Rick Galloway
Senior Vice President and Chief Financial Officer at LKQ
Executive
About Rick Galloway
Rick Galloway is Senior Vice President and Chief Financial Officer of LKQ, serving as CFO since September 2022 after leading finance for the Wholesale – North America and Self Service segments from 2019–2022 . He is 46 years old and is among LKQ’s executive officers elected by the Board . Prior roles include CFO of Alcoa’s Engineered Products and Solutions division (2010–2019) and earlier public accounting experience at Grant Thornton as an auditor across manufacturing, energy, non-profit, and government sectors, providing deep operational finance and controls expertise . Company performance metrics tied to executive pay include adjusted diluted EPS ($3.65 in 2024), organic parts & services revenue growth, free cash flow, ROIC, EBITDA dollars and margin; cumulative TSR from 12/31/2019 to 12/31/2024 was $111 vs peer group $81, illustrating alignment of pay with shareholder outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| LKQ Corporation | Senior Vice President & Chief Financial Officer | Sep 2022–Present | Principal Financial Officer; SOX 302/906 certifications; oversight of capital allocation and controls |
| LKQ Corporation | CFO, Wholesale – North America & Self Service | Jul 2019–Sep 2022 | Segment finance leadership; margin and cash discipline for core U.S. business |
| Alcoa Corporation | CFO, Engineered Products & Solutions division | 2010–2019 (various roles including divisional CFO) | Finance leadership across 97 global manufacturing facilities; operational and capital efficiency |
| Grant Thornton | Auditor | Early career (years not specified) | External audit across manufacturing, energy, non-profit, and government; controls foundation |
External Roles
- Not disclosed in company filings reviewed.
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Year-end Base Salary ($) | $600,000 | $700,000 |
| Target Bonus (% of Salary) | 60% | 75% |
| Actual Annual Bonus Paid ($) | $479,019 | $116,002 |
Performance Compensation
Annual Bonus (2024 Corporate Program)
| Metric | Weight | Threshold | Target | Maximum | Achieved | Payout as % of Target |
|---|---|---|---|---|---|---|
| EBITDA ($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 | — | — | — | — | — | 22.9% |
- Galloway’s bonus is based entirely on corporate measures (no segment multipliers) .
Cash Long-Term Incentive (LTI) – 2022–2024 Performance Period
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Adjusted Diluted EPS (Year 3) | 40% | $4.02 | $4.52 | $5.02 | $3.65 | 0.0% | 0.0% |
| 3-Year Avg Organic Parts & Services Rev Growth | 40% | 2.0% | 3.5% | 5.0% | 2.6% | 69.0% | 27.6% |
| 3-Year Avg ROIC | 20% | 14.0% | 14.8% | 15.5% | 13.6% | 0.0% | 0.0% |
| Resulting Payout | — | — | — | — | — | 27.6% | 27.6% |
| Sustainability Modifier | — | — | — | — | — | +5% | Final 29.0% |
| Cash LTI Earned by Rick Galloway | 2022–2024 ($) |
|---|---|
| Amount Earned & Paid | $46,493 |
- 2024–2026 LTI targets: EPS $4.65 (100% payout), 3-year organic parts & services growth 3.75% (100%), ROIC 12.75% (100%); with 0/50/100/200% payout schedule and ±10% sustainability modifier .
Equity Awards (2024 Grants)
| Award Type | Target Shares | Max Shares | Grant Date Fair Value ($) |
|---|---|---|---|
| PSU-1 (time vesting post EPS condition) | 17,283 | N/A | $900,014 |
| PSU-2 (3-year performance) | 8,642 | 17,284 | $450,033 (Target) / $900,066 (Max) |
- PSU-1s vest in equal tranches on March 1 and September 1 over three years, contingent on achieving positive adjusted diluted EPS within five years; performance condition for 2024 grants met in February 2025, with remaining tranches vesting per schedule .
- 2022 PSU-2s vested at 27.6% of target; Rick received 1,235 shares under those awards .
Equity Ownership & Alignment
Beneficial Ownership (as of March 11, 2025)
| Holder | Shares Beneficially Owned | % of Outstanding |
|---|---|---|
| Rick Galloway | 33,035 | <1% (*) |
(*) Represents less than 1% of outstanding shares.
Outstanding Equity (12/31/2024)
| Category | Units/Shares | Market/Payout Value ($) |
|---|---|---|
| Unvested Shares/Units (RSUs & PSU-1s) | 32,227 | $1,184,342 (at $36.75) |
| Unearned PSU-2 (performance awards) | 20,443 | $751,280 (at $36.75) |
Ownership Policies
- Executive stock ownership guideline for Senior Vice Presidents: 2x base salary; retain at least 50% of net-after-tax vested shares until compliant .
