UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.     )

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2023 notice of annual meeting and proxy statement

March 31, 2023

Dear Fellow Stockholder,

You are cordially invited to attend our annual meeting of stockholders at 1:00 PM Pacific time, on May 9, 2023. This year’s annual meeting of stockholders will be held in a virtual-only meeting format online via live webcast using a unique link to be provided by email after registering at register.proxypush.com/FAF.

With this letter, we are including the notice for the annual meeting, the proxy statement and the proxy card. We are also including a copy of our 2022 annual report. More information regarding how to vote, participate in, and submit questions for the annual meeting can be found in the proxy statement.

We have made arrangements for you to vote your proxy over the Internet or by telephone, as well as by mail with the traditional proxy card. The proxy card contains instructions on these methods of voting.

Your vote is important. Whether or not you plan on participating in the virtual annual meeting on May 9, 2023, we hope you will vote as soon as possible.

Thank you for your continued support of First American Financial Corporation.

This year’s meeting will be held in a virtual-only meeting format online via live webcast. To participate in the meeting, stockholders must go to register.proxypush.com/FAF with the control number provided on their proxy card or voting instruction form and register by following the instructions. Upon completing registration, a stockholder will receive further instructions via email, including a unique link that will allow that stockholder access to the meeting. During the meeting, stockholders may vote, submit questions and view the list of stockholders as of the record date. For additional information on voting at or participating in the meeting online, including how to submit questions, please see “Questions and Answers” on page 87.

How to vote your shares before the meeting

Your vote is very important. Please submit your vote by proxy as soon as possible via the Internet, telephone or mail. Brokers are not permitted to vote on certain proposals and may not vote on any of the proposals unless you provide voting instructions. Voting your shares will help to ensure that your interests are represented at the meeting.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 9, 2023:  First American Financial Corporation’s notice of annual meeting and proxy statement, annual report and other proxy materials are available at www.firstam.com/proxymaterials.

Meeting Contingencies

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the chair of the meeting will convene the meeting at 2:00 PM Pacific Time on the date specified above and at our address, 1 First American Way, Santa Ana, CA 92707, solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the Investors page of our website at investors.firstam.com.

Lisa W. Cornehl

Senior Vice President, Chief Legal Officer and Secretary

Santa Ana, California

March 31, 2023

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First American Financial Corporation

PROXY STATEMENT

Solicitation of Proxies by the Board of Directors

The board of directors (our “Board”) of First American Financial Corporation, a Delaware corporation (our “Company,” “we” or equivalent terms), is soliciting proxies from holders of our common stock for use at the annual meeting of our stockholders to be held on May 9, 2023, at 1:00 PM Pacific time. The meeting will be held in a virtual-only meeting format online via live webcast using a unique link to be provided by email after registering at register.proxypush.com/FAF. We have included information on how to vote, submit questions, and participate in the virtual meeting in the “Questions and Answers” section on pages 87-94.

We are mailing this proxy statement and the enclosed proxy card, notice of annual meeting, stockholders letter and 2022 annual report to our stockholders on or about March 31, 2023. In lieu of a proxy card, holders of shares held in street name through a bank, broker or other nominee are receiving a voting instruction form from their bank, broker or other nominee. As used herein, references to “proxy” or “proxy card” also refer to the voting instruction form provided to street name holders.

The remainder of this proxy statement has been divided into five sections. You should read all five sections before you vote.

The Compensation Discussion and Analysis section contains certain financial measures that are not presented in accordance with generally accepted accounting principles (“GAAP”). Please see Appendix A for the rationale behind the presentation of these measures and a reconciliation of these amounts to the nearest GAAP financial measures.

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Information Regarding the Nominees for Election

The following list provides information with respect to the four persons nominated and recommended to be elected as a Class I director by our Board, to serve for a three-year term expiring on the date of the 2026 annual meeting of stockholders. Each of the nominees is currently serving as a director of our Company. Each of James L. Doti and Michael D. McKee was previously elected by stockholders at the 2020 annual meeting of stockholders. Kenneth D. DeGiorgio was appointed by our Board as a Class I director on February 4, 2022. Marsha A. Spence was appointed by our Board as a Class I director on May 11, 2022. Ms. Spence was recommended by the non-management directors of our Board. Thomas V. McKernan is a Class I director that was not nominated for reelection because he has reached our Company’s mandatory retirement age. As of the annual meeting, the Board will be reduced from eleven to ten directors.

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Information Regarding the Other Incumbent Directors

The following lists provide information with respect to the individuals currently serving as Class II directors, whose current term expires at the 2024 annual meeting of stockholders, and Class III directors, whose term expires in 2025. The Class II directors were previously elected by stockholders at the 2021 annual meeting, and the Class III directors were previously elected by stockholders at the 2022 annual meeting.

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Class II Directors—Term Expiring 2024

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Class III Directors—Term Expiring 2025

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See the section entitled “Security Ownership of Management,” which begins on page 22, for information pertaining to stock ownership of our directors. There are no family relationships among any of the directors or nominees or any of our executive officers. There are no arrangements or understandings between any director and any other person pursuant to which any director was or is to be selected as a director.

The following chart displays information about the skills and experience of our directors. Most of our directors at least have exposure in each of these areas and many are proficient, but the chart below reflects only those that have self-reported as being from experienced to highly experienced in these areas.

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The following chart displays self-reported information about the diversity of our directors.

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Item 1.    Election of Class I Directors

Our certificate of incorporation provides for a classified Board. Each person elected as a Class I director at the annual meeting of stockholders will serve for a three-year term expiring on the date of the 2026 annual meeting and until his or her successor in office is elected and qualified. Our Board has nominated the following individuals for election as Class I directors:

Kenneth D. DeGiorgio

James L. Doti

Michael D. McKee

Marsha A. Spence

Unless otherwise specified by you in your proxy card, the proxies solicited by our Board will be voted “FOR” the election of each of the Class I director nominees. If any nominee should become unable or unwilling to serve as a director, the proxies will be voted for such substitute nominee(s) as shall be designated by our Board. Our Board presently has no knowledge that any of the nominees will be unable or unwilling to serve.

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Item 2.    Advisory Vote to Approve Executive Compensation

Pursuant to Section 14A of the Securities Exchange Act of 1934 and Securities and Exchange Commission (“SEC”) rules, we are seeking the advice of our stockholders on the compensation of our named executive officers (“NEOs”) as presented in the “Executive Compensation” section of this proxy statement commencing on page 31. Specifically, we are seeking stockholder approval of the following resolution:

“RESOLVED, that the stockholders of First American Financial Corporation approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 2023 annual meeting of stockholders.”

We refer to this proposal as a “Say on Pay” proposal. As part of its process in determining executive compensation levels for 2022, the Compensation Committee has reviewed the results of last year’s Say on Pay proposal, in which approximately 95% of our Company’s shares present and entitled to vote approved, on an advisory basis, 2021 executive compensation. The stockholder support for the prior Say on Pay proposal reinforces the Compensation Committee’s belief that it should continue its practice of implementing and overseeing executive compensation programs that provide for a substantial portion of the executive officers’ total compensation to be related to our Company’s consolidated financial performance. It also reinforces the Compensation Committee’s view that, for executive officers, the mix of compensation should be weighted heavily toward at-risk pay and should include a substantial portion payable in equity. This is consistent with the overall philosophy of maintaining a pay mix that results fundamentally in a pay-for-performance orientation and a strong alignment between the interests of executive officers and long-term stockholders.

