DEF 14A of Lithia Motors Inc
Filed Mar 11, 2025 · FY20240001023128-25-000034
Director and Nominee Biographies
Director and Nominee Biographies
Cassandra M. McKinney
Cassandra M. McKinney Cassandra M. McKinney has spent the past 30 years as a senior executive with prominent banking institutions. She is currently EVP, Retail Bank for Comerica Bank, a position she has served in since April 2020, and a member of Comerica’s Management Executive Committee where she is responsible for the company’s Consumer and Small Business banking segment. Prior to this role, Ms. McKinney served as SVP, Director Retail Bank Product and Operations Group for Comerica from 2016 to 2020. Prior to working in the banking sector, Ms. McKinney spent 11 years with IBM (NYSE: IBM) in technology information systems and sales and service management. Ms. McKinney also serves as the Director and on the Education Committee for the Consumer Banking Association, and is a member of the Executive Leadership Counsel and of The Links Incorporated. She further holds Bachelor’s Degrees in Chemical Engineering from Columbia University and Chemistry from Dillard University. Ms. McKinney joined our Board in July of 2024, and serves on both our Audit and Compensation committees. Ms. McKinney's brings to our Board her executive experience in banking, accounting, financial reporting, strategy, innovation, retail and value creation.
Shauna F. McIntyre
Shauna F. McIntyre Shauna F. McIntyre has spent the majority of her 30-year career leading and scaling technology-driven businesses at the intersection of industrial automation, energy, and mobility and is a three-time CEO with experience revitalizing companies for growth. Most recently, she served as Deputy CEO of Northvolt North America from August 2024 to November 2024, and CEO of Cuberg, Northvolt’s advanced energy storage subsidiary, from February 2024 to August 2024. Ms. McIntyre ran an advisory practice to private equity and other firms from June 2022 to February 2024. She also restructured operations for Electric Last Mile Solutions (NASDAQ: ELMS) while serving as their interim CEO from February 2022 to June 2022, navigating the company through its bankruptcy process. Prior, she scaled Sense Photonics technology business to a successful exit as their CEO from April 2020 until October 2021. Before becoming a CEO, Ms. McIntyre worked across industrial, automotive, and Silicon Valley tech sectors, including as the program lead for Google’s automotive services from May 2018 to April 2020 and as Vice President, of Commercial Vehicle Platforms at Honeywell. Ms. McIntyre holds an M.B.A. from Harvard Business School and an M.S. and B.S in Mechanical Engineering from University of California, Berkeley and the University of California, Los Angeles, respectively.
Board of Directors
Board of Directors Our Bylaws provide for not fewer than five and not more than nine directors. Our Board of Directors has the discretion to set the size of our board from time to time. Our Board of Directors has set the number of directors at eight. In connection with Mr. Robino’s term expiring at the 2025 Annual Meeting of Shareholders, the Board intends to reduce its size from eight to seven members. There is no requirement that directors attend our Annual Meeting of Shareholders, but directors are encouraged to do so. Our Board of Directors held fifteen meetings in 2024. Each incumbent director attended at least 80% of all meetings of the Board and of the Board committees on which the director served. All of our directors then in office attended our 2024 Annual Meeting of Shareholders.
Board of Directors
Board of Directors •Enterprise Risk Management •Cybersecurity •Policies, practices and contributions regarding the environment, sustainability and social issues.
Compensation of Directors
Compensation of Directors
Non-Employee Director Compensation
Non-Employee Director Compensation Our directors serve from election at each Annual Meeting of Shareholders until the following annual meeting or until the director’s successor is elected and qualified. The Compensation Committee annually reviews non-employee director compensation and recommends any applicable changes to our Board of Directors. The Compensation Committee engages independent consultants to review the market competitiveness of the compensation paid to the non-employee directors compared to Company peers. The Compensation Committee engaged Pay Governance in 2024 to help review and assess non-employee director compensation for the 2024-2025 Board service year. Pay Governance recommended, and the Board of Directors approved, changes to the director compensation program to retain competitive positioning for the 2024-2025 Board service year. The changes include an increase to the cash retainer amounts and equity grants, as set forth below and places the compensation at the median compared to Company peers, which are the same companies in the peer group used for executive compensation comparisons. The changes in the director compensation program are effective for the 2024-2025 Board service year. Accordingly, the actual compensation paid to a non- employee director in the 2024 calendar year is earned under two separate compensation programs. Except for Sidney B. DeBoer, directors who are employees of the Company are not compensated separately for their service as directors. As noted in the Non- Employee Director Compensation Table, for his services as a director, Sidney B. DeBoer receives the same compensation, in the same form, as the Company pays to its non-employee directors. Separately, Sidney B. DeBoer receives payments for his prior services rendered as an employee that are described below under "Certain Relationships and Transactions with Related Persons.” on page 85. Executive officers of the Company do not recommend or determine non-employee director compensation. Our non- employee directors are Mses. Loretz-Congdon, McIntyre and McKinney and Messrs. Lentz, Miramontes and Robino.
Non-Employee Director Compensation
| Lithia Motors, Inc. 2025 Proxy Statement | 03: Corporate Governance | 27 |
Non-Employee Director Compensation
We pay a majority of our non-employee directors’ compensation as equity awards. The Compensation Committee believes that paying a majority of the annual compensation in equity provides non-employee directors with a vested interest in our long-term financial success and aligns their interests with those of our shareholders. The compensation structure for our non-employee directors for the 2024-2025 service year was as follows: •$100,000 cash (no increase from the 2023-2024 calendar year) plus an additional $25,000 cash to each director for each committee chair position the director holds and $35,000 cash ($5,000 increase from the 2023-2024 calendar year) to each director who serves as Lead Independent Director or as chairman of the Board. In each case, cash amounts are paid in 12 monthly installments over the service period. •An award for a number of restricted stock units ("RSUs"), which are settled in shares of our common stock, with a value of $195,000 ($15,000 increase from the 2023-2024 board service year). The number of RSUs awarded is based on the average closing share price for the 20 trading days prior to the award grant date. •RSU awards to our non-employee directors are granted immediately after our annual shareholder meeting and vest over one year, with 25% vesting on the first business day of the month after each regularly scheduled quarterly meeting of our Board of Directors if the director continues to serve on that day. All equity grants to non-employee directors are subject to our stock ownership policy. See "Non-Employee Director Stock Ownership Policy; Hedging and Pledging Restrictions” below.
2024 Director Compensation
2024 Director Compensation
Non-Employee Director Compensation Table
Non-Employee Director Compensation Table The following table summarizes compensation paid to non-employee directors and to our Chairman during calendar year 2024, which amounts represent the 2024 portion of both the 2023-2024 Board term and the 2024-2025 Board term:
Non-Employee Director Compensation Table
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total Compensation | | Kenneth E. Roberts (4) | $33,333 | $0 | $33,333 | | Susan O. Cain (4) | $41,667 | $0 | $41,667 | | Sidney B. DeBoer (3) | $160,000 | $183,100 | $343,100 | | James E. Lentz | $100,000 | $183,100 | $283,100 | | Stacy C. Loretz-Congdon | $100,000 | $183,100 | $283,100 | | Shauna F. McIntyre | $116,667 | $183,100 | $299,767 | | Cassandra M. McKinney (5) | $50,000 | $158,210 | $208,210 | | Louis P. Miramontes | $125,000 | $183,100 | $308,100 | | David J. Robino | $160,000 | $183,100 | $343,100 |
Non-Employee Director Compensation Table
(1) The fees reflected in the column "Fees Earned or Paid in Cash” in the above table are the actual fees earned in calendar year 2024 (2) The amounts set forth in this column reflect the grant date fair value of all awards granted in 2024 calculated in accordance with FASB ASC Topic 718 and excluding the effects of any forfeitures. (See Note 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for the valuation and assumptions and other information related to our stock awards). (3) This amount reflects the fees the Board has agreed to pay Mr. DeBoer for his service as a director under his Director Service Agreement, and does not include the amounts paid to Mr. DeBoer under his September 14, 2015 Transition Agreement or otherwise, which are described under "Certain Relationships and Related Transactions and Director Independence” on page 85. (4) Ms. Cain and Mr. Roberts's service on the Board ended at our 2024 Annual Shareholder Meeting and therefore they did not receive any fees for the 2024-2025 Board term. (5) Ms. McKinney joined our Board effective July 1, 2024 and therefore received a pro-rata portion of the 2024-2025 Board term fees and equity awards.
