Scott Ross

About Scott Ross

Scott R. Ross is Executive Vice President and Chief Information Officer (CIO) of O’Reilly Automotive, Inc. (ORLY), joining the company in October 2023 and serving as CIO since then; he is age 59 . He brings 30+ years of IT leadership spanning Mobil Oil, L.L.Bean, Lowe’s (VP Enterprise Architecture; VP International & Business Development; SVP IT Omnichannel Technology), and Hudson’s Bay Company (President, Saks Cloud Services) . Education: BS in Management Information Systems, University of Wyoming (1983–1987) . Company performance context: ORLY delivered 5-year total shareholder return of 171%, 2024 comparable store sales +2.9%, operating profit $3.25B, cash from operations $3.05B, and diluted EPS $40.66 .

Past Roles

External Roles

Fixed Compensation

Notes:

• 2024 incentive achievement factor was 50% for all participating NEOs, including Ross .
• Base salary increases were aligned to performance evaluation approach; Ross’s increase reflects his October 2023 start .

Performance Compensation

• Annual incentive plan metrics and 2024 results (apply to NEOs including CIO):

• Ross’s 2024 annual incentive target: $460,000 (80% of $575,000); actual payout $230,000 (50% achievement) .
• Equity awards and vesting:
  • 2024 grant: stock options for 685 shares at $1,041.75 exercise price; grant-date fair value $287,467; options vest 25% per year over 4 years (Feb 1, 2025–2028) .
  • 2023 grant: stock options dated Oct 30, 2023 (930.14 strike); vest 25% annually over four years (Oct 30, 2024–2027) .
  • Outstanding at 12/31/2024: 626 options exercisable; 1,875 unexercisable (Oct 30, 2023 grant); plus 685 unexercisable (Feb 1, 2024 grant) .

Equity Ownership & Alignment

• Stock Ownership Guidelines: Executive Vice President required minimum ownership of 3× base salary; eligible equity excludes unvested awards; all executives were in compliance as of 12/31/2024; noncompliant executives must hold 50% of net after-tax shares from exercises until compliant; exemption after age 62 .
• Hedging/Pledging: Company policy prohibits hedging or pledging of Company securities by Directors and Named Executive Officers .

Employment Terms

• Change-in-Control (CIC) severance (if terminated without Cause, for death/Disability, or for Good Reason within 6 months prior to or 2 years post-CIC, subject to release and compliance):
  • Continuation of salary for 2 years: $1,150,000
  • Payment equal to 2× target bonus: $920,000
  • Continuation of insurance coverage for 2 years: $54,583
  • Pro rata target bonus for year of termination and unpaid prior-year bonus; earned but unused PTO
  • Outplacement services up to $30,000 (≤24 months)
  • Immediate vesting of all equity awards; stock options exercisable for 12 months; Ross’s unvested options valued at $578,037; no unvested restricted shares
  • Reimbursement of reasonable legal fees in disputes
• Clawback Policy: “No-fault” mandatory recovery for current/former Section 16 officers in the event of an accounting restatement; discretionary recovery of “Additional Compensation” (including time-vesting equity) for fraud or willful misconduct over a 3-year lookback . Policy filed as exhibit to Form 10-K; complies with SEC/Nasdaq rules .

Compensation Committee Analysis

• Peer group methodology and 2024 composition (examples include AAP, AZO, GPC, LKQ, LOW, ROST, SHW, TSCO, ULTA, GWW); changes from prior year included removals (BIG, DRI, FL) and additions (BJ, FAST, ULTA). 2024 peer revenue mean $23.68B; market cap mean $34.13B; ORLY revenue $16.71B; market cap $68.16B .
• Say-on-Pay: Over 90% support historically; 2024 vote results: For 43,776,382; Against 4,448,488; Abstain 162,275; Broker non-votes 4,960,454 .

Investment Implications

• Pay-for-performance alignment: Ross’s incentive payout tracked company results (50% achievement) with metrics focused on comps, operating income, ROIC, and free cash flow; equity is primarily options with 4-year vesting, reinforcing long-term value creation and reducing near-term selling pressure versus RSUs .
• Retention and CIC protection: CIO has robust CIC protections (2× salary + 2× target bonus, accelerated vesting), typical for senior tech leaders; these benefits, plus stock ownership requirements and hedging/pledging prohibitions, align retention with shareholder interests while guarding against misaligned risk-taking .
• Ownership and potential supply of shares: Beneficial ownership is modest (930 total, incl. options), with a significant portion unexercisable through 2025–2028; absence of RSU grants in 2024 and staged option vesting suggests limited near-term insider selling pressure from Ross specifically .
• Execution track record: Background across major retailers and cloud services positions Ross to drive ORLY’s technology and omnichannel initiatives amid rising automation and distribution efficiency priorities discussed by management; supports continued margin and inventory availability advantages .

Sources

• Proxy Statement (DEF 14A) dated March 31, 2025: sections on performance metrics, compensation, ownership, CIC, clawback, guidelines .
• 8-K May 22, 2024: 2024 meeting results including say-on-pay vote .
• Q4 2024 Earnings Call Transcript (Feb 6, 2025): context on distribution, automation, hub strategy .
• SEC Form 10-K company profile: Ross’s age, tenure, and prior roles .
• Education (non-filing public profile): University of Wyoming BS MIS .