LKQ CORP (LKQ)
Sector: Consumer Discretionary
2026 Annual Meeting Analysis
LKQ CORP · Meeting: May 6, 2026
Directors FOR
4
Directors AGAINST
4
Say on Pay
FOR
Auditor
AGAINST
Director Elections
Election of Our Board of Directors
Against Analysis
Divitto has served approximately 7.6 years, well within the underperformance period; LKQ's stock has lost about 42% over three years while the consumer cyclical sector benchmark (XLY) gained about 58%, a gap of nearly 100 percentage points that far exceeds the 30-point threshold that triggers an AGAINST vote, and the 5-year record is also negative (-21.6%) so the longer-term mitigant does not apply.
Jude became CEO and a director in July 2024, approximately 1.9 years ago, just outside the 24-month exemption window; LKQ's stock has declined about 42% over three years while the consumer cyclical sector benchmark (XLY) rose about 58%, a gap of nearly 100 percentage points well above the 30-point trigger threshold, and because the 5-year return is also deeply negative (-21.6%) the longer-term mitigant does not soften this result — this TSR vote is independent of the Say on Pay analysis.
Mendel has served approximately 7.6 years, meaning his tenure fully overlaps the underperformance period; LKQ's stock lost about 42% over three years while the consumer cyclical sector benchmark (XLY) gained about 58%, a nearly 100-point gap far exceeding the 30-point trigger threshold, and the 5-year return of -21.6% confirms this is sustained underperformance with no mitigating longer-term track record.
Urbain has served approximately 6.3 years, so his tenure fully overlaps the underperformance period; LKQ's stock declined about 42% over three years while the consumer cyclical sector benchmark (XLY) gained about 58%, a gap of nearly 100 percentage points far above the 30-point trigger threshold, and the negative 5-year return means the longer-term mitigant cannot soften the result.
For Analysis
Clarke joined the board approximately 1.7 years ago, which is within the 24-month exemption window for new directors, so the TSR underperformance trigger does not apply to him.
Gove joined the board on February 5, 2025, roughly 1.1 years ago, which is within the 24-month new-director exemption, so the TSR underperformance trigger does not apply to her.
Metcalf joined the board approximately 1.3 years ago, within the 24-month new-director exemption, so the TSR underperformance trigger does not apply to him.
Powell joined the board on February 5, 2025, roughly 1.1 years ago, which is within the 24-month new-director exemption, so the TSR underperformance trigger does not apply to him.
Of the eight nominees, four directors with tenures exceeding 24 months (Divitto, Jude, Mendel, Urbain) receive AGAINST votes due to severe and sustained TSR underperformance — LKQ's stock fell about 42% over three years while the consumer cyclical sector benchmark (XLY) rose about 58%, a gap of nearly 100 percentage points against a 30-point trigger threshold. The four newer directors (Clarke, Gove, Metcalf, Powell) are exempt from the TSR trigger under the 24-month new-director exemption and receive FOR votes.
Say on Pay
✓ FORCEO
Justin Jude
Total Comp
$8,767,864
Prior Support
95%%
CEO Justin Jude received total compensation of approximately $8.8 million in 2025, which is broadly in line with benchmark expectations for a CEO at a roughly $7.5 billion market-cap consumer cyclical company, and the pay structure is strongly performance-oriented — approximately 89% of his target pay was variable or incentive-based, well above the 50-60% minimum the policy requires. The incentive plans used meaningful, multi-year performance conditions tied to earnings per share, return on invested capital, and organic revenue growth, and the 2023-2025 long-term award paid out at 0% because performance targets were not met, demonstrating that the pay-for-performance link is functioning. The prior year say-on-pay vote received approximately 95% support, the company has a proper clawback policy in place, and no individual pay-mix or governance red flags are present.
Auditor Ratification
✗ AGAINSTAuditor
Deloitte & Touche LLP
Tenure
28 yrs
Audit Fees
$9,571,550
Non-Audit Fees
$1,570,050
Deloitte has been LKQ's auditor since 1998, a relationship of approximately 28 years that exceeds the 25-year tenure threshold under the voting policy, raising concerns about whether the auditor can maintain truly independent and skeptical judgment after such a long relationship with the same management team; the company's stated rationale — that long tenure enhances audit quality through historical knowledge — is a general argument that falls short of the specific and compelling justification (such as a concrete multi-year rotation plan or exceptional audit quality metrics) needed to override the tenure trigger; the non-audit fee ratio is approximately 16% of audit fees, well within the 50% threshold, so fees are not a concern.
Stockholder Proposals
1 proposal submitted by shareholders
Proposal 4
Approval of an Amendment to the Company's Restated Certificate of Incorporation to Provide Stockholders Holding a Combined 25% or More of Our Common Stock with the Right to Request a Special Meeting of Stockholders
This proposal improves stockholder rights by adding a meaningful check that does not currently exist — right now only management or the board can call a special meeting, and shareholders have no say; granting stockholders holding at least 25% of shares the right to demand a special meeting is a mainstream governance improvement that shifts power toward shareholders. The 25% threshold is consistent with market practice for S&P 500 companies, and the board is responding directly to a non-binding advisory vote passed at the 2025 annual meeting, which is exactly the kind of engaged shareholder-board dialogue the policy supports. Voting FOR is straightforward under the charter amendment guidance: the proposed change is clearly pro-shareholder relative to the current baseline of zero stockholder meeting rights.
Overall Assessment
LKQ's 2026 annual meeting presents a mixed ballot: four of eight director nominees receive AGAINST votes due to severe and sustained stock underperformance (-42% over three years versus +58% for the consumer cyclical sector benchmark XLY, a nearly 100-point gap), and Deloitte's 28-year auditor tenure triggers an AGAINST on ratification, while Say on Pay earns a FOR given a well-structured, heavily performance-based pay program that actually paid out zero on a failed three-year long-term incentive cycle, and the charter amendment to add a 25% stockholder special meeting right is a clear governance improvement that warrants support.