To ensure that our compensation program aligns with the long-term interests of our stockholders, we engaged with our stockholders to seek feedback on our executive compensation program. Following another review of our executive compensation program and incorporating feedback received from our stockholders, the Compensation Committee elected to allocate an even larger portion of the long-term incentive awards (“LTI Awards”) for executive officers to the multi-year, metric-based performance awards introduced last year. Specifically, we increased the percentage of our LTI Awards subject to a three-year performance period based on our Company’s total shareholder return relative to the S&P MidCap 400® Index at the end of the three-year performance period, as calculated and as further detailed in the section entitled “Compensation Discussion and Analysis” commencing on page 31 (“LTI PRSUs”), from 25% to 50%, and reduced the percentage of our LTI Awards subject solely to time-based vesting (“LTI RSUs”) from 75% to 50%. As a result of this change, 86% of the compensation for our chief executive officer, Mr. DeGiorgio, for 2022 was performance-based, with 66% of all restricted stock units (“RSUs”) awarded in 2023 (in connection with 2022 performance) being metric-based. For all other NEOs, on average, this change resulted in 63% of all RSUs awarded in 2023 (in connection with 2022 performance) being metric-based.

The results of the 2022 executive compensation program are included in the section entitled “Compensation Discussion and Analysis” commencing on page 31. As a whole, executive compensation (excluding compensation adjustments associated with Mr. DeGiorgio’s promotion to chief executive officer in February 2022) was down in 2022 compared to 2021 as challenging economic conditions weighed on our Company’s financial results, as reflected in the 77% payout of target annual incentive compensation in 2022 compared to a 175% payout in 2021. Stockholders are urged to read the Compensation Discussion and Analysis as well as the Summary Compensation Table and related compensation tables and narrative, appearing on pages 60 through 73, in their entirety.

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While this vote to approve executive compensation is not binding, the Compensation Committee intends to review the results of the vote in connection with its ongoing analysis of our Company’s compensation programs. We expect to include a Say on Pay proposal in our proxy materials on an annual basis and, thus, we expect that the next Say on Pay proposal will occur at our 2024 annual meeting, taking into consideration the results of the Say on Frequency vote.

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Item 3.    Advisory Vote on the Frequency of Executive Compensation Vote

Section 14A of the Securities Exchange Act of 1934 and SEC rules require us to seek the advice of our stockholders as to whether a vote to approve our Company’s executive compensation program, like the one described in Item 2, should be held every one, two or three years. Our Board is recommending a vote every year.

There appear to be valid reasons behind selecting any of these options. For example, a less than annual frequency may permit stockholders to focus more on overall design issues rather than details of individual decisions, and might permit stockholders who receive proxy statements from many companies to invest a more appropriate amount of time in analyzing their companies’ executive compensation proposals. We believe, however, that an annual vote gives stockholders the best opportunity to provide prompt feedback to our Company and to react to emerging trends in compensation. In addition, we believe that an annual frequency enhances the Compensation Committee’s ability to ascertain the reasons for any negative feedback received from the stockholders, as well as its ability to respond appropriately and promptly to any such feedback.

You should mark your proxy for one year, two years or three years based on your preference as to the frequency with which you believe an advisory vote on such compensation should be held. You may also abstain. While the vote is advisory and not binding, the Board has determined that it intends to implement the frequency that is approved by the stockholders. The Board may, however, in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.

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Item 4.    Approval of Amendment and Restatement of the 2020 Incentive Compensation Plan

Our Company’s 2020 Incentive Compensation Plan (the “Existing Plan”) provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock-based awards to non-employee directors, officers and eligible employees of our Company and any subsidiaries and affiliates. The Existing Plan, which replaced our Company’s 2010 Incentive Compensation Plan (the “2010 Plan”), became effective on January 22, 2020 upon its adoption by the Board, and was approved by our Company’s stockholders at the 2020 Annual Meeting of Stockholders.

On March 8, 2023, the Board approved an amendment and restatement of the Existing Plan (the “Proposed A&R Plan”), which, subject to stockholder approval, would increase the number of shares of common stock available for grant under the Existing Plan by 2,150,000 shares. As such, our Company is seeking stockholder approval of the Proposed A&R Plan in order to allow our Company to continue to utilize equity-awards, including performance-based awards, to attract, retain, and motivate employees.

As of February 28, 2023, a total of 1,037,696 shares remained available for future awards under the Existing Plan. If the Proposed A&R Plan is approved, the total number of shares available for future awards would be 3,187,696 shares representing approximately 3.1% of our Company’s outstanding common equity as of the record date.

Summary of Proposed Material Amendment

The material difference between the Existing Plan and the Proposed A&R Plan is described below, and such description is qualified in its entirely by the text of the Proposed A&R Plan, which is attached as Appendix B to this proxy statement. For further and complete information on the terms of the Proposed A&R Plan, we encourage you to refer to the text of the Proposed A&R Plan. Capitalized words used but not defined in this section have the meaning ascribed to them in the Proposed A&R Plan.

Increase in Share Reserve. Upon adoption, the material aggregate number of shares of our common stock authorized for issuance under the Proposed A&R Plan would be 6,450,000, reflecting an increase of 2,150,000 shares authorized for issuance as compared to the current Existing Plan. Assuming that aggregate equity awards are granted at levels consistent with recent historical practices, then we generally expect that the share reserve under the Proposed A&R Plan, should be sufficient to cover our Company’s projected equity grants for a period of approximately three years.

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Key Data

When approving the Proposed A&R Plan, the Compensation Committee considered the burn rate with respect to the equity awards granted by our Company, as well as our overhang. Our burn rate is equal to the total number of equity awards our Company granted in a fiscal year divided by the basic weighted-average common stock outstanding during the year. Our Company’s three-year average burn rate as of December 31, 2022 was approximately 0.8%, as further detailed in the table below. Our Company and the Compensation Committee continue to monitor our Company’s equity use to confirm the burn rate is maintained within competitive market norms.

Overhang is equal to the number of equity awards outstanding plus the total number of shares available for grant under our Company’s equity plan, divided by the sum of the total common stock outstanding, the number of equity awards outstanding and the total number of shares available for grant under our Company’s equity plan. Our overhang as of December 31, 2022 was 3.3%. If the Proposed A&R Plan is approved, our overhang would increase to 4.9%.

The following table includes information regarding outstanding equity awards and shares available for future awards under the Existing Plan as of February 28, 2023 (and without giving effect to approval of the Proposed A&R Plan).

As of February 28, 2023, the market price of our Company’s common stock, the class of stock underlying all awards subject to the Existing Plan, was $56.78 per share.

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Promotion of Good Corporate Governance Practices

The Existing Plan has a number of special terms and limitations that are supportive of sound corporate governance practices, including:

The Proposed A&R Plan will make no changes to these key features of our Existing Plan.

Summary of the Proposed A&R Plan

The following summary of the material terms of the Proposed A&R Plan is qualified in its entirety by reference to the full text of the Proposed A&R Plan, which is set forth in Appendix B to this proxy statement.

