{"url_path":"/sec/lad/proxy/2026-03-11/000102312826000026","section_key":"body","section_title":"DEF 14A body","topic":"sec","document":{"doc_type":"DEF 14A","doc_date":"2026-03-11","source_url":"https://www.sec.gov/Archives/edgar/data/1023128/0001023128-26-000026-index.html","accession_number":"0001023128-26-000026","cik":"0001023128","ticker":"LAD","issuer_name":"LITHIA MOTORS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1023128/0001023128-26-000026-index.html","primary_entity_key":"0001023128","primary_entity_name":"LITHIA MOTORS INC"},"word_count":35906,"has_tables":true,"body_markdown":"lad-20260311\n0001023128DEF 14AFALSEiso4217:USD00010231282025-01-012025-12-3100010231282024-01-012024-12-3100010231282023-01-012023-12-3100010231282022-01-012022-12-3100010231282021-01-012021-12-310001023128ecd:AggtChngPnsnValInSummryCompstnTblForAplblYrMemberecd:PeoMember2025-01-012025-12-310001023128ecd:AggtChngPnsnValInSummryCompstnTblForAplblYrMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128lad:AggregateGrantDateFairValueOfStockAwardAmountsReportedInSummaryCompensationTableMemberecd:PeoMember2025-01-012025-12-310001023128lad:AggregateGrantDateFairValueOfStockAwardAmountsReportedInSummaryCompensationTableMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128lad:AggregateGrantDateFairValueOfOptionAwardAmountsReportedInSummaryCompensationTableMemberecd:PeoMember2025-01-012025-12-310001023128lad:AggregateGrantDateFairValueOfOptionAwardAmountsReportedInSummaryCompensationTableMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:PeoMember2025-01-012025-12-310001023128ecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:PnsnAdjsSvcCstMemberecd:PeoMember2025-01-012025-12-310001023128ecd:PnsnAdjsSvcCstMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:PnsnAdjsPrrSvcCstMemberecd:PeoMember2025-01-012025-12-310001023128ecd:PnsnAdjsPrrSvcCstMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:YrEndFrValOfEqtyAwrdsGrntdInCvrdYrOutsdngAndUnvstdMemberecd:PeoMember2025-01-012025-12-310001023128ecd:YrEndFrValOfEqtyAwrdsGrntdInCvrdYrOutsdngAndUnvstdMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:ChngInFrValOfOutsdngAndUnvstdEqtyAwrdsGrntdInPrrYrsMemberecd:PeoMember2025-01-012025-12-310001023128ecd:ChngInFrValOfOutsdngAndUnvstdEqtyAwrdsGrntdInPrrYrsMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:VstngDtFrValOfEqtyAwrdsGrntdAndVstdInCvrdYrMemberecd:PeoMember2025-01-012025-12-310001023128ecd:VstngDtFrValOfEqtyAwrdsGrntdAndVstdInCvrdYrMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:ChngInFrValAsOfVstngDtOfPrrYrEqtyAwrdsVstdInCvrdYrMemberecd:PeoMember2025-01-012025-12-310001023128ecd:ChngInFrValAsOfVstngDtOfPrrYrEqtyAwrdsVstdInCvrdYrMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:FrValAsOfPrrYrEndOfEqtyAwrdsGrntdInPrrYrsFldVstngCondsDrngCvrdYrMemberecd:PeoMember2025-01-012025-12-310001023128ecd:FrValAsOfPrrYrEndOfEqtyAwrdsGrntdInPrrYrsFldVstngCondsDrngCvrdYrMemberecd:NonPeoNeoMember2025-01-012025-12-310001023128ecd:DvddsOrOthrErngsPdOnEqtyAwrdsNtOthrwsRflctdInTtlCompForCvrdYrMemberecd:PeoMember2025-01-012025-12-310001023128ecd:DvddsOrOthrErngsPdOnEqtyAwrdsNtOthrwsRflctdInTtlCompForCvrdYrMemberecd:NonPeoNeoMember2025-01-012025-12-31000102312812025-01-012025-12-31000102312822025-01-012025-12-31000102312832025-01-012025-12-31000102312842025-01-012025-12-31000102312852025-01-012025-12-31\n\nUNITED STATES\n\nSECURITIES AND EXCHANGE COMMISSION\n\nWASHINGTON, D.C. 20549\n\nSCHEDULE 14A INFORMATION\n\nProxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934\n\n☒\n\nFiled by the Registrant\n\n☐\n\nFiled by a Party other than the Registrant\n\nCHECK THE APPROPRIATE BOX:\n\n☐\n\nPreliminary Proxy Statement\n\n☐\n\nConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))\n\n☒\n\nDefinitive Proxy Statement\n\n☐\n\nDefinitive Additional Materials\n\n☐\n\nSoliciting Material Pursuant to §240.14a-12\n\nLITHIA MOTORS, INC.\n\n(Exact Name of Registrant as Specified In Its Charter)\n\nPAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):\n\n☒\n\nNo fee required\n\n☐\n\nFee paid previously with preliminary materials.\n\n☐\n\nFee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.\n\nNotice of 2026 Annual Meeting\n\nof Shareholders and Proxy Statement\n\nThursday, April 30, 2026, at 8:30 a.m.\n\nPacific Daylight Time\n\nvirtualshareholdermeeting.com/LAD2026\n\nAPRIL 2026\n\nOUR VALUES\n\nThe Fuel behind Lithia & Driveway\n\nEarn Customers for Life\n\nImprove Constantly\n\nCreate welcoming and trustworthy\n\nexperiences for our customers.\n\nChampion one another’s growth to\n\nachieve more together.\n\nTake Personal Ownership\n\nHave Fun!\n\nEnjoy the freedom to make the right\n\nchoices and own our results.\n\nConnect as a team through celebration,\n\npositivity, passion, and purpose.\n\nOur Vision\n\nLeading the modernization of personal transportation solutions\n\nwherever, whenever, and however consumers desire.\n\nLetter from the Chief Executive Officer\n\nDear Shareholder,\n\nWe are glad to extend an invitation for you to join us at Lithia & Driveway’s virtual 2026 Annual Meeting\n\nof Shareholders on Thursday, April 30, 2026, at 8:30 a.m. Pacific Daylight Time where we will discuss\n\nour continued progress in executing our strategy to drive profitable growth and modernize personal\n\ntransportation solutions wherever, whenever, and however customers desire.\n\nIn 2025, we built momentum as the world’s largest omnichannel mobility retailer, delivering another year\n\nof consistent financial growth and operational excellence. We optimized our network, continued to enhance\n\nour adjacencies, and improved performance while building a durable business through any consumer\n\ncycle. Our investments in AI and digital are building customer loyalty through simple, transparent, and\n\nconvenient customer experiences, while also empowering our team members to improve productivity and\n\nfocus on what they do best – creating memorable customer experiences.\n\nOur results demonstrate our growth and resilience. We achieved double-digit growth in EPS, same-store\n\ngrowth across all business lines, reached record profitability in financing operations led by Driveway\n\nFinance Corporation, and continued to diversify our store network. Our strategic partnerships accelerated\n\nand we are seeing the benefits of the depth of our platform.\n\nOur disciplined capital allocation provides a foundation to capture market share and respond to market\n\nconditions to maximize shareholder value. This foundation combines with our relentless focus on\n\noperational efficiency to accelerate our growth.\n\nFor 80 years, our people have been the key to our success. Our mission, Growth Powered by People,\n\nreflects the core of our entrepreneurial strategy. As we continue to transform the industry, we remain\n\nanchored in our core values to Earn Customers for Life, Improve Constantly, Take Personal Ownership,\n\nand Have Fun!\n\nIn the years ahead, we are committed to unlocking the full potential of our omnichannel platform. Our\n\ndiversified business model positions us to drive sustainable growth, and we are confident in our ability to\n\ncontinue leading the transformation of automotive retail.\n\nThank you for your partnership and support.\n\nBryan B. DeBoer\n\nPresident & Chief Executive Officer\n\nLithia Motors, Inc.\n\nNotice Of Annual Meeting Of Shareholders\n\n2026 Annual Meeting Information\n\nMeeting Date\n\nThursday,\n\nApril 30, 2026\n\nAnnual Meeting\n\nWebsite\n\nwww.virtualshareholder\n\nmeeting.com/LAD2026\n\nMeeting Time\n\n8:30 a.m.\n\n(Pacific Daylight Time)\n\nRecord Date\n\nFebruary 27, 2026\n\nItems of Business\n\nRecommendation\n\nCOMPANY PROPOSALS\n\n1.Elect the ten director nominees named in this proxy statement; . . . . . . . . . . . . . . . . . . . .\n\nFOR, each nominee\n\n2.Approve, by an advisory vote, named executive officer compensation; . . . . . . . . . . . . . .\n\nFOR\n\n3.Ratify the appointment of KPMG LLP as our independent registered public accounting\n\nfirm for fiscal year ending December 31, 2026; and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\nFOR\n\nSHAREHOLDER PROPOSAL\n\n4.Vote on a shareholder proposal requesting a change to our board leadership\n\nstructure, if properly presented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\nAGAINST\n\nTo the Shareholders of Lithia Motors, Inc.\n\nI am pleased to invite you to the 2026 Annual Meeting of Shareholders of Lithia Motors, Inc. (the “Annual Meeting”) which will be\n\nheld virtually at 8:30 a.m. Pacific Daylight Time on Thursday, April 30, 2026. We believe a fully virtual meeting facilitates greater\n\nparticipation by providing easy access to the meeting and allowing shareholders to participate from any location around the world.\n\nAll of our shareholders will be able to participate in the Annual Meeting online without prohibitive cost or inconvenience. There will be\n\nno physical location for shareholders to attend.\n\nThe Annual Meeting will only occur virtually through an audio webcast, accessible at the link provided above. You may notify the\n\nCompany of your desire to participate in the Annual Meeting by remote communication by logging into the 2026 Annual Meeting\n\nWebsite, listed above, in advance of the meeting. Log-in will begin at 8:00 a.m. Pacific Daylight Time. To participate in the Annual\n\nMeeting, you will need your unique control number included on your proxy card (printed in the box and marked by the arrow) or on\n\nthe instructions that accompanied your proxy materials.\n\nIf you have any questions regarding this information or the proxy materials, please visit our website at investors.lithiadriveway.com,\n\nor contact our investor relations department at (541) 776-6591. Our proxy statement and 2025 Annual Report on Form 10-K can be\n\naccessed directly at the following internet address: www.proxyvote.com. Just enter the control number located on your proxy card.\n\nWe appreciate your continued support of Lithia Motors and look forward to receiving your proxy.\n\nVery truly yours,\n\nDavid G. Stork, Senior Vice President and Chief Administrative Officer\n\nMarch 11, 2026\n\nHow to Vote\n\nOnly holders of record of our common stock at the close of business on February 27, 2026, the record date, will be entitled to notice\n\nof and to vote at the meeting and any adjournment thereof. A list of shareholders entitled to vote at the Annual Meeting will be\n\navailable during the entire time of the Annual Meeting at www.virtualshareholdermeeting.com/LAD2026. You may vote or submit\n\nquestions during the Annual Meeting by following the instructions available on the 2026 Annual Meeting Website. Further information\n\nregarding voting rights and the matters to be voted upon is presented in our proxy statement.\n\nImportant notice regarding the availability of proxy materials for the 2026 Annual Meeting of\n\nShareholders to be held on April 30, 2026.\n\nOur proxy statement and 2025 Annual Report on Form 10-K can be accessed directly at the following Internet address:\n\nwww.proxyvote.com. Just enter the control number located on your proxy card. To obtain paper copies of the proxy statement and\n\nour 2025 Annual Report on Form 10-K at no charge, written requests should be mailed to the attention of Investor Relations, Lithia\n\nMotors, Inc., 150 N. Bartlett Street, Medford, Oregon 97501.\n\nYOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we\n\nurge you to vote and submit your proxy via internet, telephone or by completing, signing,\n\ndating and returning your proxy card or voting instruction form so that your shares will be\n\nrepresented at the Annual Meeting.\n\nSpecial Note Regarding Forward Looking Statements\n\nThis document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements\n\noften use words such as  “project,” “outlook,” “target,” “may,” “will,” “would,” “should,” “seek,” “expect,” “plan,” “intend,” “forecast,”\n\n“anticipate,” “believe,” “estimate,” “predict,” “potential,” “likely,” “ensure,” “goal,” “strategy,” “future,” “maintain,” and “continue” or the\n\nnegative of these terms or other comparable terms. The Company’s expectations, beliefs and projections are expressed in good faith\n\nand are believed to have a reasonable basis. Because forward-looking statements relate to the future, they are subject to inherent\n\nuncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-\n\nlooking statements are not guarantees of future performance, and our actual results of operations, financial condition, and liquidity\n\nand development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking\n\nstatements in this document. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties\n\nthat could cause actual results to differ materially from estimated or projected results include, without limitation, those described in\n\nthe Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors,” and those that\n\nhave been or may be described in other reports filed by the Company, including reports on Form 8-K.\n\nThe risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without\n\nlimitation: (i) the profitability of our strategy and growth; (ii) future market conditions, including anticipated vehicle and other sales,\n\ngross profit and inventory supply;  (iii) our business strategy and plans, including our achieving our long-term financial targets; (iv)\n\nthe growth, expansion, make-up, and success of our network, including our finding accretive acquisitions that meet our target\n\nvaluations and acquiring additional stores; (v) annualized revenues from acquired stores or achieving target returns; (vi) the growth\n\nand performance of our Driveway e-commerce home solution and DFC, their synergies and other impacts on our business and our\n\nability to meet Driveway and DFC-related targets; (vii) the impact of sustainable vehicles and other market and regulatory changes\n\non our business, including evolving vehicle distribution models; (viii) our capital allocations and uses and levels of capital\n\nexpenditures in the future; (ix) expected operating results, such as improved store performance, continued improvement of SG&A as\n\na percentage of gross profit and any projections; (x) our anticipated financial condition and liquidity, including from our cash and the\n\nfuture availability of our credit facilities, unfinanced real estate, and other financing sources; (xi) our continuing to purchase shares\n\nunder our share repurchase program; (xii) our compliance with financial and restrictive covenants in our credit facilities and other\n\ndebt agreements; (xiii) our programs and initiatives for team member recruitment, training, and retention; and (xiv) our strategies and\n\ntargets for customer retention, growth, market position, operations, financial results, and risk management.\n\nAny forward-looking statement made by us in this document is based only on information currently available to us and speaks only\n\nas of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking\n\nstatement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments\n\nor otherwise.\n\nOther\n\nAll references in this proxy statement to \"LAD,\" “Lithia,” “Lithia Motors,” “Lithia & Driveway,” the “Company,” “we,” “us,” or “our” refer\n\nto Lithia Motors, Inc. and its subsidiaries, except where the context otherwise requires or as otherwise indicated. Our store\n\noperations are conducted by our subsidiaries.\n\nThe content on any website referred to in this proxy statement is not incorporated by reference in this proxy statement unless\n\nexpressly noted.\n\nTable of Contents\n\n[01](#ic4b68f9df5f645149bb3535a26afa3af_19)\n\n[Lithia Motors, Inc. Proxy Statement](#ic4b68f9df5f645149bb3535a26afa3af_19)\n\n[8](#ic4b68f9df5f645149bb3535a26afa3af_19)\n\n[06](#ic4b68f9df5f645149bb3535a26afa3af_145)\n\n[Compensation Tables](#ic4b68f9df5f645149bb3535a26afa3af_145)\n\n[52](#ic4b68f9df5f645149bb3535a26afa3af_145)\n\n[2025 Achievements and Performance Highlights](#ic4b68f9df5f645149bb3535a26afa3af_22)\n\n[8](#ic4b68f9df5f645149bb3535a26afa3af_22)\n\n[Summary Compensation Table](#ic4b68f9df5f645149bb3535a26afa3af_148)\n\n[52](#ic4b68f9df5f645149bb3535a26afa3af_148)\n\n[Our Company Strategy](#ic4b68f9df5f645149bb3535a26afa3af_25)\n\n[9](#ic4b68f9df5f645149bb3535a26afa3af_25)\n\n[Grants of Plan-Based Awards Table for 2025](#ic4b68f9df5f645149bb3535a26afa3af_151)\n\n[54](#ic4b68f9df5f645149bb3535a26afa3af_151)\n\n[Outstanding Equity Awards at Fiscal Year-End](#ic4b68f9df5f645149bb3535a26afa3af_154)\n\n[55](#ic4b68f9df5f645149bb3535a26afa3af_154)\n\n[02](#ic4b68f9df5f645149bb3535a26afa3af_28)\n\n[Directors and Nominees](#ic4b68f9df5f645149bb3535a26afa3af_28)\n\n[10](#ic4b68f9df5f645149bb3535a26afa3af_28)\n\n[Stock Vested for 2025](#ic4b68f9df5f645149bb3535a26afa3af_157)\n\n[56](#ic4b68f9df5f645149bb3535a26afa3af_157)\n\n[Employee/Founder Directors](#ic4b68f9df5f645149bb3535a26afa3af_31)\n\n[11](#ic4b68f9df5f645149bb3535a26afa3af_31)\n\n[Non-Qualified Deferred Compensation](#ic4b68f9df5f645149bb3535a26afa3af_160)\n\n[56](#ic4b68f9df5f645149bb3535a26afa3af_160)\n\n[Independent Directors](#ic4b68f9df5f645149bb3535a26afa3af_31)\n\n[11](#ic4b68f9df5f645149bb3535a26afa3af_31)\n\n[Potential Payments Upon Termination or Change in Control](#ic4b68f9df5f645149bb3535a26afa3af_163)\n\n[57](#ic4b68f9df5f645149bb3535a26afa3af_163)\n\n[Summary of Director Experience, Skills and Attributes](#ic4b68f9df5f645149bb3535a26afa3af_34)\n\n[12](#ic4b68f9df5f645149bb3535a26afa3af_34)\n\n[CEO Pay Ratio](#ic4b68f9df5f645149bb3535a26afa3af_166)\n\n[61](#ic4b68f9df5f645149bb3535a26afa3af_166)\n\n[Director Nominee Biographies](#ic4b68f9df5f645149bb3535a26afa3af_37)\n\n[13](#ic4b68f9df5f645149bb3535a26afa3af_37)\n\n[Pay Versus Performance](#ic4b68f9df5f645149bb3535a26afa3af_169)\n\n[62](#ic4b68f9df5f645149bb3535a26afa3af_169)\n\n[Non-Director Executive Officers](#ic4b68f9df5f645149bb3535a26afa3af_40)\n\n[18](#ic4b68f9df5f645149bb3535a26afa3af_40)\n\n[07](#ic4b68f9df5f645149bb3535a26afa3af_175)\n\n[Proposal No. 1 Election of Directors](#ic4b68f9df5f645149bb3535a26afa3af_175)\n\n[64](#ic4b68f9df5f645149bb3535a26afa3af_175)\n\n[03](#ic4b68f9df5f645149bb3535a26afa3af_43)\n\n[Corporate Governance](#ic4b68f9df5f645149bb3535a26afa3af_43)\n\n[20](#ic4b68f9df5f645149bb3535a26afa3af_43)\n\n[Board of Directors](#ic4b68f9df5f645149bb3535a26afa3af_46)\n\n[20](#ic4b68f9df5f645149bb3535a26afa3af_46)\n\n[08](#ic4b68f9df5f645149bb3535a26afa3af_178)\n\n[Proposal No. 2 Advisory vote to approve the](#ic4b68f9df5f645149bb3535a26afa3af_178)\n\n[compensation of our named executive officers](#ic4b68f9df5f645149bb3535a26afa3af_178)\n\n[65](#ic4b68f9df5f645149bb3535a26afa3af_178)\n\n[2025 Board and Committee Composition](#ic4b68f9df5f645149bb3535a26afa3af_49)\n\n[20](#ic4b68f9df5f645149bb3535a26afa3af_49)\n\n[Board Committees](#ic4b68f9df5f645149bb3535a26afa3af_52)\n\n[21](#ic4b68f9df5f645149bb3535a26afa3af_52)\n\n[Director Independence](#ic4b68f9df5f645149bb3535a26afa3af_55)\n\n[22](#ic4b68f9df5f645149bb3535a26afa3af_55)\n\n[09](#ic4b68f9df5f645149bb3535a26afa3af_181)\n\n[Proposal No. 3 Ratification of appointment of](#ic4b68f9df5f645149bb3535a26afa3af_181)\n\n[independent public accounting firm](#ic4b68f9df5f645149bb3535a26afa3af_181)\n\n[66](#ic4b68f9df5f645149bb3535a26afa3af_181)\n\n[Lead Independent Director and Governance Practices](#ic4b68f9df5f645149bb3535a26afa3af_58)\n\n[22](#ic4b68f9df5f645149bb3535a26afa3af_58)\n\n[From our Lead Independent