CPRT Copart Inc

NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS

Forward-Looking Statements

This proxy statement, including the section entitled “Compensation Discussion and Analysis” set forth below, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements are based on our current expectations and involve risks and uncertainties that may cause our actual results to differ materially from those anticipated by these forward-looking statements. These forward-looking statements may include statements regarding actions to be taken by us in the future. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those mentioned in the section on forward-looking statements and in the risk factors in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended July 31, 2023, and in our periodic reports on Form 10-Q and current reports on Form 8-K as filed with the SEC.

2023 Annual Meeting of Stockholders

Agenda and Voting Recommendations

At this year’s annual meeting, our stockholders will be asked to vote on the following agenda items:

Fiscal 2023 Performance Summary

Corporate Governance Highlights

Director Nominees

Executive Compensation Highlights

Set forth below is the fiscal 2023 compensation for each NEO (as defined in the “Compensation Discussion and Analysis” section of this proxy statement) as determined under U.S. Securities and Exchange Commission (“SEC”) rules. See the Fiscal 2023 Summary Compensation Table and the accompanying notes to the table beginning on page 55 for more information.

“ESG” Strategy and Highlights

Since our inception in 1982, Copart has played a critical role in the automotive circular economy as a key intermediary enabling the recycling and reuse of automobiles and automotive parts, while facilitating access to transportation around the world. The very nature of our business is aligned with the reduction of carbon emissions. The process of manufacturing a new vehicle generates approximately 2 metric tons of carbon dioxide equivalents, according to the U.S. Department of Energy. By matching millions of vehicles each year with buyers who will repurpose vehicles, Copart helps the world avoid millions of tons of carbon dioxide equivalents.

We are proud that our business, by its nature, enhances the habitability of our planet. We facilitate the re-use and recycling of millions of vehicles each year, while accelerating access to affordable transportation and the attendant benefits of social, educational, and economic mobility around the world. To learn more about Copart’s ESG efforts, please review our inaugural sustainability report, which was published in October 2022, and which is available on our website at https://www.copart.com/content/copart-esg-report-2022.pdf.

Copart’s ESG strategy is rooted in our company’s core values and prioritizes four focus areas:

Questions and Answers and Other Information

Please see “Other Matters” beginning on page 67 and “Questions and Answers about the Proxy Materials and Annual Meeting” beginning on page 7 for important information about the proxy materials, voting, the annual meeting, company documents, communications and the deadlines to submit stockholder proposals and director nominees for the 2024 annual meeting of stockholders. Additional questions may be directed by phone by calling us at (972) 391-5000.

In accordance with SEC guidelines, all numbers representing shares of Copart, Inc. common stock, including equity incentive awards relating to Copart, Inc. common stock, have been adjusted to reflect the 2-1 forward stock split in the form of a stock dividend that was effective on August 21, 2023. These adjustments include all stock price, exercise price, restricted stock unit, and per share or per restricted stock unit information.

Learn More About Our Company

You can learn more about our company, view our governance materials and much more by visiting our website at www.copart.com under Investor Relations.

Please also visit www.edocumentview.com/CPRT to access our notice of annual meeting of stockholders, proxy statement and 2023 annual report on Form 10-K.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

These proxy materials are furnished in connection with the solicitation by the Board of Copart, Inc. (“Copart”) of proxies to be voted at our 2023 annual meeting of stockholders, which will take place on Friday, December 8, 2023 at 8:00 a.m., Central Standard Time, at our corporate headquarters located at Copart Tower, 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254, and any postponements, adjournments or continuations thereof.

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully. Information contained on or accessible through our website is not intended to be incorporated by reference into this proxy statement, and references to our website in this proxy statement are intended to be inactive textual references only.

By accessing the proxy materials on the Internet or choosing to receive your future proxy materials by email, you will save us the cost of printing and mailing documents to you and will reduce the impact of the annual meeting on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials. If you choose to receive future proxy materials by mail, you will receive a paper copy of those materials, including a form of proxy. Your election to receive proxy materials by mail or email will remain in effect until you notify us that you are terminating your request.

