Copart grants CEO Jayson Adair options on 20,000,000 shares; his salary is expected to be $1 a year

Copart's board gave chief executive A. Jayson Adair an option on 20,000,000 shares on October 14, 2026, and the company says the award will replace his salary and equity compensation for a decade. The grant carries four exercise prices from $26.27 to $52.54 a share, a stated total exercise price of $785,300,000, and it cannot be exercised unless stockholders approve it at the 2026 annual meeting or at a special meeting held after that.

The disclosure came in a Form 8-K filed October 16, 2026, two days after the board acted on its compensation committee's recommendation. The option sits outside Copart's 2007 Equity Incentive Plan and is documented in a stand-alone agreement filed with the report; its term runs to October 13, 2036.

Four strike prices under a single five-year cliff

None of the award vests gradually. The whole option becomes exercisable on the fifth anniversary of the grant, provided Adair remains chief executive until then, and the agreement forfeits the whole award if that service ends before the fifth anniversary, apart from the two exceptions it carves out. If Adair dies or becomes disabled while serving as chief executive, the unvested shares whose exercise price sits below the average closing price over the 30 trading days before the termination vest immediately before it, and the clawback and the holding period are waived for those shares. If a change in control closes while he is still chief executive, the unvested shares whose exercise price sits below the price per share paid to holders in that transaction vest immediately before it, though those shares stay subject to the clawback and the holding period. Anything that fails those in-the-money tests is forfeited. The 20,000,000 shares are split into four tranches of 5,000,000, each with its own strike, so Adair keeps only the appreciation above the price attached to each block. The highest tranche pays nothing unless the stock trades above $52.54.

The ladder matters more than the headline share count. The agreement prices the package at a total exercise price of $785,300,000 for the 20,000,000 shares, yet the four tranche prices printed on its notice page multiply out to $786,800,000, $1,500,000 more than that stated total. Neither document gives a closing price for the grant date, so how far the top strike sits above the market cannot be checked from this filing, and the report states no share count against which to measure dilution.

A $1 salary and a clawback that outlasts vesting

Copart presents the option as a substitute for ordinary pay. The filing says Adair “is expected to receive a salary of $1 each year” and is not expected to collect a bonus or further equity awards during the term, and it describes the grant as his only substantive cash or equity compensation for ten years, apart from perquisite programs the committee approves. Those are expectations recorded in a filing, not an executed employment contract.

The restrictions continue past the cliff. Once vested, 10% of the shares are subject to a service-based clawback for each whole or partial year remaining in the term after Adair stops being chief executive, so a departure partway through leaves the shares for the remaining years recoverable at the exercise price, including shares already exercised. Shares equal in value to the after-tax gain must be held until the term ends. Death, disability and a change in control each bend those rules, and each can also pull part of the award forward to early vesting, as set out above. The option is additionally subject to Copart's Compensation Recovery Policy.

Two documents, two middle strikes

The report and the agreement do not give identical prices. The Form 8-K lists $35.03 and $43.78 as the second and third exercise prices; the notice page of the agreement lists $34.94 and $43.61 for the same two tranches, and both documents agree on $26.27 and $52.54. The gap is cents a share, and neither document reconciles it, so the agreement, as the operative instrument, is the version to rely on for the actual strikes. The stated total exercise price of $785,300,000 appears only in the agreement.

What decides whether the option exists

Stockholder approval is a condition rather than a formality. The 8-K says “No portion of the Option may be exercised before stockholder approval is obtained” and that “the Option will be forfeited in its entirety” if investors do not approve it at the 2026 annual meeting or at a special meeting held afterward. The filing sets no date for that meeting and carries no news release, so the compensation committee's reasoning is likely to be set out in the proxy statement for the 2026 annual meeting. That document, and the vote it precedes, are the next checkpoints for the award.