DEF 14A of LKQ Corp, Mar 25, 2025

DEF 14A of LKQ Corp

Filed Mar 25, 2025 · FY20240001065696-25-000021

Open on EDGAR

  1. NON-EMPLOYEE DIRECTOR COMPENSATION

    NON-EMPLOYEE DIRECTOR COMPENSATION

  2. 2024 Director Compensation Table

    2024 Director Compensation Table The following table provides compensation information for the one-year period ended December 31, 2024 for each of our directors that served during 2024 (other than Messrs. Jude and Zarcone whose compensation for their service as an employee is discussed under "Executive Compensation--Compensation Discussion and Analysis" and "Executive Compensation--Compensation Tables").

  3. 2024 Director Compensation Table

    | Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Total | | Patrick Berard (3) | $125,000 | $165,043 | $290,043 | | Andrew C. Clarke(3) | 55,712 | 130,654 | 186,366 | | Meg A. Divitto(3) | 136,344 | 165,043 | 301,387 | | Joseph M. Holsten | 40,497 | — | 40,497 | | Blythe J. McGarvie(3) | 155,000 | 165,043 | 320,043 | | John W. Mendel(4) | 150,000 | 165,043 | 315,043 | | James S. Metcalf(3) | 6,041 | 66,933 | 72,974 | | Jody G. Miller(4) | 140,000 | 165,043 | 305,043 | | Guhan Subramanian(4) | 105,000 | 350,021 | 455,021 | | Xavier Urbain(3) | 130,000 | 165,043 | 295,043 |

  4. 2024 Director Compensation Table

    (1) The amounts represent cash fees. Ms. Miller and Mr. Clarke deferred their fees into deferred RSUs. (2) The amounts represent the aggregate grant date fair value of awards granted in 2024, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification 718, “Compensation-Stock Compensation” (“FASB ASC Topic 718”) excluding the effect of estimated forfeitures. The grant date fair value was calculated by multiplying the average price of underlying shares on the date of grant by the number of awards granted. Messrs. Clarke and Metcalf joined the Company mid-year and, consequently, their awards were prorated. Mr. Mendel, Ms. Miller and Mr. Subramanian deferred the equity that they were granted in May 2024 into deferred RSUs. For Mr. Subramanian, the amount presented includes $165,043 for the annual award and $184,978 for the additional annual award for his service as the Chairman of the Board. (3) As of December 31, 2024, the following non-employee directors held the following unvested equity awards: Mr. Berard, 3,709 RSUs; Mr. Clarke, 2,919 RSUs; Ms. Divitto, 3,709 RSUs; Ms. McGarvie, 3,709 RSUs; Mr. Metcalf, 1,741 RSUs; and Mr. Urbain, 3,709 RSUs. (4) As of December 31, 2024, the following non-employee directors held the following unvested deferred equity awards: Mr. Mendel, 3,709 deferred RSUs; Ms. Miller, 3,709 deferred RSUs; and Mr. Subramanian, 7,867 deferred RSUs.

  5. Executive Summary

    | Compensation Component | Description/Purpose | 2024 Highlights | | Total Direct Compensation | | | | Base Salary | •Fixed compensation element •Salary levels based on market rates, executive’s experience, responsibilities, and contribution to our development and growth | •Increases in 2024 aimed at aligning with peers | | Annual Bonus | •Cash incentive designed to reward achievement of annual performance objectives •2024 annual bonuses were based on EBITDA, EBITDA margin percentage, and free cash flow, in each case subject to pre-established adjustments. For business unit leaders, a portion of 2024 annual bonuses were based on the same corporate measures and a portion was based on similar measures at the business unit level | •Our 2024 financial results led to bonus payments equaling 22.9% (Corporate), 17.3% (Wholesale - North America) and 80.0% (Europe) of target under each of the Corporate, Wholesale - North America, and Europe Programs, respectively | | Cash Long-Term Incentive (“LTI”) Award | •Cash incentive designed to reward multi-year performance, and promote retention of key talent •For each of the 2022-2024, 2023-2025 and 2024-2026 performance periods, each executive is eligible to earn from 0 to 200% of their target award based on the Company’s adjusted diluted EPS for the last year of the three-year performance period, and parts & services organic revenue growth and return on invested capital (“ROIC”), each measured as an average over the three-year performance period, in each case subject to pre-established adjustments •For each of the performance periods the percentage of target achieved based on financial results may be increased or decreased by up to 10% based on performance against multi-year sustainability goals | •For the 2022-2024 performance period, financial goal achievement resulted in an earned amount of 27.6% of target •This earned amount was increased by 5% based on certain performance against the Company's sustainability goals, which resulted in a payout of 29.0% of target | | Performance-Based Restricted Stock Units (PSUs) | •Share-based incentive designed to align the interests of management with those of our stockholders, reward multi-year performance, and promote retention of key talent •In 2022, 2023 and 2024, executives were granted two types of units (“PSU-1s” and “PSU-2s”) that will be converted to a number of common shares, subject to achievement of performance goals, as well as the executive’s continued employment over the vesting period ◦PSU-1s generally vest over a three-year period, subject to the executive’s continued employment, but only if we achieve positive adjusted diluted EPS during any fiscal year within five years from the date of grant ◦PSU-2s may be earned from 0 to 200% of the target number of shares based on the Company's adjusted diluted EPS for the last year of the three-year performance period, and parts & services organic revenue growth and ROIC, each measured as an average over the three-year performance period, in each case subject to pre-established adjustments | •Because positive adjusted diluted EPS was achieved for 2024, one-third of the PSU-1s granted in 2024 vested, and the remaining portion will vest over the next two years subject to continued service •For the 2022-2024 performance period, goal achievement resulted in a payout of 27.6% of target for the PSU-2s granted in 2022 |

  6. What Our Compensation Programs are Designed to Reward

    What Our Compensation Programs are Designed to Reward Our compensation programs are designed to reward our executive officers for the performance of our Company and the individual performance of each executive officer. Specifically, with respect to the performance of our Company, •Our annual bonus program is designed to reward successful performance based on EBITDA, EBITDA margin percentage and free cash flow, in each case subject to pre-established adjustments described below; •Our cash long-term incentive program and performance-based restricted stock units (“PSU-2s”) are designed to reward adjusted diluted EPS growth, measured based on the last year of the three-year performance period, and parts & services organic revenue growth and ROIC, each measured as an average over the three-year performance period, in each case subject to pre-established adjustments described below; •Our cash long-term incentive program includes a sustainability multiplier that may increase or decrease the percentage of target earned by up to 10% based on performance against our multi-year sustainability goals; •Our traditional performance-based restricted stock units (“PSU-1s”) are designed to reward profitability; and •In addition to rewarding achievement of the performance vesting requirements for our PSU-1s and PSU-2s, all of our equity awards reward long-term total stockholder return because the ultimate value of any earned awards is tied to our stock performance during the performance and vesting periods. With respect to individual performance of an executive officer, we analyze the growth of the performance metrics that most directly relate to such individual’s area of responsibility and consider certain subjective factors, including the individual’s management and leadership skills, ability to resolve challenges and to overcome obstacles, and overall contribution to our success. Individual performance is a factor in the determination of adjustments to base salary, annual bonus targets, and long-term incentive award opportunities, along with other considerations including external market data, the unique scope of each executive’s role and responsibilities, the criticality of certain positions to our success, and internal pay parity.

  7. Executive Compensation Decision-Making

    Executive Compensation Decision-Making Role of the Compensation and Human Capital Committee and Management Management provides to the Compensation and Human Capital Committee historical compensation information relating to our executive officers to aid the deliberations of the Compensation and Human Capital Committee regarding executive officer compensation. The information typically includes historical and proposed base salaries, bonuses, long-term cash incentive awards, equity-based awards, and any other material component of compensation or benefits. The Compensation and Human Capital Committee takes into account the historical trend of each element of compensation and the total of all of the elements for each year in connection with its decisions about proposed compensation amounts. In addition, the Compensation and Human Capital Committee receives recommendations from the President and Chief Executive Officer regarding the compensation of the other executive officers. Role of the Compensation and Human Capital Committee’s Consultant The Compensation and Human Capital Committee has engaged Frederic W. Cook & Co., Inc. (“F.W. Cook”) as its independent executive compensation advisors. F.W. Cook reports directly to the Compensation and Human Capital Committee and does no work for management that is not under the Compensation and Human Capital Committee’s purview. The Compensation and Human Capital Committee has considered the independence of F.W. Cook based on the consideration of the factors specified in the rules of the SEC and the listing standards of The Nasdaq Stock Market, and determined that its engagement of F.W. Cook did not raise any conflicts of interest with LKQ or any of our directors or executive officers. F.W. Cook periodically conducts comprehensive reviews of our executive officer compensation programs to provide competitive context for the Compensation and Human Capital Committee's decisions on setting target pay levels and incentive program design. The reviews include a comparative analysis of our executive compensation program with the executive compensation programs of a peer group of companies. The peer group used for competitive comparisons to inform the Compensation and Human Capital Committee's decisions on setting 2024 target pay opportunities and program design was as follows:

  8. Executive Compensation Decision-Making

    The peer group consisted primarily of U.S. public companies in similar industries that generally had revenues between 0.33x and 3.0x of our revenue and/or had a market capitalization between 0.33x and 3.0x of our market capitalization. The Compensation and Human Capital Committee does not target any specific percentile with regard to setting the compensation opportunities of our executive officers in comparison to the executive officers of the peer group nor does it apply a formula or assign relative weightings to specific compensation elements.

