Justin Jude
About Justin Jude
Justin L. Jude is President and Chief Executive Officer of LKQ Corporation (appointed July 1, 2024) and serves as a director; the Board determined he is not independent given his executive role . He has been with LKQ since February 2004 and has ~28 years of industry experience, with deep credentials across operations, supply chain, information systems, and divisional P&L leadership . Age: 49 (as per Board matrix) . Pay-for-performance at LKQ is tightly linked to adjusted diluted EPS, organic parts & services revenue growth, ROIC, free cash flow, EBITDA dollars, and EBITDA margin across annual and multi‑year incentives; in 2024, ~85% of Jude’s target total direct compensation was incentive-based, evidencing high performance sensitivity .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| LKQ Corporation | President & CEO | Jul 2024 – Present | Primary management liaison to Board; enterprise leadership |
| LKQ Corporation | EVP & Chief Operating Officer | Jan 2024 – Jun 2024 | Global operations leadership and execution |
| LKQ Corporation | SVP Operations – Wholesale Parts Division | Jul 2015 – Dec 2023 | North America wholesale operations optimization |
| Keystone Automotive Operations, Inc. (LKQ specialty business) | President | Jun 2014 – Jul 2015 | Specialty segment leadership, P&L |
| LKQ Corporation | VP – Information Systems (North America) | Feb 2011 – May 2014 | IT leadership supporting operational efficiency |
| LKQ Corporation | VP – Supply Chain | Mar 2008 – Feb 2011 | Supply chain optimization |
| LKQ Corporation | Various roles since joining | Feb 2004 – Mar 2008 | Progressive operational responsibilities |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed | — | — | LKQ board matrix indicates Justin Jude serves on 0 other current public company boards |
Fixed Compensation
| Year | Base Salary ($) | Target Annual Bonus ($) | Actual Annual Bonus ($) | Notes |
|---|---|---|---|---|
| 2022 | 614,959 | — | 713,367 | Actual bonus from CIP |
| 2023 | 642,521 | — | 579,341 | Actual bonus from CIP |
| 2024 | 901,636 | 1,151,913 | 263,788 | Target set as % of salary; actual payout aligned to corporate program results |
Performance Compensation
Annual Bonus (CIP) – Design and 2024 Results
| Metric | Weight | 2024 Program Result | Notes |
|---|---|---|---|
| EBITDA dollars | 30% | Corporate payout equaled 22.9% of target | Segment EBITDA definition; pre‑established adjustments |
| EBITDA margin % | 30% | Corporate payout equaled 22.9% of target | Margin defined as EBITDA/revenue; adjusted for FX |
| Free Cash Flow | 40% | Corporate payout equaled 22.9% of target | FCF adjusted for FX and certain restructuring/transaction cash items |
• Jude’s bonus was based entirely on corporate measures (no segment weighting), consistent with CEO role .
• Bonus targets are set annually during budget/guidance, with external factor considerations; 2024 targets reflected Uni‑Select dilution and interest outflows, leading to lower FCF target vs 2023 actuals .