Non-Employee Director Compensation Table
| Lithia Motors, Inc. 2025 Proxy Statement | 03: Corporate Governance | 28 |
Non-Employee Director Compensation Table
The following table sets forth all stock units held by each non-employee director as of December 31, 2024. Ms. Susan Cain and Mr. Kenneth Roberts's service on the Board ended at our 2024 Annual Shareholder Meeting and therefore they did not hold any unvested stock awards as of December 31, 2024:
Non-Employee Director Compensation Table
| Name | Unvested Stock Awards (#) | | Sidney B. DeBoer | 176 | | James E. Lentz | 176 | | Stacy C. Loretz-Congdon | 176 | | Shauna F. McIntyre | 176 | | Cassandra M. McKinney | 212 | | Louis P. Miramontes | 176 | | David J. Robino | 176 |
06 Compensation Tables
| 2024 Short-Term Incentive Plan | | | | | Weighting | Performance Metric | Attainment | | | | Relative Revenue Growth | Peer Rank 1st | Payout 200% | | | Relative Net Income Growth | Peer Rank 13th | Payout 70% | | | Corporate Responsibility & Strategy | Achievement Above Target | Payout 150% | | | | Total Payout: | 130% |
2024 Short-Term Incentive
2024 Short-Term Incentive
/ 3rd in peers
/ 3rd in peers As shown below, 2024 was a year of strong execution and progress in our operational plan. In 2024, we achieved record revenue, Driveway Finance achieved profitability, and we streamlined our cost structure, despite headwinds created by the continued normalization of profits per unit, and made progress on our corporate responsibility and strategic initiatives. These achievements resulted in our cash-based 2024 short-term incentive paying out at 130% of target. Because we began issuing performance-based restricted stock units (PSUs) using our new 3-year performance period in 2023, no PSUs completed their performance period in 2024. During the course of the year, we received feedback from proxy advisors, and our Lead Independent Director and the Chair of our Compensation Committee engaged with our key investors regarding our compensation plan. Input from these engagement efforts resulted in improvements to our new compensation program as first deployed in 2023.
2024 Long-Term Incentive
2024 Long-Term Incentive As discussed further in Long Term Incentive Plan – 2024 PSUs, below, the Compensation Committee did not increase our CEO’s target annual long-term incentive in 2024 and actively managed the long-term incentive design to more closely align the target and reportable grant date values of our named executive officers' PSUs. In response to shareholder feedback, we also replaced relative net income growth with relative EPS growth in our 2024 PSUs, which will vest and pay out, subject to performance, after the end of their performance period on December 31, 2026. Because we began issuing PSUs using our new 3-year performance period in 2023, no PSUs completed their performance period in 2024.
2025 Compensation
2025 Compensation The highlights of our 2025 compensation plan are as follows: •Our 2025 incentive structure remains focused on long-term performance equity that vests based on our relative revenue growth and EPS growth, with a relative TSR modifier. Our 2025 short-term plan also remains consistent with 2024, emphasizing net income and revenue growth, with a corporate responsibility and strategy component. •Our CEO’s base salary and target cash and equity incentive compensation opportunity did not increase for 2025. As a result of the Compensation Committee’s management of the compensation program, the reportable grant-date accounting value of our CEO’s 2025 PSUs will be less than the reportable grant-date value of our CEOs 2024 PSUs. •Starting in 2025, in light of increased public awareness of CEO safety, we began allowing our CEO and certain other employees to use our corporate aircraft arrangements for personal travel subject to annual limits set by the Compensation Committee, as described in the Perquisites section below.
2025 Compensation
| RSUs | PSUs | | •Vesting Period: annual installments over three years | •Performance Period: 2024-2026 •Metrics: ◦Relative Revenue Growth (40%) ◦Relative EPS Growth (60%) ◦Relative TSR Modifier (up to +/- 35%) s |
2024 Shareholder Engagement
| What We Do | | | ✓ | Align pay and performance, with significant percentages of target total direct compensation (TDC) based on performance or at risk (91% for the CEO and 79% for the other NEOs) | | ✓ | Rigorous financial, strategic and relative performance goals, including relative TSR, with audited attainment determinations | | ✓ | 3-year performance periods on long-term incentives | | ✓ | Meaningful stock ownership guidelines for directors and executives | | ✓ | Clawback policies on cash incentives and stock awards due to financial restatement or misconduct resulting in reputational harm | | ✓ | Double-trigger change in control provisions | | ✓ | Entirely independent Compensation Committee | | ✓ | Independent compensation consultant | | ✓ | Annual compensation program and policies risk assessment | | ✓ | Ability to exercise negative discretion on earned bonus amounts |
Total Contacted >75%*
| What We Heard | What We Did | | CEO Pay | No Change to CEO Target Base and Incentive Pay in 2024 | | Proxy advisor firms commented that CEO pay increased between 2022 and 2023, and was too high. | Based on his positioning relative to similarly situated CEOs of peers, company performance and investor feedback, we did not increase our CEO's base salary and target cash and equity incentive compensation in 2024. Further, the reportable value of our CEO's equity compensation as shown in the summary compensation table decreased in 2024 due to the Compensation Committee's active management of the long-term incentive program, as discussed in Long-Term Incentive Plan - 2024 PSUs, below. | | Metric Selection/Overlap | Increased Metric Alignment with Strategic Plan and Majority Differentiated Metrics | | Shareholders representing a significant percentage of our outstanding shares asked that our short- and long-term metrics align with our strategic plan, which emphasizes revenue and EPS, while proxy advisors preferred that we minimize overlap between the LTIP and STIP plan metrics. | Our 2024 LTIP and STIP core metrics, as approved at the beginning of 2024, were relative revenue and relative net income. Upon hearing feedback from our investors stressing the importance of incorporating EPS into our plans, and to differentiate STIP and LTIP metrics wherever prudent, we amended our 2024 PSUs in May of 2024 to replace the relative net income metric with relative EPS, as further discussed in Long-Term Incentive Plan - 2024 PSUs, below. Following this change, core metrics weighted at 60% of our STIP and LTIP, respectively, are non-overlapping. Revenue (weighted at 40% for both plans) is our only overlapping metric between STIP and LTIP because of its prime importance as a strategic goal for pay delivery in the short and long-term plan. | | Pay Equity | Flat YOY CEO Pay and Merit Based increased for Other NEOs in 2024 | | One proxy advisor suggested pay equity between the CEO and other named executive officers should improve. | 2024 was a year of transition for our executive team as Adam Chamberlain was elevated to the role of EVP, Chief Operating Officer. We expect pay equity to continue to improve as this transition matures, particularly in so far as we maintained CEO target compensation in 2024 and have continued with appropriate and merit-based compensation increases for our other named executive officers. |
Target Compensation By Component
Target Compensation By Component ■ Long-Term Incentive ■ Performance-Based RSUs ■ Service-Based RSUs ■ Short-Term Incentive ■ Base Salary ■ Other
Target Compensation By Component
| | | Compensation Component | Description | | | Annual | Base Salary | A competitive base income set to attract talent and promote long-term retention. Lithia believes that as an employee moves into higher level positions in the Company, base pay should become a smaller component of overall TDC. | | Performance Based | | Short-Term Incentive | An annual performance-based cash incentive which ties a significant portion of our executives annual cash to growth in revenue and profitability, and achievement of our corporate responsibility and strategy goals. | | | Long-Term | Long-Term Incentive | A long-term equity-based program that emphasizes performance-vesting restricted stock units that incorporate relative financial metrics and a relative TSR modifier, with a minority weighting on service-vesting restricted stock. Performance awards vest only after a 3-year performance period. | | | Other | Retirement | A non-qualified deferred compensation plan with annual discretionary contributions that provides key employees funds for retirement and supports succession planning. Supplemental Executive Retirement Plan contributions promote retention by using longer-term vesting periods. Participants may choose to defer up to 50% of their base salary and 100% of their bonus compensation. | | | | Perquisites | Perquisites are limited. |
