Construction Partners Inc

Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis describes the Company’s executive compensation philosophy and programs for our NEOs. For fiscal 2024, our NEOs were:

Executive Summary

Our goal is to attract and retain talented executives who deliver value to our stockholders through the achievement of the Company’s specific business objectives, such as consistent, sustained growth in revenue and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), among other objectives. We have designed our executive compensation program and overall pay-for-performance philosophy to align with that goal and our results. Our executive compensation program for the 2024 fiscal year reflected the following developments and circumstances:

•Performance-Based Compensation Structure: In fiscal 2024, our performance-based compensation program consisted of a formulaic annual incentive program for our executives and a structured long-term incentive program consisting of time-based restricted stock and restricted stock units (“RSUs”), as well as performance-based restricted stock units (“PSUs”). These incentive programs are designed to focus executives on the key drivers of Company performance in the current year and through future years, reward performance and align executives’ interests with those of our stockholders.

•Acquisitive Growth: Fiscal 2024 was an active year for acquisitions at the Company, as we acquired eight complementary businesses operating across four states, adding to or expanding our operations in Alabama, Georgia, North Carolina and South Carolina, while continuing to execute on our strategy of controlled, profitable growth. Management remained focused on our core business while taking advantage of these opportunities and successfully integrating the acquired businesses after completion of the respective transactions. After fiscal year-end, the Company completed additional acquisitions in Texas and Oklahoma.

•Financial Performance / ROAD Map: During fiscal 2024, management and the Board continued to focus on our five-year strategic plan for the Company. This plan, known as “ROAD Map 2027,” represents a dynamic framework with financial targets and other strategic goals that guide management’s decision-making process in the execution of the Company’s business and are incorporated into the Company’s incentive compensation program. ROAD Map 2027 is reviewed at least annually and refined by management and the Board to incorporate circumstances existing at the time.

•Sustainability: We continue to focus on our goal of becoming a leader in sustainability within the asphalt pavement and aggregate industries. During fiscal 2024, we continued our support of The Road Forward, an initiative led by the National Asphalt Pavement Association (“NAPA”), to promote climate stewardship within the asphalt industry, and collaborated with federal and state agencies and other stakeholders on issues ranging from energy efficiency to sustainable asphalt mix designs. We also leveraged NAPA’s Emerald Eco-Label tool in conjunction with comprehensive life cycle assessments to create transparent Environmental Product Declarations (“EPDs”), providing stakeholders with critical information for assessing the sustainability of our products and materials. Notably, we were the first company in several of the states in which we operate to publicly document the impact of our asphalt mixes through EPDs. We also continued our efforts to maximize energy efficiency across our asphalt plants and construction operations as an EPA ENERGY STAR®partner.

Compensation Philosophy

The Compensation Committee is responsible for establishing and implementing the Company’s executive compensation philosophy. The Compensation Committee reviews and determines all components of our NEOs’ compensation, including making individual compensation decisions and reviewing and revising the Company’s compensation programs and practices.

In order to attract, retain and engage the highest level of executive talent, the Compensation Committee has established the following compensation philosophy:

•Provide competitive compensation: The Company’s executive compensation programs are designed to attract, retain and motivate highly qualified executives critical to achieving the Company’s strategic objectives and building stockholder value.

•Promote a pay-for-performance culture: We expect executives to perform at a high level to ensure the Company’s success and reward executives appropriately when success is achieved. A significant portion of our NEOs’ compensation is derived from our annual and long-term incentive plans, which encourage achievement of both short-term and long-term Company objectives.

•Alignment between management and stockholders: In order to align our executives’ interests with those of our stockholders, we provide a significant portion of our NEOs’ total compensation in the form of equity. Executive equity awards are designed to focus executives on long-term value creation, as well as to encourage retention of our key executives.

Overview of Our Executive Compensation Program

Our executive compensation program consists of several elements that the Compensation Committee utilizes as it deems appropriate. In general, our program incorporates a combination of base salary, annual performance-based cash incentives, long-term equity incentives, benefits and perquisites. The following table summarizes certain primary components of our compensation program, several of which we used during fiscal 2024.

Components of Compensation

During fiscal 2024, the compensation of our NEOs consisted of base salary, annual cash incentives, cash bonuses, LTIP-A awards, LTIP-B awards, benefits and perquisites, in each case, as described in further detail below.

Base Salary

The base salary element of our compensation program is designed to be competitive with compensation paid to similarly-situated, competent and skilled executives. The Compensation Committee uses the following factors to determine base salary levels and appropriate adjustments for our NEOs:

•knowledge of industry pay practices;

•changes in responsibilities;

•overall managerial effectiveness with respect to leadership planning, talent development, communications, strategy execution and similar matters;

•level of expertise and potential for future contributions to the Company, retention risks and equity within our overall salary program; and

•economic environment and its impact on the Company.

