Sprouts Farmers Market Inc

The elements of our 2024 executive compensation program are presented below in summary format and more fully explained in the sections that follow:

Base Salary

Base salary is a fixed portion of compensation that reflects the talent and compensation committee’s (and the Chief Executive Officer’s, in the case of other named executive officers) assessment of the individual named executive officer’s performance, skills, experience, time in the role and scope of responsibility. Base salaries are generally targeted at levels near the median of comparable roles at comparable companies and are reviewed on an annual basis to determine if any adjustments are required.

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Executive Compensation

Performance-based Cash Bonus

We utilize performance-based cash incentives to motivate executives to attain short-term objectives that align with long-term business goals. Meeting or exceeding our annual business and financial goals is important to executing our strategy and delivering long-term value to stockholders. Individual award opportunities vary by job level and are generally set so that, along with other components of compensation, the executives’ target TDC is competitive with comparable roles at comparable companies.

For 2024, our performance-based cash bonus plan was based upon (1) Adjusted EBIT, as further adjusted for any income or expense that is unusual, non-recurring or extraordinary, as the talent and compensation committee of our board deems appropriate (referred to as “Plan EBIT”), and (2) comparable store sales growth. No incentive award was payable to executives unless a pre-established minimum of 95% of the target Plan EBIT goal or 97.5% of the target comparable store sales goal was exceeded. Incentive award payouts increased for performance up to a maximum of 115% of the target Plan EBIT goal and 105% of the target comparable store sales goal. For the 2024 performance-based cash bonus plan, the talent and compensation committee did not make any further adjustments to EBIT to arrive at Adjusted EBIT or Plan EBIT.

The performance-based cash bonus plan focuses executive officers on critical financial goals. Our talent and compensation committee believes that Plan EBIT is a primary indicator to our stockholders of our core business health, and its use achieves our desire to use a measure of profitability that drives stockholder value creating behaviors. The second measure, comparable store sales growth, focuses executive officers on both strengthening our core business and making our stores more productive.

Each executive officer has a target performance-based cash bonus opportunity, expressed as a percentage of his or her base salary (referred to as the “Target Bonus”), with the ability to earn above or below that target based on our company’s actual performance.

In March 2024, the talent and compensation committee and board of directors approved the financial and operational goals for the company. The talent and compensation committee also reviewed and approved the Target Bonus opportunity for each executive officer. If Plan EBIT and comparable store sales growth were 100% of the established targets, each of our executive officers would be entitled to receive 100% of such officer’s respective Target Bonus. In addition, each executive officer had the opportunity to earn up to 300% of such officer’s Target Bonus (referred to as “Total Bonus Opportunity”). Payouts are interpolated between the threshold and target amounts and the target and maximum amounts. The range of bonus opportunities for our named executive officers for 2024 were as follows:

Because such a large percentage of executive officer compensation is performance-based, our talent and compensation committee invests significant time determining the annual financial target for our performance-based cash bonus program. In general, management makes the initial recommendation for the financial targets based upon our company’s annual board-approved budget, and these recommendations are reviewed and discussed by the talent and compensation committee. The major factors used in setting one or more targets for a particular year are the results for the most recently completed year and the budget for the current year. Other factors taken into account may include general economic and competitive market conditions and industry dynamics. Our talent and compensation committee sets the final corporate performance goals during our first quarter at levels our talent and compensation committee believes are challenging for management to achieve.

Performance-based cash bonus payouts are determined in the first quarter of each year following completion of the plan year by measuring the performance against each of the applicable performance goals. In determining whether the performance goals are met, the talent and compensation committee exercises its judgment whether to reflect or exclude the impact of changes in accounting principles and extraordinary, unusual

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Executive Compensation

or infrequently occurring events. For 2024, no further adjustments were made to EBIT to arrive at our Adjusted EBIT or Plan EBIT. The 2024 incentive award target goals and 2024 results and corresponding bonus percentages relative to the target amounts are shown below.

(1)See Appendix A to this proxy statement for a reconciliation of this non-GAAP measure.

Based on these results, our named executive officers earned a 2024 cash incentive award of 291% of their respective Target Bonus amounts based on operating results that exceeded both the Plan EBIT target goal (weighted 75% and corresponding to a 300% bonus payout percentage) and the comparable store sales target goal (weighted 25% and corresponding to a 264% bonus payout percentage). See “Summary Compensation Table” for actual amounts paid under our 2024 performance-based cash bonus plan.

Long-Term Equity Incentive Compensation

Each year we grant equity-based long-term incentive awards to executive officers and key team members to motivate and reward them for creating long-term stockholder value. Long-term incentive awards are generally established so that, when added to total cash compensation, the target TDC for an individual executive is generally competitive around the market median of comparable roles at comparable companies. In 2024, our talent and compensation committee determined to grant to our executive officers performance shares, time vesting RSUs and stock options. The value of such equity awards increases or decreases as a result of changes in the market price of our common stock, which directly aligns the interests of our named executive officers with our stockholders.

Performance conditions for the performance shares granted in 2024 will be evaluated based on our 2026 Plan EBIT; goals for 2026 Plan EBIT are not disclosed as this would create competitive harm. While future results cannot be predicted, the talent and compensation committee believes that the 2026 Plan EBIT target was set at a level such that achievement of the target would reflect a strong performance on the part of the executive

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officers and that payout at the maximum would occur only upon the achievement of results substantially in excess of internal and market expectations at the time the target was set. The performance shares granted in 2024 were substantially identical in structure to those granted in 2022, with awards based on company profitability over a three-year performance period. The goals for performance shares granted in 2022 based on 2024 results and corresponding payout percentages relative to the target amounts are shown below.

(1)See Appendix A to this proxy statement for a reconciliation of this non-GAAP measure.

For 2025, our talent and compensation committee approved the following changes to long-term equity incentive awards granted to our team members, including our named executive officers:

•performance-based awards are granted in the form of performance-based restricted stock units (PSUs), rather than performance shares; and

•PSUs, RSUs and stock options provide for certain pro rata accelerated vesting upon a team member’s retirement if the sum of the individual’s age and years of service are at least 68, and the individual is at least age 55 and has completed at least 3 years of service.

Benefits and Perquisites

We provide our named executive officers with benefits that the talent and compensation committee of our board of directors believes are reasonable and in the best interests of our company and our stockholders. Consistent with our compensation philosophy, we maintain competitive benefit packages for our named executive officers. The talent and compensation committee, in its discretion, may revise, amend or add to an officer’s benefits if it deems it advisable. We believe these benefits are generally equivalent to benefits provided by comparable companies.

•Retirement Plan Benefits. We sponsor a 401(k) Plan covering substantially all eligible team members, including our named executive officers. Team member contributions to the 401(k) Plan are voluntary. Contributions by participants are limited to their annual tax deferred contribution limit by the Internal Revenue Service. We match an amount of 50% of every dollar contributed up to the first 6% of the eligible compensation deferred by a participant.

•Health and Welfare Benefits. We offer medical, dental, vision, life insurance, short-term and long-term disability insurance and accidental death and dismemberment insurance for all eligible team members. Named executive officers are eligible to participate in the same plans as other eligible team members.

•Perquisites. We pay the premium amounts for medical, dental, vision, life insurance, short-term and long-term disability insurance and accidental death and dismemberment insurance plans on behalf of certain of our named executive officers, and impute income related to the limited personal use of our corporate aircraft by certain of our executive officers.