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Share Name | Share Symbol | Market | Type |
---|---|---|---|
LKQ Corporation | NASDAQ:LKQ | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.21 | 0.48% | 43.55 | 43.55 | 43.57 | 44.06 | 43.47 | 43.47 | 504,464 | 17:01:11 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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(Name of person(s) filing proxy statement, if other than the registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Joseph M. Holsten
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Dominick Zarcone
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Varun Laroyia
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Executive Chairman of the Board
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President and Chief Executive Officer
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Executive Vice President and Chief Financial Officer
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1.
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Elect nine directors for the ensuing year.
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2.
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Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2018.
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3.
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Hold an advisory vote on executive compensation.
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4.
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Transact such other business as may be properly brought before the 2018 Annual Meeting or any adjournment or postponement of the 2018 Annual Meeting.
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By Order of the Board of Directors
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Victor M. Casini
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Senior Vice President, General Counsel and Corporate Secretary
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March 15, 2018
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YOU ARE URGED TO MARK, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY.
THE PROXY IS REVOCABLE AT ANY TIME PRIOR
TO ITS USE.
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Page
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Nominees
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•
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Submitting another proper proxy with a more recent date than that of the proxy first given by following the Internet voting instructions or completing, signing, dating and returning a proxy card;
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•
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Sending written notice of revocation to our Corporate Secretary; or
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•
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Attending the
2018
Annual Meeting and voting by ballot.
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Board Evaluations
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Our Board evaluates board and committee performance and practices regularly and takes action to enhance and strengthen Board functioning.
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Board Leadership
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To support effective board oversight, we have different persons in the roles of Executive Chairman of the Board and Chief Executive Officer, and we have a lead independent director, independent committee chairs and independent committees.
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Risk Oversight and Financial Reporting
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Our Board seeks to provide robust oversight of current and potential risks facing our company and its business and demonstrate strong financial reporting practices.
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Board Independence
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Six of our nine current directors are independent; the Audit Committee, Compensation Committee and Governance/Nominating Committee consist entirely of independent directors.
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Stock Ownership Guidelines
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We have stock ownership guidelines for our directors and executive officers to further align their interests with those of our stockholders.
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No Hedging of Company Securities
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Under our insider trading policy, our directors and executive officers are prohibited from hedging our Company’s securities.
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Board Refreshment and Board Quality
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Our Board is committed to practices that create an effective mix of useful expertise and fresh perspectives, including the thoughtful refreshment of the Board when appropriate. In 2017, the Board retained a leadership advisory firm to analyze the skills and experience of the Board members and support future board development. Our Board also considers whether our public disclosures effectively convey the strength and quality of our Board and board practices. We also provide strong new director orientation programs and on-going director education and tutorials and encourage our directors to attend continuing education programs.
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Annual Director Elections
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All directors are elected annually for one-year terms.
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Majority Voting for Director Elections
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Our Bylaws provide for a majority voting standard in uncontested elections, and further require that a director who fails to receive a majority vote must tender his or her resignation to the Board.
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Proxy Access
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We implemented proxy access in 2017, which permits an eligible stockholder to nominate and include in our proxy materials director nominees (subject to the requirements specified in our Bylaws).
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•
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automotive aftermarket industry;
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•
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automotive industry in the U.K. and Europe in addition to North America;
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•
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mergers, acquisitions and integration in domestic and international markets;
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•
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insurance industry;
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•
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global and emerging perspectives in business leadership and business negotiations;
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•
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executive positions;
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•
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operations;
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•
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corporate governance;
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•
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audit practices, finance and accounting;
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•
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sustainability and recycling;
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•
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government regulations; and
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•
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financing and capital markets.
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Name
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Age
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Director Since
*
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Position(s)
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Sukhpal Singh Ahluwalia
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59
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November 2014
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Chairman of Euro Car Parts Limited and Director
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A. Clinton Allen
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74
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October 2003
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Lead Independent Director
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Robert M. Hanser
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64
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November 2015
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Director
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Joseph M. Holsten
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65
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October 2003
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Executive Chairman of the Board and Director
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Blythe J. McGarvie
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61
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March 2012
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Director
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John F. O'Brien
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74
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October 2003
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Director
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Guhan Subramanian
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47
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January 2013
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Director
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William M. Webster, IV
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60
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October 2003
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Director
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Dominick Zarcone
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59
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May 2017
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President and Chief Executive Officer and Director
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*
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For periods during which we were a publicly-traded company.
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•
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Board composition, independence and membership criteria
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•
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Length of board service and the review process upon a change in status of a director
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•
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Board meeting procedures
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•
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Board committees, committee membership selection, and committee functions
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•
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Director rights and responsibilities, including access to information, the retention of independent experts, orientation and education programs, an annual evaluation of governance practices, and risk oversight
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Name
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Audit
Committee
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Compensation
Committee (1)
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Governance/
Nominating
Committee (2)
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IRCA
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Sukhpal Singh Ahluwalia
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—
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—
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—
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Member
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A. Clinton Allen
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Member
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—
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Member
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—
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Robert M. Hanser
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—
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—
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—
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Member
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Joseph M. Holsten
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—
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—
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—
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—
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Blythe J. McGarvie
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Chairperson
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—
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Member
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—
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Paul M. Meister
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Member
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Chairperson
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—
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—
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John F. O'Brien
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—
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Member
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Chairperson
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—
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Guhan Subramanian
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Member
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—
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Member
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—
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William M. Webster, IV
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—
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Member
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—
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Chairperson
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Dominick P. Zarcone
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—
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—
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—
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Member
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(1)
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As of May 1, 2018, Mr. O'Brien will become chairperson of the Compensation Committee and Mr. Hanser will become a member of the Compensation Committee.
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(2)
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As of May 1, 2018, Mr. Subramanian will become chairperson of the Governance/Nominating Committee.
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•
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Retainer-only cash compensation with no fees for attending meetings (which is an expected part of board service), with additional retainers for special roles such as Executive Chairman of the Board, Lead Independent Director, and committee chairs to recognize their incremental time and effort. Cash compensation in 2017 for our non-employee directors consisted of:
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◦
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annual cash board service retainer of $100,000
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◦
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annual cash payments for serving on committees of the board:
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▪
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$25,000 and $15,000 for each of the chairman and the other members of the Audit Committee, respectively;
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▪
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$15,000 and $10,000 for each of the chairman and the other members of the Compensation Committee, respectively;
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▪
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$12,000 and $8,000 for each of the chairman and the other members of the Governance/Nominating Committee, respectively;
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▪
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$12,000 and $8,000 for each of the chairman and the other members of the IRCA Committee, respectively. Neither Mr. Zarcone nor Mr. Ahluwalia receives compensation for serving on the IRCA Committee, since they are employee directors.