  9. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    (1) Mr. Jude’s salary increased to (i) $800,000 on January 1, 2024 in connection with his promotion to Executive Vice President and Chief Operating Officer and (ii) $1,000,000 on July 1, 2024 in connection with his promotion to President and Chief Executive Officer. (2) Amounts included within the tables above and that follow for 2024 are translated from Great British Pound (GBP) or Swiss Francs (CHF) to U.S. Dollars at the 2024 average exchange rates. Amounts included within the tables above and that follow for 2023 are translated from Great British Pound (GBP) to U.S. Dollars at the 2023 average exchange rates. The change in the U.S. Dollar-denominated year-end base salaries presented for Mr. Hamilton is due to fluctuations in applicable exchange rates. (3) Mr. Meyne's salary increased on January 1, 2024 in connection with his promotion to Senior Vice President of LKQ Corporation and President of Wholesale - North America. Annual Bonus Awards We offer annual bonus awards under our CIP to provide incentives for achievement of financial goals aligned with our business strategy and measured over a one-year time horizon. Each participant in the bonus program (including our named executive officers) is eligible to receive a cash payment equal to a percentage of the participant’s base salary earned for the year at specified threshold, target, and maximum levels of performance. In 2024, consistent with 2023, the corporate performance measures for our executive officers’ bonuses were the Company’s EBITDA (weighted 30%), EBITDA margin percentage (weighted 30%), and free cash flow (weighted 40%), subject to pre-established adjustments as described below. The bonuses for Messrs. Jude, Zarcone, Galloway, and McKay were based entirely on the corporate performance measures. For Mr. Meyne, who in 2024 was the President of our Wholesale - North America segment, 20% of his bonus was based on these corporate performance measures, and 80% of his bonus was based on similar measures for his business segment, as shown in the Wholesale - North America program table below. For Mr. Hamilton, the President and Managing Director of our Europe segment in 2024, 20% of his bonus was based on these corporate performance measures, and 80% of his bonus was based on similar measures for his business segment, as shown in the Europe program table below. EBITDA is defined as Segment EBITDA as presented in our public filings. EBITDA margin percentage is calculated as EBITDA divided by revenue. Free cash flow reflects net cash provided by operating activities less purchases of property, plant and equipment. All three performance measures were subject to adjustments for certain items as specified by the Compensation and Human Capital Committee at the time the bonus targets were established. For 2024, such adjustments related to currency exchange rates for all three corporate performance measures. For free cash flow, an additional adjustment was made for certain cash restructuring and transaction related expenses. The adjustments did not have a net effect on the calculated achievement for the annual bonus awards. Bonus targets are established annually upon completion of our budget and guidance setting process and are approved by the Compensation and Human Capital Committee. Targets are based on events and circumstances as of the time that annual budgets are established and guidance is set, which may be impacted by external factors, including currency exchange rates, inflation, scrap and precious metals prices, and other external events, such as tax legislation. In some instances, based on these events and circumstances, bonus targets may be set at levels lower than the prior year actual performance. In 2024, we budgeted an increase in EBITDA dollars but a decrease in EBITDA margin percentage as a result of the full year effect of the Uni-Select acquisition in August 2023, which had a dilutive effect on overall EBITDA margin percentage. We also anticipated incremental cash outflows relative to 2023 for interest payments. As a result, the 2024 bonus target for free cash flow was set at a lower level than actual performance under the program for 2023. The following table sets forth with respect to the 2024 annual bonus awards the threshold, target, and maximum for each of the three performance metrics referenced above along with the actual achievement. Performance below threshold for a given measure would result in no payment for that component. Performance at threshold, target, or maximum for a given measure would result in payment of 50%, 100%, or 200% of target, respectively, for that component. Performance between levels is linearly interpolated.

  10. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    For purposes of the foregoing two tables, “ATWC” means average trade working capital, defined as the average of the trailing twelve-month trade accounts receivables, plus inventory, less payables, measured as a percent of third party revenues. The following table sets forth with respect to the 2024 annual bonus awards each executive's bonus opportunity at target along with the earned bonus amount.

  11. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    | | 2024 Target Bonus Opportunity | | 2024 Actual Bonus Earned | | | | % Salary | $ | % of Target | $ | | Justin Jude | 100%/150%(1) | $1,151,913 | 22.9% | $263,788 | | Dominick Zarcone | 150% | $1,650,000 | 22.9% | $377,850 | | Rick Galloway (2) | 75% | $506,557 | 22.9% | $116,002 | | Andy Hamilton (3) | 60% | $384,743 | 68.6% | $263,971 | | Matthew McKay (4) | 60% | $311,311 | 22.9% | $71,290 | | John Meyne (5) | 60% | $360,000 | 18.4% | $66,312 |

  12. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    (1) The target bonus percentage for Mr. Jude increased from 60% of base salary in 2023 to 100% for January 1, 2024 through June 30, 2024 (when Mr. Jude was Executive Vice President and COO) and to 150% starting July 1, 2024 (when Mr. Jude was promoted to President and CEO). (2) The target bonus percentage for Mr. Galloway increased from 60% of base salary in 2023 to 75% of base salary in 2024 to better align his target compensation with market rates. (3) Amounts included within the tables above and that follow for 2024 are translated from Great British Pound (GBP) or Swiss Francs (CHF) to U.S. Dollars at the 2024 average exchange rates. The target bonus percentage for Mr. Hamilton increased from 50% of base salary in 2023 to 60% of base salary in 2024 in connection to his promotion to President of Europe. (4) The target bonus percentage for Mr. McKay was 60% in both 2023 and 2024. (5) The target bonus percentage for Mr. Meyne increased from 40% of base salary in 2023 to 60% of base salary in 2024 in connection to his promotion to President of Wholesale - North America. Long Term Incentive Awards We grant performance awards each year to certain of our key employees (including our named executive officers) that are designed to reward multi-year performance, create retention incentives, and in the case of equity awards, to align the interests of recipients with those of stockholders because the realized value reflects our stockholder return. When making long-term incentive awards, we consider factors specific to each employee such as salary, position and responsibilities. We also consider factors such as the rate of the Company’s development and growth and an estimate of the value of each award. In addition, we determine the amount of dilution that we believe would be generally acceptable to our stockholders and correspondingly limit the aggregate number of equity awards granted each year. In 2024, our long-term incentive awards to certain of our key employees (including our named executive officers) consisted of a mix of the following three grant types: •Cash-Based LTI Awards: Cash-Based long-term incentive opportunity granted under the CIP that may be earned from 0 to 200% of the target amount, based on performance against financial metrics measured over the three-year performance period from January 1, 2024 through December 31, 2026. The financial metrics for the 2024-2026 performance period are adjusted diluted EPS for 2026 (weighted 40%), three-year average parts & services organic revenue growth (weighted 40%), and three-year average ROIC (weighted 20%), subject to pre-established adjustments as described below. The percentage of target earned based on financial performance may increase or decrease by up to 10% based on performance against our multi-year sustainability goals. •PSU-1s: Performance-based restricted stock units granted under the Equity Incentive Plan that generally vest over a three-year period, subject to the executive’s continued employment through the date of vesting, but only if we achieve positive adjusted diluted EPS during any fiscal year within five years from the date of grant. In addition, the PSU-1s are aligned with stockholders' interests because the ultimate value of any earned shares depends on our total stockholder return over the performance and vesting period. •PSU-2s: Performance-based restricted stock units granted under the Equity Incentive Plan that may be earned from 0 to 200% of the target number of shares based on the same financial metrics as used for the Cash-Based LTI awards, measured over the same three-year performance period, subject to the executive's continued employment through the date of vesting. In addition to rewarding achievement of such performance objectives, the PSU-2s are aligned with stockholders' interests because the ultimate value of any earned shares depends on our total stockholder return over the performance and vesting period. 2022-2024 Cash-Based LTI The performance measures for the 2022-2024 performance period were adjusted diluted EPS, average organic parts & services revenue growth and average ROIC, subject to pre-established adjustments as described below. ROIC is calculated as adjusted net operating profit after tax divided by average invested capital, which is defined as average stockholders’ equity plus average net debt (calculated as total debt less cash and equivalents). All three performance measures were adjusted for items specified by the Compensation and Human Capital Committee at the time the LTI targets were established. Such adjustments related to currency exchange rates (for adjusted diluted EPS only); asset impairments; restructuring and acquisition expenses; gains and losses related to acquisitions and divestitures; amortization expense of acquired intangibles; change in fair value of contingent consideration liabilities; results of discontinued operations; net income and loss attributable to noncontrolling interest; and certain other minor adjustments. Based on such adjustments, adjusted diluted EPS for 2024 was increased from $2.63 on a GAAP basis to $3.65 for the LTI calculation, average organic parts & services revenue growth for 2022-2024 was increased from 2.5% to 2.6% and average ROIC for 2022-2024 was increased from 11.9% to 13.6%. In accordance with the pre-established LTI plan provisions, the impact of acquisitions with a purchase price over $50 million completed during the Performance Period (Uni-Select and Earl Owen in 2023) were excluded from the calculation of ROIC. Additionally, pursuant to the pre-established adjustment guidelines under the CIP, the adjusted diluted EPS target range for the impact of the Uni-Select acquisition was adjusted. The organic parts & services revenue growth target was not adjusted as the Uni-Select acquisition would not impact expected organic parts & services revenue growth. The table below sets forth the targets for these performance measures for the 2022-2024 performance period and the actual results for each component. Payouts between levels were calculated using linear interpolation. These results produced an earned amount that was 27.6% of target.

  13. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    | | Weighting | Threshold Goal (50% of target payout) | Target Goal (100% of target payout) | Maximum Goal (200% of target payout) | Actual Results | Payout | Weighted Payout | | Adjusted Diluted EPS (3rd Year) | 40.0% | $4.02 | $4.52 | $5.02 | $3.65 | 0.0% | 0.0% | | 3-Year Average Organic Parts & Services Revenue Growth | 40.0% | 2.0% | 3.5% | 5.0% | 2.6% | 69.0% | 27.6% | | 3-Year Average ROIC | 20.0% | 14.0% | 14.8% | 15.5% | 13.6% | 0.0% | 0% | | | | | | | Total Payout | | 27.6% |

  14. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    | EPS Achievement in 2026 (40% Wtg.) | 3-Year Average Parts & Services Organic Revenue Growth (40% Wtg.) | 3-Year Average ROIC (20% Wtg.) | Payout (% of Target)(1) | | <$4.20 | <2.75% | <12.00% | 0% | | $4.20 | 2.75% | 12.00% | 50% | | $4.65 | 3.75% | 12.75% | 100% | | >=$5.10 | >=4.75% | >=13.50% | 200% |

  15. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    (1) Payout percentages are calculated based on the weighted sum of the respective actual results of each performance measure. If the actual achievement is between the goal levels shown above, the payout is linearly interpolated. Each named executive officer’s threshold, target, and maximum award opportunity under the 2024-2026 Cash-Based LTI is set forth in the table below (excluding the impact of the sustainability modifier).

  16. Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element

    PSU-1s The PSU-1s generally vest in equal tranches over a three-year period on each six-month anniversary of the grant date, provided that we achieve positive adjusted diluted EPS during any fiscal year period within five years following the grant date. Generally, no PSU-1s vest prior to achievement of positive adjusted diluted EPS, and, if positive adjusted diluted EPS is not achieved within the five years following grant, the PSU-1s are forfeited. The performance-based condition for the PSU-1s granted in 2024 was met in February 2025, and all applicable PSU-1s that had previously met the time-based vesting condition have vested and the remaining PSU-1s will vest according to the remaining schedule of the time-based condition. PSU-2s The PSU-2s granted in 2024 generally vest based on the performance of the Company with respect to diluted EPS, three-year average parts & services organic revenue growth, and three-year average ROIC over the three-year performance period (January 1, 2024 through December 31, 2026), as defined and subject to pre-established adjustments as described above for the 2024-2026 Cash-Based LTI. The table above under “2024-2026 Cash-Based LTI” sets forth the targets for these performance measures for the 2024-2026 performance period and the corresponding payout as percentages of target share units. The PSU-2s granted in 2022 were subject to the same financial performance measures as the 2022-2024 Cash-Based LTI described above and consequently vested at 27.6% of target, resulting in payment of 2,088, 12,413, 1,235, 446, and 1,298 shares for Messrs. Jude, Zarcone, Galloway, Hamilton, and McKay. Mr. Meyne was not a participant in the equity portion of the 2022-2024 LTI Plan. Policy and Procedures for Granting Equity We typically grant equity awards annually, on the first business day following the Company's release of earnings for the previously completed fiscal year, and in other limited circumstances, such as commencement of employment, promotion, or for retention purposes. The Compensation and Human Capital Committee does not take material nonpublic information into account when determining the timing and terms of equity awards. The Compensation and Human Capital Committee does not time the release of material nonpublic information to affect the value of executive compensation. Other Compensation In order to be competitive in attracting executive personnel, we provide certain other compensation to our executive officers, including matching contributions for a portion of the executive officers’ contributions to our retirement plans, payment of life insurance, disability insurance, accidental death or disability insurance premiums, and vehicle leasing. See the Summary Compensation Table for more information regarding these items of other compensation. Recent Fiscal 2025 Compensation Decisions In February 2025, the Compensation and Human Capital Committee conducted its annual executive compensation review and made fiscal 2025 compensation decisions for our continuing named executive officers. The target total direct compensation mix (i.e., the proportion of base salary, target annual cash incentive, and target long-term incentives) has been rebalanced to better align with peer group practices. The Compensation and Human Capital Committee maintained the same performance metrics for our PSU-2 program (but increased the weighting for ROIC to 40% and decreased the weighting for organic parts & services revenue to 20%). In addition, the Compensation and Human Capital Committee discontinued the cash LTI program and allocated long-term incentives 50% to PSU-1s and 50% to PSU-2s (based on target level achievement).

  17. Severance Protection

    Severance Protection Severance Policy We have a Severance Policy for Key Executives (the “Severance Policy”), including all of our named executive officers. The Severance Policy sets forth in a written document the terms and conditions that the Company would normally expect to follow upon an involuntary separation of service of a key executive. We believe that it is in the Company's interest to have a formal Severance Policy to provide increased certainty for the executives and the Company in the event of a severance. Further, the formalization of the policy is expected to assist the Company with the recruitment and retention of key executives, provide the Company with important protections, and reduce costs in the event of a dispute. The Severance Policy provides cash severance and other benefits in the event of a termination by the Company without “cause” or by the Covered Executive (as defined below) with “good reason”. For additional information about our Severance Policy, refer to “Potential Payments Upon Termination or Change in Control” on page 45. Change of Control Agreements We have Change of Control Agreements with certain of our employees, including each of our named executive officers, that provide cash severance and other benefits in the event of a qualifying termination of employment within 12 months prior to or 24 months following a Change of Control, as defined in the agreements. We provide these agreements to ensure these executives are able to objectively consider transactions that will benefit stockholders even if it is likely to result in termination of the executives' employment. The agreements have an initial term of three years and will automatically renew for a two-year period at the end of the initial term and each two-year anniversary thereafter, unless notice of termination is given by the Company at least 60 days before any such renewal date. The operative provisions of the agreements will apply, however, only if a Change of Control, as defined in the agreements, occurs during the period the agreement is in effect. For additional information about our Change of Control Agreements, refer to “Potential Payments Upon Termination or Change in Control” on page 45.

  18. Compensation-Related Governance Policies

    Compensation-Related Governance Policies Incentive Compensation Recovery Policy As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we maintain a clawback policy, which requires that certain incentive compensation paid to any current or former executive officer, including our named executive officers, will be subject to recoupment if (x) the incentive compensation was calculated based on financial statements that were required to be restated due to material noncompliance with financial reporting requirements, without regard to any fault or misconduct, and (y) that noncompliance resulted in overpayment of the incentive compensation within the three fiscal years preceding the fiscal year in which the restatement was required. Incentive compensation subject to the clawback policy consists of compensation that is granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure (as defined in the rules implementing such requirement), including stock price and total shareholder return, on and after September 1, 2023. Stock Ownership Requirements Each of our named executive officers is expected to hold a minimum of at least the number of shares equal in value to a multiple of his or her annual base salary as set forth below. These requirements are to be satisfied within five years of an individual becoming subject to the requirements. Until the expected level of ownership is achieved, each executive must retain at least 50% of the net-after-tax shares from equity compensation vesting. For purposes of our stock ownership requirements, we include the number of shares actually owned by the named executive officer in his or her own name or in the name of an estate planning entity of which the named executive officer is the sole beneficiary. We also include restricted stock units including PSU-1s. However, we exclude any shares of stock that the named executive officer has a right to acquire through the exercise of stock options and any shares of stock subject to the three-year performance awards (PSU-2s). The complete guidelines can be found on our website at www.lkqcorp.com (click the “Corporate Governance” link under “Investor Relations”).

  19. Compensation-Related Governance Policies

    Pledging/Hedging/Insider Trading The Company’s policies prohibit our directors, officers, and employees from pledging our common stock or engaging in hedging transactions involving our common stock, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds. We have adopted and maintain insider trading policies and procedures governing the purchase, sale, and other dispositions of Company securities that are applicable to the Company itself, all of our directors, officers, including the named executive officers, and employees of the company and all members of their immediate families and households. Please see page 15 for more information on the policies and procedures. Forfeiture of Equity Awards for Restrictive Covenant Violations Our equity awards generally provide that our executive officers will forfeit to the Company their unvested equity awards, the shares received upon vesting of the equity awards, and the proceeds from the sale of shares received upon vesting of such equity awards if the executive officer violates the restrictive covenants in the award agreements relating to the equity awards. The restrictive covenants prohibit the executive officer from competing with us, soliciting our customers and employees, and improperly using our confidential information, for a specified period after the executive officer’s affiliation with us ceases.

  20. Taxation of “Parachute” Payments and Deferred Compensation

    Taxation of “Parachute” Payments and Deferred Compensation We do not provide our named executive officers with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G, 4999, or 409A of the Code. Sections 280G and 4999 of the Code provide that executive officers, directors who hold significant equity interests in our Company, and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change in control of our Company that exceeds certain prescribed limits, and that the Company, or a successor, may forfeit a deduction on the amounts subject to this additional tax. Section 409A of the Code also imposes additional significant taxes on an executive officer, director or other service provider to the Company in the event that he or she receives “deferred compensation” that does not meet certain requirements of Section 409A of the Code.

  21. Accounting for Stock-Based Compensation

    Accounting for Stock-Based Compensation We follow FASB ASC Topic 718, for our stock-based awards. FASB ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options, restricted stock unit awards and performance unit awards (including PSUs), based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below for equity awards to our named executive officers as required by the applicable SEC rules. FASB ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that the recipient of such compensation is required to render service in exchange for the option or other award. For performance unit awards (including PSUs), stock-based compensation expense recognized may be adjusted over the performance period based on interim estimates of performance against pre-set objectives.

  22. Summary Compensation Table

    Summary Compensation Table The following table includes information concerning compensation for the fiscal years ended December 31, 2024, 2023, and 2022 paid to our named executive officers and their principal position with us as of the fiscal year-end December 31, 2024:

  23. Summary Compensation Table

    | Name and Principal Position | Year | Salary (1) | Stock Awards (2) | Non-Equity Incentive Plan Compensation (3) | All Other Compensation (4) | Total | | Justin Jude | 2024 | $901,636 | $3,150,075 | $371,014 | $78,461 | $4,501,186 | | President and Chief Executive Officer | 2023 | $642,521 | $1,410,108 | $1,314,341 | $71,372 | $3,438,342 | | | 2022 | $614,959 | $1,110,095 | $1,316,067 | $68,075 | $3,109,196 | | Dominick Zarcone | 2024 | $1,100,000 | $5,800,020 | $783,570 | $170,060 | $7,853,650 | | Former President and Chief Executive Officer | 2023 | $1,087,534 | $5,800,064 | $5,133,411 | $168,012 | $12,189,021 | | | 2022 | $1,050,000 | $5,000,075 | $4,515,281 | $175,536 | $10,740,892 | | Rick Galloway | 2024 | $675,410 | $1,350,047 | $162,495 | $61,986 | $2,249,938 | | Senior Vice President and Chief Financial Officer | 2023 | $593,767 | $1,080,021 | $807,711 | $55,113 | $2,536,612 | | | 2022 | $437,900 | $810,102 | $635,578 | $43,183 | $1,926,763 | | Andy Hamilton* | 2024 | $641,239 | $1,350,047 | $285,059 | $100,636 | $2,376,981 | | Senior Vice President & President and Managing Director of LKQ Europe | | | | | | | | Matt McKay | 2024 | $518,852 | $1,260,061 | $137,944 | $56,425 | $1,973,282 | | Senior Vice President - General Counsel & Corporate Secretary | 2023 | $487,534 | $900,103 | $787,066 | $54,730 | $2,229,433 | | | 2022 | $443,699 | $690,006 | $598,731 | $54,126 | $1,786,562 | | John Meyne** | 2024 | $600,000 | $1,350,047 | $97,718 | $54,646 | $2,102,411 | | Senior Vice President & President of Wholesale - North America | | | | | | |

  24. Summary Compensation Table

    * Compensation for 2023 and 2022 for Mr. Hamilton is not disclosed because he was not a named executive officer during those fiscal years. Amounts included within the tables above and that follow for 2024 are translated from Great British Pound (GBP) or Swiss Francs (CHF) to U.S. Dollars at the 2024 average exchange rates. **Compensation for 2023 and 2022 for Mr. Meyne is not disclosed because he was not a named executive officer during those fiscal years. (1) The base compensation of our executive officers is discussed beginning on page 30. (2) The amounts shown above represent the aggregate grant date fair value of awards granted during the period indicated, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The grant date fair value was calculated by multiplying the average price of underlying shares on the date of grant by the number of awards granted. PSU-1s have only a single possible achievement level (target), which was the basis for the grant date fair value disclosed in the table above. PSU-2s may be earned from 0% to 200% of the target number of share units based on performance versus goals for the performance period beginning January 1, 2024 and ending December 31, 2026 and were valued based on performance at 100% of target in the table above. The following table summarizes the grant date fair value of the 2024 PSU-1 and PSU-2 awards as disclosed above and at maximum achievement levels for each executive.

  25. Summary Compensation Table

    | | PSU-1s Grant Date Fair Value | | PSU-2s Grant Date Fair Value | | | Name | Target | Maximum | Target | Maximum | | Justin Jude | $2,100,033 | $2,100,033 | $1,050,042 | $2,100,085 | | Dominick Zarcone | $3,262,505 | $3,262,505 | $2,537,515 | $5,075,031 | | Rick Galloway | $900,014 | $900,014 | $450,033 | $900,066 | | Andy Hamilton | $900,014 | $900,014 | $450,033 | $900,066 | | Matthew McKay | $840,023 | $840,023 | $420,038 | $840,076 | | John Meyne | $900,014 | $900,014 | $450,033 | $900,066 |

  26. Summary Compensation Table

    (3) Our Non-Equity Incentive Plan Compensation includes amounts related to our Cash-Based LTI awards and annual bonus awards. The amounts for each named executive officer for each of these award categories are set forth in the table below. The amounts shown under Cash-Based LTI Earned for 2024 are equal to the amounts earned and subsequently paid for the 2022-2024 performance period, the amounts shown under Cash-Based LTI Earned for 2023 are equal to the amounts earned and subsequently paid for the 2021-2023 performance period and the amounts shown under Cash-Based LTI Earned for 2022 are equal to the amounts earned and subsequently paid for the 2020-2022 performance period. The amounts shown under Annual Bonus Earned are equal to the amounts earned and subsequently paid for each annual performance period under our annual bonus program related to the years presented. For more information regarding our annual incentive awards, see the section entitled “Annual Bonus Awards” beginning on page 31. For more information regarding our Cash-Based LTI awards, see the section entitled “Long Term Incentive Awards” beginning on page 33.

  27. Summary Compensation Table

    | Name | Year | Cash-Based LTI Earned | Annual Bonus Earned | Total | | Justin Jude | 2024 | $107,226 | $263,788 | $371,014 | | | 2023 | $735,000 | $579,341 | $1,314,341 | | | 2022 | $602,700 | $713,367 | $1,316,067 | | Dominick Zarcone | 2024 | $405,720 | $377,850 | $783,570 | | | 2023 | $2,940,000 | $2,193,411 | $5,133,411 | | | 2022 | $2,152,500 | $2,362,781 | $4,515,281 | | Rick Galloway | 2024 | $46,493 | $116,002 | $162,495 | | | 2023 | $328,692 | $479,019 | $807,711 | | | 2022 | $259,161 | $376,417 | $635,578 | | Andy Hamilton | 2024 | $21,088 | $263,971 | $285,059 | | Matt McKay | 2024 | $66,654 | $71,290 | $137,944 | | | 2023 | $393,750 | $393,316 | $787,066 | | | 2022 | $154,980 | $443,751 | $598,731 | | John Meyne | 2024 | $31,406 | $66,312 | $97,718 |

  28. Summary Compensation Table

    (4) The amounts include Company matching contributions under retirement plans, payment of life insurance, disability insurance, accidental death or disability insurance premiums, and other miscellaneous compensation related payments.

  29. Summary Compensation Table

    | Name | Retirement Plans | Life Insurance Premiums | Disability Insurance Premiums | Other | Total | | Justin Jude | $67,957 | $2,871 | $7,633 | $— | $78,461 | | Dominick Zarcone | $139,174 | $21,322 | $9,564 | $— | $170,060 | | Rick Galloway | $52,656 | $2,309 | $7,021 | $— | $61,986 | | Andy Hamilton | $422 | $— | $— | $100,214(a) | $100,636 | | Matthew McKay | $46,516 | $2,414 | $7,495 | $— | $56,425 | | John Meyne | $38,936 | $8,981 | $6,729 | $— | $54,646 |

  30. Summary Compensation Table

    (a) Other compensation for Mr. Hamilton consists of reimbursement of (i) housing ($51,771), (ii) commuter allowance ($25,565), (iii) car allowance, and (iv) relocation expenses. Amounts included within the tables above and that follow for 2024 are translated from Great British Pound (GBP) or Swiss Francs (CHF) to U.S. Dollars at the 2024 average exchange rates.

  31. Grants of Plan-Based Awards for Fiscal Year-End December 31, 2024

    Grants of Plan-Based Awards for Fiscal Year-End December 31, 2024 The following table sets forth information regarding plan-based awards granted by us to the named executive officers during the last fiscal year. All equity awards were granted under the Company's Equity Incentive Plan.

  32. Grants of Plan-Based Awards for Fiscal Year-End December 31, 2024

    | Name | Award Type | Board Approved Date | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2)(3) | | | Grant Date Fair Value of Stock and Option Awards (4) ($) | | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | Justin Jude | PSU-1 | 2/15/2024 | 2/23/2024 | — | — | — | — | 40,327 | — | $2,100,033 | | | PSU-2 | 2/15/2024 | 2/23/2024 | — | — | — | 10,082 | 20,164 | 40,328 | $1,050,042 | | | Annual Bonus | | | $575,956 | $1,151,913 | $2,303,825 | — | — | — | — | | | LTI | | | $525,000 | $1,050,000 | $2,100,000 | — | — | — | — | | Dominick Zarcone | PSU-1 | 2/15/2024 | 2/23/2024 | — | — | — | — | 62,650 | — | $3,262,505 | | | PSU-2 | 2/15/2024 | 2/23/2024 | — | — | — | 24,364 | 48,728 | 97,456 | $2,537,515 | | | Annual Bonus | | | $825,000 | $1,650,000 | $3,300,000 | — | — | — | — | | | LTI | | | $725,000 | $1,450,000 | $2,900,000 | — | — | — | — | | Rick Galloway | PSU-1 | 2/15/2024 | 2/23/2024 | — | — | — | — | 17,283 | — | $900,014 | | | PSU-2 | 2/15/2024 | 2/23/2024 | $— | $— | $— | 4,321 | 8,642 | 17,284 | 450,033 | | | Annual Bonus | | | $253,279 | $506,557 | $1,013,115 | — | — | — | — | | | LTI | | | $225,000 | $450,000 | $900,000 | — | — | — | — | | Andy Hamilton | PSU-1 | 2/15/2024 | 2/23/2024 | — | — | — | — | 17,283 | — | $900,014 | | | PSU-2 | 2/15/2024 | 2/23/2024 | — | — | — | 4,321 | 8,642 | 17,284 | $450,033 | | | Annual Bonus | | | $192,372 | $384,743 | $769,487 | — | — | — | — | | | LTI | | | $225,000 | $450,000 | $900,000 | — | — | — | — | | Matthew McKay | PSU-1 | 2/15/2024 | 2/23/2024 | — | — | — | — | 16,131 | — | 840,023 | | | PSU-2 | 2/15/2024 | 2/23/2024 | — | — | — | 4,033 | 8,066 | 16,132 | 420,038 | | | Annual Bonus | | | $155,656 | $311,311 | $622,623 | — | — | — | — | | | LTI | | | $210,000 | $420,000 | $840,000 | — | — | — | — | | John Meyne | PSU-1 | 2/15/2024 | 2/23/2024 | — | — | — | — | 17,283 | — | $900,014 | | | PSU-2 | 2/15/2024 | 2/23/2024 | — | — | — | 4,321 | 8,642 | 17,284 | $450,033 | | | Annual Bonus | | | $180,000 | $360,000 | $720,000 | — | — | — | — | | | LTI | | | $225,000 | $450,000 | $900,000 | — | — | — | — |

  33. Grants of Plan-Based Awards for Fiscal Year-End December 31, 2024

    (1) The amounts shown related to the annual bonus awards represent payments that were possible for the 2024 annual performance period. The annual awards for 2024 were calculated as a percentage of salary earned during 2024 of the named executive officer. If the actual achievement is between these levels (between threshold and target or target and maximum), the payout is linearly interpolated. The 2024 annual awards for our named executive officers have been earned and paid, and the actual amount earned by each named executive officer is included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. The amounts shown related to our LTI represent potential payments after the completion of the three-year performance period ending December 31, 2026 (excluding the sustainability modifier). If the actual achievement is between these levels (between threshold and target or target and maximum), the payout is linearly interpolated. See “Executive Compensation - Compensation Discussion and Analysis” for more information. (2) The amounts shown for the PSU-1 award type represent the number of shares to be paid out upon the vesting of performance-based RSUs granted during the year under our Equity Incentive Plan. PSU-1 awards only provide for a single performance condition, so no threshold or maximum payouts are disclosed, and there is either a full payout of the amount shown (subject to time-based vesting) or no payout. See “Executive Compensation - Compensation Discussion and Analysis” for more information. (3) In 2024, LKQ granted performance-based three-year equity awards (PSU-2s) under our Equity Incentive Plan. As these awards are performance-based, the exact number of shares to be paid may be zero or may range from 50% to 200% of the target number of shares, depending on the Company's performance and the achievement of certain performance metrics (adjusted diluted EPS, three-year average organic parts & services revenue growth, and three-year average ROIC) over the three-year period ending December 31, 2026. The amounts shown represent the number of shares that may be paid out upon achievement of the threshold, target, and maximum performance levels. Payout for performance between levels will be linearly interpolated. See “Executive Compensation - Compensation Discussion and Analysis” for more information. (4) The amounts disclosed under the “Grant Date Fair Value of Stock and Option Awards” column represent the grant date fair value calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For more information, please see Footnote 2 to the Summary Compensation Table above.

  34. Outstanding Equity Awards at Fiscal Year-End December 31, 2024

    Outstanding Equity Awards at Fiscal Year-End December 31, 2024 The following table sets forth information regarding the status of equity awards held by the named executive officers at December 31, 2024.

  35. Outstanding Equity Awards at Fiscal Year-End December 31, 2024

    | | Stock Awards (1) | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | 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)(3) | | Justin Jude | 53,181 | $1,954,402 | 44,452 | $1,633,611 | | Dominick Zarcone | 113,227 | $4,161,092 | 119,719 | $4,399,673 | | Rick Galloway | 32,227 | $1,184,342 | 20,443 | $751,280 | | Andy Hamilton | 37,888 | $1,392,384 | 20,048 | $736,764 | | Matthew McKay | 24,260 | $891,555 | 18,765 | $689,614 | | John Meyne | 24,536 | $901,698 | 17,284 | $635,187 |

  36. Outstanding Equity Awards at Fiscal Year-End December 31, 2024

    (1) The stock awards include RSUs, PSU-1s and PSU-2s. PSU-1s generally vest in equal tranches on March 1 and September 1 over a three-year period on each six-month anniversary of the grant date based on continued service, provided that we achieve positive adjusted diluted EPS during any fiscal year period within five years following the grant date. Generally, no PSU-1s vest prior to achievement of positive adjusted diluted EPS, and, if positive adjusted diluted EPS is not achieved within the five years following grant, the PSU-1 is forfeited. The performance-based conditions for the PSU-1s granted in 2022, 2023 and 2024 were met, and all applicable PSU-1s that had previously met the time-based vesting condition vested immediately and the remaining PSU-1s will vest according to the remaining schedule of the time-based condition. These are reflected as time-based awards in the table above. We granted performance-based restricted stock units (PSU-2s) in 2022, 2023 and 2024. The exact number of shares to be paid out after completion of the performance period may be up to twice the grant amount. The following table sets forth the vesting schedule of the unvested number of RSUs, PSU-1s and PSU-2s for each named executive officer as of December 31, 2024, with the 2022 PSU-2s based on actual achievement of 27.6% of target for the performance period ended December 31, 2024 (which are reflected in the table above as time-based awards), and the 2023 and 2024 PSU-2s, for which the performance period has not yet ended, based on maximum potential achievement:

  37. Outstanding Equity Awards at Fiscal Year-End December 31, 2024

    | | 2025 | 2026 | 2027 | 2028 | Total | | Justin Jude | 30,275 | 20,312 | 47,046 | — | 97,633 | | Dominick Zarcone | 72,368 | 52,685 | 107,893 | — | 232,946 | | Rick Galloway | 18,399 | 13,311 | 20,960 | — | 52,670 | | Andy Hamilton | 18,905 | 18,341 | 20,515 | 175 | 57,936 | | Matthew McKay | 14,442 | 9,764 | 18,819 | — | 43,025 | | John Meyne | 11,957 | 7,976 | 21,449 | 438 | 41,820 |

  38. Outstanding Equity Awards at Fiscal Year-End December 31, 2024

    (2) The amounts shown in these columns are based on the closing price ($36.75) of a share of our common stock on December 31, 2024, the last trading day of fiscal year 2024. (3) The amounts shown in these columns include shares subject to PSU-2s, with the numbers and values of such shares based on actual achievement for the 2022 PSU-2s, for which the performance period ended December 31, 2024, and maximum potential achievement for the PSU-2s granted in 2023 and 2024, for which the performance period has not yet ended.

  39. Option Exercises and Stock Vested for Fiscal Year-End December 31, 2024

    Option Exercises and Stock Vested for Fiscal Year-End December 31, 2024 The following table sets forth information regarding the vesting of the named executive officers' RSUs, PSU-1s, and PSU-2s during the last fiscal year.

  40. Option Exercises and Stock Vested for Fiscal Year-End December 31, 2024

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Justin Jude | 34,534 | $1,736,321 | | Dominick Zarcone | 132,667 | $6,682,552 | | Rick Galloway | 18,805 | $903,876 | | Andy Hamilton | 17,719 | $810,742 | | Matthew McKay | 19,780 | $991,338 | | John Meyne | 4,585 | $210,392 |

  41. Option Exercises and Stock Vested for Fiscal Year-End December 31, 2024

    (1) The amounts shown in this column are based on the closing price of our stock price on the applicable vesting date.

  42. Pension Benefits

    Pension Benefits None of our named executive officers participated in or received benefits from a pension plan during the last fiscal year or in any prior year.

  43. Nonqualified Deferred Compensation for Fiscal Year-End December 31, 2024

    Nonqualified Deferred Compensation for Fiscal Year-End December 31, 2024 The following table sets forth information regarding the accounts of the named executive officers in the retirement plan that supplements our 401(k) plan. This supplemental plan is discussed beginning on page 36.

  44. Nonqualified Deferred Compensation for Fiscal Year-End December 31, 2024

    | Name | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY (2) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/Distributions | Aggregate Balance at Last FYE (4) | | Justin Jude | $221,049 | $55,020 | $475,113 | $— | $4,530,379 | | Dominick Zarcone | $1,136,682 | $126,237 | $451,333 | $(59,018) | $5,089,879 | | Rick Galloway | $154,810 | $39,718 | $78,681 | $— | $680,515 | | Andy Hamilton | $— | $— | $— | $— | $— | | Matthew McKay | $54,695 | $33,579 | $146,190 | $— | $1,333,218 | | John Meyne | $368,468 | $25,998 | $196,970 | $— | $3,249,617 |

  45. Nonqualified Deferred Compensation for Fiscal Year-End December 31, 2024

    (1) These amounts represent contributions to the supplemental plan by the named executive officers from their respective 2024 salaries, 2023 bonuses (paid in 2024), and Cash-Based LTI for the 2021-2023 program (paid in 2024) reported in the Summary Compensation Table under the columns entitled “Salary” (in 2024) and “Non-Equity Incentive Plan Compensation” (in 2023). (2) These amounts were also reported in the Summary Compensation Table under the column entitled “All Other Compensation” for fiscal year 2024. These amounts represent aggregate contributions to the supplemental plan by the Company for fiscal year 2024. (3) These amounts represent aggregate interest or other earnings accrued during fiscal year 2024, none of which were reported in the Summary Compensation Table. (4) These amounts represent money we owe the named executive officers for salaries and incentive compensation they earned in prior years but did not receive because they elected to defer receipt. The following amounts of executive and Company contributions were included in the Summary Compensation Table in prior years: Mr. Jude - $1,119,051; Mr. Zarcone - $3,046,962; Mr. Galloway - $267,230. Refer to page 36 for a description of the terms of the plan.

  46. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Severance Policy The Severance Policy applies to the executive officers of the Company and any other executive designated by the Compensation and Human Capital Committee (“Covered Executives”). It provides that, in the event the employment of a Covered Executive is terminated by the Company without “cause” or by the Covered Executive with “good reason,” the Company will provide to such Covered Executive (a) a pro rata bonus for the year in which the termination occurs (based on the actual performance achieved, as applicable to other active participants), (b) during the Severance Period (defined as 18 months in the case of the Chief Executive Officer and our Chief Financial Officer and 12 months for all other Covered Executives), a monthly severance payment equal to one-twelfth of the sum of the Covered Executive’s latest annual base salary and the average annual bonus (for the two prior full fiscal years), (c) a pro rata payment of any pending cash long term incentive award (based on the actual performance achieved, as applicable to other active participants), (d) Company-subsidized health and dental coverage during the applicable Severance Period, (e) continuation of vesting of outstanding performance based restricted stock units and other restricted stock units during the applicable Severance Period, and (f) outplacement services. The foregoing payments and benefits for a Covered Executive could be reduced in connection with the application of Internal Revenue Code Section 280G if such a reduction would enable the Covered Executive to financially benefit on an after-tax basis. The receipt by a Covered Executive of any severance benefits is conditioned upon (a) the delivery by the Covered Executive of a full and unconditional release of all claims against the Company, and (b) compliance by the Covered Executive during the Severance Period with provisions relating to confidentiality, non-competition, non-solicitation of the Company’s customers, and non-hiring of the Company’s employees. For purposes of the Severance Policy and the Change of Control Agreements described below, “Cause” generally means the named executive officer’s (i) engagement in willful and continued failure to substantially perform his material duties with the Company; (ii) engagement in misconduct that is materially and demonstrably injurious to the Company; (iii) conviction of, or plea of no contest to, a felony, other crime of moral turpitude; or (iv) final non-appealable adjudication in a criminal or civil proceeding for fraud. For purposes of the Severance Policy and the Change of Control Agreements described below, “Good Reason” means (i) a substantial adverse change in the named executive officer’s title, position, offices, nature of his duties or responsibilities, or reporting relationship; (ii) reduction of the named executive officer’s base salary, bonus, or benefits; (iii) failure by the Company to pay the named executive officer material compensation or benefits when due including, without limitation, failure by the Company to pay any accrued benefits; (iv) the relocation of the named executive officer’s primary office to a location which is more than 40 miles; or (v) or any failure by a successor to the Company to assume the agreement or, in the case of the change of control agreements, assume any agreement with respect to the named executive officer’s outstanding equity awards. Change of Control Agreements The Change of Control Agreements with our executive officers provide certain severance payments and other benefits in the event the employment is terminated by the Company without "cause" or by the executive with "good reason" within two years following a Change of Control (or within 12 months prior to a Change of Control in certain circumstances). Each of our named executive officers is a party to a change in control agreement. Upon a qualifying termination, the employee will be entitled to receive payments and benefits that include the following: •Payment of salary and other compensation accrued through the termination date; •Payment of a pro rata annual bonus (in a lump-sum); •A lump sum severance payment equal to two times the sum of the employee's (a) salary and (b) the greater of the employee's target annual bonus or average annual bonus over the preceding three years; •If applicable, all unreimbursed relocation expenses; •Continuing coverage of the employee and the employee's dependents under the Company's health and dental care plans for up to a period of 24 months; •Outplacement services; and •The employee's outstanding equity-based compensation awards will become vested and exercisable in full (in the case of performance-based awards, based on actual or assumed performance). If the employee’s employment with the Company is terminated as a result of death or disability, the employee or his or her estate will be entitled to receive salary and other compensation accrued through the termination date and a pro rata annual bonus (in a lump-sum). If the employee’s employment with the Company is terminated for Cause or the employee resigns for other than Good Reason (as those terms are defined in the agreement) the employee will be entitled to receive salary and other compensation accrued through the termination date. The agreement also contains confidentiality obligations on the part of the employee that survive indefinitely and requires that the employee deliver a release to the Company as a condition to receiving payments of benefits under the agreement. The agreement also provides that in the event of a dispute concerning an agreement, the Company will pay the legal fees of the employee. Under the agreements, a “Change of Control” would include any of the following events: •any “person,” as defined in the Exchange Act, acquiring 30% or more of our outstanding common stock or combined voting power of our outstanding securities, subject to certain exceptions; •during a two-year period, our current directors (or new directors approved by them) cease to constitute a majority of our Board; and •a merger, consolidation, share exchange, reorganization or similar transaction involving the Company or any of its subsidiaries, a sale of substantially all the Company’s assets, or the acquisition of assets or stock of another entity by the Company (unless following such business combination transaction a majority of the Company’s directors continue as directors of the resulting entity, the holders of the outstanding voting securities of the Company immediately prior to such an event continue to own shares or other securities that represent more than 50% of the combined voting power of the resulting entity after such event in substantially the same proportions as their ownership prior to such business combination transaction, and no person owns 30% or more of the resulting entity’s common stock or voting securities). In the event of a Change of Control of the Company, a Covered Executive who is a party to a Change of Control Agreement and who experiences a qualifying termination will generally be eligible only for the benefits under the Change of Control Agreement (and not Severance Policy benefits). Moreover, if a Covered Executive had already received benefits under the Severance Policy, such received benefits would reduce or offset the benefits (to the extent that they are the same type of benefit) that are otherwise provided to the Covered Executive under the Change of Control Agreement. Other Change of Control Payments

  47. Potential Payments Upon Termination or Change in Control

    Pursuant to the Company's Equity Incentive Plan, for equity awards, upon a Change of Control, if the acquiror assumes the awards on substantially the terms existing prior to the Change of Control, the vesting periods and/or conditions of the awards do not accelerate; if the acquiror does not assume the award or if the participant’s employment is terminated involuntarily or constructively within two years of the Change of Control, the awards will be deemed fully vested (for performance-based awards, the vesting will be based on the actual or assumed achievement of the performance goals as determined by the Compensation and Human Capital Committee). Pursuant to the terms of our Cash Incentive Plan, upon a Change of Control, participants remain eligible to receive payments in accordance with the terms of outstanding cash bonus awards subject to continued service, provided that the annual cash bonus awards will be calculated based on the better of actual achievement of the performance goals or the target achievement. In addition, if the acquiror does not assume the annual cash bonus awards or if the participant’s employment is terminated by the Company or an affiliate without "Cause" or by the participant for "Good Reasons", within two years of the Change of Control, the annual cash bonus awards will be deemed earned based on the better of actual achievement of the performance goals or the target achievement. For purposes of the Equity Incentive Plan and the Cash Incentive Plan, “Cause” generally means a termination (i) due to the willful and continued failure or refusal by the participant to substantially perform assigned duties (other than any such failure resulting from the participant’s disability), (ii) the participant’s dishonesty or theft, (iii) the participant’s violation of any obligations or duties under any employee agreement, or (iv) the participant’s gross negligence or willful misconduct. For purposes of the Equity Incentive Plan and the Cash Incentive Plan, “Good Reason” generally means (i) a substantial reduction in the participant’s aggregate level of compensation and benefits, (ii) a substantial reduction or diminution in the participant’s titles, responsibilities, or duties, (iii) a substantial detrimental change in the participant’s employment reporting relationship, or (iv) any relocation of the Participant’s principal place of business of 50 miles or more. The following table summarizes the value of payments and benefits that our named executive officers who were employed as of December 31, 2024 would have received under the circumstances described in the table assuming the event occurred on December 31, 2024. The table excludes amounts that were fully-earned as of December 31, 2024, such as accrued but unpaid salary, earned annual bonus awards for the one-year performance period ended December 31, 2024, and earned Cash-Based long-term incentive awards and PSU-2s for the three year performance period ended December 31, 2024. Mr. Zarcone’s employment terminated on December 31, 2024, and he did not receive any severance benefits in connection with such termination.

