Gary Glandon

About Gary Glandon

Senior Vice President and Chief People Officer (CPO) at Lithia & Driveway (LAD). Joined in February 2021 after 30+ years in HR/EHS leadership, including as President & CEO of Glandon Partners (2018–2020) and SVP & CHRO at Rogers Corporation; holds an M.S.B.A. (University of Saint Francis) and B.S.B.A./B.B.A. (Michigan State University/Broad College of Business) . LAD disclosed that Glandon will retire effective December 31, 2025, with succession planning underway to ensure a seamless transition . Company performance during his tenure includes 2024 revenue of $36.2B (+17% YoY), EPS $29.65 (-18% YoY), and net income $802M (-20% YoY) ; total shareholder return (TSR) outcomes reported were +31% (1-year), +74% (2-year), and +32% (3-year) as of 12/31/2024, with top-tier relative rankings in certain periods .

Past Roles

External Roles

• None disclosed .

Fixed Compensation

Performance Compensation

LAD’s 2024 executive incentive design (applies to NEOs and generally to executives) emphasized pay-for-performance. Individual amounts for Glandon are not separately disclosed.

• Short-Term Incentive (STIP) design and outcome (2024): | Metric | Weight | 2024 Attainment | 2024 Payout vs Target | |---|---:|---:|---:| | Relative Revenue Growth | 40% | Peer Rank 1st | 200% | | Relative Net Income Growth | 50% | Peer Rank 13th | 70% | | Corporate Responsibility & Strategy | 10% | Above Target | 150% | | Total STIP Payout | — | — | 130% of target (company-wide STIP result) |

• Long-Term Incentive (LTI) design (2024 PSUs): | Component | Weighting/Term | Performance mechanics | |---|---|---| | PSUs | 75% of 2024 LTI; 3-year performance period (2024–2026) | Relative Revenue Growth (40%), Relative EPS Growth (60%), with a Relative TSR modifier of up to +/-35% | | RSUs | 25% of 2024 LTI; service vesting | Generally vests over three years in annual installments (see typical schedule below) |

• Additional design notes:

  • In 2024, LAD replaced “relative net income” with “relative EPS” in PSUs to better align with strategy and reduce metric overlap across plans .
  • 2024 financials drove the above-target STIP payout noted above (130%) .

Equity Ownership & Alignment

• Typical vesting schedules (executive awards): | Award type | Typical vesting cadence | |---|---| | Time-based RSUs | Three equal annual installments over three years (e.g., 1/3 each year) . | | PSUs | Cliff payout post 3-year performance period upon certification (e.g., 2024–2026 performance, pays in 2027) . |

Note: Company insider trading policy requires pre-clearance and restricts trading windows for executives .

Employment Terms

• Change-in-control (CIC) economics (double-trigger):
  • LAD’s standard CIC terms for named executives: 24 months base salary + 2 years of bonus, accelerated vesting of time-based RSUs, PSUs vest at target, and continuing certain benefits (e.g., health up to 18 months; long-term care premiums up to 24 months). Non-compete and non-solicit apply for two years post-separation if benefits are elected; non-disparagement for three years .
  • Gary Glandon’s CIC cash multiple specifically: 12 months of base salary rather than 24 months (substantially similar agreements covering many executives are noted; Glandon is named in this group) .
  • Agreements include 280G cutback to avoid excise tax where applicable .
• Retirement and other separation:
  • For qualifying retirement, disability, or death, equity may continue to vest per plan terms (PSUs still performance-based), with SERP vesting provisions as described; these are program-level, not specific to Glandon .
• Upcoming transition:
  • Retirement announced effective December 31, 2025; succession plan to be announced prior, reducing transition risk .

Performance & Track Record (Company-level during his tenure)

Strategic milestones disclosed for 2024: Driveway Finance Corporation achieved profitability with a ~$3.9B portfolio; ~$5.9B in expected annualized revenue from acquisitions; continued omnichannel expansion (network reach to 95% of consumers within 205 miles) .

Compensation Governance, Say-on-Pay, and Peer Benchmarking

• Compensation Committee retained Pay Governance as independent advisor; committee fully independent .
• Shareholder engagement increased following 2024 say-on-pay (81% support); feedback led to re-incorporating EPS in LTI and other refinements .
• Peer group spans auto retail and broader retail for market benchmarking (e.g., ABG, PAG, AN, KMX, AZO, ORLY, TJX, DG, etc.) .
• No hedging/pledging, no option repricing, double-trigger CIC, and robust clawbacks underline governance rigor .

Compensation Structure Analysis

• Mix and at-risk pay: Heavy weighting to performance equity (PSUs) and relative metrics ties pay to shareholder outcomes; shift from net income to EPS in PSUs increases correlation to stated long-term targets .
• Short-term vs long-term balance: 2024 STIP emphasized relative revenue/net income and strategic/ESG execution with clear payout curves; LTI focuses on multi-year relative growth with TSR modifier to align with total return .
• Clawbacks and ownership: Strong holding power through ownership guidelines and multi-year vesting; comprehensive clawbacks mitigate risk-taking and align behavior .

Risk Indicators & Red Flags

• Pledging/hedging: Prohibited for executives, reducing misalignment and forced-sale risk .
• CIC/severance: Glandon’s CIC multiple (12 months base salary) is below CEO/EVP norms (24 months), limiting severance inflation risk .
• Clawbacks: Dual policies (Dodd-Frank and reputational misconduct) strengthen accountability .
• Related party/loans: No disclosures involving Glandon .

Investment Implications

• Alignment: Strong pay-for-performance architecture (relative revenue/EPS with TSR modifier), ownership guidelines, anti-pledging/hedging, and clawbacks support alignment; Glandon’s CIC terms are conservative (12 months salary) versus NEOs, limiting parachute risk .
• Retention/transition: Announced retirement effective 12/31/2025 elevates near-term succession/continuity focus for the people/HR agenda; management disclosed succession planning to mitigate transition risk .
• Near-term trading pressure: Executive RSUs often vest in early January on a three-year schedule; combined with trading window constraints, this can create episodic liquidity events across the team (individual grants for Glandon are not disclosed) .
• Performance lens: While 2024 revenue grew 17%, EPS and net income declined amid normalization; multi-year TSR remains positive. Incentive structures that emphasize relative growth and TSR should continue to drive focus on profitable scale-up and capital discipline .