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◦
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The Executive Chairman of the Board received an annual compensation amount of $525,000 in
2017
and an annual grant of RSUs with a value on the grant date of approximately $50,000
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◦
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Our Lead Independent Director received an annual compensation amount of $25,000, and
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◦
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Mr. Hanser received an annual stipend of $15,000 for his additional advice and contributions to the Board relating to Europe matters.
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•
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Significant portion of total compensation in full-value equity awards, for alignment with stockholders, where annual grants are based on a fixed-value formula and short vesting to avoid entrenchment. In
2017
, equity compeenstion for non-employee directors consisted of an annual grant of restricted stock units ("RSUs") with a value on the grant date of approximately $115,000. The
2017
equity grant will vest in May
2018
, one year after the date of grant.
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•
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Meaningful stock ownership requirements of 20,000 shares.
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•
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No benefits or perquisites.
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Name
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Fees
Earned
or Paid in
Cash
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Stock
Awards
(1),(2)
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Option
Awards
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Non-Equity
Incentive Plan
Compensation
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Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
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All Other
Compensation
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Total
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|||||||||||
Sukhpal Singh Ahluwalia
(3)
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—
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—
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—
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—
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—
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$
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644,450
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$
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644,450
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||
A. Clinton Allen
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$
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148,000
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$
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115,009
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—
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—
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—
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—
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$
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263,009
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Robert M. Hanser
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$
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123,000
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|
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$
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115,009
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|
—
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|
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—
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|
|
—
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—
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|
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$
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238,009
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|
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Joseph M. Holsten
(4)
|
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$
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625,000
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|
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$
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165,008
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—
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|
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—
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|
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—
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|
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—
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|
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$
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790,008
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Blythe J. McGarvie
|
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$
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133,000
|
|
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$
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115,009
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|
|
—
|
|
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—
|
|
|
—
|
|
|
—
|
|
|
$
|
248,009
|
|
|
Paul M. Meister
|
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$
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130,000
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|
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$
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115,009
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|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
245,009
|
|
|
John F. O'Brien
|
|
$
|
122,000
|
|
|
$
|
115,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
237,009
|
|
|
Guhan Subramanian
|
|
$
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123,000
|
|
|
$
|
115,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
238,009
|
|
|
William M. Webster, IV
|
|
$
|
122,000
|
|
|
$
|
115,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
237,009
|
|
(1)
|
The amounts represent the aggregate grant date fair value of awards granted in 2017, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification 718, “Compensation-Stock Compensation” (“FASB ASC Topic 718”). See Note 6 of the consolidated financial statements in our 2017 Annual Report regarding assumptions underlying the valuation of equity awards. Our Equity Incentive Plan is discussed beginning on page 26.
|
(2)
|
As of December 31, 2017, the non-employee directors held the following outstanding equity awards: Mr. Allen, 60,000 stock options and 3,662 RSUs; Mr. Hanser, 3,662 RSUs; Mr. Holsten, 5,254 RSUs; Ms. McGarvie, 3,662 RSUs; Mr. Meister, 60,000 stock options and 3,662 RSUs; Mr. O’Brien, 3,662 RSUs; Mr. Subramanian, 3,662 RSUs; and Mr. Webster, 60,000 stock options and 3,662 RSUs.
|
(3)
|
The compensation reported for Mr. Ahluwalia is paid pursuant to a Services Agreement between us and Mr. Ahluwalia. For a description of the Services Agreement, see the section entitled “Certain Transactions -- Transactions with Related Persons” on page 41.
|
(4)
|
We had a consulting agreement with Mr. Holsten pursuant to which he provided consulting services to us for a five year term, which commenced on January 1, 2012 when he ceased to be employed by us. Mr. Holsten's consulting agreement expired on December 31, 2016. The Board of Directors instituted an amended compensation package for Mr. Holsten commencing as of January 1, 2017. The amended compensation package included, in addition to his standard compensation as a director, (a) an annual amount equal to $350,000 in cash for his service as Chairman of the Board, and (b) an annual grant of RSUs with a value on the grant date of approximately $50,000. As of June 1, 2017, the Board of Directors further amended Mr. Holsten's compensation package in part to compensate Mr. Holsten in connection with overseeing and mentoring Mr. Zarcone in his new role as Chief Executive Officer. The changes were an increase from $350,000 to $700,000 in the annual amount for his service as Executive Chairman of the Board and to make him eligible to receive a bonus in May 2018 of up to $750,000 in the discretion of the Board of Directors based on Mr. Holsten's effectiveness as the mentor of Mr. Zarcone and based on our financial performance.
|
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2017
|
|
2016
|
||||
Audit Fees
|
|
$
|
5,376,355
|
|
|
$
|
5,179,397
|
|
Audit-Related Fees
|
|
865,865
|
|
|
449,700
|
|
||
Tax Fees
|
|
2,080,637
|
|
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1,332,848
|
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||
All Other Fees
|
|
69,362
|
|
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43,307
|
|
||
Total Audit and Non-Audit Fees
|
|
$
|
8,392,219
|
|
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$
|
7,005,252
|
|
Audit Committee (as of March 15, 2018):
|
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Blythe J. McGarvie (Chair)
|
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A. Clinton Allen
|
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Paul M. Meister
|
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Guhan Subramanian
|
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•
|
Dominick Zarcone, President and Chief Executive Officer
|
•
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Varun Laroyia, Executive Vice President and Chief Financial Officer
|
•
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John S. Quinn, Chief Executive Officer and Managing Director, LKQ Europe
|
•
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Walter P. Hanley, Senior Vice President -- Development
|
•
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Victor M. Casini, Senior Vice President, General Counsel and Corporate Secretary
|
•
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Robert L. Wagman, President and Chief Executive Officer until May 31, 2017
|
What we do
|
What we don’t do
|
ü
The majority of our executives’ target total direct compensation is tied to performance.
ü
We require executive officers and directors to acquire and maintain meaningful ownership of our stock to ensure their interests are closely aligned with the long-term financial interests of our stockholders.
ü
Our equity awards include meaningful restrictive covenants (e.g., non-competition, non-solicitation of customers or employees, etc.) that, if violated, would result in forfeiture of unvested awards, shares received upon vesting of awards, or cash proceeds received upon sale of such shares.
ü
Our Compensation Committee is composed entirely of independent directors.
ü
Our Compensation Committee engages an independent compensation consultant that provides no other services to the Company.
ü
We periodically assess our executive compensation programs to ensure they do not create risks that are likely to have a material adverse effect on our Company.
|
û
We do not provide golden parachute excise tax or other tax gross-ups.