Administration

The Proposed A&R Plan is administered by the Compensation Committee of the Board. Subject to the express provisions of the Proposed A&R Plan, the administrator is authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of the Proposed A&R Plan. In addition, the Compensation Committee may delegate any or all aspects of its responsibilities and powers under the Proposed A&R Plan to any persons; provided, however, that the Compensation Committee may not delegate its authority to correct defects, omissions or inconsistencies in the Proposed A&R Plan.

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Participants

Any person who is designated as an employee of our Company or of any subsidiary or affiliate and any non-employee director of our Company is eligible for selection by the administrator for the grant of awards under the Proposed A&R Plan. Options intending to qualify as “incentive stock options” within the meaning of Section 422 of the Code may only be granted to employees of our Company or any subsidiary. Approximately 21,150 employees and 9 non-employee directors currently qualify to participate in the Proposed A&R Plan.

Shares Subject to the Proposed A&R Plan; Award Limits

The total number of shares of our Company’s common stock that may be delivered pursuant to awards under the Proposed A&R Plan is 6,450,000, reduced by one (1) Share for every one (1) Share issued pursuant to awards granted under the Prior Plan from and after January 1, 2020 and prior to May 5, 2020. Such shares may be either authorized and unissued shares or previously issued shares acquired by our Company or any subsidiary. Shares subject to (i) awards under the Proposed A&R Plan or (ii) awards that remained outstanding as of December 31, 2019 under the 2010 Plan, that, in either case, have expired or been terminated, cancelled, forfeited or otherwise not issued under an award and shares subject to awards settled in cash will be available for delivery in connection with future awards under the Proposed A&R Plan; provided, however, that (i) all shares covered by a stock appreciation right, to the extent that it is exercised, and whether or not shares are actually issued to the participant upon the exercise of the stock appreciation right and (ii) all shares withheld by our Company to pay the exercise price of an option and/or the withholding taxes related to an award under the Proposed A&R Plan will not become available for future awards under the Proposed A&R Plan. Any shares delivered under the Proposed A&R Plan upon exercise or satisfaction of a substitute award in connection with any acquisition, merger, consolidation or otherwise will not reduce the shares available for delivery under the Proposed A&R Plan.

The aggregate number of shares subject to options granted during any calendar year to any one participant may not exceed 500,000. The aggregate number of shares subject to stock appreciation rights during any calendar year to any one participant may not exceed 500,000. The aggregate number of shares subject to awards of restricted stock or restricted stock units granted during any calendar year to any one participant may not exceed 200,000. The aggregate number of shares subject to awards of performance shares or performance units during any calendar year to any one participant may not exceed 200,000. The aggregate number of shares subject to awards of other stock-based awards during any calendar year to any one participant may not exceed 200,000 shares. The aggregate dollar value of shares subject to awards granted under the Proposed A&R Plan, together with any cash compensation earned and paid or payable for services rendered, during any calendar year to any one non-employee director will not exceed $500,000.

Option Awards

The administrator establishes the exercise price per share under each option, which, other than in the event of options granted in connection with a merger or other acquisition, may not be less than the fair market value of a share on the date the option is granted. The administrator establishes the term of each option, which in no case may exceed a period of ten (10) years from the date of grant. Options granted under the Proposed A&R Plan may either be incentive stock options (“ISOs”) or options which are not intended to qualify as ISOs, called nonqualified stock options (“NQSOs”). ISOs may only be granted to employees. An option granted under the Proposed A&R Plan will not be considered an ISO to the extent that it, together with any other ISOs under the Proposed A&R Plan, are exercisable for the first time by any participant during any calendar year with respect to shares having an aggregate fair market value in excess of $100,000 as of the time the option with respect to such shares is granted. No option may be

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repriced, regranted through cancellation (or exchanged, through cancellation or otherwise, for another award), or otherwise amended to reduce the exercise price applicable thereto (other than in connection with a change in our Company’s capitalization), without the approval of our Company’s stockholders.

Stock Appreciation Rights

A stock appreciation right provides the right to the monetary equivalent of the increase in value of a specified number of shares over a specified period of time after the right is granted. Stock appreciation rights may be granted to participants either in tandem with or as a component of other awards granted under the Proposed A&R Plan (“tandem SARs”) or not in conjunction with other awards (“freestanding SARs”). All freestanding SARs are to be granted subject to the same terms and conditions applicable to options as set forth above and in the Proposed A&R Plan and all tandem SARs are to have the same exercise price, vesting, exercisability, forfeiture and termination provisions as the award to which they relate. No SAR may be repriced, regranted through cancellation (or exchanged, through cancellation or otherwise, for another award), or otherwise amended to reduce the exercise price applicable thereto (other than in connection with a change in our Company’s capitalization) without the approval of our Company’s stockholders.

Restricted Stock and Restricted Stock Units

Restricted stock is an award or issuance of shares under which the grant, issuance, retention, vesting and/or transferability is subject during specified periods of time to conditions (including continued employment or performance conditions) and terms as the administrator deems appropriate. Restricted stock units are awards denominated in units of shares under which the issuance of shares is subject to conditions (including continued employment or performance conditions) and terms as the administrator deems appropriate. Participants holding shares of restricted stock granted under the Proposed A&R Plan may exercise full voting rights with respect to those shares during the period of restriction. Participants do not have voting rights with respect to shares underlying restricted stock units unless and until such shares are reflected as issued and outstanding shares on our Company’s stock ledger. Participants in whose name restricted stock is granted are entitled to receive all dividends and other distributions paid with respect to those shares, unless determined otherwise by the administrator. Notwithstanding the foregoing, dividends or dividend equivalents credited/payable in connection with an award that is not yet vested will be subject to the same restrictions and risk of forfeiture as the underlying award and will not be paid until the underlying award vests.

Performance Units and Performance Shares

Performance units and performance shares confer upon the participant the opportunity to receive shares or cash upon the attainment of performance and/or satisfaction of other terms and conditions determined by the administrator. Each performance unit has an initial value that is established by the administrator at the time of grant. Each performance share has an initial value equal to the fair market value of a share on the date of grant. Performance units and/or shares are earned based on the achievement or satisfaction of the corresponding performance criteria and/or other terms and conditions. Earned performance units and performance shares may be paid in the form of cash or shares, or a combination of the two, at the discretion of the administrator. Participants receiving performance units or performance shares only have the rights of a stockholder with respect to shares of common stock, if any, actually received by the participant upon satisfaction or achievement of the terms and conditions of such award and not with respect to shares subject to the award but not actually issued to the participant.

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Other Stock-Based Awards

The administrator may grant types of equity-based or equity-related awards not otherwise described by the terms of the Proposed A&R Plan in such amounts and subject to the provisions of the Proposed A&R Plan and such other terms and conditions as the administrator shall determine.

Deferral of Gains

The administrator may, in an award agreement, provide for the deferred delivery of shares or payment of cash, as applicable, upon settlement, vesting or other events with respect to restricted stock or restricted stock units, performance units or performance shares or other stock-based awards.

Performance Criteria

The administrator may establish performance criteria and levels of achievement versus such criteria that will determine the number of shares, units or cash to be granted, retained, vested, issued or issuable under or in settlement of an award or the amount payable pursuant to an award.

