Shoals Technologies (SHLS) PRE 14APreliminary proxy

We are pleased to invite you to attend the Annual Meeting of Shareholders of Shoals Technologies Group, Inc. (“Shoals” or the “Company”) to be held on Thursday, May 2, 2024, at 10:00 a.m. Eastern Time (the “Annual Meeting”). This year’s Annual Meeting will be conducted virtually, via live audio webcast. You will be able to attend the meeting online by visiting www.virtualshareholdermeeting.com/SHLS2024. You will be able to submit questions and vote your shares electronically during the meeting by logging in using the 16-digit control number included on your notice of internet availability of proxy materials, proxy card or the voting instruction form received from your bank or broker. Once you have logged in to the virtual meeting, you will be able to submit questions and vote your shares electronically during the Annual Meeting.

The accompanying proxy statement provides information about the matters we will ask you to consider at the Annual Meeting, which are:

You may vote by proxy over the Internet, by telephone, or by mail by following the instructions on the notice of internet availability of proxy materials, proxy card or voting instruction form received from your bank or broker. Voting by proxy will ensure your representation at the Annual Meeting regardless of whether you attend.

The 2024 annual meeting of shareholders of Shoals Technologies Group, Inc. (the “Company”) will be held via the internet at www.virtualshareholdermeeting.com/SHLS2024 on Thursday, May 2, 2024, at 10:00 a.m. Eastern Time for the following purposes:

Our Board of Directors has set the record date as March 11, 2024. Only shareholders that owned shares of the Company’s Class A common stock at the close of business on that day are entitled to notice of and may vote at this meeting or any adjournment or postponement thereof. A list of shareholders entitled to vote at the meeting will be available for examination by any shareholder for any purpose relevant to the meeting during ordinary business hours for at least ten days prior to May 2, 2024, at 1400 Shoals Way, Portland, Tennessee 37148 and on the date of the meeting, on the virtual platform for the Annual Meeting at www.virtualshareholdermeeting.com/SHLS2024.

The notice of internet availability of proxy materials is first being delivered to the Company’s shareholders of record on or about March 22, 2024.

Our business and affairs are managed under the direction of our Board, which is currently composed of eight directors. Our Board has determined that all directors, except for our Chief Executive Officer, Brandon Moss, meet the Nasdaq requirements to be independent directors.

Our Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation”) provides that the authorized number of directors may be changed only by resolution of our Board. Our Certificate of Incorporation also currently provides that our Board will be divided into three classes of directors, with the classes as nearly equal in number as possible. At each annual meeting of shareholders, a class of directors is elected for a three-year term to succeed the class whose term is then expiring.

The following table sets forth the director class, name, age as of March 5, 2024, and other information for each member of our Board:

The Board believes that in order for our Board to effectively guide us to long-term sustainable, dependable performance, it should be composed of individuals with sophistication and experience in the many disciplines that impact our business. In order to best serve our shareholders, our Board seeks to, as a whole, be competent in key corporate disciplines, including risk management, crisis management, leadership, regulatory issues, reputational issues, accounting and financial acumen, business judgment, governance, social responsibility, strategy and strategic planning. Additionally, we desire that the Board have specific knowledge related to our industry, such as expertise in the solar and energy industries. The Nominating and Corporate Governance Committee (the “Nominating and Corporate Governance Committee”) believes that all directors must, at a minimum, meet the criteria set forth in the Company’s Code of Ethics and the Corporate Governance Guidelines, which specify, among other things, that the Nominating and Corporate Governance Committee will consider criteria such as independence, diversity, age, skills, and experience in the context of the needs of the Board. The Nominating and Corporate Governance Committee believes that diversity of backgrounds and viewpoints is a key attribute for a director nominee. While we do not have a formal policy on diversity, when considering the selection of director nominees, the Nominating and Corporate Governance Committee considers individuals with diverse viewpoints, accomplishments, cultural background, professional expertise, and diversity in gender, ethnicity, race, skills, personal characteristics and geographic representation, that, when considered as a group, provide a sufficient mix of perspectives to allow the Board to best fulfill its responsibilities to the long-term interests of our shareholders. Currently, of the eight directors on our Board, two self-identify as female and one self-identifies as an underrepresented minority. The Nominating and Corporate Governance Committee also considers a combination of factors for each director, including (a) the nominee’s ability to represent all shareholders without a conflict of interest, (b) the nominee’s ability to work in and promote a productive environment, (c) whether the nominee has sufficient time and willingness to fulfill the substantial duties and responsibilities of a director, (d) whether the nominee has demonstrated the high level of character, ethics and integrity expected by the Company, (e) whether the nominee possesses the broad professional and leadership experience and skills necessary to effectively respond to the complex issues encountered by a publicly-traded company, (f) the nominee’s ability to apply sound and independent business judgment and (g) the diverse attributes of the nominee, such as differences in background, qualifications and personal characteristics.

Our Board believes the current directors embody a diverse range of viewpoints, backgrounds and skills, including with respect to gender and underrepresented minority diversity. The following matrix provides information about each of our directors, including certain types of knowledge, skills, experiences, and attributes as well as diversity information. The matrix does not encompass all of the knowledge, skill, experience, or attribute of our directors and does not suggest that a director who is not listed as having any particular knowledge, skill, experience, or attribute is unable to contribute to the decision-making process in such area. No individual knowledge, skill, experience, or attribute is solely dispositive of becoming a member of our Board. With respect to self-identified gender identity and demographic background, each of the categories listed in the table has the meaning ascribed to them in Nasdaq Rule 5605(f). Diversity characteristics not applicable to our Board have been excluded from this table. To see our Board diversity matrix as of March 16, 2023, see our proxy statement filed with the SEC on March 22, 2023.

The Nominating and Corporate Governance Committee has determined that all of our directors meet the criteria and qualifications set forth in the Company’s Code of Ethics, the Corporate Governance Guidelines and the criteria set forth above for director nominees. Moreover, each director possesses the following critical personal qualities and attributes that we believe are essential for the proper functioning of the Board to allow it to fulfill its duties for our shareholders: accountability, ethical leadership, governance, integrity, risk management, and sound business judgment. In addition, our directors have the confidence to assess and challenge the way things are done and recommend alternative solutions, a keen awareness of our business and regulatory and social realities of the environment in which we operate, the independence and high-performance standards necessary to fulfill the Board’s oversight function, and the humility, professional maturity, and style to interface openly and constructively with other directors. Finally, the director biographies below include a non-exclusive list of other key experiences and qualifications that further qualify the individual to serve on the Board. These collective qualities, skills, experiences and attributes are essential to our Board’s ability to exercise its oversight function for the Company and its shareholders, and guide the long-term sustainable, dependable performance of the Company.

Subject to any earlier resignation or removal in accordance with the terms of our current Certificate of Incorporation and our Bylaws, our Class III directors will serve until this Annual Meeting, our Class I directors

will serve until the annual meeting of shareholders to be held in 2025, and our Class II directors will serve until the annual meeting of shareholders to be held in 2026. Our Certificate of Incorporation currently provides that our directors may be removed only for cause upon the affirmative vote of at least 66 ²∕3% of the voting power of our outstanding shares of stock entitled to vote thereon. At the Annual Meeting, we are asking that shareholders approve an amendment to our Certificate of Incorporation to declassify our Board and phase-in the annual election of directors beginning at the 2025 annual meeting of shareholders, such that from and after the 2027 annual meeting of shareholders, all directors will be up for election at each annual meeting and will serve for a term of one year and until such directors’ successors are duly elected and qualified or until such directors’ earlier death, resignation or removal.

The Nominating and Corporate Governance Committee will consider shareholder nominations for membership on the Board. For the 2025 Annual Meeting, nominations may be submitted to 1400 Shoals Way, Portland, Tennessee 37148, Attn: Chief Legal Officer and Corporate Secretary, and such nominations will then be forwarded to the Nominating and Corporate Governance Committee. Recommendations must be in writing and we must receive the recommendation no later than the close of business on January 31, 2025 and no earlier than the close of business on January 2, 2025. Recommendations must also include certain other procedural requirements as specified in our Bylaws. In addition to satisfying the requirements of our Bylaws, to comply with the requirements set forth in Rule 14a-19 of the Exchange Act, shareholders who intend to solicit proxies in support of director nominees other than the Board’s nominees must also provide written notice to the Chief Legal Officer and Corporate Secretary that sets forth all the information required by Rule 14a-19(b) of the Exchange Act. Such notice must be postmarked or transmitted electronically to the Chief Legal Officer and Corporate Secretary at the Company’s principal executive offices no later than March 3, 2025.