Base Salary
| | | Weighting of Performance Factors | | | | Named Executive Officer | Target Short-Term Incentive (% of Salary) | Relative Revenue Growth | Relative Net income Growth | Corporate Responsibility & Strategy | | Bryan B. DeBoer | 150% | | | | | Tina H. Miller | 87% | | | | | Adam A. Chamberlain | 113% | | | | | Christopher S. Holzshu | 120% | | | | | George N. Hines | 69% | | | |
Short-Term Incentive Plan
Short-Term Incentive Plan
How our 2024 Short-Term Incentive Plan Works
How our 2024 Short-Term Incentive Plan Works Our 2024 short-term incentive plan compensated executives for achieving annual performance goals in each of the above criteria. Each named executive officer’s target cash bonus potential was based on a market competitive percentage of base salary ranging from approximately 67% to 150%, which was paid out according to the attainment of pre-approved performance goals. Each executive’s target bonus, expressed as a percentage of salary, and their weighted performance goals, were as follows:
How our 2024 Short-Term Incentive Plan Works
| Lithia Motors, Inc. 2025 Proxy Statement | 05: Compensation Discussion and Analysis (CD&A) | 40 |
How our 2024 Short-Term Incentive Plan Works
| 2024 Short-Term Incentive Plan - Relative Financial Metrics | | | | | Weighting | Performance Metric | Attainment | | | | Relative Revenue Growth | Peer Rank 1st | Payout 200% | | | Relative Net Income Growth | Peer Rank 13th | Payout 70% |
How our 2024 Short-Term Incentive Plan Works
40% 50%
Establishment of 2024 Targets and Actual Cash Payouts
Establishment of 2024 Targets and Actual Cash Payouts We believe using metrics that promote high performance and profitable growth are critical. These performance criteria are approved annually by the Compensation Committee and are designed to reward both short-term and long-term value creation, support growth in profitability, maximize our capital deployment strategies and increase share value. Management provides the Compensation Committee with a quarterly review of the short-term incentive plan attainment pacing. If we do not achieve threshold performance, then no short-term incentive is earned or paid. The Compensation Committee has discretion to reduce awards under the short-term incentive plan. For 2024, our relative financial metrics and corporate responsibility and strategy goals and attainment were as follows: •Relative Financial Metrics: 90% of our short-term incentive plan payouts depended on our financial performance, all which are relative to our expanded retail peer group. Specifically, 40% was based on our revenue growth rank, and 50% was based on our net income growth rank, as shown below. *Our and peer company growth under both metrics is measured as the sum of that applicable metric for the four quarters reported prior to December 15, 2024, divided by the sum of the same metric for the immediately preceding four quarters. In 2024, relative financial metric results and corresponding payout percentages relative to target are shown below:
Establishment of 2024 Targets and Actual Cash Payouts
| Revenue Growth Rank | Attainment Percentage | Net Income Growth Rank | Attainment Percentage | | 1st to 5th | 200% | 1st to 5th | 200% | | 6th | 180% | 6th | 180% | | 7th | 160% | 7th | 160% | | 8th | 140% | 8th | 140% | | 9th | 120% | 9th | 120% | | 10th | 100% | 10th | 100% | | 11th | 100% | 11th | 100% | | 12th | 80% | 12th | 80% | | 13th | 70% | 13th | 70% | | 14th | 60% | 14th | 60% | | 15th | 50% | 15th | 50% | | 16th to 20th | 0% | 16th to 20th | 0% |
Establishment of 2024 Targets and Actual Cash Payouts
| Lithia Motors, Inc. 2025 Proxy Statement | 05: Compensation Discussion and Analysis (CD&A) | 41 |
Establishment of 2024 Targets and Actual Cash Payouts
Corporate Responsibility and Strategy Objectives: 10% of our 2024 short-term incentive plan was based on progress toward our corporate responsibility and strategy goals. These goals are rigorous and intended to focus management on advancing our initiatives described in the Corporate Responsibility section of this Annual Proxy Statement, above. Each year, management determines the extent to which these objectives are accomplished, which is then presented to the Compensation Committee for approval. Payout percentages are as follows:
Establishment of 2024 Targets and Actual Cash Payouts
| Objectives | % of Payout | | Significantly Above Target | 200% | | Above Target | 150% | | Target | 100% | | Below Target | 50% |
Establishment of 2024 Targets and Actual Cash Payouts
We successfully executed on our corporate responsibility objectives this year, as shown below. Accordingly, these results, as approved, warranted a payout of this portion of each executive’s 2024 short-term incentive plan award schedule at 150% based on achievement of our goals, including:
Establishment of 2024 Targets and Actual Cash Payouts
| Corporate Responsibility and GreenCars | Strategic | | •7% our new vehicle sales are electric vehicles. •Over 11 million unique visitors to GreenCars.com (48% increase year-over-year). •~18,000 sales influenced by GreenCars (42% increase year-over- year). •2024 energy efficiency projects will save an estimated an estimated 1.7-million-kilowatt hours per year. •6 of the 16 ENERGY STAR certified dealerships in the country are within the LAD network. The most of any auto retailer. •Based on the current renewable energy project pipeline, Lithia is on pace to have 25 on-site solar systems across our network saving an estimated 7-million-kilowatt hours and $1 million in expense per year. | •Driveway operating gross profit increased +221% year-over-year. •Driveway.com has received a 4.4 overall Google rating in 2024. •Grew online inventory to ~62,000 by the end of Q4 (a 20% increase year-over-year) – strengthening customer optionality within our network. •SELL Title Processing time has improved 36%. •DMV Processing Time has improved 21% year-over-year. •Driveway achieved a significant number of influenced sales for the Store Network. •Driveway operational plan is ahead of schedule with significantly reduced costs relative to 2023. |
2024 Actual Bonus
2024 Actual Bonus Based on 2024 attainment of these goals, the 2024 short-term incentive plan payouts were as follows:
2024 Actual Bonus
| Named Executive Officers | Target Short-Term Incentive Plan as % of Base Salary | Actual 2024 Payout as % of Target | Actual 2024 Payout ($) | | Bryan B. DeBoer | 150% | 130.0% | 2,535,000 | | Tina H. Miller | 87% | 130.0% | 845,000 | | Christopher S. Holzshu | 120% | 130.0% | 1,404,000 | | Adam A. Chamberlain | 113% | 130.0% | 975,000 | | George N. Hines | 69% | 130.0% | 572,000 |
2024 Actual Bonus
| Lithia Motors, Inc. 2025 Proxy Statement | 05: Compensation Discussion and Analysis (CD&A) | 42 |
Long-Term Incentive Plan
Long-Term Incentive Plan We issue awards under our long-term incentive plan primarily in the form of PSUs, with a service-based RSU component. We believe this PSU and RSU mix better aligns our executive team with our shareholders compared to a stock option-based plan because PSUs are directly tied to performance outcomes and both PSUs and RSUs experience the upside as well as the downside of stock price changes. This structure leverages Lithia’s public company status to reward employees for achieving financial performance that exceeds our peers, drives our stock price upward, and remains tied to the fundamental profitability of our business. In addition, relative metrics informed by our operational goals and financials objectives link pay outcomes to the attainment of market leading results.
Pay Versus Performance table, are designed to create strong shareholder alignment and
Pay Versus Performance table, are designed to create strong shareholder alignment and appropriate holding power to support our employee retention and stock ownership goals.
