COSTAR GROUP, INC. 8-K

What Happened

• On January 7, 2026, CoStar Group, Inc. filed an 8-K disclosing two main actions: a second amendment to CEO Andrew C. Florance’s employment agreement (effective January 1, 2026) and adoption of a company Executive Severance Plan. The amendment removes Section 22 (Special Reimbursement), eliminating a legacy tax gross-up entitlement related to IRC Sections 280G and 4999 that had been in Mr. Florance’s agreement since April 1998.
• The company also issued a press release on January 7, 2026 (attached as Exhibit 99.1) that provided full-year 2026 financial outlook and medium-term targets, announced a new $1.5 billion share repurchase program, and introduced a new executive compensation program responsive to stockholder feedback.

Key Details

• CEO: Andrew C. Florance; amendment dated/entered into in early January 2026 and effective January 1, 2026.
• Removed benefit: deletion of the legacy tax gross-up (Section 22) tied to Sections 280G and 4999 of the Internal Revenue Code.
• Severance Plan: adopted January 7, 2026; covers executives at Vice President level or above (as designated by the plan administrator) and provides customary severance on involuntary termination (subject to release): base salary multiplied by a severance multiplier, earned unpaid bonus, subsidized COBRA coverage, pro‑rated or full-year bonus treatment (with higher protections during a change in control period), and partial or full equity vesting acceleration (subject to performance for performance awards).
• Capital allocation: announced $1.5 billion new share repurchase program in the January 7 press release.

Why It Matters

• Governance/payroll: Removing the long-standing tax gross-up from the CEO’s contract eliminates a legacy perk that could reduce future excise-tax-related payments to Mr. Florance and aligns the CEO’s package with more modern executive-pay practices.
• Clarity on severance exposure: The new Executive Severance Plan formalizes severance terms (who’s covered and what benefits apply), which can increase transparency around potential future severance costs for investors but does not itself create duplicative protections.
• Capital return and guidance: The $1.5 billion repurchase program and the company’s published 2026 financial outlook and targets are material to shareholders because they affect share count, capital allocation, and expectations for company performance.