Sector: Industrials
AVIS BUDGET GROUP INC · Meeting: May 20, 2026
Directors FOR
1
Directors AGAINST
5
Say on Pay
FOR
Auditor
AGAINST
Election of Directors
Against Analysis
Pahwa has served since April 2018 (over 3 years), so the TSR trigger applies: CAR's 3-year price return of 9.1% (low positive, 0–20% band) trails the XLI sector ETF by 59.9 percentage points, exceeding the 50pp threshold for a No vote; the 5-year TSR of 167.2% versus XLI's comparable period does not clear the same 50pp threshold (5-year XLI return is not explicitly provided but the stock's 5-year TSR of 167.2% is strong, suggesting the 3-year trough may be transient — however, given the magnitude of underperformance and Pahwa's role as Executive Chairman with direct governance accountability during the underperformance period, the trigger is sustained), and he is non-independent as current Executive Chairman.
Hees has served since February 2020 (over 3 years), the 3-year TSR underperformance trigger fires (CAR trails XLI by 59.9pp, exceeding the 50pp threshold for the low-positive TSR band), and he is classified as non-independent due to his prior role as Executive Chairman through May 2024; the 5-year TSR of 167.2% is strong but Hees served through most of the underperformance period as Executive Chairman, making the sustained governance accountability concern material.
Krominga has served since October 2006 (nearly 20 years), well beyond the 24-month exemption, and the 3-year TSR underperformance trigger fires (59.9pp gap vs. XLI exceeds the 50pp threshold); while CAR's 5-year TSR of 167.2% is strong (suggesting the 3-year underperformance may be somewhat transient), Krominga's extremely long tenure means she has been a board member through the full cycle of performance and the Corporate Governance Committee had to waive a mandatory retirement age for her 2026 nomination, raising governance concentration concerns.
Lurie has served since May 2018 (over 3 years), so the TSR trigger fully applies; CAR's 3-year return of 9.1% trails XLI by 59.9pp, well above the 50pp threshold for the low-positive TSR band, and the 5-year TSR mitigant is noted (167.2% 5-year return is strong) but the magnitude of recent underperformance is severe enough that a For downgrade is not warranted for a long-tenured director on the Audit Committee who has served through the full underperformance period.
Sarma has served since May 2020 (over 3 years), the 3-year TSR underperformance trigger fires at 59.9pp below XLI (exceeding the 50pp threshold), and as Chair of the Compensation Committee and representative of SRS Investment Management (which controls ~49% of shares), his oversight of executive pay during a period of significant shareholder underperformance is a material concern; the 5-year TSR of 167.2% provides some mitigant but does not fully offset the governance accountability concern given his central role in compensation decisions.
For Analysis
Hariharan joined in January 2022, which is within 24 months of the current meeting date only if measured from early 2022 to early 2024 — she has now served more than 24 months, so the exemption no longer applies; however, her tenure covers approximately 3 years and the 3-year underperformance trigger fires (59.9pp gap vs. XLI), but as a non-executive independent director on the Audit Committee with relevant technology and investment experience, no overboarding, and full attendance, the 5-year TSR mitigant is noted (CAR's 5-year TSR of 167.2% suggests the 3-year trough is a recent development within an otherwise strong longer-term record), supporting a FOR vote.
The 3-year TSR underperformance trigger fires for all six nominees: CAR's 3-year price return of 9.1% (low-positive band, 0–20%) trails the XLI industrials sector ETF by 59.9 percentage points, well above the 50pp threshold. The 5-year TSR of 167.2% is strong and suggests the 3-year trough may be partly transient; for Hariharan (newest independent director, joined January 2022, full meeting attendance, no governance flags), we apply the 5-year mitigant and vote FOR. For the remaining five directors — including two non-independent directors (Pahwa, Hees), the 20-year-tenured Lead Independent Director (Krominga, whose mandatory retirement age was waived), the long-tenured Audit Committee Chair (Lurie), and the controlling-shareholder representative who chairs the Compensation Committee (Sarma) — the combination of tenure, governance roles during the underperformance period, and severity of the TSR gap supports AGAINST votes.
CEO
Choi, Brian J.
Total Comp
$5,921,410
Prior Support
98.9%%
CEO Brian Choi received total compensation of approximately $5.9 million for 2025 (a partial year in the CEO role), which is within a reasonable range for a CEO at a $6.7 billion industrial company undergoing a leadership transition. The pay program demonstrates meaningful pay-for-performance alignment: the 2023 performance stock awards paid out at zero because threshold EBITDA goals were not met, the 2025 annual bonus paid out below target (65% of target for the CEO) reflecting actual company performance, and variable compensation (equity awards plus annual bonus) comprises the overwhelming majority of total pay. The company has a Dodd-Frank-compliant clawback policy, strong stock ownership requirements, and received 98.9% shareholder support on last year's Say on Pay vote, indicating broad shareholder satisfaction with the compensation structure.
Auditor
Deloitte & Touche LLP
Tenure
29 yrs
Audit Fees
$11,323,000
Non-Audit Fees
$4,025,000
Deloitte has served as Avis Budget's auditor since 1997, a tenure of approximately 29 years, which exceeds the 25-year threshold that triggers a No vote under our policy. The non-audit fees (tax fees of $3,953,000 plus audit-related fees of $72,000 = $4,025,000) represent approximately 35.5% of audit fees ($11,323,000), which is below the 50% independence threshold and does not independently trigger a No vote. However, the 29-year tenure raises meaningful concerns about auditor independence and professional skepticism; the proxy notes the lead engagement partner was rotated in 2025, which is a modest mitigant but does not overcome the tenure trigger under our policy.
1 proposal submitted by shareholders
Proposal 4
John Chevedden is a well-known individual governance activist with a long track record of submitting legitimate, shareholder-friendly governance proposals — this is not an ideological or political filing. The proposal asks the company to eliminate supermajority voting requirements in its charter and bylaws, replacing them with simple majority standards, which is a mainstream governance improvement widely supported by institutional investors and broadly accepted as best practice. At the 2025 annual meeting, more than 76% of all outstanding shares (an exceptionally high threshold to clear) voted in favor of essentially the same proposal, demonstrating overwhelming shareholder support; the only reason it failed was that Delaware law required 80% approval for the charter amendment itself. The board's opposition argument — that it is too soon to try again — is unpersuasive given the near-miss result and the clear majority preference of shareholders for this governance improvement.
The 2026 Avis Budget ballot presents four proposals: we vote FOR on Say on Pay (strong pay-for-performance structure, 98.9% prior-year support) and FOR on the shareholder majority voting proposal (76% prior-year support from a credible activist filer on a mainstream governance ask), AGAINST on auditor ratification (Deloitte's 29-year tenure exceeds our 25-year independence threshold), and AGAINST on five of six director nominees due to severe 3-year TSR underperformance (CAR trails the XLI industrials ETF by 59.9 percentage points, well above the 50pp trigger threshold), with only newly-tenured independent director Anu Hariharan receiving a FOR recommendation based on the 5-year TSR mitigant.
