DEF 14A of Paccar Inc, Mar 20, 2024

DEF 14A of Paccar Inc

Filed Mar 20, 2024 · FY20230001193125-24-072684

Open on EDGAR

  1. Item 1: Election of Directors

    Item 1: Election of Directors In an uncontested director election, each director nominee shall be elected by the affirmative vote of the majority of the votes cast with respect to that director’s election at any meeting for the election of directors at which a quorum is present. A majority of votes cast means that the number of shares voted “for” a director’s election exceeds 50 percent of the number of votes cast with respect to that director’s election. Votes cast include votes “against,” but exclude “abstentions” and “broker nonvotes” with respect to that director’s election. Pursuant to the Company’s Bylaws, an incumbent director that is not elected by a majority vote will tender his or her resignation subject to acceptance by the Board. The Company’s Certificate of Incorporation does not provide for cumulative voting. Proxies signed, dated and returned unmarked will be voted FOR all of the nominees. Please note that brokers and custodians may not vote on the election of directors in the absence of specific client instruction. Those who hold shares in such accounts are encouraged to provide voting instructions to the broker or custodian. If any nominee is unable to act as director because of an unexpected occurrence, the proxy holders may vote the proxies for another person or the Board of Directors may reduce the number of directors to be elected.

  2. BOARD NOMINEES FOR DIRECTORS

    BOARD NOMINEES FOR DIRECTORS

  3. (TERMS EXPIRE AT THE 2025 ANNUAL MEETING)

    (TERMS EXPIRE AT THE 2025 ANNUAL MEETING) MARK C. PIGOTT, age 70, is Executive Chairman of the Company and has held that position since April 2014. Mr. Pigott was Chairman and Chief Executive Officer of the Company from January 1997-April 2014, Vice Chairman from January 1995-December 1996, Executive Vice President from December 1993-January 1995, Senior Vice President from January 1990-December 1993, and Vice President from October 1988-December 1989. He served as a director of Franklin Resources Inc., an investment management company, from 2011-2021. He is the brother of John M. Pigott, a director of the Company. He has served as a director of the Company since 1994. Mr. Pigott has the attributes and qualifications listed in the Company guidelines for board membership including engineering and business degrees from Stanford University, thorough knowledge of the global commercial vehicle industry and an outstanding record of profitable growth generated through 45 years with the Company. PACCAR has benefited from an excellent record of industry-leading stockholder returns generated under his leadership. DAME ALISON J. CARNWATH, age 71, has been a senior adviser to Evercore Partners, an independent corporate finance advisory firm (formerly known as Lexicon Partners) in the United Kingdom, since 2005. She has also served as a director of Coller Capital Ltd. since 2015, and as a director and audit committee chair of both EG Group Ltd. and ASDA Group Ltd. since 2021, all United Kingdom-based companies. She has been a member of the supervisory board and chair of the audit committee of BASF, a leading chemical company based in Germany, since 2014, and has served as a director of Zurich Insurance Group since 2012 and currently serves as audit committee chair. She previously served as chair of the advisory board at LivingBridge Services Ltd., a private equity firm (1999-2023); as chair of Land Securities P L C, the United Kingdom’s largest property company listed on the London Stock Exchange (2008-2018); as non-executive chair of MF Global Holdings Ltd. (2008-2010); and as a non-executive director of BP P.L.C. (2018-2021) and the Man Group Ltd. (2001-2013), all based in the United Kingdom. She has served as a director of the Company since 2005. Dame Alison has the attributes and qualifications listed in the Company guidelines for board membership including certification as a chartered accountant, service as chair (1999-2004) and chief executive (2001) of Videndum PLC (formerly the Vitec Group), a British supplier to the broadcast industry, and extensive experience in international finance and investment banking, including three years as a managing director of Donaldson, Lufkin & Jenrette International (1997-2000). FRANKLIN L. FEDER, age 72, served as chief executive officer, Alcoa Latin America & Caribbean, of Alcoa Corporation, a global producer of bauxite, alumina and aluminum, from 2004-2014. He previously served as vice president financial planning & analysis and director of corporate development of Alcoa Corporation from 1999-2004, chief financial officer of Alcoa Latin America from 1994-1999 and director corporate planning from 1990-1994. He was also managing partner of Technomic Consultores from 1978-1988, and a partner at Booz Allen Hamilton Inc. from 1989-1990. He has served as a director of Minerals Technologies Inc. since 2017. He has also served as a director of Companhia Brasileira de Alumínio and AES Tiete Energia S.A. since 2016, of Prumo Logística S.A. since 2019, and, since 2021, as a member of the advisory board of Prada Assessoria, all Brasil-based companies. He previously served as a director of Intercement Brasil from 2017-2020, a director of Loma Negra Corporation from 2018-2020, a director of Unigel from 2016-2018, a director of Grupo Dahma from 2015-2016 and a director of Alexander Proudfoot from 2014-2016. He has served as a director of the Company since 2018. Mr. Feder has the attributes and qualifications listed in the Company guidelines for board membership including an M.B.A. from IMD in Lausanne, Switzerland and a B.A. from the Getulio Vargas Foundation in Sao Paulo, Brasil. R. PRESTON FEIGHT, age 56, is Chief Executive Officer of the Company and has held that position since July 2019. Mr. Feight served as Executive Vice President of the Company from September 2018-June 2019, PACCAR Vice President and President of DAF Trucks from April 2016-August 2018, General Manager of Kenworth Truck Company and Vice President of PACCAR from January 2015-March 2016, Kenworth Assistant General Manager for Marketing and Sales from April 2012-December 2014 and Kenworth Chief Engineer from August 2008-March 2012. Previously he worked as an engineer at Ford Motor Company for six years and as an engineer at AlliedSignal Inc. for two years. He has served as a director of the Company since 2019. Mr. Feight has the attributes and qualifications listed in the Company guidelines for board membership including a B.S. in mechanical engineering from Northern Arizona University, an M.S. in engineering management from the University of Colorado and thorough knowledge of the global commercial vehicle industry gained through 26 years with the Company. KIRK S. HACHIGIAN, age 64, served as executive chairman of JELD-WEN Holding, Inc., a global manufacturer of windows and doors, from 2016 to 2019; and as JELD-WEN’s chairman and chief executive officer from 2014 to 2016. He served as chairman and chief executive officer of Cooper Industries PLC, a global manufacturer of electrical products, from 2005 to 2012. Prior to joining Cooper, Mr. Hachigian was an executive with General Electric Company for eight years, including assignments in Mexico and Asia. He has served as the chairman of Allegion PLC since 2023 and as a director since 2013, including as chair of the corporate governance and nominating committee and previously as lead director. He has served as a director of NextEra Energy Inc. since 2013 and is chair of compensation committee. He has also served as a director of L3Harris Technologies, Inc. since 2023 and as a director of Cabinetworks Group from 2021-2022. He has served as a director of the Company since 2008. Mr. Hachigian has the attributes and qualifications listed in the Company guidelines for board membership including a B.S. degree in mechanical engineering from University of California at Berkeley and an M.B.A. from the University of Pennsylvania’s Wharton School of Business.

  4. (TERMS EXPIRE AT THE 2025 ANNUAL MEETING)