When filling a vacancy on the Board, the Nominating and Corporate Governance Committee identifies the desired skills and experience of a new director and nominates individuals who it believes can strengthen the Board’s capabilities and further diversify the collective experience represented by the then-current directors. The Nominating and Corporate Governance Committee has engaged and may engage third parties to assist in the search and provide recommendations. Also, directors are generally asked to recommend candidates for the position. The candidates are then evaluated based on the process outlined in our Corporate Governance Guidelines and the Nominating and Corporate Governance Committee charter, and the same process will be used for all candidates, including candidates recommended by shareholders.

Our Board recommends that the nominees below be elected as members of the Board at the Annual Meeting.

Each nominee was recommended for election by the Nominating and Corporate Governance Committee for consideration by the Board and our shareholders. On February 27, 2024, with the recommendation of the Nominating and Corporate Governance Committee, the Board appointed Brandon Moss, our Chief Executive Officer, as a director based on Mr. Moss’s skills, qualifications and contributions to the Company and the Board since he began serving as Chief Executive Officer. Mr. Moss is a Class III director and is a nominee recommended for election at the Annual Meeting. If, before the Annual Meeting, any nominee becomes unable to serve, or chooses not to serve, the Board may nominate a substitute. If that happens, the persons named as proxies on the proxy card will vote for the substitute. Alternatively, the Board may either let the vacancy stay unfilled until an appropriate candidate is identified or reduce the size of the Board to eliminate the unfilled seat.

The Board believes Mr. Forth’s deep expertise in the energy industry, plus his experience as an investor and board member of several companies in the energy industry, and his service in different executive leadership roles qualifies him to serve as a director of our Board.

The Board believes Mr. Moss’s extensive senior leadership experience, more than twenty years of experience in the electrical industry, M&A and business integration experience, understanding of global supply chains and efficient manufacturing processes and comprehensive knowledge of our business and perspective of our day-to-day operations qualifies him to serve as a director of our Board.

The Board believes Mr. Daul’s expertise in the energy industry and his experience as a seasoned leader with an ability to execute complex transactions across diverse technologies and teams qualifies him to serve as a director of our Board.

solar, mini-hydro, wind, and biomass. At Enel, Mr. Volpe also served as CEO of Enel Romania, a regulated electricity distribution business that covers one third of the country. Mr. Volpe graduated magna cum laude in Management, Economics and Industrial Engineering, at Polytechnic of Milan and obtained his MBA from Columbia Business School.

The Board believes Mr. Volpe’s broad experience in the energy industry, and his expertise as a board member and senior executive in the industry for 20 years, qualifies him to serve as a director of our Board.

The Board believes Mr. Wilver’s experience in strategic planning and business development as well as in leading the financial, accounting and investor relations functions of large, multi-national manufacturing companies along with corporate governance expertise from his membership at public company boards and their committees qualifies him to serve as a director of our Board.

The Board believes Ms. Mills’s extensive experience in the utilities industry in addition to her deep expertise in business operations, risk management, strategy development, and financial management, along with governance experience through her previous work on the board and compensation committee of Medifast, Inc. qualifies her to serve as a director of our Board.

global provider of technical, professional and construction services. Sundberg has also served as SVP, Human Resources and Ethics at Arizona Public Services Company, the largest electric utility in Arizona, and advanced through a series of HR leadership roles at American Express. Ms. Sundberg holds a Bachelor of Science degree in Business Management from Brigham Young University.

The Board believes Ms. Sundberg’s extensive experience in managing human resources and leading complex corporate initiatives, in addition to her broad understanding of different industries from financial services to utilities, qualifies her to serve as a director of our Board.

For a director to be independent, the Board must determine that such director does not have any direct or indirect material relationship with the Company. Pursuant to our Corporate Governance Guidelines, the Board has undertaken its annual review of director independence.

The Board has affirmatively determined that Ty Daul, Toni Volpe, Peter Wilver, Jeannette Mills, Lori Sundberg, Brad Forth and Robert Julian meet the Nasdaq requirements to be independent directors . In addition, the Board has determined that each member currently serving on the Compensation Committee is independent under the heightened independence standards for compensation committee members under the listing standards of the Nasdaq and the rules and regulations of the SEC and that each member currently serving on the Audit Committee is independent under the heightened independence standards required for audit committee members by the listing standards of the Nasdaq and the rules and regulations of the SEC. In making these determinations, the Board reviewed information provided by the directors and by the Company with regard to the directors’ business and personal activities as they relate to the Company and its affiliates.

Our Board has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The composition, duties and responsibilities of these committees are as set forth below. In the future, our Board may establish other committees, as it deems appropriate, to assist it with its responsibilities.

For the year ended December 31, 2023, our Board held four regular meetings and two special meetings. During 2023, the Audit Committee held four regular meetings, the Compensation Committee held four regular meetings and two special meetings, and the Nominating and Corporate Governance Committee held four regular meetings. Directors are expected to attend the annual meeting of shareholders and all or substantially all of the Board meetings and meetings of committees on which they serve. All directors then in office attended the 2023 Annual Meeting. In 2023, each director attended 100% of the meetings of the Board during such director’s tenure and the total number of meetings held by any of the committees of the Board on which the director served.

Each of our standing committees has a written charter which is available on the Investor Relations page of our website at https://investor.shoals.com. Our website is not part of this notice and proxy statement.

The table below sets forth the current composition of our Board committees, as well as the number of regular and special meetings held by each committee:

Our Audit Committee is composed of Messrs. Daul, Volpe and Julian, with Mr. Julian serving as Chair of the committee. Our Board has affirmatively determined that all members of our Audit Committee meet the independence requirements of Rule 10A-3 under the Exchange Act and the listing standards of Nasdaq.

In addition, our Board has determined that Mr. Julian is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the “Securities Act”). This designation does not impose on Mr. Julian any duties, obligations or liabilities that are greater than are generally imposed on members of our Audit Committee and our Board.

Our Compensation Committee is composed of Ms. Sundberg, Mr. Forth and Ms. Mills, with Ms. Sundberg serving as Chair of the Compensation Committee. Our Board has affirmatively determined that all members of

the Compensation Committee meet the independence requirements of the listing standards of Nasdaq and further qualifies as a non-employee director for purposes of Rule 16b-3 under the Exchange Act. The members of the Compensation Committee are not current or former employees of the Company, are not eligible to participate in any of the Company’s executive compensation programs, do not receive compensation that would impair their ability to make independent judgments about executive compensation and are not “affiliates” of the Company, as defined under Rule 10C-1 under the Exchange Act. The Compensation Discussion and Analysis section of this proxy statement provides details regarding the basis on which the Compensation Committee determines executive compensation.

The Compensation Committee has the ability, under its charter, to select and retain, at the expense of the Company, independent legal and financial counsel and other consultants necessary to assist the Compensation Committee as the Compensation Committee may deem appropriate, in its sole discretion. The Compensation Committee also has the authority to select and retain any compensation consultant to be used to survey the compensation practices in the Company’s industry and to provide advice so that the Company can maintain its competitive ability to recruit and retain highly qualified personnel. The Compensation Committee has the sole authority to approve related fees and retention terms for any of its counsel and consultants.

During 2023, the Compensation Committee continued to use the services of Pay Governance LLC (“Pay Governance”), as an independent compensation consultant, in fulfilling its obligations under its charter, to provide the Compensation Committee with objective expert analyses, assessments, research, and recommendations for executive compensation programs, incentives, executive benefits, and non-executive director compensation. The Compensation Committee selected Pay Governance to serve as its independent consultant only after assessing the firm’s independence, which concluded that no conflicts of interest existed. See the section entitled “Compensation Discussion and Analysis—Key Participants in the Compensation Process—The Role of the Independent Consultant” for more information.

