Goosehead Insurance Inc

The Compensation Committee determines the compensation of our NEOs (other than the CEO) in consultation with the CEO. The CEO's compensation is determined solely by the Compensation Committee while the compensation levels of our executive officers are informed by the judgment and recommendation of our CEO and are reviewed, analyzed, and ratified by the Compensation Committee and our Board of Directors.

In determining compensation for our NEOs, the Compensation Committee and our Board of Directors review and evaluate many factors, including:

•Goosehead’s performance and growth;

•the individual NEO's prior year performance with respect to several performance factors;

•financial measurements such as premium growth, revenue growth, Core Revenue*, net operating income, Adjusted EBITDA*, and trends in those measurements;

•ability of each NEO to achieve strategic objectives;

•individual performance and performance as a management team;

•long-term potential to maintain and enhance value for our shareholders; and

•market compensation practices for similar positions within related industries.

*Core Revenue and Adjusted EBITDA are non-GAAP financial measures. See "Executive Compensation — Pay versus Performance — Most Important Performance Measures" below for a discussion of these key performance measures.

While our business model is complex and unique in our industry, we understand the value in peer group comparison when it comes to providing competitive and reasonable executive compensation. As such, as part of our compensation-setting process, the Compensation Committee reviews market practices related to executive compensation generally to ensure our executive compensation is in line with market standards.

Using this information, the Compensation Committee evaluates both the short-term and long-term performance compensation for our NEOs to ensure alignment with our business objectives. The Compensation Committee does not react to short-term changes in business performance in determining the amount and mix of executive compensation components. Goosehead’s executive compensation model has a strong track record of aligning the interests of its executive officers and its shareholders and has been a key catalyst to Goosehead’s operating and financial performance. This methodological approach encourages our executive officers to make decisions that will result in significant long-term value creation for our business and our shareholders without providing an incentive to take unnecessary risks or to chase short-term returns at the expense of creating long-term value.

The Compensation Committee sought input from compensation experts in devising and implementing our compensation structure, including our Equity Award Grant Policy discussed herein, and believes our program to be conservative while aligning management’s interests with the best interests of our stakeholders.