Leah C. Stearns

About Leah C. Stearns

Copart’s Senior Vice President and Chief Financial Officer since December 2022; age 45. Prior roles include CFO at CBRE Group (2019–2021) and 17 years at American Tower culminating as SVP and CFO of its U.S. division. Education: B.S. in Finance (Boston University, 2002) and MBA (Boston College, 2010). Under her finance leadership period, Copart reported FY2025 revenue up 9.7% to $4.6B, operating income up 7.9% to $1.7B, and net income up 13.9% to $1.5B; Copart highlights a 15-year TSR of ~1,888% vs ~475% for the S&P 500. Liquidity at FY2025-end was $6.0B and total assets exceeded $10B.

Past Roles

External Roles

Fixed Compensation

• FY2025 base salary rate and change: | Executive | End of FY2024 Base Salary | End of FY2025 Base Salary | Change | |---|---|---|---| | Leah C. Stearns | $566,500 | $583,500 | +3.0% |

• FY2025 cash compensation realized: | Component | FY2025 Amount | |---|---| | Salary paid | $580,591 | | Target bonus (plan target) | $466,800 | | Actual bonus paid | $464,000 | | Perqs/Other | $11,714 (auto allowance $9,000; 401(k) $2,714) |

• Multi-year Summary Compensation (SEC SCT basis): | Metric | FY2023 | FY2024 | FY2025 | |---|---|---|---| | Salary ($) | $349,039 | $563,327 | $580,591 | | Stock Awards ($) | $3,942,000 | — | — | | Option Awards ($) | $5,110,638 | $3,275,415 | — | | Non-Equity Incentive Plan Comp ($) | $300,000 | $450,481 | $464,000 | | All Other Comp ($) | $5,250 | $12,664 | $11,714 | | Total ($) | $9,706,972 | $4,301,887 | $1,056,305 |

Notes: No equity grants in FY2025; last grants were in November 2023. Pension/SERP and deferred compensation are not maintained (other than 401(k)).

Performance Compensation

• FY2025 Annual Cash Incentive (executive bonus plan) | Metric | Weight | Target | Actual | Payout | Notes | |---|---|---|---|---|---| | Operating Income | 60% | $1.8B (93% at $1.3B; 107% at $2.3B) | $1.7B | 99% for financial component | +/-1% per $71M from target | | Individual Goals (CFO) | 40% | 100% | 100% | 100% | Finance analytics/capital allocation; improve International segment margins | | Dollar outcome | — | Target $466,800 | — | Paid $464,000 | Aligned with 60/40 matrix above |

• Equity Awards and Vesting (Key terms) | Grant Date | Instrument | Quantity | Exercise Price | Vesting | Performance Condition | Expiration | |---|---|---|---|---|---|---| | 12/05/2022 | RSUs | 120,000 | — | 20% at 1-yr; then quarterly 1/16 over 16 quarters | — | — | | 12/05/2022 | Stock Options (time-based) | 60,000 | $32.85 | 20% at 1-yr; then monthly 1/48 | — | 12/05/2032 | | 12/05/2022 | Stock Options (performance-based) | 300,000 | $32.85 | 20% at 1-yr; then monthly 1/48 | Stock price ≥ $41.06 (125% of strike) for 20 consecutive trading days and at exercise | 12/05/2032 | | 11/24/2023 | Stock Options (time-based) | 75,000 | $50.81 | 20% at 1-yr; then monthly 1/48 | — | 11/24/2033 | | 11/24/2023 | Stock Options (performance-based) | 75,000 | $50.81 | 20% at 1-yr; then monthly 1/48 | Stock price ≥ $63.51 (125% of strike) for 20 consecutive trading days and at exercise | 11/24/2033 |

Outstanding as of FY2025-year end (illustrative excerpts):

• Options: 31,000 exercisable / 29,000 unexercisable (12/5/22 TB, $32.85); 155,000 exercisable / 145,000 unearned (12/5/22 PB, $32.85); 25,000 exercisable / 50,000 unexercisable (11/24/23 TB, $50.81); 25,000 exercisable / 50,000 unearned (11/24/23 PB, $50.81).
• RSUs unvested at 7/31/25: 60,000 (market value $2,719,800 at $45.33 on 7/31/25).