Cash-Based Long-Term Incentive (3-year)
| Performance Period | Metric | Weight | Targets (Threshold/Target/Max) | Actual | Payout |
|---|---|---|---|---|---|
| 2022–2024 | Adjusted Diluted EPS (year 3) | 40% | $4.02 / $4.52 / $5.02 | $3.65 (adjusted) | 0.0% |
| 2022–2024 | 3-yr Avg Organic Parts & Services Revenue Growth | 40% | 2.0% / 3.5% / 5.0% | 2.6% | 69.0% component; 27.6% weighted total |
| 2022–2024 | 3-yr Avg ROIC | 20% | 14.0% / 14.8% / 15.5% | 13.6% | 0.0% |
| 2022–2024 | Sustainability modifier | ±10% of target | — | Met → +5% applied to 27.6% earned amount for program (company-wide) | Included in CAP narrative |
| Performance Period | Metric | Weight | Threshold / Target / Max | Status |
|---|---|---|---|---|
| 2024–2026 | EPS (2026) | 40% | $4.20 / $4.65 / ≥$5.10 | In progress |
| 2024–2026 | 3-yr Avg Organic Parts & Services Revenue Growth | 40% | 2.75% / 3.75% / ≥4.75% | In progress |
| 2024–2026 | 3-yr Avg ROIC | 20% | 12.00% / 12.75% / ≥13.50% | In progress |
| 2024–2026 | Sustainability modifier | ±10% of target | Talent development, carbon footprint, supplier code of conduct, 3rd‑party risk, community, ethics training | In progress |
Equity PSUs
| Award Type | Grant Date | Target Shares | Threshold | Maximum | Grant Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|---|---|
| PSU‑1 | 2024‑02‑23 | 40,327 | — | — | 2,100,033 | Time‑based over ~3 years, tranches on Mar 1 and Sep 1; performance condition requires positive adjusted diluted EPS within five years (met for 2024 grants in Feb 2025) |
| PSU‑2 | 2024‑02‑23 | 20,164 | 10,082 | 40,328 | 1,050,042 (target); 2,100,085 (max) | Earned 0‑200% based on EPS (2026), 3‑yr organic revenue growth, 3‑yr ROIC; vests at end of performance period, employment‑based |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 166,942 shares; <1% of outstanding |
| Unvested stock awards (RSUs/PSU‑1) | 53,181 shares; $1,954,402 market value at $36.75 (12/31/2024) |
| Unearned PSU‑2 (performance awards) | 44,452 shares; $1,633,611 market/payout value at $36.75 (12/31/2024) |
| Vesting schedule (future tranches) | 2025: 30,275; 2026: 20,312; 2027: 47,046; Total: 97,633 |
| Stock ownership guideline (CEO) | 6x base salary; must retain ≥50% of net-after-tax shares until compliant; compliance required within 5 years |
| Pledging/Hedging | Prohibited for directors/officers/employees |
| Clawbacks/forfeiture | Violations of restrictive covenants (non‑compete, non‑solicit, confidentiality) trigger forfeiture of unvested awards, vested shares, and sale proceeds |
Employment Terms
| Provision | Key Terms |
|---|---|
| Severance Policy (involuntary termination) | Cash severance paid monthly over severance period; for CEO/CFO: 18 months; others: 12 months; unvested share-based awards continue to vest during severance period at $36.75 valuation basis |
| Change-of-control agreements | Double trigger; upon qualifying termination: lump-sum severance equal to 2x (salary + greater of target bonus or 3‑yr avg bonus), pro rata annual bonus, up to 24 months health/dental, outplacement, and full vesting of outstanding equity (performance-based based on actual or assumed performance) |
| Severance economics (illustrative) | For Jude: Involuntary termination total $4,234,107; CoC where LTI not assumed total $4,138,695; Involuntary termination in connection with CoC total $8,480,928; Death/Disability total $7,734,116 |
| Indemnification | Executives have indemnification agreements to fullest extent under Delaware law and certificate of incorporation |
Detailed severance components for Justin Jude (selected):
- Cash Severance: $2,469,531 (involuntary), $4,303,825 (involuntary + CoC)
- Unvested/Accelerated Share‑based Awards: $1,383,895 (involuntary), $1,877,668 (CoC scenarios, death/disability)
- PSU‑2 Awards: $741,027 (CoC scenarios), $1,044,141 (death/disability)
- Cash‑Based LTI: $350,000 (involuntary), $1,520,000 (CoC scenarios, death/disability)
- Medical/Dental: $23,181 (involuntary), $30,908 (involuntary + CoC)
- Other Perqs: $7,500 (involuntary and involuntary + CoC)
Board Governance
| Attribute | Detail |
|---|---|
| Board leadership | Separate Chairman (Guhan Subramanian) and CEO (Justin Jude); structure expected to continue post‑meeting |
| Jude’s independence | Not independent due to current executive officer status |
| Committee roles | Proxy does not list Jude as serving on Board committees; Compensation & Human Capital Committee is fully independent |
| Board/Committee evaluations | Annual director and committee evaluations; Board interviews and outside assessments periodically |
| Director attendance | Board held 5 meetings in 2024; each incumbent director attended ≥75% of meetings; 5 executive sessions held |
| Director ownership guidelines | Non‑employee directors: 5x annual cash retainer; retain ≥50% net shares until compliant; all current directors meet guidelines |
Director Compensation and Other Directorships
- Jude’s compensation is reported as a Named Executive Officer (NEO); he is not a non‑employee director, so standard director fee structures do not apply to him .
- Other public company boards (current): 0 for Jude (per board matrix) .
Compensation Structure Analysis
- High at‑risk mix: ~85% of Jude’s 2024 target total direct compensation is incentive‑based, aligning pay with performance outcomes .
- Annual bonus metrics focus: EBITDA dollars (30%), EBITDA margin (30%), Free Cash Flow (40), with corporate program payout of 22.9% of target in 2024; Jude’s actual annual bonus was $263,788, reflecting low bonus pressure amid integration and interest headwinds .
- Shift to PSUs: Equity awards are performance‑based PSU‑1/PSU‑2; PSU‑1 vests semi‑annually over ~3 years upon positive adjusted diluted EPS condition, which was satisfied in 2025 for 2024 grants, increasing near‑term vesting cadence .
- Multi‑year LTI discipline: 2022–2024 payout was 27.6% of target with a +5% sustainability modifier applied, evidencing downside responsiveness to sub‑threshold EPS/ROIC performance .
- Governance protections: No golden parachute excise tax gross‑ups; no single‑trigger cash/equity; option repricing forbidden; pledging/hedging prohibited; independent comp consultant .
Say‑on‑Pay & Shareholder Feedback
| Year | Approval % |
|---|---|
| 2024 | 96% support for NEO compensation program |
Expertise & Qualifications
- Core skillset: Extensive operations, logistics, supply chain, IT, and divisional leadership; primary management liaison to Board as CEO .
- Board matrix: Operations, automotive industry, executive leadership, supply chain/logistics attributes reflected for Jude; age 49; tenure ~0.9 years as of the proxy .
Equity Award Inventory and Vesting Pressure
| As of 12/31/2024 | Shares | Value ($) |
|---|---|---|
| Unvested RSUs/PSU‑1 | 53,181 | 1,954,402 (at $36.75) |
| Unearned PSU‑2 (max potential) | 44,452 | 1,633,611 (at $36.75) |
| Future vesting tranches | 2025: 30,275; 2026: 20,312; 2027: 47,046 | — |
• Insider selling pressure mitigants: 50% net share retention until guideline compliance and outright prohibition of pledging/hedging reduce forced sale dynamics despite semi‑annual vesting cadence for PSU‑1 .
Investment Implications
- Alignment: Jude’s high at‑risk pay mix and metric set (EPS, organic growth, ROIC, FCF/EBITDA) tie incentives to value creation drivers, but recent LTI payout at 27.6% highlights execution sensitivity to margin/returns and post‑acquisition integration .
- Near‑term flows: PSU‑1 condition satisfied for 2024 grants, increasing semi‑annual vesting through 2027; retention rule to hold ≥50% of net-after-tax shares dampens potential supply from executive selling .
- Downside protections: Double‑trigger CoC and no tax gross‑ups/single‑trigger benefits reduce governance risk; clawback/forfeiture on covenant breaches adds discipline .
- Governance balance: Separate Chair/CEO structure and independent committees support oversight, while Jude’s non‑independent director status is standard for sitting CEOs and flagged explicitly by the Board .
- Shareholder posture: Strong 96% say‑on‑pay support suggests investor acceptance of design and performance linkage; watch 2024–2026 LTI targets (EPS $4.65, organic growth 3.75%, ROIC 12.75%) as forward scorecard for incentive realization .