Thomas B. Newbern
AUTOZONEAbout Thomas B. Newbern
Thomas B. Newbern is Chief Operating Officer (COO) of AutoZone and a Named Executive Officer. He was elevated to COO in FY24 from Executive Vice President and has 39 years of AutoZone tenure, underscoring deep operational experience and continuity in the leadership bench . AutoZone’s long-term performance framework ties executive pay to value creation: the company reported FY25 revenue of $18.9B and diluted EPS of $144.87, and has delivered ~20% average annual TSR over the past 20 years, materially above market benchmarks . Annual incentives are based on Economic Profit driven 50% by EBIT and 50% by ROIC, with rigorous hurdles and guardrails intended to ensure payouts are funded by incremental EBIT, aligning pay with performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AutoZone | Executive Vice President (prior role) | FY23 | Supported leadership transition and operational execution; promoted to COO in FY24 |
External Roles
- No public company directorships or external roles disclosed for Mr. Newbern in the proxy .
Fixed Compensation
| Metric | FY24 | FY25 |
|---|---|---|
| Base Salary ($) | $800,000 | $810,000 |
| Target Bonus (% of Base) | Prorated around promotion (75% pre-promotion; 100% post) | 100% |
| Actual Annual Incentive ($) | $760,982 | $782,187 |
Performance Compensation
Annual Incentive Plan (MIP) Framework and FY25 Attainment
| Metric | Weighting | Target | Actual | Payout Basis |
|---|---|---|---|---|
| EBIT ($MM) | 50% | $3,808.4 | $3,762.4 | Economic Profit matrix, above-target payout requires exceeding EBIT target |
| ROIC (%) | 50% | 42.38% | 41.55% | Economic Profit matrix at 96.75% attainment |
| Economic Profit ($MM) | N/A | $2,474.3 | $2,458.2 | 96.75% of target payout achieved |
- Vesting: Annual cash; no vesting schedule applies .
Long-Term Incentive (Stock Options) – Design and FY25 Awards
| Item | Details |
|---|---|
| Vehicle | 100% stock options; 10-year term; aligns directly to stock price appreciation |
| Grant discipline | Fixed-share approach and burn rate; vesting changed to defer first vest beyond year 1 |
| Vesting schedule (most execs from FY25 grants) | 50% after year 2; 25% after year 3; 25% after year 4; first vest >1 year post grant |
| FY25 Options Granted (Newbern) | 4,597 options; exercise price $3,129.78; grant date fair value $5,200,014 |
Equity Ownership & Alignment
| Ownership Component | Amount | Notes |
|---|---|---|
| Shares owned directly (#) | 3,231 | Beneficial ownership as of Oct 20, 2025 |
| Options exercisable (#) | 24,373 | Aggregate across grants |
| Options unexercisable (#) | 12,861 | Aggregate across grants |
| Total beneficial ownership (#) | 44,514 (<1%)* | Less than 1% of 16,632,663 shares outstanding |
| Option exercises in FY25 (#/$) | 0 / — | Indicates no insider selling via option exercises in FY25 |
| Stock ownership guideline | 4x base salary (COO) | All execs in compliance; 50% post-exercise holding until compliant |
| Hedging/pledging | Prohibited (no pledging, no hedging; pre-clearance/trading windows apply) |
Outstanding option grants (selected detail):
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 10/07/2019 | 8,500 | — | 1,060.81 | 10/08/2029 |
| 10/07/2020 | 6,900 | — | 1,139.99 | 10/08/2030 |
| 10/05/2021 | 5,032 | 1,678 | 1,651.22 | 10/05/2031 |
| 10/04/2022 | 2,620 | 2,620 | 2,205.03 | 10/04/2032 |
| 10/06/2023 | 1,321 | 3,966 | 2,549.04 | 10/06/2033 |
| 10/11/2024 | — | 4,597 | 3,129.78 | 10/11/2034 |
Employment Terms
| Term | Provision |
|---|---|
| Severance & non-compete | Salary continuation 12–24 months based on service; >5 years = 24 months; 2-year non-compete and non-solicit |
| Involuntary termination (Not for Cause) – illustrative FY25 table values | Severance pay $1,620,000; benefits continuation $26,807; annual incentive $782,187 |
| Change-in-control | No separate cash severance disclosed; equity plans emphasize death and retirement vesting |
| Equity vesting on death/retirement | Unvested options vest upon death; retirement defined as age ≥55 and ≥15 years of service; ESPP/XSPP unvested shares vest on involuntary termination without cause, disability, or death |
| Clawback | Mandatory recovery for restatements; discretionary recovery for willful misconduct (lookback 3 fiscal years) |
| Benefits/perquisites (FY25 “All Other”) | Perqs/personal benefits $7,814; imputed income $24,878; company contributions $63,316; life insurance premiums $3,828 |
| Deferred compensation (EDCP, FY25) | Executive contributions $310,735; company contributions $49,316; earnings $161,749; withdrawals $(574,657); balance $2,530,504 |
Investment Implications
- Strong pay-for-performance alignment: Annual cash incentives tied to Economic Profit (50% EBIT/50% ROIC) with 90% hurdle and “no above-target without EBIT beat” guardrails; FY25 payout at 96.75% signals disciplined target-setting and limited discretion .
- Retention risk appears low: 39-year tenure, 24-month salary continuation, and substantial unexercisable options with multi-year vesting reduce near-term exit probability; anti-hedging and ownership rules further align incentives .
- Insider selling pressure currently limited: No option exercises in FY25 for Newbern; option vesting defers liquidity until year 2 and beyond, moderating near-term selling .
- Equity-heavy incentives magnify sensitivity to stock performance: Large option exposure aligns long-term value creation but increases compensation variability; governance mitigants include clawback policy and anti-pledging/hedging prohibitions .
- Shareholder sentiment supportive: Say-on-pay support improved to >89% of votes cast in FY25 after program refinements, reducing governance overhang risk .