This proxy statement and the accompanying proxy card, notice of annual meeting of stockholders, Internet Notice, and annual report on Form 10-K for the fiscal year ended July 31, 2023 are being distributed and made available on or about October 26, 2023 to all stockholders of record entitled to vote at the annual meeting.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

We will also transact such other business that may properly come before the annual meeting.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, the stockholder of record, and these proxy materials were sent directly to you by Copart. As the stockholder of record, you have the right to grant your voting proxy directly to our designated proxies or to vote in person at the annual meeting. We have enclosed or sent a proxy card for you to use with the printed proxy materials delivered to you. You may also vote on the Internet or by telephone, as described below under the heading “How can I vote my shares without attending the Annual Meeting?” and on your proxy card.

Beneficial Owners

Many of our stockholders hold their shares through a broker, trustee or other nominee, rather than directly in their own name. If your shares are held in a brokerage account or by a bank or another nominee, you are considered the beneficial owner of shares held in “street name.” The proxy materials were forwarded to you by your broker, trustee or nominee who is considered, with respect to those shares, the stockholder of record.

As a beneficial owner, you have the right to direct your broker, trustee, or other nominee on how to vote your shares. For directions on how to vote shares beneficially held in street name, please refer to the voting instruction card provided by your broker, trustee, or nominee. You are also invited to attend the annual meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the annual meeting unless you obtain a legal proxy from the broker, trustee, or nominee that holds your shares, giving you the right to vote the shares at the annual meeting.

If you do not comply with the procedures outlined above, you may not be admitted to the annual meeting.

Please let us know if you plan to attend the meeting by marking the appropriate box on the proxy card, or, if you vote by telephone or by Internet, by indicating your plans when prompted.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

Shares held in your name as the stockholder of record may be voted by you in person at the annual meeting.

Beneficial Owners

Shares held beneficially in street name may be voted by you in person at the annual meeting only if you obtain a legal proxy from the broker, trustee, or other nominee that holds your shares giving you the right to vote the shares.

Even if you plan to attend the annual meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the annual meeting.

You can vote via the Internet by following the instructions provided on your Internet Notice or proxy card.

Telephone and Internet voting facilities for stockholders of record will be available twenty-four hours a day until 1:00 a.m., Central Standard Time, on Friday, December 8, 2023. If you vote by telephone or the Internet, you do not have to return your proxy or voting instruction card.

If you are a beneficial owner of shares, your broker, trustee, or nominee may make telephone or Internet voting available to you. The availability of telephone and Internet voting for beneficial owners will depend on the voting processes of your broker, trustee, or nominee. Therefore, we recommend that you follow the voting instructions in the materials you receive.

By telephone

You can vote by calling the toll-free telephone number on your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been properly recorded.

By mail

Please complete, sign, and date the proxy or voting instruction card and return it in the prepaid envelope at any time prior to the annual meeting. If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named on the proxy card will vote the shares represented by your proxy card as recommended by our Board.

For shares you hold beneficially in street name, you may change your vote by submitting new voting instructions to your broker, trustee, or nominee following the instructions they provided or, if you have obtained a legal proxy from your broker, trustee, or nominee giving you the right to vote your shares, by attending the annual meeting and voting in person.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

Election of Directors

Directors are elected by majority vote, which requires the affirmative vote of a majority of the total votes cast at the annual meeting. For a description of our majority voting standard, please refer to the sections captioned “Corporate Governance and Board of Directors”. You may vote “FOR”, “AGAINST”, or “ABSTAIN” for each nominee. Abstentions and broker non-votes are not counted as votes “FOR” or “AGAINST” and will not affect the outcome of the election of directors.

Advisory (Non-Binding) Vote on Approval of Executive Compensation

Under our bylaws, the votes cast “FOR” must exceed the votes cast “AGAINST” to approve, on an advisory (non-binding) basis, the compensation of our named executive officers for the fiscal year ended July 31, 2023. You may vote “FOR”, “AGAINST” or “ABSTAIN” on this proposal. Abstentions and broker non-votes are not counted as votes “FOR” or “AGAINST” and will not affect the outcome of this proposal.

Advisory (Non-Binding) Vote on the Frequency of a Stockholder Advisory Vote on Executive Compensation

The choice of frequency that receives the highest number of affirmative votes will be considered the advisory vote of our stockholders. You may vote “ONE YEAR,” “TWO YEARS,” “THREE YEARS” or “ABSTAIN” on this proposal. Abstentions and broker non-votes are not counted as votes for “ONE YEAR,” “TWO YEARS,” “THREE YEARS” or “AGAINST” and will not affect the outcome of this proposal.