Our Nominating and Corporate Governance Committee is composed of Ms. Sundberg, Mr. Forth and Mr. Wilver, with Mr. Forth serving as Chair of the Nominating and Corporate Governance Committee. Our

Board has affirmatively determined that all members of the Nominating and Corporate Governance Committee meet the independence requirements of the listing standards of Nasdaq.

The following section describes our Board leadership structure, the reasons our Board considers that this structure is appropriate at this time, the roles of various positions, and related key governance practices. Our Board believes that the separation of the roles of Chair and Chief Executive Officer benefit the Company and its shareholders at this time.

With respect to the roles of Chair and Chief Executive Officer, the Corporate Governance Guidelines provide that the roles may be separated or combined, and the Board will exercise its discretion in combining or separating these positions as it deems appropriate in light of prevailing circumstances. Since the IPO, the roles of Chair and Chief Executive Officer have been separated. The Board believes that this structure clarifies the individual roles and responsibilities of Chief Executive Officer and Chair, streamlines decision-making, and enhances accountability.

Our Chief Executive Officer, Mr. Moss, is a member of the Board, but is not the Chair of the Board. The Board believes that, at this time, separating the roles of Chair and Chief Executive Officer is the most effective leadership structure because it allows Mr. Moss to focus on the management of the Company, day-to-day operations and engaging with external stakeholders.

Our Chair, Mr. Forth, an independent member of the Board, focuses his attention on the broad strategic issues considered by the Board leveraging his strong background to provide strategic guidance and effective oversight of management, engaging with the Chief Executive Officer between Board meetings and providing overall guidance to our Chief Executive Officer as to the Board’s views and perspectives. Mr. Forth has valuable experience on the issues, challenges, and opportunities we face, positioning him well to develop agendas and ensure that the Board’s time and attention are focused on the most critical matters.

Our Nominating and Corporate Governance Committee conducts an annual performance evaluation to determine whether the Board and its committees are functioning effectively. This evaluation includes survey materials and a report to, and discussion of survey results with, the Nominating and Corporate Governance Committee and the full Board. The survey materials solicit feedback on organizational matters, business strategy, financial matters, board structure and meeting administration. The directors use discussions with the full Board to provide feedback, identify themes for the Board to consider, suggest specific action steps and review Board

agendas. The evaluation focuses on the Board’s and the committees’ contributions to the Company, with an enhanced focus on areas in which the Board or management believes there could be improvement. In addition, focus areas identified through the evaluation will be incorporated into the Board’s agendas for 2024 to monitor progress.

As part of the annual Board self-evaluation, the Board evaluates whether the current leadership structure continues to be appropriate for the Company and its shareholders. Our Corporate Governance Guidelines provide the flexibility for our Board to modify our leadership structure in the future as appropriate.

The Compensation Committee reviews and approves corporate goals and objectives relevant to Chief Executive Officer compensation and evaluates the Chief Executive Officer’s performance in light of these goals and objectives. The Compensation Committee recommends to the Board the Chief Executive Officer’s compensation level or changes to such level based on the evaluation of the Chief Executive Officer’s performance and any other factors the Compensation Committee deems relevant.

The entire Board works with the Nominating and Corporate Governance Committee to evaluate potential successors to the Chief Executive Officer. In 2022, in connection with the announcement that Mr. Whitaker would step-down as Chief Executive Officer in 2023 for health reasons, the Board launched a search for potential successors to the Chief Executive Officer position with the assistance of executive search firm, Spencer Stuart. While the search was in process, and following Mr. Whitaker’s departure, effective March 15, 2023, Mr. Jeffery Tolnar, our President, was appointed as Interim Chief Executive Officer. On June 14, 2023, the Company announced that the Board had appointed Brandon Moss as Chief Executive Officer, effective July 17, 2023. Upon the effectiveness of Mr. Moss’s appointment as Chief Executive Officer, Jeffery Tolnar ceased serving as Interim Chief Executive Officer and continued serving in his position as President.

Pursuant to our Insider Trading Policy, we prohibit our employees, directors and officers from engaging in hedging transactions, including the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such hedging transactions may permit a director, officer or employee to continue to own Company securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company’s other shareholders. Additionally, directors, officers and other employees are prohibited from holding our securities in a margin account or otherwise pledging our securities as collateral for a loan.

Our Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, improve long-term organizational performance, and enhance shareholder value. The Board sets the tone at the top as it relates to enterprise risk management and encourages management to promote a corporate culture that incorporates risk management into our corporate strategy and day-to-day operations. A fundamental part of risk management is not only understanding the most significant risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for a given company. The involvement of our full Board in reviewing our business is an integral aspect of its assessment of the Company’s risk profile and also its determination of what constitutes an appropriate level of risk.

While our full Board has overall responsibility for risk oversight, it has delegated primary oversight of certain risks to its committees.

In connection with its reviews of the operations of our business, our full Board addresses the primary risks associated with our business, such as regulatory and legal risks and strategic planning. Our Board appreciates the evolving nature of our business and industry and is actively involved with monitoring new threats and risks as they emerge.

We are committed to ensuring our Board and its committees are consistently updated on threats to our business and receive consistent updates on risk mitigation processes. At periodic meetings of our Board and its committees, management reports to and seeks guidance from our Board and its committees with respect to what we believe are the most significant risks that could affect our business, such as legal and regulatory risks, privacy risks, and financial, tax and audit related risks.

We have adopted a Code of Ethics that applies to all of our employees, officers and directors, including our principal executive officer, principal financial officer and principal accounting officer. Our Code constitutes a “code of ethics,” as defined by Item 406(b) of Regulation S-K. Our Code of Ethics is available on the Investor Relations page of our website at https://investor.shoals.com. We intend to satisfy the disclosure requirements of Item 5.05 of Form 8-K regarding any amendments to the Code of Ethics, or any waivers of its requirements that applies to our principal executive officer, principal financial officer or principal accounting officer and relates to any element of the definition of code of ethics set forth in Item 406(b) of Regulation S-K by posting such information on our website at https://investor.shoals.com.

None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board or compensation committee of any entity that has one or more executive officers serving on our Board or Nominating and Corporate Governance Committee.

Shareholders and other interested parties may contact an individual director, the Board as a group, or a specified Board committee or group, including the independent directors as a group, by sending regular mail to:

Each communication should specify which director or directors the communication is addressed to, as well as the general topic of the communication. The Company will receive the communications and process them before forwarding them to the addressee. The Company may also refer communications to other departments within the Company. The Company generally will not forward to the directors a communication that is primarily commercial in nature, relates to an improper or irrelevant topic, or requests general information regarding the Company.

Below is a list of the names, ages, positions, and a brief account of the business experience of the individuals who serve as executive officers of the Company as of March 5, 2024:

The purpose of this Compensation Discussion and Analysis is to provide information about the material elements of compensation that are paid, awarded to, or earned by, our named executive officers (who we collectively refer to as our “Named Executive Officers”), who consist of our principal executive officer, our principal financial officer, and our three other most highly compensated executive officers (other than our principal executive officer and principal financial officer).

For the fiscal year 2023 (the “2023 Fiscal Year”), our Named Executive Officers and their positions were as follows:

On November 30, 2022, the Company announced that its Chief Executive Officer, Jason Whitaker, had informed the Board that he intended to step down from his role as Chief Executive Officer in early 2023. On February 23, 2023, the Board made the decision to terminate Mr. Whitaker’s employment as Chief Executive Officer of the Company due to disability, effective as of March 15, 2023. Mr. Whitaker also ceased to be a Board member on that date. On February 24, 2023, the Company entered into a separation agreement with Mr. Whitaker, memorializing the terms and conditions of his termination due to disability under his employment agreement and his grant agreements governing his outstanding RSUs and PSUs. See the section titled “Jason Whitaker Separation Agreement” below for further details regarding Mr. Whitaker’s separation agreement.