    BARBARA B. HULIT, age 57, served as chief executive officer and president of the Advanced Healthcare Solutions segment of Fortive Corporation from July 2019 to January 2022, and as senior vice president from June 2016 to June 2019. While at Fortive, she had company-wide responsibility for the Fortive Business System (FBS) office, IT, procurement and high growth markets. Prior to the 2016 spin-off of Fortive from Danaher Corporation, Ms. Hulit held multiple executive roles at Danaher, including leading the Danaher Business System (DBS) office from 2012 to 2016 and serving as president of Fluke Corporation from 2005 to 2012. Prior to joining Danaher, Ms. Hulit worked at The Boston Consulting Group, Inc. for 13 years where she focused primarily on growth strategies. Ms. Hulit has served as a director of Envista Holdings Corporation, a global dental business, since 2021 and as a director of Novanta Corporation, a global technology supplier to medical and industrial manufacturers, since 2022. She has served as a member of the Dean’s Advisory Council for the Graduate School of the Kellogg School of Management at Northwestern University since 2012. She has served as a director of the Company since 2023. Ms. Hulit has the attributes and qualifications listed in the Company guidelines for board membership including an M.B.A from the Kellogg School of Management at Northwestern University, a B.A. in marketing from the University of Texas and over 30 years of experience in business strategy, operations, innovation, M&A and IT. RODERICK C. MCGEARY, age 73, served in consulting and audit roles with KPMG LLP from 1972-2000 culminating in the position as co-vice chairman of consulting (1997-1999). He has served as a director of Raymond James Financial, Inc. since September 2015 and also served as a director of Cisco Systems, Inc. from 2003 to 2023. He was chairman of BearingPoint, Inc., formerly KPMG Consulting, LLC, a management and technology consulting firm, from 2004 to 2009 and was its interim chief executive officer from 2004 to 2005. He has served as a director of the Company since 2012. Mr. McGeary has the attributes and qualifications listed in the Company guidelines for board membership including a B.S. degree in accounting from Lehigh University, strong experience as a certified public accountant and extensive experience in management and technology consulting. CYNTHIA A. NIEKAMP, age 64, served as senior vice president of automotive coatings at PPG Industries, Inc., a global leader in performance and industrial coatings. Ms. Niekamp joined PPG in 2009 as vice president of automotive coatings and was promoted to senior vice president in 2010. She also served as a member of the PPG operating committee from 2010 to 2016. Prior to joining PPG, Ms. Niekamp served as president and general manager of BorgWarner Inc.’s TorqTransfer Systems division, a global supplier of engineered-four-wheel drive systems to major automakers, from 2004 to 2008. She also served in various executive roles for MeadWestvaco Corporation (now part of WestRock Company) from 1995 to 2004, including as vice president, corporate strategy and planning; senior vice president, strategy and specialty operations; and chief financial officer. Ms. Niekamp has served as a director of Ball Corporation, a global provider of metal packaging and aerospace technologies, since 2016. She previously served as a director of Magna International Inc. (2014-2022), Cooper Tire & Rubber Company LLC (2011–2014), Rockwood Holdings, Inc. (2006-2009) and Delphi Corporation (2003-2005). She has served as a director of the Company since 2023. Ms. Niekamp has the attributes and qualifications listed in the Company guidelines for board membership including an M.B.A. from Harvard University, a bachelor’s degree with distinction in industrial engineering from Purdue University and over 33 years of experience in business and financial management, corporate strategy, emerging markets and strategic acquisitions. JOHN M. PIGOTT, age 60, is a partner in Beta Business Ventures, LLC, a private investment company concentrating in natural resources, and was a partner in the predecessor company Beta Capital Group, LLC since 2003. He is the brother of Mark C. Pigott, a director of the Company. He has served as a director of the Company since 2009. Mr. Pigott has the attributes and qualifications listed in the Company guidelines for board membership including an engineering degree from Stanford, an M.B.A. from UCLA and a background in manufacturing gained through 12 years with the Company including five years as a senior manager of Company truck operations in the United Kingdom and in the United States. He is a substantial long-term stockholder in the Company. GANESH RAMASWAMY, age 55, is Executive Vice President of Industrial & Energy Technology at Baker Hughes Company, an energy technology company with a diversified portfolio of technologies and services that span the energy and industrial value chain. Mr. Ramaswamy previously served as President of Global Services for Johnson Controls, a worldwide provider of technologies and solutions for buildings, from 2019 to 2022. From 2015 to 2019, Mr. Ramaswamy served in executive roles at Danaher Corporation, a diversified manufacturer of life sciences, diagnostics, and industrial products and services. His roles at Danaher included Senior Vice President of High Growth Markets at Beckman Coulter Diagnostics; President of Videojet Technologies Inc.; and Group Executive for Marking & Coding. From 2011 to 2015, Mr. Ramaswamy held executive roles at Hoya Corporation, including as President of Pentax Medical, a provider of endoscopic imaging devices and solutions. He began his career in product development and general management at GE Global Research and GE HealthCare. He has served as a director of the Company since 2021. Mr. Ramaswamy has the attributes and qualifications listed in the Company guidelines for board membership including a Ph.D. in mechanical engineering from the University of Pennsylvania, an M.B.A. from the University of Wisconsin – Milwaukee, an M.S. in mechanical engineering from Auburn University and a B.Tech. in mechanical engineering from the University of Kerala. MARK A. SCHULZ, age 71, is currently president and chief executive officer of M. A. Schulz and Associates, a management consulting firm, and a founding partner in Fontinalis Partners LLC, a transportation technology strategic investment firm. He served as president of international operations at Ford Motor Company from 2005 until his retirement in 2007 and in a variety of executive roles during 35 years with Ford, including running Ford’s Mazda, Jaguar, Land Rover and Aston Martin affiliates and setting up manufacturing and distribution operations in South America, Europe, Asia and Africa. He has served as a director of NWTN Inc. since 2023. He has also served as a director of Dana Incorporated (2008-2018), as a director of Yellow Corporation (2007-2009) and as a director of the National Committee of United States-China Relations and the United States-China Business Council. He has served as a director of the Company since 2012 and as lead director since January 2020. Mr. Schulz has the attributes and qualifications listed in the Company guidelines for board membership including engineering degrees from Valparaiso University and the University of Michigan, an M.B.A. from the University of Detroit, an M.S. in management from the Massachusetts Institute of Technology and over 35 years of management experience in the automotive industry worldwide.

  5. (TERMS EXPIRE AT THE 2025 ANNUAL MEETING)

    GREGORY M. E. SPIERKEL, age 67, served as chief executive officer of Ingram Micro Inc., a worldwide distributor of technology products, from 2005 to 2012. He previously served as president from March 2004-April 2005. During his 14-year tenure with that company, he held other senior positions including executive vice president. He has served as a director of Schneider Electric SE (Paris) since 2014 and also served as a director of MGM Resorts International from 2013 to 2023. He has served as a director of the Company since 2008. Mr. Spierkel has the attributes and qualifications listed in the Company guidelines for board membership including an M.B.A. from Georgetown University and 32 years of management experience around the world including seven years as chief executive of Ingram Micro Inc. THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.

  6. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS The following table provides information on compensation for non-employee directors who served during the fiscal year ended December 31, 2023:

  7. Summary Compensation

    | Name | Fees Earned or Paid in Cash ($) (a) | Stock Awards ($) (b) | All Other Compensation ($) (c) | Total ($) (d) | | A. J. Carnwath | 160,000 | 165,076 | 5,000 | 330,076 | | F. L. Feder | 141,580 | 165,076 | 5,000 | 311,656 | | B. E. Ford (e) | 48,970 | 165,076 | 0 | 214,046 | | K. S. Hachigian | 151,971 | 165,076 | 5,000 | 322,047 | | B. B. Hulit | 99,190 | 123,794 | 5,000 | 227,984 | | R. C. McGeary | 185,000 | 165,076 | 5,000 | 355,076 | | C. A. Niekamp | 95,769 | 123,794 | 10,000 | 229,563 | | J. M. Pigott | 125,000 | 165,076 | 5,000 | 295,076 | | G. Ramaswamy | 140,000 | 165,076 | 5,000 | 310,076 | | M. A. Schulz | 187,500 | 165,076 | 10,000 | 362,576 | | G. M. E. Spierkel | 165,529 | 165,076 | 5,000 | 335,605 |

  8. Non-Employee Director Compensation Program

    Non-Employee Director Compensation Program In addition to the cash compensation described in footnote (a) above, on the first business day of the year, each non-employee director receives $165,000 in restricted stock or RSUs under the RSDC Plan. The number of restricted shares or RSUs is determined by dividing $165,000 by the closing price of a share of Company stock on the first business day of the year and rounding up to the nearest whole share. Non-employee directors newly elected during the calendar year receive a prorated award to reflect the number of calendar quarters the director will serve in the year of election. RSUs are credited to the director’s deferred stock unit account. Restricted shares or RSUs vest three years after the date of grant or upon retirement, death or disability. Restricted shares receive dividends and voting rights and RSUs receive dividend equivalents (treated as if reinvested at the closing price of Company stock on the dividend date) and have no voting rights. Non-employee directors may also elect to defer all or a part of their cash retainer and fees to an income account or to a stock unit account under the RSDC Plan. The income account accrues interest at a rate equal to the simple combined average of the monthly Aa Industrial Bond yield averages for the immediately preceding quarter and is compounded quarterly. The stock unit account is credited with the number of shares of Company common stock that could have been purchased at the closing price on the date the cash compensation is payable. Stock units receive dividend equivalents (as described above) and have no voting rights. Deferred accounts are paid out at or after retirement or termination in accordance with the director’s election. The stock unit account is distributed in shares of the Company’s common stock. The deferred stock units held by non-employee directors are reflected in footnote (b) to the Stock Ownership Table on page 5. The Company provides transportation or reimburses non-employee directors for travel and out-of-pocket expenses incurred in connection with their services. It also pays or reimburses directors for expenses incurred to participate in continuing education programs related to their service as a PACCAR director.