Ratification of Appointment of Ernst & Young LLP

Under our bylaws, the votes cast “FOR” must exceed the votes cast “AGAINST” to approve the ratification of the appointment by the Audit Committee of our Board of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2024. Abstentions are not counted as votes “FOR” or “AGAINST” this proposal.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

We will deliver, promptly upon written or oral request, a separate copy of the annual report on Form 10-K for the fiscal year ended July 31, 2023, Internet Notice and proxy statement to any stockholder at a shared address to which a single copy of any of those documents was delivered. To receive a separate copy of the annual report on Form 10-K for the fiscal year ended July 31, 2023, Internet Notice and/or proxy statement, you may write to or call our Investor Relations Department at Copart Tower, 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254, telephone (972) 391-5000. Any such request should be made promptly in order to ensure timely delivery. Any stockholders of record who (i) share the same address and currently receive multiple copies of our 2023 Form 10-K, Internet Notice and proxy statement, and (ii) wish to receive only one copy of these materials per household in the future, may contact our Investor Relations Department at the address or telephone number listed above to participate in the householding program.

A number of brokerage firms have instituted householding. If you hold your shares beneficially in street name, please contact your bank, broker, or other holder of record to request information about householding.

Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to our corporate secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 2024 annual meeting of stockholders, our corporate secretary must receive the written proposal at our principal executive offices not later than June 28, 2024 pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided, however, that in the event that we hold our 2024 annual meeting of stockholders more than thirty days from the one year anniversary date of the 2023 annual meeting, we will disclose the new deadline by which stockholder proposals must be received under Part II, Item 5 of our earliest possible Quarterly Report on Form 10-Q or, if impracticable, by any means reasonably calculated to inform stockholders. All stockholder proposals must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act, regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:

Copart, Inc.

Copart Tower

Attn: Corporate Secretary

14185 Dallas Parkway, Suite 300

Dallas, Texas 75254

The submission of a stockholder proposal does not guarantee that it will be included in Copart’s proxy statement or proxy.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING

Requirements for Stockholder Proposals to be Brought Before the 2024 Annual Meeting

Our bylaws establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders, but do not intend for the proposal to be included in our proxy statement. Our bylaws provide that the only business that may be conducted at an annual meeting is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise properly brought before the meeting by or at the direction of our Board, or (iii) properly brought before the meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our corporate secretary, which notice must contain the information specified in our bylaws. To be timely for our 2024 annual meeting of stockholders, our corporate secretary must receive the written notice at our principal executive offices:

In the event that we hold our 2024 annual meeting of stockholders more than thirty days before or after December 8, 2024, then notice of a stockholder proposal that is not intended to be included in our proxy statement must be received not later than the close of business on the later of the following two dates:

If a stockholder who has notified us of his or her intention to present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, we are not required to present the proposal for a vote at such meeting.

Nomination of Director Candidates

Our bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our bylaws. In addition, the stockholder must give timely notice to our corporate secretary in accordance with our bylaws, which, in general, require that the notice be received by our corporate secretary within the time period described above under “Requirements for Stockholder Proposals to be Brought Before the 2024 Annual Meeting” for stockholder proposals that are not intended to be included in our proxy statement.

In addition to satisfying the requirements of our bylaws, pursuant to Rule 14a-19 promulgated under the Exchange Act, if you intend to solicit proxies in support of director nominees other than our nominees, then we must receive notice providing the information required by Rule 14a-19 postmarked no later than October 9, 2024. However, if the date of next year’s annual meeting is more than 30 days before or more than 30 days after December 8, 2024, then we must receive your notice by the close of business on the later of the sixtieth (60th) day prior to such meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made.

In addition, it is the policy of our Nominating and Governance Committee to consider recommendations for candidates to the Board from stockholders holding not less than 1% of the outstanding shares of our common stock continuously for at least twelve months prior to the date of submission of the recommendation or nomination. Any such recommendations should include the nominee’s name and qualifications for membership on our Board, and should be directed to our chief legal officer at our address set forth above for our corporate secretary. For additional information regarding stockholder recommendations for director candidates, please see the sections entitled “Corporate Governance and Board of Directors — Director Nomination Process” and “Corporate Governance and Board of Directors — Considerations in Identifying and Evaluating Director Nominees.”

Availability of Bylaws

A copy of our current bylaws may be obtained free of charge by written request to our Investor Relations Department c/o Copart, Inc., Copart Tower, 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254.

