VALERO ENERGY CORP/TX

The Human Resources and Compensation Committee uses peer group compensation data to assess benchmarks of base salary, annual incentive compensation, and long-term incentive compensation. The Committee uses the Compensation Comparator Peer Group (as described below) to benchmark compensation for our named executive officers. This reference is sometimes referred to in this proxy statement as “compensation survey data” or “competitive survey data.”

Our compensation and benefits staff, under supervision of the Committee, develops initial recommendations for base salary, bonuses, and other compensation arrangements using the compensation survey data with assistance from Exequity. Our use of the data is consistent with our philosophy of providing executive compensation and benefits that are competitive with companies that we compete with for executive talent. In addition, the compensation survey data and analyses assist the Committee in assessing our pay levels and targets relative to companies in the Compensation Comparator Peer Group. See also “Elements of Executive Compensation—Benchmarking Competitive Pay Levels” below.

Compensation Comparator Peer Group

The Compensation Comparator Peer Group (applicable to 2025 salary, long-term incentive, and annual incentive bonus decisions) iscomposed of companies that either engage in U.S. domestic oil and gas operations or are large, complex companies from comparable industries that are representative of the scale and complexity of Valero’s operations. The Compensation Comparator Peer Group is relevant to our business because we compete with the member companies for talent at every level from entry-level employees to senior executives. We believe that our pay comparisons are size-appropriate because the median revenues and market capitalization of the peer group are within a reasonable range of our revenues and market capitalization for the period covered in the competitive survey data (as discussed further below). Our understanding of this group’s compensation programs/levels is vitally important in order to remain competitive in the market for employee and executive talent.

• Also a member of the Performance Peer Group as described below.

Given Valero’s size and complexity, our employees at all levels would be qualified candidates for similar jobs at any of the companies included in this group. The Compensation Comparator Peer Group was approved by the Committee in October 2024 when executive pay levels were initially considered and established according to the annual pay review process and was also utilized in establishing 2025 LTI targets and awards, as discussed in further detail under “Process and Timing of Compensation Decisions” below under this caption and “Elements of Executive Compensation—Long-Term Incentive Awards” below.

The Committee established the group after considering: (i) direct competitor companies with whom Valero would either seek out executive talent or must defend our own (includes independent refining and marketing and integrated oil and gas companies with large-scale refining operations, with some consideration for oil and gas exploration and production companies and oil field services companies if similar in scale and complexity); (ii) similarly complex organizations in comparable industries within an appropriate and comparable size based on revenues and market capitalization (generally within the range of 50% to 250% of Valero’s); and (iii) companies generally employing typical U.S.-based approaches to executive pay and within a reasonable geographic proximity. In establishing the Compensation Comparator Peer Group, the Committee looked to position Valero within a reasonable range of the peer group median revenues and market capitalization.

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COMPENSATION DISCUSSION AND ANALYSIS

Performance Peer Group

We use a different peer group for purposes of determining the relative performance of Valero’s TSR. We use this relative TSR metric in the performance share component of our LTI program. The 2025 Performance Peer Group was selected based on the members’ engagement in U.S. domestic refining and marketing operations or comparable industries. In addition, we confirm the correlation of these companies’ stock price over time with Valero’s in order to ensure that we are making TSR comparisons against companies whose stock price can generally be expected to perform in consistent ways in relation to Valero’s. This testing helps confirm that Valero’s outperformance versus peers is attributable to the stewardship of our executives, as opposed to extraneous market conditions.

Our use of different peer groups for compensation and performance is based on the Committee’s belief that when measuring business performance, companies with a similar business model (or with similar operations within such business model) should be included. But the Committee also recognizes that comparing the performance of Valero’s operations with those of upstream and integrated oil and gas companies, and similarly complex organizations in comparable industries, can result in anomalies due to the mismatch in how similar industry-specific events can impact companies with these varying business models. Broader events arising from legal, regulatory, and political uncertainties, as well as global geopolitical and other conflicts and tensions, also affect companies differently, adding to the difficulty in formulating a peer group without anomalies in results. In addition, there are relatively few companies in our business against which clear comparisons can be drawn, rendering a peer group composition more challenging than in most industries.

In February 2025, the Committee approved/established a peer group for TSR measurement applicable to performance share grants with performance periods ending in 2025 as set forth below. Included in the peer group is the Energy Select Sector SPDR Fund (XLE) index, which serves as a proxy for stock price performance of the energy sector and includes companies with which we compete for capital. The change in the XLE index price across the designated performance periods is measured as TSR. Valero is included in this peer group when results are calculated.

In addition to Valero, such peer group for each of the 2025, 2024, and 2023 performance share awards is composed of the following ten companies and the XLE index, which helps incentivize our NEOs’ focus on outperforming our peers throughout the highs and the lows of our industry.

*Also a member of the Compensation Comparator Peer Group as described previously.