  9. Key Compensation and Governance Practices

    | • | Net income is the key metric in the annual incentive compensation program. |

  10. Key Compensation and Governance Practices

    | • | The key metrics for long-term incentive cash awards are the three-year change in net income, return on sales, return on capital and, beginning with the 2023-2025 performance cycle, total shareholder return, as compared with Peer Companies. |

  11. Key Compensation and Governance Practices

    | • | Executive officer stock ownership guidelines and holding requirements align executives’ long-term goals with that of stockholders. |

  12. Key Compensation and Governance Practices

    | • | The Company does not discount, backdate, reprice or grant equity awards retroactively and prohibits the buy-out of underwater options. |

  13. Compensation Program Objectives and Structure

    | • | Annual incentive cash compensation. Annual cash awards that focus on the attainment of Company profit targets and individual business unit goals. |

  14. Compensation Program Objectives and Structure

    | • | An equity- and cash-based Long-Term Incentive Plan (“LTIP”) that focuses on long-term growth in stockholder value, including three-year performance versus industry peers as measured by net income change, return on sales, return on capital and, beginning with the 2023-2025 LTIP cycle, total shareholder return. The equity-based compensation consists of stock options and restricted stock or restricted stock units (RSUs). |

  15. Executive Compensation Criteria

    Executive Compensation Criteria The Committee considers a number of important factors when reviewing and determining executive compensation, including job responsibilities, Company performance, business unit performance, individual performance and compensation for executives among peer organizations. The Committee also considers the opinion of the Chief Executive Officer when determining compensation for the executives that report to him. Industry Compensation Comparison Groups. The Committee periodically utilizes information from published compensation surveys as well as compensation data from Peer Companies to determine if compensation for the Chief Executive Officer and other executive officers is competitive with the market. The Committee believes that comparative compensation information should be used in its deliberations. It does not specify a “target” compensation level for any given executive but rather a range of target compensation. The Committee has discretion to determine the nature and extent to which it will use comparative compensation data. Role of Compensation Consultants. The Committee typically retains a compensation consultant to assess the competitiveness of the Company’s compensation programs every two years. It did not employ a compensation consultant in 2023. The Committee adopted the current executive salary structure effective January 1, 2023. Peer Companies. As part of its analysis of comparative data, the Committee includes compensation data from Peer Companies. In particular, the Company measures its financial performance against Peer Companies when evaluating achievement of the cash portion of the LTIP Company Performance Goal. The Committee reviews the composition of the Peer Companies annually to ensure the companies are appropriate for comparative purposes. The Peer Companies are listed below. The Peer Group Index is listed on page 43.

  16. Elements of Total Compensation

    Elements of Total Compensation The Company’s executive compensation program is comprised of base salaries, annual incentive cash and long-term incentives consisting of cash, stock options and restricted stock/RSUs.

  17. Elements of Total Compensation

    A hallmark of the annual cash incentive program has been a consistent and rigorous focus on achieving the Company’s annual net income goal. The Committee has chosen net income, not EBITDA or operating profit, as the chief financial metric for this program because it is the primary indicator of corporate performance to stockholders. When setting incentive compensation goals for the Named Executive Officers, the Committee believes that corporate performance is an appropriate measure of individual performance. Accordingly, the majority of the 2023 annual incentive compensation for the Chief Executive Officer and a substantial portion of the annual incentive compensation for each of the Named Executive Officers is based upon Company net income performance. The net income goal is proposed by Company management and approved by the Board and the Committee before or within the first 90 days of each year. The target level represents an amount of net income that the Committee determines is attainable with excellent performance under expected economic conditions. The remaining goals for the Chief Executive Officer and the other Named Executive Officers are based upon individual business unit or leadership criteria determined by the Committee for the Chief Executive Officer and by the Chief Executive Officer for the other Named Executive Officers. The Committee assesses annual goal achievement and approves awards for the Named Executive Officers. For 2023, the Company’s net income target was $2.8 billion with a minimum incentive compensation threshold of $2.5 billion and a maximum incentive compensation threshold of $3.2 billion. Actual net income achieved was $4.6 billion. The Committee approved an overall payment for R. P. Feight of 180 percent of target, based on 140 percent achievement of the Company profit goal and 110 percent for his leadership in achieving the Company’s strategic initiatives in his role as Chief Executive Officer. The Committee approved an overall payment for H. C. Schippers of 182 percent of target, including 140 percent achievement of the business unit profit goal and 120 percent achievement for his leadership of Company growth initiatives. The Committee approved an overall payment for C. M. Dozier of 176 percent of target, including 140 percent achievement of the business unit profit goals and 110 percent achievement for his leadership of Company growth initiatives. The Committee approved an overall payment for D. C. Siver of 173.9 percent of target, including 137.4 percent achievement of the business unit profit goals and 110 percent achievement for his leadership of Company growth initiatives. The Committee approved an overall payment for T. R. Hubbard of 173 percent of target, including 140 percent achievement of the business unit profit goals and 105 percent for his leadership of Company growth initiatives. The Committee exercised discretion to reduce each Named Executive Officer’s maximum funding amount described below under the heading “IC Funding Limit” in determining payout as described above. The following table outlines the 2023 goals and incentive awards for each of the current Named Executive Officers:

  18. Elements of Total Compensation

    IC Funding Limit. IC awards for the Named Executive Officers are subject to the terms of the Senior Executive Yearly Incentive Compensation Plan (the “IC Plan”) approved by the stockholders. The maximum amount that may be paid to any eligible participant in any year under the IC Plan is $4,500,000. Pursuant to the IC Plan, the Committee established a yearly funding plan limit for 2023 IC awards equal to a percentage of the Company’s net income (the “Annual Pool”) and assigned a percentage of the Annual Pool to each Named Executive Officer. The 2023 funding limit equaled three percent of the Company’s net income and the corresponding maximum share of such pool for the current Chief Executive Officer and the next four most highly compensated executive officers was 41.7 percent, 22.7 percent, 12.4 percent, 12.4 percent and 10.8 percent, respectively. The Committee, in its sole discretion, may reduce or eliminate (but not increase) any award otherwise payable to the Named Executive Officers under each officer’s funding maximum based on the achievement of the IC Plan goals, an assessment of individual performance and other factors within the discretion of the Committee. The Committee exercised such discretion in determining the IC awards for 2023 performance. Long-Term Incentive Compensation (“LTIP”). The Company’s long-term incentive program is based on a multi-year performance period and provides annual grants of stock options and cash incentive awards. The program also includes restricted stock/RSUs, which are awarded to certain executives based on the attainment of an annual performance goal and vest over three years. The LTIP aligns the interests of executives with those of stockholders to focus on long-term growth in stockholder value. The 2023 target for each element of the long-term compensation program for each Named Executive Officer is calculated as a percentage of base salary as indicated in the table below:

  19. Elements of Total Compensation

    | Name | Long-Term Cash | Stock Options | Restricted Stock/RSUs | | R. P. Feight | 250% | 600% | 250% | | H. C. Schippers | 110% | 400% | 120% | | C. M. Dozier | 100% | 380% | 110% | | D. C. Siver | 100% | 380% | 110% | | T. R. Hubbard | 70% | 150% | 60% |

  20. Elements of Total Compensation

    | Name | Financial Performance and Individual Performance Measures for LTIP 2023-2025 Cycle | Performance Measure as a % of Target | | R. P. Feight | Company Performance Goal Business Leadership | 75 25 | | H. C. Schippers | Company Performance Goal Business Unit Profit Business Leadership | 50 30 20 | | C. M. Dozier | Company Performance Goal Business Unit Profit Business Leadership | 50 25 25 | | D. C. Siver | Company Performance Goal Business Unit Profit Business Leadership | 50 25 25 | | T. R. Hubbard | Company Performance Goal Business Unit Profit Business Leadership | 25 40 35 |