û
Neither our Severance Policy nor our Change of Control Agreements provide "single-trigger" cash severance upon a Change of Control.
û
Our equity grant agreements do not provide "single-trigger" equity vesting upon a Change of Control.
û
Our equity plans expressly forbid option repricing, and exchange of underwater options for other awards or cash, without stockholder approval.
û
We do not provide material benefits or perquisites to U.S.-based executive officers that are not provided to other employees.
û
We prohibit executives and directors from hedging Company stock.
|
Executive
|
|
2018 Salary
(1)
|
|
2017 Salary
(1)
|
|
2016 Salary
|
Dominick Zarcone
|
|
$975,000
|
|
$900,000
(2)
|
|
$500,000
|
Varun Laroyia
|
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$500,000
|
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$500,000
(3)
|
|
N/A
|
John S. Quinn
|
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$595,000
|
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$585,000
|
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$565,000
|
Walter P. Hanley
|
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$450,000
|
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$440,000
|
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$400,000
|
Victor M. Casini
|
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$410,000
|
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$400,000
|
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$400,000
|
Robert L. Wagman
|
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$500,000
|
|
$1,025,000
(4)
|
|
$1,000,000
|
(1)
|
Certain of the salaries for the named executive officers were increased in 2017 and 2018 (effective in April in each year) to align their salaries more closely with similarly-situated executives at the peer companies.
|
(2)
|
The amount shown for Mr. Zarcone for 2017 represents his annualized base salary for his position as President and Chief Executive Officer, which he assumed on May 31, 2017; his salary prior to May 31, 2017 was $515,000 in his position as Chief Financial Officer.
|
(3)
|
Mr. Laroyia joined the Company in October 2017. The amount disclosed for 2017 represents his annual base salary.
|
(4)
|
The amount shown for Mr. Wagman for 2017 represents the amount he was paid when he relinquished his position as President and Chief Executive Officer on May 31, 2017; his salary after May 31, 2017 was $500,000 in his position as strategic advisor. The amount for 2018 represents his salary for his position as strategic advisor.
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual
|
2017 EPS Goals
|
|
$1.70
|
|
$1.82 - $1.85
|
|
$1.94
|
|
$1.86
|
|
2017 Bonus Opportunities
|
|
|
|
|
|
|
|
|
|
Dominick Zarcone
(1)
|
% Salary
|
|
46%
|
|
86%
|
|
139%
|
|
99%
|
|
$
|
|
$336,995
|
|
$632,185
|
|
$1,021,437
|
|
$729,498
|
Varun Laroyia
(2)
|
% Salary
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
|
$350,000
|
|
$350,000
|
|
$350,000
|
|
$350,000
|
John S. Quinn
|
% Salary
|
|
35%
|
|
50%
|
|
110%
|
|
65%
|
|
$
|
|
$202,871
|
|
$289,815
|
|
$637,593
|
|
$376,760
|
Walter P. Hanley
|
% Salary
|
|
35%
|
|
50%
|
|
110%
|
|
65%
|
|
$
|
|
$154,000
|
|
$220,000
|
|
$484,000
|
|
$286,000
|
Victor M. Casini
|
% Salary
|
|
35%
|
|
50%
|
|
110%
|
|
65%
|
|
$
|
|
$140,000
|
|
$200,000
|
|
$440,000
|
|
$260,000
|
Robert L. Wagman
(3)
|
% Salary
|
|
50%
|
|
100%
|
|
150%
|
|
112.5%
|
|
$
|
|
$210,161
|
|
$420,323
|
|
$630,484
|
|
$472,863
|
(1)
|
Mr. Zarcone's Threshold, Target, and Maximum bonus percentages were 35%, 50%, and 110%, respectively, for the five months he served as Executive Vice President and Chief Financial Officer, and 50%, 100%, and 150%, respectively, for the seven months he served as President and Chief Executive Officer.
|
(2)
|
Mr. Laroyia was granted a guaranteed bonus of $350,000 for 2017 in connection with his appointment as Executive Vice President and Chief Financial Officer.
|
(3)
|
Mr. Wagman's bonus was prorated based on the period he served as Chief Executive Officer.
|
|
|
Weighting
|
|
Target Growth
|
|
Actual Results
|
Adjusted EPS
|
|
45.0%
|
|
45% - 50%
|
|
38.9%
|
Revenue
|
|
45.0%
|
|
31% - 33%
|
|
55.5%
|
ROE
|
|
10.0%
|
|
155 bps - 165 bps
|
|
(91) bps
|
(1)
|
Payout percentages are calculated based on the weighted sum of the respective actual results of each performance measure.
|
POSITION
|
MINIMUM NUMBER OF SHARES *
|
APPROXIMATE MULTIPLE OF 2017 BASE SALARY**
|
Chief Executive Officer
|
112,000
|
4.8x
|
Chief Financial Officer
|
52,000
|
4.0x
|
Other Named Executive Officers
|
46,000
|
3.4x - 4.5x
|
*
|
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. We exclude any pledged shares and shares of stock that the named executive officer has a right to acquire through the exercise of stock options.
|
**
|
Based on closing price per share of LKQ Corporation common stock on March 8, 2018 of $38.79.