Director](#ic4b68f9df5f645149bb3535a26afa3af_61)\n\n[23](#ic4b68f9df5f645149bb3535a26afa3af_61)\n\n[Fees Paid to KPMG LLP Related to Fiscal Years 2024 and](#ic4b68f9df5f645149bb3535a26afa3af_184)\n\n[2025](#ic4b68f9df5f645149bb3535a26afa3af_184)\n\n[67](#ic4b68f9df5f645149bb3535a26afa3af_184)\n\n[Director Qualifications and Nominations](#ic4b68f9df5f645149bb3535a26afa3af_64)\n\n[24](#ic4b68f9df5f645149bb3535a26afa3af_64)\n\n[Our Board’s Risk Oversight Role](#ic4b68f9df5f645149bb3535a26afa3af_67)\n\n[26](#ic4b68f9df5f645149bb3535a26afa3af_67)\n\n[Audit Committee Report](#ic4b68f9df5f645149bb3535a26afa3af_187)\n\n[67](#ic4b68f9df5f645149bb3535a26afa3af_187)\n\n[Code of Business Conduct and Ethics](#ic4b68f9df5f645149bb3535a26afa3af_73)\n\n[27](#ic4b68f9df5f645149bb3535a26afa3af_73)\n\n[Selection of KPMG as our Auditor](#ic4b68f9df5f645149bb3535a26afa3af_190)\n\n[68](#ic4b68f9df5f645149bb3535a26afa3af_190)\n\n[Compensation of Directors](#ic4b68f9df5f645149bb3535a26afa3af_76)\n\n[27](#ic4b68f9df5f645149bb3535a26afa3af_76)\n\n[Audit Committee Actions](#ic4b68f9df5f645149bb3535a26afa3af_193)\n\n[68](#ic4b68f9df5f645149bb3535a26afa3af_193)\n\n[2025 Director Compensation](#ic4b68f9df5f645149bb3535a26afa3af_82)\n\n[28](#ic4b68f9df5f645149bb3535a26afa3af_82)\n\n[Non-Employee Director Stock Ownership Policy; Hedging and](#ic4b68f9df5f645149bb3535a26afa3af_91)\n\n[Pledging Restrictions](#ic4b68f9df5f645149bb3535a26afa3af_91)\n\n[29](#ic4b68f9df5f645149bb3535a26afa3af_91)\n\n[10](#ic4b68f9df5f645149bb3535a26afa3af_199)\n\n[Proposal No. 4 Shareholder Proposal Requesting](#ic4b68f9df5f645149bb3535a26afa3af_199)\n\n[that our Board of Directors Appoint an Independent](#ic4b68f9df5f645149bb3535a26afa3af_199)\n\n[Board Chair](#ic4b68f9df5f645149bb3535a26afa3af_199)\n\n[69](#ic4b68f9df5f645149bb3535a26afa3af_199)\n\n[04](#ic4b68f9df5f645149bb3535a26afa3af_94)\n\n[Corporate Responsibility](#ic4b68f9df5f645149bb3535a26afa3af_94)\n\n[30](#ic4b68f9df5f645149bb3535a26afa3af_94)\n\n[Introduction](#ic4b68f9df5f645149bb3535a26afa3af_94)\n\n[30](#ic4b68f9df5f645149bb3535a26afa3af_94)\n\n[11](#ic4b68f9df5f645149bb3535a26afa3af_202)\n\n[Additional Ownership Information](#ic4b68f9df5f645149bb3535a26afa3af_202)\n\n[72](#ic4b68f9df5f645149bb3535a26afa3af_202)\n\n[Increase GreenCars on the Road](#ic4b68f9df5f645149bb3535a26afa3af_97)\n\n[31](#ic4b68f9df5f645149bb3535a26afa3af_97)\n\n[Operate Sustainable Stores](#ic4b68f9df5f645149bb3535a26afa3af_100)\n\n[31](#ic4b68f9df5f645149bb3535a26afa3af_100)\n\n[12](#ic4b68f9df5f645149bb3535a26afa3af_205)\n\n[General Information](#ic4b68f9df5f645149bb3535a26afa3af_205)\n\n[74](#ic4b68f9df5f645149bb3535a26afa3af_205)\n\nExtend Vehicle Lifecycles\n\n[32](#ic4b68f9df5f645149bb3535a26afa3af_549755814813)\n\n[Online Meeting](#ic4b68f9df5f645149bb3535a26afa3af_208)\n\n[74](#ic4b68f9df5f645149bb3535a26afa3af_208)\n\n[Strengthen Our Communities](#ic4b68f9df5f645149bb3535a26afa3af_106)\n\n[32](#ic4b68f9df5f645149bb3535a26afa3af_106)\n\n[Voting](#ic4b68f9df5f645149bb3535a26afa3af_220)\n\n[75](#ic4b68f9df5f645149bb3535a26afa3af_220)\n\n[Maximize Employee Health, Wellness & Safety](#ic4b68f9df5f645149bb3535a26afa3af_103)\n\n[33](#ic4b68f9df5f645149bb3535a26afa3af_103)\n\n[Attending the Annual Meeting](#ic4b68f9df5f645149bb3535a26afa3af_238)\n\n[76](#ic4b68f9df5f645149bb3535a26afa3af_238)\n\nChampion an Inclusive, High-Performance Culture\n\n[33](#ic4b68f9df5f645149bb3535a26afa3af_549755814819)\n\n[Additional Information](#ic4b68f9df5f645149bb3535a26afa3af_253)\n\n[78](#ic4b68f9df5f645149bb3535a26afa3af_253)\n\n[2026 Shareholder Proposals or Nominations](#ic4b68f9df5f645149bb3535a26afa3af_274)\n\n[79](#ic4b68f9df5f645149bb3535a26afa3af_274)\n\n[05](#ic4b68f9df5f645149bb3535a26afa3af_109)\n\n[Compensation Discussion and Analysis (CD&A)](#ic4b68f9df5f645149bb3535a26afa3af_109)\n\n[34](#ic4b68f9df5f645149bb3535a26afa3af_109)\n\n[Executive Summary and Compensation Highlights](#ic4b68f9df5f645149bb3535a26afa3af_115)\n\n[35](#ic4b68f9df5f645149bb3535a26afa3af_115)\n\n[13](#ic4b68f9df5f645149bb3535a26afa3af_283)\n\n[Certain Relationships and Related Transactions and](#ic4b68f9df5f645149bb3535a26afa3af_283)\n\n[Director Independence](#ic4b68f9df5f645149bb3535a26afa3af_283)\n\n[80](#ic4b68f9df5f645149bb3535a26afa3af_283)\n\n[Compensation Components](#ic4b68f9df5f645149bb3535a26afa3af_124)\n\n[40](#ic4b68f9df5f645149bb3535a26afa3af_124)\n\n[2025 Compensation Program Design & Results](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[41](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[Base Salary](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[41](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[Short-Term Incentive Plan](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[41](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[Long-Term Incentive Plan](#ic4b68f9df5f645149bb3535a26afa3af_133)\n\n[44](#ic4b68f9df5f645149bb3535a26afa3af_133)\n\n[Compensation Decision Making Process](#ic4b68f9df5f645149bb3535a26afa3af_136)\n\n[48](#ic4b68f9df5f645149bb3535a26afa3af_136)\n\n[Executive Compensation Governance Components](#ic4b68f9df5f645149bb3535a26afa3af_139)\n\n[50](#ic4b68f9df5f645149bb3535a26afa3af_139)\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n01: Lithia Motors, Inc. Proxy Statement\n\n8\n\n01\n\nLITHIA MOTORS, INC. PROXY STATEMENT\n\nThis proxy statement, the accompanying 2025 Annual Report on Form 10-K, the Notice of Annual Meeting and the proxy card are\n\nbeing furnished to the shareholders of Lithia Motors, Inc., an Oregon corporation, in connection with the solicitation of proxies by the\n\nCompany for use at our 2026 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will only occur virtually\n\nthrough an audio webcast, accessible at www.virtualshareholdermeeting.com/LAD2026 on Thursday, April 30, 2026, at 8:30 a.m.\n\nPacific Daylight Time. On or about March 11, 2026, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials\n\n(the \"Notice\") containing instructions on how to access this proxy statement and our 2025 Annual Report on Form 10-K. The Notice\n\nprovides instructions on how to vote online, by mail or by telephone and includes instructions on how to receive a paper copy of the\n\nproxy materials by mail.\n\n2025 Achievements & Performance Highlights\n\n$32.32\n\nEPS | Up 10% v. prior year\n\n$826M\n\nNet Income | Up 1% v. prior year\n\n$37.6B\n\nRevenue | Up 4% v. prior year\n\n11.4%\n\nof Shares Repurchased\n\n$1.0B\n\nCapital Returned via Dividends and\n\nBuybacks |  Up 148% v. prior year\n\n$2.4B\n\nExpected Annualized Revenue from\n\nKey 2025 Acquisitions\n\nIn 2025, Lithia & Driveway grew earnings per share by 10% and we recorded the highest revenue in our history as we continued to\n\nexpand our omnichannel ecosystem. In particular, we accomplished the following:\n\n•Sold 828,000 units, continuing to establish Lithia & Driveway as the world's largest auto retailer\n\n•Returned to class-leading growth in used vehicles, delivering 5.8% same-store growth in used vehicle revenue year-over-year\n\n•Achieved 9.4% growth in aftersales gross profit on a same-store basis, demonstrating the resilience of this high-margin category\n\n•Increased profitability in Financing Operations, including our captive lender, Driveway Finance Corporation, to $75 million, a $66\n\nmillion year-over-year increase and scaled to a $4.8 billion portfolio at year-end\n\n•Provided significant shareholder return with the repurchase of 11.4% of our outstanding shares at a weighted average price of\n\napproximately $314\n\n•Acquired $2.4 billion in revenue while optimizing our network and improved reach to within 200 miles of 95% of the US population\n\n•Strengthened our key strategic partnerships with Pinewood.AI, a cloud-native global dealer management system and automotive\n\nintelligence platform that delivers a seamless and scalable experience for stores and customers, and continued to mature our\n\ninvestment in Wheels, the largest fleet management company in North America\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n01: Lithia Motors, Inc. Proxy Statement\n\n9\n\nOur Company Strategy\n\nLithia & Driveway (LAD) is the largest global automotive retailer making Auto Done Easy by providing simple, transparent, and\n\nconvenient experiences throughout the ownership lifecycle. Our comprehensive network of physical locations, e-commerce\n\nplatforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies delivers profitable growth in a\n\nmassive and unconsolidated industry. LAD's unique, highly diversified design provides the flexibility and scale to pursue its vision\n\nto modernize personal transportation solutions wherever, whenever, and however consumers desire.\n\nOur omnichannel ecosystem and international network of stores and customer solutions provide consistent free cash flow to fund our\n\ngrowth through acquisitions and investments while maintaining a strong, disciplined balance sheet. Our growth and scale allow us to\n\nimprove the reach to our customers, grow our market share, and enhance our product and service offerings.\n\nLAD is focused on improving the customer experience through all our channels. We continue to evolve and execute best-in-class\n\ncustomer experiences across our stores and adjacencies to build loyalty and Earn Customers for Life. This strategy underpins our\n\nlong-term plan and positions us, along with our Driveway and GreenCars brands, store websites, and MyDriveway online customer\n\nportal, to meet customers on their terms, creating Auto Done Easy.\n\nDriveway Finance Corporation (DFC), our captive finance solution, continues to scale profitably. In 2025 we increased our portfolio\n\nto nearly $5B and increased profitability to $75 million across Finance Operations. DFC diversifies our earnings stream, amplifying\n\nfuture profitability. With DFC as our leading captive finance arm, we have room to expand the penetration rate and size of the\n\nportfolio with high-quality loans at the top of the customer funnel.\n\nOur regenerative cash flow engine enables us to allocate capital efficiently and flexibly. We repurchased over 11% of outstanding\n\nshares in 2025 while maintaining balance sheet strength. We completed strategic acquisitions totaling $2.4 billion of annualized\n\nrevenues, strengthening our network density and luxury mix across key markets. Our capital deployment strategy is opportunistic\n\nand responsive to market conditions, maintaining a balanced approach between share repurchases, selective acquisitions, and\n\norganic investments. This approach ensures sustainable growth while generating long-term value for shareholders.\n\nOur leaders and teams build an atmosphere of high performance and they Take Personal Ownership in driving our collective\n\nsuccess. As we achieve ambitious goals while transforming the industry, we find and grow talented team members who enjoy and\n\nthrive in entrepreneurial environments. We reward growth and execution through pay for performance, special recognition programs,\n\nsuch as the Lithia & Driveway Partners Group (LPG), and a company-wide focus on developing our best talent. These elements\n\ncreate our unique culture that is reflected in our mission, Growth Powered by People.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n10\n\n02\n\nDirectors & Nominees\n\n60%\n\n80%\n\n100%\n\nDirector/Nominee\n\nDiversity\n\nDirector/Nominee\n\nIndependence\n\nCommittee\n\nIndependence\n\n60% of directors and nominees\n\nare gender or ethnically diverse.\n\n80% of directors and nominees\n\nare Independent.\n\n100% of Board committee\n\nmembers are Independent.\n\n2.9\n\n61.9\n\nYears\n\nYears\n\nIndependent Director/Nominee\n\nAverage Tenure\n\nIndependent Director/Nominee\n\nAverage Age\n\n0-2 Years:\n\n3-5 Years:\n\n6-8 Years:\n\n50-59 Years:\n\n60-65 Years:\n\n66-71 Years:\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n11\n\nEmployee/Founder Directors\n\nIndependent Directors and Nominees\n\nSidney B. DeBoer, 82\n\nChairman of the Board\n\nFounder of Lithia Motors, Inc.\n\nTenure: 29 years*\n\nLouis P. Miramontes, 71\n\nLead Independent Director, Audit Chair\n\nManaging Partner at KPMG LLP (retired)\n\nAudit Committee Financial Expert\n\nTenure: 8 years\n\nOther Public Boards: 1\n\nBryan B. DeBoer, 59\n\nChief Executive Officer\n\nand President\n\nTenure: 18 years\n\nStacy C. Loretz-Congdon, 66\n\nIndependent, Nominating and Governance Chair\n\nSVP, CFO and Assistant Secretary,\n\nCore-Mark Holding Company, Inc. (retired)\n\nAudit Committee Financial Expert\n\nTenure: 3 years\n\nShauna F. McIntyre, 54\n\nIndependent, Compensation Chair\n\nCEO of Ensurge Micropower ASA\n\nTenure: 7 years\n\n2025 Committee Participation\n\nRichard J. Bailey Jr., 55\n\nIndependent\n\nPresident of Southern Oregon University\n\nTenure: less than 1 year\n\nAudit Committee\n\nLouis P. Miramontes\n\nJames E. Lentz\n\nStacy C. Loretz-Congdon\n\nCassandra M. McKinney\n\nRichard J. Bailey Jr.\n\nHeidi L. O'Neill\n\nCHAIR\n\nMEMBER\n\nMEMBER\n\nPriya C. Huskins, 53\n\nIndependent\n\nSVP and National Director, Arthur J. Gallagher & Co.\n\nNominee\n\nOther Public Boards: 2\n\nMEMBER\n\nMEMBER\n\nMEMBER\n\nJames E. Lentz, 70\n\nIndependent\n\nToyota North America CEO (retired)\n\nTenure: 3 years\n\nCompensation Committee\n\nShauna F. McIntyre\n\nJames E. Lentz\n\nCassandra M. McKinney\n\nLouis P. Miramontes\n\nCHAIR\n\nMEMBER\n\nCassandra M. McKinney, 65\n\nIndependent\n\nEVP, Executive Director of Retail,\n\nComerica Bank (retired)\n\nAudit Committee Financial Expert\n\nTenure: 2 years\n\nMEMBER\n\nMEMBER\n\nNominating & Governance Committee\n\nStacy C. Loretz-Congdon\n\nJames E. Lentz\n\nShauna F. McIntyre\n\nLouis P. Miramontes\n\nCHAIR\n\nHeidi L. O'Neill, 61\n\nIndependent\n\nPresident of Consumer, Product, and Brand at\n\nNike, Inc. (retired)\n\nTenure: less than 1 year\n\nMEMBER\n\nMEMBER\n\nMEMBER\n\n*Board member tenure reflects years of service since the Company's initial public offering.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n12\n\nSummary of Director Experience, Skills and Attributes\n\nSkills and Attributes of our Board\n\nOur directors bring a balanced mix of skills, qualifications and experience and we believe their diverse backgrounds contribute to an\n\neffective and well-balanced board. Listed below is a summary of the diverse skills and attributes of our Board of Directors:\n\nSkills and Experience\n\nDescription\n\nFinance\n\nDirectors with an understanding of accounting, financial reporting, capital allocation processes and financial markets\n\nare essential to ensuring effective oversight of our financial resources, risks and processes, and provide valuable\n\nadvice and insights with respect to establishing a successful capital strategy critical to our ongoing success.\n\nLegal and\n\nCompliance\n\nDirectors with risk management and compliance oversight experience guide our Board and management in executing\n\ntheir responsibilities to identify, evaluate and understand the magnitude of various risks facing the Company, and are\n\nkey in designing appropriate policies and procedures to effectively mitigate and manage those risks.\n\nExecutive\n\nCompensation\n\nDirectors who have experience and expertise with tax, legal, securities and accounting issues are integral in setting\n\nthe compensation of our executive officers and designing and implementing effective incentive plans.\n\nRisk\n\nManagement\n\nDirectors with experience in risk management guide our risk mitigation strategy beyond mere financial and\n\naccounting risk, to encompass cyber, enterprise, compensation, supply chain, corporate responsibility and\n\ngovernance risk management.\n\nInternational\n\nDirectors with international or global markets experience bring valuable knowledge and perspective of global industry\n\ndynamics to the Company and its international operations, including exposure to different cultural perspectives and\n\npractices and different political and regulatory environments.\n\nStrategic\n\n& Senior\n\nLeadership\n\nDirectors with senior leadership experience in complex public, private and government organizations, whether as an\n\nofficer or board member, can effectively oversee the management of the Company and bring a valuable perspective\n\nto important operational issues, strategy and initiatives to drive change and growth. These directors are generally\n\nhighly effective at motivating, managing and inspiring others and have talent, professional development and\n\nsuccession planning skills.\n\nBoard Service\n\n& Governance\n\nDirectors with corporate governance experience gained from service on or to company boards provide valuable\n\ninsight into the dynamics and operations of the Board and the impact that governance and compensation decisions\n\nhave on the Company and stockholders. Their skills support the Company's goals of strong corporate governance\n\npractices through Board and management accountability, transparency, legal and regulatory compliance and\n\nprotection of stockholder interests.\n\nMarketing,\n\nAdvertising &\n\nInvestor\n\nRelations\n\nDirectors that have effectively engaged both customers and investors guide us as we seek to solidify an omnichannel\n\ncustomer experience while listening to and protecting the interests of our stockholders.\n\nTechnology,\n\nCybersecurity,\n\n& Digital\n\nInnovation\n\nAs we continue to drive digital innovation in our market and the broader environment, we rely upon directors with\n\nexperience in innovating across digital platforms and designing systems to protect our electronic infrastructure, as\n\nwell as our information and the information of our customers.\n\nMergers &\n\nAcquisitions\n\nDirectors with strategic planning and merger and acquisition experience can provide insight as we identify the best\n\nstrategic manner in which to expand our business and drive growth either through innovative strategic initiatives or\n\nacquisitions and other business ventures. Such individuals can provide valuable guidance on how to develop a\n\nstrategic plan and oversee the execution of key strategic initiatives and evaluating our progress of those initiatives.\n\nHuman Rights\n\n& Community\n\nResponsibility\n\nDirectors who have experience advocating not just for shareholders, but stakeholders, provide valuable insight into\n\nprotecting the rights of people, our employees and the communities in which we do business, and are advocates of\n\nsocial justice.\n\nDiversity\n\n& Inclusion\n\nDirectors who have experience and expertise in building cultures that are rich in diversity, inclusion and equal\n\nopportunity that can help us incorporate those same ideals into our human capital management strategy.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n13\n\nDirector and Nominee Biographies\n\nSidney B. DeBoer\n\nBiography\n\nWhy Nominated\n\nSidney B. DeBoer took Lithia Motors public in 1996 and is the Chairman\n\nof the Board. Mr. DeBoer served as Chief Executive Officer and\n\nSecretary from 1968 through 2011, and then as Executive Chairman\n\nthrough the end of 2015. His charitable work on the Southern Oregon\n\nUniversity Foundation Board, Oregon Community Foundation and the\n\nOregon Shakespeare Festival has created a vibrant community for our\n\nCompany’s headquarters. Mr. DeBoer attended Stanford University and\n\nthe University of Oregon.\n\nMr. DeBoer is the Chairman of the Board. Mr.