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

Board Composition

Our Board is currently comprised of eleven members. Our bylaws permit our board to establish the authorized number of directors within a range of five to eleven members, and eleven directors are currently authorized. The Board is nominating eleven nominees for election.

All directors elected at an annual meeting are elected to serve from the time of election and qualification until the earlier of the next annual meeting of stockholders following such election, or their resignation or removal. At each annual meeting of stockholders, the terms of each of our incumbent directors expire and eleven members of our Board are standing for re-election as directors.

Our bylaws provide for a majority voting standard in the election of directors, except in the event of a contested election, in which case we will revert to a plurality voting standard, the default standard under Delaware law. For a description of our majority voting standard, please refer to the section captioned “Proposal 1-Election of Directors.”

Board Skills and Diversity Matrices

The directors serving on our Board come from diverse backgrounds that align with our business requirements, help us to address the risks to which our business is subject, and foster sound business judgment.

Industry experience among our Board is a highly relevant and important background for our business, and for this reason our Board includes representatives with direct operations experience in our core salvage vehicle remarketing business. Four of our directors have served as our current or former executives, and each of them has more than 25 years of experience in the salvage vehicle industry. Two of these four members are founders of our company.

We believe that investment industry experience is also valuable for good stewardship of our business, by providing us with an informed perspective such that we can make decisions in alignment with the long-term interests of our stockholders. Currently three of our directors come from investment management backgrounds.

Because we operate in a complex regulatory environment under the laws of many different national, state, and local jurisdictions in the geographies where we conduct operations, we believe that government experience is highly relevant and important for our business oversight. Two of our directors have deep backgrounds in government service, and this experience helps to inform our Board’s decisions.

Given the importance of technology to our business model, we believe that having directors with experience in the technology sector, including in cybersecurity, is important. As such, we have one director who currently serves as an executive vice president of a customer relationship management software company, and before that, who served as the chief technology officer at an auction services technology company; one director who served as the executive vice president and chief financial officer at a company that specializes in owning and operating enterprise data centers; and one director who has held numerous executive roles, including service as chief executive officer, of a technology and e-commerce businesses. Taken together with the technology experience of our four directors who are our current or former executives, more than half of our Board members have meaningful technology backgrounds.

Because of the criticality of land capacity to our business operations, we believe that experience in land acquisitions, zoning, and development enhances the Board’s oversight of our business. Six of our directors have substantial direct experience in land acquisitions, including four directors who are our current or former executives; one recently served as the executive vice president and chief financial officer of a real estate investment trust; and one director who serves on the board of another publicly-traded corporation that invests in industrial real estate.

Finance and accounting expertise is likewise critical. To meet this specialized expertise requirement, two of our Board members have CPA certifications and have served as chief financial officers at other companies; three

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

additional Board members have deep expertise in financial analysis as a result of their investment management backgrounds, and two of our directors have substantial experience with budget development, analysis and oversight in the government sector.

Legal expertise is important for identifying and analyzing the applicable legal requirements to which our business is subject, and overseeing the risk and compliance issues that result from those legal requirements. To meet this specialized expertise requirement, one of our Board members is an experienced attorney practicing in the areas of corporate governance and risk management.

We believe that experience serving as directors of other publicly-traded corporations is also highly beneficial to our Board oversight function. Five of our directors have experience as current or former directors at one or more publicly-traded corporations beyond their service on our Board.

The following tables identify the directors on our Board against the combination of diverse backgrounds and specialized expertise described in this section:

Industry Background and Experience

Specialized Expertise

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

Board Diversity Matrix

Our Nominating and Governance Committee considers all aspects of diversity, including racial and gender diversity, in evaluating board candidates, in addition to relevant skills and experience. The following table sets forth further diversity statistics as self-reported by the eleven (11) directors on our board as of July 31, 2023:

Fiscal 2023 Board Meetings

During fiscal 2023, our Board held four meetings, and took action six times by unanimous written consent. Each of our directors attended or participated in 75% or more of the total number of meetings of our Board held during the period of their service. Each of the directors also attended or participated in 75% or more of the meetings held by the standing committees of our Board on which they served during the past fiscal year.