On February 23, 2023, the Company appointed Jeffery Tolnar as interim Chief Executive Officer, effective immediately following Mr. Whitaker’s termination of employment on March 15, 2023. From March 15, 2023, through July 17, 2023, our President, Jeffery Tolnar, served as the interim Chief Executive Officer of the Company. In addition to the compensation he received in consideration for his service as our President (as described below), Mr. Tolnar also received the following additional compensation in consideration for his service as the interim Chief Executive Officer during such period: (i) an additional $15,000 per month in base salary, with such monthly amount paid on the last payroll of the month for each month Mr. Tolnar served as interim Chief Executive Officer, and (ii) a $90,000 one-time, lump-sum cash payment, paid to Mr. Tolnar on September 1, 2023, which was conditioned upon Mr. Tolnar’s continued employment with the Company during the six-month period following his appointment as interim Chief Executive Officer.

Our current Chief Executive Officer, Brandon Moss, was appointed as Chief Executive Officer on June 14, 2023, effective as of July 17, 2023. In connection with his appointment as Chief Executive Officer, Mr. Moss and the Company entered into an offer letter memorializing the terms and conditions of his employment. See the section titled “Brandon Moss Offer Letter” below for further details regarding Mr. Moss’s offer letter.

As shown in the table above, the compensation that Mr. Moss actually earned and received in respect of the 2023 Fiscal Year differs from the initial target total compensation level set for him in connection with his appointment as our Chief Executive Officer. This is because (i) his base salary earned in respect of the 2023 Fiscal Year reflects his partial year of service as our Chief Executive Officer during the 2023 Fiscal Year, (ii) his annual incentive plan cash award in respect of the 2023 Fiscal Year was prorated to reflect his partial year of service, and (iii) he received a one-time equity award and cash award in the 2023 Fiscal Year, each of which were intended to reimburse him for the forfeited cash and equity awards previously granted to him by his former employer.

Payouts under our annual incentive plan (the “AIP”) reflect our performance against pre-set Adjusted EBITDA goals and the Compensation Committee’s assessment of goal achievements and individual performance. The selection of Adjusted EBITDA as the driving metric under the AIP supports the Compensation Committee’s view of measuring operating performance without unusual or one-time events.

After careful consideration, and as consistent with our discussions with shareholders, the Compensation Committee confirmed that Adjusted EBITDA that excludes the $63.0 million charge for wire insulation shrinkback and related litigation expenses necessary to recover damages from the supplier of defective wire (as further described in “2023 Fiscal Year AIP Performance Targets and Results”) was the appropriate metric for assessing performance in the 2023 Fiscal Year AIP. As we continue to analyze all of the incoming information and remediation projections, we have determined the range of expenses communicated was still appropriate and the impact of the charge was immaterial at this time. This approach ensures consistency with the Company’s externally reported financial performance results, preempts the possibility of future unintended incentive payouts when settlements occur, and reflects alignment with long-term shareholder experience, and appropriately rewards our leadership team. Adjusted EBITDA performance resulted in a maximum score for this 75% weighted AIP factor whereas overriding the Adjusted EBITDA calculation would have resulted in a below target payout.

The Compensation Committee also considered the entirety of Shoals’ overall performance in Fiscal Year 2023 that suggested some non-Adjusted EBITDA opportunities for improvement. To reflect a more holistic review of company performance, the Compensation Committee and the Board of Directors reduced each named

executive’s payment for performance on Individual Goals by half (applied negative discretion). Individual Goals are weighted 25% of AIP at target. After the Compensation Committee exercised negative discretion, the final payout dollar value across the NEOs was reduced by 9% (or 16% of target) from the overall result.

The 2023 Fiscal Year AIP paid out at an average of 165% of target for Mr. Bardos, Ms. Peetz, and Mr. Tolnar, each of whom were in their respective roles for the full 2023 Fiscal Year. The average payout absent the downward adjustment would have been 181% of target. The 2023 Fiscal Year AIP paid out at 168.75% of target for Mr. Moss, with such payout prorated based on Mr. Moss’s partial year of service during the 2023 Fiscal Year. Without the downward adjustment, Mr. Moss’s payout would have been 187.5% of target.

The awards of performance-based restricted stock units (“PSUs”) granted to certain of our Named Executive Officers in the 2023 Fiscal Year will not provide a payout until early 2026, when the Compensation Committee approves the level of achievement against pre-set Net Revenue Growth CAGR and Average Gross Margin targets (each as further described below in the section titled “2023 Fiscal Year Long-Term Incentive Equity Compensation”). The awards of time-based restricted stock units (“RSUs”) granted to certain of our Named Executive Officers in the 2023 Fiscal Year create foundational ownership that encourages retention and ties to changes in shareholder value.

We continued our strong growth in 2023, with revenues up 50% compared to 2022. Additionally, we recently took steps to expand and centralize our manufacturing capacity in Portland, Tennessee, with the lease of a new 638,000 square foot facility. Additionally, our backlog and awarded orders as of December 31, 2023 were $631.3 million, representing a 47% increase compared to the same time last year. Even though gross profit percentage decreased 5.8% in 2023, we exhibited strong operating leverage during 2023, evidenced by our Adjusted Gross Profit percentage increasing 6.8%, as compared to 2022, reflecting favorable mix and operational efficiencies. Further, we have shown growth in our international business, which now accounts for more than 13% of backlog and awarded orders. Our results are a reflection of the strength of the end-markets we serve, the capacity of our products to take market share from competing alternatives, greater leverage on fixed costs, and an increase in the efficiencies of our manufacturing operations.

For the year ended December 31, 2023, our results for net income and net income attributable to Shoals Technologies Group, Inc. included impacts from wire insulation shrinkback warranty expenses and related inventory write-down, and Adjusted EBITDA and Adjusted Net Income included (i) $59.1 million wire insulation shrinkback warranty expenses related to the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback, and (ii) $2.6 million of inventory write-downs of the defective red wire. We consider expenses incurred in connection with the identification, repair and replacement of the impacted wire harnesses as well as the write-down of related inventory distinct from normal, ongoing service identification, repair and replacement expenses that would be reflected under ongoing warranty expenses within the operation of our business and normal write-downs of inventory, which we do not exclude from our non-GAAP measures. In the future, we also intend to exclude from our non-GAAP measures the benefit of liability releases, if any. We believe excluding expenses from these discrete liability events provides investors with a better view of the operating performance of our business and allows for comparability through periods. In addition, for the year ended December 31, 2023, our results for Adjusted EBITDA and Adjusted Net Income included $1.3 million of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective red wire. We consider this litigation distinct from ordinary course legal matters given the expected magnitude of the expenses, the nature of the allegations in the Company’s complaint, the amount of damages sought, and the impact of the matter underlying the litigation on the Company’s financial results. In the future, we also intend to exclude from our non-GAAP measures the benefit of recovery, if any. We believe excluding expenses from these discrete litigation events provides investors with a better view of the operating performance of our business and allows for comparability through periods. The following table provides a summary of our financial results for 2023 and a comparison of these results to 2022 and 2021.

In the 2023 Fiscal Year, the Compensation Committee considered competitive market compensation data, in addition to other factors, in determining the policies and programs that address executive compensation and benefits.

For the 2023 Fiscal Year, with respect to pay decisions for our Named Executive Officers, the Compensation Committee reviewed a peer group of 17 solar and related industry companies that are reasonably comparable to the Company in terms of market capitalization (the “Peer Group”), and with whom we are likely to compete for executive talent, in order to better evaluate executive compensation market practices. The Compensation Committee compared the Peer Group against a group of companies comprised of revenue-comparable companies in broad Electrical Components & Equipment and Electrical Equipment Standard & Poor’s GICS codes.

Market capitalization of this group of companies was substantially lower than our market capitalization and the market capitalization of companies in solar and related industries. The Compensation Committee intends to continue to review other peer groups in the future. The Compensation Committee confirmed the current appropriateness of the Peer Group for the 2023 Fiscal Year.

When making executive pay decisions, the Compensation Committee also considers other factors such as individual experience and performance, critical skills, and the general talent market for senior executives.

The Compensation Committee’s review of the external compensation market also included data and practices from general compensation surveys and other compensation survey information provided by our independent consultant Pay Governance LLC (“Pay Governance”).

The Compensation Committee regularly reviews executive compensation, taking into consideration input received through the Company’s regular and ongoing engagement with investors. During the third quarter of 2023, the Company’s management and Compensation Committee chair engaged with a significant cross-section of its shareholder base. Feedback from all discussions was shared with the appropriate Board Committee and/or the full Board.