\n\nDeBoer's founder's spirit and pioneering work in the\n\npublic auto retail sector as an automotive dealer has\n\nearned him numerous awards and recognition. His\n\nfamiliarity with our business, executive leadership\n\nknowledge and industry experience make him\n\nuniquely qualified to serve as our Chair. Mr. DeBoer\n\nhas served on our board since 1968.\n\nBryan B. DeBoer\n\nBiography\n\nWhy Nominated\n\nPrior to becoming CEO, Bryan B. DeBoer was Senior Vice President of\n\nMergers & Acquisitions/Operations and then Chief Operating Officer,\n\ndriving the growth of Lithia and transforming the Company culture to an\n\nentrepreneurial and high-performance model. Upon joining Lithia in\n\n1989, Mr. DeBoer grew through the store positions of Finance Manager,\n\nUsed Vehicle Manager, General Sales Manager, General Manager and\n\nmulti-store General Manager. Mr. DeBoer has a B.S. degree, summa\n\ncum laude, from Southern Oregon University in Business Administration.\n\nHe also graduated from the National Automobile Dealers Association\n\nDealer Academy.\n\nMr. DeBoer has been our CEO and President since\n\n2012 and first became a director in 2008. Mr.\n\nDeBoer’s store experience, passion for mergers and\n\nacquisitions and demonstrated ability to develop\n\nstrong manufacturer relationships drive our growth.\n\nHis enthusiasm for the car business combined with a\n\nvisionary spirit set the tone for our innovative and\n\nentrepreneurial culture.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n14\n\nRichard J. Bailey Jr.\n\nBiography\n\nWhy Nominated\n\nRichard J. Bailey Jr. has served as the President and Chief Executive\n\nOfficer of Southern Oregon University since January 2022, and before\n\nthat oversaw the resurgence of Northern New Mexico College, where he\n\nserved as President from October 2016 to January 2022. Prior to that, \n\nMr. Bailey completed a 24-year career with the U.S. Air Force, retiring as\n\na full colonel and command pilot with more than 3,500 flying hours. From\n\n2012 to 2016, Mr. Bailey also taught cybersecurity and cyber strategy for\n\nthe U.S. Air Force. Dr. Bailey received a bachelor’s degree in\n\nengineering sciences from the Air Force Academy, a master’s degree in\n\ninternational affairs from Washington University (St. Louis), and a\n\ndoctorate degree in government from Georgetown University.\n\nMr. Bailey joined our Board in October of 2025 and\n\nbrings with him a track record of operational\n\nexcellence, strategic oversight, human capital\n\nmanagement, and cybersecurity expertise as a full\n\nColonel in the U.S. Air Force and distinguished\n\nuniversity president. Mr. Bailey serves on our Audit\n\nCommittee.\n\nPriya C. Huskins\n\nBiography\n\nWhy Nominated\n\nPriya C. Huskins is a Senior Vice President and National Director for\n\nArthur J. Gallagher & Co., a commercial insurance brokerage. She\n\nassumed this role following Gallagher’s acquisition of Woodruff Sawyer &\n\nCo. in 2025, where she has served in various positions since 2003,\n\nincluding as a Partner and Senior Vice President since 2005, as a member\n\nof Woodruff Sawyer’s board of directors since 2016, and as the Presiding\n\nDirector of that board beginning in 2023. Prior to that, Ms. Huskins was a\n\ncorporate and securities attorney at the law firm Wilson Sonsini Goodrich\n\n& Rosati from 1997 to 2003. She also has sat on the advisory board of the\n\nStanford Rock Center for Corporate Governance since 2012. Since 2007,\n\nMs. Huskins has served on the board of directors of Realty Income\n\nCorporation (NYSE: O) where she currently chairs the Compensation and\n\nTalent Committee and sits on the Nominating/Governance Committee.\n\nSince 2021, she has been a member of the board for NMI Holdings, Inc.\n\n(Nasdaq: NMIH), where she currently serves as a member of the\n\nCompensation committee and Governance and Nominating committee.\n\nMs. Huskins is also a member of the board of the Long Term Stock\n\nExchange, a role she has held since 2022. She previously served as lead\n\nindependent director of Anzu SPAC I (Nasdaq: ANZUU), which became\n\nEnvoy Medical, Inc. (Nasdaq: COCH), from 2021 to 2023. Ms. Huskins\n\nholds a Juris Doctorate degree from the University of Chicago Law School\n\nand an undergraduate degree from Harvard College.\n\nIf elected, Ms. Huskins will bring to the Board more\n\nthan 25 years of recognized leadership as a teacher,\n\nwriter, advisor and practitioner on a broad range of\n\nboard governance matters, including risk oversight,\n\nexecutive compensation, complex legal and regulatory\n\nmatters, and shareholder relations.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n15\n\nJames E. Lentz\n\nBiography\n\nWhy Nominated\n\nJames E. Lentz spent the majority of his more than 40 year career in the\n\nauto industry at Toyota, where he served as Chief Executive Officer for\n\nToyota Motor North America from 2013 until his retirement in 2020.\n\nDuring his 38 years with Toyota, Mr. Lentz oversaw all business for\n\nToyota’s North American region, including manufacturing, research and\n\ndevelopment, sales, marketing, product support, and corporate\n\nresources. Mr. Lentz led and contributed to several key milestones in\n\nToyota’s history, including the Scion brand launch and the recognition of\n\nToyota and Lexus brands as leaders in customer experience. He has\n\nbeen named “Marketer of the Year” by Advertising Age, an “All-Star” by\n\nAutomotive News, and “Industry Leader of the Year” by the Automotive\n\nHall of Fame. Mr. Lentz also serves as an advisor to several private\n\ncompanies. Mr. Lentz earned both his undergraduate degree and M.B.A.\n\nin Finance from the University of Denver.\n\nMr. Lentz joined our Board in October of 2022. With\n\nhis tenured career in the automotive industry, and\n\nextensive experience in corporate resources, Mr.\n\nLentz is lending his significant industry and leadership\n\nexpertise while serving on our Compensation, Audit\n\nand Nominating and Governance committees.\n\nStacy C. Loretz-Congdon\n\nBiography\n\nWhy Nominated\n\nStacy C. Loretz-Congdon, in 2016 and after 26 years of service, retired\n\nfrom Core-Mark Holding Company, Inc., one of the largest marketers of\n\nfresh and broad-line supply solutions to the convenience retail industry\n\nand a Fortune 500 company which merged with Performance Food\n\nGroup Company (NYSE: PFGC) in 2021. Ms. Loretz-Congdon served in\n\nvarious capacities at Core-Mark, including as Senior Vice President,\n\nChief Financial Officer and Assistant Secretary, as well as a member of\n\nCore-Mark’s Information Technology Steering Committee and the\n\nInvestment Committee, from December 2006 to May 2016. Ms. Loretz-\n\nCongdon also served on the board of Core-Mark Families Foundation, a\n\nnon-profit providing scholarships to children, from 2015 to 2023, and\n\npreviously served on the board of Farmer Bros. Co (Nasdaq: FARM),\n\nincluding as Audit Committee Chair, until the end of her term in February\n\n2025. She has been named as one of the Top 50 female CFOs in the\n\nFortune 500 by Business Insider and Convenience Store News named\n\nher Woman of the Year (both in 2015). Prior to joining Core-Mark, Ms.\n\nLoretz-Congdon was an auditor for Coopers & Lybrand. Ms. Loretz-\n\nCongdon received her Bachelor of Science degree in Accounting from\n\nCalifornia State University, San Francisco.\n\nMs. Loretz-Congdon joined our Board in April 2023.\n\nShe brings to our Board her deep experience in\n\naccounting and the oversight of Fortune 500 public\n\ncompany finance functions, including all corporate\n\nfinance disciplines, strategy execution, risk mitigation,\n\ninvestor relations, as well as involvement with human\n\ncapital management and technology initiatives. She is\n\nalso an audit committee financial expert as defined\n\nunder SEC rules, and serves on our Audit Committee\n\nand chairs our Nominating and Governance\n\nCommittee.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n16\n\nShauna F. McIntyre\n\nBiography\n\nWhy Nominated\n\nShauna F. McIntyre has spent the majority of her 30-year career leading\n\nand scaling technology-driven businesses at the intersection of industrial\n\nautomation, energy, and mobility and is a four-time CEO with experience\n\nrevitalizing companies for growth. Since August of 2025, she has served\n\nas CEO of Ensurge Micropower ASA (OL: ENSU), a microbattery\n\ndeveloper and manufacturer. Prior to that, she was the Deputy CEO of\n\nNorthvolt North America from August 2024 to November 2024, and CEO\n\nof Cuberg, Northvolt’s advanced energy storage subsidiary, from\n\nFebruary 2024 to August 2024. Ms. McIntyre ran an advisory practice to\n\nprivate equity and other firms from June 2022 to February 2024.  She\n\nalso restructured operations for Electric Last Mile Solutions (NASDAQ:\n\nELMS) while serving as their interim CEO from February 2022 to June\n\n2022, navigating the company through its bankruptcy process. Prior, she\n\nscaled Sense Photonics technology business to a successful exit as their\n\nCEO from April 2020 until October 2021. Ms. McIntyre was also the\n\nprogram lead for Google’s automotive services from May 2018 to April\n\n2020. Ms. McIntyre holds an M.B.A. from Harvard Business School and\n\nan M.S. and B.S in Mechanical Engineering from University of California,\n\nBerkeley and the University of California, Los Angeles, respectively.\n\nMs. McIntyre joined our Board in April 2019. Ms.\n\nMcIntyre brings a wealth of knowledge and expertise\n\nto our Board in a wide variety of subjects within the\n\nautomotive industry, including manufacturing, cyber\n\nsecurity, technology, innovation, E-commerce, finance,\n\nmanagement and operations. Ms. McIntyre was\n\nselected to serve on our Board of Directors because of\n\nher valuable strategic, industry and leadership\n\nexperience. Ms. McIntyre chairs our Compensation\n\nCommittee and serves on our Nominating and\n\nGovernance Committee.\n\nCassandra M. McKinney\n\nBiography\n\nWhy Nominated\n\nCassandra M. McKinney has over 30 years of experience as a senior\n\nexecutive, primarily with prominent banking institutions. Prior to her\n\nretirement from Comerica Bank (NYSE: CMA) in April of 2025, she had\n\nserved as Comerica's EVP, Retail Bank since April of 2020 and as a\n\nmember of Comerica’s Management Executive Committee where she\n\nwas responsible for the company’s Consumer and Small Business\n\nbanking segment. Prior to that role, Ms. McKinney served as SVP,\n\nDirector Retail Bank Product and Operations Group for Comerica from\n\n2016 to 2020. Prior to working in the banking sector, Ms. McKinney spent\n\n11 years with IBM (NYSE: IBM) in technology information systems and\n\nsales and service management. Ms. McKinney also served as a Director\n\nand on the Education Committee for the Consumer Banking Association,\n\nand is a member of the Executive Leadership Counsel of The Links\n\nIncorporated. She holds Bachelor’s Degrees in Chemical Engineering\n\nfrom Columbia University and Chemistry from Dillard University.\n\nMs. McKinney joined our Board in July of 2024 and\n\nbrings to our Board her executive experience in\n\nbanking, accounting, financial reporting, strategy,\n\ninnovation, retail and value creation. Ms. McKinney\n\nserves on both our Audit and Compensation\n\ncommittees. Ms. McKinney is an audit committee\n\nfinancial expert as defined under SEC rules.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n17\n\nLouis P. Miramontes\n\nBiography\n\nWhy Nominated\n\nLouis P. Miramontes has been an independent financial advisor since\n\n2014. Mr. Miramontes serves on the board of directors of Oportun\n\nFinancial Corporation (Nasdaq: OPRT), where he is a member of the\n\nAudit and Nominating and Governance committees, and previously\n\nserved on the board of directors of Rite Aid Corporation until August\n\n2023. He also provides advisory services to a real estate development\n\ncompany. Previously, Mr. Miramontes had a distinguished 38-year career\n\nat KPMG until his retirement in 2014, where he served in many\n\nleadership roles, including managing partner of the San Francisco office\n\nand Senior Partner for the Latin America region. He provided audit\n\nservices to public and private clients in the retail, financial services, and\n\nreal estate sectors. Mr. Miramontes holds a B.S. degree in Business\n\nAdministration from California State University, East Bay.\n\nMr. Miramontes joined our Board in 2018 and has\n\nextensive experience in accounting, financial reporting\n\nand corporate governance. He is our Lead\n\nIndependent Director, chairs our Audit Committee and\n\nserves on our Nominating and Governance Committee\n\nand our Compensation Committee. Mr. Miramontes is\n\nalso an audit committee financial expert as defined\n\nunder SEC rules.\n\nHeidi L. O’Neill\n\nBiography\n\nWhy Nominated\n\nHeidi L. O’Neill is an experienced corporate leader, executive and board\n\nmember. She recently concluded a 27 year tenure with Nike, Inc.\n\n(NYSE: NKE) in May of 2025, where she retired as President of\n\nConsumer, Product, and Brand at Nike, Inc. In that role, Ms. O'Neill led\n\nthe integration of global men’s, women’s and kid’s consumer and sport\n\nteams, the entire global product and innovation engine, and global brand\n\nmarketing and sports marketing. Prior to that, Ms. O’Neill held a variety\n\nof leadership roles at Nike, including President of Consumer and\n\nMarketplace, President of Nike Direct, and leading Nike’s North America\n\napparel business as VP/GM. Ms. O'Neill currently serves as a board\n\nmember for Spotify Technology S.A. (NYSE: SPOT), a role she has held\n\nsince 2017, where she is a member of the People Experience and\n\nCompensation Committee. Ms. O'Neill is also a board member for Hyatt\n\nHotels Corporation (NYSE: H), a role she has held since 2023, where\n\nshe is a member of the Talent and Compensation Committee. Ms.\n\nO'Neill studied journalism at the University of Colorado–Boulder.\n\nMs. O'Neill joined our Board in October of 2025, and\n\nbrings her deep executive, leadership, retail, marketing\n\nand brand design experience to our Board. She is also\n\na seasoned director with experience overseeing\n\ncompanies in the midst of growth. Ms. O'Neill serves\n\nas a member of our Audit Committee.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n18\n\nOther Executive Officers\n\nChuck D. Lietz\n\nSenior Vice President, Finance\n\nBiography\n\nCharles (Chuck) D. Lietz is our Senior Vice President, Finance, a role he has held since February 2023. Mr. Lietz joined Lithia in\n\nApril 2019 as our Vice President, Finance, and served in that role until his elevation to Senior Vice President. In his current role,\n\nMr. Lietz oversees Driveway Finance Corporation (DFC), our captive finance company. Prior to joining Lithia, Mr. Lietz was the\n\nManaging Director of U.S. Bank’s (NYSE:USB) Dealer Commercial Services group and as the Business Office Director for\n\nPrecision Interconnect, a division of Tyco International’s medical products group. Mr. Lietz holds a bachelor’s degree in accounting\n\nfrom the University of Portland (Oregon), as well as a master’s degree in business administration from Washington State\n\nUniversity.\n\nKatie L. Macaddino\n\nSenior Vice President, People and Culture\n\nBiography\n\nKatherine (Katie) L. Macaddino is our Senior Vice President, People & Culture, a role she has held since January 2026. Ms.\n\nMacaddino joined Lithia in 2021 with responsibilities over our People and Culture strategy, first as a Director and then as a Senior\n\nDirector, before her elevation to Senior Vice President. Before joining Lithia, Ms. Macaddino was a Director, Technologist Learning\n\nand Development, with Intel Corporation (NASDAQ: INTC). Ms. Macaddino holds a master's degree in human resources\n\nmanagement from Cornell University and a bachelor’s degree in business management from Portland State University (Oregon).  \n\nTina H. Miller\n\nSenior Vice President and Chief Financial Officer (CFO)\n\nBiography\n\nTina H. Miller is our Senior Vice President, Chief Financial Officer (CFO), leading the accounting, tax, corporate finance, financial\n\nplanning and analysis, risk management and treasury functions, and has served in this role since August 2019. She joined Lithia in\n\n2005, working in internal audit and corporate accounting before being promoted to Corporate Controller in 2015 and Vice President\n\nin 2018. Before Lithia, Ms. Miller worked as an auditor at Ernst & Young in their assurance practice. She graduated from Santa\n\nClara University with a B.S. in Accounting and is a licensed CPA in Oregon.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n02: Directors and Nominees\n\n19\n\nDavid G. Stork\n\nSenior Vice President and Chief Administrative Officer\n\nBiography\n\nDavid G. Stork is our Senior Vice President and Chief Administrative Officer and began serving in that role in 2021. Prior to that,\n\nMr. Stork served as our Chief Legal Officer starting when he joined Lithia in December 2018. Before joining Lithia, David was\n\nGeneral Counsel and Head of Compliance at JELD-WEN, Inc., and served as General Counsel and Director of risk management\n\nfor Krause Gentle Companies. His expertise in innovation, diversification, risk management, compliance, mergers and acquisitions\n\nand the enhancement of intellectual property are beneficial as Lithia grows and diversifies. Mr. Stork holds a bachelor’s degree in\n\nLiterature and Economics from Luther College and a Juris Doctorate from the University of Minnesota Law School.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n20\n\n03\n\nCORPORATE GOVERNANCE\n\nBoard Leadership and Structure\n\nBoard of Directors\n\nOur Bylaws provide for not fewer than five directors. Our Board has the discretion to set the size of our board from time to time. Our\n\nBoard has set the number of directors at ten, effective as of the Annual Meeting.\n\nThere is no requirement that directors attend our Annual Meeting, but directors are encouraged to do so. Our Board held eighteen\n\nmeetings in 2025. Each incumbent director attended at least 80% of all meetings of the Board and of the Board committees on which\n\nthe director served. All of our directors then in office attended our 2025 Annual Meeting of Shareholders.\n\n2025 Board and Committee Composition\n\nThe Board has three standing committees, each of which operates under a charter that has been approved by the Board. The\n\nChair of each committee reviews and discusses the agendas and materials for meetings with senior management in advance of\n\ndistribution to the other committee members, and reports to the Board on actions taken at each committee meeting. The following\n\ntable sets forth the current membership of each committee. Priya C. Huskins is nominated for election to the Board at the Annual\n\nMeeting. The Board will consider committee appointments for Ms. Huskins if she is elected to the Board.\n\nDirector\n\nAudit\n\nCompensation\n\nNominating & Governance\n\nSidney B. DeBoer\n\nCB\n\n \n\n \n\nBryan B. DeBoer\n\n \n\n \n\nRichard J. Bailey Jr.