Board Leadership Structure

Chairman of the Board

Our Board believes that it is important to retain its flexibility to allocate the responsibilities of the positions of the chairman of our Board and chief executive officer in a way that it believes is in our best interests. Currently, the roles of chairman of our Board and chief executive officer have been separated by our Board. Willis J. Johnson is our Chairman of the Board, and A. Jayson Adair and Jeffrey Liaw are our co-chief executive officers. Our Board believes that the separation of the offices of chairman and chief executive officer is appropriate at this time because it allows

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

our co-chief executive officers to focus primarily on our business strategy, operations, and corporate vision, while the chairman provides guidance to the co-chief executive officers, sets the agenda for Board meetings, and presides over meetings of the full Board. Our Board’s administration of risk oversight has not affected its leadership structure.

Lead Independent Director

Our Board has also appointed Daniel J. Englander as our lead independent director. In this role, Mr. Englander serves as the formal liaison between the Board and the co-chief executive officers, reviews and approves the proposed Board agendas, and leads the executive session portion of our regular Board meetings at which only independent directors are present.

Director Independence

As a company listed on the Nasdaq Global Select Market (“Nasdaq”), we are required under the Nasdaq listing requirements to maintain a board comprised of a majority of “independent directors,” as determined affirmatively by our Board. In addition, the Nasdaq rules require that, subject to specified exceptions, each member of our audit, compensation, and nominating and governance committees be independent. In September 2023, our Board undertook a review of the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board determined that a majority of our directors are “independent directors” as defined under applicable Nasdaq rules. Of our incumbent directors, Matt Blunt, Steven D. Cohan, Daniel J. Englander, James E. Meeks, Thomas N. Tryforos, Diane M. Morefield, Stephen Fisher, Cherylyn Harley LeBon, and Carl D. Sparks have each been determined by our Board to be an “independent director” as that term is defined under the rules of Nasdaq.

In making its independence determinations, our Board considered transactions between us and entities associated with the directors or members of their immediate family. All identified transactions that appear to relate to us and a person or entity with a known connection to a director are presented to our Board for consideration. In making its determination that certain directors are independent, our Board considered the transactions in the context of the Nasdaq rules, and the standards established by the SEC for members of audit committees, compensation committees, and nominating and governance committees.

Oversight of Risk Management

The role of our Board in our risk oversight process includes receiving regular reports from members of senior management on areas of material risk to us, including operational, financial, legal and regulatory, and strategic and reputational risks.

Our Board’s role in risk oversight is consistent with our Board’s leadership structure, with the co-chief executive officers and other members of senior management having responsibility for assessing and managing our risk exposure, and our Board and committees providing oversight in connection with those efforts. While our Board has the ultimate oversight responsibility for our risk management policies and processes, the committees of our Board also have responsibility for risk oversight with respect to certain matters.

Our Audit Committee oversees management of financial risk exposures, including the integrity of our accounting and financial reporting processes and controls. As part of this responsibility, our Audit Committee meets periodically with our independent auditors, our internal auditors, and our financial and accounting personnel to discuss significant financial risk exposures and the steps management has taken to monitor, control, and report these exposures. Additionally, our Audit Committee reviews significant findings prepared by our independent auditors together with management’s responses as well as significant findings of our internal auditors. Our Audit Committee also oversees risk associated with related party transactions, business conduct, regulatory compliance, and cybersecurity and privacy compliance.

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

Our Compensation Committee considers the risks associated with our compensation policies and practices with respect to both executive compensation and employee compensation generally. Our management has reviewed with our Compensation Committee the compensation plans and programs that could have a material impact on us. The management review considered whether any of these plans or programs may encourage inappropriate risk-taking, whether any plan may give rise to risks that are reasonably likely to have a material adverse effect on us, and whether our management would recommend any changes to the plans. Our management also reviewed with our Compensation Committee risk-mitigating controls such as the degree of Compensation Committee and senior management oversight of each program and the level and design of internal controls over such programs. Based upon this review, we believe that the mix and design of the elements of our compensation policies and practices do not encourage our employees to assume excessive risks and, accordingly, are not reasonably likely to have a material adverse effect on us.

Our Nominating and Governance Committee oversees risks associated with our overall governance practices and the leadership structure of our board. Our Board is kept informed of each committee’s risk oversight and other activities via regular reports of the committee chairs to the full board. As part of its oversight of our overall governance practices, the Nominating and Governance Committee has adopted our enterprise policy development and governance framework. To the extent that an ESG aspect is not covered by the full Board in its oversight of our corporate strategy or specifically assigned to another committee, the Nominating and Governance Committee also oversees our general activities in ESG areas.