  21. Elements of Total Compensation

    The Committee believes that the three-year change in net income, return on sales, return on capital and total shareholder return are excellent indicators of the Company’s performance against the Peer Companies. The target amount will be earned if the Company’s financial performance ranks above at least half of the Peer Companies. The maximum cash award amount will be earned if the Company’s financial performance ranks above all of the Peer Companies. No award will be earned if the Company’s financial performance ranks in the bottom 25 percent of the Peer Companies. The Company has used this rigorous comparison goal for over 15 years. During that period the Company ranked above 50 percent of the Peer Companies in 12 of the last 15 years, demonstrating excellent performance against the Peer Companies and providing superior returns to stockholders. The remaining portion of the award for the Chief Executive Officer and the Named Executive Officers is based upon individual business unit and leadership goals determined by the Committee for the Chief Executive Officer, and by the Chief Executive Officer for the other Named Executive Officers, measured over a three-year performance cycle. The Committee assesses goal achievement for the prior three-year period in April following completion of the applicable cycle and approves awards for the Named Executive Officers at such time. Long-term incentive cash awards are measured on a sliding scale as indicated below:

  22. Elements of Total Compensation

    In April 2023, the Committee determined cash awards for the three-year period ending December 31, 2022. For the 2020-2022 LTIP cycle, the Company ranked third among the eleven Peer Companies and the Committee approved a payout of 150 percent of target on the Company Performance Goal for each Named Executive Officer. All Named Executive Officers in the 2020-2022 LTIP cycle had goals in addition to the Company Performance Goal. The award for R. P. Feight was based 25 percent on strategic goals focused on market share growth and PACCAR’s zero emissions strategy development. The Committee determined that R. P. Feight exceeded each goal and approved an overall payout of 152.5 percent of target. The award for H. C. Schippers was based 30 percent on business unit profit at DAF and Worldwide Financial Services and 20 percent on business unit leadership. The Committee determined that H. C. Schippers exceeded each goal and approved an overall payout of 156.4 percent of target. The award for C. M. Dozier was based 25 percent on business unit profit at Kenworth and PACCAR Australia and 25 percent on business unit leadership. The Committee determined that C. M. Dozier exceeded each goal and approved an overall payout of 148.5 percent of target. The award for D. C. Siver was based 25 percent on business unit profit at Peterbilt, PACCAR Parts and PACCAR Engine Company and 25 percent on business unit leadership. The Committee determined that D. C. Siver exceeded each goal and approved an overall payout of 144.7 percent of target. The award for T. R. Hubbard was based 30 percent on business unit profit at Worldwide Financial Services and 35 percent on business unit leadership. The Committee determined that T. R. Hubbard exceeded each goal and approved an overall payout of 161.5 percent of target. The Committee exercised discretion to reduce each Named Executive Officer’s maximum funding amount described below under the heading “LTIP Funding Limit” in determining payout as described above. The long-term cash awards for the 2021-2023 LTIP cycle have not been determined as of the date of this proxy statement because peer group comparison data was not available. LTIP Funding Limit. The maximum cash portion amount that may be paid to any eligible participant in any year under the LTIP program is $7,000,000. The LTIP awards for the Named Executive Officers are subject to the conditions of payment set forth in the Long-Term Incentive Plan. Pursuant to the LTIP, the Committee established a funding limit for the 2023-2025 LTIP performance cycle equal to one percent of the Company’s cumulative net income and the maximum share of such pool assigned to the current Chief Executive Officer and the next four most highly compensated executive officers was 54.5 percent, 17.2 percent, 10.1 percent, 10.1 percent and 8.1 percent, respectively. The Committee, in its sole discretion, may reduce or eliminate (but not increase) any award otherwise payable to the Named Executive Officers under each officer’s funding maximum based on the achievement of the LTIP goals, an assessment of individual performance and other factors within the discretion of the Committee. Stock options. The Committee includes stock options in its compensation program because stock options link the interests of executives directly with stockholders’ interests through increased individual stock ownership. Stock options are granted by the Committee once each year on a predetermined date after the fourth-quarter earnings release and are not repriced, backdated or purchased by the Company. The number of options is determined by multiplying the executive’s base salary on the grant date by a target award percentage and dividing by the average closing price of the Company’s stock on the first five trading days of the year. The exercise price of stock options is the closing price of the Company’s stock on the date of grant. Options become exercisable at the end of a three-year vesting period and expire ten years after the date of grant. A participant who elects to retire at age 62 with 15 years of service, but before age 65, has ten years from date of grant to exercise vested options and a prorated number of stock options which are not otherwise exercisable at the time of retirement will become immediately exercisable, and may thereafter be exercised by the participant at any time within ten years after the date of grant. A participant who retires at or after age 65 has the full term to exercise options and unvested options will continue to vest. Vesting may be accelerated in the event of a change in control. The Committee granted stock options on February 8, 2023 in accordance with the target award percentages listed on page 20. All stock options granted in 2023 vest and become exercisable on January 1, 2026 and remain exercisable until February 8, 2033, unless the participant’s employment terminates earlier for reasons other than retirement or the participant is demoted to an ineligible position. Annual restricted stock program. Performance-based restricted stock and RSUs are included in the program because they link the interests of executives directly with stockholders’ interests through increased individual stock ownership and add a performance goal that is tied to the success of the Company’s business. The Committee sets a Company performance goal on or before the first 90 days of the year, and restricted stock or RSU grants are made in the following year if the Committee determines that the performance goal is achieved. The number of restricted shares or RSUs is determined by multiplying the executive’s base salary by the target award percentage and dividing by the average closing price of the Company’s stock on the first five trading days of the year. The restricted stock or RSUs vest 25 percent on the first day of the month following the grant and an additional 25 percent on each succeeding first of January. Unvested awards are forfeited upon termination unless termination is by reason of death, disability or retirement. All awards vest immediately upon a change in control. Each Named Executive Officer has the same rights as all other stockholders to vote the restricted shares and to receive cash dividends. Named Executive Officers may elect to receive RSUs instead of restricted stock on the above terms, except that RSUs do not have voting rights and receive dividend equivalents that are credited to a stock unit account. The performance goal for 2023 was five percent after-tax return on revenue. The goal was determined based on the average return on revenues of heavy- and medium-duty truck manufacturers in Europe and North America. Return on revenue is defined as net income divided by total revenues. On February 5, 2024, the Committee determined that the 2023 performance goal was achieved and approved the grant of restricted stock or RSUs consistent with the target award percentages listed on page 20. The restricted stock or RSUs granted on February 5, 2024 for 2023 performance are included in footnote (b) on page 27.

  23. Deferral of Annual and Long-Term Performance Awards

    Deferral of Annual and Long-Term Performance Awards The Committee administers a Deferred Compensation Plan described on page 31, which allows eligible employees to defer cash incentive awards into an income account or a stock unit account. Both accounts are unfunded and unsecured. This program provides tax and retirement planning benefits to participants and market-based returns on amounts deferred. Certain deferrals are subject to Internal Revenue Code Section 409A. Payouts from the income account are made in cash either in a lump sum or in a maximum of 15 annual installments in accordance with the executive’s payment election. Stock unit accounts are paid out in Company stock either in a one-time distribution or in a maximum of 15 annual installments in accordance with the executive’s payment election. Participation in the Deferred Compensation Plan is voluntary.

  24. Effect of Post-Termination Events

    Effect of Post-Termination Events The Company has no written employment agreement with its Chief Executive Officer or with any Named Executive Officer. Executive compensation programs provide full benefits only if a Named Executive Officer remains with the Company until normal retirement at age 65. In general, upon a termination without cause, a Named Executive Officer retains vested benefits but receives no enhancements or severance. In a termination for cause, the executive forfeits all benefits except those provided under a qualified pension plan. Long-term cash incentives are prorated upon retirement at age 62, with 15 years of service, or death and are awarded at the maximum level upon a change in control. The annual restricted stock/RSU grants become fully vested at retirement, death or a change in control. The Company believes that the benefits described in this section help it attract and retain its executive officers by providing financial security in the event of certain qualifying terminations of employment or a change in control of the Company. The fact that the Company provides these benefits does not materially affect other decisions that the Company makes regarding compensation. The Company maintains a separation pay plan for all U.S. salaried employees that provides a single payment of up to six months of base salary in the event of job elimination in a business restructuring or reduction in the workforce. The Named Executive Officers are eligible for the benefit on the same terms as any other eligible U.S. salaried employee.