\n\nI\n\n•\n\nJames E. Lentz\n\nI\n\n•\n\n•\n\n•\n\nStacy C. Loretz-Congdon\n\nI\n\n•\n\nC\n\nShauna F. McIntyre\n\nI\n\nC\n\n•\n\nCassandra M. McKinney\n\nI\n\n•\n\n•\n\nLouis P. Miramontes\n\nLI\n\nC\n\n•\n\n•\n\nHeidi L. O’Neill\n\nI\n\n•\n\nCB = Chairman of the BoardI = Independent Director LI = Lead Independent Director C = Committee Chairman\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n21\n\nBoard Committees\n\nOur Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Governance\n\nCommittee. Each committee member is an independent director under New York Stock Exchange (NYSE) listing standards,\n\nincluding, with respect to members of the Audit Committee and the Compensation Committee, under the enhanced independence\n\nstandards that apply to members of those committees. A written copy of our committee charters, Corporate Governance Guidelines,\n\nCode of Business Conduct and Ethics, and Shareholder Communications Policy may be obtained by contacting our Investor\n\nRelations Department, Lithia Motors, Inc., 150 N. Bartlett Street, Medford, Oregon 97501. These documents are also available on\n\nour Investor Relations website at investors.lithiadriveway.com.\n\nThe Audit Committee\n\nOur Audit Committee is responsible for the engagement, evaluation and oversight of our independent auditors; the review of our\n\nfinancial statements and financial disclosure; the assessment of our accounting practices and policies and risk management; the\n\nreview of our internal audit function and effectiveness of internal controls; and approving related party transactions; among other\n\nduties. The Audit Committee serves as a conduit to promote open communication between the independent auditors, the accounting\n\ndepartment, the Company's internal auditors, management and the Board in furtherance of our commitment to accurate financial\n\nreporting, sound financial risk practices, and ethical behavior. The Audit Committee routinely meets in executive session with\n\nrepresentatives from KPMG, our Chief Financial Officer and our Director of Internal Audit. Our Director of Internal Audit reports\n\ndirectly to the chair of the Audit Committee. The Audit Committee held eight meetings during 2025. To ensure sufficient attention to\n\nthe duties of our Audit Committee, committee members may not serve on more than two other public company audit committees. In\n\naddition to meeting the independence requirement for audit committee members, each current member of the Audit Committee also\n\nmeets the financial literacy and experience requirements contained in the corporate governance listing standards of the NYSE. Our\n\nBoard has reviewed the qualifications and experience of the nominees standing for election and has determined that both Mses.\n\nLoretz-Congdon and McKinney and Mr. Miramontes satisfy the requirements of an \"audit committee financial expert\" as defined by\n\nSEC rules.\n\nThe Compensation Committee\n\nOur Compensation Committee is responsible for our executive compensation philosophy and design. The Compensation Committee\n\nannually reviews the performance of, and determines the salary and the variable, long-term and other compensation for, our Chief\n\nExecutive Officer. The Compensation Committee also reviews and approves the compensation for other executive officers and\n\nreviews and recommends the compensation for non-employee Board members.\n\nThe primary purpose of the Compensation Committee is to discharge the responsibilities of the Board relating to the compensation\n\nof the CEO and our other executive officers and make recommendations to the Board with respect to compensation of our non-\n\nemployee directors. The Compensation Committee has overall responsibility for evaluating and, as appropriate, approving or\n\nrecommending to the Board compensation plans, policies and programs of the Company as they affect the executive officers. The\n\nCompensation Committee is also responsible for providing input to the Board regarding executive officer succession and talent\n\ndevelopment, and reviewing the Company’s policies, programs and initiatives regarding human capital management and providing\n\nguidance to the Board and management on these matters.\n\nThe Compensation Committee has the authority, in its sole discretion, to select, retain and obtain the advice of a compensation\n\nconsultant and outside legal counsel as necessary to assist with the execution of its duties and responsibilities. In 2025, the\n\nCompensation Committee retained Pay Governance LLC (“Pay Governance”) to provide advice and counsel. Pay Governance\n\nprovided compensation advice with respect to our named executive officers as detailed in the \"Compensation Discussion and\n\nAnalysis” sections of this proxy statement among other executive compensation advice. The Compensation Committee administers\n\nour employee benefits plans with respect to the participation of our executive officers, including our 2013 Amended and Restated\n\nStock Incentive Plan, 2009 Employee Stock Purchase Plan, Short-Term Incentive Plan and Executive Management Non-Qualified\n\nDeferred Compensation and Supplemental Executive Retirement Plan (SERP). The Compensation Committee certifies and\n\napproves payments based on performance measures. The Compensation Committee held six meetings in 2025.\n\nSee “[Compensation Discussion and Analysis](#ic4b68f9df5f645149bb3535a26afa3af_109)”, below, for more information on our compensation philosophy and how the\n\nCompensation Committee determines the compensation of our executive officers.\n\nThe Compensation Committee assessed the independence of Pay Governance pursuant to SEC and NYSE rules and determined\n\nthat no conflict of interest exists that would prevent Pay Governance from independently representing the Compensation Committee.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n22\n\nIn making this assessment, the Compensation Committee considered each of the factors set forth by the Securities and Exchange\n\nCommission (SEC) and the NYSE with respect to Pay Governance’s independence, including that Pay Governance provided no\n\nservices for the Company other than pursuant to its engagement by the Compensation Committee. The Compensation Committee\n\nalso determined there were no other factors the Compensation Committee should consider in connection with the assessment or that\n\nwere otherwise relevant to the Compensation Committee’s engagement of Pay Governance.\n\nThe Nominating and Governance Committee\n\nOur Nominating and Governance Committee is responsible for assisting our Board in identifying outstanding individuals to become\n\nBoard members; recommending to our Board nominees for each annual meeting of shareholders; overseeing evaluations of the\n\nBoard and its committees; developing, periodically reviewing, monitoring and recommending to the Board effective corporate\n\ngovernance policies and procedures; and developing and enforcing our Code of Business Conduct and Ethics. The Nominating and\n\nGovernance Committee also reviews and provides guidance to our Board and management about the Company's policies and\n\npractices that relate to corporate social responsibility and sustainability, as referred to the Nominating and Governance Committee\n\nby the Board. The Nominating and Governance Committee held four meetings in 2025.\n\nDirector Independence\n\nOur Corporate Governance Guidelines require our Board to be comprised of a majority of independent directors. Generally, under\n\nNYSE listing standards, a director is not independent if the director has a direct or indirect material relationship with Lithia or its\n\nmanagement. In accordance with its charter, the Nominating and Governance Committee annually reviews the independence of all\n\nnon-employee director nominees and reports its findings to the full Board, which makes a determination about the independence of\n\neach nominee. The Board and the Nominating and Governance Committee review and discuss all transactions and relationships\n\nbetween each director nominee and any member of the director’s immediate family and Lithia, its consolidated subsidiaries and\n\naffiliates, and management, both in the context of the specific independence standards enumerated in the NYSE listing standards,\n\nas well as other business and personal relationships that could compromise the independent judgment of a director. In making this\n\ndetermination relationships considered included the charitable contributions to Southern Oregon University Foundation described\n\nbelow under [Certain Relationships and Transactions with Related Persons](#ic4b68f9df5f645149bb3535a26afa3af_283) on page [80](#ic4b68f9df5f645149bb3535a26afa3af_283). The contributions did not exceed $1 million\n\nper year. Other than the NYSE listing standards, we do not adhere to categorical standards for determining independence; rather, we\n\nreview and evaluate the specific facts and circumstances of each transaction and relationship to determine whether the director is\n\nindependent. As a result of this review, our Board affirmatively determined that each of Mses. Huskins, Loretz-Congdon, McIntyre,\n\nMcKinney and O'Neill and Messrs. Bailey, Lentz, and Miramontes is independent under NYSE listing standards and, prior to his\n\ndeparture from our Board at the 2025 Annual Shareholder Meeting, David J. Robino was independent under NYSE listing standards.\n\nLead Independent Director and Governance Practices\n\nLithia’s governance documents provide our Board with flexibility to select the leadership structure that is best for the Company. If\n\nthe Chair of our Board is not an independent director, our Board annually selects an independent director to serve as the “Lead\n\nIndependent Director” responsible for coordinating the activities of the independent directors, ensuring the Board and management\n\naddress matters important to the independent Board members and fulfilling the Lead Independent Director duties set forth in Lithia's\n\nCorporate Governance Guidelines. If the Chair of our Board is an independent director, our Board of Directors may nonetheless\n\nselect a Lead Independent Director from one of the other independent directors.\n\nBryan B. DeBoer is our President and CEO, and Sidney B. DeBoer is our Chair of the Board. At this time, we believe it is beneficial\n\nfor Sidney B. DeBoer to bring his strength as a long-time leader at Lithia to the role of Chair, while Bryan B. DeBoer as CEO focuses\n\non developing and implementing the Company’s strategies. Mr. Robino, our prior Lead Independent Director, did not stand for\n\nre-election at our 2025 Annual Meeting of Shareholders. Therefore, in 2025, our Board elected Louis P. Miramontes to serve as\n\nour Lead Independent Director for the 2025 - 2026 Board year. Mr. Miramontes is an experienced independent member of our Board\n\nand has been recognized as governance leader by the National Association of Corporate Directors.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n23\n\nLetter from the Lead Independent Director\n\nThis letter highlights some of the ways our Board is working to provide independent oversight of management and stewardship of\n\nyour interests.\n\nIndependent Board Oversight:\n\nThe Lead Independent Director position is a key component of our Board's overall independence. The duties and responsibilities of\n\nthis role are outlined in detail in our Corporate Governance Guidelines, which provide that the Lead Independent Director\n\ncoordinates the activities of all the independent directors, may organize and conduct separate meetings of the independent directors\n\n without management present, helps to plan board agendas, liaises with and guides board committee chairs as needed, and\n\nprovides board leadership whenever the acting Board Chair or CEO have a real or perceived conflict. \n\n          \n\nBoard Refreshment:\n\nBoard succession is an important responsibility of the Board and ensures we have the right mix of directors to oversee Lithia's\n\ngrowth. Mr. David Robino, our prior Lead Independent Director, did not stand for re-election at our 2025 Annual Shareholder\n\nMeeting. We thank Mr. Robino for his service. In addition, we added five new independent directors to our Board since 2023,\n\nincluding most recently Mr. Bailey and Ms. O’Neill in 2025 and the nomination of Ms. Huskins just this year. These directors bring\n\ninvaluable operational, strategic and governance expertise to our Board. As a result, and if Ms. Huskins is elected, our Board will\n\nhave grown to 10 directors, of whom 8 are independent. We also use director age and tenure limits designed to foster a refreshed\n\nbut experienced and independent board. \n\nBoard Practices:\n\nWe also continue to implement the following best governance practices:\n\n•The Chair of the Board and the CEO are separate.\n\n•The Board’s involvement is critical to Lithia’s comprehensive strategic review conducted annually.\n\n•The Board regularly receives information concerning, and provides input on, succession planning.\n\n•Our Board and management annually engage shareholders and remain responsive to their input, as discussed in the\n\nCompensation Discussion and Analysis, below.\n\n•The Board and its committees met 36 times in 2025.\n\n•Annually, an independent third party facilitates a “360 degree” review of our CEO with the other Board members and the officers\n\nreporting directly to the CEO. The results of that review are shared with the independent directors.\n\n•An independent third party also annually conducts a review of the performance of each director, each Board committee, and the\n\nBoard as a whole.\n\n•We have adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics (each of which is available on\n\nour website at investors.lithiadriveway.com), and an insider trading policy.\n\n•Independent directors may not serve longer than 15 years or past the age of 79.\n\n•All of our directors are elected annually.\n\n•There is majority voting in uncontested director elections.\n\n•The Board has adopted proxy access permitting eligible shareholders to nominate director candidates.\n\n•The Board designates a director to lead our cybersecurity oversight efforts.\n\n•Directors and executive officers all are required to satisfy minimum stock ownership requirements.\n\nThe Board is committed to continuing to serve your interests, and we thank you for your support.\n\nLouis P. Miramontes\n\nLead Independent Director\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n24\n\nDirector Qualifications and Nominations\n\nThe Nominating and Governance Committee is responsible for identifying and evaluating potential director nominees for election to\n\nour Board each year. The Nominating and Governance Committee seeks a selection of directors who as a group will possess\n\ndiverse skills and knowledge, including in such area as finance, marketing, management, and technology, as well as automotive\n\nretailing, and that will contribute to the Board’s overall effectiveness and the Company’s overall corporate goals and responsibility to\n\nits shareholders.\n\nBoard Succession Planning and Recruitment\n\nIdentifying and recommending individuals for appointment or elections to our Board are core responsibilities of the Nominating and\n\nGovernance Committee. The Nominating and Governance Committee carries out this responsibility through a year-round process\n\ndescribed below:\n\n1\n\n2\n\n3\n\n4\n\nEvaluation of Board\n\nComposition\n\nThe Nominating and\n\nGovernance Committee\n\nevaluates the Board’s\n\nmembership needs\n\nbased on a variety of\n\nfactors.\n\nCandidate Evaluation\n\nCandidates are\n\nevaluated on whether\n\nthey exhibit certain\n\ncore attributes that\n\nour Nominating and\n\nGovernance Committee\n\nlooks for in all\n\ncandidates, as well\n\nas particular needs of\n\nthe Board at the time.\n\nCandidate Recruitment\n\nThe Nominating and\n\nGovernance Committee\n\nidentifies individuals\n\nthrough a variety of\n\nmethods, including\n\nindependent search\n\nfirms and shareholder\n\nrecommendations.\n\nRecommendation to\n\nBoard\n\nThe Nominating and\n\nGovernance Committee\n\nrecommends selected\n\ncandidates to the full\n\nBoard for nomination\n\nor appointment to the\n\nBoard.\n\nEvaluation of Board Composition: Each year the Nominating and Governance Committee evaluates the size and composition of\n\nthe Board to assess whether they are appropriate in light of the Company’s evolving needs. In this evaluation, the committee\n\nconsiders the Company’s strategic direction, current director qualifications, the results of Board and committee self-assessments,\n\nand legal and investor relations review.\n\nAs part of the nomination process, the Nominating and Governance Committee annually reviews and evaluates the skills, talents,\n\nother characteristics and contributions of the current directors in the context of the desired composition of our Board, our operating\n\nrequirements and the interests of our shareholders. The committee also reviews and interviews candidates for our Board whose\n\nbackground and experience suggest the candidates may be valuable board members considering the current Board composition.\n\nThe Nominating and Governance Committee may propose to nominate current Board members or add new Board members, either\n\nas additional directors or in transition of current Board members. Potential candidates may be suggested by various sources,\n\nincluding management, Board members, shareholders, business leaders and other industry executives and directors. We may from\n\ntime-to-time engage a director search firm. The search firm Egon Zehnder was engaged in connection with the appointment of Mr.\n\nBailey, and Ms. O'Neill and the nomination of Ms. Huskins.\n\nSpecifically, the Nominating and Governance Committee evaluates potential director nominee candidates based on broad criteria\n\nthat include the individual’s skills, experience and other factors in the context of the current composition of our Board, including the\n\nBoard’s overall diversity. Among other aspects, the Nominating and Governance Committee evaluates the following factors when\n\nevaluating director nominees: business experience, other directorships, business and personal relationships with management,\n\neducational background, expertise in finance and accounting, knowledge of financial reporting and the business of the Company,\n\nand industry experience. In this context, diversity encompasses differences of viewpoint, personal and professional experience,\n\nexpertise in specific areas, and other individual qualities and backgrounds. Our Nominating and Governance Committee Charter\n\nprovides that the Nominating and Governance Committee will endeavor to incorporate diversity, including gender, race and ethnicity,\n\namong the list of candidates when filling any Board vacancy.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n25\n\nAt a minimum, director nominees must have the ability to dedicate sufficient time to Board activities, and independent director\n\nnominees must meet applicable NYSE independence standards and not have any conflicts of interest with the Company. The\n\nNominating and Governance Committee reviews its effectiveness in balancing these criteria when assessing the composition of\n\nour Board.\n\nDirectors are not considered independent if they have been on the Board for 15 or more years, and no person may serve as an\n\nindependent director after attaining the age of 79.\n\nIf a director is an active member of the board of directors of more than three other public companies, then the Nominating and\n\nGovernance Committee, when performing its annual review of the composition of the Board, will take into consideration the\n\ncompeting time requirements of the director in fulfilling the directors' duties as a member of our Board.