How our 2024 Long-Term Incentive Plan Works
How our 2024 Long-Term Incentive Plan Works In 2024, the Compensation Committee approved long-term incentive awards for our executives consisting of PSUs and RSUs, as set forth in the table below. The Compensation Committee approved the PSUs and RSUs awarded to NEOs and other key employees after considering, among other things, peer comparisons, Company financial performance and absolute and relative total shareholder return, awards granted in prior years, the percentage of total compensation and targets determined based upon the Company’s Board approved business plan, and the recommendation of our independent compensation consultant. 25% 75% 2024
LTI Target
LTI Target
Value Split
Value Split PSUs (3yr performance period) RSUs (annual service-vesting over 3yrs) Target v. Disclosed Accounting Value: In addition, the Compensation Committee adjusted our 2024 long-term incentive plan to ensure a greater degree of alignment between target grant date values and the reportable grant date accounting values which appear in the Summary Compensation Table, below. Specifically, as discussed in last year’s Annual Shareholder Proxy Statement, the grant date accounting values of our executives’ 2023 equity awards exceeded the target amounts set by the Compensation Committee due to the timing of those grants, a sudden increase in our stock price immediately pre-grant, our normal practice of determining the number of shares underlying each award using the 40-day average closing stock price on the date of grant, and the introduction of a Monte Carlo simulation into the valuation of our PSUs, which takes into account outperforming pre-grant stock price growth.
Value Split
| Named Executive Officer | 2024 Target PSU Value ($) | 2024 Target RSU Value ($) | 2024 Target Total LTI Value ($) | | Bryan B. DeBoer | 8,062,500 | 2,687,500 | 10,750,000 | | Tina H. Miller | 1,500,000 | 500,000 | 2,000,000 | | Christopher S. Holzshu | 3,712,500 | 1,237,500 | 4,950,000 | | Adam A. Chamberlain | 1,000,000 | 333,333 | 1,333,333 | | George N. Hines | 750,000 | 250,000 | 1,000,000 |
Value Split
Mindful of this, in 2024, the Compensation Committee returned to its normal early-January grant timeline. Nonetheless, due to an unexpected substantial increase in the Company’s stock price in December 2023, the expected grant date accounting value of our CEO’s 2024 equity was forecasted to be materially in excess of target. To manage this, our Compensation Committee, in conjunction with its advisors, reviewed various updated designs and modeled several alternatives to manage that variance. Taking that feedback into account, the Compensation Committee decided to shorten the averaging period used for measuring relative TSR, and for determining the number of shares granted, from 40 days to 20 days for our executive officers. This action was taken in advance of the 2024 awards’ grant date and, as a result, the grant date value for our executives’ equity awards is more in line with target and has decreased year-over-year. Retirement: In the event of the retirement of an NEO or, in certain cases, termination of employment other than for cause, and to the extent the NEO (i) meets certain retirement eligibility criteria described in the award agreement (which criteria differ for individual executives and award years but require, at a minimum, that an individual’s combined age and service must equal at least 65) and (ii) complies with certain post-retirement assistance requirements and covenants, all PSUs and RSUs will continue to vest as if the executive continue their employment with the Company (i.e., subject to any performance requirements and in accord with any service-based vesting schedule). Lithia believes that this retirement vesting feature is appropriate and motivating because it provides protection to long-tenured NEOs considering the vesting and performance period and is a prevalent practice among other companies within the Peer Group. Further, PSUs will be forfeited and provide no value to its holder to the extent a NEO violates specific post-retirement covenants.
2024 PSUs
2024 PSUs The 2024 PSUs pay out formulaically after the completion of a 3-year performance period based on relative financial metrics and a relative TSR modifier, as follows:
2024 PSU Design Overview
2024 PSU Design Overview •Performance Period: 2024-2026 •Metric: ◦Relative Revenue Growth (40%) ◦Relative EPS Growth (60%) ◦Relative TSR modifier (up to +/- 35%) •Incentive: drive high-quality and profitable revenue that outperforms our peers; link pay outcomes to stock performance. As discussed in our 2024 Annual Shareholder Proxy Statement, the 2024 PSUs as originally approved would have vested based on our revenue growth and net income growth, in each case relative to our expanded retail peer group over the 3-year performance period, with a relative TSR modifier that can increase or decrease payouts by up to 35%. However, we heard from several of our large shareholders that they believed our incentive compensation should focus on EPS and that we should replace net income with EPS in the 2024 PSUs in so far as the Company’s long-term strategy is in part EPS-based. In addition, shareholder advisors re-affirmed their preference for including non-overlapping metrics in the Company’s short-and long- term incentive plan. After considering this investor feedback, and after reviewing best compensation practices, the Company changed the relative profitability metric in our 2024 PSUs from net income to EPS in May of 2024 so that the Company’s 2024 long-term incentive plan more closely aligns with the Company’s stated EPS-based strategic goals and to minimize metric overlap between our 2024 short- term incentive plan (which utilizes net income) and our 2024 long-term incentive plan (which now incorporate EPS instead of net income). Additional reasons for this change include that it: •was responsive to shareholder feedback, •was made early, within 5 months of grant for awards that utilize a 36-month performance period, and at a time when outcomes under the old and new formulae were substantially uncertain,
2024 PSU Design Overview
| Lithia Motors, Inc. 2025 Proxy Statement | 05: Compensation Discussion and Analysis (CD&A) | 44 |
2024 PSU Design Overview
•was not intended to increase payouts, and included an express preservation of the Compensation Committee’s authority to manage any resulting and unintended payout increases, •resulted in no incremental accounting or compensation charge, and •did not involve a change in the 2024 PSU’s goal rigor (i.e., the EPS goals, described below, use the same payout schedule – based on our ranked performance relative to peers – as the net income component originally included in the 2024 PSUs). 2024 PSU Payout Formula: The 2024 PSUs use a performance period that ends on December 31, 2026 and will pay out in 2027 to the extent the Compensation Committee certifies attainment based on the following formula:
[ (Relative Revenue Attainment * 40%) + (Relative EPS Growth Attainment * 60%) ] * Relative TSR Modifier
[ (Relative Revenue Attainment * 40%) + (Relative EPS Growth Attainment * 60%) ] * Relative TSR Modifier
[ (Relative Revenue Attainment * 40%) + (Relative EPS Growth Attainment * 60%) ] * Relative TSR Modifier
| Relative Revenue Growth: Attainment under the revenue growth1 component of our PSUs is based on our revenue growth performance ranked against our full Peer Group, as shown below: | | Relative EPS Growth: Attainment under the EPS growth1 component of our PSUs is based on our EPS growth performance ranked against our full Peer Group, as shown below: | | TSR Modifier The attainment percentage determined by our relative revenue growth and relative EPS growth is then multiplied by an adjustment factor determined by our 3-year TSR ranking relative to our full Peer Group, as follows: | | | Revenue Growth Rank | Attainment Percentage | EPS Growth Rank | Adjustment Factor | TSR Growth Rank | Modification Factor | | 1st to 5th | 195% | 1st to 5th | 195% | 1st to 5th | 1 .35 | | 6th | 175% | 6th | 175% | 6th | 1 .30 | | 7th | 160% | 7th | 160% | 7th | 1 .25 | | 8th | 140% | 8th | 140% | 8th | 1 .15 | | 9th | 120% | 9th | 120% | 9th | 1 .10 | | 10th | 100% | 10th | 100% | 10th | 1 .0 | | 11th | 100% | 11th | 100% | 11th | 1 .0 | | 12th | 90% | 12th | 90% | 12th | 0 .90 | | 13th | 85% | 13th | 85% | 13th | 0 .85 | | 14th | 75% | 14th | 75% | 14th | 0 .75 | | 15th | 50% | 15th | 50% | 15th | 0 .70 | | 16th to 20th | 0% | 16th to 20th | 0% | 16th to 20th | 0 .65 |
[ (Relative Revenue Attainment * 40%) + (Relative EPS Growth Attainment * 60%) ] * Relative TSR Modifier
(1)Our relative revenue and EPS growth rank is determined by ranking our 3-year annual growth average for the given metric against the 3-year annual growth average of each company in the Peer Group. This average is determined by averaging each company’s growth rate for the applicable metric for each of the three successive 4-quarter periods reported before December 15, 2026. For this purpose, the applicable metric’s growth rate Is the sum of that applicable metric for a given four quarters period, divided by the sum of the same metric for the immediately preceding four quarters.