Shareholders expressed overall support for the Company’s executive compensation program and design, as demonstrated by the 2023 annual meeting of stockholders say-on-pay vote results of approximately 90%. Additionally, shareholders expressed overall support for the Company’s pay package for its new CEO, Brandon Moss.

Some investors expressed their firm’s support for the Company to declassify its Board. In response to investor feedback, at the Annual Meeting, the Company is asking that shareholders approve an amendment to its Certificate of Incorporation to declassify its Board and phase-in the annual election of directors beginning at the 2025 annual meeting of shareholders, such that from and after the 2027 annual meeting of shareholders, all directors will be up for election at each annual meeting and will serve for a term of one year and until such directors’ successors are duly elected and qualified or until such directors’ earlier death, resignation or removal.

The objective of our executive compensation program is to attract, retain and motivate top talent to drive the Company’s current success and future growth. The guiding principles of our executive compensation program are as follows:

The compensation of our executive officers, including our Named Executive Officers, is reviewed in detail by the Compensation Committee during the first quarter of every fiscal year. Named Executive Officer direct compensation for the 2023 Fiscal Year generally consisted of a base salary, an AIP annual award, and long-term incentive awards, each of which is detailed below.

Adjusted EBITDA was selected as the sole financial performance measure for the 2023 Fiscal Year AIP because of its importance to value provided to shareholders. Adjusted EBITDA is defined as net income plus (i) interest expense, net, (ii) income tax expense, (iii) depreciation expense, (iv) amortization of intangibles, (v) payable pursuant to the TRA adjustment, (vi) gain on termination of TRA, (vii) loss on debt repayment, (viii) equity-based compensation, (ix) acquisition-related expenses, (x) COVID-19 expenses, (xi) non-recurring and other expenses, (xii), wire insulation shrinkback expenses, and (xiii) wire insulation shrinkback litigation expenses. Threshold, Target, and Stretch Adjusted EBITDA goals were approved by the Compensation Committee in February 2023 and were established based upon the Company’s fiscal 2023 operating plan approved by the Board. Adjusted EBITDA performance carries a weight of 75% in the final 2023 Fiscal Year AIP determination.

The objective of our compensation program is to align executives’ compensation with the objectives of our strategy and our operating results, attract and retain highly qualified executives, and provide incentives that drive shareholder value.

Despite record quoting activity and strong orders, the charges for wire insulation shrinkback and related litigation expenses resulted in our GAAP net income of $42.7 million for the 2023 Fiscal Year.

The Compensation Committee also considered the entirety of Shoals’ overall performance in Fiscal Year 2023 that suggested some non-Adjusted EBITDA opportunities for improvement. To reflect a more holistic review of company performance, the Compensation Committee and the Board of Directors reduced each named executive’s payment for performance on Individual Goals by half (applied negative discretion). Individual Goals are weighted 25% of AIP at target. After the Compensation Committee exercised negative discretion, the final payout dollar value across the NEOs was reduced by 9% (or 16% of target) from the overall result.

The 2023 Fiscal Year AIP paid out at an average of 165% of target for Mr. Bardos, Ms. Peetz, and Mr. Tolnar, each of whom were in their respective roles for the full 2023 Fiscal Year. The average payout absent the cap would have been 181% of target. The 2023 Fiscal Year AIP paid out at 168.75% of target for Mr. Moss, with such payout prorated based on Mr. Moss’s partial year of service during the 2023 Fiscal Year. Without the downward adjustment, Mr. Moss’s payout would have been 187.5% of target.

Mr. Whitaker’s employment was terminated due to disability, effective March 15, 2023, and as a result, he did not receive an AIP award in the 2023 Fiscal Year and, thus, was not evaluated for the AIP individual component. Each remaining Named Executive Officer had 25% of their AIP award target based upon an Individual Management by Objectives (“Individual Goals”) component.

Each Named Executive Officer who participated in the 2023 Fiscal Year AIP had Individual Goals that were approved by the Compensation Committee. The Compensation Committee and Board determined that the payment for performance against Individual Goals would be reduced by half to account for non-EBITDA performance shortfalls versus the Company’s business scorecard and so to better reflect holistic performance. Performance assessment and key achievements are outlined below.

The Company maintains the Shoals Technologies Group, Inc. 2021 Long-Term Incentive Plan (the “LTIP”), which was adopted on January 26, 2021. Each of our Named Executive Officers are eligible to participate in the LTIP, which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, other stock-based awards or cash awards to employees and consultants of the Company and its affiliates and non-employee directors on the Board. The Compensation Committee determines the size and vesting terms of all awards made under the LTIP and administers all other aspects of the LTIP.

The PSUs granted to certain of our Named Executive Officers in the 2023 Fiscal Year vest after a three-year performance period ending on December 31, 2025, with the performance criteria tied equally to Net Revenue Growth CAGR and Average Gross Margin, subject to continued employment through the date the Compensation Committee certifies achievement of such performance criteria following the end of such performance period. For purposes of such 2023 PSU awards, “Net Revenue Growth CAGR” means the Company’s compound annual growth rate, measured as of the last day of the applicable performance period, and “Average Gross Margin” means the three-year average of the Company’s gross profits during the applicable performance period, where gross profits means net sales (revenues as reported on the Company’s income statement for the applicable year) minus direct and production overhead cost (costs of goods sold as reported on the Company’s income statement for the applicable year).

PSUs may pay out from 0% to 200% of target. Pre-set Threshold, Target, and Stretch goals were established by the Compensation Committee at grant but remain confidential during the performance period due to competitive harm that may occur if goals were to be made public before our 2026 proxy statement is released.

The RSUs granted to certain of our Named Executive Officers in the 2023 Fiscal Year vest in three substantially equal installments on each of the first three anniversaries of the applicable vesting commencement date, subject to continued employment through each applicable vesting date.

The 2023 LTIP award values were determined by taking into account base pay and annual incentive values, assessing market competitive total compensation levels, our compensation philosophy that weights variable compensation higher than fixed compensation and retention value. These values also consider each Named Executive Officers’ role, potential long-term contribution, performance, experience and skills. The target values remain within the market median for comparable positions.

The following table shows the target dollar value of the 2023 LTI awards made to certain of our Named Executive Officers in the 2023 Fiscal Year.

See the section titled “Narrative Description to the Summary Compensation Table and the Grant of Plan-Based Awards Table for the 2023 Fiscal Year—Long-Term Equity Compensation” below for details on the grants of RSUs and PSUs to the Named Executive Officers.

In February 2024, the Compensation Committee determined that certain of the PSU awards to be granted to our Named Executive Officers during fiscal year 2024 will be subject to a new set of performance-vesting metrics.

50% of the 2024 PSU awards will continue to be subject to performance-based vesting based upon Net Revenue Growth CAGR targets. New for 2024, this portion of the PSU award value will then be modified based

upon Net Revenue Growth CAGR relative to the Company’s compensation peer group. Specifically, this portion of the PSU award will be multiplied by 1.5x for performance at the 80th percentile or above, 1.0x for performance at the 50th percentile, and 0.5x for performance at the 20th percentile or below. Interpolated payouts will be calculated for performance between the 20th percentile and 50th percentile or between the 50th percentile and 80th percentile. This modifier was implemented to acknowledge both absolute and relative growth performance.

Also new for 2024, the remaining 50% of the 2024 PSU awards will be subject to performance-based vesting based upon Cumulative Adjusted Diluted EPS targets (instead of Average Gross Margin targets). For purposes of such 2024 PSU awards, “Cumulative Adjusted Diluted EPS” means Adjusted Diluted EPS measured on a cumulative basis during the applicable performance period, and “Adjusted Diluted EPS” means Adjusted Net Income (as defined above in the section titled “Business Environment and Financial Results”) divided by the diluted weighted average of Company Class A common stock outstanding for the applicable period.

The Compensation Committee felt that this change was appropriate because Cumulative Adjusted Diluted EPS is a metric that many investors use to evaluate investment decisions and because it is more directly impacted by the executive leadership team.