- Pledging and hedging of LKQ stock by directors, officers, and employees is prohibited under policy .
Employment Terms
Severance and Change-of-Control Economics (Rick Galloway)
| Scenario | Cash Severance ($) | Unvested/Accelerated Share-Based Awards ($) | PSU-2 ($) | Cash LTI ($) | Medical/Dental ($) | Other ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Involuntary Termination | $1,691,577 | $868,660 | — | $150,000 | $65,764 | $7,500 | $2,783,501 |
| Change of Control (Awards not assumed/continued) | — | $1,138,956 | $317,594 | $810,000 | — | — | $2,266,550 |
| Involuntary Termination in Connection with CoC | $2,413,115 | $1,138,956 | $317,594 | $810,000 | $87,685 | $7,500 | $4,774,850 |
| Death or Disability | $2,684,650 | $1,138,956 | $549,743 | $810,000 | — | — | $5,183,349 |
Key terms and protections:
- Severance Policy: CFO receives 18 months of severance (monthly payments equal to one-twelfth of latest base salary + average bonus of prior two years), pro rata bonus and LTI based on actual performance, company-subsidized health/dental, continuation of RSU/PSU vesting during severance period, and outplacement; benefits contingent on release and compliance with confidentiality, non-compete, non-solicit .
- Change-of-Control Agreements: Double-trigger; benefits payable only upon qualifying termination within 12 months before to 24 months after a CoC; Rick’s agreement dated September 15, 2022 .
- Equity awards use double-trigger vesting in CoC; no single-trigger cash severance or equity vesting .
- Clawback: Recovery of incentive comp tied to financial reporting measures upon restatements (no fault standard), covering last three fiscal years .
- No excise tax gross-up: Company does not provide 280G/4999 gross-ups; may reduce payments to avoid excise tax when beneficial .
Performance & Track Record
- Certifications: Rick signed SOX 302 and 906 certifications for LKQ’s 2024 Form 10-K and Q2/Q3 2025 Form 10-Qs, attesting to fair presentation and controls effectiveness .
- Pay vs Performance context: 2024 adjusted diluted EPS was $3.65; cumulative TSR for 2019–2024 was $111 vs peer group $81; average “compensation actually paid” to other NEOs was $1.37M in 2024, directionally aligned with TSR and net income .
Compensation Peer Group and Governance
- Peer group used for benchmarking includes: Adient, Advance Auto Parts, Aptiv, AutoZone, Beacon Roofing, BorgWarner, CDW, Dana, Fastenal, Genuine Parts, Goodyear, Lear, O’Reilly, Republic Services, United Rentals, W.W. Grainger, Watsco, WESCO; no targeted percentile; mix guided by comparability of revenues/market cap (0.33x–3.0x) .
- Compensation & Human Capital Committee: Independent directors; uses F.W. Cook as independent advisor (no conflicts) .
- Current committee membership (as of Mar 25, 2025): John W. Mendel (Chair), Sue Gove, James S. Metcalf, Jody Miller .
Say-On-Pay & Shareholder Feedback
- Say-on-Pay approval at 2024 annual meeting (for 2023 compensation): 96% of votes cast in favor, indicating strong shareholder support; annual vote continues .
Investment Implications
- Alignment: A majority of compensation is at-risk; annual bonus and LTI metrics (EPS, ROIC, organic growth, FCF, EBITDA) emphasize quality earnings and capital efficiency—positive for long-term shareholder alignment .
- Vesting/Selling Pressure: Significant scheduled vesting (PSU-1 tranches each March/September) and 18,805 shares vested in 2024 ($903,876 realized) could create periodic liquidity events; hedging/pledging is prohibited, mitigating misalignment risk .
- Retention Risk: Robust double-trigger CoC protections and 18-month severance for CFO reduce near-term attrition risk; clawback and restrictive covenants (non-compete, non-solicit) enhance governance and discourage opportunistic departures .
- Performance sensitivity: 2022–2024 LTI paid 29% of target due to below-threshold EPS/ROIC despite moderate organic growth; future upside requires delivering on 2024–2026 targets (EPS ≥$4.65, ROIC ≥12.75%) to unlock higher PSU/LTI payouts .
- Shareholder signals: Consistent high Say-on-Pay support and prohibition of tax gross-ups/option repricing point to disciplined pay governance—reducing headline risk .