Amendment and Termination

The Board may amend, alter, suspend or terminate the Proposed A&R Plan and the administrator may, to the extent permitted by the Proposed A&R Plan, amend the terms of any award granted under the Proposed A&R Plan, including any award agreement, in each case, retroactively or prospectively; provided, however, that no such amendment, alteration, suspension, or termination of the Proposed A&R Plan may be made which, without first obtaining stockholder approval as required by law or regulation or otherwise, would, except as provided in the Proposed A&R Plan: (a) increase the maximum number of shares which may be sold or awarded under the Proposed A&R Plan or increase the maximum limitations as set forth in the Proposed A&R Plan; (b) decrease the minimum exercise price of outstanding options; (c) change the class of persons eligible to receive awards under the Proposed A&R Plan; (d) extend the duration of the Proposed A&R Plan or the period during which options or stock appreciation rights may be exercised; or (e) otherwise require stockholder approval to comply with any applicable law, regulation or rule.

No amendment or alteration to the Proposed A&R Plan or an award or award agreement may be made which would impair the rights of the holder of an award, without such holder’s consent, provided that no such consent is required if the administrator determines in its sole discretion and prior to the date of any change in control that such amendment or alteration either is required or advisable in order for our Company, the Proposed A&R Plan or the award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard.

Adjustments

The number and kind of shares available for issuance under the Proposed A&R Plan (including under any awards then outstanding), and the number and kind of shares subject to the individual limits set forth in the Proposed A&R Plan and above, will be equitably adjusted by the administrator as it determines appropriate to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of outstanding shares of our Company.

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In the event there is any other change in the number or kind of outstanding shares, or any stock or other securities into which such shares shall have been changed, or for which it shall have been exchanged, by reason of a change of control, other merger, consolidation or otherwise, then immediately prior to the occurrence of such change of control, unless specified otherwise in an award agreement, any and all options, stock appreciation rights and other stock-based awards which are outstanding will accelerate and become fully exercisable. Immediately prior to any such change in control, unless specified otherwise in an award agreement, any restrictions, performance criteria or other conditions applicable to restricted stock units, shares of restricted stock and other stock-based awards previously awarded to participants will be immediately canceled or deemed achieved, and all such restrictions will lapse. Immediately prior to the change of control, all awards which are outstanding will immediately become fully vested and nonforfeitable. The administrator may, in its discretion, determine that an award can or cannot be exercised after, or will otherwise terminate or not terminate as of, a change in control.

Transferability

Awards generally may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a participant other than by will or the laws of descent and distribution, except as determined by the administrator and consistent with the terms of the Proposed A&R Plan, and each ISO or stock appreciation right granted in connection with an ISO may be exercisable only by the participant during his or her lifetime. Notwithstanding the foregoing, to the extent permitted by the administrator, the person to whom an award is initially granted may make certain limited transfers to certain family members, family trusts, or family partnerships.

Effective Date and Termination of the Proposed A&R Plan

The Existing Plan became effective upon its adoption by the Board on January 22, 2020, and received stockholder approval at our Company’s 2020 Annual Meeting of Stockholders. The Proposed A&R Plan will become effective on May 9, 2023 if it is approved by our stockholders. The Proposed A&R Plan will remain available for the grant of awards, subject to the right of the Board to amend or terminate the Proposed A&R Plan, until the earlier of the date that all shares subject to the Proposed A&R Plan have been delivered, and any restrictions on such shares have lapsed or the tenth (10th) anniversary of January 22, 2020.

Federal Income Tax Treatment

The following discussion of the federal income tax consequences of the Proposed A&R Plan is intended to be a summary of applicable federal law as currently in effect. It should not be taken as tax advice by Proposed A&R Plan participants, who are urged to consult their individual tax advisors.

Stock Options

ISOs and NQSOs are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of Section 422 of the Code. NQSOs do not comply with such requirements.

An optionee is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes of the alternative minimum tax. If an optionee holds the shares acquired upon exercise of an ISO for at least two years following the option grant date and more than one year following exercise, the optionee’s gain, if any, upon a subsequent disposition of such shares is long term capital gain. The measure of the gain is the difference between the proceeds received on disposition and the optionee’s basis in the shares (which generally equals the exercise price). If an optionee disposes of stock acquired

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pursuant to exercise of an ISO before satisfying these holding periods, the optionee will recognize both ordinary income and capital gain in the year of disposition. Our Company is not entitled to an income tax deduction on the grant or exercise of an ISO or on the optionee’s disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, our Company will be entitled to a deduction in the year the optionee disposes of the shares in an amount equal to the ordinary income recognized by the optionee.

In order for an option to qualify for ISO tax treatment, the grant of the option must satisfy various other conditions more fully described in the Code. Our Company does not guarantee that any option will qualify for ISO tax treatment even if the option is intended to qualify for such treatment. In the event an option intended to be an ISO fails to so qualify, it will be taxed as an NQSO, as described in the paragraph below.

An optionee is not taxed on the grant of an NQSO. On exercise, the optionee recognizes ordinary income equal to the difference between the exercise price and the fair market value of the shares acquired on the date of exercise. Our Company is generally entitled to an income tax deduction in the year of exercise in the amount recognized by the optionee as ordinary income. The optionee’s gain (or loss) on subsequent disposition of the shares is long term capital gain (or loss) if the shares are held for more than one year following exercise. Our Company does not receive a deduction for this gain.

Stock Appreciation Rights

An optionee is not taxed on the grant of a stock appreciation right. On exercise, the optionee recognizes ordinary income equal to the cash or the fair market value of any shares received. Our Company is entitled to an income tax deduction in the year of exercise in the amount recognized by the optionee as ordinary income.

Restricted Stock

Grantees of restricted stock do not recognize income at the time of the grant. When the award vests or is paid, grantees generally recognize ordinary income in an amount equal to the fair market value of the stock or units at such time, and our Company will receive a corresponding deduction. However, no later than 30 days after a participant receives an award of restricted stock, the participant may elect under Section 83(b) of the Code to recognize taxable ordinary income in an amount equal to the fair market value of the shares at the time of grant. Provided that the 83(b) election is made in a timely manner, when the restrictions on the shares lapse, the participant will not recognize any additional income. If the participant forfeits the shares to our Company (e.g., upon the participant’s termination of employment or service prior to vesting), the participant may not claim a deduction with respect to the income recognized as a result of the election. Dividends paid with respect to unvested shares of restricted stock generally will be taxable as ordinary income to the participant at the time the dividends are received.

Restricted Stock Units and Performance Awards

Generally, a participant will not recognize any taxable income upon the grant of an RSU or performance award. Upon settlement, the participant will recognize taxable ordinary income equal to the fair market value of the shares. Our Company will generally be entitled to a compensation deduction in an amount equal to, and at the same time as, the ordinary income recognized by the participant.

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Company Deduction and Section 162(m)

Section 162(m) of the Code generally limits the federal income tax deduction for compensation paid to “covered employees” (in general, the CEO, the CFO, and the three other most highly-compensated executive officers for the year at issue and any person who was part of that group for any other year beginning after December 31, 2016) to $1,000,000. Thus, certain compensation attributable to awards may be nondeductible to our Company due to the application of Section 162(m) of the Code.