  25. 2023 Summary Compensation

    | Name and Principal Position | Year | Salary ($) | Stock Awards (Restricted Stock/ RSUs) ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) (c) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (d) | All Other Compensation ($) (e) | Total ($) | | R. P. Feight | 2023 | 1,544,231 | 4,262,500 | 1,856,874 | 3,487,500 | 4,486,196 | 21,364 | 15,658,665 | | Chief Executive Officer | 2022 | 1,400,000 | 3,850,000 | 1,323,050 | 6,619,000 | 43,437 | 20,250 | 13,255,737 | | | 2021 | 1,393,077 | 3,850,000 | 1,372,256 | 3,143,490 | 3,022,430 | 19,500 | 12,800,753 | | H. C. Schippers | 2023 | 1,035,577 | 1,320,000 | 798,662 | 1,793,838 | 1,727,788 | 21,364 | 6,697,229 | | President & Chief | 2022 | 994,038 | 1,320,000 | 630,020 | 3,207,787 | 124,863 | 15,250 | 6,291,958 | | Financial Officer | 2021 | 948,269 | 1,254,000 | 620,806 | 2,282,113 | 1,176,042 | 14,500 | 6,295,730 | | C. M. Dozier | 2023 | 674,038 | 816,750 | 512,148 | 950,400 | 1,385,504 | 16,500 | 4,355,340 | | Executive Vice President | 2022 | 635,769 | 528,000 | 189,032 | 1,353,964 | 0 | 15,250 | 2,722,015 | | | 2021 | 596,538 | 528,000 | 196,053 | 859,530 | 861,450 | 14,500 | 3,056,071 | | D. C. Siver | 2023 | 674,038 | 816,750 | 512,148 | 939,060 | 1,126,552 | 16,500 | 4,085,048 | | Executive Vice President | 2022 | 635,769 | 528,000 | 189,032 | 1,426,543 | 458 | 15,250 | 2,795,052 | | | 2021 | 600,000 | 528,000 | 196,053 | 1,008,400 | 499,034 | 14,500 | 2,845,987 | | T. R. Hubbard | 2023 | 542,692 | 363,000 | 164,730 | 618,475 | 601,838 | 16,500 | 2,307,235 | | Vice President | | | | | | | | |

  26. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards The following table shows all plan-based awards granted to the Named Executive Officers during 2023:

  27. 2023 Grants of Plan-Based Awards

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (a) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | | | Threshold ($) | Target ($) | Maximum ($) | Target ($) | Maximum ($) | | | | | R. P. Feight | | | | | | | | | | | Restricted Equity Rights (b) | 2/8/2023 | | | | 3,875,000 | 4,262,500 | | | | | Stock Options (c) | 2/8/2023 | | | | | | 141,038 | 71.95 | 1,856,874 | | LTIP Cash (c) | | 246,591 | 3,875,000 | 7,750,000 | | | | | | | Annual Incentive Cash (d) | | 193,750 | 1,937,500 | 3,875,000 | | | | | | | H. C. Schippers | | | | | | | | | | | Restricted Equity Rights (b) | 2/8/2023 | | | | 1,200,000 | 1,320,000 | | | | | Stock Options (c) | 2/8/2023 | | | | | | 60,662 | 71.95 | 798,662 | | LTIP Cash (c) | | 50,000 | 1,100,000 | 2,200,000 | | | | | | | Annual Incentive Cash (d) | | 59,138 | 985,625 | 1,971,250 | | | | | | | C. M. Dozier | | | | | | | | | | | Restricted Equity Rights (b) | 2/8/2023 | | | | 742,500 | 816,750 | | | | | Stock Options (c) | 2/8/2023 | | | | | | 38,900 | 71.95 | 512,148 | | LTIP Cash (c) | | 30,682 | 675,000 | 1,350,000 | | | | | | | Annual Incentive Cash (d) | | 21,600 | 540,000 | 1,080,000 | | | | | | | D. C. Siver | | | | | | | | | | | Restricted Equity Rights (b) | 2/8/2023 | | | | 742,500 | 816,750 | | | | | Stock Options (c) | 2/8/2023 | | | | | | 38,900 | 71.95 | 512,148 | | LTIP Cash (c) | | 30,682 | 675,000 | 1,350,000 | | | | | | | Annual Incentive Cash (d) | | 21,600 | 540,000 | 1,080,000 | | | | | | | T. R. Hubbard | | | | | | | | | | | Restricted Equity Rights (b) | 2/8/2023 | | | | 330,000 | 363,000 | | | | | Stock Options (c) | 2/8/2023 | | | | | | 12,512 | 71.95 | 164,730 | | LTIP Cash (c) | | 14,000 | 385,000 | 770,000 | | | | | | | Annual Incentive Cash (d) | | 42,900 | 357,500 | 715,000 | | | | | |

  28. 2023 Grants of Plan-Based Awards

    | (a) See the CD&A for how these amounts are determined. |

  29. 2023 Grants of Plan-Based Awards

    | (b) Represents dollar-denominated rights that are settled in restricted stock/RSUs under the LTIP described on page 20 following satisfaction of an annual performance goal. The restricted equity rights were settled on February 5, 2024 based on the average closing price of the Company’s stock on the first five trading days of 2024, as follows: R. P. Feight 43,436; H. C. Schippers 13,268; C. M. Dozier 8,282; D. C. Siver 8,282; T. R. Hubbard 3,728. The grant date fair value of the restricted stock/RSUs, calculated using the closing price of Company stock on February 5, 2024 of $104.16, is as follows: R. P. Feight $4,524,294; H. C. Schippers $1,381,995; C. M. Dozier $862,653; D. C. Siver $862,653; T. R. Hubbard $388,308. |

  30. 2023 Grants of Plan-Based Awards

    | (c) Represents stock options granted or cash awards made under the LTIP. |

  31. 2023 Grants of Plan-Based Awards

    | (d) Represents awards under the Company’s IC Plan described on page 19. |

  32. 2023 Outstanding Equity Awards at Fiscal Year-End

    2023 Outstanding Equity Awards at Fiscal Year-End The following table shows all outstanding stock option and restricted stock or RSU awards held by the Named Executive Officers on December 31, 2023:

  33. 2023 Outstanding Equity Awards at Fiscal Year-End

    | | | Option Awards (a) | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Vesting Date | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (b) | Market Value of Shares or Units of Stock That Have Not Vested ($) (c) | | R. P. Feight | 144,762 | 0 | 61.26 | 1/1/2024 | 2/2/2031 | 11,374 | 1,110,671 | | | 0 | 136,440 | 62.87 | 1/1/2025 | 2/7/2032 | 28,422 | 2,775,408 | | | 0 | 141,038 | 71.95 | 1/1/2026 | 2/8/2033 | 43,791 | 4,279,191 | | H. C. Schippers | 5,000 | 0 | 41.64 | 1/1/2018 | 2/4/2025 | 4,835 | 472,138 | | | 17,352 | 0 | 33.33 | 1/1/2019 | 2/4/2026 | 9,744 | 951,502 | | | 64,797 | 0 | 50.79 | 1/1/2023 | 2/4/2030 | 13,650 | 1,332,923 | | | 65,490 | 0 | 61.26 | 1/1/2024 | 2/2/2031 | | | | | 0 | 64,971 | 62.87 | 1/1/2025 | 2/7/2032 | | | | | 0 | 60,662 | 71.95 | 1/1/2026 | 2/8/2033 | | | | C. M. Dozier | 20,682 | 0 | 61.26 | 1/1/2024 | 2/7/2031 | 1,541 | 150,479 | | | 0 | 19,494 | 62.87 | 1/1/2025 | 2/7/2032 | 3,897 | 380,542 | | | 0 | 38,900 | 71.95 | 1/1/2026 | 2/8/2033 | 6,006 | 586,486 | | D. C. Siver | 19,167 | 0 | 45.79 | 1/1/2021 | 2/7/2028 | 1,680 | 164,052 | | | 24,411 | 0 | 43.71 | 1/1/2022 | 2/6/2029 | 3,897 | 380,542 | | | 19,917 | 0 | 50.79 | 1/1/2023 | 2/4/2030 | 6,006 | 586,486 | | | 20,682 | 0 | 61.26 | 1/1/2024 | 2/2/2031 | | | | | 0 | 19,494 | 62.87 | 1/1/2025 | 2/7/2032 | | | | | 0 | 38,900 | 71.95 | 1/1/2026 | 2/8/2033 | | | | T. R. Hubbard | 8,829 | 0 | 45.79 | 1/1/2021 | 2/7/2028 | 1,043 | 101,849 | | | 9,904 | 0 | 43.71 | 1/1/2022 | 2/6/2029 | 2,313 | 225,864 | | | 11,055 | 0 | 50.79 | 1/1/2023 | 2/4/2030 | 3,567 | 348,318 | | | 12,279 | 0 | 61.26 | 1/1/2024 | 2/2/2031 | | | | | 0 | 11,574 | 62.87 | 1/1/2025 | 2/7/2032 | | | | | 0 | 12,512 | 71.95 | 1/1/2026 | 2/8/2033 | | |