\n\nWe require all of our directors to annually sign an acknowledgment of their confidentiality obligations and obligations under our\n\ninsider trading policy and other applicable policies to reinforce their commitment to protect our confidential information and our\n\nbusiness reputation and to comply with applicable securities laws.\n\nWe seek to attract and retain high-quality candidates for Board membership regardless of the origin of the recommendation, and\n\nthere are no differences in the manner in which the Nominating and Governance Committee evaluates nominees for director based\n\non whether the nominee is recommended by a shareholder or the committee itself. The Nominating and Governance Committee will\n\nconsider potential nominees recommended by any record or beneficial shareholder. See \"[Shareholder Proposals or Nominations -](#ic4b68f9df5f645149bb3535a26afa3af_277)\n\n[Shareholder Director Recommendations](#ic4b68f9df5f645149bb3535a26afa3af_277)” below.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n26\n\nOur Board’s Risk Oversight Role\n\nOur Board monitors the risks facing our business by evaluating our risk management processes, including the processes established\n\nto monitor how management reports material risks to our Board and how our executive team manages the various risks that our\n\nCompany faces. Our Board annually reviews the potential risks we face, including cyber risks, environmental risks and the potential\n\nimpact of new laws and industry and competitive developments on our business, and the potential severity and likelihood of the risk.\n\nIt considers immediate or short-term risks, while also evaluating and monitoring risks that could develop in severity or likelihood over\n\ntime. Our Board collaborates with management on developing the Company’s annual risk management plan and, as part of that\n\nprocess, helps management ensure that those risks and uncertainties are considered in ongoing operations and in the Company’s\n\nrisk management plan. Our Board has delegated responsibility for certain areas of its risk oversight to its standing committees. The\n\nBoard and our Board committees are charged with the following risk oversight responsibilities.\n\nBoard of Directors\n\n•Enterprise Risk Management\n\n•Cybersecurity\n\n•Policies, practices and contributions regarding the environment, sustainability and social issues.\n\nAudit Committee\n\n•Material financial risk\n\nexposures and the process by\n\nwhich management assesses\n\nand manages financial risk\n\n•Ethics and legal compliance\n\n•Transactions with related\n\nparties\n\nCompensation Committee\n\n•Risks related to compensation\n\npolicies and programs\n\n•CEO and management\n\nsuccession planning\n\n•Human capital management,\n\nand employee relations\n\nNominating and Governance\n\nCommittee\n\n•Board succession planning\n\n•Board structure\n\n•Code of Business Conduct and\n\nEthics compliance and\n\nenforcement\n\n•Corporate sustainability and\n\nsocial responsibility, as\n\nreferred by the Board\n\nWhile our Board oversees risk management, our management is charged with managing risk through effective internal controls and\n\nprocesses, which facilitate the identification and management of risks. Management regularly discusses risk management with our\n\nBoard, which requests and receives presentations from internal subject matter experts on topics of risk. Management also retains\n\nadvisors or experts, as necessary, who can provide meaningful assistance in determining, assessing or managing areas of risk,\n\nbeyond the Company’s own capabilities.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n27\n\nCybersecurity\n\nWe are committed to maintaining robust cybersecurity practices and proactively work to protect the privacy of our customers, ensure\n\nthe confidentiality, integrity and availability of our operation, and prevent cyber crimes against us. We operate with an internal policy\n\nand control framework for data protection, which is compliant with regulatory requirements and employs advanced technology and\n\nresources for cyber protection. This includes continuous monitoring, intrusion detection systems, and anomaly detection mechanics\n\nto promptly identify unusual activities or security breaches.\n\nOur Board oversees our cybersecurity and data protection strategy and appoints a director to lead the Board’s efforts. Our Board has\n\ndesignated Shauna McIntyre; Ms. McIntyre holds an NACD CERT certificate in cybersecurity oversight and also maintains familiarity\n\nwith developments and practices in cybersecurity, which better enable Ms. McIntyre, and therefore the Board, to oversee the\n\nCompany’s cybersecurity strategy. Management regularly reports risk exposures to the Board as well as the steps taken to monitor\n\nand control the risks, including quarterly reports on our cybersecurity posture, current and future risks, and potential incidents or\n\nvulnerabilities. As part of that review, George Hines, our former Chief Innovation and Technology Officer, led our information\n\ntechnology and cyber protection strategy in 2025, and interacted directly with our Board. With the involvement of the designated\n\ndirector, we also obtain reports, evaluations and recommendations regarding our policies and systems from third parties with\n\ncybersecurity and information technology expertise. Currently, our Board believes assigning a director to lead the Board's\n\ncybersecurity risk oversight and thereby reviewing cyber risks and security amongst the full Board, better serves its oversight\n\nresponsibility than assigning cyber risk oversight to a committee.\n\nCode of Business Conduct and Ethics\n\nWe adopted a Code of Business Conduct and Ethics that applies to all of our officers, directors and employees, including our\n\nprincipal executive, financial and accounting officers. A complete copy of our Code of Business Conduct and Ethics is available on\n\nour website at investors.lithiadriveway.com. You may request a copy by mail from our Investor Relations Department, Lithia Motors,\n\nInc., 150 N. Bartlett Street, Medford, Oregon 97501. We intend to publicly disclose any amendment to and any waiver of the Code of\n\nBusiness Conduct and Ethics on our website.\n\nCompensation of Directors\n\nNon-Employee Director Compensation\n\nOur directors serve from election at each annual meeting of shareholders until the following annual meeting or until the director’s\n\nsuccessor is elected and qualified. The Compensation Committee annually reviews non-employee director compensation and\n\nrecommends any applicable changes to our Board. The Compensation Committee engages independent consultants to review the\n\nmarket competitiveness of the compensation paid to the non-employee directors compared to Company peers. The Compensation\n\nCommittee engaged Pay Governance in 2025 to help review and assess non-employee director compensation for the 2025-2026\n\nBoard service year. Pay Governance recommended, and the Board approved, changes to the director compensation program to\n\nretain competitive positioning for the 2025-2026 Board service year. The changes include an increase to the cash retainer amounts\n\nand equity grants, as set forth below and places the compensation at the median compared to Company peers, which are the same\n\ncompanies in the peer group used for executive compensation comparisons. The changes in the director compensation program are\n\neffective for the 2025-2026 Board service year. Accordingly, the actual compensation paid to a non-employee director in the 2025\n\ncalendar year is earned under two separate compensation programs. Except for Sidney B. DeBoer, directors who are employees of\n\nthe Company are not compensated separately for their service as directors. As noted in the Non-Employee Director Compensation\n\nTable, for his services as a director, Sidney B. DeBoer receives the same compensation, in the same form, as the Company pays to\n\nits non-employee directors. Separately, Sidney B. DeBoer receives payments for his prior services rendered as an employee that are\n\ndescribed below under \"[Certain Relationships and Transactions with Related Persons](#ic4b68f9df5f645149bb3535a26afa3af_283)” on page [80](#ic4b68f9df5f645149bb3535a26afa3af_283). Executive officers of the\n\nCompany do not recommend or determine non-employee director compensation. Our non-employee directors are currently Mses.\n\nLoretz-Congdon, McIntyre, McKinney, O'Neill and Messrs. Bailey, Lentz and Miramontes.\n\nWe pay a majority of our non-employee directors’ compensation as equity awards. The Compensation Committee believes that\n\npaying a majority of the annual compensation in equity provides non-employee directors with a vested interest in our long-term\n\nfinancial success and aligns their interests with those of our shareholders. The compensation structure for our non-employee\n\ndirectors for the 2025-2026 service year was as follows:\n\n•$100,000 in cash (no increase from the 2024-2025 calendar year) paid in 12 monthly installments over the service period.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n28\n\n•An additional $30,000 in cash to each director who holds the position of Compensation Committee or Audit Committee chair (a\n\n$5,000 increase from the 2024-2025 calendar year), $30,000 in cash (a $5,000 increase from the 2024-2025 calendar year) to\n\nour Nominating and Governance Committee chair, and $40,000  (a $5,000 increase from the 2024-2025 calendar year) to any\n\ndirector who serves as our Lead Independent Director or as chairman of the Board. In each case, these additional cash\n\namounts are also paid in 12 monthly installments over the service period.\n\n•An award for a number of restricted stock units (\"RSUs\"), which are settled in shares of our common stock, with a value of\n\n$195,000 (no increase from the 2024-2025 board service year). The number of RSUs awarded is based on the average closing\n\nshare price for the 20 trading days prior to the award grant date.\n\n•RSU awards to our non-employee directors are granted immediately after our annual shareholder meeting and vest over one\n\nyear, with 25% vesting on the first business day of the month after each regularly scheduled quarterly meeting of our Board if\n\nthe director continues to serve on that day. All equity grants to non-employee directors are subject to our stock ownership policy.\n\nSee \"[Non-Employee Director Stock Ownership Policy; Hedging and Pledging Restrictions](#i5bc9dcf69170433da1518a068dca445d_6095)” below.\n\n2025 Director Compensation\n\nNon-Employee Director Compensation Table\n\nThe following table summarizes compensation paid to non-employee directors and to our Chairman during calendar year 2025,\n\nwhich amounts represent the 2025 portion of both the 2024-2025 Board term and the 2025-2026 Board term.\n\nName\n\nFees Earned\n\nor Paid in\n\nCash(1)\n\nStock\n\nAwards(2)\n\nTotal Compensation\n\nRichard J. Bailey Jr. (3)\n\n$25,000\n\n$107,978\n\n$132,978\n\nSidney B. DeBoer(4)\n\n$166,667\n\n$186,462\n\n$353,129\n\nJames E. Lentz\n\n$100,000\n\n$186,462\n\n$286,462\n\nStacy C. Loretz-Congdon\n\n$116,667\n\n$186,462\n\n$303,129\n\nShauna F. McIntyre\n\n$128,333\n\n$186,462\n\n$314,795\n\nCassandra M. McKinney\n\n$100,000\n\n$186,462\n\n$286,462\n\nLouis P. Miramontes\n\n$155,000\n\n$186,462\n\n$341,462\n\nHeidi L. O’Neill (3)\n\n$25,000\n\n$107,978\n\n$132,978\n\nDavid J. Robino (5)\n\n$53,333\n\n$0\n\n$53,333\n\n(1)    The fees reflected in the column \"Fees Earned or Paid in Cash” in the above table are the actual fees earned in calendar year 2025\n\n(2)    The amounts set forth in this column reflect the grant date fair value of all awards granted in 2025 calculated in accordance with FASB ASC Topic 718 and excluding the effects of any\n\nforfeitures. (See Note 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for the valuation and assumptions\n\nand other information related to our stock awards).\n\n(3)    Mr. Bailey and Ms. O'Neill joined our Board effective October 1, 2025 and therefore received a pro-rata portion of the 2025-2026 Board term fees and equity awards.\n\n(4)    This amount reflects the fees the Board has agreed to pay Mr. DeBoer for his service as a director under his Director Service Agreement, and does not include the amounts paid to Mr.\n\nDeBoer under his September 14, 2015 Transition Agreement or otherwise, which are described under \"Certain Relationships and Related Transactions and Director Independence” on page [80](#ic4b68f9df5f645149bb3535a26afa3af_283).\n\n(5)    Mr. Robino's service on the Board ended at our 2025 Annual Shareholder Meeting and therefore he did not receive any fees with respect to the 2025-2026 Board term.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n03: Corporate Governance\n\n29\n\nThe following table sets forth all stock units held by each non-employee director as of December 31, 2025. Mr. David Robino's\n\nservice on the Board ended at our 2025 Annual Shareholder Meeting and therefore he did not hold any unvested stock awards as of\n\nDecember 31, 2025:\n\nName\n\nUnvested Stock Awards (#)\n\nRichard J. Bailey Jr.\n\n171\n\nSidney B. DeBoer\n\n168\n\nJames E. Lentz\n\n168\n\nStacy C. Loretz-Congdon\n\n168\n\nShauna F. McIntyre\n\n168\n\nCassandra M. McKinney\n\n168\n\nLouis P. Miramontes\n\n168\n\nHeidi L. O’Neill\n\n171\n\nDeferred Compensation Agreements with Non-Employee Directors\n\nWe offer our non-employee directors the opportunity to defer receipt of all or a portion of their compensation by entering into a\n\ndeferred compensation agreement with the Company. Under this agreement, participants who elect to defer compensation may defer\n\nreceipt of all or a portion of their cash compensation under our deferred compensation plan and any stock award pursuant to our\n\n2013 Stock Incentive Plan (including cash deferred into stock). Deferrals are paid following a separation from the Board in a lump\n\nsum, or, if elected and earlier, during the director's term of service as a lump sum on a fixed date or over a series of installments. Ms.\n\nMcKinney and Mr. Miramontes elected to defer their stock compensation issued for the 2025 - 2026 Board service year.\n\nNon-Employee Director Stock Ownership Policy; Hedging and Pledging\n\nRestrictions\n\nWe expect our non-employee directors to acquire and hold a sufficient number of shares of our common stock to meaningfully\n\nparticipate in the risks and rewards of ownership with our shareholders and to appropriately align the interests of directors with our\n\nlong-term goals. Accordingly, under our Stock Ownership Policy for Directors, non-employee directors are required to own and\n\nmaintain shares of our common stock having a market value equal to at least five times the annual base cash compensation paid to\n\nthe director within five years after the director’s initial appointment to our Board. (If a director does not or ceases to comply with the\n\npolicy, the director is expected to retain 100% of the net after-tax shares received upon the settlement of any equity incentive award\n\nand not otherwise transfer any shares until the stock ownership minimums are attained). In determining compliance with the policy,\n\nshare ownership includes RSUs subject to time-vesting and indirect share ownership.\n\nWe have adopted an Insider Trading Policy and procedures applicable to our directors, officers, and employees, and have\n\nimplemented processes for the Company that we believe are reasonably designed to promote compliance with insider trading laws,\n\nrules, and regulations, and the NYSE listing standards. Our Insider Trading Policy and our Stock Ownership Policy for directors\n\nspecify that they may not (1) engage in hedging or monetization transactions, including through the use of financial instruments such\n\nas prepaid variable forwards, equity swaps, collars and exchange funds or (2) hold Company securities in a margin account or\n\notherwise pledge Company securities as collateral for a loan, except as specifically approved by the Board.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n04: Corporate Responsibility\n\n30\n\n04\n\nCORPORATE RESPONSIBILITY\n\nOur Commitment to all Stakeholders\n\nIntroduction\n\nLithia & Driveway’s long-term growth depends on the trust of our customers, our employees, and the communities\n\nwe serve. As our organization expands across North America and the United Kingdom, we continue to integrate\n\nsustainability into our operating model, guided by six goals that strengthen our environmental stewardship, operational\n\nefficiency, workplace culture, and local impact.\n\nWe strive to Improve Constantly by reducing our footprint, advancing sustainable mobility, elevating our people, and\n\ndeepening our community partnerships.\n\nEnvironmental Goals\n\nSocial Goals\n\nGoal 1\n\nGoal 4\n\nIncrease GreenCars on the Road\n\nStrengthen Our Communities\n\nOur GreenCars resource leads the way in\n\nconsumer education on electric vehicles.\n\nWe cultivate bonds, build bridges &\n\nfoster engagement in the communities\n\nwe serve.\n\nGoal 2\n\nGoal 5\n\nOperate Sustainable Stores\n\nMaximize Employee\n\nHealth, Wellness & Safety\n\nWe improve operations with facility\n\nupdates & ENERGY STAR certification.\n\nOur leaders nurture workplaces where\n\nteam members feel engaged, inspired,\n\nand respected.\n\nGoal 3\n\nGoal 6\n\nExtend Vehicle Lifecycles\n\nChampion an Inclusive,\n\nHigh-Performance Culture\n\nSelling and serving value-autos keeps\n\ngood cars on the road longer.\n\nA culture of belonging fuels innovation,\n\nteamwork, and our mission of Growth\n\nPowered by People.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n04: Corporate Responsibility\n\n31\n\nGoal 1 – Increase GreenCars on the Road\n\nGreenCars is strengthening its position as a key driver of consumer transition from internal combustion vehicles to more sustainable\n\ntransportation. By combining digital education with high visibility national events, the platform helps demystify EV ownership, address\n\nconcerns around charging and cost, and build confidence in emerging technologies. Its growing presence at major industry\n\ngatherings has expanded our reach to new audiences, reinforced our leadership in EV education, and supported dealerships as they\n\nguide customers through the shift to EV. This work not only accelerates adoption but also positions the Company to capture long\n\nterm value as the market moves toward electrification.\n\nGreenCars also partnered with stores on targeted community events, including:\n\n•Connecting with tens of thousands of consumers with our presence at Electrify Expo, the largest EV festival in the U.S.\n\n•a Detroit-Area EV Summit, where the Suburban Collection and GreenCars trained teams from 30 stores on EV sales, service,\n\nand industry trends.\n\n•Helping Roseville Toyota become the #1 Toyota BEV retailer in the U.S.\n\nGoal 2 – Operate Sustainable Stores\n\nAs the automotive industry accelerates toward a low-carbon future, Lithia & Driveway continues investing in operational upgrades\n\nthat modernize our facilities, reduce emissions, and improve energy performance. Our sustainability strategy is grounded in a data-\n\ndriven, three-pillar energy efficiency framework: establishing baselines, improving performance, and communicating results. Our\n\n2025 projects are expected to save over 3 million kWh of electricity per year, reducing our environmental impact and reducing\n\noperational costs.