[ (Relative Revenue Attainment * 40%) + (Relative EPS Growth Attainment * 60%) ] * Relative TSR Modifier
| Lithia Motors, Inc. 2025 Proxy Statement | 05: Compensation Discussion and Analysis (CD&A) | 45 |
2022 Driveway-Based PSUs
2022 Driveway-Based PSUs In 2022, we awarded PSUs which would potentially vest in three tranches based upon the attainment of Driveway vehicle sales goals. Each tranche of these Driveway PSUs vest on a specific vesting date, subject to the attainment of that tranche’s sales goal If the performance goals for a given tranche are not satisfied by the applicable date, then the portions of PSUs associated with such tranche shall be forfeited without consideration The target for the first tranche was achieved and vested on January 1, 2023. The targets for the second and third tranches were not achieved by the applicable deadlines, and were forfeited.
Peer Group and Benchmarking
Peer Group and Benchmarking In September of 2023, as part of the annual assessment of the peer group used for setting compensation, the Compensation Committee again asked Pay Governance to review the Company’s peer group for appropriateness. Pay Governance reviewed our peer group, taking into account the following criteria:
Peer Group Criteria
Peer Group Criteria •Are broadly representative of Lithia’s key characteristics (e.g., size, profitability, retail, and direct-to-consumer models), •Operate in Lithia’s labor market for executive and director talent, and •When taking in the aggregate, have a Peer Group median revenue, market capitalization, and pre-tax profit that is close to Lithia’s size and scope. With these factors in mind, Pay Governance continued to recommend that our peer group include broader retail companies given the limited number of direct auto retail competitors and the fact that we sell automotive related products and services. After reviewing Pay Governance’s analysis, and given the multifaceted nature of our customers’ retail experience, which is akin to other retail industries, the Compensation Committee approved the continued use of the 2023 peer group for 2024 compensation decisions, as shown below. We believe this peer group continues to reflect the competitive market for talent and performance, particularly given our goal to operate as a premier retailer both within and beyond the automotive retail space.
Peer Group Criteria
| Symbol | Company Name | Symbol | Company Name | | AAP | Advance Auto Parts, Inc. | LKQ | LKQ Corporation | | ABG | Asbury Automotive Group, Inc. | LOW | Lowes Companies, Inc. | | AN | Autonation, Inc. | ORLY | O'Reilly Automotive, Inc. | | AZO | AutoZone, Inc. | PAG | Penske Automotive Group, Inc. | | BBY | Best Buy Co., Inc. | SAH | Sonic Automotive, Inc. | | KMX | CarMax, Inc. | SYY | Sysco Corporation | | DG | Dollar General Corporation | GAP | The Gap, Inc. | | DLTR | Dollar Tree, Inc. | TJX | The TJX Companies, Inc. | | GPC | Genuine Parts Company | TSCO | Tractor Supply Company | | GPI | Group 1 Automotive, Inc. | | |
Peer Group Criteria
| Lithia Motors, Inc. 2025 Proxy Statement | 05: Compensation Discussion and Analysis (CD&A) | 47 |
How We Use the Peer Group
How We Use the Peer Group The positions of our named executive officers were compared to their counterpart positions in our Peer Group, and the compensation levels for comparable positions in the Peer Group were examined for guidance in determining: •base salaries; •cash awards under our short-term incentive plan; and •the amount and mix of equity awards under our long-term incentive plan. The Compensation Committee approves base salaries, short-term incentive plan awards and long-term incentive awards on a case- by-case basis for each named executive officer, taking into account, among other things, individual and company performance, role expertise and experience and the competitive market, advancement potential, recruiting needs, internal equity, retention requirements, unrealized equity gains, succession planning, and best compensation governance practices. The Compensation Committee does not tie individual compensation to specific target percentiles.
How the Compensation Committee Makes Decisions and Policies
How the Compensation Committee Makes Decisions and Policies The Compensation Committee has the final responsibility to approve all matters of compensation and benefits for executive officers, and from time to time it seeks input and recommendations from the CEO and the Human Resources department. The Compensation Committee also meets privately with its independent compensation consultant, and considers the Board’s input and advice, when establishing the CEO’s compensation. Our independent compensation consultant has worked directly with and on behalf of the Compensation Committee to assist the Compensation Committee in satisfying its responsibilities; and does not undertake projects for management, except with the approval of the Compensation Committee chair. The Compensation Committee reports to the Board of Directors on the major items covered at each Compensation Committee meeting. The Compensation Committee assessed the independence of its compensation consultant during 2024 and believes that there are no conflicts of interest. In reaching this conclusion, the Compensation Committee considered applicable SEC rules and regulations and the corresponding New York Stock Exchange independence factors regarding compensation advisor independence. In determining executive compensation, the Compensation Committee also considers, among other factors, the possible tax consequences to Lithia and to its executives. The Compensation Committee may consider the accounting consequences to Lithia of different compensation decisions and the impact on shareholder dilution. However, neither of these factors by themselves will compel particular compensation decisions. The Compensation Committee annually grants equity-based long-term incentive awards to executive officers after the close of the prior year and the review and evaluation of each executive officer’s performance. The Compensation Committee’s policy is to generally grant long-term incentive awards only during open trading windows and to establish grant dates in advance, generally establishing those dates near the beginning of each fiscal year.
