People

Control, Operators, and Incentives

Copart is a founder-shaped company that has never carried a founder's control mechanics. Co-founder Willis J. Johnson has chaired the board since January 2004 and helped build the business from a single salvage yard in 1982 [1]; longtime executive A. Jayson Adair ran the company for years and now sits as Executive Chairman; Jeffrey Liaw became sole Chief Executive Officer in April 2024 after two years as co-CEO [2]. Yet the company has a single class of common stock, one vote per share, and a majority-voting standard for director elections [3]. There is no super-voting wedge: the founders' influence rests on the same shares every other holder owns, and the largest voting blocks are index managers, not insiders.

The incentive architecture is the more distinctive fact. Copart pays its most senior people almost entirely in stock options — Adair on a $1.00 salary — and layers a premium-price hurdle on top of ordinary vesting [4]. What that design does to alignment, and where the current price leaves those strikes, is the substance of this tab. This tab records the structure; the chapters weigh it.

Control: votes track economics one-for-one

Source: 2025 Proxy Statement, Security Ownership of Certain Beneficial Owners and Management (ownership as of Oct 10, 2025; percentages of 967,834,374 shares outstanding) [5].

Because every share carries one vote, the "% Economics" and "% Votes" columns are identical [6]. The two founders together hold roughly 8.9% of the vote — meaningful influence, but well short of control — while the largest single voting blocks are Vanguard (10.24%) and BlackRock (6.01%) [7]. All directors and officers as a group held 9.60% [8]. A minority holder here is not structurally boxed out by a control class; the practical constraints are the founders' block, the concentration of votes in a few index managers, and a board on which the two founders and the CEO are not independent.

Source: 2025 Proxy Statement, Security Ownership table and the voting Q-and-A (single class, one vote per share) [9] [10].

One control-adjacent fact sits outside the ownership table. In September 2025 the board granted Johnson a waiver of the company's anti-pledging policy, allowing him to pledge up to 20% of the shares he beneficially owns as collateral for personal loans [11]. The same policy otherwise prohibits officers and directors from short sales, exchange-traded options, hedging, and pledging company stock as collateral [12].

Board and committees

The board has twelve members; nine are designated independent under Nasdaq rules, and the roles of Chairman, Executive Chairman, and CEO are held by three different people [13]. Daniel J. Englander serves as Lead Independent Director [14]. The three standing committees are composed entirely of independent directors [15].

Sources: 2025 Proxy Statement — director biographies and independence determination [16]; committee rosters [17] [18]. Ages as of Oct 24, 2025. NGS = Nominating, Governance, and Sustainability.

Two observed facts sit alongside the independence designations. First, tenure is long: five of the twelve directors have served since 2012 or earlier, and two independent directors — Cohan (a former Copart officer, 1992–1996) and Meeks (a salvage-industry executive whose daughter the company employs, noted below) — carry historical ties to the company or its founders [19]. Second, the board met five times in fiscal 2025, and each committee is independent-only [20]. The Audit Committee, chaired by Cohan, includes two designated financial experts (Cohan and Morefield) [21]. Ernst & Young LLP is the independent auditor, put to a ratification vote as a matter of good corporate practice [22].

Operators: a settled leadership team

Sources: 2025 Proxy Statement — director and executive-officer biographies [23] [24] [25].

Succession has been orderly rather than abrupt. Liaw joined as President and CFO, became President and CEO for North America, then co-CEO in April 2022, and sole CEO in April 2024 as Adair moved to Executive Chairman [26]. The CFO seat has been held by Leah C. Stearns — previously CFO of CBRE Group and of American Tower's U.S. division — since December 2022, a single, stable tenure rather than the revolving door seen at some peers [27].

Incentive architecture: options with a premium-price hurdle

Copart's compensation philosophy is explicit and unusual: the Compensation Committee has paid its most senior executives "almost exclusively" through loaded, multi-year stock-option awards since 2009, settling pay several years at a time rather than negotiating annually [28]. Adair, the Executive Chairman, draws a $1.00 annual salary [29]. Liaw's package was roughly 74% stock options by value in fiscal 2022, and he is not eligible for any new equity award until April 2026; in the interim he receives a salary and a bonus [30].

Two design features govern how that equity pays out:

Vesting. Since June 2020, executive option grants vest 20% on the first anniversary, then 1/60 monthly, reaching full vesting on the fifth anniversary [31].