\n\n1. Energy Efficiency At Scale\n\nMore than 90% of business units in the U.S. now operate with exterior LED lighting, and store retrofits continue to drive meaningful\n\nreductions in electricity consumption. Our major 2025 projects include:\n\n•Suburban Toyota of Troy: Full interior/exterior LED retrofit + 206 kW solar installation commitment saving an estimated\n\n450,000 kWh annually.\n\n•BMW/MINI/Kia of Anchorage: Holistic LED modernization across three locations saving an estimated 290,000 kWh annually.\n\n2. Renewable Energy Deployment\n\nWith nearly 8% of U.S. business units positioned to generate onsite renewable energy once current projects are complete, LAD\n\ncontinues advancing solar installations at right-fit locations.\n\n3. EV-Charging Infrastructure\n\nStores increasingly integrate charging infrastructure into both customer service and community access. For example:\n\n•Planet Honda (Union, NJ) installed one of the network’s top-performing public DC fast-charging stations, complemented by 10\n\nback-of-house Level 2 EV charging units.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n04: Corporate Responsibility\n\n32\n\nGoal 3 – Extend Vehicle Lifecycles\n\nKeeping cars on the road longer is core to our business, and doing so depends on a reliable, skilled technician workforce. As\n\ndemand for vehicle maintenance grows amidst a nationwide technician shortage, we seek to strengthen our talent pipeline so that\n\nwe are equipped to sustain vehicle longevity, support our stores, and meet the evolving needs of both traditional and electric\n\nvehicles. To that end, in 2025, we:\n\n•Supported SkillsUSA programs through hands‑on employee involvement that strengthens technical competitions, provides\n\nreal‑world mentorship, and connects students with internship pathways that help develop a stronger, job‑ready talent pipeline for\n\nthe automotive workforce.\n\n•Through our EV Drive & Learn Initiative, our stores hosted educational events introducing technician students to EV\n\ntechnology and industry career paths.\n\nGoal 4 – Strengthen Our Communities\n\nLAD’s community giving strategy is anchored in four quarterly pillars—Special Olympics, Sustainability, Back-to-School, and\n\nFoodbanks & Breast Cancer Awareness—each tied to a core value and generating millions in donations. Stores select the pillar they\n\nare most passionate about and partner with local nonprofits, empowering thousands of employees to give back.\n\nQ1: Special Olympics              \n\nHave Fun!\n\nQ2: Sustainability                \n\nImprove Constantly\n\n•45 dealerships raised funds for the Special Olympics by\n\nsponsoring Polar Plunge events nationwide.\n\n•Community Environmental Partnerships – LAD’s ongoing\n\ncollaboration with SOLVE supported waste-reduction and\n\nrecycling efforts while earning regional recognition from\n\nPortland Business Journal’s inaugural Environmental\n\nImpact Award.\n\nQ3: Back-to-School                                   \n\nEarn Customers for Life\n\nQ4: Food Banks &                     \n\nBreast Cancer Awareness                                    \n\nTake Personal Ownership\n\n•Participation in OEM‑led back‑to‑school and student\n\nsupport programs, such as Ford Drive for Your School,\n\nSubaru Loves Learning, and Toyota Backpacks for\n\nStudents, gives us meaningful opportunities to partner\n\nwith our manufacturers to strengthen local communities,\n\nsupport young learners, and demonstrate shared\n\ncommitment to education and opportunity beyond the\n\nshowroom.\n\n•Our Alaska stores came together to raise money for\n\nvarious causes in their community, including donations to\n\nthe Boys & Girls Club of Alaska and to Best Beginnings to\n\nsupport childhood literacy.\n\n•Lithia employees across the country united throughout\n\nNovember to support their communities, donating\n\nthousands of pounds of food and partnering with local\n\nnonprofits to help fight hunger during the holiday season.\n\n•The 2025 Lithia and Driveway Play for a Cure golf\n\ntournament raised money for the American Cancer\n\nSociety.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n04: Corporate Responsibility\n\n33\n\nVeteran Support & Lithia4Kids\n\n•In 2025, we kicked off partnerships with the Military Warriors Support Foundation and JP Morgan Chase to annually grant three\n\nvehicles to veteran service members. This past year, two stores awarded Subaru vehicles to combat-wounded veterans through\n\nthese partnerships.\n\n•Nearly $500,000 was distributed through over 150 Lithia4Kids grants, supporting children's mental health, STEM learning,\n\nmigrant student needs, and youth transportation programs.\n\nGoal 5 – Maximize Employee Health, Wellness & Safety\n\nOur people are the heart of our organization, and we invest in their health, financial well-being, safety, and career development. We\n\nprioritize safe workplaces, robust total rewards, and a culture that values recognition and continuous learning.\n\nHighlights:\n\n•Hyundai Global Dealer of the Year – Evans Halshaw Hyundai Leeds: Store leadership credits this award to a strong culture\n\nof togetherness, first-time leaders stepping into management roles, and an emphasis on professional development.\n\n•AutoNews Best Dealerships to Work For (U.S. & Canada): 20+ LAD stores recognized, including: Audi Coral Springs\n\n(Winner: Large Dealership Category) and Audi Millburn (Winner: Minority Leadership Category)\n\nGoal 6 – Champion an Inclusive, High-Performance Culture\n\nWe remain committed to fostering a culture where diverse experiences, perspectives, and backgrounds strengthen our organization.\n\nAcross North America and the UK, we continue to invest in leadership development programs that equip employees with tools to\n\ngrow and excel.\n\nLeadership & Development Highlights\n\n•Accelerate My Potential (AMP): Our AMP leadership development program is a means of investing in high‑potential talent by\n\nbuilding core leadership skills, expanding cross‑team connections, and preparing emerging leaders for future roles. In 2025 we\n\nexpanded this program to all of our North American operations.\n\n•Women LEAD (Lead, Explore, Achieve, Develop): This month‑long program supports women’s leadership and career growth\n\nthrough mentorship, skill‑building sessions, and opportunities to hear from company leaders and keynote speakers, helping\n\nfoster an inclusive environment where women can thrive.\n\n•LPG Expansion: We invite top store managers into our Lithia & Driveway Partners Group (LPG) to highlight, reward, and set an\n\nexample of what high performance within our organization looks like. In 2025, our LPG membership broadened to recognize\n\nStore Department Managers in their outstanding performance.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n34\n\n05\n\nCompensation Discussion and Analysis (CD&A)\n\nIntroduction\n\nThis Compensation Discussion and Analysis discusses Lithia’s\n\ncompensation program for our named executive officers (“NEOs”),\n\nincluding our philosophy, objectives and how our 2025 performance\n\ndrove compensation for the 2025 calendar year. Our current named\n\nexecutive officers are as follows:\n\nTable of Contents\n\n05 Compensation Discussion\n\n    and Analysis (CD&A)\n\nBryan B. DeBoer, 59\n\nPosition(s): Bryan B. DeBoer has been our Chief\n\nExecutive Officer (CEO) and President since 2012.\n\nTina H. Miller, 45\n\nPosition(s): Tina H. Miller is our Senior Vice President,\n\nChief Financial Officer (CFO), and has served in this\n\nrole since 2019\n\nDavid G. Stork, 64\n\nPosition(s): David G. Stork is our Senior Vice\n\nPresident, Chief Administrative Officer, and has served\n\nin this role since 2021.\n\nGary M. Glandon, 67\n\nPosition(s): Before transitioning to Senior Advisor\n\neffective October 1, 2025, Gary Glandon was our Senior\n\nVice President and Chief People Officer, a role he\n\nserved in since 2021.\n\nGeorge N. Hines, 53\n\nPosition(s): Before transitioning to a non-executive\n\nconsulting role on March 1, 2026, George Hines was\n\nour Senior Vice President, Chief Innovation and\n\nTechnology Officer (CITO), a role he served in since\n\n2019.\n\nAdam A. Chamberlain, 52\n\nPosition(s): Adam A. Chamberlain was our Executive\n\nVice President and Chief Operating Officer (COO)\n\nbefore resigning effective June 1, 2025.\n\n[Introduction](#ic4b68f9df5f645149bb3535a26afa3af_109).........................................................[34](#ic4b68f9df5f645149bb3535a26afa3af_109)\n\nExecutive Summary................…........................[35](#ic4b68f9df5f645149bb3535a26afa3af_115)\n\nPerformance & Compensation Highlights.......…[35](#ic4b68f9df5f645149bb3535a26afa3af_115)\n\n[Our Compensation Practices Benefit](#ic4b68f9df5f645149bb3535a26afa3af_118)\n\n[Our Shareholders](#ic4b68f9df5f645149bb3535a26afa3af_118)...............................................[37](#ic4b68f9df5f645149bb3535a26afa3af_118)\n\n[Compensation Components](#ic4b68f9df5f645149bb3535a26afa3af_124)...............................[40](#ic4b68f9df5f645149bb3535a26afa3af_124)\n\n2025[Compensation Design](#ic4b68f9df5f645149bb3535a26afa3af_127)[& Results](#ic4b68f9df5f645149bb3535a26afa3af_127)................[41](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[Base Salary](#ic4b68f9df5f645149bb3535a26afa3af_127).....................................................…[41](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\n[Short-Term](#ic4b68f9df5f645149bb3535a26afa3af_127) Incentive Plan...............................…[41](#ic4b68f9df5f645149bb3535a26afa3af_127)\n\nLong-Term Incentive Plan................................…[44](#ic4b68f9df5f645149bb3535a26afa3af_133)\n\n[Compensation Decision Making Process](#ic4b68f9df5f645149bb3535a26afa3af_136)........….[48](#ic4b68f9df5f645149bb3535a26afa3af_136)\n\n[Executive Compensation Governance](#ic4b68f9df5f645149bb3535a26afa3af_139)\n\n[Components](#ic4b68f9df5f645149bb3535a26afa3af_139)........................................................[50](#ic4b68f9df5f645149bb3535a26afa3af_139)\n\n[Compensation Committee Report](#ic4b68f9df5f645149bb3535a26afa3af_142).......................[51](#ic4b68f9df5f645149bb3535a26afa3af_142)\n\n06 Compensation Tables\n\n[Summary Compensation Table](#ic4b68f9df5f645149bb3535a26afa3af_148)...........................[52](#ic4b68f9df5f645149bb3535a26afa3af_148)\n\n[Grants of Plan-Based Awards Table for](#ic4b68f9df5f645149bb3535a26afa3af_151) 2025......[54](#ic4b68f9df5f645149bb3535a26afa3af_151)\n\n[Outstanding Equity Awards at](#ic4b68f9df5f645149bb3535a26afa3af_154)\n\n2025 Fiscal Year-End..........................................[55](#ic4b68f9df5f645149bb3535a26afa3af_154)\n\n[Stock Vested for](#ic4b68f9df5f645149bb3535a26afa3af_157)2025.........................................[56](#ic4b68f9df5f645149bb3535a26afa3af_157)\n\n[Non-Qualified Deferred Compensation](#ic4b68f9df5f645149bb3535a26afa3af_160)...............[56](#ic4b68f9df5f645149bb3535a26afa3af_160)\n\n[Termination](#ic4b68f9df5f645149bb3535a26afa3af_163) [or Change in Control Payment](#ic4b68f9df5f645149bb3535a26afa3af_163)s.......[57](#ic4b68f9df5f645149bb3535a26afa3af_163)\n\n[CEO Pay Ratio](#ic4b68f9df5f645149bb3535a26afa3af_166)....................................................[61](#ic4b68f9df5f645149bb3535a26afa3af_166)\n\n[Pay Versus Performance](#ic4b68f9df5f645149bb3535a26afa3af_169).....................................[62](#ic4b68f9df5f645149bb3535a26afa3af_169)\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n35\n\nExecutive Summary\n\nWe just completed our first three-year performance cycle since 2023, when we:\n\n•redesigned our compensation program,\n\n•introduced relative and diverse financial metrics, and\n\n•incorporated performance-based restricted stock units (PSUs) with a 3-year performance period and relative TSR modifier. We\n\nbelieve the 3-year performance period to be the most reliable measure of our performance relative to our peers.\n\nThe goal of this leading practice redesign was simple: use challenging goals to incentivize outperformance compared to our\n\ncompensation Peer Group in our strategically important metrics, principally revenue, profit generation and stock price performance.\n\nThis program is organized around the following components that align the interests of our executives with our investors by rewarding\n\nsuperior performance.\n\nRigorous Relative Metrics\n\nRevenue Growth\n\nProfitability (EPS and Net Income) and Stock\n\nPrice\n\nAll of our financial metrics and\n\nthe TSR modifier in our PSUs\n\nmeasure results relative to our\n\npeers. We use rigorous financial\n\ngoals and 3-year TSR goals \n\nthat pay at target only if our\n\nperformance meets the peer\n\nmedian and pay above target\n\nonly for peer outperformance.\n\nRevenue is the most important\n\ncomponent of our growth strategy, and\n\ntherefore is weighted at 40% of our\n\nshort- and long-term incentive plans.\n\nStarting in 2026, we replaced top-line\n\nrevenue with same store revenue in our\n\nshort-term plan, resulting in a balance\n\nof organic and inorganic growth and\n\ncomplete metric diversity between our\n\nlong- and short-term plans, as\n\ndiscussed in \"[2026 Compensation](#if8537bcfe58a40ee9307f641ed27db7e_22)\"\n\nbelow.\n\nWe seek to grow not just revenue, but earnings and,\n\nultimately, shareholder value. Therefore, beginning\n\nwith our 2024 compensation program, profitability\n\nmetrics in each of our plans are non-overlapping\n\nand weighted heavier than revenue. Specifically,\n\n50% of our short-term incentive depends on relative\n\nnet income growth and relative EPS makes up 60%\n\nof our PSU's core metrics. We also incorporate a\n\n3-year relative TSR modifier in all our PSUs to\n\nensure alignment with shareholder experience.\n\nThis redesign, which we continue to use, creates a stable compensation program that provides a clear line-of-sight incentive to\n\nmanagement, and ties pay outcomes to performance.\n\nPerformance Highlights\n\n2025 Net Income\n\n2025 Earnings Per Share\n\n2025 Revenue\n\n$32.32\n\n$826M\n\n$37.6B\n\n3-Year Total\n\nShareholder Return\n\n2025 Capital Returned\n\n(Share Buybacks and Dividends)\n\n2025 Acquired Revenue\n\n74th\n\npercentile of our Peers\n\n$1.0B\n\n$2.4B\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n36\n\nCompensation Highlights\n\n2025 Short-Term Incentive\n\nLong-Term Incentive - 2023 PSUs\n\nWeighting    Performance\n\nWeighting    Performance\n\nRevenue grew 8% over 1 year,\n\nranking 3rd out of 19 peers\n\nQuarterly Revenue growth averaged 11%\n\nyear-over-year for 3 years, ranking 2nd out\n\nof 19 peers\n\n40%\n\n100%\n\nNet Income grew 10% over\n\n1 year, ranking 3rd out of 19 peers\n\nTotal Shareholder Return was 53.8%\n\nover 3 years, ranking 6th out of 19 peers\n\nModifier\n\n50%\n\nCorporate Strategy performance\n\nwas 140% of target\n\nOperating Margin was 4.80%\n\nover 3 years.\n\nModifier\n\n10%\n\nPayout: 194% of target\n\nPayout:  210% of target\n\n2025 Long-Term Incentive\n\nAs discussed further in [Long Term Incentive Plan – 2025 PSU](#i7ac90e1bcced473fab3ea9bd83c74225_27)[s](#i7ac90e1bcced473fab3ea9bd83c74225_27), below, we continued to structure our long-term incentive\n\nconsistent with prior years as a mix of performance-based PSUs with a 3-year performance period on the following metrics, and\n\ntime-based RSUs that vest annually over 3 years. We believe stability in this program is in the best interest of shareholders as we\n\nseek to incent management to generate profitable revenue that drives shareholder growth.\n\nPSUs\n\nRSUs\n\n•Performance Period: 2025-2027\n\n•Metrics:\n\n◦Relative Revenue Growth (40%)\n\n◦Relative EPS Growth (60%)\n\n◦Relative TSR Modifier (up to +/- 35%)\n\ns\n\n•Vesting Period: annual installments over three years\n\n2026 Compensation\n\nAs we continue to refine our compensation program, we heard from investors that same store metrics were important and that they\n\npreferred non-overlapping metrics in long- and short-term incentive plans. We also believe core operating performance and organic\n\ngrowth are important aspects of our growth strategy. Accordingly, starting in 2026, the revenue component of our short-term\n\nincentive plan (weighted at 40% of the plan) will change from top-line revenue to same store revenue to emphasize organic growth\n\nin our integrated stores. The revenue component in our long-term incentive will remain tied to top-line revenue, meaning our 2026\n\nlong- and short-term plans use distinct metrics.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n37\n\n2025 Shareholder Engagement\n\nTotal Contacted                  >60%*\n\nLithia’s Compensation Committee encourages shareholder feedback on our\n\ncompensation approach and aims for constant improvement. We rely on\n\nfocused board-level shareholder engagement, complemented by regular\n\nshareholder outreach and engagement activities conducted by our CEO and\n\nother members of our management team, and our annual say-on-pay vote.\n\nThese engagements build shareholder alignment.\n\nMindful of our historically strong say-on-pay support, including 84% voting\n\nin favor in 2025, we engaged with shareholders representing over 60% of\n\nour outstanding capital stock in 2025, on a variety of topics, including our\n\nexecutive compensation program. In addition, our Lead Independent Director\n\nand the Chair of our Compensation Committee invited some of our largest\n\nshareholders, including shareholders representing over 45% of the shares\n\nvoted “against” our compensation program in our 2025 say-on-pay vote, to\n\ndiscuss and provide feedback on our compensation program and other\n\nmatters.\n\nOur engagement with shareholders, as well as feedback received from the\n\nproxy advisory firms, is reflected in our compensation program, as seen\n\nbelow:\n\nTotal Engaged                >50%*\n\nDirector Contacted  >25%*\n\n* represents percent of outstanding capital stock as of\n\nDecember 31, 2025\n\nWhat We Heard\n\nWhat We Did\n\nCEO Pay\n\nNo Change to CEO Target Base and Incentive Pay in 2025\n\nProxy advisor firms commented that CEO pay was \n\nhigh (above median) relative to peers.\n\nBased on his positioning relative to similarly situated CEOs of peers,\n\ncompany performance and investor feedback, we did not increase our\n\nCEO's base salary and target cash and equity incentive compensation in\n\n2025.\n\nFurther, the reportable value of our CEO's equity compensation and total\n\ncompensation as shown in the summary compensation table decreased in\n\n2025 due to the Compensation Committee's active management and\n\ndesign of the long-term incentive program.\n\nMetric Selection\n\nIncreased Metric Alignment with Strategic Plan and\n\nDifferentiated Metrics\n\nAfter incorporating shareholder feedback in 2024\n\nby incorporating EPS into our LTIP, our\n\nshareholders further asked that we include same-\n\nstore metrics into our incentive plans to emphasize\n\norganic growth. In addition, some shareholders\n\nprefer that we use different metrics in our long-term\n\nand short-term incentives.\n\nStarting in 2026, we replace the relative top-line revenue component of\n\nour short-term incentive with a relative same-store revenue metric to\n\nemphasize organic growth. As a result, all of our 2026 long-term incentive\n\nmetrics are distinct from our 2026 short-term incentive metrics.