New Plan Benefits

The benefits that will be awarded or paid in the future under the Proposed A&R Plan are not currently determinable. Such awards are within the discretion of the Compensation Committee, and the Compensation Committee has not determined future awards or who might receive them. Please see the Grant of Plan-Based Awards Table on page 62 for information on awards granted in 2022 under the 2020 Plan to certain of our Company’s executive officers. The equity grant program for our non-employee directors is described under the Director Compensation section in this proxy statement.

Past Grants under the Existing Plan

As of December 31, 2022, awards covering 2,654,929 shares of our Company’s common stock have been granted under the Existing Plan. The following table shows information regarding the grants of those awards among the persons and groups identified below.

Unless otherwise specified by you in your proxy card, the proxies solicited by our Board will be voted “FOR” the approval of the Proposed Amendment and Restatement of our Company’s 2020 Incentive Compensation Plan.

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Item 5.    Ratification of Selection of Independent Auditor

The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2023. Representatives of PwC are expected to participate in the annual meeting and will have an opportunity to make a statement and be available to respond to appropriate questions.

Selection of our independent registered public accounting firm is not required to be submitted for stockholder approval, but the Audit Committee is seeking ratification of its selection of PwC from our stockholders as a matter of good corporate governance. If the stockholders do not ratify this selection, the Audit Committee will reconsider its selection of PwC and will either continue to retain this firm or appoint a new independent registered public accounting firm. Even if the selection is ratified, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our Company’s best interests and those of our stockholders.

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Security Ownership of Management

The following table sets forth the total number of our shares of common stock beneficially owned and the percentage of the outstanding shares so owned as of the record date by:

Unless otherwise indicated in the notes following the table, the stockholders listed in the table are the beneficial owners of the listed shares with sole voting and investment power (or, in the case of individual stockholders, shared power with such individual’s spouse) over the shares listed. Shares subject to rights exercisable within 60 days after the record date are treated as outstanding when determining the amount and percentage beneficially owned. None of the directors or officers included in the table below have the right to acquire any shares within 60 days of the record date.

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Board and Committee Meetings

Our Board held eight meetings during 2022. No incumbent director attended less than 75% of the aggregate of all meetings of the Board and the committees (if any) on which the director served. From time to time, our Board may act by unanimous written consent as permitted by the laws of the State of Delaware. Our Board’s standing committees include an audit, compensation, nominating and corporate governance and executive committee. The roles and responsibilities of the audit, compensation and nominating and corporate governance committee are set forth below. The executive committee may meet from time to time in between Board meetings and may exercise the authority of the Board. In 2022, after overseeing the implementation of certain processes and reporting functions, the Board dissolved the ad-hoc risk oversight accountability and review (ROAR) committee. The following table reflects the composition of each of the standing committees as of the date of this proxy statement.

Audit Committee

The functions performed by the Audit Committee include:

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The Audit Committee’s charter is posted in the corporate governance section of our website at www.firstam.com. Our Board has determined that Messrs. Doti, McKernan and Oman are audit committee financial experts within the meaning of the SEC’s rules and regulations.

Compensation Committee

The Compensation Committee establishes compensation rates and procedures with respect to our executive officers, including the determination of their annual bonus awards, monitors our equity compensation plans, assesses risk with respect to our compensation programs and makes recommendations to the Board regarding director compensation. The Compensation Committee’s charter is posted in the corporate governance section of our website at www.firstam.com.

Additional information concerning the Compensation Committee’s processes and procedures surrounding non-employee director compensation is included in the section entitled “Director Compensation,” which begins on page 80. Additional information concerning the executive compensation policies and objectives established by the Compensation Committee, the Compensation Committee’s processes and procedures for consideration and determination of executive compensation, and the role of executive officers and the Compensation Committee’s compensation consultant in determining executive compensation is included in the section entitled “Compensation Discussion and Analysis,” which begins on page 31, under the subsection entitled “Compensation Decision Process,” which begins on page 42.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become directors of our Company; recommending to the Board nominees for directorships to be filled by the Board or by the stockholders; developing, recommending to the Board and periodically reviewing the corporate governance principles applicable to our Company; overseeing our Company’s succession plan for the chief executive officer and the succession planning process for other key employees; and overseeing sustainability matters material to our Company’s business. This committee’s charter is posted in the corporate governance section of our website at www.firstam.com. The committee’s charter outlines the procedures by which certain stockholders of our Company may recommend director nominees to the Board. In particular, the committee will accept and consider, in its discretion, director recommendations from any stockholder holding in excess of five percent of our Company’s outstanding shares of common stock. Such recommendations must include the name and credentials of the recommended nominee and should be submitted to the secretary of our Company at 1 First American Way, Santa Ana, California 92707. The committee will evaluate director candidates recommended by stockholders for election to our Board in the same manner and using the same criteria as used for any other director candidate (as described below). If the committee determines that a stockholder-recommended candidate is suitable for membership on our Board, it will include the candidate in the pool of candidates to be considered for nomination upon the occurrence of the next vacancy on our Board or in connection with the next annual meeting of stockholders.

Our Bylaws also provide for proxy-access, which is described in the section “Stockholder Proposals, Director Nominations and Proxy Access” on page 84. In 2022, in response to stockholder feedback, we

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amended our Bylaws to implement majority voting in uncontested elections of directors. In contested elections, where the number of nominees exceeds the number of directors to be elected, plurality voting will continue to apply. Our Bylaws also require that any director who does not receive a majority of the votes cast will promptly tender his or her resignation for consideration by the Nominating and Corporate Governance Committee and the Board.

As stated in the corporate governance guidelines, the committee takes into account all factors it considers appropriate in identifying and evaluating candidates for membership on the Board, including some or all of the following:  strength of character, an inquiring and independent mind, practical wisdom, mature judgment, career specialization, relevant technical skills, reputation in the community, diversity and the extent to which the candidate would fill a present need on the Board. This committee makes recommendations to the full Board as to whether or not incumbent directors should stand for re-election. However, if our Company is legally required by contract or otherwise to provide third parties with the ability to nominate directors, the selection and nomination of such directors generally is not subject to the committee process for identifying and evaluating nominees for director. The committee conducts all necessary and appropriate inquiries into the background and qualifications of possible candidates and may engage a search firm to assist in identifying and evaluating potential candidates for nomination.

Our corporate governance guidelines set forth a policy for the consideration of diversity in identifying nominees for director. The policy recognizes the benefits associated with a diverse board and, as indicated above, requires that the Nominating and Corporate Governance Committee consider diversity as a factor when identifying and evaluating candidates for membership on the Board. The policy utilizes a broad conception of diversity, including professional and educational background, prior experience on other boards, political and social perspectives, as well as race, national origin, gender and sexual orientation. The Nominating and Corporate Governance Committee assessed the effectiveness of the Board diversity policy by considering, among other factors, self-assessed director skills and experience; the race, national origin, gender and sexual orientation of Board members; and the practices of the Board and the committee when identifying and evaluating candidates for membership on the Board.

Utilizing the factors and in recognition of the legal requirements described above, the committee makes recommendations, as it deems appropriate, regarding the composition and size of the Board. The priorities and emphasis of the committee and of the Board may change from time to time to take into account changes in business and other trends and the portfolio of skills and experience of current and prospective Board members.