|
Compensation Committee (as of March 15, 2018):
|
|
Paul M. Meister (Chair)
|
|
John F. O’Brien
|
|
William M. Webster, IV
|
|
Name and Principal Position
|
|
Year
|
|
Salary
(1)
|
|
Bonus (2)
|
|
Stock
Awards
(3)
|
|
Non-Equity
Incentive Plan
Compensation
(4)
|
|
All Other
Compensation
(5)
|
|
Total (6)
|
||||||||||||
Dominick Zarcone
|
|
2017
|
|
$
|
736,039
|
|
|
$
|
—
|
|
|
$
|
1,680,349
|
|
|
$
|
1,448,073
|
|
|
$
|
32,970
|
|
|
$
|
3,897,431
|
|
President and Chief Executive Officer
|
|
2016
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
1,177,317
|
|
|
$
|
325,000
|
|
|
$
|
23,892
|
|
|
$
|
2,026,209
|
|
|
2015
|
|
$
|
382,693
|
|
|
$
|
—
|
|
|
$
|
4,177,393
|
|
|
$
|
250,000
|
|
|
$
|
12,684
|
|
|
$
|
4,822,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Varun Laroyia
*
|
|
2017
|
|
$
|
125,000
|
|
|
$
|
350,000
|
|
|
$
|
1,900,006
|
|
|
$
|
—
|
|
|
$
|
2,321
|
|
|
$
|
2,377,327
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
John S. Quinn
|
|
2017
|
|
$
|
578,846
|
|
|
$
|
—
|
|
|
$
|
1,177,323
|
|
|
$
|
1,095,373
|
|
|
$
|
435,888
|
|
|
$
|
3,287,430
|
|
Chief Executive Officer and Managing Director, LKQ Europe
|
|
2016
|
|
$
|
565,000
|
|
|
$
|
—
|
|
|
$
|
1,177,317
|
|
|
$
|
578,526
|
|
|
$
|
846,724
|
|
|
$
|
3,167,567
|
|
|
2015
|
|
$
|
548,972
|
|
|
$
|
—
|
|
|
$
|
1,177,408
|
|
|
$
|
478,835
|
|
|
$
|
547,273
|
|
|
$
|
2,752,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Walter P. Hanley
|
|
2017
|
|
$
|
440,000
|
|
|
$
|
—
|
|
|
$
|
1,072,394
|
|
|
$
|
836,853
|
|
|
$
|
22,554
|
|
|
$
|
2,371,801
|
|
Senior Vice President - Development
|
|
2016
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
1,072,376
|
|
|
$
|
429,021
|
|
|
$
|
19,392
|
|
|
$
|
1,920,789
|
|
|
2015
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
1,073,012
|
|
|
$
|
363,479
|
|
|
$
|
19,076
|
|
|
$
|
1,855,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Victor M. Casini
|
|
2017
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
817,955
|
|
|
$
|
776,853
|
|
|
$
|
21,400
|
|
|
$
|
2,016,208
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
2016
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
817,943
|
|
|
$
|
429,021
|
|
|
$
|
13,392
|
|
|
$
|
1,660,356
|
|
|
2015
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
1,073,012
|
|
|
$
|
363,479
|
|
|
$
|
19,076
|
|
|
$
|
1,855,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Robert L. Wagman
|
|
2017
|
|
$
|
711,346
|
|
|
$
|
—
|
|
|
$
|
699,604
|
|
|
$
|
1,818,260
|
|
|
$
|
23,517
|
|
|
$
|
3,252,727
|
|
Strategic Advisor (formerly President and Chief Executive Officer)
|
|
2016
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
1,679,017
|
|
|
$
|
1,496,846
|
|
|
$
|
31,309
|
|
|
$
|
4,207,172
|
|
|
2015
|
|
$
|
904,932
|
|
|
$
|
—
|
|
|
$
|
1,679,110
|
|
|
$
|
1,264,586
|
|
|
$
|
29,881
|
|
|
$
|
3,878,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
On October 1, 2017, Mr. Laroyia became our Chief Financial Officer; Mr. Laroyia had not been employed by us prior to that date.
|
(1)
|
The base compensation of our executive officers is discussed beginning on page 24.
|
(2)
|
Mr. Laroyia was granted a guaranteed bonus of $350,000 for 2017 in connection with his appointment as Executive Vice President and Chief Financial Officer.
|
(3)
|
The amounts represent the aggregate grant date fair value of awards granted during the period indicated, calculated in accordance with FASB ASC Topic 718. See Note 6 of the consolidated financial statements in our 2017 Annual Report regarding assumptions underlying the valuation of equity awards. Our Equity Incentive Plan is discussed beginning on page 26.
|
(4)
|
Our Non-Equity Incentive Plan Compensation includes amounts related to our LTIP (long-term) and MIP (annual) awards. The amounts for each NEO for each of these award categories are set forth in the table below. The amounts shown under LTIP Earned for 2017 are equal to the amounts earned and subsequently paid for the 2015-2017 performance period under the LTIP. The amounts shown under Deferred LTIP reflect payments in the respective years for awards for the 2012-2014 performance period under the LTIP that were subject to mandatory deferral and continuing service requirements. The amounts shown for the MIP are equal to the amounts earned and subsequently paid for each annual performance period related to the years presented. For more information regarding our MIP, see the section entitled "Annual Bonus Awards" beginning on page 25. For more information regarding our LTIP, see the section entitled "Long Term Incentive Awards" beginning on page 26.
|
|
Name
|
|
Year
|
|
LTIP Earned
|
|
Deferred LTIP
|
|
MIP
|
||||||
|
Dominick Zarcone
|
|
2017
|
|
$
|
718,575
|
|
|
$
|
—
|
|
|
$
|
729,498
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
325,000
|
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Varun Laroyia
|
|
2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
John S. Quinn
|
|
2017
|
|
$
|
499,297
|
|
|
$
|
219,316
|
|
|
$
|
376,760
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
211,276
|
|
|
$
|
367,250
|
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
204,349
|
|
|
$
|
274,486
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Walter P. Hanley
|
|
2017
|
|
$
|
375,400
|
|
|
$
|
175,453
|
|
|
$
|
286,000
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
169,021
|
|
|
$
|
260,000
|
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
163,479
|
|
|
$
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Victor M. Casini
|
|
2017
|
|
$
|
341,400
|
|
|
$
|
175,453
|
|
|
$
|
260,000
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
169,021
|
|
|
$
|
260,000
|
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
163,479
|
|
|
$
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Robert L. Wagman
|
|
2017
|
|
$
|
959,400
|
|
|
$
|
385,997
|
|
|
$
|
472,863
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
371,846
|
|
|
$
|
1,125,000
|
|
|
|
|
2015
|
|
$
|
—
|
|
|
$
|
359,654
|
|
|
$
|
904,932
|
|
(5)
|
The amounts include Company matching contributions under our retirement plans, the amount of life insurance premiums paid by us for the benefit of the NEOs, the amount we pay to the NEOs as reimbursement for their payment of the premiums for disability insurance, and other compensation. The amounts for each NEO for each such category of compensation are set forth in the table below.