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n38\n\nOur Compensation Practices Benefit our Shareholders\n\nOur executive compensation programs have strong governance components that further strengthen our pay-for-performance\n\ncompensation philosophy, including the following:\n\nWhat We Do\n\n✓\n\nAlign pay and performance, with significant percentages\n\nof target total direct compensation (TDC) based on\n\nperformance or at risk (90% for the CEO and 73% for the\n\nother NEOs)\n\n✓\n\nRigorous financial, strategic and relative performance\n\ngoals, including relative TSR, with audited attainment\n\ndeterminations\n\n✓\n\n3-year performance periods on PSUs\n\n✓\n\nMeaningful stock ownership guidelines for directors and\n\nexecutives\n\n✓\n\nClawback policies on cash incentives and stock awards\n\ndue to financial restatement or misconduct resulting in\n\nreputational harm\n\n✓\n\nDouble-trigger change in control provisions\n\n✓\n\nEntirely independent Compensation Committee\n\n✓\n\nIndependent compensation consultant\n\n✓\n\nAnnual compensation program and policies risk\n\nassessment\n\n✓\n\nAbility to exercise negative discretion on all incentives\n\nWhat We Do Not Do\n\n×\n\nNo “golden parachute” gross-ups\n\n×\n\nNo hedging/pledging/short-sales of company stock\n\n×\n\nNo dividends paid on unvested stock awards or on\n\noptions/SARs (which we do not currently grant)\n\n×\n\nNo excessive perquisites\n\n×\n\nNo options/SARs (which we do not currently grant) with\n\nbelow FMV exercise price\n\n×\n\nNo repricing of options/SARs (which we do not currently\n\ngrant) without shareholder approval\n\n×\n\nNo excessive severance\n\n×\n\nNo guaranteed salary increases, bonuses, or long-term\n\nincentive awards\n\n×\n\nNo adjustment or modification of any outstanding cash\n\nor long-term equity incentive in response to volatile\n\nmarket conditions\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n39\n\nCompensation Philosophy\n\nOur vision guides our mission, and our mission drives our business strategy and our compensation philosophy. All four of these\n\nareas are informed by our values.\n\nWho We Are\n\nThe pragmatic disruptor with a proven multifaceted success\n\nstrategy, competitively leading the modernization of personal\n\ntransportation by providing consumers solutions, wherever,\n\nwhenever, and however, they desire.\n\nOur Mission\n\nOur mission, Growth Powered by People, focuses on our\n\ncustomers and team to create a competitive advantage. We are a\n\ngrowth company and the continued development of our team is\n\ncritical to our long-term success. Our entrepreneurial culture is the\n\nfoundation of our business strategy. This culture drives our team to\n\ncreate simple, customer-centered experiences. Trust in each other\n\nis key to making decisions that will be in the best interests of the\n\nCompany and its stakeholders. We strive for high customer\n\nretention and strong market share, while controlling costs, to yield\n\nexceptional profit performance.\n\nOur Business Strategy\n\nWe are a growth company focused on profitably consolidating the largest retail sector by providing personal transportation solutions,\n\nwherever, whenever, and however, consumers desire.\n\nCompensation Philosophy\n\nLithia’s compensation program is designed to support the Company’s vision, mission, and values and align appropriate incentives\n\nand rewards with the execution of our business strategy, all while attracting, motivating, rewarding, and retaining high-performing\n\nemployees, who influence and drive the Company’s long-term success. Lithia strives to do this by providing compensation that is\n\nmarket competitive and performance-based.\n\nOur Values\n\nWithin our entrepreneurial and high-performance culture, we implement a human capital policy that supports a diverse and\n\nenergized workforce with career advancement, role mobility opportunities, and strong health, safety, and wellness initiatives. Our\n\nvalues guide us beyond producing financial returns to serving our customers and communities, developing our people, reaching\n\nour potential and growing our company:\n\nWorking together, we create a welcoming and\n\nhighly responsive environment with positive\n\nexperiences that Earn Customers for Life.\n\nBy innovating, remaining humble and\n\nchallenging ourselves to perform better,\n\nwe Improve Constantly.\n\nWe are motivated by the freedom of\n\nTaking Personal Ownership for our actions\n\nand results.\n\nOur enthusiasm for our customers,\n\ncommunities, cars, each other and our success\n\nrepresent the catalyst for Having Fun!\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n40\n\nCompensation Components\n\nThe three major elements of our executive officers’ regular total direct compensation (TDC) are: (i) base salary, (ii) awards under\n\nour cash-based short-term incentive plan, and (iii) awards under our equity-based long-term incentive plan. While performance\n\ndrives all aspects of our compensation, for 2025, 90% of target annual TDC for the CEO and 73% of the target annual TDC for our\n\nother named executive officers, was incentive-based or at-risk, reflecting Lithia’s pay-for-performance philosophy.\n\nTarget Compensation By Component\n\nn Long-Term Incentive\n\nn Performance-Based RSUs\n\nn Service-Based RSUs\n\nn Short-Term Incentive\n\nn Base Salary\n\nn Other\n\nOther\n\nNEOs*\n\nCEO\n\n*Average NEO target compensation\n\nat start of year\n\nCompensation Component\n\nDescription\n\nAnnual\n\nBase Salary\n\nA competitive base income set to attract talent and promote long-term retention. Lithia\n\nbelieves that as an employee moves into higher level positions in the Company, base pay\n\nshould become a smaller component of overall TDC.\n\nPerformance Based\n\nShort-Term Incentive\n\nAn annual performance-based cash incentive which ties a significant portion of our\n\nexecutives' annual cash to growth in revenue and profitability relative to our\n\ncompensation Peer Group, and achievement of our corporate responsibility and strategy\n\ngoals.\n\nLong-Term\n\nLong-Term Incentive\n\nA long-term equity-based program that emphasizes PSUs that incorporate relative\n\nfinancial metrics and a relative TSR modifier, with a minority weighting on RSUs.\n\nPerformance awards vest only after a 3-year performance. All metrics are measured\n\nrelative to our compensation Peer Group.\n\nOther\n\nRetirement\n\nA non-qualified deferred compensation plan with annual discretionary contributions that\n\nprovides key employees funds for retirement and supports succession planning.\n\nSERP contributions promote retention by using longer-term vesting periods. Participants\n\nmay choose to defer up to 50% of their base salary and 100% of their bonus\n\ncompensation.\n\nPerquisites\n\nPerquisites are limited.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n41\n\n2025 Compensation Program Design & Results\n\nBase Salary\n\nWe provide base salaries to our executive officers to compensate them for their services rendered during the year and to provide\n\nthem with a level of competitive and stable fixed compensation.\n\nThe Compensation Committee approves the base salary for our CEO each year based on competitive market factors, the CEO’s\n\nduties and responsibilities, comparison of relative CEO pay within the Peer Group described below, the CEO’s performance and\n\nthe relative pay of our senior management team. The base salaries of all other NEOs are developed by the CEO and our\n\nindependent compensation consultant based on similar factors and are analyzed and approved by the Compensation Committee.\n\nIn 2025, the Compensation Committee did not increase target base salaries for our executives as shown below. Mr. Glandon's\n\nsalary was reduced in 2025 in connection with his transition to senior advisor. Accordingly, Mr. Glandon's 2025 salary shown below\n\nis a blend of his original 2025 salary of $600,000 per year and his senior advisor salary of $300,000 per year. Mr. Chamberlain\n\nresigned effective June 1, 2025 and therefore did not earn his full 2025 salary.\n\nNamed Executive Officer\n\n2024 Base Salary ($)\n\n2025 Base Salary ($)\n\nΔ\n\nBryan B. DeBoer\n\n1,300,000\n\n1,300,000\n\n—%\n\nTina H. Miller\n\n750,000\n\n750,000\n\n—%\n\nDavid G. Stork\n\n500,000\n\n500,000\n\n—%\n\nGary M. Glandon\n\n600,000\n\n537,500\n\n(10)%\n\nGeorge N. Hines\n\n640,000\n\n640,000\n\n—%\n\nAdam A. Chamberlain\n\n750,000\n\n750,000\n\n—%\n\nShort-Term Incentive Plan\n\nThe 2025 short-term incentive plan rewarded executives based on our revenue and net income growth, in each case relative to our\n\nPeer Group, and execution of our corporate responsibility and strategy initiatives. Consistent with our 2024 short-term incentive, we\n\ncontinued to use all relative financials metrics in 2025, weighted at 90% of the plan, emphasized profitability over revenue, and\n\nincorporated a corporate responsibility and strategy component. \n\nHow our 2025 Short-Term Incentive Plan Works\n\nOur 2025 short-term incentive plan compensated executives for achieving annual performance goals in each of the below criteria.\n\nEach named executive officer’s target cash bonus potential was based on a market competitive percentage of base salary ranging\n\nfrom approximately 64% to 150%, which was paid out according to the attainment of pre-approved performance goals. Each\n\nexecutive’s target bonus, expressed as a percentage of salary, and their weighted performance goals, were as follows:\n\nWeighting of Performance Factors\n\nNamed Executive Officer\n\nTarget Short-Term\n\nIncentive\n\n(% of Salary)\n\nRelative Revenue\n\nGrowth\n\nRelative Net income\n\nGrowth\n\nCorporate\n\nResponsibility &\n\nStrategy\n\nBryan B. DeBoer\n\n150%\n\nTina H. Miller\n\n87%\n\nDavid G. Stork\n\n64%\n\nGary M. Glandon\n\n67%\n\nGeorge N. Hines\n\n69%\n\nAdam A. Chamberlain\n\n100%\n\n40%\n\n50%\n\n10%\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n42\n\nEstablishment of 2025 Targets and Actual Cash Payouts\n\nWe believe using metrics that promote high performance and profitable growth are critical. These performance criteria are\n\napproved annually by the Compensation Committee and are designed to reward both short-term and long-term value creation,\n\nsupport growth in profitability, and increase share value. Management provides the Compensation Committee with a quarterly\n\nreview of the short-term incentive plan attainment pacing. If we do not achieve threshold performance, then no short-term\n\nincentive is earned or paid. The Compensation Committee has discretion to reduce awards under the short-term incentive plan.\n\nFor 2025, our relative financial metrics and corporate responsibility and strategy goals and attainment were as follows:\n\n•Relative Financial Metrics: 90% of our short-term incentive plan payouts depended on our financial performance\n\nrelative to our compensation Peer Group. Specifically, 40% of the plan was based on our revenue growth rank, and\n\n50% was based on our net income growth rank, as shown below.\n\nRevenue Growth\n\nRank\n\nAttainment\n\nPercentage\n\nNet Income\n\nGrowth Rank\n\nAttainment\n\nPercentage\n\n1st to 5th\n\n200%\n\n1st to 5th\n\n200%\n\n6th\n\n180%\n\n6th\n\n180%\n\n7th\n\n160%\n\n7th\n\n160%\n\n8th\n\n140%\n\n8th\n\n140%\n\n9th\n\n120%\n\n9th\n\n120%\n\n10th\n\n100%\n\n10th\n\n100%\n\n11th\n\n100%\n\n11th\n\n100%\n\n12th\n\n80%\n\n12th\n\n80%\n\n13th\n\n70%\n\n13th\n\n70%\n\n14th\n\n60%\n\n14th\n\n60%\n\n15th\n\n50%\n\n15th\n\n50%\n\n16th to 20th\n\n0%\n\n16th to 20th\n\n0%\n\n*Our and peers' growth under both metrics is measured as the sum of that applicable metric for the four quarters reported prior to December\n\n15, 2025, divided by the sum of the same metric for the immediately preceding four quarters.\n\nIn 2025, relative financial metric results and corresponding payout percentages relative to target were as follows:\n\n2025 Short-Term Incentive Plan - Relative Financial Metrics\n\nWeighting\n\nPerformance Metric\n\nAttainment\n\nRelative Revenue Growth\n\nPeer Rank\n\n3rd\n\nPayout\n\n200%\n\nRelative Net Income Growth\n\nPeer Rank\n\n3rd\n\nPayout\n\n200%\n\n40%\n\n50%\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n43\n\nCorporate Responsibility and Strategy Objectives: We believe a small portion of our short-term incentive should be based on\n\nnon-financial goals. Therefore, 10% of our 2025 short-term incentive plan was based on progress toward our consumer optionality,\n\nsustainability, and corporate responsibility goals, which supplement our financial goals. These goals are rigorous and intended to\n\nfocus management on advancing our initiatives described in the [Corporate Responsibility](#ic4b68f9df5f645149bb3535a26afa3af_94) section of this proxy statement, above.\n\nEach year, management presents the extent to which these objectives are accomplished to the Compensation Committee for review\n\nand approval. Payout percentages are as follows:\n\nObjectives\n\n% of Payout\n\nSignificantly Above Target\n\n200%\n\nAbove Target\n\n150%\n\nTarget\n\n100%\n\nBelow Target\n\n50%\n\nWe successfully executed on our corporate responsibility objectives this year, as shown below. Accordingly, these results, as\n\napproved, warranted a payout of this 10% portion of each executive’s 2025 short-term incentive plan award at 140% based on\n\nachievement of our goals, including the following. Based on overall attainment, this non-financial component of the short-term\n\nincentive accounted for 7.2% of payouts.\n\nConsumer Optionality\n\nSustainability and Corporate Responsibility\n\n•Driveway Finance Corporation (DFC) achieved 14.5%\n\npenetration rate in 2025 (up from 11.6% in 2024).\n\n•Expanded and successfully migrated Driveway Finance\n\ncustomers to myDriveway portal.\n\n•Grew Driveway.com customer scores, digital retail\n\nprocesses and post-sale support driving an increase in\n\npurchase commitments and purchases of 68% and 101%\n\nyear over year, respectively. \n\n•Expanded GreenCars partner stores by over 25% to 298\n\nstores, achieved newsletter subscribers of 40,144, and\n\nhosted over 30 in-person GreenCar events.\n\n•Ecosystem profitability, including attributed net profits,\n\nreached breakeven in 2025 and is now positive compared to\n\na net loss in 2024.\n\n•Grew sustainable vehicle sales to 26% of total retail vehicles in North\n\nAmerica from 21% in 2024, and grew mix of value auto sales from 22.8%\n\nof used retail vehicle sales to 25.9%.\n\n•Started or completed energy efficiency projects scheduled to deliver over 3\n\nmillion kWh in annual savings, a 76% increase over 2024.\n\n•Awarded the Environment Impact Award by the Portland Business Journal\n\nfor our company’s work on Earth Day to organize a statewide trash\n\ncleanup across Oregon.\n\n•Roseville Toyota recognized as the #1 retailer of Toyota battery electric\n\nvehicles in the nation.\n\n•Over $100,000 raised across the country for Special Olympics in 2025\n\nfollowing a nationwide campaign with record attendance.\n\n•Over 300 Automotive students attended a Lithia educational workshop this\n\nyear that heavily emphasized EV technology. \n\n•Lithia 4 Kids giving increased over 50% year over a year to $463,000.\n\n2025 Actual Bonus\n\nBased on 2025 attainment of these goals, the 2025 short-term incentive plan payouts were as follow. As Mr. Chamberlain resigned\n\nfrom his employment effective June 1, 2025, he did not receive any payout on his 2025 short-term incentive. Mr. Glandon's 2025\n\nshort-term incentive plan target is calculated as a percentage of his yearly salary in effect prior to his transition to senior advisor.\n\nNamed Executive Officers\n\nTarget Short-Term Incentive\n\nPlan as % of Base Salary\n\nActual 2025 Payout as % of\n\nTarget\n\nActual 2025 Payout ($)\n\nBryan B. DeBoer\n\n150%\n\n194.0%\n\n$3,783,000\n\nTina H. Miller\n\n87%\n\n194.0%\n\n$1,261,000\n\nDavid G. Stork\n\n64%\n\n194.0%\n\n$620,800\n\nGary M. Glandon\n\n67%\n\n194.0%\n\n$776,000\n\nGeorge N. Hines\n\n69%\n\n194.0%\n\n$853,600\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n44\n\nLong-Term Incentive Plan\n\nWe issue awards under our long-term incentive plan primarily in the form of PSUs, with a service-based RSU component. We\n\nbelieve this PSU and RSU mix better aligns our executive team with our shareholders compared to a stock option-based plan\n\nbecause PSUs are directly tied to performance outcomes and both PSUs and RSUs experience the upside as well as the downside\n\nof stock price changes. This structure rewards employees if they achieve financial performance that exceeds our peers and drives\n\nour stock price upward.\n\nThe amounts of unvested equity for each of our executive officers, as seen in our\n\nPay Versus Performance table, are designed to create strong shareholder alignment and\n\nappropriate holding power to support our employee retention and stock ownership goals.\n\nHow our 2025 Long-Term Incentive Plan Works\n\n25%\n\nIn 2025, the Compensation Committee approved long-term incentive awards for our executives\n\n2025\n\nLTI Target\n\nValue Split\n\nconsisting of PSUs and RSUs, as set forth in the table below. The Compensation Committee\n\napproved the PSUs and RSUs awarded to NEOs and other key employees after considering,\n\namong other things, peer comparisons, absolute and relative Company financial performance\n\n75%\n\nand total shareholder return, awards granted in prior years, the percentage of total\n\ncompensation and targets determined based upon the Board approved business plan, and the\n\nrecommendation of our independent compensation consultant.\n\nPSUs (3yr performance period)\n\nRSUs (annual service-vesting over 3yrs)\n\nNamed Executive Officer\n\n2025 Target PSU Value ($)\n\n2025 Target RSU Value ($)\n\n2025 Target Total LTI Value ($)\n\nBryan B. DeBoer\n\n8,062,500\n\n2,687,500\n\n10,750,000\n\nTina H. Miller\n\n1,552,500\n\n517,500\n\n2,070,000\n\nDavid G. Stork\n\n465,000\n\n155,000\n\n620,000\n\nGary M. Glandon\n\n510,000\n\n170,000\n\n680,000\n\nGeorge N. Hines\n\n772,500\n\n257,500\n\n1,030,000\n\nAdam A. Chamberlain\n\n1,612,500\n\n537,500\n\n2,150,000\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n45\n\n2025 PSU Design Overview\n\n•3-Year Performance Period: 2025-2027\n\n•Metric:\n\n◦Relative Revenue Growth (40%)\n\n◦Relative EPS Growth (60%)\n\n◦Relative TSR modifier (up to +/- 35%)\n\n•Incentive: drive high-quality and profitable revenue and stock performance over 3-years relative to our peers.\n\n2025 PSU Payout Formula:\n\nThe 2025 PSUs use a 3-year performance period that ends on December 31, 2027 and will pay out in 2028 to the extent the\n\nCompensation Committee certifies attainment based on the following formula. These goals are consistent with the goals for our\n\n2024 PSUs.