The Compensation Committee reviews the base salaries of our NEOs annually and also at the time of any promotion or change in responsibilities. The following table sets forth the annual base salary rates of each of our NEOs in effect for calendar years 2024 and 2025. The salaries actually paid to the NEOs during the fiscal year vary from the salary rates set forth in the following table due to the fact that we implement salary increases at the beginning of the calendar year, but our fiscal year ends on September 30.

Annual Cash Incentives

Each member of our management team, including each of our NEOs, has a target annual cash incentive opportunity calculated as a percentage of his or her base salary. For our NEOs, those percentages were as follows in fiscal 2024:

Each participant’s annual cash incentive is determined based on (i) the level of achievement of one or more Company financial objectives and (ii) one or more secondary metrics based either on individual performance or Company performance. Following a calculation of the participant’s baseline cash incentive award using the foregoing metrics, the final amount of the payment to each participant remains subject to adjustment by the Compensation Committee in its sole discretion. For fiscal year 2024, annual cash incentives were based on the following metrics and weightings:

The amount of the annual cash incentive earned with respect to the Adjusted EBITDA component was based on a comparison of the Company’s Adjusted EBITDA for fiscal 2024 to internal targets, as follows:

For fiscal 2024, the target Adjusted EBITDA for purposes of the annual cash incentive was approximately $209.1 million and the actual Adjusted EBITDA achieved was approximately $220.6 million, resulting in a payout of 100% of the NEOs’ respective target amounts attributable to the Adjusted EBITDA metric.

The amount of the annual cash incentive earned by each NEO with respect to the individual or additional Company performance component was based on the Compensation Committee’s evaluation of the level of achievement by the NEO or Company, as applicable, of one or more specific objectives, the nature of which varied based on the respective NEO’s geographic or functional area of responsibility. For fiscal 2024, Messrs. Smith’s and Hoffman’s annual cash incentive metrics were based on the Company’s revenue, EBITDA, reductions in overhead expense and working capital levels. For Messrs.

Harper and Flowers, who served as presidents of two of the Company’s subsidiary operating companies for some or all of the fiscal year (six months for Mr. Harper and a full year for Mr. Flowers), the annual cash incentive metrics were based on their respective companies’ Adjusted EBITDA, safety results, working capital levels and gain/fade results on construction projects. Mr. Armstrong’s annual cash incentive metrics were based on the Company’s Adjusted EBITDA, working capital levels and gain/fade results on construction projects.

In November 2024, the Compensation Committee determined the amount of the annual cash incentive earned by each eligible NEO. The following table sets forth the amounts paid to each NEO subsequent to fiscal year-end for fiscal 2024 performance based on the elements described above:

Discretionary Cash Bonuses

In addition to the annual cash incentive opportunity, cash bonuses may be paid at the discretion of the Compensation Committee as appropriate under the circumstances. During fiscal 2024, discretionary bonuses were paid to certain of the NEOs in the following amounts: (i) for Mr. Smith, $550,000 and (ii) for Mr. Flowers, $40,000. Subsequent to fiscal year-end 2024, certain of the NEOs also received a discretionary bonus in respect of performance during the 2024 fiscal year in the following amounts: (i) for Mr. Smith, $65,000, (ii) for Mr. Hoffman, $62,500, (iii) for Mr. Harper, $8,750, (iv) for Mr. Flowers, $12,500, and (v) for Mr. Armstrong, $7,500. These bonuses were paid in recognition of the NEOs’ leadership and contributions to the Company’s achievement of improved profitability and strategic growth initiatives, including acquisitions.

Following the end of fiscal 2024, the Compensation Committee approved one-time cash bonus payments to certain of our NEOs as a transaction bonus related to the Company’s acquisition of Asphalt Inc., LLC (doing business as Lone Star Paving, “Lone Star” and such acquisition the “Lone Star Acquisition”), in the following amounts: (i) for Messrs. Smith and Hoffman, $500,000 and (ii) for Messrs. Harper and Armstrong, $60,000.