Our corporate governance guidelines also contain a mandatory retirement policy, which provides that no person is eligible for election as a director if on January 1 of the year of the election he or she is age 77 or older. The Board has not granted any waivers or exemptions to this policy.

Independence of Directors

The Board has affirmatively determined that each member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, as well as each other member of the Board, except Kenneth D. DeGiorgio, Dennis J. Gilmore and Marsha A. Spence, is “independent” as that term is defined in the corporate governance rules of the New York Stock Exchange for listed companies and in accordance with our Company’s corporate governance guidelines. In addition, each member of the Audit Committee and the Compensation Committee is independent under the additional standards applicable to the respective committee under the Securities Exchange Act of 1934, as amended, and the New York Stock Exchange listing standards. In making these determinations, the Board considered the following relationships between directors and our Company:  Messrs. Gilyard and McKee are affiliated with, and Ms. Wyrsch was previously affiliated with, entities that do business with, or

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that represent clients that do business with, us in the ordinary course from time to time (and the amounts involved in each case are significantly less than 2% of such entity’s consolidated gross revenues); each of Messrs. Doti and Kennedy is or recently was affiliated with one or more nonprofit organizations to which our Company and/or our management has made donations from time to time (and the amounts in each case are significantly less than $1 million and 2% of the nonprofit organization’s consolidated gross revenues); and Mr. Kennedy receives standard board fees for his service as a director of our Company’s trust subsidiary, as further described in the section entitled “Director Compensation,” which begins on page 80. Each of the relationships above, while considered by the Board, falls within our categorical independence standards contained in the Board’s corporate governance guidelines, which are available on the corporate governance section of our website at www.firstam.com. The Board also considered the following relationships between Mr. Kennedy and our Company: he was employed as our executive chairman until his retirement in February 2012; for serving as chairman of the Board until February 9, 2022 and as lead independent director of the Board since then, he receives Company-provided office space, mobile devices, computer, other office equipment and administrative support as set forth in the section entitled “Director Compensation,” which begins on page 80; and his son is employed by a subsidiary of our Company as further described in the section entitled “Transactions and Litigation with Management and Others” on page 28.

Board Leadership Structure; Meetings of Independent Directors

Our Board believes it is important to select our Company’s chairman and our Company’s chief executive officer in the manner it considers in the best interests of our Company at any given point in time. Accordingly, the chairman and chief executive officer positions may be filled by one individual or by two different individuals. Our Board has determined at this time that it is appropriate to separate the roles of chairman and chief executive officer and these positions are currently held by different individuals, Mr. Gilmore and Mr. DeGiorgio, respectively. Until February 2022, Mr. Kennedy served as our chairman and Mr. Gilmore as our chief executive officer.

In addition to a chairman, we also have a lead independent director, currently Mr. Kennedy. Dr. Doti served as our lead independent director until February 2022. The lead director is responsible for chairing and coordinating the agenda for the executive sessions of independent directors. In 2022, the independent directors met two times in executive session. In addition, the lead director may provide advice to the chairman with respect to the following: (i) establishing an appropriate schedule for Board meetings; (ii) preparing agendas for the meetings of the Board and its committees; (iii) the retention of consultants who report directly to the Board; (iv) the Nominating and Corporate Governance Committee’s oversight and implementation of our corporate governance policies; and (v) the Compensation Committee’s oversight of the implementation of and compliance with our Company’s policies and procedures for evaluating and undertaking executive and incentive-based compensation.

Our Board believes this to be the most effective leadership structure for our Company because it effectively allocates authority, responsibility, and oversight between management, the chairman of the Board and the lead director and capitalizes on the experience and strengths of our current management team. It does this by giving primary responsibility for the operational leadership and strategic direction of our Company to our chief executive officer, enabling the lead director to facilitate our Board’s independent oversight of management and consideration of key governance matters, and allowing our chairman to promote communication between management and our Board. The Board believes that its programs for overseeing risk, as described under the Risk Oversight section below, would be effective under a variety of leadership frameworks. Accordingly, the Board’s risk oversight function did not significantly impact its selection of the current leadership structure.

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Annual Performance Evaluation

The Board and each of its committees conduct an annual self-evaluation to determine whether the Board and its committees are functioning effectively. In connection with this annual evaluation, directors are given an opportunity to evaluate the effectiveness of each other and to evaluate their own personal effectiveness. The results of the evaluation are reported to the Board and each committee.

Risk Oversight

The Board’s responsibilities in overseeing our Company’s management and business to maximize long-term stockholder value include oversight of our Company’s key risks and management’s processes and controls to manage those risks appropriately. Management, in turn, is responsible for the day-to-day management of risk and implementation of appropriate risk management controls and procedures.

Although risk oversight permeates many elements of the work of the full Board and the committees, the Audit Committee has the most direct and systematic responsibility for overseeing risk management and has been designated by the Board as its risk oversight committee. To that end, the Audit Committee charter provides for a variety of regular and recurring responsibilities relating to risk, including:

In performing these functions, the committee regularly receives reports from management and internal and external auditors regarding our Company’s:

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Separately, the Compensation Committee oversees our Company’s compensation policies and practices and has assessed whether our Company’s compensation policies encourage excessive risk taking. The Compensation Committee has concluded that these policies and practices do not create risks that are reasonably likely to have a material adverse effect on our Company. In arriving at that conclusion, the Compensation Committee considered, among other factors, our Company’s review and approval processes surrounding certain compensatory arrangements; the metrics used to determine variable compensation, including the performance measures selected by the Compensation Committee and performance ranges associated with the metrics; the Compensation Committee’s oversight of inclusion or exclusion of extraordinary items in the financial results upon which certain compensatory arrangements are based; the inclusion of overall Company performance in the determination of divisional leader compensation; the portion of variable compensation paid in restricted stock units, which generally vest over three to four years; the extent to which qualitative judgments are involved in the compensatory arrangements; the amount of compensation paid as sales commissions, management’s review of such compensation paid and the localized nature of the commission payments; controls, such as underwriting and approval controls; and the extent to which compensatory arrangements can be changed if circumstances evidence increased risk associated with such arrangements.

Director Attendance at Annual Meetings

Our directors are expected to attend the annual meetings of our stockholders. At last year’s annual meeting, each of our Company’s directors attended the virtual meeting.

Stockholder and Interested Party Communications with Directors

Stockholders and other interested parties may communicate directly with members of the Board, including the chairman, lead director or any of the other non-management directors of our Company (individually or as a group), by writing to such director(s) at our Company’s principal executive offices, 1 First American Way, Santa Ana, California 92707. In general, stockholder communications delivered to our Company for forwarding to Board members about bona fide issues and concerning our Company related to the duties and responsibilities of the Board will be forwarded in accordance with the stockholder’s instructions. Directors receiving such communications will respond as such directors deem appropriate, including the possibility of referring the matter to management of our Company, to our Company’s internal audit department, to the full Board or to an appropriate committee of the Board.

The Audit Committee has established procedures to receive, retain and address complaints regarding accounting, internal accounting controls or auditing matters, and for the submission by our employees of concerns regarding questionable accounting or auditing matters. Our 24-hour, toll-free hotline is available for the submission of such concerns or complaints at 1-866-921-6714. To the extent required by applicable law, individuals wishing to remain anonymous or to otherwise express their concerns or complaints confidentially are permitted to do so.