Board Committees

Our Board maintains three standing committees: an audit committee, a compensation committee, and a nominating and governance committee. Each committee has a written charter, which is reviewed and approved annually by our Board, outlining the principal responsibilities of the committee. Copies of the current committee charters are available in the Corporate Governance section of the Investor Relations page on our website at www.copart.com.

Only directors deemed to be “independent” (see below) serve on the Audit, Compensation, or Nominating and Governance Committees. However, our Board may create special committees from time to time and our current employee directors or those deemed not to be independent under applicable rules and guidelines may be appointed to serve on those special committees, as our Board may determine.

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

Compensation Committee Interlocks and Insider Participation

Our Compensation Committee consists of Daniel J. Englander, Matt Blunt, Steven D. Cohan, Cherylyn Harley LeBon, and Thomas N. Tryforos. No member of our Compensation Committee was, at any time during fiscal 2023, an officer nor employee of Copart or any of our subsidiaries. Mr. Cohan was previously an officer of Copart from 1992-1996. In addition, no member of our Compensation Committee had any relationship requiring disclosure under Item 404 of Regulation S-K promulgated by the SEC at the time such committee member served as a board member and committee member.

No interlocking relationship, as described by the SEC, currently exists or existed during fiscal 2023 between any member of our Compensation Committee and any member of any other company’s board of directors or compensation committee.

Considerations in Identifying and Evaluating Director Nominees

To the extent our Nominating and Governance Committee believes it appropriate to identify and evaluate new director candidates, our Nominating and Governance Committee generally requests our board members and others provide recommendations, meets from time to time to evaluate biographical information and background material relating to potential candidates, and interviews potential director candidates.

Our Nominating and Governance Committee consists of Diane M. Morefield, Daniel J. Englander, Cherylyn Harley LeBon, Carl D. Sparks, and Thomas N. Tryforos and has established policies and procedures relating to the consideration of any individual recommended as a prospective director nominee from stockholders. Please see the section entitled “Director Nomination Process” below. The Nominating and Governance Committee will consider candidates recommended by stockholders in the same manner as candidates recommended to the committee from other sources.

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

In its evaluation of director candidates, including the members of the Board eligible for re-election, our Nominating and Governance Committee will consider the following:

Our Nominating and Governance Committee evaluates these factors, among others, and does not assign any particular weighting or priority to any of these factors.

Any nominee for a position on the Board must satisfy the following minimum qualifications:

The Nominating and Governance Committee considers diversity as one of many factors in identifying nominees for director, including personal characteristics such as race and gender, as well as diversity in the experience and skills that contribute to the board’s performance of its responsibilities in the oversight of a complex and highly-competitive global business. The Nominating and Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees.

If our Nominating and Governance Committee determines that an additional or replacement director is required, the Nominating and Governance Committee may take such measures as it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the Nominating and Governance Committee, Board, or management.

Director Nomination Process

Our Nominating and Governance Committee is responsible for, among other things, determining the criteria for membership to our Board and recommending candidates for election to the Board. It is the policy of our Nominating and Governance Committee to consider recommendations for candidates to the Board from stockholders holding not less than 1% of the outstanding shares of our common stock continuously for at least twelve months prior to the date of submission of the recommendation or nomination. Stockholder recommendations for candidates to the Board must be directed in writing to Copart, Inc., Copart Tower, 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254, Attention: Chief Legal Officer, and must include the candidate’s name, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve, information regarding any relationships between the candidate and Copart, and evidence of the recommending stockholder’s ownership of our stock. Such recommendations must also include a statement from the recommending stockholder in support of the candidate, particularly within the context of the criteria for board membership, including issues of character, integrity, judgment, independence, area of expertise, corporate experience, length of service, personal characteristics (including gender, race, LGBTQ+ status and diversity of experience), potential conflicts of interest, and other commitments, and personal references. For details regarding the process to nominate a director directly for election to the Board at an annual meeting of the stockholders, please see the section entitled “Questions and Answers About the Proxy Materials and Annual Meeting — What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors? — Nomination of Director Candidates.”

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

Director Attendance at Annual Meetings

Although we do not have a formal policy regarding attendance at stockholder meetings, our directors are encouraged to attend the annual meeting of stockholders. Mr. Adair attended and delivered remarks at our 2022 Annual Meeting.

No Hedging Policy

Our insider trading policy precludes our officers, directors, employees, consultants, agents and contractors from engaging in transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.