|
|
Name
|
|
Year
|
|
Retirement
Plans
|
|
Life Insurance
Premiums
|
|
Disability Insurance
Premiums
|
|
Other (a)
|
||||||||
|
Dominick Zarcone
|
|
2017
|
|
$
|
31,370
|
|
|
$
|
1,210
|
|
|
$
|
390
|
|
|
$
|
—
|
|
|
|
|
2016
|
|
$
|
22,500
|
|
|
$
|
1,142
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
|
2015
|
|
$
|
9,808
|
|
|
$
|
2,366
|
|
|
$
|
510
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Varun Laroyia
|
|
2017
|
|
$
|
2,308
|
|
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
John S. Quinn
|
|
2017
|
|
$
|
28,386
|
|
|
$
|
1,210
|
|
|
$
|
390
|
|
|
$
|
405,902
|
|
|
|
|
2016
|
|
$
|
24,943
|
|
|
$
|
1,142
|
|
|
$
|
250
|
|
|
$
|
820,389
|
|
|
|
|
2015
|
|
$
|
23,833
|
|
|
$
|
2,366
|
|
|
$
|
510
|
|
|
$
|
520,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Walter P. Hanley
|
|
2017
|
|
$
|
20,954
|
|
|
$
|
1,210
|
|
|
$
|
390
|
|
|
$
|
—
|
|
|
|
|
2016
|
|
$
|
18,000
|
|
|
$
|
1,142
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
|
2015
|
|
$
|
16,200
|
|
|
$
|
2,366
|
|
|
$
|
510
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Victor M. Casini
|
|
2017
|
|
$
|
19,800
|
|
|
$
|
1,210
|
|
|
$
|
390
|
|
|
$
|
—
|
|
|
|
|
2016
|
|
$
|
12,000
|
|
|
$
|
1,142
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
|
2015
|
|
$
|
16,200
|
|
|
$
|
2,366
|
|
|
$
|
510
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Robert L. Wagman
|
|
2017
|
|
$
|
21,917
|
|
|
$
|
1,210
|
|
|
$
|
390
|
|
|
$
|
—
|
|
|
|
|
2016
|
|
$
|
29,917
|
|
|
$
|
1,142
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
|
2015
|
|
$
|
27,005
|
|
|
$
|
2,366
|
|
|
$
|
510
|
|
|
$
|
—
|
|
(a)
|
Other compensation for Mr. Quinn consists of tax equalization benefits and reimbursement of (i) relocation expenses,
(ii) losses on the sale of up to two vehicles, (iii) housing, (iv) home finding assistance, (v) one vehicle lease, (vi) family travel between the United States and the United Kingdom, and (vii) immigration fees, pursuant to his offer letter from the Company relating to his assignment in Europe. The amounts of each of these items that exceeded 10% of the total perquisites and personal benefits for Mr. Quinn during 2017 were as follows: tax equalization benefits - $205,707; housing -- $172,752; and home leave -- $20,518. In addition, the Company engaged in certain foreign currency exchange transactions on behalf of Mr. Quinn. Mr. Quinn paid all fees incurred by the Company in connection with such transactions.
|
(6)
|
The amounts in the Total column (and the Non-Equity Incentive Plan Compensation column) for 2016 and 2015 are lower than were previously reported in the respective Summary Compensation Tables for those years. This is due to a change in our reporting of LTIP awards. In prior years, the amounts shown for the LTIP under Non-Equity Incentive Plan Compensation were equal to the amount recorded by us to the income statement for accounting purposes in the years presented. Beginning with this Proxy Statement, the amounts shown for the LTIP under Non-Equity Incentive Plan Compensation will be reported as described in Footnote (4) above.
|
Name
|
|
Award Type
|
|
Grant
Date |
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards (1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards (2)
|
|
Grant Date
Fair Value of Stock and Option Awards (3) |
|||||||||||||
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
||||||||||||||
Dominick Zarcone
|
|
RSU
|
|
1/13/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,105
|
|
|
$
|
1,177,323
|
|
|||
|
|
RSU
|
|
5/31/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,061
|
|
|
$
|
503,026
|
|
|||
|
|
LTIP
|
|
|
|
$
|
347,250
|
|
|
$
|
693,250
|
|
|
$
|
1,386,500
|
|
|
—
|
|
|
—
|
|
|
|
|
MIP
|
|
|
|
$
|
336,995
|
|
|
$
|
632,185
|
|
|
$
|
1,021,437
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Varun Laroyia
|
|
RSU
|
|
10/2/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,554
|
|
|
$
|
1,900,006
|
|
|||
|
|
LTIP
|
|
|
|
$
|
135,000
|
|
|
$
|
266,250
|
|
|
$
|
532,500
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
John S. Quinn
|
|
RSU
|
|
1/13/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,105
|
|
|
$
|
1,177,323
|
|
|||
|
|
LTIP
|
|
|
|
$
|
210,600
|
|
|
$
|
415,350
|
|
|
$
|
830,700
|
|
|
—
|
|
|
—
|
|
|
|
|
MIP
|
|
|
|
$
|
202,871
|
|
|
$
|
289,815
|
|
|
$
|
637,593
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Walter P. Hanley
|
|
RSU
|
|
1/13/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,798
|
|
|
$
|
1,072,394
|
|
|||
|
|
LTIP
|
|
|
|
$
|
158,400
|
|
|
$
|
312,400
|
|
|
$
|
624,800
|
|
|
—
|
|
|
—
|
|
|
|
|
MIP
|
|
|
|
$
|
154,000
|
|
|
$
|
220,000
|
|
|
$
|
484,000
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Victor M. Casini
|
|
RSU
|
|
1/13/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,779
|
|
|
$
|
817,955
|
|
|||
|
|
LTIP
|
|
|
|
$
|
144,000
|
|
|
$
|
284,000
|
|
|
$
|
568,000
|
|
|
—
|
|
|
—
|
|
|
|
|
MIP
|
|
|
|
$
|
140,000
|
|
|
$
|
200,000
|
|
|
$
|
440,000
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Robert L. Wagman
|
|
RSU
|
|
1/13/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,049
|
|
|
$
|
699,604
|
|
|||
|
|
MIP
|
|
|
|
$
|
210,161
|
|
|
$
|
420,323
|
|
|
$
|
630,484
|
|
|
—
|
|
|
—
|
|
(1)
|
The amounts shown related to our LTIP represent potential payments after the completion of the three-year performance period ending December 31, 2019. Awards under the LTIP are calculated as a percentage of the NEO's 2017 base salary. A minimum amount is paid if a threshold level of growth is achieved, and a maximum award is paid if a specified higher level of growth is achieved. Between these growth levels, there are two intermediate growth levels on the upside (between target and maximum) and three on the downside (between target and minimum) which would result in a proportionate award if the respective growth level is achieved. The amounts shown related to our MIP represent payments that were possible for the 2017 annual performance period. Awards under the MIP are calculated as a percentage of the NEO’s weighted average base salary. A minimum amount is paid if a threshold level of performance is achieved, and a maximum award is paid if a specified higher level of performance is achieved. Performance between these two levels results in a proportionate payment of the award. Mr. Laroyia was granted a guaranteed bonus of $350,000 for 2017 when he was appointed Executive Vice President and Chief Financial Officer. The 2017 MIP awards for our NEOs have been earned and paid, and the actual amount earned by each NEO is included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
|
(2)
|
The amounts shown represent the number of shares to be paid out upon the vesting of performance-based RSUs granted during the year. There is 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.
|
(3)
|
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.
