Lithia Motors Inc.
05/03/2024 | Press release | Distributed by Public on 05/03/2024 15:20
Material Event - Form 8-K
Item 8.01 Other Events
Over the past several months, Lithia Motors, Inc. (the "Company") received valuable feedback from shareholders, proxy advisory firms and its consultants regarding its compensation design. As requested by our shareholders, the Company has replaced the profitability metric from net income to earnings per share ("EPS") in the 2024 performance share units ("PSUs") granted in January of this year. With this adjustment the Company's long-term incentive plan more closely aligns with the Company's stated EPS based strategic goal and incentivizes a more flexible deployment of capital to most effectively create value for its shareholders.
As discussed in its proxy statement for the 2024 Annual Meeting of Shareholders, filed March 12, 2024, the Company redesigned its long-term incentive plan in 2023 to move from a one-year to a three-year performance period, added a TSR modifier, and all metrics are relative to peers. This change, which occurs approximately four months into a thirty-six month performance period, is limited to replacing net income with EPS. This results in no incremental accounting or compensation charge, is not intended to increase payouts, and the Compensation Committee, as always, retains negative discretion.