Summary Compensation Table
Summary Compensation Table The following table provides certain information concerning compensation for each of our 2024 NEOs.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings(2) | All Other Compensation(4) | Total | | Bryan B. DeBoer President and Chief Executive Officer | 2024 | $1,300,000 | $12,953,359 | $2,535,000 | $— | $7,342 | $16,795,702 | | | 2023 | $1,300,000 | $15,312,692 | $2,666,040 | $— | $7,258 | $19,285,990 | | | 2022 | $1,250,000 | $7,822,865 | $2,045,920 | $— | $6,932 | $11,125,717 | | Tina H. Miller Senior Vice President and Chief Financial Officer | 2024 | $750,000 | $2,410,122 | $845,000 | $— | $76,798 | $4,081,920 | | | 2023 | $750,000 | $2,564,125 | $875,008 | $— | $56,714 | $4,245,847 | | | 2022 | $525,000 | $1,082,879 | $543,448 | $— | $56,387 | $2,207,714 | | Adam A. Chamberlain (3) Executive Vice President and Chief Operating Officer | 2024 | $662,500 | $1,548,518 | $975,000 | $— | $83,237 | $3,269,255 | | Christopher S. Holzshu Executive Vice President | 2024 | $900,000 | $5,964,851 | $1,404,000 | $— | $106,389 | $8,375,240 | | | 2023 | $900,000 | $7,051,236 | $1,476,576 | $— | $106,305 | $9,534,117 | | | 2022 | $800,000 | $3,003,340 | $959,025 | $— | $105,979 | $4,868,344 | | George N. Hines Senior Vice President and Chief Innovation and Technology Officer | 2024 | $640,000 | $1,205,061 | $572,000 | $— | $57,999 | $2,475,060 | | | 2023 | $600,000 | $1,353,357 | $546,880 | $— | $57,915 | $2,558,152 | | | 2022 | $480,000 | $788,463 | $383,610 | $— | $57,589 | $1,709,662 | | (1) | These amounts reflect the grant date fair value for performance and time-vesting RSUs granted in the year, computed in accordance with FASB ASC Topic 718 and excluding any estimated forfeitures. These amounts are not paid to or realized by the executive. If the maximum level of performance were to be achieved for the awards granted in 2024, the grant date value for those awards would be $29,292,294 for Mr. DeBoer, $5,449,896 for Ms. Miller, $13,488,442 for Mr. Holzshu, $3,485,009 for Mr. Chamberlain, and $2,724,948 for Mr. Hines. The fair value of the PSUs was calculated using a Monte Carlo simulation model, assuming (i) a volatility of 41.98%, (ii) remaining performance period of 3.00 years, (iii) a risk-free interest rate of 3.91%, and (iv) a dividend yield of 0.61%. For the PSUs, the attainment levels used in the calculation of the grant date fair value was based on the probable outcomes at the time of grant. For a more detailed discussion of the assumptions used to determine the grant date fair values and other related information, see Notes 1 and 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. | | | | | | | | (2) | In the listed years, our named executive officers did not earn above-market interest on contributions to our Executive Management Non-Qualified Deferred Compensation and SERP. | | | | | | | | (3) | Mr. Chamberlain first became a named executive officer in 2024. | | | | | | | | (4) | All Other Compensation in 2024 consisted of the following: | | | | | | |
Summary Compensation Table
| Name | 401(k) Match | Insurance Premiums (a) | Contributions to Nonqualified Deferred Compensation Plan | Total | | Bryan B. DeBoer | $2,500 | $4,842 | $— | $7,342 | | Tina H. Miller | $2,500 | $4,298 | $70,000 | $76,798 | | Adam A. Chamberlain | $2,500 | $5,737 | $75,000 | $83,237 | | Christopher S. Holzshu | $2,500 | $3,889 | $100,000 | $106,389 | | George N. Hines | $2,500 | $5,499 | $50,000 | $57,999 |
Summary Compensation Table
| (a) Insurance premiums include amounts paid by us on behalf of the executive for short-term disability insurance, long-term disability insurance, long term care insurance and life insurance policies. |
Summary Compensation Table
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Grants of Plan-Based Awards Table for 2024
Grants of Plan-Based Awards Table for 2024
Grants of Plan-Based Awards Table for 2024
| | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards (# of shares) | | | Grant Date Fair Value of Stock and Option Awards ($)(4) | | Name | | Committee Approval | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | Bryan B. DeBoer | 2024 STIP | | (3) | 975,000 | 1,950,000 | 3,900,000 | — | — | — | — | | | 2024 PSU | 01/01/2024 | 01/02/2024(1) | — | — | — | 13,572 | 27,144 | 71,457 | 10,008,536 | | | 2024 RSU | 01/01/2024 | 01/02/2024(2) | — | — | — | — | 9,048 | | 2,944,824 | | Tina H. Miller | 2024 STIP | | (3) | 325,000 | 650,000 | 1,300,000 | — | — | | — | | | 2024 PSU | 01/01/2024 | 01/02/2024(1) | — | — | — | 2,525 | 5,050 | 13,294 | 1,862,036 | | | 2024 RSU | 01/01/2024 | 01/02/2024(2) | — | — | — | — | 1,684 | | 548,086 | | Adam A. Chamberlain | 2024 STIP | | (3) | 375,000 | 750,000 | 1,500,000 | — | | | — | | | 2024 PSU | 01/01/2024 | 01/02/2024(1) | — | — | — | 1,263 | 2,525 | 6,647 | 931,018 | | | 2024 PSU | 07/29/2024 | 08/01/2024 | | | | 484 | 968 | 2,548 | 255,194 | | | 2024 RSU | 01/01/2024 | 01/02/2024(2) | — | — | — | — | 842 | | 274,043 | | | 2024 RSU | 07/29/2024 | 08/01/2024 | | | | | 323 | | 88,263 | | Christopher S. Holzshu | 2024 STIP | | (3) | 540,000 | 1,080,000 | 2,160,000 | — | — | | — | | | 2024 PSU | 01/01/2024 | 01/02/2024(1) | — | — | — | 6,250 | 12,499 | 32,904 | 4,608,631 | | | 2024 RSU | 01/01/2024 | 01/02/2024(2) | — | — | — | — | 4,167 | | 1,356,220 | | George N. Hines | 2024 STIP | | (3) | 220,000 | 440,000 | 880,000 | — | | | — | | | 2024 PSU | 01/01/2024 | 01/02/2024(1) | — | — | — | 1,263 | 2,525 | 6,647 | 931,018 | | | 2024 RSU | 01/01/2024 | 01/02/2024(2) | | | | — | 842 | | 274,043 |
Grants of Plan-Based Awards Table for 2024
| (1) These amounts reflect PSUs which are earned based on our relative revenue growth and relative EPS growth, with a TSR modifier, the material terms of which are further described under “Compensation Discussion and Analysis – 2024 Compensation Program Design & Result - Long-Term Incentive Plan” above. | | (2) These amounts here also reflect time-based RSU's which vest in three equal annual installments over three years. | | (3) The values reflect the threshold, target, and maximum amounts payable under our Short-Term Incentive Plan for the 2024 performance year, as further described in the discussion under "Compensation Discussion and Analysis – 2024 Compensation Program Design & Result - Short-Term Incentive Plan”. The actual amount paid for 2024 is included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. | | (4) These amounts reflect the grant date fair value for awards granted under the 2013 Amended and Restated Stock Incentive Plan. The grant date fair value is computed in accordance with FASB ASC Topic 718 for PSUs and RSUs granted during the applicable year. The attainment level used to calculate the grant date fair value for the performance and time-vesting grants was 100% based on the probable outcome at the time of grant. For a more detailed discussion of the assumptions used to determine the grant date fair value and other related information, see footnote 1 to the Summary Compensation Table, above, and Notes 1 and 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. |
Grants of Plan-Based Awards Table for 2024
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Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End The following table sets forth the outstanding equity awards held by our NEOs as of December 31, 2024:
Outstanding Equity Awards at 2024 Fiscal Year-End
| Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Bryan B. DeBoer | 1/1/2021 | 10,845(4) | 3,876,328 | | — | | | 1/3/2022 | 16,598(5) | 5,932,623 | | — | | | 2/2/2023 | 8,096(5) | 2,893,753 | | | | | 2/2/2023 | | | 79,301(7) | 28,344,556 | | | 1/2/2024 | 9,048(6) | 3,234,027 | | | | | 1/2/2024 | | — | 71,457(8) | 25,540,876 | | Tina H. Miller | 1/1/2021 | 1,049(4) | 374,944 | | — | | | 1/3/2022 | 2,133(5) | 762,398 | | — | | | 2/2/2023 | 1,356(5) | 484,675 | | | | | 2/2/2023 | | — | 13,278(7) | 4,745,956 | | | 1/2/2024 | 1,684(6) | 601,912 | | | | | 1/2/2024 | | — | 13,294(8) | 4,751,674 | | Adam A. Chamberlain | 2/2/2023 | 452(5) | 161,558 | | — | | | 2/2/2023 | | — | 4,428(7) | 1,582,700 | | | 1/2/2024 | 842(6) | 300,956 | | — | | | 1/2/2024 | | — | 6,647(8) | 2,375,837 | | | 8/1/2024 | 323(6) | 115,450 | | — | | | 8/1/2024 | | — | 2,548(8) | 910,732 | | Christopher S. Holzshu | 1/1/2021 | 3,254(4) | 1,163,077 | | — | | | 1/3/2022 | 5,453(5) | 1,949,066 | | — | | | 2/2/2023 | 3,728(5) | 1,332,499 | | — | | | 2/2/2023 | | — | 36,516(7) | 13,051,914 | | | 1/2/2024 | 4,167(6) | 1,489,411 | | | | | 1/2/2024 | | — | 32,904(8) | 11,760,877 | | George N. Hines | 1/1/2021 | 678(4) | 242,338 | | — | | | 1/3/2022 | 1,186(5) | 423,912 | | — | | | 2/2/2023 | 715(5) | 255,562 | | — | | | 2/2/2023 | | — | 7,009(7) | 2,505,227 | | | 1/2/2024 | 842(6) | 300,956 | | | | | 1/2/2024 | | — | 6,647(8) | 2,375,837 | | (1) | All shares are related to restricted stock units subject to time-vesting restrictions. | | | | | | (2) | Assumes a stock price of $357.43, the closing price of our common stock on December 31, 2024. | | | | | | (3) | All shares are related to restricted stock units subject to performance-vesting restrictions. | | | | | | (4) | Vests 100% on January 1, 2025. | | | | | | (5) | Vests 50% on January 1, 2025 and 50% on January 1, 2026. | | | | | | (6) | Vests 33% on January 1, 2025 and 2026 and 34% on January 1, 2027. | | | | | | (7) | PSUs are earned following the completion of their performance period on December 31, 2025, subject to (i) our relative revenue growth (ii) an operating margin governor and (iii) a relative TSR modifier. The number of shares and the value for the PSUs reflects payout at maximum because our performance under the metrics mentioned in the prior sentence for the first and second year of the three-year performance period exceeded target levels. | | | | | | (8) | PSUs are earned following the completion of their performance period on December 31, 2026, subject to (i) our relative revenue growth rank (ii) our EPS growth ranking and (iii) a relative TSR modifier. The number of shares and the value for the PSUs reflects payout at maximum because our performance under the metrics mentioned in the prior sentence for the first year of the three-year performance period exceeded target levels. | | | | |
Outstanding Equity Awards at 2024 Fiscal Year-End
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Stock Vested for 2024
Stock Vested for 2024 The following table summarizes shares acquired on vesting of RSUs during 2024 for each NEO:
Stock Vested for 2024
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | | Bryan B. DeBoer | 36,401 | 11,986,121 | | Tina H. Miller | 3,802 | 1,251,923 | | Adam A. Chamberlain | 223 | 73,429 | | Christopher S. Holzshu | 11,875 | 3,910,200 | | George N. Hines | 2,563 | 843,945 |
Stock Vested for 2024
(1) Equals the value of the shares acquired based on the closing price of our common stock on the vesting date.