|
|
|
Option Awards (1)
|
|
Stock Awards (2)
|
|||||||||||||||||||||||
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock
That Have
Not
Vested
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
|||||||||||
Dominick Zarcone
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,012
|
|
|
$
|
2,806,718
|
|
|
53,166
|
|
|
$
|
2,162,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Varun Laroyia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,554
|
|
|
$
|
2,137,371
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
John S. Quinn
|
|
80,000
|
|
|
—
|
|
|
$
|
9.298
|
|
|
10/1/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
80,000
|
|
|
—
|
|
|
$
|
9.983
|
|
|
1/8/2020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,255
|
|
|
$
|
1,149,131
|
|
|
37,105
|
|
|
$
|
1,509,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Walter P. Hanley
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,738
|
|
|
$
|
1,046,764
|
|
|
33,798
|
|
|
$
|
1,374,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Victor M. Casini
|
|
40,000
|
|
|
—
|
|
|
$
|
9.568
|
|
|
1/11/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
40,000
|
|
|
—
|
|
|
$
|
5.978
|
|
|
1/9/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
40,000
|
|
|
—
|
|
|
$
|
9.983
|
|
|
1/8/2020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,175
|
|
|
$
|
861,187
|
|
|
25,779
|
|
|
$
|
1,048,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Robert L. Wagman
|
|
26,000
|
|
|
—
|
|
|
$
|
9.568
|
|
|
1/11/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
36,000
|
|
|
—
|
|
|
$
|
5.978
|
|
|
1/9/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
68,000
|
|
|
—
|
|
|
$
|
9.983
|
|
|
1/8/2020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,295
|
|
|
$
|
1,638,798
|
|
|
22,049
|
|
|
$
|
896,733
|
|
(1)
|
The grant date of each of the options was ten years prior to the expiration date. Each of the unexercisable options became exercisable with respect to 10% of the number of shares of common stock subject to the option on each six month anniversary of the grant date over a total of five years.
|
(2)
|
Outstanding stock awards include unvested RSUs. The RSUs vest over a period between three and five years from the grant date. The following table sets forth the vesting schedule of the earned and unearned number of units for each NEO assuming the satisfaction of the performance vesting condition of the unearned units, which occurred subsequent to December 31, 2017:
|
|
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|||||
|
Dominick Zarcone
|
|
70,540
|
|
|
36,776
|
|
|
14,862
|
|
|
—
|
|
|
122,178
|
|
|
Varun Laroyia
|
|
14,014
|
|
|
14,014
|
|
|
14,014
|
|
|
10,512
|
|
|
52,554
|
|
|
John S. Quinn
|
|
39,770
|
|
|
19,409
|
|
|
6,181
|
|
|
—
|
|
|
65,360
|
|
|
Walter P. Hanley
|
|
36,228
|
|
|
17,678
|
|
|
5,630
|
|
|
—
|
|
|
59,536
|
|
|
Victor M. Casini
|
|
29,177
|
|
|
13,483
|
|
|
4,294
|
|
|
—
|
|
|
46,954
|
|
|
Robert L. Wagman
|
|
41,282
|
|
|
17,389
|
|
|
3,673
|
|
|
—
|
|
|
62,344
|
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Name
|
|
Number of
Shares
Acquired
on Exercise
|
|
Value Realized
on Exercise
|
|
Number of
Shares
Acquired
on Vesting
|
|
Value Realized
on Vesting
|
||||||
Dominick Zarcone
|
|
—
|
|
|
$
|
—
|
|
|
68,860
|
|
|
$
|
2,245,972
|
|
Varun Laroyia
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
John S. Quinn
|
|
—
|
|
|
$
|
—
|
|
|
50,796
|
|
|
$
|
1,618,532
|
|
Walter P. Hanley
|
|
—
|
|
|
$
|
—
|
|
|
47,066
|
|
|
$
|
1,499,495
|
|
Victor M. Casini
|
|
60,000
|
|
|
$
|
1,556,949
|
|
|
41,969
|
|
|
$
|
1,337,030
|
|
Robert L. Wagman
|
|
72,000
|
|
|
$
|
1,643,263
|
|
|
76,896
|
|
|
$
|
2,449,104
|
|
Name
|
|
Executive
Contributions
in Last FY (1)
|
|
Registrant
Contributions
in Last FY (2)
|
|
Aggregate
Earnings
in Last FY
|
|
Aggregate
Withdrawals/
Distributions (3)
|
|
Aggregate
Balance
at Last FYE (4)
|
||||||||||
Dominick Zarcone
|
|
$
|
63,893
|
|
|
$
|
31,370
|
|
|
$
|
22,802
|
|
|
$
|
(24,225
|
)
|
|
$
|
161,613
|
|
Varun Laroyia
|
|
$
|
46,154
|
|
|
$
|
2,308
|
|
|
$
|
571
|
|
|
$
|
—
|
|
|
$
|
49,033
|
|
John S. Quinn
|
|
$
|
56,773
|
|
|
$
|
28,386
|
|
|
$
|
12,170
|
|
|
$
|
(152,233
|
)
|
|
$
|
258,625
|
|
Walter P. Hanley
|
|
$
|
52,049
|
|
|
$
|
20,954
|
|
|
$
|
585,732
|
|
|
$
|
(24,225
|
)
|
|
$
|
3,248,543
|
|
Victor M. Casini
|
|
$
|
67,518
|
|
|
$
|
19,800
|
|
|
$
|
572,689
|
|
|
$
|
(24,225
|
)
|
|
$
|
2,893,091
|
|
Robert L. Wagman
|
|
$
|
43,835
|
|
|
$
|
21,917
|
|
|
$
|
83,293
|
|
|
$
|
(24,225
|
)
|
|
$
|
615,788
|
|
(1)
|
These amounts represent contributions to the supplemental plan by the NEOs from their respective 2017 salaries and 2016 bonuses (paid in 2017) reported in the Summary Compensation Table under the columns entitled “Salary” (in 2017) and “Non-Equity Incentive Plan Compensation” (in 2016).
|
(2)
|
These amounts were also reported in the Summary Compensation Table under the column entitled “All Other Compensation.”
|
(3)
|
These amounts represent distributions, and the transfers on behalf of the NEOs from the supplemental plan to our 401(k) plan that are permitted by the tax laws.
|
(4)
|
These amounts represent money we owe the NEOs 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. Zarcone - $96,923; Mr. Laroyia - $0; Mr. Quinn - $498,559; Mr. Hanley - $2,253,532; Mr. Casini - $1,633,515; and Mr. Wagman - $577,477.
