stockholders. Feedback from our stockholders is integral to our Board’s decision-making process, and, accordingly, in early 2025 we invited our largest stockholders who represented approximately 60% of our shares outstanding at the time of our outreach to engage with us. We ultimately held meetings with stockholders who accepted our invitation representing approximately 9% of our shares then outstanding.

During these discussions, we gained valuable input from our stockholders on matters including our corporate governance practices, executive compensation program and approaches to sustainability, risk oversight and human capital management. A summary of the key themes follows below.

Key Themes

Our stockholders were generally pleased with the design of our executive compensation program, and in particular, with the continued incorporation of performance-based awards in our long-term incentive program. A summary of this feedback and the Company’s response follows:

Our Board and Compensation Committee intend to consider the results of the 2025 Say-on-Pay vote, as well as future advisory votes and other stockholder feedback, in evaluating our executive compensation program and making its executive compensation decisions.