Corporate Governance Principles and Code of Business Conduct

Our Board has adopted Corporate Governance Principles. Our Corporate Governance Principles address, among other items, the qualifications and responsibilities of our directors, the structure and composition of our Board and corporate governance policies and standards applicable to us in general. In addition, our Board has adopted our Code of Business Conduct, applicable to all of our employees, executive officers and directors. The full text of our corporate governance principles and Code of Business Conduct are available on our website at https://www.copart.com/content/us/en/investor-relations/investor-relations. The Nominating and Governance Committee of our Board is responsible for overseeing the Code of Business Conduct, including regularly reviewing and updating our Code of Conduct for regulatory and best practices updates. Any amendments to the Code of Business Conduct, or any waivers of its requirements, will be disclosed on our website.

Annual Board Self-Evaluations

Each year, the Nominating and Governance Committee leads the Board through self-evaluations to assess whether the Board, its committees, and its members are functioning effectively and, to identify areas where improvement can be made. This process also includes an evaluation of all directors, including the Chairman of the Board, Lead Director and committee chairs. The Chair of the Nominating and Governance Committee compiled and anonymized the results of the self-evaluation and presented summaries that identified common themes, issues and suggestions to the committees and the Board. The Board and its committees reviewed and discussed the summaries during committee and Board executive sessions, and then, as appropriate, enhanced policies and practices based on the results. We believe this approach, in addition to ongoing feedback, supports the Board’s effectiveness and continuous improvement.

External Director Equity Ownership Policy

In September 2020, our Board adopted a new external director equity ownership policy. Taken together with the equity compensation element of our external director compensation program, the policy is designed to encourage our directors to build and maintain a meaningful equity ownership position in our stock, in order to better align the interests of our Board with the interests of our stockholders. The external director equity ownership policy prohibits our external directors from selling any shares of our stock that they beneficially own unless both before and after the proposed sale the director holds shares — including vested options that can be exercised for shares — with a fair market value as of the proposed transaction date greater than or equal to three times the cash portion of their annual director compensation.

Stockholder Communications with our Board

Our Board recommends that stockholders who wish to communicate directly with our Board should do so in writing. Our Board has approved the following procedure for stockholders to communicate with our directors. Mail can be addressed to directors in care of Copart, Inc., Attention: Chief Legal Officer, Copart Tower, 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254. All mail received will be opened and screened for security purposes. All mail, other

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

than trivial or obscene items, will be forwarded to our directors. Trivial items will be delivered to our directors at the next scheduled Board meeting. Mail addressed to a particular director will be forwarded or delivered to that director. Mail addressed to “Outside Directors” or “Non-Management Directors” will be forwarded or delivered to the chairman of our Nominating and Governance Committee. Mail addressed to the “Board of Directors” will be forwarded or delivered to the Chairman of our Board. Our chief legal officer may decide in the exercise of his judgment whether a response to any stockholder communication is necessary.

This procedure does not apply to stockholder proposals submitted pursuant to our bylaws and Rule 14a-8 of the Exchange Act, as discussed in this proxy statement under the caption “What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors? —Nomination of Director Candidates.”

Environmental, Social, and Governance

Through its governance and oversight of our business, our Board is responsible for setting our strategic corporate goals. Our goals are to generate sustainable profits for our stockholders while providing environmental and social benefits for the world around us.

We believe that our business model should be aligned with recognized environmental, sustainability, and governance standards, with a broad awareness of the social, environmental, and human context in which we operate. Our Nominating and Governance Committee is responsible for overseeing our business activities in this area.

In October 2022, we published our inaugural ESG report on our investor relations website that provides detailed disclosures regarding our ESG objectives based on the UN SDGs, the SASB standards, and the GRI reporting framework. Although these disclosures are not incorporated by reference into this proxy statement, we believe the 2022 ESG report offers valuable insights into the ways our business aligns favorably with important goals in these areas.

Data Protection and Cybersecurity

We are committed to protecting the data that we use in our business operations, including personal data that may identify individuals. We have a chief information security officer who leads our cybersecurity efforts, and we have implemented an information security management system. We have also made substantial investments in both the number of our cybersecurity professionals and the technologies we use to protect the data that we use in our business.

Furthermore, our Audit Committee is responsible for oversight of our data protection and cybersecurity activities. To enhance the Board’s oversight of cybersecurity matters, Stephen Fisher was added to our Board and the Audit Committee. He is a technologist who currently serves as the executive vice president for Next Generation CRM and Unified Data Services at Salesforce.com, and who previously served as the chief technology officer of eBay, Inc.