Transactions and Litigation with Management and Others

The Board has adopted a written policy regarding related party transactions, which generally requires the Nominating and Corporate Governance Committee’s review and approval of transactions involving amounts in excess of $120,000 between our Company and/or our affiliates, on the one hand, and, on the other hand, any of our Company’s directors, director-nominees, executive officers, stockholders beneficially owning in excess of 5% of our Company’s common stock or any of their immediate family members that have a direct or indirect material interest in the transaction. If the proposed transaction involves $1,000,000 or less, then the chair of the Nominating and Corporate Governance Committee may approve the transaction.

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Certain transactions, including compensatory arrangements reported in this proxy statement for executive officers and directors of our Company, are deemed to be pre-approved by the Nominating and Corporate Governance Committee under the terms of the policy. In cases where the potential transaction would involve the executive officer, director, large stockholder or any of their immediate family members only in an indirect fashion, the policy does not apply where such indirect interest results solely from ownership of less than 10% of, or being a director of, the entity entering into the transaction with our Company.

Mr. Kennedy’s son is employed by a subsidiary of our Company as a managing director, agency division. His base salary in 2022 was $225,000, his cash bonus for 2022 (paid in 2023) was approximately $309,600 and the dollar value of restricted stock units granted to him in 2023 (in connection with 2022 performance) was approximately $231,400. Some of Mr. Kennedy’s son’s 2021 compensation was received in 2022 and disclosed in last year’s proxy statement. He received standard employee benefits and participated in the standard, performance-based incentive compensation program available to similarly-situated employees of his level and experience.

Mr. Gilmore’s daughter is employed by a subsidiary of our Company as a vice president, division area manager. Her base salary in 2022 was $130,000 and her cash bonus for 2022 (paid in 2023) was $23,400. In addition, she received standard employee benefits and participated in the standard, performance-based incentive compensation program available to similarly-situated employees of her level and experience.

Ms. Spence serves as the chairman of Mother Lode Holding Co. (“MLHC”), a subsidiary of our Company that was acquired on May 2, 2022. In connection with the acquisition, Ms. Spence entered into an employment agreement to continue as chairman of MLHC for one year after the closing of the acquisition.  In 2022, our Company paid Ms. Spence a salary of approximately $137,300 and provided standard employee benefits available to similarly-situated employees. In addition, Ms. Spence was the beneficiary under a legacy Supplemental Executive Retirement Plan (“MLHC SERP”) and Deferred Compensation Plan (“MLHC DCP”) that MLHC offered prior to the acquisition by our Company. Although those plans were frozen at the time of the acquisition, our Company assumed the obligations under those plans that were then in place, including the obligations under Ms. Spence’s MLHC SERP contract, of which the sellers funded the estimated maximum amount payable under the MLHC SERP contract at the closing of the acquisition, and with respect to her MLHC DCP contributions, the accrued liabilities of which were funded into a rabbi trust by the sellers at the closing of the acquisition to pay out the benefits thereunder. As of December 31, 2022, the approximate balance of Ms. Spence’s MLHC DCP account was $498,000 and the approximate amount of the liabilities under her MLHC SERP contract was $2,808,000. Ms. Spence did not receive any payments under her MLHC SERP contract or her MLHC DCP in 2022. MLHC is also a lessee under seven lease agreements with respect to properties beneficially owned by a trust to which both Ms. Spence and her husband are beneficiaries. Our Company paid approximately $860,000 in rent payments under these leases during 2022. These leases were included in the acquisition and were determined by our Company’s corporate real estate team at the time to be at fair market value rates.

For information on transactions involving our Company and persons or groups of stockholders who are known to us to be the beneficial owners of more than 5% of our common stock, see the footnotes to the table in the section “Who are the largest principal stockholders outside of management?” on page 93.

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Executive Officers

The following provides information regarding our Company’s current executive officers:

All officers of our Company are appointed annually by the Board on the day of the annual meeting of stockholders.

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Compensation Discussion and Analysis

Introduction

In this section, we describe our executive compensation program for our NEOs. Our Company’s NEOs for 2022 were:

Executive Summary

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The Committee continues to focus on ensuring that our executive compensation programs attract, retain and motivate leaders who create long-term value for our stockholders. As part of that ongoing effort, the Committee considered the input our Company received during its stockholder outreach efforts in 2021 that were highlighted in last year’s proxy as well as additional feedback our Company received in its regular and ongoing communications with stockholders.

Following its regular review of our executive compensation program and incorporating the feedback received from stockholders, the Committee elected to allocate an even larger portion of the long-term incentive (“LTI Awards”) for executive officers to the multi-year, metric-based performance awards introduced last year. Specifically, the Committee increased the percentage of our LTI Awards subject to a three-year performance period based on our Company’s total shareholder return relative to the S&P MidCap 400 Index at the end of the three-year performance period, as further detailed below, from 25% to 50%, and reduced the percentage of our LTI Awards subject solely to time-based vesting from 75% to 50%. As a result of this change, 86% of the compensation for our chief executive officer, Mr. DeGiorgio, for 2022 was performance-based, with 66% of all RSUs awarded in 2023 (in connection with 2022 performance) being metric-based. For all other NEOs, excluding Messrs. Gilmore and Leavell, on average, this change resulted in 63% of all RSUs awarded in 2023 (in connection with 2022 performance) being metric-based.

The changes that the Committee made to the executive compensation program in 2023 (based on 2022 performance) continue to ensure that a significant portion of the payout of long-term awards are metric-based as shown in the table below. Messrs. Gilmore and Leavell did not receive any performance-based compensation for their 2022 employment.

This chart shows performance-based compensation and metric-based compensation for the NEOs for 2022, other than for Messrs. Gilmore and Leavell, who did not receive any performance-based compensation in connection with their 2022 employment.  

The Committee believes that the compensation paid to management by our Company is commensurate with its performance and consistent with our Company’s pay-for-performance philosophy.

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Total Revenues (in billions) $6.2 $7.1 $9.2 Net income attributable to the Company $707 $696 $1241 Pretax Margin (Title Segment) 16.1% 15.7% 16.3% Return on Equity 17.3% 14.9% 23.2% 2019 2020 2021

Note: The charts above reflect Company results under GAAP. The Committee makes certain non-GAAP adjustments in connection with its compensation programs, which are further described below.

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Execution on Company Strategy

to continue investing in key strategic initiatives, including the acquisition of Mother Lode Holding Company, an acquisition that we expect to augment our efforts to expand our core title business in key markets. We also continued to invest in venture-stage innovative real estate-related technology companies that have provided valuable insight into the strategies and needs of companies in this space, allowing us to better serve those needs. On the innovation front, our Company further leveraged its proprietary data extraction technology to increase its title plant footprint to include over 1,700 counties and continued to make good progress with our digital title and settlement effort, and on our instant title decisioning initiative for purchase transactions. Moreover, our financial strength allowed us to return considerable capital to our stockholders. In 2022, we returned $658 million to stockholders in stock repurchases and dividends. These accomplishments continue to validate our Company’s strategy, including our continuing efforts to digitally transform the process of transacting real estate.

2022 Performance Metric Results

The NEO annual cash bonuses and annual equity bonuses were paid out at 77% of target for all NEOs. These payout amounts reflect the results of the two financial metrics utilized by the Committee: return on equity and pretax margin. Target and actual results of these metrics for 2022 are set forth below.