|
•
|
Payment of salary and other compensation accrued through the termination date;
|
•
|
Payment of a pro rata bonus;
|
•
|
A severance payment equal to two times (two-and-one-half times in the case of Mr. Zarcone) the sum of the employee's (a) salary and (b) the greater of the employee's target 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 a period of 24 months (30 months in the case of Mr. Zarcone);
|
•
|
Outplacement services; and
|
•
|
The employee's outstanding equity-based compensation awards shall become vested and exercisable.
|
•
|
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).
|
|
Involuntary Termination
(1)(2)
|
|
Change of Control
|
|
Involuntary Termination Following a Change of Control (1)
|
|
Death or Disability (3)
|
||||||||
Dominick Zarcone
|
|
|
|
|
|
|
|
||||||||
Cash Severance
|
$
|
1,781,250
|
|
|
$
|
—
|
|
|
$
|
3,830,463
|
|
|
$
|
700,000
|
|
Unvested and Accelerated Share-based Awards
|
3,759,779
|
|
|
1,948,012
|
|
|
4,968,979
|
|
|
4,968,979
|
|
||||
Long-Term Incentive Plan
(4)
|
277,904
|
|
|
277,904
|
|
|
277,904
|
|
|
534,418
|
|
||||
Medical and Dental Benefits
(5)
|
58,256
|
|
|
—
|
|
|
97,093
|
|
|
—
|
|
||||
Other Benefits and Perquisites
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
5,877,189
|
|
|
$
|
2,225,916
|
|
|
$
|
9,174,439
|
|
|
$
|
6,203,397
|
|
Varun Laroyia
|
|
|
|
|
|
|
|
||||||||
Cash Severance
|
$
|
1,125,000
|
|
|
$
|
—
|
|
|
$
|
1,700,000
|
|
|
$
|
700,000
|
|
Unvested and Accelerated Share-based Awards
|
854,924
|
|
|
—
|
|
|
2,137,371
|
|
|
2,137,371
|
|
||||
Long-Term Incentive Plan
(4)
|
21,319
|
|
|
21,319
|
|
|
21,319
|
|
|
29,583
|
|
||||
Medical and Dental Benefits
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other Benefits and Perquisites
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
2,001,243
|
|
|
$
|
21,319
|
|
|
$
|
3,858,690
|
|
|
$
|
2,866,954
|
|
John S. Quinn
|
|
|
|
|
|
|
|
||||||||
Cash Severance
|
$
|
1,358,802
|
|
|
$
|
—
|
|
|
$
|
1,749,630
|
|
|
$
|
700,000
|
|
Unvested and Accelerated Share-based Awards
|
2,155,225
|
|
|
290,424
|
|
|
2,658,191
|
|
|
2,658,191
|
|
||||
Long-Term Incentive Plan
(4)
|
203,905
|
|
|
203,905
|
|
|
203,905
|
|
|
415,350
|
|
||||
Medical and Dental Benefits
(5)
|
49,506
|
|
|
—
|
|
|
66,008
|
|
|
—
|
|
||||
Other Benefits and Perquisites
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
3,767,438
|
|
|
$
|
494,329
|
|
|
$
|
4,677,734
|
|
|
$
|
3,773,541
|
|
Walter P. Hanley
|
|
|
|
|
|
|
|
||||||||
Cash Severance
|
$
|
670,000
|
|
|
$
|
—
|
|
|
$
|
1,320,000
|
|
|
$
|
700,000
|
|
Unvested and Accelerated Share-based Awards
|
1,473,393
|
|
|
264,640
|
|
|
2,421,329
|
|
|
2,421,329
|
|
||||
Long-Term Incentive Plan
(4)
|
153,364
|
|
|
153,364
|
|
|
153,364
|
|
|
312,400
|
|
||||
Medical and Dental Benefits
(5)
|
33,004
|
|
|
—
|
|
|
66,008
|
|
|
—
|
|
||||
Other Benefits and Perquisites
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
2,329,761
|
|
|
$
|
418,004
|
|
|
$
|
3,960,701
|
|
|
$
|
3,433,729
|
|
Victor M. Casini
|
|
|
|
|
|
|
|
||||||||
Cash Severance
|
$
|
630,000
|
|
|
$
|
—
|
|
|
$
|
1,200,000
|
|
|
$
|
700,000
|
|
Unvested and Accelerated Share-based Awards
|
1,186,629
|
|
|
264,640
|
|
|
1,909,619
|
|
|
1,909,619
|
|
||||
Long-Term Incentive Plan
(4)
|
139,422
|
|
|
139,422
|
|
|
139,422
|
|
|
284,000
|
|
||||
Medical and Dental Benefits
(5)
|
33,004
|
|
|
—
|
|
|
66,008
|
|
|
—
|
|
||||
Other Benefits and Perquisites
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
1,989,055
|
|
|
$
|
404,062
|
|
|
$
|
3,315,049
|
|
|
$
|
2,893,619
|
|
(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 or 12 months). 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 2017, $40.67) that would continue to vest during the Severance Period (18 or 12 months).
|
(3)
|
The amount shown for the Cash Severance payment represents the life insurance proceeds paid to the NEO's beneficiaries pursuant to a company-provided life insurance policy.
|
(4)
|
The payout amount under the Long Term Incentive Plan in the event of an involuntary termination, a Change of Control, or an involuntary termination following a Change of Control is calculated based on the actual performance of the Company. The payment amount in the event of death or disability is calculated assuming that the target performance metrics were met.
|
(5)
|
Medical and Dental Benefits reflect the lump sum payment to each NEO 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.
|
(6)
|
In addition to the benefits shown, each named executive officer is entitled to receive outplacement services at the expense of the Company. The amounts to be incurred by the Company for such services would be dependent on the terms and conditions of the services, which would be determined prior to the termination date or Change of Control date.
|
1.
|
To identify the “median employee” from our employee population, we used the amount of “gross wages” for the identified employees as reflected in our payroll records for 2017. 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 2017 in accordance with the requirements of Item 402(c)(2)(x), and then added LKQ’s annual share of the cost of medical and dental insurance for the employee, resulting in annual total compensation of $32,343.
|
3.
|
For the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table, adjusted as follows.
|
a.
|
As noted elsewhere in this Proxy Statement, Mr. Zarcone began serving as our CEO effective May 31, 2017, upon the resignation of Robert Wagman, our former CEO. We identified Mr. Zarcone as our CEO for this pay ratio disclosure because he was serving in that position on December 31, 2017, the date that we selected to identify our median employee.
|
b.