Equity Ownership & Alignment

• Beneficial ownership (as of 10/10/2025): | Holder | Shares Beneficially Owned | Percent Outstanding | Detail | |---|---|---|---| | Leah C. Stearns | 348,000 | <1% | Includes 66,000 shares held directly; 6,000 RSUs vesting within 60 days; 276,000 options exercisable within 60 days |

• Ownership policies and restrictions:

  • Executive Officer Equity Ownership Policy: minimum holding equal to 3x cash salary; executives cannot sell unless holdings meet/exceed threshold; company states full compliance.
  • Anti-hedging and anti-pledging: no short sales, hedging, derivatives; pledging generally prohibited (Board granted a specific waiver only to the Chairman).
  • Insider trading policy restricts grant timing and trading during blackout periods.

• Recent vesting/sales context:

  • RSUs vested in FY2025: 24,000 ($1,295,820 realized on vesting before taxes/fees).

Employment Terms

• Employment agreement: If involuntarily terminated without cause or resigns for “good reason,” lump-sum severance equals 50% of then-current base salary (subject to release of claims). For Leah C. Stearns, the severance amount would have been $291,750 if termination occurred on 7/31/2025.
• Change-in-control: Equity awards do not automatically accelerate on a change-in-control; acceleration applies if awards are not assumed by the acquirer (single-trigger for non-assumption, applies company-wide).
• Clawback: Dodd-Frank compliant recovery policy covering cash/equity incentive compensation tied to financial reporting metrics received in the 3 completed fiscal years preceding an accounting restatement.
• Benefits and perquisites: Standard employee benefits; 401(k) match; auto allowance; no special executive retirement plans or tax gross-ups upon change-in-control.

Performance & Track Record Indicators

• Company operating performance (FY2025): | Metric | FY2025 | YoY | |---|---|---| | Revenue | $4.6B | +9.7% | | Operating Income | $1.7B | +7.9% | | Net Income | $1.5B | +13.9% | | Liquidity at FY-end | $6.0B | — (cash/treasuries $4.7B + $1.25B undrawn revolver) | | Total Assets | >$10B | — |

• Bonus goal execution (FY2025): CFO met 100% of personal goals (build strategic financial analysis/capital allocation; enhance International margins); company operating income achieved 99% of target metric.

Say-on-Pay and Committee/Peer Practices

• Say-on-Pay: ~95% approval at 2024 annual meeting.
• Compensation Committee: Independent directors; current members include Daniel J. Englander (Chair), Matt Blunt, Steven D. Cohan, Cherylyn Harley LeBon, and Thomas N. Tryforos.
• Consultant: Compensia engaged; assessed peer group for CFO compensation in FY2025; no consultant conflicts disclosed.

Compensation Structure Analysis

• Mix and leverage:
  • No new equity in FY2025; equity heavily front-loaded at appointment (Dec 2022) and supplemented in Nov 2023; design features significant performance-based option tranches with 125% price hurdles to reinforce stockholder alignment.
  • Annual cash incentive uses a single financial metric (Operating Income) for 60% weighting plus 40% qualitative goals; payouts capped and calibrated (+/-1% per $71M from target in FY2025).
• Governance features:
  • No tax gross-ups, no repricing, strong anti-hedging/pledging, ownership minimums, and clawback policy enhance alignment and risk control.

Investment Implications

• Alignment and retention: Large unvested RSUs (60k) and multi-year options (including performance-based tranches at $41.06 and $63.51 hurdles) create multi-year retention and value-creation incentives tied to absolute stock performance; executive ownership and 3x-salary holding requirement limit near-term sell pressure from vesting.
• Cash incentive sensitivity: Operating Income-centric bonus (60% weight) plus qualitative goals (40%) supports controllable execution levers; FY2025 payout near target underscores tight linkage to operating performance.
• Downside protection/red flags: Severance terms are modest (0.5x salary) and no automatic CIC equity acceleration (unless not assumed), reducing parachute risk; no hedging/pledging and no tax gross-ups mitigate governance risk.
• Potential selling/option exercise dynamics: RSUs continue vesting quarterly and options vest monthly over five years; some performance options require sustained price thresholds before exercisability, tempering immediate monetization even if time-vested.