  34. 2023 Outstanding Equity Awards at Fiscal Year-End

    | (a) Represents stock options granted under the LTIP that vest in full on the third January 1 following the grant date. The vesting date may be accelerated if a change in control occurs. Options expire ten years from the date of grant unless employment is terminated earlier. |

  35. 2023 Outstanding Equity Awards at Fiscal Year-End

    | (b) Represents restricted stock/RSUs granted in settlement of restricted equity rights under the LTIP, which vest in four equal tranches commencing on March 1 following the grant date and then on January 1 of each year. |

  36. 2023 Outstanding Equity Awards at Fiscal Year-End

    | (c) The amount shown represents the number of shares multiplied by the closing price of the Company’s stock on December 31, 2023 of $97.65. |

  37. 2023 Option Exercises and Stock Vested

    2023 Option Exercises and Stock Vested The following table shows all stock options exercised and restricted stock or RSU awards that vested during 2023 for the Named Executive Officers and the value realized upon exercise or vesting:

  38. 2023 Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (a) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (b) | | R. P. Feight | 173,211 | 5,719,153 | 43,853 | 2,984,214 | | H. C. Schippers | 68,712 | 2,676,842 | 19,118 | 1,289,707 | | C. M. Dozier | 47,307 | 1,263,664 | 6,790 | 460,457 | | D. C. Siver | 0 | 0 | 7,335 | 496,416 | | T. R. Hubbard | 14,300 | 543,104 | 4,438 | 300,215 |

  39. 2023 Option Exercises and Stock Vested

    | (a) The dollar amounts shown are determined by multiplying the number of shares of the Company’s common stock by the difference between the per-share market price of the Company’s common stock at the time of exercise and the exercise price of the options. |

  40. 2023 Option Exercises and Stock Vested

    | (b) The dollar amounts are determined by multiplying the number of restricted shares or RSUs that vested by the per-share closing price of the Company’s common stock on the vesting date. |

  41. 2023 Pension Benefits

    2023 Pension Benefits The following table shows the present value of the retirement benefit payable to the Named Executive Officers as of December 31, 2023:

  42. 2023 Pension Benefits

    | Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | R. P. Feight | Retirement Plan | 25 | 1,049,466 | 0 | | | Supplemental Retirement Plan | 25 | 13,564,303 | 0 | | H. C. Schippers | Retirement Plan (DAF) | 30 | 464,040 | 0 | | | Retirement Plan (US) | 7 | 419,293 | 0 | | | Supplemental Retirement Plan | 7 | 3,102,095 | 0 | | | Transition Agreement | 7 | 3,215,164 | 0 | | C. M. Dozier | Retirement Plan | 35 | 1,578,022 | 0 | | | Supplemental Retirement Plan | 35 | 5,258,438 | 0 | | D. C. Siver | Retirement Plan | 30 | 1,296,680 | 0 | | | Supplemental Retirement Plan | 30 | 4,558,283 | 0 | | T. R. Hubbard | Retirement Plan | 16 | 848,628 | 0 | | | Supplemental Retirement Plan | 16 | 2,038,408 | 0 |

  43. 2023 Pension Benefits

    The Company’s U.S. qualified noncontributory retirement plan has been in effect since 1947. The Named Executive Officers participate in this plan on the same basis as other U.S. salaried employees. Employees are eligible to become a member in the plan after completion of 12 months of employment with at least 1,000 hours of service. The plan provides benefits based on years of service and salary. Participants are vested in their retirement benefits after five years of service. The benefit for each year of service, up to a maximum of 35 years, is equal to one percent of the highest average salary plus 0.5 percent of highest average salary in excess of the Social-Security-covered compensation level. Highest average salary is defined as the average of the highest 60 consecutive months of an employee’s cash compensation, which includes base salary and annual incentive cash compensation, but it excludes compensation under the LTIP. The benefits are not subject to any deduction for Social Security or other offset amounts. Benefits from the plan are paid as a monthly single-life annuity or, if married, actuarially equivalent 50 percent, 75 percent or 100 percent joint and survivor annuity options are also available. Survivor benefits based on the 50 percent joint and survivor option will be paid to an eligible spouse if the employee is a vested member in the plan and dies before retirement. The Company’s unfunded U.S. Supplemental Retirement Plan (“SRP”) provides a retirement benefit to those affected by the maximum benefit limitations permitted for qualified plans by the Internal Revenue Code and to those deferring incentive compensation bonuses. The benefit is equal to the amount of normal pension benefit reduction resulting from the application of maximum benefit and salary limitations and the exclusion of deferred incentive compensation bonuses from the retirement plan benefit formula. Benefits from the plan are paid as a lifetime monthly annuity or a single lump-sum distribution at the executive’s election and the benefits will be paid at the later of: (1) termination of employment or (2) the date the participant attains age 55. If the participant dies before the supplemental benefit commencement date, the participant’s surviving spouse will be eligible to receive a survivor pension for the amount by which the total survivor pension benefit exceeds the surviving spouse’s retirement plan benefit. Executives terminated for cause, as defined in the Plan, forfeit all SRP benefits. Normal retirement age under both plans is 65, and participants may retire early between ages 55 and 65 if they have 15 years of service. For retirement at ages 55 through 61 with 15 years of service, pension benefits are reduced four percent per year from age 65. For retirement at or after age 62 with 15 years of service, there is no reduction in retirement benefits. As of December 31, 2023, R. P. Feight, H. C. Schippers, C. M. Dozier, D. C. Siver and T. R. Hubbard are eligible for a reduced early retirement benefit. H. C. Schippers’ transition agreement provides that if he works for PACCAR in the United States for at least five years, then an additional year of credited service will be added to his nonqualified retirement benefit for each fully completed year of service. H. C. Schippers participated in the Company’s pension program in the Netherlands on the same basis as other DAF Eindhoven employees. DAF participates in the Metal and Electrical Engineering Industry Pension Fund (the “Fund”), a multi-employer defined benefit plan covering employees of the country’s metal industry. The benefit is based on a percentage of the career average salary up to the annually indexed salary maximum multiplied by years of service up to age 68 per January 1, 2023. In 2023, the percentage of salary was 1.815 percent and the yearly indexed maximum salary was €86,202. Survivor benefits include a pension up to 70 percent of the participant’s benefit. Participants contribute 50 percent of the premiums and are vested from date of hire. Normal retirement benefits begin at age 68 and participants may retire early at or after age 55 with reduced benefits. The Pension Benefits table shows the present value of the accrued retirement benefits for the Named Executive Officers under the Company’s retirement plan and Supplemental Retirement Plan based on highest average salary and service as of December 31, 2023 and the present value of H. C. Schippers’ accrued benefits under the Fund and his transition agreement. Present value calculations for each Named Executive Officer under age 62 assumed that each remains employed until age 62, if eligible for unreduced benefits, or age 65 if not. Additional assumptions include the use of FTSE Discount Pension Curve as of December 31, 2023 and December 31, 2022 to discount future payouts (equivalent to a discount rate of 4.8 percent and 5.0 percent, respectively, for the Plan in aggregate). The mortality assumptions use the RP-2012 White Collar Male Mortality Table projected generationally with projection scale MP-2021.

  44. 2023 Nonqualified Deferred Compensation

    2023 Nonqualified Deferred Compensation The following table provides information about the deferred compensation accounts of the Named Executive Officers as of December 31, 2023. Amounts deferred reflect cash awards payable in prior years but voluntarily deferred by the executive.