|
As Mr. Zarcone served as our CEO for only a portion of 2017, we annualized the amount reported in the Summary Compensation Table for him (in other words, we estimated the compensation that Mr. Zarcone would have earned if he served as our CEO for all of 2017, based on the level of compensation he actually earned for the portion of 2017 that he did serve as our CEO). To maintain consistency between the annual total compensation of our CEO and the median employee, we also added the value of LKQ’s annual share of the cost of medical and dental insurance for our CEO and his eligible dependents (estimated at $9,801) to the amount reported in the Summary Compensation Table (as annualized as described in the prior sentence). This resulted in annual total compensation for purposes of determining the ratio in the amount of $4,364,508, which exceeds the amount reported for Mr. Zarcone in the Summary Compensation Table by $467,077.
|
•
|
each person known by us to be the beneficial owner of 5% or more of the outstanding common stock (based solely on a review of filings on Schedule 13G or 13D with the SEC);
|
•
|
each of our directors and named executive officers; and
|
•
|
all of our directors and executive officers as a group.
|
|
|
Shares Beneficially Owned (2)
|
||||
Name and Address of Beneficial Owner (1)
|
|
Number
|
|
Percent
|
||
The Vanguard Group, 100 Vanguard Blvd, Malvern, PA 19355
(3)
|
|
29,673,757
|
|
|
9.6
|
%
|
Artisan Partners Limited Partnership, 875 East Wisconsin Ave, Milwaukee, WI 53202
(3)
|
|
27,188,728
|
|
|
8.8
|
%
|
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055
(3)
|
|
18,779,286
|
|
|
6.1
|
%
|
Sukhpal Singh Ahluwalia
(4)
|
|
1,500
|
|
|
*
|
|
A. Clinton Allen
(5)
|
|
287,758
|
|
|
*
|
|
Robert M. Hanser
|
|
7,214
|
|
|
*
|
|
Joseph M. Holsten
|
|
262,774
|
|
|
*
|
|
Blythe J. McGarvie
|
|
26,877
|
|
|
*
|
|
Paul M. Meister
|
|
332,067
|
|
|
*
|
|
John F. O'Brien
|
|
128,661
|
|
|
*
|
|
Guhan Subramanian
|
|
23,811
|
|
|
*
|
|
William M. Webster, IV
(6)
|
|
167,569
|
|
|
*
|
|
Dominick Zarcone
(7)
|
|
161,778
|
|
|
*
|
|
Varun Laroyia
|
|
4,159
|
|
|
*
|
|
John S. Quinn
|
|
341,136
|
|
|
*
|
|
Walter P. Hanley
(8)
|
|
184,036
|
|
|
*
|
|
Victor M. Casini
(9)
|
|
384,881
|
|
|
*
|
|
Robert L. Wagman
|
|
305,251
|
|
|
*
|
|
All directors and executive officers as a group (18 persons)
|
|
2,492,672
|
|
|
*
|
|
*
|
Represents less than 1% of our outstanding common stock.
|
(1)
|
Unless otherwise specified, the address of each such person is c/o LKQ Corporation, 500 West Madison Street, Suite 2800, Chicago, Illinois 60661.
|
(2)
|
Shares are considered beneficially owned, for the purpose of this table only, if held by the person indicated as beneficial owner, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security, or if the person has the right to acquire beneficial ownership within 60 days, unless otherwise indicated in these footnotes. The numbers and percentages of shares owned by our directors and executive officers include in each case shares subject to currently outstanding equity awards that were exercisable or scheduled to vest within 60 days of March 8, 2018 as follows: Sukhpal Singh Ahluwalia - 0; A. Clinton Allen - 63,662; Robert M. Hanser - 3,662; Joseph M. Holsten - 5,254; Blythe J. McGarvie - 3,662; Paul M. Meister - 63,662; John F. O'Brien - 3,662; Guhan Subramanian - 3,662; William M. Webster, IV - 63,662; Dominick Zarcone - 23,874; Varun Laroyia - 0; John S. Quinn - 160,000; Walter P. Hanley - 0; Victor M. Casini - 80,000; Robert L. Wagman - 104,000; and all directors and executive officers as a group - 532,262.
|
(3)
|
Based solely on Schedule 13G/As filed by Artisan Partners Limited Partnership on February 7, 2018, The Vanguard Group on February 9, 2018, and by BlackRock, Inc. on February 8, 2018.
|
(4)
|
Includes 1,500 shares owned by a trust of which Mr. Ahluwalia's children are beneficiaries and of which Mr. Ahluwalia is not a beneficiary.
|
(5)
|
Includes 11,000 shares held by an IRA, of which Mr. Allen is the beneficiary, and 23,300 shares owned by Mr. Allen's wife.
|
(6)
|
Does not include shares owned by a trust of which Mr. Webster's children are beneficiaries, of which Mr. Webster is not a trustee, and as to which none of Mr. Webster or any of his children have voting or investing power.
|
(7)
|
Includes 1,600 shares owned by Mr. Zarcone's wife.
|
(8)
|
Includes 64,017 shares owned by Mr. Hanley's wife.
|
(9)
|
Includes 132,766 shares owned by a trust of which Mr. Casini and his wife are co-trustees and Mr. Casini is a beneficiary.
|
|
VOTE BY INTERNET -
www.proxyvote.com
|
|
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
|
BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.
P.O. BOX 1342
BRENTWOOD, NY 11717
|
VOTE BY PHONE - 1-800-690-6903
|
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
|
|
|
VOTE BY MAIL
|
|
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
|
|
E36681-P02945
|
|
|
LKQ CORPORATION
|
||
|
Annual Meeting of Stockholders
|
||
|
May 7, 2018 1:30 P.M.
|
||
|
This proxy is solicited by the Board of Directors
|
||
|
|
|
|
|
|
The undersigned appoints Victor M. Casini and Matthew J. McKay (the "Named Proxies") and each of them as proxies for the undersigned, with full power of substitution, to vote the shares of common stock of LKQ Corporation, a Delaware corporation (the "Company"), the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company to be held at 500 West Madison Street, Third Floor Conference Center -- Madison Room, Chicago, IL 60661, on Monday, May 7, 2018 at 1:30 P.M. Central Time and all adjournments thereof.
|
|
|
|
|
|
|
The Board of Directors of the Company recommends a vote "FOR" all nominees for director, and "FOR" proposals 2 and 3.
|
|
|
|
|
|
|
|
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted "FOR" all nominees for director, and "FOR" proposals 2 and 3. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof.
|
|
|
|
|
||
|
|
||
|
|
|
|
|
You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE), but you need not mark any box if you wish to vote in accordance with the Board of Directors' recommendation. The Named Proxies cannot vote the shares unless you sign and return this card.
|
|
|
|
|
||
|
|
||
|
|
|
|
|
Continued and to be signed on reverse side
|
|
|
|
|
|
1 Year LKQ Chart |
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