In February 2024, the Compensation Committee also approved changes to the AIP metrics for fiscal year 2024. In the 2023 Fiscal Year, the AIP plan was based 75% on Adjusted EBITDA and 25% on Individual Goals. To provide greater balance across performance metrics, the AIP plan for fiscal year 2024 will be based 60% on Adjusted EBITDA, 15% on Adjusted Free Cash Flow, and 25% on Individual Goals. Additionally, given the importance of the warranty remediation discussed previously, performance in that area will be included in each NEO’s Individual Goals.

We provide the following benefits to our Named Executive Officers on the same basis as other eligible employees:

We believe these benefits are generally consistent with those offered by other companies and specifically with those companies with which we compete for employees.

The Compensation Committee reviews and approves the compensation elements and compensation targets for each of our executive officers, including the Named Executive Officers. The Compensation Committee also makes determinations with respect to the AIP as it relates to our executive officers, including the approval of annual performance goals and subsequent full-year achievement against those goals. The Compensation Committee administers all elements of the LTIP and approves any benefits or other related programs offered to executive officers. Further, the Compensation Committee evaluates the Company’s compensation programs on an annual basis to ensure our plans do not induce or encourage excessive risk-taking by participants.

During the 2023 Fiscal Year, our Chief Executive Officer and Chief Human Resources Officer, in consultation with Pay Governance, made recommendations to the Compensation Committee regarding compensation actions and incentive awards. The Chief Human Resources Officer serves as the liaison between

the Compensation Committee and Pay Governance, providing internal data on an as-needed basis so that Pay Governance can produce comparative analyses for the Compensation Committee. The Company’s human resources, finance, and legal departments supported the work of the Compensation Committee by providing information, answering questions, and responding to various requests from committee members.

In the 2023 Fiscal Year, the Compensation Committee continued to use the services of Pay Governance in fulfilling its obligations under its charter. Pay Governance attended all of the Compensation Committee meetings in the 2023 Fiscal Year and provided the Compensation Committee with objective expert analyses, assessments, research, and recommendations for executive compensation programs, incentives, executive benefits, and non-executive director compensation. In this capacity, Pay Governance provided services that related solely to the work performed for, and at the direction of, the Compensation Committee. The Compensation Committee selected Pay Governance to serve as its independent consultant only after assessing the firm’s independence, which concluded that no conflicts of interest existed. The Compensation Committee retains the right to modify or terminate its relationship with Pay Governance or select other outside advisors to assist the Compensation Committee in carrying out its responsibilities.

We believe that a strong, experienced management team is essential to the best interests of the Company and our shareholders. We have entered into employment agreements and/or offer letters with certain of our Named Executive Officers in order to minimize employment security concerns arising in the course of negotiating and completing a significant transaction. For a description of such employment agreements and offer letters, see the section below titled “Narrative Description to the Summary Compensation Table and the Grant of Plan-Based Awards Table for the 2023 Fiscal Year - Employment Agreements and Offer Letters.” For a more complete description of our obligations under the employment agreements and offer letters in the event of a termination of employment or change in control, see the section below titled “Potential Payments Upon Termination or a Change in Control.”

The Compensation Committee oversees the design and implementation of our compensation and benefits programs and policies and monitors the incentives created by these programs and policies to determine whether they encourage excessive risk-taking. The Compensation Committee also assesses the relationship between risk management policies and practices and compensation and evaluates compensation policies and practices that could mitigate any such risk.

The Company has determined that any risks arising from its compensation programs and policies are not reasonably likely to have a material adverse effect on the Company. The Company’s compensation programs and policies mitigate risk by combining performance-based, long-term compensation elements with payouts that are highly correlated to the value delivered to shareholders. The combination of performance measures for annual bonuses and the equity compensation programs, share ownership and retention guidelines for our Named Executive Officers, as well as the multiyear vesting schedules for equity awards encourage employees to maintain both a short and a long-term view with respect to Company performance.

We maintain stock ownership guidelines for our Chief Executive Officer, Chief Financial Officer, other executive officers and executive vice presidents and non-employee directors. These stock ownership guidelines specify the desired level of Company stock ownership and encourage a set of behaviors for each covered individual. Only the following equity holdings count towards achieving these ownership levels: (1) shares owned directly, (2) vested shares held in a 401(k) account, (3) shares beneficially owned in a family trust or by a spouse and/or minor children, (4) unvested restricted stock or RSUs (net of taxes), (5) unvested deferred stock units of the Company, and (6) shares obtained through stock option exercises. Unvested PSUs and unexercised stock options do not count toward compliance with the stock ownership guidelines.

In addition to the above, a 50% retention requirement of net after-tax shares is required to be held as long as the covered individual’s requirement is not yet achieved.

Our Insider Trading Policy prohibits our Named Executive Officers from engaging in any hedging transactions without prior written approval from our Chief Executive Officer, Chief Financial Officer or Chief Legal Officer. Further, this policy prohibits our Named Executive Officers from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

The Compensation Committee has adopted a Clawback and Recoupment Policy that complies with NASDAQ’s new clawback listing standards, Section 10D of the Exchange Act and the rules promulgated thereunder (the “Clawback Policy”). In the event that we are required to prepare an accounting restatement of our financial statements due to our material noncompliance with any financial reporting requirement under the securities laws, the Clawback Policy requires that covered executives must reimburse us, or forfeit, any excess incentive-based compensation received by such covered executive during the three completed fiscal years immediately preceding the date on which we are required to prepare the restatement. Executives covered by the Clawback Policy include our current and former executive officers, as determined by the Compensation Committee in accordance with Section 10D of the Exchange Act and the NASDAQ listing standards, and such other senior executives or employees who may from time to time be deemed subject to the Clawback Policy by the Compensation Committee.

Incentive-based compensation subject to the Clawback Policy includes any compensation that is granted, earned or vested based wholly or in part on the attainment of a financial reporting measure. The amount subject to recovery is the excess of the incentive-based compensation received based on the erroneous data over the incentive-based compensation that would have been received had it been based on the restated results, and is computed without regard to any taxes paid. The Clawback Policy will only apply to incentive-based compensation received on or after the effective date of NASDAQ Listing Rule 5608.

Section 280G of the Code disallows a tax deduction with respect to “excess parachute payments” to certain executive officers of companies that undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax penalty on the individual receiving the “excess parachute payment.” Parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans or programs and other equity-based compensation. “Excess parachute payments” are parachute payments that exceed a threshold determined under Section 280G of the Internal Revenue Code (the “Code”) based on an executive officer’s prior compensation. In approving compensation arrangements for our Named Executive Officers, the Board considers all elements of the cost to us of providing such compensation, including the potential impact of Section 280G of the Code. However, the Board may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility of Section 280G of the Code and the imposition of excise taxes under Section 4999 of the Code when it believes that such arrangements are appropriate to attract and retain executive talent. We do not provide for excise tax gross-ups to our executive officers and do not expect to do so in the future.

Section 162(m) of the Code limits us to a deduction for federal income tax purposes of no more than $1 million of compensation paid to certain executive officers in a taxable year. The Compensation Committee considers the impact of Section 162(m) when making compensation decisions.

Another section of the Code, Section 409A, affects the manner by which deferred compensation opportunities are offered to our employees because Section 409A requires, among other things, that “non-qualified deferred compensation” be structured in a manner that limits employees’ abilities to accelerate or further defer certain kinds of deferred compensation. We intend to operate our existing compensation arrangements that are covered by Section 409A in accordance with the applicable rules thereunder, and we will continue to review and amend our compensation arrangements where necessary to comply with Section 409A.

We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC 718, for our equity-based compensation awards. ASC 718 requires companies to calculate the grant date “fair value” of their equity-based awards using a variety of assumptions. ASC 718 also requires companies to recognize the compensation cost of their equity-based awards in their income statements over the period that an associate is required to render service in exchange for the award. Future grants of stock options, restricted stock, restricted stock units and other equity-based awards under our equity incentive award plans will be accounted for under ASC 718. The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

We held our second advisory vote on the compensation of our Named Executive Officers (sometimes referred to as the “say-on-pay” vote) at our 2023 annual meeting of shareholders, and approximately 90% of the advisory votes cast voted to approve the compensation for our Named Executive Officers. The Compensation Committee reviewed and considered the results of this “say-on-pay” vote when evaluating the compensation for our Named Executive Officers in the 2023 Fiscal Year, along with other insights gleaned from ongoing stockholder outreach activities.

