CarMax Inc. EVP Diane Cafritz to Depart; Severance Amended, Consulting Deal

What Happened

• CarMax, Inc. announced on July 31, 2026 (filed via Form 8-K) that Diane L. Cafritz, Executive Vice President and Chief Innovation and People Officer, will leave the company effective December 31, 2026.
• The company and Ms. Cafritz amended her existing severance agreement and entered a consulting agreement. The amendment changes the severance payout formula and the consulting contract covers Jan 1–June 30, 2027.

Key Details

• Departure date: December 31, 2026.
• Severance amendment: previously Section 7.3 provided a severance equal to 1.5 × (annual base salary + target annual bonus). The amendment removes the "target bonus" element from that 1.5× calculation; instead Ms. Cafritz will be eligible to receive her full-year actual fiscal 2027 annual bonus as determined under CarMax’s Annual Performance-Based Bonus Plan.
• Consulting agreement: Ms. Cafritz will provide consulting services from January 1, 2027 through June 30, 2027 (six months) for a total payment equal to half of her current annual base salary, which aggregates to $360,500.
• Restrictive covenants: the consulting agreement extends the non-solicitation and non-competition covenants by an additional six months, so those covenants will expire two and a half years from her effective departure date.

Why It Matters

• This is a material executive change in CarMax’s senior leadership (Chief Innovation and People Officer), and the company has structured a transition that includes both amended severance terms and paid consulting to support handoff.
• The amendment alters the severance composition (lowering the 1.5× multiplier base by removing the target bonus but preserving payment of the actual FY2027 bonus), and the consulting fee ($360,500) and extended non-compete may affect near-term cash outflows and governance/competition considerations.
• Investors should note the timing and structure of the payments and the extended restrictive covenants, which limit Ms. Cafritz’s ability to compete or solicit for 2.5 years after departure; the filing includes the amendment and consulting agreement as exhibits.