Sector: Consumer Discretionary
OREILLY AUTOMOTIVE INC · Meeting: May 14, 2026
Directors FOR
9
Directors AGAINST
0
Say on Pay
FOR
Auditor
AGAINST
Election of Directors
Long-tenured Executive Chairman with deep automotive aftermarket expertise; no overboarding concerns; ORLY's 3-year TSR of +68.7% vs. XLY benchmark gap of +16.2pp falls well short of the 65pp threshold required to trigger an against vote for a strong-positive TSR company; 100% meeting attendance.
Executive Vice Chairman with over 50 years of industry experience; no overboarding; TSR trigger does not apply given the +16.2pp gap vs. XLY is far below the 65pp threshold; 100% meeting attendance.
Independent Lead Director and Audit Committee Chair with strong retail CFO and CPA background; holds one outside board seat (Ollie's Bargain Outlet); TSR trigger does not fire; 100% attendance; qualifies as audit committee financial expert.
Joined the board in 2025 and is therefore exempt from the TSR performance trigger under the 24-month new-director exemption; brings relevant M&A and corporate governance legal expertise from a career at Skadden; independence determination appropriately addressed by the board given her prior firm relationship.
Affiliated director who joined in 2024 and is within the 24-month new-director exemption from the TSR trigger; brings over 40 years of ORLY operational experience including as former CEO; does not serve on any committees given non-independent status, which is appropriate.
Independent director since 2003 with strong CFO and audit financial expert credentials; holds one current outside board seat (Cadrenal Therapeutics); TSR trigger does not apply; 100% meeting attendance.
Independent director since 2017 with deep retail finance and capital markets background; qualifies as audit committee financial expert; no overboarding; TSR trigger does not fire; 100% meeting attendance.
Independent director since 2020 with senior operational leadership experience in consumer-facing industries; holds one current outside board seat (General Mills); TSR trigger does not apply; 100% meeting attendance.
Independent director since 2021 with extensive human capital and consumer-facing operations experience; no overboarding concerns; TSR trigger does not fire; 100% meeting attendance.
All nine nominees receive a FOR vote. O'Reilly's 3-year price return of +68.7% outperforms the XLY sector ETF benchmark by +16.2 percentage points, which is well below the 65pp threshold required to trigger an against vote for a company with strong positive absolute returns. All directors attended 100% of meetings, no director is overboarded, audit committee members have appropriate financial expertise, and the board discloses a detailed skills matrix. Kimberly deBeers and Gregory Johnson are both within the 24-month new-director exemption period and are not subject to the TSR trigger.
CEO
Brad Beckham
Total Comp
$4,231,108
Prior Support
over 90%%
CEO Brad Beckham received total compensation of $4,231,108 for 2025, which is reasonable for a large-cap consumer cyclical retailer with a $76 billion market cap and reflects a pay mix where approximately 72% is variable (stock options at 33% and annual cash incentive at 39%), well above the 50-60% variable pay threshold required by our policy. The annual cash incentive paid out at 146.3% of target based on objectively measured financial metrics — comparable store sales growth of 4.7%, operating income of $3.46 billion, and return on invested capital of 59.66% — all exceeding pre-established targets, which is consistent with strong pay-for-performance alignment. O'Reilly's 3-year total shareholder return of +68.7% outperforms the XLY benchmark by +16.2 percentage points, so above-benchmark incentive pay is clearly supported by actual shareholder outcomes; the company also maintains a robust clawback policy and has consistently received over 85% shareholder support on Say on Pay since 2011.
Auditor
Ernst & Young LLP
Tenure
33 yrs
Audit Fees
$2,609,000
Non-Audit Fees
$698,000
Ernst & Young has audited O'Reilly's financial statements since 1992, a tenure of approximately 33 years, which exceeds the 25-year threshold that triggers a no vote under our policy. The non-audit fee ratio (tax fees of $660,000 plus audit-related fees of $38,000 totaling $698,000 against audit fees of $2,609,000) works out to approximately 27%, which is within the acceptable 50% limit and does not independently trigger a no vote. However, the 33-year tenure raises meaningful concerns about auditor independence and whether E&Y can maintain the professional skepticism needed to rigorously challenge management — the proxy does not provide a specific and compelling rationale for continuing the relationship beyond the standard lead partner rotation disclosure, which is insufficient to override the tenure trigger.
1 proposal submitted by shareholders
Proposal 4
John Chevedden is a well-known individual governance activist with a track record of submitting legitimate, shareholder-focused proposals, so this filer clears our credibility threshold. The proposal asks only for a disclosure report on political spending policies and expenditures — this is a low-bar transparency ask, not a demand to change business operations, and the information requested is material because undisclosed political spending through trade associations and similar groups creates real reputational and alignment risk for shareholders. The company's opposition claims political contributions are already publicly disclosed where required, but this misses the point of the proposal: O'Reilly scored just 4% on the 2025 CPA-Zicklin Index of Corporate Political Disclosure, meaning its voluntary disclosure is nearly nonexistent, and the company's own statement acknowledges it participates in trade associations whose dues may support political advocacy — precisely the gap this proposal would close.
O'Reilly's 2026 annual meeting ballot presents four proposals: the director slate receives unanimous FOR votes as the company's strong 3-year TSR and clean governance profile clear all policy thresholds; the Say on Pay vote also earns a FOR given reasonable CEO pay levels, a predominantly variable pay structure, and clear alignment between above-target incentive payouts and genuine shareholder returns. However, Ernst & Young's 33-year audit tenure triggers an AGAINST vote on auditor ratification under the policy's 25-year tenure threshold, and the political spending disclosure proposal earns a FOR given the credible filer, the low bar of a transparency ask, and O'Reilly's near-zero score on the industry's standard political disclosure index.
