David O'Reilly
O REILLY AUTOMOTIVEAbout David O’Reilly
David O’Reilly is Executive Vice Chairman of O’Reilly Automotive and an affiliated director, age 75, serving on the Board since 1972; prior roles include CEO (1993–2005), President (1993–1999), and Vice President (1975–1993) . Company performance context: 5-year total shareholder return 171%, 2024 diluted EPS +6%, operating profit $3.25B, cash from operations $3.05B, and comps +2.9% . O’Reilly is excluded from the annual cash incentive plan; his pay is primarily base salary plus time-vested equity, with alignment via robust ownership guidelines and a “no-fault” clawback policy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| O’Reilly Automotive, Inc. | Chief Executive Officer | 1993–2005 | Led IPO, establishing platform for 30 years of growth |
| O’Reilly Automotive, Inc. | President | 1993–1999 | Oversaw retail/professional operations, supply chain, strategic development |
| O’Reilly Automotive, Inc. | Vice President | 1975–1993 | Deep operational experience across retail/customer operations |
External Roles
No other public company directorships disclosed in nominee biography (contrast with other directors where external boards are listed) .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $675,385 | $697,346 | $716,654 |
| All Other Compensation ($) | $38,590 | $38,958 | $39,255 |
| Components of “All Other” (2024) | — | — | Deferred comp contribution $7,684; 401(k) contribution $10,350; medical reimbursement $11,500; group term life $6,014; perquisites $883 |
| Director Fees | — | — | None (compensated solely as executive officer) |
| CEO Pay Ratio (context) | — | — | 89:1 (company-wide ratio; CEO vs median) |
Performance Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards ($) | $340,147 | $350,462 | $360,446 |
| Option Awards ($) | — | — | — |
| Non-Equity Incentive ($) | — | — | — |
Performance plan design (company-wide, 2024; O’Reilly excluded from this plan):
- Metrics/weights: Comparable store sales (30%), Operating income (30%), ROIC (20%), Free cash flow (20%); actual achievement yielded 50% of target for participants .
- Targets/actuals: Comps 4.0% target vs 2.9% actual; Operating income $3,371M target vs $3,251M actual; ROIC 67.29% target vs 66.93% actual; FCF $1,993M target vs $1,988M actual .
Equity Ownership & Alignment
| Ownership Breakdown (as of 3/6/2025) | Shares | Notes |
|---|---|---|
| Direct | 36,998 | Includes 282 restricted shares |
| Indirect | 181,636 | 9,635 spouse; 171,984 trust (children); 17 in employee savings plan |
| Options (exercisable within 60 days) | 0 | |
| Total Beneficial Ownership | 218,634 | |
| Percent of Class | <1% |
Ownership policy and alignment:
- Stock ownership guidelines: Affiliated Director minimum 5x base salary; all directors and executives in compliance as of 12/31/2024 .
- Pledging/hedging prohibited for directors/NEOs (reduces misalignment/forced-sale risk) .
- 2024 vesting realized: 878 restricted shares vested, value $919,538 .
Vesting schedules (unvested at 12/31/2024):
| Award Date | Type | Unvested Shares | Vest Date |
|---|---|---|---|
| 2/3/2022 | Restricted Shares | 171 | 2/3/2025 |
| 2/1/2024 | Restricted Shares | 346 | 2/1/2025 |
Equity award practices:
- Annual equity grants typically approved in Q1; no timing based on material nonpublic information .
Stock split considerations:
- 15-for-1 split approved (record date 6/2/2025; trading post-split 6/10/2025); plan anti-dilution adjustments increase shares by 15x and divide option strike by 15; affects outstanding awards generally (David has no options) .
Employment Terms
Change-in-control (CIC) agreement economics (if terminated without Cause/by Good Reason within 6 months before or 2 years after CIC):
| Component | Amount |
|---|---|
| Salary continuation (2 years) | $1,441,000 |
| Target bonus multiple | Not applicable (excluded) |
| Insurance continuation (2 years) | $2,079 |
| Earned but unused PTO | $12,400 |
| Unvested restricted shares vest | $613,059 value |
| Unvested options vest/exercisable 12 months | Not applicable (no options) |
| Outplacement services | Up to $30,000 |
| Legal fees (dispute termination) | Reasonable fees covered |
| Total illustrated (12/31/2024 CIC scenario) | $2,068,538 |
Clawback/insider policies:
- Mandatory “no-fault” clawback for Section 16 officers in event of restatement; discretionary recovery for fraud/willful misconduct over 3-year lookback .
- Insider trading policy governs transactions; hedging/pledging prohibited .
Deferred compensation:
| Item (2024) | Amount |
|---|---|
| Executive contribution | $21,015 |
| Company contribution | $7,684 |
| Aggregate earnings | $694,860 |
| Year-end balance | $3,490,164 |
Board Governance
| Attribute | Detail |
|---|---|
| Independence | Affiliated director; not independent |
| Committee roles | None (committees composed entirely of independent directors) |
| Board leadership | Chairman (Greg Henslee) and CEO (Brad Beckham) roles separated |
| Lead Independent Director | Thomas T. Hendrickson (appointed Jan 2024) |
| Board/committee attendance (2024) | Each current director attended 100% of Board meetings; independent directors held four executive sessions, with full attendance except Ms. Sastre (illness) |
Director compensation:
- Independent director retainers and equity detailed; affiliated directors (e.g., David O’Reilly) receive no additional director pay beyond executive compensation .
Related party transactions (risk oversight):
- Company leases land/buildings for 68 stores from entities affiliated with David and Larry O’Reilly; aggregate payments $4.8M in 2024; Audit Committee reviews/approves for fairness and arm’s-length basis .
Say-on-Pay & shareholder feedback:
-
90% approval for executive compensation at 2024 Annual Meeting; never below 85% since 2011 .
Compensation Structure Analysis
| Theme | Observation |
|---|---|
| Cash vs equity mix | For 2024, O’Reilly: Salary $716,654; Stock awards $360,446; All other comp $39,255; no cash incentive—mix skews to fixed cash + time-based equity . |
| Options vs RSUs | No options outstanding; equity is restricted shares vesting time-based—lower performance leverage vs PSUs/options . |
| At-risk pay linkage | Excluded from annual cash incentive metrics; pay-for-performance primarily via stock value and ownership guidelines/clawback . |
| Award modifications | No material repricing/modification of equity awards in 2024 . |
Investment Implications
- Alignment: High insider ownership and strict stock ownership guidelines, with hedging/pledging prohibited, support long-term alignment; time-based equity reduces short-term metric volatility but lessens direct pay-for-performance linkage versus PSU frameworks .
- Retention/turnover risk: CIC protections (2x salary; equity acceleration; benefits) and large deferred comp balances indicate low near-term retention risk; exclusion from annual bonus suggests strategic/oversight role rather than day-to-day operational targets .
- Trading signals: 2024 vesting of 878 shares and single-installment 2025 vesting of 346/171 shares occurred; combined with June 2025 split adjustments, monitor Form 4s for post-vesting dispositions, though pledging/hedging is prohibited (reducing forced-sale risk) .
- Governance red flags: Related party leases ($4.8M) require continued audit scrutiny; board structure mitigates CEO/Chairman concentration, and committees remain independent with strong say-on-pay support .