We held our first advisory vote on the frequency of future “say-on-pay” advisory votes (sometimes referred to as the “say-on-frequency” vote) at our 2023 annual meeting of shareholders, pursuant to which the majority of the advisory votes cast voted to hold our “say-on-pay” advisory votes every year.

We will continue to consider the outcome of our “say-on-pay” and “say-on-frequency” advisory votes when making compensation decisions regarding our Named Executive Officers.

The Compensation Committee has reviewed and discussed with management the compensation discussion and analysis required by Item 402(b) of Regulation S-K. Based on the review and discussions, the Compensation Committee recommended to the Board that the compensation discussion and analysis be included in this proxy statement.

The following table sets forth certain information with respect to compensation for the years ended December 31, 2023, 2022, and 2021, earned by, awarded to or paid to our Named Executive Officers.

The following table sets forth certain information with respect to grants of plan-based awards for the year ended December 31, 2023 with respect to our Named Executive Officers.

In December 2020, we entered into an employment agreement with Ms. Peetz memorializing her base salary, target bonus opportunity, paid vacation, reimbursement of reasonable business expenses, severance benefits and eligibility to participate in the LTIP and in the Company’s benefit plans generally.

In August 2022, we entered into an employment agreement with Mr. Bardos memorializing his base salary, target bonus opportunity, paid vacation, reimbursement of reasonable business expenses, severance benefits and eligibility to participate in the LTIP and in the Company’s benefit plans generally.

The employment agreements for Ms. Peetz and Mr. Bardos (collectively, the “Employment Agreements”) each include a “best-net” cutback provision that provides that, in the event any payments or benefits provided under the agreement or any other arrangement with the Company or its affiliates constitute “parachute payments” within the meaning of Section 280G of the Code, then such payments and/or benefits will either be (i) provided to the applicable executive in full or (ii) reduced to the extent necessary to avoid the excise tax imposed by Section 4999 of the Code, whichever results in the applicable executive receiving a greater amount on an after-tax basis.

The Employment Agreements each include a perpetual confidentiality and intellectual property assignment covenants. In addition, the Employment Agreements prohibit the applicable executive from, during the term of employment and for a period of 24 months thereafter, (i) soliciting customers and employees of the Company and its affiliates and (ii) competing against the Company and its affiliates within certain geographical areas.

Pursuant to her employment agreement, Ms. Peetz also received a one-time award of RSUs under the LTIP on January 29, 2021 (the “Peetz RSUs”), partially as a buyout of otherwise forfeited compensation. A portion of the Peetz RSUs vested immediately upon grant, and on each anniversary of the grant date, 25% of the remaining Peetz RSUs will vest subject to Ms. Peetz’s continued employment through each applicable vesting date. See the “Outstanding Equity Awards at Fiscal Year End” table below and the “Potential Payments Upon Termination or a Change in Control” section below for further details regarding the Peetz RSUs.

In March 2021, we entered into an offer letter with Mr. Tolnar memorializing his base salary, target bonus opportunity, paid vacation, reimbursement of relocation expenses, severance benefits and eligibility to participate in the LTIP and in the Company’s benefit plans generally.

In December 2022, we entered into an offer letter with Mr. Tolnar in connection with this appointment as the President of the Company. This offer letter memorialized his updated compensation based on his appointment as President, including base salary, target bonus opportunity, paid vacation, severance benefits and eligibility to participate in the LTIP and in the Company’s benefit plans generally.

Mr. Tolnar’s December 2022 offer letter also includes a perpetual confidentiality covenant, as well as non-competition and non-solicitation of customers or employees covenants that apply during his employment and for a period of one year thereafter.

The December 2022 offer letter for Mr. Tolnar provides for certain severance benefits upon a termination by the Company without “cause.” See the section titled “Potential Payments Upon Termination or a Change in Control” below for further details regarding the severance benefits that certain of our Named Executive Officer are eligible to receive.

In June 2023, we entered into an offer letter with Mr. Moss memorializing his base salary, target bonus opportunity, paid vacation, reimbursement of reasonable business expenses, payment of relocation expenses, severance benefits and eligibility to participate in the LTIP and in the Company’s benefit plans generally.

Pursuant to his offer letter, Mr. Moss also received a one-time cash award of $500,000, which was intended to reimburse him for his forfeited cash and equity awards previously granted to him by his former employer. $250,000 of such cash award was paid to Mr. Moss on the first payroll following his start date, and the remaining $250,000 will be paid to him on the one-year anniversary of his start date. However, both installments of such cash payment are subject to clawback in the event of Mr. Moss’s termination by the Company without Cause (as defined in the Severance Plan) or by Mr. Moss for Good Reason (as defined in his offer letter) during the applicable one-year period following the payment date of the applicable installment.

In addition, Mr. Moss received a grant of RSUs valued at approximately $1,100,000, which was also intended to reimburse him for his forfeited cash and equity awards previously granted to him by his former employer, as further described below in the section titled “Long-Term Equity Compensation”.

The offer letter provides that Mr. Moss is a participant under the Shoals Technologies Group, Inc. Executive Severance Plan (the “Severance Plan”), which provides for certain severance benefits upon a resignation by Mr. Moss for “good reason” or upon a termination by the Company without “cause”. See the section titled “Potential Payments Upon Termination or a Change in Control” below for further details regarding the severance benefits that certain of our Named Executive Officer are eligible to receive.

In December 2020, we entered into an employment agreement with Mr. Whitaker. On February 23, 2023, the Board made the decision to terminate Mr. Whitaker’s employment as Chief Executive Officer of the Company due to disability, effective as of March 15, 2023. Mr. Whitaker also ceased to be a member of the Board on that date. In connection with such termination, Mr. Whitaker and the Company entered into a separation agreement, as further described below.

Mr. Whitaker’s employment agreement memorialized his base salary, target bonus opportunity, paid vacation, reimbursement of reasonable business expenses, severance benefits and eligibility to participate in the LTIP and in the Company’s benefit plans generally.

In addition, Mr. Whitaker’s employment agreement provided for certain severance benefits upon a resignation by Mr. Whitaker for “good reason” or upon a termination by the Company without “cause.” Further, his employment agreement includes the following restrictive covenants: (i) a perpetual confidentiality covenant, (ii) an intellectual property assignment covenant, (iii) non-competition during employment and for 24 months thereafter, and (iv) non-solicitation of customers and employees during employment and for 24 months thereafter.

On February 24, 2023, the Company entered into a separation agreement with Mr. Whitaker, memorializing the terms and conditions of his termination due to disability under his employment agreement and his grant agreements governing his outstanding RSUs and PSUs. See the section titled “Potential Payments Upon Termination or a Change in Control” below for further details regarding Mr. Whitaker’s separation agreement and the payments made to him upon his termination of employment.

In January 2023, the Compensation Committee granted RSUs and PSUs to certain of our Named Executive Officers under the LTIP. On July 17, 2023, in connection with his appointment as Chief Executive Officer of the Company, the Compensation Committee granted RSUs and PSUs to Brandon Moss under the LTIP.

Each such award of RSUs vests in substantially equal installments on each of the first three anniversaries of the applicable vesting commencement date, subject to continued employment through the applicable vesting date. However, Mr. Moss also received an additional grant of RSUs on July 17, 2023 that vest 100% on July 17, 2024, subject to his continued employment through such vesting date. Such additional RSU award was intended to reimburse Mr. Moss for the forfeited equity awards previously granted to Mr. Moss by his former employer.

Each such award of PSUs vests (i) fifty percent (50%) based on the Company’s compound annual revenue growth rate measured as of the last day of the three-year performance period ending on December 31, 2025 and (ii) fifty percent (50%) based on the Company’s average gross profits during such performance period, in each case, subject to continued employment through the date the Compensation Committee certifies achievement of the performance criteria following the end of such performance period.

See the “Outstanding Equity Awards at Fiscal Year End” table below and the “Potential Payments Upon Termination or a Change in Control” section below for further details on the grants of RSUs and PSUs to certain of our Named Executive Officers.

The following table sets forth certain information with respect to outstanding equity awards of our Named Executive Officers as of December 31, 2023 with respect to the named executive officer.