  45. 2023 Nonqualified Deferred Compensation

    | Name | Executive Contribution in 2023 ($) | Aggregate Earnings in 2023 ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance as of 12/31/2023 ($) (a) | | R. P. Feight | 0 | 0 | 0 | 0 | | H. C. Schippers | 0 | 0 | 0 | 0 | | C. M. Dozier | 0 | 0 | 0 | 0 | | D. C. Siver | 0 | 45,199 | 0 | 550,096 | | T. R. Hubbard | 0 | 0 | 0 | 0 |

  46. 2023 Nonqualified Deferred Compensation

    | (a) To the extent required to be reported, all cash awards were reported as compensation to the Named Executive Officer in the Summary Compensation Table for previous years. |

  47. 2023 Nonqualified Deferred Compensation

    The Company’s Deferred Compensation Plan provides all eligible employees, including the Named Executive Officers, an opportunity to voluntarily defer all or part of the cash awards earned and payable under the LTIP and the IC Plan. The Company makes no contributions to the Deferred Compensation Plan. Accounts are credited with interest or dividend equivalents as described below. A portion of the amount in the 2023 Aggregate Earnings column is reported in the Summary Compensation Table for the Named Executive Officers as follows: D. C. Siver $463. Certain of the Named Executive Officers have elected to defer into an income account, a stock unit account or any combination of each. Deferral elections were made in the year before the award was payable. Cash awards were credited to the income account on the date the award was payable and interest is compounded monthly on the account balance based on the simple combined average of the daily Aa Industrial Bond yield average for the immediately preceding month. The Named Executive Officer may elect to be paid out the balance of the income account in a lump sum or in up to 15 substantially equal annual installments. Cash awards credited to the stock unit account are treated as if they had been invested in the Company’s common stock on the date the cash award is payable. Dividend equivalents are credited to the stock unit account and treated as if they had been invested in the Company’s common stock on the date the dividend is paid to stockholders. A Named Executive Officer’s stock unit account is paid out in Company stock either in a one-time distribution or in a maximum of 15 annual installments, at the election of the Named Executive Officer. Payment of a Named Executive Officer’s income account and stock unit account will be made or commence to be made in the first January following the Named Executive Officer’s termination of employment, unless the Named Executive Officer elects to have payment occur or commence on an earlier date, except that payment on account of termination of employment to a participant who is a specified employee for purposes of Section 409A on the Internal Revenue Code will not be made prior to the first day of the month following the six-month anniversary of termination of employment. If the Named Executive Officer dies before his or her interest under the Deferred Compensation Plan has been distributed, his or her interest will be distributed to his or her beneficiary. A Named Executive Officer will forfeit his or her entire interest under the Deferred Compensation Plan if he or she is terminated by the Company for cause or if the Named Executive Officer refuses to provide advice or counsel to the Company or any of its subsidiaries after the Named Executive Officer’s termination of employment.

  48. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The Named Executive Officers do not have severance or change in control agreements with the Company. The information below describes certain compensation that would become payable under existing plans if each Named Executive Officer’s employment terminated or a change in control occurred on December 31, 2023. These payments do not include deferred compensation balances and the present value of accumulated Supplemental Retirement Plan benefits reported in the “Nonqualified Deferred Compensation” and “Pension Benefits” tables.

  49. Potential Payments Upon Termination or Change in Control

    | | R. P. Feight ($) | H. C. Schippers ($) | C. M. Dozier ($) | D. C. Siver ($) | T. R. Hubbard ($) | | Termination for Cause | 0 | 0 | 0 | 0 | 0 | | Termination Without Cause | 0 | 0 | 0 | 0 | 0 | | Retirement | | | | | | | Annual Incentive Plan | 3,487,500 | 1,793,838 | 950,400 | 939,060 | 618,475 | | Stock Options | N/A | N/A | N/A | N/A | N/A | | Long-Term Cash Award | 3,500,000 | 1,045,000 | 480,000 | 480,000 | 332,500 | | Restricted Stock/RSUs | 8,162,271 | 2,756,562 | 1,117,507 | 1,131,080 | 676,031 | | Total | 15,149,771 | 5,595,400 | 2,547,907 | 2,550,140 | 1,627,006 | | Death | | | | | | | Annual Incentive Plan | 3,487,500 | 1,793,838 | 950,400 | 939,060 | 618,475 | | Long-Term Cash Award | 7,125,000 | 2,145,000 | 1,025,000 | 1,025,000 | 682,500 | | Restricted Stock/RSUs | 8,162,271 | 2,756,562 | 1,117,507 | 1,131,080 | 676,031 | | Total | 18,774,771 | 6,695,400 | 3,092,907 | 3,095,140 | 1,977,006 | | Change in control | | | | | | | Annual Incentive Plan | 3,875,000 | 1,971,250 | 1,080,000 | 1,080,000 | 715,000 | | Long-Term Cash Award | 14,250,000 | 4,290,000 | 2,050,000 | 2,050,000 | 1,365,000 | | Restricted Stock/RSUs | 8,162,271 | 2,756,562 | 1,117,507 | 1,131,080 | 676,031 | | Total | 26,287,271 | 9,017,812 | 4,247,507 | 4,261,080 | 2,756,031 |

  50. Potential Payments Upon Termination or Change in Control

    Termination for Cause. If a Named Executive Officer had been terminated for “cause,” as defined in the Company’s LTIP Administrative Guidelines, all unpaid cash incentives under the IC Plan and the LTIP, stock options (vested and unvested), restricted stock/RSUs, deferred compensation balances and accrued Supplemental Retirement Plan benefits would have been immediately forfeited. Resignation or Termination Without Cause. If a Named Executive Officer had resigned or been terminated without cause, all unpaid incentives under the IC Plan and the LTIP, unvested stock options and restricted stock/RSUs would have been immediately forfeited. Vested stock options would remain exercisable for one month from the date of termination. Deferred compensation balances, as described in the Nonqualified Deferred Compensation Table, would be paid in a lump sum or in installments according to the payment election filed by the Named Executive Officer. The Named Executive Officer may elect to have such payments made or commence in any January that is at least 12 months from the date of such payment election, but no later than the first January following the year in which the executive attains age 70-1/2. Accrued Supplemental Retirement Plan (“SRP”) benefits described under the Pension Benefits Table would be paid in a form previously elected by the Named Executive Officer. R. P. Feight would receive a single lump-sum cash payment. H. C. Schippers, C. M. Dozier, D. C. Siver and T. R. Hubbard would receive monthly annuities payable for life. If termination occurred on December 31, 2023, these payments would be made or would commence in accordance with the terms of the SRP on July 1, 2024 for each Named Executive Officer. Retirement. R. P. Feight, H. C. Schippers, C. M. Dozier, D. C. Siver and T. R. Hubbard were eligible for early retirement benefits as of December 31, 2023. Deferred compensation balances and accumulated SRP benefits would have been payable for the Named Executive Officers as described above under “Resignation or Termination Without Cause.” Annual incentive compensation earned in 2023 would have been paid in the first quarter of 2024 and long-term incentive cash awards earned under the 2021-2023 performance cycle would be paid by May 2024 based on actual performance against goals. The long-term performance awards in the table reflect target awards. LTIP cash awards for incomplete cycles are prorated for retirement after age 62, with 15 or more years of service. For an officer over age 65, unvested stock options would continue to vest on their original vesting schedule and, along with vested stock options, be exercisable through their original expiration date. The stock options value in the table reflects the difference between the closing market price on December 31, 2023 and the exercise price multiplied by the number of unvested stock options. All outstanding restricted stock/RSUs for the Named Executive Officers who were (i) over age 62 or (ii) over age 55 with at least 15 years of service would vest in full upon retirement. The amount listed for restricted stock/RSUs in the table reflects vesting of all unvested restricted stock/RSUs for those eligible for normal or early retirement at the closing market price on December 31, 2023. The closing market price on December 31, 2023 was $97.65 per share. Death. In the event of the death of a Named Executive Officer on December 31, 2023, beneficiaries of the Named Executive Officer would have been entitled to receive all of the benefits that would have been paid to a Named Executive Officer who had retired on that date as described above, with the following exceptions:

  51. Potential Payments Upon Termination or Change in Control

    | • | Long-term incentive cash awards earned under the 2022-2024 LTIP performance cycle and the 2023-2025 LTIP performance cycle would have been paid on a prorated basis (2/3 and 1/3, respectively) following completion of the cycle, based on actual performance against goals. |