Premium-price hurdle. For every NEO grant since June 2020, at least half the award value carries a condition that the options cannot be exercised unless the stock trades at 125% of the exercise price both at exercise and across the trailing 20 consecutive trading days [32].

The annual cash bonus is separate: in fiscal 2025 it was weighted 60% to an operating-income target and 40% to personal goals [33]. The company reported roughly $1.7 billion of operating income, producing a 99% payout on the operating-income component and 100% on personal goals for both Liaw and Stearns; no new equity was granted in fiscal 2025 [34].

Fiscal 2025 named-executive pay

Source: 2025 Proxy Statement, Summary Compensation Table (fiscal year ended July 31, 2025) [35]. Adair's "All Other Comp" is largely security-mandated corporate-aircraft use; neither Adair nor Liaw received new equity grants in fiscal 2025.

The fiscal 2025 numbers understate the true pay-for-performance mechanics because the largest awards were granted in prior years and no fresh equity was issued in the period [36]. Adair's $432,172 total is almost entirely "all other compensation" — the Compensation Committee requires him and Liaw to use corporate aircraft for all travel, including personal, for security reasons [37]. The CEO-to-median-employee pay ratio was 46 to 1 for fiscal 2025 [38].

Where the strikes sit against the price

Sources: strikes, hurdles, and share counts from the 2025 Proxy Statement, Outstanding Equity Awards at 2025 Fiscal Year End [39]; current price from the company price feed, as reported. Option counts combine exercisable and unexercisable/unearned tranches per grant.

Against a share price of about $29 at the end of July 2026, the picture splits by vintage. The older grants — Adair's $21.26 and Liaw's $14.57 — are in the money and above their 125% hurdles [40]. The most recent executive grants are not: Liaw's April 2022 tranche at $31.42 and Stearns' December 2022 grant at $32.85 are below the current price, and their premium hurdles ($39.28 and $41.06) are well above it [41]. The same drawdown reaches the board: the fiscal 2025 director option grant carried a $62.08 strike — the December 6, 2024 closing price — roughly double the current level [42]. The most recently granted equity across executives and directors is presently underwater.

Directors are paid mainly through annual option grants struck at the meeting-date price, with a seven-year term, and are held to an equity-ownership policy requiring holdings worth at least three times their cash retainer [43].

Insider activity: exercises, gifts, and sales — no open-market buys

Across the roughly twenty-one months from October 2024 through July 2026, Form 4 activity ran in one direction. Directors and officers exercised long-dated options and sold into the market; several made gift transfers; there were no open-market purchases.

Source: SEC Form 4 filings, October 2024–July 2026 (aggregated); values are open-market sale proceeds as reported on Form 4.

Two features are worth flagging without interpretation. Liaw's selling was conducted under Rule 10b5-1 trading plans and consisted of exercising deep-in-the-money options and selling a portion of the resulting shares [44]. Stearns, the CFO, recorded grants but no sales in the window. The absence of any open-market purchases is normal for an option-heavy company but is a fact the reader should have.

Related-party ledger

Source: 2025 Proxy Statement, Related Person Transactions (fiscal 2025 through Oct 24, 2025) [45].

The disclosed related-party items are two family-employment relationships. Brett Adair, brother of the Executive Chairman, was paid $410,905 in fiscal 2025 ($250,405 salary plus a $160,000 bonus) in a non-executive role, with a monthly auto allowance and occasional personal aircraft use as a guest [46]. Diane Yassa, daughter of director James E. Meeks, was paid $326,993 ($241,993 salary plus an $85,000 bonus) in a non-executive role [47]. Both were reviewed and approved by the Audit Committee, which pre-clears related-person transactions above $120,000 [48].

Officer and director docket

The proxy discloses one Section 16(a) delinquency: a Form 4 reporting certain gift transfers by A. Jayson Adair, due January 8, 2025, was not filed until October 16, 2025 [49]. Separately, the September 2025 anti-pledging waiver granted to Johnson stands as a board-approved exception to the company's general prohibition on pledging stock [50]. Beyond these items, the proxy discloses no material litigation, regulatory proceeding, investigation, or sanction touching current officers or directors. For how the operating model these people run actually makes money, see Business; for the multi-year said-versus-did and capital-allocation record, see History.