  48. Potential Payments Upon Termination or Change in Control

    | | Involuntary Termination (1)(2) | Change of Control where LTI Awards are not Assumed or Continued (3) | Involuntary Termination in Connection with a Change of Control (1) | Death or Disability (4) | | Justin Jude | | | | | | Cash Severance (5) | $2,469,531 | $— | $4,303,825 | $3,292,307 | | Unvested and Accelerated Share-based Awards | 1,383,895 | 1,877,668 | 1,877,668 | 1,877,668 | | PSU - 2 Awards (6) | — | 741,027 | 741,027 | 1,044,141 | | Cash-Based Long-Term Incentive (7) | 350,000 | 1,520,000 | 1,520,000 | 1,520,000 | | Medical and Dental Benefits (8) | 23,181 | — | 30,908 | — | | Other Benefits and Perquisites (9) | 7,500 | — | 7,500 | — | | Total | $4,234,107 | $4,138,695 | $8,480,928 | $7,734,116 | | Rick Galloway | | | | | | Cash Severance (5) | $1,691,577 | $— | $2,413,115 | $2,684,650 | | Unvested and Accelerated Share-based Awards | 868,660 | 1,138,956 | 1,138,956 | 1,138,956 | | PSU - 2 Awards (6) | — | 317,594 | 317,594 | 549,743 | | Cash-Based Long-Term Incentive (7) | 150,000 | 810,000 | 810,000 | 810,000 | | Medical and Dental Benefits (8) | 65,764 | — | 87,685 | — | | Other Benefits and Perquisites (9) | 7,500 | — | 7,500 | — | | Total | $2,783,501 | $2,266,550 | $4,774,850 | $5,183,349 | | Andy Hamilton | | | | | | Cash Severance (5) | $990,486 | $— | $2,053,393 | $2,556,200 | | Unvested and Accelerated Share-based Awards | 678,368 | 1,375,994 | 1,375,994 | 1,375,994 | | PSU - 2 Awards (6) | — | 317,594 | 317,594 | 520,674 | | Cash-Based Long-Term Incentive (7) | 150,000 | 747,837 | 747,837 | 747,837 | | Medical and Dental Benefits (8) | 55,327 | — | 110,655 | — | | Other Benefits and Perquisites (9) | 7,500 | — | 7,500 | — | | Total | $1,881,681 | $2,441,425 | $4,612,973 | $5,200,705 | | Matt McKay | | | | | | Cash Severance (5) | $943,534 | $— | $1,982,006 | $2,604,917 | | Unvested and Accelerated Share-based Awards | 483,042 | 843,854 | 843,854 | 843,854 | | PSU - 2 Awards (6) | — | 296,426 | 296,426 | 489,914 | | Cash-Based Long-Term Incentive (7) | 140,000 | 720,000 | 720,000 | 720,000 | | Medical and Dental Benefits (8) | 43,410 | — | 86,819 | — | | Other Benefits and Perquisites (9) | 7,500 | — | 7,500 | — | | Total | $1,617,486 | $1,860,280 | $3,936,605 | $4,658,685 | | John Meyne | | | | | | Cash Severance (5) | $771,269 | $— | $1,920,000 | $2,144,666 | | Unvested and Accelerated Share-based Awards | 439,420 | 901,698 | 901,698 | 901,698 | | PSU - 2 Awards (6) | — | 317,594 | 317,594 | 317,594 | | Cash-Based Long-Term Incentive (7) | 150,000 | 587,600 | 587,600 | 587,600 | | Medical and Dental Benefits (8) | 31,177 | — | 62,355 | — | | Other Benefits and Perquisites (9) | 7,500 | — | 7,500 | — | | Total | $1,399,366 | $1,806,892 | $3,796,747 | $3,951,558 |

  49. Potential Payments Upon Termination or Change in Control

    (1) Involuntary Termination means termination of employment by the Company without Cause (as defined in the Severance Policy or Change of Control Agreement) or resignation of employment by the named executive officer for Good Reason (as defined in the Severance Policy or Change of Control Agreement). (2) The amount shown for the Cash Severance payment would be paid out in equal monthly installments over the Severance Period (18 months in the case of our Chief Executive Officer and our Chief Financial Officer or 12 months in the case of all other Covered Executives). The Unvested and Accelerated Share Based Awards amount represents the value of share-based awards (using the market value of LKQ common stock on the last trading day of 2024, $36.75) that would continue to vest during the Severance Period (18 months in the case of our Chief Executive Officer, our Chief Financial Officer or 12 months in the case of all other Covered Executives). (3) For the avoidance of doubt, all LTI is subject to “double trigger” vesting acceleration in the event of a change of control. (4) The amount shown for the Cash Severance payment represents the life insurance proceeds payable to the named executive officer’s beneficiaries pursuant to company-provided life insurance coverage in the event of death. In the event of disability each of the named executive officers would receive long-term disability payments equal to $30,000 per month until he reached the age of 65 pursuant to employer-funded long-term disability insurance coverage. (5) For description of what is included in the cash severance, see above on page 45. (6) The performance period for the PSU-2s granted in 2022 ended on December 31, 2024, and therefore these are not included in the table above. Pursuant to our Severance Policy, upon Involuntary Termination without Cause, not related to a Change of Control, the PSU-2s granted in 2023 would be earned on December 31, 2025, which is during the assumed Severance Period for all named executive officers, but the PSU-2s granted in 2024 would not vest during the assumed Severance Period. Amounts presented above are based on projected performance as of December 31, 2024. Pursuant to the award agreement for the PSU-2s, upon Involuntary Termination without Cause Following a Change of Control or Change in Control where LTI Awards are not Assumed or Continued, vesting of the PSU-2s granted in 2023 and 2024 would accelerate based on projected performance as of December 31, 2024. Pursuant to the award agreement, upon termination due to death or Disability, vesting of the PSU-2s granted in 2023 and 2024 would accelerate at target. (7) The performance period for the Cash-Based Long-Term Incentives granted in 2022 ended on December 31, 2024, and therefore these are not included in the table above. Pursuant to the Severance Policy, upon Involuntary Termination without Cause, not related to a Change of Control, a pro-rated portion of each of the Cash-Based Long-Term Incentives granted in 2023 and 2024 would be earned, based on actual performance at the end of the performance period. Amounts presented above are based on projected performance as of December 31, 2024. Pursuant to the CIP, upon Involuntary Termination without Cause Following a Change of Control or Change in Control where LTIP Awards are not Assumed or Continued, each of the Cash-Based Long-Term Incentives granted in 2023 and 2024 would be earned at the greater of actual achievement or target. Amounts presented above are based on actual achievement as of December 31, 2024. Pursuant to the CIP, upon termination due to death or Disability, the Cash-Based Long-Term Incentives granted in 2023 and 2024 would be earned at target. (8) Medical and Dental Benefits reflect the lump sum payment to each named executive officer in the event that the terms of the Company’s Health Plans (as defined in the agreement) do not allow participation subsequent to a termination or Change of Control. In the event the Health Plans do allow participation, such benefits paid by the Company will be dependent on actual claims incurred due to the self-insured nature of the Company’s plans. Medical and dental benefits are reduced to the extent that the individual becomes covered under a group health or dental plan providing comparable benefits. (9) In addition to the benefits shown, each named executive officer is entitled to receive outplacement services at the expense of the Company. While the amounts to be incurred by the Company for such services would be dependent on the terms and conditions of the services, we have estimated the fees at $7,500. Other than as described above or as set forth in the table above, we do not have any pension, change in control, severance or other post-termination plans or arrangements.

  50. CEO Pay Ratio

    CEO Pay Ratio As required by SEC rules, we are providing the following information about the relationship of the annual total compensation of our median employee (excluding our President and Chief Executive Officer) and the annual total compensation of Justin Jude, our President and Chief Executive Officer (“CEO”) on December 31, 2024. The pay ratio provided below is a reasonable estimate calculated in accordance with SEC rules and methods for disclosure. Due to estimates, assumptions, adjustments, and statistical sampling permitted under the rules, pay ratio disclosures may involve a degree of imprecision and may not be consistent with the methodologies utilized by other companies. For 2024, the median of the annual total compensation of all our employees, other than our CEO, was $44,406; and the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $4,501,186. As a result, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees was approximately 101 to 1. We took the following steps to identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO. 1.To identify the “median employee” from our employee population determined as of December 31, 2024, we used the amount of “gross wages” for the identified employees as reflected in our payroll records for 2024. For gross wages, we generally used the total amount of compensation the employees were paid before any taxes, deductions, insurance premiums, and other payroll withholding. We did not use any statistical sampling techniques. We annualized the compensation for employees who began employment after the start of the year. For compensation paid to our non-U.S. employees, we applied the U.S. dollar yearly average currency exchange rate to the local currency to facilitate comparison of all employees in U.S. dollars. 2.For the annual total compensation of our median employee, we identified and calculated the elements of that employee’s compensation for 2024 in accordance with the requirements of Item 402(c)(2)(x) of SEC Regulation S-K.

  51. Pay Versus Performance Disclosure

    Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, we are providing certain information, including information about the relationship between executive compensation actually paid (“CAP”) to certain individuals by the Company and certain financial performance of the Company. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis. Performance Measures Used for Linking Pay and Performance The following is a list of performance measures, which in our assessment represent the most important performance measures used by the Company to link compensation actually paid to the NEOs for 2024. Each metric below is used for purposes of determining payouts under either our CIP or vesting of our PSU-2s. Please see the Compensation Discussion and Analysis for a description of these metrics, including how they are subject to pre-established adjustments, and how they are used in the Company’s executive compensation program.