  52. Potential Payments Upon Termination or Change in Control

    | • | All outstanding restricted stock/RSUs would vest immediately. |

  53. Potential Payments Upon Termination or Change in Control

    Change in Control. Benefits payable in the event of a change in control on December 31, 2023 are the same as benefits payable in the event of death on the same date (as described above) with the following exceptions:

  54. Potential Payments Upon Termination or Change in Control

    | • | Named Executive Officers employed on December 31, 2023 would have been entitled to a maximum IC award for 2023 (200 percent of target), a maximum long-term incentive cash award under the 2021-2023 performance cycle of the LTIP and a maximum prorated award under the 2022-2024 and the 2023-2025 performance cycles based on the number of full or partial months completed in the performance cycle. The maximum payment amounts are shown in the table above and would have been paid in a lump sum immediately following the change in control. |

  55. Potential Payments Upon Termination or Change in Control

    | • | All outstanding restricted stock/RSUs would vest immediately. |

  56. Potential Payments Upon Termination or Change in Control

    Deferred compensation balances would have been paid as a single lump sum in cash from the “income account” and whole shares of the Company’s common stock from the “stock account” immediately following the change in control. The Compensation Committee of the Board of Directors has the discretionary authority to provide the following benefits in the event of a change in control:

  57. Potential Payments Upon Termination or Change in Control

    | • | Immediate vesting of all unvested stock options. The value of unvested options that could have been immediately vested upon a change in control on December 31, 2023 was: R. P. Feight $8,370,510; H. C. Schippers $3,818,919; C. M. Dozier $1,677,796; D. C. Siver $1,677,796; T. R. Hubbard $724,140. |

  58. Potential Payments Upon Termination or Change in Control

    | • | The additional Supplemental Retirement Plan benefits that would have been paid had the plan been terminated following a change in control on December 31, 2023 are as follows: R. P. Feight $4,594,723; H. C. Schippers $296,459; C. M. Dozier $1,387,063; D. C. Siver $1,341,264; T. R. Hubbard $291,814. Under his transition agreement, H. C. Schippers could be entitled to $642,751 more than the amount shown in the 2023 Pension Benefits Table. |

  59. CEO PAY RATIO DISCLOSURE

    CEO PAY RATIO DISCLOSURE PACCAR identified its median employee using the employee population on October 1, 2023 and used total cash compensation as the appropriate “consistently applied compensation measure” in order to determine the median paid employee. Total cash compensation paid to each employee for the period from January 1, 2023 to September 30, 2023 was reviewed for all global employees. PACCAR believes total cash compensation reasonably reflects annual compensation. The identified median employee’s total annual compensation will be compared to the CEO’s total annual compensation, both as calculated in accordance with the requirements of the Summary Compensation Table. The CEO’s cash award earned for the 2021-2023 LTIP cycle will not be determined until April 30, 2024. The CEO pay ratio for 2023 will be disclosed on Form 8-K following such determination. The CEO pay ratio for 2022 was 158 to 1.

  60. PAY VERSUS PERFORMANCE DISCLOSURE

    PAY VERSUS PERFORMANCE DISCLOSURE The following table provides information on compensation for the principal executive officer (“PEO”), the average compensation for the other Named Executive Officers (“Non-PEO NEOs”) and certain measures of the Company’s financial performance for the last four fiscal years ended December 31, 2023:

  61. PAY VERSUS PERFORMANCE DISCLOSURE

    | Year | Summary Compensation Table Total for PEO ($) (a) | Compensation Actually Paid to PEO ($) (a) (b) (c) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (a) | Average Compensation Actually Paid to Non-PEO NEOs ($) (a) (b) (c) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($ Bil.) | After-Tax Return on Revenue (%) | | | | | | | Total Shareholder Return ($) (d) | Peer Group Total Shareholder Return ($) (d) (e) | | | | 2023 | 15,658,665 | 21,916,311 | 4,361,213 | 5,510,635 | 214.16 | 224.50 / 219.92 | 4.6 | 13.1 | | 2022 | 13,255,737 | 15,910,278 | 3,658,626 | 4,472,884 | 138.21 | 178.91 | 3.0 | 10.4 | | 2021 | 12,800,753 | 10,086,318 | 3,743,979 | 3,261,059 | 118.05 | 162.86 | 1.9 | 7.9 | | 2020 | 8,770,878 | 6,840,581 | 3,762,789 | 3,143,617 | 111.74 | 132.46 | 1.3 | 6.9 |

  62. PAY VERSUS PERFORMANCE DISCLOSURE

    | (a) R. P. Feight was the PEO in 2023, 2022, 2021 and 2020. H. C. Schippers, C. M. Dozier, D. C. Siver and T. R. Hubbard were the Non-PEO NEOs in 2023. H. C. Schippers, M. T. Barkley, C. M. Dozier and D. C. Siver were the Non-PEO NEOs in 2022 and 2021. H. C. Schippers, M. T. Barkley, T. K. Quinn and D. C. Siver were the Non-PEO NEOs in 2020. |

  63. PAY VERSUS PERFORMANCE DISCLOSURE

    | (b) The “compensation actually paid” to our PEO and Non-PEO NEOs in 2023 reflects the following adjustments from the Summary Compensation Table: |

  64. PAY VERSUS PERFORMANCE DISCLOSURE

    | PEO | | | | Summary Compensation Table Total | | 15,658,665 | | Deducted Change in Pension Value in Summary Compensation Table | ($ | 4,486,196) | | Added pension plan service cost and prior service cost | | 459,662 | | Deducted Stock and Option Awards values reported in Summary Compensation Table | ($ | 6,119,374) | | Added fair value at fiscal year-end of Stock and Option Awards granted during covered year that remain outstanding and unvested as of fiscal year end | | 7,694,309 | | Added change as of covered year fiscal year end (from prior fiscal year end) in fair value of Stock and Option Awards granted in a prior fiscal year that remain outstanding and unvested as of fiscal year-end | | 8,489,767 | | Added dollar value of dividends or other earnings paid on Stock or Option Awards during fiscal year prior to vesting date | | 219,478 | | Compensation Actually Paid | | 21,916,311 |

  65. PAY VERSUS PERFORMANCE DISCLOSURE

    | Non-PEO NEOs | | | | Average Summary Compensation Table Total | | 4,361,213 | | Deducted average Change in Pension Value in Summary Compensation Table | ($ | 1,210,305) | | Added average pension plan service cost and prior service cost | | 247,093 | | Deducted average Stock and Option Awards values reported in Summary Compensation Table | ($ | 1,326,047) | | Added average fair value at fiscal year-end of Stock and Option Awards granted during covered year that remain outstanding and unvested as of fiscal year end | | 1,790,844 | | Added average change as of covered year fiscal year end (from prior fiscal year end) in fair value of Stock and Option Awards granted in a prior fiscal year that remain outstanding and unvested as of fiscal year-end | | 1,605,555 | | Added average dollar value of dividends or other earnings paid on Stock or Option Awards during fiscal year prior to vesting date | | 42,282 | | Average Compensation Actually Paid | | 5,510,635 |

  66. PAY VERSUS PERFORMANCE DISCLOSURE

    | (c) Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the date of grant. Adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions ( i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. Restricted stock/RSU grant date fair values are calculated using the stock price as of the date of grant. Adjustments have been made using the stock price as of fiscal year end and as of each date of vest. |

  67. PAY VERSUS PERFORMANCE DISCLOSURE

    | (d) Total shareholder return is based on a $100 investment as of December 31, 2019 and determined using Standard and Poor’s calculations of the cumulative total shareholder return on the Company’s common stock and the stock of each of the Peer Companies for the applicable year, weighted according to its respective capitalization at the beginning of each period, with dividends reinvested on a monthly basis. |

  68. PAY VERSUS PERFORMANCE DISCLOSURE

    | (e) Effective January 1, 2023, the Company revised its Peer Companies to include Daimler Truck Holdings AG, Iveco Group N.V. and Terex Corporation and removed CNH Industrial N.V., which spun-off Iveco, and Dana Incorporated. For 2023, the total shareholder return of the current Peer Group is listed first and the prior Peer Group is listed second. |

  69. Pay Versus Performance Relationship

    Pay Versus Performance Relationship The following graphs provide information on the relationship between compensation for the PEO, the average compensation for the Non-PEO NEOs and the measures in the Pay Versus Performance Table for the last four fiscal years ended December 31, 2023: