Matthew McKay
About Matthew McKay
Matthew J. McKay serves as Senior Vice President – General Counsel & Corporate Secretary of LKQ, and is one of the company’s named executive officers; he also signs corporate proxy and 8‑K filings on behalf of the company . His 2024 incentive pay was tied to corporate EBITDA, EBITDA margin, and free cash flow; actual results were EBITDA $1,763 million, EBITDA margin 12.2%, and free cash flow $836 million, producing a corporate annual bonus payout at 22.9% of target (McKay’s target bonus was 60% of salary) . LKQ’s long-term incentives for the 2022–2024 cycle paid at 27.6% of target on financials, lifted to 29.0% after a 5% sustainability modifier, and 2024 equity grants continued a mix of PSU‑1 (profitability gate with time vesting) and PSU‑2 (three-year EPS, organic parts & services growth, and ROIC targets) .
Past Roles
- Not disclosed in reviewed proxy/8‑K filings.
External Roles
- Not disclosed in reviewed proxy/8‑K filings.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $443,699 | $500,000 | $525,000 |
| Target Bonus (% of Salary) | 60% | 60% | 60% |
| Actual Annual Bonus ($) | $443,751 | $393,316 | $71,290 |
Performance Compensation
2024 Annual Bonus – Corporate Program
| Metric | Weight | Threshold | Target | Maximum | Achieved | Payout as % of Target |
|---|---|---|---|---|---|---|
| EBITDA ($mm) | 30% | $1,799 | $1,946 | $2,093 | $1,763 | —% (below threshold) |
| EBITDA Margin (%) | 30% | 11.7% | 12.7% | 13.7% | 12.2% | 76.4% |
| Free Cash Flow ($mm) | 40% | $900 | $1,000 | $1,100 | $836 | —% (below threshold) |
| Weighted Total Payout | — | — | — | — | — | 22.9% |
Cash LTI – 2022–2024 Cycle (Company Results)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Adjusted Diluted EPS (2024) ($) | 40% | 4.02 | 4.52 | 5.02 | 3.65 | 0.0% | 0.0% |
| 3‑yr Avg Organic Parts & Services Growth (%) | 40% | 2.0% | 3.5% | 5.0% | 2.6% | 69.0% | 27.6% |
| 3‑yr Avg ROIC (%) | 20% | 14.0% | 14.8% | 15.5% | 13.6% | 0.0% | 0.0% |
| Financial Payout Total | — | — | — | — | — | — | 27.6% |
| Sustainability Modifier | — | — | — | — | — | +5% | Final = 29.0% |
McKay’s cash LTI earned/paid for the 2022–2024 cycle was $66,654 .
Forward Cash/EPS/ROIC Goals – 2024–2026 LTI Grid
| Metric | Threshold | Target | Maximum | Payout (% of Target) |
|---|---|---|---|---|
| EPS Achievement in 2026 ($) | 4.20 | 4.65 | ≥5.10 | 50% / 100% / 200% |
| 3‑yr Avg Organic Parts & Services Growth (%) | 2.75% | 3.75% | ≥4.75% | 50% / 100% / 200% |
| 3‑yr Avg ROIC (%) | 12.00% | 13.50% | ≥13.50% | 50% / 200% |
Equity Awards (Grants and Vesting)
2024 Equity Grants (PSU‑1 and PSU‑2)
| Grant Type | Grant Date | Target Shares (#) | Maximum Shares (#) | Grant Date Fair Value ($) |
|---|---|---|---|---|
| PSU‑1 | 2024‑02‑23 | 16,131 | N/A | $840,023 |
| PSU‑2 | 2024‑02‑23 | 8,066 | 16,132 | $420,038 (target) ; $840,076 (max) |
PSU‑1s vest over three years, subject to a profitability gate (achieved for 2024); PSU‑2s vest based on 2024–2026 EPS, organic growth, and ROIC performance .
Outstanding Equity at 12/31/2024
| Metric | Amount |
|---|---|
| Unvested RSUs/PSU‑1/PSU‑2 (#) | 24,260 |
| Market Value of Unvested ($) | $891,555 |
| Unearned PSU‑2 (#) | 18,765 |
| Market/Payout Value of Unearned PSU‑2 ($) | $689,614 |
Scheduled Vesting (Unvested as of 12/31/2024)
| Year | Shares (#) |
|---|---|
| 2025 | 14,442 |
| 2026 | 9,764 |
| 2027 | 18,819 |
| Total | 43,025 |
Shares Vested in 2024
| Metric | Amount |
|---|---|
| Shares Acquired on Vesting (#) | 19,780 |
| Value Realized ($) | $991,338 |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (Shares) | 76,351 (less than 1%) |
| Shares Outstanding (Record Date) | 258,553,115 |
| Stock Ownership Guideline (SVP) | 2x base salary; retain ≥50% of net after‑tax vested shares until met |
| Compliance Status (NEOs, 2023 proxy) | All named executive officers met guidelines |
| Hedging/Pledging Policy | Prohibited for directors/officers/employees |
Deferred Compensation (Supplemental Plan)
| Component | 2024 Amount |
|---|---|
| Executive Contributions ($) | $54,695 |
| Company Contributions ($) | $33,579 |
| Aggregate Earnings ($) | $146,190 |
| Aggregate Balance ($) | $1,333,218 |
Employment Terms
- Severance Policy: For involuntary termination without cause or resignation for good reason, SVPs receive 12 months of severance (monthly installments based on latest base salary plus average prior two years’ bonus), pro‑rata annual bonus, pro‑rata cash LTI (based on actual results), continued vesting of equity awards during severance, subsidized medical/dental, and outplacement; benefits reduced if Section 280G cut‑down yields better after‑tax outcome .
- Change of Control (double trigger): Agreements provide benefits upon qualifying termination occurring within 12 months before or 24 months after a change of control; equity accelerates only if awards aren’t assumed/replaced or upon qualifying termination (double trigger) .
Potential Payments to Matt McKay (Illustrative, as of 12/31/2024)
| Scenario | Cash Severance ($) | Unvested Share‑Based Awards ($) | PSU‑2 Awards ($) | Cash LTI ($) | Medical/Dental ($) | Other ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Involuntary Termination | $943,534 | $483,042 | — | $140,000 | $43,410 | $7,500 | $1,617,486 |
| CoC – LTI Not Assumed | — | $843,854 | $296,426 | $720,000 | — | — | $1,860,280 |
| Involuntary Termination in Connection with CoC | $1,982,006 | $843,854 | $296,426 | $720,000 | $86,819 | $7,500 | $3,936,605 |
| Death/Disability | $2,604,917 | $843,854 | $489,914 | $720,000 | — | — | $4,658,685 |
Compensation Structure
Summary Compensation (NEO Table Values)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $443,699 | $487,534 | $518,852 |
| Stock Awards ($) | $690,006 | $900,103 | $1,260,061 |
| Non‑Equity Incentive ($) | $598,731 | $787,066 | $137,944 |
| All Other Comp ($) | $54,126 | $54,730 | $56,425 |
| Total ($) | $1,786,562 | $2,229,433 | $1,973,282 |
Other compensation detail (2024): retirement plans $46,516; life insurance premiums $2,414; disability premiums $7,495; other $0; total $56,425 .
Policy/Design Highlights
- 2024 annual bonus measured on EBITDA (30%), EBITDA margin (30%), and free cash flow (40), with linearly interpolated payouts and pre‑set adjustments (FX; certain cash restructuring/transaction costs for FCF) .
- Cash LTI and PSU‑2s measured on three‑year EPS/organic growth/ROIC with ±10% sustainability modifier for cash LTI; 2022–2024 paid at 27.6% (+5% to 29.0%) .
- 2025 redesign: discontinue cash LTI; long‑term incentives split 50% PSU‑1 and 50% PSU‑2, increase ROIC weighting to 40%, reduce organic growth to 20% (EPS and ROIC remain core) .
- Governance safeguards: clawback for restatements (Dodd‑Frank‑compliant), double‑trigger equity vesting, prohibition on hedging/pledging, no excise tax gross‑ups, option repricing forbidden without shareholder approval .
Compensation Peer Group (Benchmarking Context)
Peer group used to inform target pay and design included: Adient, Advance Auto Parts, Aptiv, AutoZone, Beacon Roofing Supply, BorgWarner, CDW, Dana, Fastenal, Genuine Parts, Goodyear, Lear, O’Reilly Automotive, Republic Services, United Rentals, W.W. Grainger, Watsco, WESCO International .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: ~96% of votes cast supported NEO compensation .
- Committee engages F.W. Cook, an independent consultant, and annually reviews risks; program deemed not reasonably likely to have a material adverse effect .
Investment Implications
- Pay‑for‑performance alignment: 2024 corporate underperformance versus bonus targets drove a 22.9% payout, and 2022–2024 LTI paid at 29%, indicating variable pay responds to results; 2025 design further emphasizes performance‑based equity (no cash LTI) and increases ROIC weighting, strengthening capital efficiency focus .
- Retention and selling pressure: McKay holds 24,260 unvested units with a vesting schedule across 2025–2027 plus unearned PSU‑2s; double‑trigger CoC and continued vesting during severance support retention while hedging/pledging bans reduce misalignment risk .
- Ownership alignment: Beneficial ownership of 76,351 shares and SVP guideline of 2x salary (all NEOs compliant as of 2023 proxy) suggest meaningful “skin in the game” with required share retention from vested awards .
Note: All figures reflect disclosures in LKQ’s definitive proxy statements and 8‑Ks; tables and metrics are taken directly from the company’s filings.