COMPENSATION OF DIRECTORS AND CHAIRMAN OF THE BOARD

COMPENSATION OF DIRECTORS AND CHAIRMAN OF THE BOARD

Our directors play a critical role in guiding our strategic direction and overseeing our management. Our directors consider maximizing long-term stockholder value for our investors to be their principal responsibility. Based on that long-held philosophy, our levels of cash compensation for non-employee directors and our Chairman of the Board have tended to fall below our peer group median, while levels of director equity compensation have exceeded our peer group median when measured using the equity valuation methodologies required by SEC rules.

Consistent with our compensation philosophy that director compensation should be directly linked to realized stockholder appreciation, our equity compensation programs for non-employee directors and our Chairman of the Board have focused on stock options granted on the date of each annual meeting with an exercise price equal to the closing price of our common stock in Nasdaq trading on the date of grant. Under that mechanism, if stockholders realize gains from the date of that meeting, our directors realize them as well (and proportionately to the gains realized by stockholders). If our stock price falls and stockholders do not realize gains, neither do our directors, as an option with an exercise price greater than then-prevailing market prices has no then-current value.

Outside Director Compensation Program

On October 17, 2022, our Board approved our outside director compensation program. Under our outside director compensation program, eligible directors (consisting of our Chairman of the Board and our non-employee directors) each receive an annual retainer of $50,000, which amount has been increased to $57,500 for fiscal year 2024. Additionally, each eligible director receives an additional $10,000 cash retainer for each committee on which they serve, unless the eligible director serves as the chair of one or more standing committees, consisting of the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee, in which case the eligible director receives an additional $20,000 cash retainer for their service as the chair of such committee. These cash retainers are payable in quarterly installments in arrears on a prorated basis.

Each person who first becomes an eligible director will receive, on the date on which the person first becomes an eligible director, an initial award of an option to purchase a number of shares of our common stock that results in such option having a “value” of $250,000, rounded down to the nearest whole share. Each initial award will vest as to 1/12th of the underlying shares on each month following the date the applicable eligible director’s service as an eligible director commenced, in each case subject to the eligible director’s continued service as a director through the relevant vesting date. If an individual commences service as an eligible director on the date an annual award (discussed below) would be granted, then the individual will not be granted an initial award, but instead will be granted only an annual award. If an individual commences service as an eligible director on any other date, then that individual will not be eligible to receive an annual award until the second annual meeting of stockholders where directors are elected following the individual’s initial date of service as an eligible director.

Except as described above, on the date of each of our annual stockholder meetings following the effective date of our new outside director compensation program, each eligible director automatically will be granted an annual award of an option to purchase a number of shares of our common stock that results in such option having a “value” of $250,000, rounded down to the nearest whole share. Each annual award will vest as to 1/12th of the underlying shares on each month following the date of grant, in each case subject to the applicable eligible director’s continued service as a director through the relevant vesting date.

Each initial award or annual award will have a term of seven years and will have an exercise price per share equal to the fair market value of a share of our common stock on the date of grant.

In the event of a change in control of our company, all initial awards and annual awards will fully vest, in each case subject to the applicable eligible director’s continued service as a director through the date of the change in control.

The directors are also eligible for reimbursement of reasonable and necessary expenses incurred in connection with their attendance at Board meetings.

COMPENSATION OF DIRECTORS AND CHAIRMAN OF THE BOARD

For purposes of determining the number of shares covered by an initial award or annual award and the limitations described in the previous paragraph, “value” means the fair market value of the shares subject to the equity award, as determined using the Black-Scholes option valuation formula.

Our founder and Chairman of the Board, Willis J. Johnson, participates in the outside director compensation program on the same terms as non-employee directors. However, under our new outside director compensation program, Mr. Johnson continues to receive the same perquisites and benefits he was provided under the previous stockholder-approved compensation program.

Fiscal 2023 Director Compensation

The following table presents information relating to total compensation paid or accrued for services rendered to us in all capacities by our Chairman of the Board and our non-employee directors for the fiscal year ended July 31, 2023, under our previous stockholder-approved cash and equity compensation program. The table excludes A. Jayson Adair, who is a named executive officer and does not receive any additional compensation for services provided as a director. See the section below entitled “Executive Compensation” for information about the compensation of Mr. Adair.