The following table sets forth certain information with respect to the vesting of stock awards during the fiscal year ended December 31, 2023 with respect to our Named Executive Officers.

Our Named Executive Officers did not participate in or have account balances in qualified or nonqualified defined benefit plans sponsored by us. The Board or Compensation Committee may elect to adopt qualified or nonqualified benefit plans in the future if it determines that doing so is in our best interest.

Our Named Executive Officers did not participate in or have account balances in nonqualified defined contribution plans or other nonqualified deferred compensation plans maintained by us. The Board or Compensation Committee may elect to provide our executive officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interest.

The Employment Agreements each provide that upon a termination of the applicable executive’s employment by the Company without “cause” or by the applicable executive with “good reason” (each as defined therein), subject to the applicable executive’s execution of a fully effective release of claims in favor of the Company and continued compliance with restrictive covenants, the applicable executive is eligible to receive (i) base salary continuation payments and (ii) payment or reimbursement of a portion of continuation coverage premiums under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, in each case, for 12 months.

The 2022 offer letter for Mr. Tolnar provides that upon a termination by the Company without “cause” (which is not defined), Mr. Tolnar will be eligible to receive base salary continuation payments for three months. However, the offer letter also provides that if the severance provided to him under the Severance Plan is greater than the severance provided to him under his 2022 offer letter, he will receive severance under the Severance Plan. As of December 31, 2023, Mr. Tolnar is currently a participant in the Severance Plan.

The offer letter for Mr. Moss provides that Mr. Moss is a participant in the Severance Plan, as discussed below.

The Employment Agreements generally provide that “cause” means (i) the applicable executive’s material breach of the employment agreement or any other agreement with the Company or its affiliates, (ii) the applicable executive’s breach of any policy or code of conduct established by the Company or its affiliates, (iii) the applicable executive’s violation of any law applicable to the workplace or the Company or its affiliates (including any law regarding anti-discrimination, anti-harassment or anti-retaliation), (iv) the applicable executive’s gross negligence, willful misconduct, breach of fiduciary duty, fraud, theft or embezzlement that has or could reasonably be expected to have an adverse effect on the Company or its affiliates, (v) the commission by the applicable executive of, or conviction or indictment of the applicable executive for, or plea of nolo contendere by the applicable executive to, any felony or any crime involving moral turpitude, or (vi) the applicable executive’s willful failure or refusal to perform the applicable executive’s duties or to follow any lawful directive from the Company or the board of directors of Shoals Parent, subject to a 30-day cure right, if curable.

The Employment Agreements generally provide that “good reason” means, subject to certain notice and cure conditions, (i) a material diminution in the applicable executive’s base salary or authority, duties and responsibilities, or (ii) the relocation of the applicable executive’s principal place of employment by more than 50 miles.

Mr. Tolnar and Mr. Moss are each participants in the Severance Plan, which includes “cause” and “good reason” definitions. However, Mr. Moss’s offer letter includes a slightly revised definition of “good reason”. Under Mr. Moss’s offer letter, “good reason” means, subject to certain notice and cure conditions, (i) a material diminution in his base salary or authority, duties and responsibilities (provided that the removal of Mr. Moss as an officer or board member of a member of the Company group (other than the Company) will not constitute “good reason”), (ii) the relocation of Mr. Moss’s principal place of employment by more than 50 miles (provided that the relocation contemplated in the offer letter will not constitute “good reason”), or (iii) any other action or inaction that constitutes a material breach by the Company of his offer letter.

On February 24, 2023, the Company entered into a separation agreement with Mr. Whitaker, memorializing the terms and conditions of his termination due to disability under his employment agreement and his grant agreements governing his outstanding RSUs and PSUs. Pursuant to such grant agreements, Mr. Whitaker received the following treatment of his outstanding RSUs and PSUs, in each case, effective as of the date he re-executed his separation agreement (which occurred within twenty-one days following March 15, 2023): (i) all of his unvested RSUs accelerated and immediately vested, and (ii) a prorated portion of his unvested PSUs accelerated and immediately vested based on target performance, determined by the number of days Mr. Whitaker was employed with the Company during the three-year performance period that started on January 1, 2022. Mr. Whitaker was not entitled to any additional benefits or severance payments under his employment agreement.

Upon the applicable executive’s termination of service, any unvested RSUs or PSUs are automatically forfeited. However, notwithstanding the foregoing:

Pursuant to her employment agreement, Ms. Peetz is entitled to immediate vesting of the number of Peetz RSUs equal to (i) the number of full calendar quarters that have elapsed since the last vesting date preceding the date of termination, divided by 16, multiplied by (ii) the number of Peetz RSUs originally granted.

On February 23, 2023, the Board adopted the Severance Plan, effective as of February 23, 2023. The Severance Plan will be administered by the Compensation Committee. Eligible executives will be designated by the Compensation Committee, and will be required to enter into a participation agreement with the Company in order to participate in the Severance Plan. Mr. Whitaker was not entitled to receive any payments or benefits under the Severance Plan in connection with his termination of employment.

Upon a Qualifying Termination outside of the Change in Control Protection Period (each as defined in the Severance Plan), participants in the Severance Plan will be eligible to receive, subject to the execution and non-revocation of a release of claims and continued compliance with restrictive covenants, the following severance payments and benefits:

Upon a participant’s termination of employment for any reason (pursuant to a Qualifying Termination or otherwise), all outstanding equity awards held by the participant will be treated in accordance with the applicable award agreements and the LTIP. Further, in the event a participant is covered by an employment agreement that may duplicate the severance payments and benefits described above, the Compensation Committee will reduce or eliminate the duplicative benefits provided for under the Severance Plan.

The following table provides information regarding potential payments to certain of our Named Executive Officers as of December 31, 2023 in connection with certain termination or change in control events.

The following table provides certain information with respect to all compensation plans under which our equity securities are authorized for issuance as of December 31, 2023.

Pursuant to Item 402(u) of Regulation S-K, we are disclosing the pay ratio comparing the median of the annual total compensation of our employees other than Mr. Moss, our Chief Executive Officer as of October 1, 2023 (the date selected to identify the median employee, as further described below), and the annual total compensation of Mr. Moss. The pay ratio is calculated in a manner consistent with Item 402(u) of Regulation S-K.

We selected October 1, 2023 as the date to determine the median employee. As of October 1, 2023, we had 726 employees globally, including 723 U.S. employees and three non-U.S. employees. In determining the identity of our median employee, we excluded three contracted service providers located in Spain, which in the aggregate represents less than 5% of our workforce. To identify the median employee we used federal taxable W-2 earnings, as determined from the Company’s payroll records for the twelve-month period ended December 31, 2023. Federal taxable W-2 earnings consist of cash compensation (including base salary, hourly wages, overtime pay, and annual incentive compensation) and other taxable earnings. We annualized the compensation for any employees who commenced work in 2023 and were employed as of October 1, 2023.

In accordance with the rules set forth in Item 402(u) of Regulation S-K, we calculated the median employee’s annual total compensation in the same manner as the calculation of Mr. Moss’s annual total compensation in the “Summary Compensation Table” above.

Mr. Moss was serving as our Chief Executive Officer as of October 1, 2023. The annual total compensation for Mr. Moss was calculated based on the values included in the “Summary Compensation Table” above, and was then annualized for 2023, as Mr. Moss did not begin serving as our Chief Executive Officer until July 17, 2023. To annualize Mr. Moss’s 2023 annual total compensation, (i) we first started with his total compensation as reported in the “2023 Summary Compensation Table” above (i.e., $5,560,030), (ii) next, we annualized his 2023 amounts reported in the “Salary” and the “Non-Equity Incentive Plan Compensation” columns of the “2023 Summary Compensation Table” above, since these amounts as reported in the “2023 Summary Compensation Table” above reflect Mr. Moss’s partial year of service with us, and (iii) finally, we added his 2023 amounts reported in the “Bonus”, “Stock Awards” and “All Other Compensation” columns of the “2023 Summary Compensation Table” above, since these amounts reflect one-time payments. This resulted in an annualized 2023 annual total compensation value for Mr. Moss equal to $6,607,219, which was used to calculate the ratio of annual total compensation for Mr. Moss to the annual total compensation for our median employee.

We believe that this pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.