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The table below reflects the contributions, earnings, withdrawals and distributions during 2024 and the account balances as of December 31, 2024 for each NEO under our Non-Qualified Deferred Compensation and SERP.
Non-Qualified Deferred Compensation
| Name | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY (2) | Aggregate Earnings in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE (3) | | Bryan B. DeBoer | $666,510 | $— | $473,609 | $— | $9,566,667 | | Tina H. Miller | $— | $70,000 | $33,589 | $— | $670,558 | | Adam A. Chamberlain | $— | $75,000 | $8,112 | $— | $161,950 | | Christopher S. Holzshu | $— | $100,000 | $83,867 | $— | $1,674,305 | | George N. Hines | $— | $50,000 | $14,578 | $— | $291,024 |
Non-Qualified Deferred Compensation
| (1) The executive contribution amounts in this column are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. | | (2) The registrant contribution amounts in this column are included in the All Other Compensation columns of the Summary Compensation Table above. | | (3) The following amounts included in this column for the Non-Qualified Deferred Compensation and SERP were reported in the Summary Compensation Table as compensation for fiscal 2024 or a prior fiscal year: Mr. DeBoer, $7,456,269; Ms. Miller, $511,533; Mr. Chamberlain, $75,000; Mr. Holzshu, $1,298,428; and Mr. Hines, $203,016. |
Non-Qualified Deferred Compensation
Our Non-Qualified Deferred Compensation and SERP permits us to contribute awards for participants that will have deferred payout. Under this plan, senior executives may defer receipt of portions of their compensation (up to 50% of base salary, and 100% of variable compensation) in any given year, with all deferred amounts earning interest at an annual rate set by the Compensation Committee.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination of Employment
Potential Payments Upon Termination of Employment In certain circumstances, such as a termination in connection with a change in control or the retirement, death or disability of our senior executive officers, it is appropriate to provide post-termination benefits. The specific situations in which our executive officers are eligible for post-termination benefits are discussed in more detail below, but in summary: •We only offer traditional severance upon a “double trigger”, namely upon a qualifying involuntary termination following a change in control. These double trigger benefits limit cash severance to 2x the executive’s base salary and bonus, and offer acceleration of outstanding equity. •We are required to submit these severance benefits to shareholders for a non-binding vote prior to payment (as part of a so- called “Say on Golden Parachute” vote). We do not offer equity acceleration or pay any severance apart from a termination in connection with a change in control and such a vote.
Potential Payments Upon Termination of Employment
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Potential Payments Upon Termination of Employment
•Except for the double trigger severance described above, Lithia’s only other post-termination benefits are not related to severance, are not overly rich, do not include equity acceleration, and are paid only in connection with an executive’s death, disability (which are akin and substitutes for life insurance or long-term disability benefits, and modest in amount) or a qualified retirement. These additional post-termination arrangements are limited to providing continued vesting of equity (i.e., annual vesting, subject to performance for PSUs, and subject to compliance with service and/or restrictive covenant requirements) and continued vesting of SERP contributions, except that SERP contributions also vest upon a death or disability. Our SERP is a cash program where the value of contributions accrue interest at a reasonable rate determined annually by our Compensation Committee and is not connected to the valuation of our stock price. •Besides the required “say on golden parachute” vote, shareholders have the opportunity to annually express their opinion of our executive compensation programs, including these post-termination payments, in our annual “say-on-pay” vote and through our regular shareholder engagement process. In 2024, we engaged with shareholders representing over 75% of our outstanding shares. No such shareholders raised any concern regarding our severance arrangements.
Potential Payments Upon Change in Control
Potential Payments Upon Change in Control
Non-Qualified Deferred Compensation and SERP Plan
Non-Qualified Deferred Compensation and SERP Plan Under our Non-Qualified Deferred Compensation and SERP Plan, discretionary benefits contributed to a participant’s account by us fully vest upon a change in control, as defined under Code Section 409A or Treasury Regulations issued thereunder, even if the NEO’s employment is not terminated. Vested discretionary benefits are paid to a participant in an annual installment method over ten years.
Non-Qualified Deferred Compensation and SERP Plan
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Quantitative Disclosure of Payments Upon Termination or Change in Control
Quantitative Disclosure of Payments Upon Termination or Change in Control The following table provides quantitative disclosure of estimated payouts to our continuing NEOs assuming a change in control and associated triggering events occurred under the Change in Control Agreements on December 31, 2024, and the price per share of our common stock is the closing market price of $357.43 on December 31, 2024. The amounts listed in the table below are in addition to benefits generally available to our employees upon termination of employment, such as distributions from the 401(k) plan and accrued vacation.