  52. Pay Versus Performance Disclosure

    | Adjusted Diluted EPS | | Organic Parts and Services Revenue Growth | | Free Cash Flow | | Return on Invested Capital | | EBITDA Dollars | | EBITDA Margin |

  53. Pay Versus Performance Disclosure

    Pay Versus Performance Table

  54. Pay Versus Performance Disclosure

    | Year | Summary Compensation Table Total for Current PEO(1) | Summary Compensation Table Total for Former PEO(1) | Compensation Actually Paid to Current PEO(2) | Compensation Actually Paid to Former PEO(2) | Average Summary Compensation Table Total for Other NEOs(3) | Average Compensation Actually Paid to Other NEOs(4) | Value of Initial Fixed $100 Investment Based on: | | GAAP Net Income ($ mil.)(7) | Adjusted Diluted EPS (8) | | | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | | | | 2024 | $4,501,186 | $7,853,650 | $2,841,681 | $1,932,110 | $2,175,653 | $1,366,778 | $111 | $81 | $693 | $3.65 | | 2023 | — | 12,189,021 | — | 10,962,088 | 3,402,781 | 3,111,223 | 140 | 105 | 938 | 3.98 | | 2022 | — | 10,740,892 | — | 11,905,149 | 2,982,991 | 2,761,619 | 153 | 105 | 1,150 | 3.95 | | 2021 | — | 9,445,636 | — | 17,406,173 | 3,049,150 | 5,627,834 | 169 | 142 | 1,092 | 3.94 | | 2020 | — | 7,843,673 | — | 7,733,481 | 2,513,288 | 2,401,479 | 99 | 118 | 640 | 2.68 |

  55. Pay Versus Performance Disclosure

    (1) The amounts reported in these columns are the amounts of total compensation reported for our current President and Chief Executive Officer, Justin Jude, and our former President and Chief Executive Officer, Dominick Zarcone, for each corresponding year in the “Total” column of the applicable Summary Compensation Table (“SCT”). (2) CAP to our PEOs are computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to SCT total compensation to determine the CAP values: Reconciliation of SCT to CAP for PEO

  56. Pay Versus Performance Disclosure

    | Year | Summary Compensation Table Total for PEO | Minus Summary Compensation Table Value of Equity Awards Granted to PEO | Plus Year-End Fair Value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at Year-End | Plus (Minus) Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years that are Outstanding and Unvested at Year-End | Plus Fair Value at Vesting Date of Equity Awards Granted and Vested During the Year | Plus (Minus) Change in Fair Value from End of Prior Year to Vesting Date of Equity Awards Granted in Any Prior Year that Vested During the Year | Minus Fair Value at End of Prior Year of Equity Awards Granted in Any Prior Years that was Forfeited During the Year | PEO CAP* | | 2024 (Jude) | $4,501,186 | $3,150,075 | $2,295,633 | $(509,388) | $0 | $(295,675) | $0 | $2,841,681 | | 2024 (Zarcone) | $7,853,650 | $5,800,020 | $4,226,795 | $(2,553,523) | $0 | $(1,794,792) | $0 | $1,932,110 |

  57. Pay Versus Performance Disclosure

    * The fair value of restricted stock units (RSUs) used to calculate CAP was based on LKQ’s closing stock price on each valuation date and includes the cash value of accrued dividends. The fair value of performance stock units (PSUs) used to calculate CAP was based on LKQ’s closing stock price on each valuation date and assumes estimated performance results as of the end of each reporting year for performance metrics and includes the cash value of accrued dividends. (3) For 2024, other NEOs are Mr. Galloway, Mr. Hamilton, Mr. Meyne, and Mr. McKay; for 2023, other NEOs are Mr. Galloway, Mr. Laroyia (former Executive Vice President, CEO and Managing Director of LKQ Europe), Mr. Jude, and Mr. Hanley (Senior Vice President, Development); for 2022, other NEOs are Mr. Galloway, Mr. Laroyia, Mr. Jude, Mr. Hanley, Mr. McKay, and Mr. Franz (former Senior Vice President, and CEO of LKQ Europe); for 2021 other NEOs are Mr. Laroyia, Mr. Franz, Mr. Jude, and Mr. Hanley; for 2020 other NEOs are Mr. Laroyia, Mr. Franz, Mr. Jude, and Mr. Hanley. (4) Average CAP to our other NEOs is computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to SCT total compensation to determine the CAP values: Reconciliation of SCT to CAP for Other NEOs (averaged across Other NEOs)

  58. Pay Versus Performance Disclosure

    | Year | Summary Compensation Table Total for Other NEOs | Minus Summary Compensation Table Value of Equity Awards Granted to Other NEOs | Plus Year-End Fair Value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at Year-End | Plus (Minus) Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years that are Outstanding and Unvested at Year-End | Plus Fair Value at Vesting Date of Equity Awards Granted and Vested During the Year | Plus (Minus) Change in Fair Value from End of Prior Year to Vesting Date of Equity Awards Granted in Any Prior Year that Vested During the Year | Minus Fair Value at End of Prior Year of Equity Awards Granted in Any Prior Years that was Forfeited During the Year | Other NEOs CAP* | | 2024 | $2,175,653 | $1,327,551 | $967,459 | $(326,293) | $0 | $(122,492) | $0 | $1,366,778 |

  59. Pay Versus Performance Disclosure

    * The fair value of restricted stock units (RSUs) used to calculate CAP was based on LKQ’s closing stock price on each valuation date and includes the cash value of accrued dividends. The fair value of performance stock units (PSUs) used to calculate CAP was based on LKQ’s closing stock price on each valuation date and assumes estimated performance results as of the end of each reporting year for performance metrics and includes the cash value of accrued dividends. (5) Represents the cumulative total shareholder return (TSR) of LKQ for an initial investment of $100 on December 31, 2019 through and including the end of the fiscal year for each row in the table. (6) Represents the cumulative total shareholder return (TSR) of the Dow Jones U.S. Auto Parts Index, which is an industry line peer group reported in the performance graph included in the Company’s 2024 Annual Report on Form 10-K, for an initial investment of $100 on December 31, 2019 through and including the end of the fiscal year for each row in the table. (7) Represents LKQ’s GAAP Net Income as reported in the Company’s Consolidated Statements of Income on Form 10-K for each fiscal year in the table. (8) Represents LKQ’s adjusted diluted EPS, subject to pre-established adjustments, which is the Company-selected measure. Refer to the Compensation Discussion and Analysis section of this Proxy Statement for a description of adjusted diluted EPS and the pre-established adjustments. Relationship between Company TSR and Peer Group TSR and CAP and Company TSR

  60. Description of the Information Presented in the Pay versus Performance Table

    Description of the Information Presented in the Pay versus Performance Table As described in greater detail in the Compensation Discussion and Analysis section of this Proxy Statement, the Company’s executive compensation program reflects a pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance (as described in greater detail in the Compensation Discussion and Analysis section of this Proxy Statement), not all of those Company measures are presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular fiscal year. Compensation actually paid is influenced by numerous factors, including but not limited to the timing of new grant issuances and outstanding grant vesting, share price volatility during the fiscal year, our mix of short-term and long-term metrics, and many other factors. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The cumulative TSR of the Company was $111, $140, $153, $169, and $99 for 2020-2024, 2020-2023, 2020-2022, 2020-2021, and 2020, respectively. The cumulative TSR of the Company’s Peer Group (the Dow Jones U.S. Auto Parts index) was $81, $105, $105, $142, and $118 for 2020-2024, 2020-2023, 2020-2022, 2020-2021, and 2020, respectively. Please see Note 5 and Note 6, above, for additional information related to the computation of cumulative Company TSR and Peer Group TSR, respectively. For 2020, the Company’s cumulative TSR was negative while that of the Peer Group was positive. For 2020-2021, 2020-2022 and 2020-2023, both the Company and the Peer Group cumulative TSR were positive and directionally aligned. For 2020-2024, the cumulative TSR of the Company was positive while that of the Peer Group was negative. CAP and Cumulative Company TSR CAP to our current PEO was $2,841,681 for 2024. CAP to our former PEO was $1,932,110, $10,962,088, $11,905,149, $17,406,173, and $7,733,481 for 2024, 2023, 2022, 2021, and 2020, respectively. The average CAP to the NEOs as a group (excluding the PEO(s) in the applicable year) was $1,366,778, $3,111,223, $2,761,619, $5,627,834, and $2,401,479 for 2024, 2023, 2022, 2021, and 2020, respectively. The cumulative TSR of the Company, assuming an initial fixed $100 investment was $111, $140, $153, $169, and $99 for 2020-2024, 2020-2023, 2020-2022, 2020-2021, and 2020, respectively. Please see the notes above for additional information related to the computation of CAP and cumulative Company TSR. CAP was generally directionally aligned with Company cumulative TSR. As Company cumulative TSR increased or decreased, CAP generally moved in the same direction. CAP and GAAP Net Income CAP to our current PEO was $2,841,681 for 2024. CAP to our former PEO was $1,932,110, $10,962,088, $11,905,149, $17,406,173, and $7,733,481 for 2024, 2023, 2022, 2021, and 2020, respectively. The average CAP to the NEOs as a group (excluding the PEO(s) in the applicable year) was $1,366,778, $3,111,223, $2,761,619, $5,627,834, and $2,401,479 for 2024, 2023, 2022, 2021, and 2020, respectively. The Company’s net income, as computed in accordance with Item 402(v) of Regulation S-K and reflected in the Company’s audited financial statements for the applicable fiscal year, was (in millions) $693, $938, $1,150, $1,092, and $640 for 2024, 2023, 2022, 2021, and 2020, respectively. CAP was generally directionally aligned with the Company’s net income. As Company net income increased or decreased, CAP generally moved in the same direction. CAP was not as sensitive to movements in net income as it was to movements in Company cumulative TSR, since a significant portion of executive compensation is paid in the form of stock. CAP and Adjusted Diluted EPS CAP to our current PEO was $2,841,681 for 2024. CAP to our former PEO was $1,932,110, $10,962,088, $11,905,149, $17,406,173, and $7,733,481 for 2024, 2023, 2022, 2021, and 2020, respectively. The average CAP to the NEOs as a group (excluding the PEO(s) in the applicable year) was $1,366,778, $3,111,223, $2,761,619, $5,627,834, and $2,401,479 for 2024, 2023, 2022, 2021, and 2020, respectively. The Company’s adjusted diluted EPS, as defined above, was $3.65, $3.98, $3.95, $3.94, and $2.68 for 2024, 2023, 2022, 2021, and 2020, respectively. Marked increases or decreases in the Company’s adjusted diluted EPS corresponded to a marked increase or decrease in CAP. CAP was not as sensitive to movements in adjusted diluted EPS as it was to movements in Company cumulative TSR, since a significant portion of executive is paid in the form of stock. Refer to the Compensation Discussion and Analysis section of this Proxy Statement for a description of adjusted diluted EPS.