Copart Grants CEO A. Jayson Adair 20M Share Mega-Option Award Under 10-Year $1 Salary Structure

Executive Compensation Event Analysis: Copart, Inc. ($CPRT)

Overview

On October 14, 2026, the Board of Directors of Copart, Inc., upon recommendation of its Compensation Committee, approved a 10-year compensation package for Chief Executive Officer A. Jayson Adair. The grant consists of a stand-alone nonstatutory stock option to purchase 20,000,000 shares of common stock, representing an aggregate exercise price of $785.3 million.

Award Structure and Tranches

The option grant is partitioned into four equal tranches of 5,000,000 shares with tiered exercise prices:

• Tranche 1: 5,000,000 shares at $26.27 per share
• Tranche 2: 5,000,000 shares at $35.03 per share ($34.94 in Award Agreement schedule)
• Tranche 3: 5,000,000 shares at $43.78 per share ($43.61 in Award Agreement schedule)
• Tranche 4: 5,000,000 shares at $52.54 per share

Key Terms and Governance Safeguards

1. $1 Annual Base Salary: The option award is designed to serve as Mr. Adair's sole substantive compensation over the 10-year term. He is expected to receive an annual base salary of $1 and will not be eligible for annual cash bonuses or additional equity grants during this period.
2. 5-Year Cliff Vesting: The options vest 100% on the fifth anniversary of the grant date (October 14, 2031), contingent upon continuous service as CEO.
3. Stockholder Approval Condition: Granted outside the Company’s 2007 Equity Incentive Plan, the award requires shareholder approval at the 2026 Annual Meeting (or a subsequent special meeting). If not approved, the award will be forfeited in full.
4. Service-Based Clawback & Post-Exercise Holding Period:
   • Vested shares are subject to a 10% per year clawback for each remaining year of the 10-year term if Mr. Adair departs prior to expiration under a non-qualified termination.
   • Shares equivalent to post-tax net exercise gains are subject to a strict mandatory holding period through the entire 10-year award term.
5. Change in Control & Termination Provisions: Partial accelerated vesting applies only to in-the-money tranches based on the transaction price or 30-day trailing average closing price upon qualifying events (death, disability, or CIC).

Market & Trading Implications

This structure mirrors high-conviction mega-grants historically seen in founder-led and growth companies (e.g., Tesla). By replacing cash compensation and recurring annual equity grants with a single 10-year performance and retention-oriented structure with premium strike tranches, shareholder and executive alignment is substantially deepened over the next decade.