Quantitative Disclosure of Payments Upon Termination or Change in Control
| Name | Current Annual Salary | Severance Payments(1) | Severance Related Benefits(2) | Value of Stock Awards That Would Vest(3) | Value of Long- Term Incentive Benefits that Would Vest(4) | Additional Payment under Cash Incentive Plan for 2024(5) | Total | | Bryan B. DeBoer | $1,300,000 | $2,600,000 | $20,356 | $37,001,511 | $48,703 | $5,222,100 | $44,892,670 | | Tina H. Miller | $750,000 | $1,500,000 | $15,187 | $6,034,491 | $127,493 | $1,740,700 | $9,417,871 | | Adam A. Chamberlain | $662,500 | $1,100,000 | $22,804 | $2,549,906 | $112,961 | $2,008,500 | $5,794,171 | | Christopher S. Holzshu | $900,000 | $1,800,000 | $22,421 | $15,880,972 | $221,298 | $2,892,240 | $20,816,931 | | George N. Hines | $640,000 | $1,200,000 | $24,104 | $3,167,902 | $110,649 | $1,178,320 | $5,680,975 |
Quantitative Disclosure of Payments Upon Termination or Change in Control
| (1) Payable in 24 monthly installments. | | (2) Based on current cost of providing 18 months (the full COBRA period) of COBRA benefits for our NEOs. | | (3) Payable by delivery of shares of Lithia stock immediately following a change in control. | | (4) Payable in equal annual installments over 10 years. The value of the long-term incentive is based on the unvested value of those benefits, calculated as of December 31, 2024 and would be payable even if the NEO’s employment was not terminated. | | (5) Payable in a lump sum immediately following a change in control. Amounts are in addition to amounts reported in the Summary Compensation Table under "Non-equity Incentive Plan.” |
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S- K, Lithia provides information about the relationship of the annual total compensation of our employees and the annual total compensation of our Chief Executive Officer (the "CEO”): We identified the median of the annual total compensation of all our employees using the annualized base salary and expected bonus, as of December 31, 2024, plus any equity awards and long-term incentives granted in 2024 for all individuals, excluding the CEO, who were employed by us during 2024 (total compensation was annualized for employees not employed for the full year). After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for our CEO compensation. For 2024: •the annual total compensation of the employee identified at median of our company (other than the CEO), was $58,009; •the annual total compensation of the CEO was $16,795,702; •for this ratio, both employee compensation (other than our CEO) and CEO compensation were calculated using 2024 paid wages, annualized for full-time and part-time employees who did not work a full year; and •in determining the identity of our median employee, we excluded approximately 8,200 employees of 5 acquisitions in 2024 (Carousel Motor Group, Sunrise Group, Duval Group, Woodbridge Hyundai, Pendragon UK). Based on this information, for 2024, the ratio of the annual total compensation of Bryan DeBoer, our Chief Executive Officer, to the median of the annual total compensation of all employees was estimated to be 290 to 1.
CEO Pay Ratio
| Lithia Motors, Inc. 2025 Proxy Statement | 06: Compensation Tables | 58 |
Pay Versus Performance
Pay Versus Performance As discussed in our Compensation Discussion and Analysis section, our executive compensation program is designed to reflect a strong focus on pay-for-performance to drive superior financial results and value creation and strongly align our executives’ interests with those of our shareholders. The following table sets forth compensation information of our Principal Executive Officer (PEO) and our non-PEO named executive officers (NEOs) along with total shareholder return, net income and revenue performance results, for our fiscal years ending in 2020, 2021, 2022, 2023, and 2024, in accordance with Item 402(v) of Regulation S-K.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO NEOs (2) | Average Compensation Actually Paid to Non-PEO NEOs (1) (2) | Company Total Shareholder Return | Peer Group Total Shareholder Return (3) | Net Income (millions) | Revenue (millions) | | 2024 | $16,795,702 | $20,673,914 | $4,550,369 | $5,310,903 | $251.19 | $199.78 | $802.0 | $36,188.2 | | 2023 | $19,285,990 | $29,392,849 | $4,715,979 | $6,355,137 | $229.78 | $183.20 | $1,000.8 | $31,042.3 | | 2022 | $11,125,717 | $3,939,506 | $2,805,572 | $1,740,328 | $141.84 | $134.65 | $1,251.0 | $28,187.8 | | 2021 | $10,532,359 | $14,008,918 | $2,323,172 | $2,821,850 | $204.49 | $177.33 | $1,060.1 | $22,831.7 | | 2020 | $8,520,411 | $23,884,186 | $2,002,293 | $4,731,197 | $200.80 | $119.26 | $470.3 | $13,126.5 |
Pay Versus Performance Table
(1) In accordance with the requirements of Item 402(v) of Regulation S-K, 2024 “compensation actually paid” (CAP) to our PEO and average CAP for our non-PEO NEOs was calculated by making the following adjustments to the total compensation reported in the Summary Compensation Table, above. The equity award related adjustments described below reflect the fair value (or change in fair value) for performance- and time-vesting RSUs, computed in accordance with FASB ASC Topic 718 on the relevant dates. No equity awards were modified in the indicated year.
PEO Compensation Actually Paid Reconciliation
PEO Compensation Actually Paid Reconciliation
PEO Compensation Actually Paid Reconciliation
| | 2024 | | Summary Compensation Table (SCT) Total | $16,795,702 | | Amounts reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the SCT | $0 | | Amounts Reported under the “Stock Awards” Column of the SCT | ($12,953,359) | | Amounts Reported under the “Option Awards” Column of the SCT | $0 | | Total Deductions from SCT | ($12,953,359) | | “Service Cost” for Pension Plans | $0 | | “Prior Service Cost” for Pension Plans | $0 | | Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year | $14,313,355 | | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | $2,602,240 | | Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year | $0 | | Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | ($84,023) | | Fair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year | $0 | | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation | $0 | | All Other Adjustments | $16,831,572 | | Compensation Actually Paid SCT Total less Total Deduction from SCT plus (minus) All Other Adjustments | $20,673,914 |
PEO Compensation Actually Paid Reconciliation
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Average Non-PEO Compensation Actually Paid Reconciliation
Average Non-PEO Compensation Actually Paid Reconciliation All the following amount represents averages of the indicated amounts for our non-PEO named executive officers in the indicated year.
Average Non-PEO Compensation Actually Paid Reconciliation
| | 2024 | | Summary Compensation Table (SCT) Total | $4,550,369 | | Amounts reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the SCT | $0 | | Amounts Reported under the “Stock Awards” Column of the SCT | ($2,782,138) | | Amounts Reported under the “Option Awards” Column of the SCT | $0 | | Total Deductions from SCT | ($2,782,138) | | “Service Cost” for Pension Plans | $0 | | “Prior Service Cost” for Pension Plans | $0 | | Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year | $3,107,000 | | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | $446,326 | | Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year | $0 | | Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | ($10,654) | | Fair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year | $0 | | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation | $0 | | All Other Adjustments | $3,542,672 | | Avg. Compensation Actually Paid SCT Total less Total Deduction from SCT plus (minus) All Other Adjustments | $5,310,903 |
Average Non-PEO Compensation Actually Paid Reconciliation
(2) The non-PEO named executive officers included for purposes of determining the average compensation for our named executive officers each year, is as follows:
Average Non-PEO Compensation Actually Paid Reconciliation
| | NEOs: | | 2024 | Tina H. Miller, Adam A. Chamberlain, Christopher S. Holzshu, George N. Hines | | 2021 - 2023 | Tina H. Miller, Christopher S. Holzshu, Scott A. Hillier, George N. Hines | | 2020 | Tina H. Miller, Christopher S. Holzshu, Scott A. Hillier, Thomas M. Dobry |
Average Non-PEO Compensation Actually Paid Reconciliation
(3) Peer group TSR is calculated using the Auto Peers reflected in our Stock Performance Graph in the 2024 Annual Report on Form 10-K, which is the same peer group used for calculating peer group TSR in our last-filed pay versus performance table. For each year indicated, those Auto Peers consisted of Penske Automotive Group, AutoNation, Sonic Automotive, Group 1 Automotive, Asbury Automotive Group, and CarMax.
Average Non-PEO Compensation Actually Paid Reconciliation
| Performance Measures | Table of Performance Measures This table presents the performance measures the Committee considers to have been the most important in its executive compensation program linking pay to performance for 2024, with revenue serving as the single most important financial metric. The role of each of these performance measures on our NEOs’ compensation is discussed in the Compensation Discussion and Analysis section. | | Revenue (financial) | | | Earnings Per Share (financial) | | | Total Shareholder Return (financial) | | | Net Income (financial) | | | Corporate Responsibility and Strategic (non-financial) | |
Average Non-PEO Compensation Actually Paid Reconciliation
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Biographical Information on our Nominees
Biographical Information on our Nominees Our Board of Directors believes that the combination of the qualifications, skills and experiences of the nominees will contribute to an effective and well-functioning Board. Our Board of Directors and the Nominating and Governance Committee believe that individually, and as a group, the nominees possess the necessary qualifications to provide for future oversight of our business consistent with their fiduciary duties to shareholders. Included in each director nominee’s biography, above, is a description of the experience, skills, tenure and attributes of each nominee. Our Board of Directors unanimously recommends a vote FOR each of the nominees named above.
Biographical Information on our Nominees
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Biographical Information on our Nominees
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