Long-Term Equity Incentive Compensation

The Company maintains the Construction Partners, Inc. 2018 Equity Incentive Plan (the “Equity Incentive Plan”), pursuant to which employees, directors and consultants of the Company, including our NEOs, are eligible to receive stock-based awards and performance awards that are intended to retain our executives to provide continuity in the Company’s leadership as well as focus executives on achieving the Company’s strategic objectives. Awards to our NEOs under the Equity Incentive Plan during fiscal 2024 consisted of LTIP-A and LTIP-B awards, as described in further detail below. Additionally, the Company maintains the Construction Partners, Inc. 2024 Restricted Stock Plan (the “Restricted Stock Plan”), pursuant to which employees, directors and consultants of the Company, including our NEOs are eligible to receive restricted shares of Class B common stock. The Restricted Stock Plan is intended to provide participants with a larger equity interest in the Company, to enhance the commonality of interests between participants, on the one hand, and the Company’s stockholders, on the other hand, and to provide an effective mechanism for the Company to attract and retain well-qualified individuals to serve on the Board and as employees and consultants.

LTIP-A Awards

During fiscal 2024, the Compensation Committee granted LTIP-A awards to our NEOs consisting of restricted stock and cash-settled RSUs that vest in equal annual installments over four fiscal years, with the first vesting date occurring on September 30, 2024. These awards were granted to the NEOs in the following amounts during fiscal 2024:

LTIP-B Awards

During fiscal 2024, the Compensation Committee granted LTIP-B awards to certain NEOs. The LTIP-B awards represent PSUs having a notional value equivalent to one share of our Class A common stock for purposes of determining the number of shares underlying the award. Each LTIP-B award provides for a target number of PSUs that are eligible to vest, with the preliminary number of vested PSUs to be determined based on the Company’s actual performance compared to its targets over the three-year performance period beginning October 1, 2023 and ending September 30, 2026. For LTIP-B awards granted in fiscal 2024, the following performance metrics were used:

Fifty percent (50%) of the target PSUs (the “Revenue Target PSUs”) will be eligible to vest based on the Company’s achievement of compound aggregate revenue growth rate as it compares to the revenue growth rate target, as set forth in the table below. The number of vested Revenue Target PSUs will be interpolated for performance between each performance level (based on whole percentages), and no Revenue Target PSUs will vest if the actual performance level is less than 89% of the revenue growth target over the performance period.

Similarly, fifty percent (50%) of the target PSUs (the “Adjusted EBITDA Margin Target PSUs”) will be eligible to vest based on the Company’s achievement of average Adjusted EBITDA margin as it compares to the average Adjusted EBITDA margin target, as set forth in the table below. The number of vested Adjusted EBITDA Margin Target PSUs will be interpolated for performance between each performance level (based on whole percentages), and no Adjusted EBITDA Margin Target PSUs will vest if the actual performance level is less than 95.2% of the average Adjusted EBITDA margin target over the performance period.

Following a determination of the preliminary vested PSUs based on the criteria set forth above, the final number of PSUs that are eligible to vest will be either increased or decreased by up to 15% based on a comparison of the Company’s total stockholder return (“TSR”) over the performance period compared to that of the Russell 2000 over the same period (provided that the Company’s TSR must be positive in order for any upward adjustment to be made). Specifically, the number of vested PSUs is subject to modification based on the following schedule:

During fiscal 2024, the Compensation Committee granted LTIP-B awards to our NEOs in the following amounts:

2022 LTIP-B Awards that Vested in 2024

The Compensation Committee granted LTIP-B awards in fiscal 2022 under the Equity Incentive Plan consisting of PSUs having a notional value equivalent to one share of our Class A common stock for purposes of determining the number of shares underlying the award, the vesting of which was based on the Company’s achievement of the compound aggregate revenue growth rate and return on capital employed (“ROCE”) targets over the three-year performance period comprising the fiscal years ended September 30, 2022, 2023 and 2024. The following table sets forth the target metrics, actual level of achievement of such metrics, and payout percentages attributable to such level of achievement for the 2022 LTIP-B awards:

The total number of PSUs vested pursuant to the 2022 LTIP-B awards was adjusted based on the TSR of our Class A common stock compared to the TSR of the Russell 2000 over the performance period commencing October 1, 2021 (the first day of fiscal 2022) and ending on September 30, 2024. The Compensation Committee determined that our TSR ranked in the 92nd percentile relative to the Russell 2000, which resulted in an increase in the number of earned shares of 15%.