Note: The Committee’s definitions of pretax margin and return on equity are described on page 46 below. Actual results set forth above have been adjusted to exclude current year net investment gains/losses from the investment portfolio and certain current year net investment gains/losses from our Company’s venture investment portfolio. Return on equity also excludes accumulated other comprehensive income/loss and noncontrolling interests. These are non-GAAP financial measures. Please see Appendix A for the rationale behind the presentation of these measures and a reconciliation of these amounts to the nearest GAAP financial measures.

The annual incentive plan gives the Committee the discretion to adjust the metric-driven payout by up to 30 percentage points to account for factors that may impact our Company’s return on equity or pretax margin, including unanticipated external factors, such as regulatory changes or changes in interest rates; success in strategic initiatives designed to create long-term stockholder value, such as innovation efforts, risk management, employee engagement, or market share gains/losses in key markets; or environmental, social and governance (“ESG”) actions, initiatives, or omissions that impact, and reflect the role of our Company in, broader society, such as employee development, inclusion efforts, privacy and data

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protection and sustainability/environmental impact. The Committee also retains the ability to pay a participant a lower amount, including the discretion not to pay an annual incentive bonus. For 2022, the Committee did not make any discretionary adjustments.

Pay Philosophy

Pay Objectives

Our Company’s executive officer compensation program, which is administered by the Committee, is designed to enhance stockholder value by providing that a substantial portion of the executive officer’s total compensation be related to our Company’s consolidated financial performance and a lesser portion be related to the Committee’s qualitative assessment of the contribution of each individual executive officer. The Committee also believes that there is value in consistency in our Company’s executive officer compensation program. As a result, while target performance levels change from year to year, the general structure of the program typically remains consistent from year to year. From time to time, the Committee makes adjustments to the compensation program based on stockholder feedback, changes in market compensation practices or to better accomplish the Committee’s objectives.

Our Company’s approach is designed to develop and administer programs that will achieve the following objectives:

Compensation Mix

The Committee utilizes the particular elements of compensation described below because it believes that they represent a well-proportioned mix of stock-based compensation, retention value and at-risk compensation that produces short-term and long-term performance incentives and rewards. By following this portfolio approach, the Committee endeavors to provide the NEOs with a measure of security with respect to their minimum level of compensation, while motivating each NEO to focus on the business metrics that will produce a high level of performance for our Company with corresponding increases in long-term stockholder value and long-term financial benefits for the NEO, as well as reducing the risk of loss of top executive talent.

For NEOs, the mix of compensation is weighted heavily toward at-risk pay. This is consistent with the overall philosophy of maintaining a pay mix that results fundamentally in a pay-for-performance orientation.

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The chart below shows the percentage of our NEOs’ 2022 total compensation at target that was fixed versus performance-based, as well as the percentage of RSUs that were or will be determined based on metric-driven performance criteria versus time-based RSUs that were determined based on the subjective judgment of the Committee.

Target Compensation⁽¹⁾

CEO Base Salary 11% LTI Awards 44% Target AIP Bonus RSUs 25% Target AIP Cash Bonus 20% Metric Based Equity as a Percentage of all RSUs 52% Average of Other NEOs Base Salary 20% LTI Awards 41% Target AIP Bonus RSUs 19% Target AIP Cash Bonus 20% Metric Based Equity as a Percentage of all RSUs

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Say on Pay Results and Stockholder Outreach

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Summary of Executive Compensation Practices

The table below highlights certain of our executive compensation practices, including practices we have implemented that drive performance as well as those we have prohibited because we do not believe they serve our stockholders’ interests.

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Executive Compensation Program

Key Pay Elements

The following chart summarizes the key pay elements for our NEOs. Each element is described in detail beginning on page 43 in the Section “Pay Elements and Practices.” Purpose How It Links to Performance Base Salary To provide a fixed source of income Reviewed annually and adjusted based on individual and Company performance and other factors, including base salary levels at peer companies and/or published market survey’s METRIC BASED Annual Cash Bonus To reward the achievement of annual performance Variable and based on measurable Co and/or published market surveys Annual Equity Bonus To reward the achievement of annual performance, I prove retention and incentivize long-term Company performance Variable and based on measurable Company performance against financial metrics. Subject to discretionary committee adjustment; target levels reviewed annually and adjusted based on individual and Company performance and other factors, including annual equity award levels at peer companies and/or published market surveys; subject to a four-year vesting period (changing to three years for grants beginning in 2023) Long-Term Equity Incentive (Performance Vesting) To incentivize for long-term Company performance Variable and based on Committee assessment of company and individual performance together with compensation levels at peer companies and/or in published market surveys and other factors; value based on relative TSR over a three-year performance period; vests three years after grant Long-Term Equity Incentive (Time Vesting) To incentivize for long-term Company performance Variable and based on Committee assessment of Company and individual performance together with compensation levels at peer companies or in publish market surveys and other factors, subject to a three-year vesting period

Compensation Element Purpose How it Links to Performance FIXED AT-RISK Base Salary Annual Cash Bonus Annual Equity Bonus Long-Term Equity Incentive To provide a fixed source of income To reward the achievement of annual performance To reward the achievement of annual performance To incentivize for long-term Company performance Reviewed annually and adjusted based on individual and Company performance and other factors, including base salary levels at peer companies Variable and based on measurable Company performance against financial targets, subject to discretionary Committee adjustment; target levels reviewed annually and adjusted based on individual and Company performance and other factors, including annual cash bonus levels at peer companies Variable and based on measurable Company performance against financial targets, subject to discretionary Committee adjustment; target levels reviewed annually and adjusted based on individual and Company performance and other factors, including annual equity bonus levels at peer companies; subject to a four-year vesting period Variable and based on Committee assessment of Company and individual performance together with compensation levels at peer companies and other factors; subject to a four-year vesting period

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The comparator companies for 2022 were:

These companies are the same as those utilized by the Committee with respect to 2021 executive compensation. The peer companies represent the Committee’s continuing efforts to identify a significant number of comparable companies notwithstanding the fact that there is only one other company in our Company’s primary industry (Title Insurance) with financial and operational characteristics similar to our Company’s.

Use of Comparator Companies and Market Compensation Studies

After consideration of the data collected on competitive compensation levels and relative compensation within the executive officer group, the Committee determines each individual executive officer’s target total compensation or total compensation opportunities based on Company and individual performance and the need to attract, incentivize and retain an experienced and effective management team. The Committee examines the relationship of each executive officer’s base salary, target annual incentive bonus opportunity and potential long-term incentive awards (if such an amount has been determined) to

First American Financial Corporation   2023 Proxy Statement | 41

market data at the 25th, 50th, and 75th percentiles. The Committee does not believe, however, that compensation or compensation opportunities should be structured toward a uniform relationship to any specific percentile of the market data, especially in light of the different financial characteristics of our Company’s business units (such as the relationship of revenues to net income). Accordingly, total compensation for specific individuals will vary based on a number of factors, in addition to Company and individual performance, including scope of duties, tenure, institutional knowledge and/or difficulty in recruiting a replacement executive officer.

Compensation Decision Process

42 | 2023 Proxy Statement   First American Financial Corporation