CVNA 2019 Proxy Statement

- 25 - below, our compensation program is designed to be highly performance-based with approximately 80% of each of our NEO’s compensation tied to our financial performance and stock price performance. The following table describes the material elements of compensation and the objectives of each element: PROGRAM DESCRIPTION OBJECTIVES ANNUAL COMPENSATION: Base Salary x Ongoing cash compensation based on executive officer's role, responsibilities, competitive market positioning, and individual performance. x Attract and retain qualified key managerial talent. x Recognize sustained individual performance. Annual Incentive Plan x Annual cash incentive with target award amounts for each executive officer. x Actual cash awards may be higher or lower than target, based on the company’s financial performance. x Attract and retain qualified key managerial talent. x Encourage and reward achievement of annual performance objectives. LONG-TERM COMPENSATION: Long-Term Incentive Program x A long-term incentive program using a combination of time-vested and performance-based awards. x Focus executives on long-term company performance and long-term financial and strategic success. x Retention. x Align employee and stockholder interests via performance goals and stock ownership. 19% 13% 20% 29% 19% 81% CEO and Other NEO Average Compensation by Type Base Salary Annual Incentive Plan Stock Options Time-based RSUs Performance-contingent RSUs Pay at Risk