The following table sets forth the target number of shares and total shares actually earned by each of the NEOs in respect of the 2022 LTIP-B awards:

Stock Bonus Awards

Subsequent to fiscal 2024 year-end, the Compensation Committee awarded bonuses in the form of fully vested shares of Class A common stock to certain members of management, including our NEOs, in recognition of exceptional performance and successful organic and acquisitive growth of the Company during the 2024 fiscal year. These awards were granted to the NEOs in the following amounts:

Following fiscal year-end, the Compensation Committee granted awards of restricted stock under the Equity Incentive Plan and Restricted Stock Plan to certain of our NEOs as a transaction bonus (the “Transaction Bonus Awards”) related to the Lone Star Acquisition. The Transaction Bonus Awards provided for vesting upon the later of (i) the closing of the Lone Star Acquisition and (ii) the first date, if any, that the closing price of our Class A common stock on The Nasdaq Global Select Market equaled or exceeded $88.00 per share, provided that (A) such date occurred on or before the fourth anniversary of the grant date and (B) the recipient was employed by, or providing services to, the Company on the vesting date. The Transaction Bonus Awards vested in full on November 6, 2024. The following table sets forth the Transaction Bonus Awards granted to our NEOs:

Benefits

Our NEOs are eligible to participate in our health and welfare benefit programs on the same basis and terms as our general employee population, including our 401(k) plan. As such, our NEOs are eligible for employer matching contributions and discretionary contributions. All of our 401(k) plan participants are eligible for employer matching contributions equal to 100% of the participant’s elective deferral contributions up to 3% of the participant’s compensation, plus 50% of the participant’s elective deferral contributions that exceed 3% but are not more than 5% of the participant’s compensation.

Perquisites

We generally provide limited perquisites or personal benefits to our NEOs, the nature and amount of which vary by individual. These benefits generally consist of a combination of personal use of a Company-owned vehicle or a vehicle allowance and Company-paid premiums for health, life, disability and/or vision insurance.

Employment Agreements

The Company has entered into an employment agreement (each, an “Employment Agreement” and collectively, the “Employment Agreements”) with certain key members of management, including each of our NEOs. Each Employment Agreement contains substantially similar terms other than with respect to title, minimum base salary and principal place of employment, including with respect to the following key aspects of the employment relationship:

•Term. The term of the Employment Agreements began on April 1, 2020 for Messrs. Smith, Harper, Flowers and Armstrong and on April 1, 2023 for Mr. Hoffman, and expires on April 1, 2025. The Employment Agreements will not renew following their expiration on April 1, 2025.

•Salary. The Employment Agreements specify a minimum annual base salary during the term. The minimum base salary is reviewed at least annually by the Compensation Committee, and the Compensation Committee may, but is not required to, increase the applicable executive’s salary during the term.

•Annual Bonus. Each executive is eligible to receive a cash bonus in an amount determined either in the discretion of the Compensation Committee or based on the achievement of performance goals under any annual incentive program that may be established and administered by the Compensation Committee from time to time.

•Equity Awards. Each executive is eligible to receive awards under the Equity Incentive Plan, the Restricted Stock Plan and any other stock option, stock purchase or equity-based incentive compensation plan or arrangement adopted by the Company from time to time in which executives of the Company are eligible to participate, in an amount determined by the Compensation Committee. Any such equity awards will be governed by the applicable plan and award agreements.

•Perquisites; Employee Benefits. Each executive is entitled to fringe benefits and perquisites consistent with the practices of the Company and to the extent that the Company provides similar benefits or perquisites to similarly situated executives, which may include the use of a Company-owned automobile to the extent that the Company deems necessary for the performance of services to the Company. Each executive is entitled to participate in all other employee benefit plans, practices and programs on a basis that is no less favorable than is provided to similarly situated executives, to the extent consistent with applicable law and the terms of the applicable employee benefit plans.

•Termination Payments. If an Employment Agreement is terminated under certain circumstances, the executive may be entitled to receive certain severance payments and benefits. For a description of these payments and benefits and the circumstances under which they may be required, see the discussion below under the heading “Potential Payments Upon Termination or Change in Control.”

•Restrictive Covenants. The Employment Agreements provide for certain restrictive covenants, including covenants limiting or prohibiting competition, use of confidential information, solicitation of customers, recruitment of employees, and disparagement of the Company during the term of the Employment Agreements and, if the Company so elects, for a period of 18 months following the termination of employment with the Company for any reason.

•Right of First Refusal to Purchase Shares of Class B Common Stock. During the term of the Employment Agreements and for a period of 18 months following the termination of employment for any reason, the Company or its assignee has a right of first refusal to purchase any shares of the Company’s Class B common stock that the executive (or, as applicable, the executive’s estate) elects to transfer, convert or dispose of during such period.

•Clawback. The executive’s compensation is subject to any clawback policies required by applicable law, government regulation or stock exchange listing requirement or otherwise adopted by the Company, as such policies may be amended from time to time. For more information about our clawback policy that applies to all NEOs, see the discussion below under the heading “Compensation Policies and Practices Related to Risk Management — Incentive Compensation Recoupment Policy.”

How We Determine Executive Compensation

The Compensation Committee meets several times each year to perform its responsibilities as delegated by the Board and as set forth in the Compensation Committee’s charter. These responsibilities include evaluating and approving the Company’s compensation philosophy, policies, plans and programs for our NEOs. In the performance of its duties, the Compensation Committee regularly reviews the total compensation, including the base salary, target annual cash incentive award opportunities, long-term incentive award opportunities and other benefits for each of our NEOs.

The Compensation Committee has the authority, in its sole discretion, to retain or obtain the advice of compensation consultants, outside counsel and other advisers as it deems necessary to assist with the execution of its duties and responsibilities. Prior to selecting or receiving advice from such advisers, the Compensation Committee is required to consider certain factors specified in SEC and Nasdaq rules, including an evaluation of whether the adviser has a conflict of interest that would impair the independent execution of the adviser’s services to the Company. The Company will provide appropriate funding for payment of reasonable compensation to any adviser retained by the Compensation Committee.

Due to our size and the unique nature of our industry, which primarily consists of small, closely held companies and large national or multinational corporations, the Compensation Committee has elected not to identify a peer group for compensation benchmarking purposes based on a lack of directly comparable companies. Instead, in determining appropriate compensation levels for the NEOs, the Compensation Committee relies on its knowledge of the competitive market, historical pay practices, internal relationships among positions at the Company and individual performance of the NEOs.

Role of Compensation Consultant

During fiscal 2024, the Compensation Committee retained Dana Krieg, an independent compensation consultant (the “Compensation Consultant”), in accordance with the Compensation Committee’s charter. Ms. Krieg has more than 25 years of executive compensation consulting experience, having worked for Watson Wyatt (now Willis Towers Watson) and Ernst & Young for the majority of her career. She advises clients on executive compensation strategy and design as well as governance and overall compliance of their executive compensation programs.

The Compensation Consultant reports directly to the Compensation Committee. The Compensation Committee retains sole authority to hire or terminate the Compensation Consultant, approve the Compensation Consultant’s fees, determine the nature and scope of the services to be provided and evaluate the Compensation Consultant’s performance.

The Compensation Consultant attends Compensation Committee meetings, as requested, and communicates with the Compensation Committee chair between meetings. The Compensation Committee makes all final decisions and recommendations regarding the Company’s compensation program.

During fiscal 2024, the Compensation Consultant’s roles included, but were not limited to, the following:

•advising the Compensation Committee on executive compensation trends;

•evaluating the effectiveness of the Company’s cash- and equity-based compensation programs;

•providing advice to the Compensation Committee on governance best practices, as well as any other areas of concern or risk; and

•reviewing and commenting on proxy statement disclosure items, including the Compensation Discussion and Analysis.

The Compensation Committee has assessed the independence of the Compensation Consultant, considering all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act. Based on this review, the Compensation Committee concluded that there are no conflicts of interest raised by the work performed by the Compensation Consultant and that the Compensation Consultant is independent.

Role of Chief Executive Officer

The Compensation Committee makes all compensation decisions related to our NEOs. Our Chief Executive Officer regularly provides information and recommendations to the Compensation Committee on the performance of our executive officers and appropriate levels and components of compensation, as well as other information that the Compensation

Committee may request. However, our Chief Executive Officer does not participate in any Compensation Committee deliberations or determinations with respect to his own compensation.

Role of Advisory Vote on Compensation of our NEOs

Our Board recognizes the fundamental interest that our stockholders have in the compensation of our executive officers. At the 2022 Annual Meeting of Stockholders, approximately 97.2% of the votes cast were in favor of the proposal to approve, on an advisory basis, the compensation of our NEOs. Based upon the results of such advisory vote and our review of our compensation policies and decisions, the Board and Compensation Committee believe that these policies and decisions are consistent with our compensation philosophy and objectives and align the interests of our NEOs with the long-term goals of the Company. While the “say on pay” vote is not binding on the Board or the Company, we will continue to review our executive compensation program in the future and will consider the views of our stockholders, as well as other developments, during such review. In particular, the Board and Compensation Committee will consider the outcome of the advisory, non-binding vote to approve our executive compensation to occur at the Annual Meeting when making future compensation decisions for the NEOs.

Based on the advisory vote of our stockholders at the 2022 Annual Meeting of Stockholders, the Board determined that the Company will hold stockholder advisory votes on executive compensation once every three years. Following the Annual Meeting, the next stockholder advisory vote on executive compensation will be held at the Annual Meeting of Stockholders in 2028.