\n\n[ (Relative Revenue Attainment * 40%) + (Relative EPS Growth Attainment * 60%) ] * Relative TSR Modifier\n\nRelative Revenue Growth:\n\nAttainment under the revenue growth\n\ncomponent of our PSUs is based on our\n\nrevenue growth performance over 3 years\n\nranked against our compensation Peer\n\nGroup, as shown below:\n\nRelative EPS Growth:\n\nAttainment under the EPS growth\n\ncomponent of our PSUs is based on\n\nour EPS growth performance over 3-\n\nyears ranked against our\n\ncompensation Peer Group, as shown\n\nbelow:\n\nTSR Modifier\n\nThe attainment percentage determined\n\nby our relative revenue growth and\n\nrelative EPS growth is then multiplied by\n\nan adjustment factor determined by our\n\n3-year TSR ranking relative to our\n\ncompensation Peer Group, as follows:\n\nRevenue Growth(1)\n\nRank\n\nAttainment\n\nPercentage\n\nEPS Growth(1)\n\nRank\n\nAdjustment\n\nFactor\n\nTSR Growth(2)\n\nRank\n\nModification\n\nFactor\n\n1st to 5th\n\n195%\n\n1st to 5th\n\n195%\n\n1st to 5th\n\n1 .35\n\n6th\n\n175%\n\n6th\n\n175%\n\n6th\n\n1 .30\n\n7th\n\n160%\n\n7th\n\n160%\n\n7th\n\n1 .25\n\n8th\n\n140%\n\n8th\n\n140%\n\n8th\n\n1 .15\n\n9th\n\n120%\n\n9th\n\n120%\n\n9th\n\n1 .10\n\n10th\n\n100%\n\n10th\n\n100%\n\n10th\n\n1 .0\n\n11th\n\n100%\n\n11th\n\n100%\n\n11th\n\n1 .0\n\n12th\n\n90%\n\n12th\n\n90%\n\n12th\n\n0 .90\n\n13th\n\n85%\n\n13th\n\n85%\n\n13th\n\n0 .85\n\n14th\n\n75%\n\n14th\n\n75%\n\n14th\n\n0 .75\n\n15th\n\n50%\n\n15th\n\n50%\n\n15th\n\n0 .70\n\n16th to 20th\n\n0%\n\n16th to 20th\n\n0%\n\n16th to 20th\n\n0 .65\n\n(1)\n\nOur and our peer's relative revenue and EPS growth rank is determined based on such companies' 3-year annual growth average for the given metric. This average is\n\ndetermined by averaging a company’s growth rate for the applicable metric for each of the three successive 4-quarter periods reported before December 15, 2027. For this\n\npurpose, the applicable metric’s growth rate is the sum of that applicable metric for a given four quarter period, divided by the sum of the same metric for the immediately\n\npreceding four quarter period.\n\n(2)\n\nTSR is calculated based on the change in the 20-day average closing price from January 1, 2025 to December 31, 2027 and assuming dividend reinvestment.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n46\n\n2023 PSU Design Overview and Payout\n\n•3-Year Performance Period: 2023-2025\n\n•Performance:\n\n•Attainment:\n\n•Metric:\n\n•Relative Revenue Growth\n\n2nd Among Peers\n\n175%\n\n•Modifier: Relative TSR  (up to +/- 25%)\n\n6th Among Peers\n\nPayout increased 20%\n\n•Modifier: Operating Margin (set max/min payout)\n\n4.80%\n\nNo Adjustment\n\nTotal Attainment:\n\n210%\n\n2023 PSU Payout:\n\nIn 2023, we awarded PSUs with a 3-year performance period that ended December 31, 2025 and vested based on our relative\n\nrevenue growth over the performance period, with a relative TSR modifier that could increase or decrease payouts by up to 25%\n\nand an operating margin governor that set the upper and lower limits of attainment. Following the completion of this 3-year\n\nperformance period, the Compensation Committee certified the financial results and payouts for the 2023 PSUs in January 2026\n\nat 210% of target, based on the following performance formula and goals.\n\n(Relative Revenue Growth * Relative TSR Modifier) adjusted by an Operating Margin Governor\n\nRelative Revenue Growth:\n\nAttainment under the revenue growth\n\ncomponent of our 2023 PSUs was\n\nbased on our revenue growth over 3\n\nyears ranked against our compensation\n\nPeer Group, as shown below:\n\nTSR Modifier\n\nThe attainment percentage determined\n\nby our relative revenue growth was then\n\nmultiplied by an adjustment factor\n\ndetermined by our 3-year TSR ranking\n\nrelative to our compensation Peer\n\nGroup, as follows:\n\nOperating Margin Governor\n\nFinally, the payout determined via\n\nmultiplying our revenue growth\n\nattainment by our TSR adjustment\n\nfactor is subject to a maximum and\n\nminimum set by our 3-year operating\n\nmargin, as shown below:\n\nRevenue Growth(1)\n\nRank\n\nAttainment\n\nPercentage\n\nTSR(2) Modifier\n\nAdjustment Factor\n\nOperating Margin\n\nAttainment Range\n\nMin\n\nMax\n\n1st to 5th\n\n175%\n\n1st to 5th\n\n1.25\n\n>4.50%\n\n60%\n\n218.8%\n\n6th\n\n160%\n\n6th\n\n1.20\n\n4.0% to 4.5%\n\n50%\n\n200%\n\n7th\n\n145%\n\n7th\n\n1.15\n\n3.5% to <4.0%\n\n40%\n\n175%\n\n8th\n\n130%\n\n8th\n\n1.10\n\n3.0% to <3.5%\n\n30%\n\n150%\n\n9th\n\n115%\n\n9th\n\n1.05\n\n2.0% to <3.0%\n\n20%\n\n125%\n\n10th\n\n100%\n\n10th\n\n1.00\n\n<2.0%\n\n0%\n\n125%\n\n11th\n\n100%\n\n11th\n\n1.00\n\n12th\n\n80%\n\n12th\n\n0.95\n\n13th\n\n70%\n\n13th\n\n0.90\n\n14th\n\n60%\n\n14th\n\n0.85\n\n15th\n\n50%\n\n15th\n\n0.80\n\n16th to 20th\n\n0%\n\n16th to 20th\n\n0.75\n\nActual Rank\n\nAttainment\n\nActual Rank\n\nAdjustment Factor\n\nActual Result\n\nPayout Adjustment \n\n2nd\n\n175%\n\n6th\n\n1.20\n\n4.80%\n\nNone\n\n(1)\n\nOur and our peers' relative revenue growth rank is determined by ranking the average quarterly revenue growth rate. This average is determined by averaging each company’s\n\ngrowth rate for the applicable metric for each of the 12 successive 4-quarter periods reported before December 15, 2025. For this purpose, the revenue growth rate is the revenue\n\nresult for a given quarter divided by the revenue result for the corresponding quarter from the prior year.\n\n(2)\n\nTSR is calculated based on the change in the 30-day average closing price from January 1, 2023 to December 31, 2025 and assuming dividend reinvestment.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n47\n\nPerquisites\n\nConsistent with our pay-for-performance compensation philosophy, we believe perquisites for executive officers should be limited in\n\nscope and value, and should only be offered when they provide necessities or conveniences that allow our executive officers to\n\nfocus on and optimally perform in their role with Lithia. Accordingly, we provided our NEOs with insurance premiums for long-term\n\ncare assistance, long-term disability and life and accidental death and dismemberment on their behalf.\n\nIn 2025, following increased public awareness of CEO safety and to facilitate business efficiency, our Compensation Committee\n\nadopted a responsible aircraft policy that allows the CEO and the other employees approved by the Compensation Committee and\n\nthe CEO to use our corporate aircraft arrangements for personal travel up to a shared maximum of 30 hours beginning in 2025. The\n\nCEO or such employees were required to reimburse for the incremental cost of their flights to the extent all such costs for employee\n\npersonal flights in 2025 exceed $120,000 (which was below the median for comparable policies in the S&P 500). This cap is set\n\nannually at the discretion of the Compensation Committee. Executives were also permitted to be accompanied by their spouses\n\nwhen using our corporate aircraft arrangements for business travel. Executives must reimburse the Company for the incremental\n\ncost of their spouses' travel. For 2025, the incremental cost of our CEO's personal flights was $62,673.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n48\n\nCompensation Decision Making Process\n\nThe Compensation Committee begins its process of deciding how to compensate Lithia’s named executive officers by considering\n\nthe competitive market data provided by its independent compensation consultant and the Human Resources department.\n\nCompetitive market data consists of peer group and pay information from surveys collected by our compensation consultant\n\n(e.g., where there may be little data for a role amongst our peers).\n\nPeer Group and Benchmarking\n\nIn July of 2024, as part of the annual assessment of the peer group used for setting compensation, the Compensation Committee\n\nagain asked Pay Governance to review the Company’s peer group for appropriateness. Pay Governance reviewed our peer group,\n\ntaking into account the following criteria:\n\nPeer Group Criteria\n\n•Are broadly representative of Lithia’s key characteristics (e.g., size, profitability, retail, and direct-to-consumer\n\nmodels),\n\n•Operate in Lithia’s labor market for executive and director talent, and\n\n•When reviewed in the aggregate, have a Peer Group median revenue, market capitalization, and pre-tax profit that is\n\nclose to Lithia’s size and scope.\n\nWith these factors in mind, Pay Governance continued to recommend that our peer group include auto, specialty and broader\n\nretail companies given the limited number of direct auto retail competitors and the fact that we sell automotive related products and\n\nservices. After reviewing Pay Governance’s analysis, and given the multifaceted nature of our customers’ retail experience, which\n\nis akin to other retail industries, the Compensation Committee continued the use of the 2024 peer group for 2025 compensation\n\ndecisions, as shown below. We believe this peer group continues to reflect the competitive market for talent and performance,\n\nparticularly given our goal to operate as a premier retailer both within and beyond the automotive retail space.\n\nSymbol\n\nCompany Name\n\nSymbol\n\nCompany Name\n\nAAP\n\nAdvance Auto Parts, Inc.\n\nLKQ\n\nLKQ Corporation\n\nABG\n\nAsbury Automotive Group, Inc.\n\nLOW\n\nLowes Companies, Inc.\n\nAN\n\nAutonation, Inc.\n\nORLY\n\nO'Reilly Automotive, Inc.\n\nAZO\n\nAutoZone, Inc.\n\nPAG\n\nPenske Automotive Group, Inc.\n\nBBY\n\nBest Buy Co., Inc.\n\nSAH\n\nSonic Automotive, Inc.\n\nKMX\n\nCarMax, Inc.\n\nSYY\n\nSysco Corporation\n\nDG\n\nDollar General Corporation\n\nGAP\n\nThe Gap, Inc.\n\nDLTR\n\nDollar Tree, Inc.\n\nTJX\n\nThe TJX Companies, Inc.\n\nGPC\n\nGenuine Parts Company\n\nTSCO\n\nTractor Supply Company\n\nGPI\n\nGroup 1 Automotive, Inc.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n49\n\nHow We Use the Peer Group\n\nThe positions of our named executive officers were compared to their counterpart positions in our Peer Group, and the\n\ncompensation levels for comparable positions in the Peer Group were examined for guidance in determining:\n\n•base salaries;\n\n•cash awards under our short-term incentive plan; and\n\n•the amount and mix of equity awards under our long-term incentive plan.\n\nThe Compensation Committee approves base salaries, short-term incentive plan awards and long-term incentive awards on a case-\n\nby-case basis for each named executive officer, taking into account, among other things, individual and company performance, role\n\nexpertise and experience and the competitive market, advancement potential, recruiting needs, internal equity, retention\n\nrequirements, unrealized equity gains, succession planning, and best compensation governance practices.\n\nThe Compensation Committee does not tie individual compensation to specific target percentiles.\n\nHow the Compensation Committee Makes Decisions and Policies\n\nThe Compensation Committee has the final responsibility to approve all matters of compensation and benefits for executive officers,\n\nand from time to time it seeks input and recommendations from the CEO and the Human Resources department. The Compensation\n\nCommittee also meets privately with its independent compensation consultant, and considers the Board’s input and advice, when\n\nestablishing the CEO’s compensation. Our independent compensation consultant has worked directly with and on behalf of the\n\nCompensation Committee to assist the Compensation Committee in satisfying its responsibilities; and does not undertake projects\n\nfor management, except with the approval of the Compensation Committee chair. The Compensation Committee reports to the\n\nBoard on the major items covered at each Compensation Committee meeting.\n\nThe Compensation Committee assessed the independence of its compensation consultant during 2025 and believes that there are\n\nno conflicts of interest. In reaching this conclusion, the Compensation Committee considered applicable SEC rules and regulations\n\nand the corresponding NYSE independence factors regarding compensation advisor independence.\n\nIn determining executive compensation, the Compensation Committee also considers, among other factors, the possible tax\n\nconsequences to Lithia and to its executives.\n\nThe Compensation Committee may consider the accounting consequences to Lithia of different compensation decisions and the\n\nimpact on shareholder dilution. However, neither of these factors by themselves will compel particular compensation decisions.\n\nThe Compensation Committee annually grants equity-based long-term incentive awards to executive officers after the close of the\n\nprior year and the review and evaluation of each executive officer’s performance. The Compensation Committee’s policy is to\n\ngenerally grant long-term incentive awards only during open trading windows and to establish grant dates in advance, generally\n\nestablishing those dates near the beginning of each fiscal year.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n50\n\nExecutive Compensation Governance Components\n\nStock Ownership Guidelines\n\nNEOs and non-NEO Vice Presidents are expected to own and maintain shares of our\n\ncommon stock having a market value equal to a multiple of their annual base cash\n\nsalary, as indicated in the table to the left, within seven years of service in their position.\n\nOur stock ownership policy more closely aligns the interests of our NEOs with the\n\ninterests of our shareholders and exposes our NEOs to downside equity performance\n\nrisk. In determining compliance with the policy, share ownership includes RSUs subject\n\nto time-vesting, but does not include our PSUs, which incorporate a 3-year performance\n\nperiod, until the performance conditions have been met. As of December 31, 2025, all of\n\nour executive officers exceeded the applicable minimum stock ownership requirements.\n\nPosition\n\nMultiple of\n\nSalary\n\nYears of\n\nService\n\nCEO\n\n5\n\n7\n\nEVP\n\n3\n\n7\n\nSVP\n\n2\n\n7\n\nVP\n\n1\n\n7\n\nRecoupment (or “Clawback”) Policies\n\nOur Compensation Committee has adopted two clawback policies applicable to performance-based compensation, including awards\n\nunder our short-term and long-term incentive plans. Our Dodd-Frank Compensation Recoupment Policy complies with the SEC and\n\nNYSE required clawback rules and requires that the Compensation Committee, subject to certain exceptions permitted under those\n\nrules, recoup certain types of excess incentive-based compensation received by current and former executive officers in the event of\n\na financial restatement. Our Dodd-Frank Compensation Recoupment Policy became effective October 2, 2023 and applies to our\n\nperformance-based cash and equity incentive compensation received on and after that date. This policy was attached as an exhibit\n\nto our most recently filed Annual Report on Form 10-K.\n\nIn addition, under our recoupment policy originally adopted in 2022, the Compensation Committee, if it determines appropriate and\n\nsubject to applicable laws, may seek reimbursement from executive officers of:\n\n•Cash paid to executive officers under our short-term incentive plan to the degree overpaid based on the restated financial\n\nresults; and\n\n•The incremental shares of our common stock settled for any RSUs in excess of the shares of our common stock that would\n\nhave been settled for such RSUs based on the restated financial results, or the value of such incremental shares to the extent\n\nan executive officer sells any incremental shares.\n\nIn the event the Compensation Committee reasonably determines that an executive engaged in misconduct that resulted in\n\nreputational harm to Lithia, this clawback policy also enables the Compensation Committee, if it determines appropriate and subject\n\nto applicable laws, to seek reimbursement from such executive officers of:\n\n•All or a portion of cash paid to such executive officers under our short-term incentive plan; and\n\n•Return any shares acquired by the executive pursuant to a stock award (including time-based awards).\n\nAnti-Hedging and Pledging Policy\n\nOur insider trading policy for all employees and our stock ownership policy for executive officers specify that they may not (1)\n\nengage in hedging or monetization transactions, including through the use of financial instruments such as prepaid variable\n\nforwards, equity swaps, collars and exchange funds or (2) hold Company securities in a margin account or otherwise pledge\n\nCompany securities as collateral for a loan, except as specifically approved by the Board.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n05: Compensation Discussion and Analysis (CD&A)\n\n51\n\nCompensation Risk Management\n\nEach year our Compensation Committee reviews whether our compensation policies and practices encourage executives or other\n\nemployees to take unnecessary or unreasonable risks that could threaten the long-term value of the Company, or that are\n\nreasonably likely to have a material adverse effect. The Compensation Committee believes that our practices adequately manage\n\nthis risk because:\n\n•we limit the amount of fixed compensation in the form of base salary based on data from our market survey;\n\n•the primary criteria we use for performance compensation components are measures such as revenue, earnings per share, and\n\nnet income, which we believe are less susceptible to manipulation for short-term gain;\n\n•cash payments are capped under our short-term incentive plan;\n\n•the incentive plans for executive management have the flexibility to put weight on Company-wide or divisional performance\n\nmeasures;\n\n•our short-term incentive plan preserves discretion to permit the Compensation Committee to elect not to pay otherwise achieved\n\namounts for any reason;\n\n•a meaningful component of compensation is long-term incentive plan equity grants with extended vesting periods designed to\n\nensure that our executives value and focus on the Company's long-term performance; and\n\n•NEOs have equity positions in Lithia and are subject to stock ownership policies, which we believe increases their focus on\n\nlong-term shareholder value.\n\nInsider Trading Policy\n\nWe have adopted an insider trading policy and procedures applicable to our directors, officers, and employees, and have\n\nimplemented processes for the Company that we believe are reasonably designed to promote compliance with insider trading laws,\n\nrules, and regulations, and the NYSE listing standards. The Company's insider trading policy applicable to all directors and\n\nemployees prohibits insider trading when the person is aware of material nonpublic information and restricts directors and executive\n\nofficers and certain other employees determined to have potential access to insider information from trading in Company stock\n\nduring predetermined closed periods. In addition, executive officers and directors are required to pre-clear any trades. The foregoing\n\nsummary of our insider trading policy and procedures does not purport to be complete and is qualified by reference insider trading\n\npolicy which was filed as exhibits to our Annual Report on Form 10-K for the year ending December 31, 2025.\n\nCompensation Committee Interlocks & Insider Participation\n\nThe following directors served on the Compensation Committee during 2025: Shauna McIntyre, James Lentz, Cassandra McKinney,\n\nLouis Miramontes, and, prior to his departure from our Board at the 2025 Annual Shareholder Meeting, David Robino, none of whom\n\nwas a Company officer or employee during 2025 or was formerly a Company officer or had any relationship with the Company\n\nrequiring disclosure under Item 404 of Regulation S-K. During 2025, none of our executive officers served as a member of a board of\n\ndirectors or as a member of a compensation committee of any entity that has one or more executive officers serving as a member on\n\nour Board or any committee of our Board.\n\nCompensation Committee Report\n\nThe Compensation Committee has reviewed and discussed the \"Compensation Discussion and Analysis,\" included elsewhere in this\n\nproxy statement, with management, and, based on such review and discussions, the Compensation Committee recommended to the\n\nBoard that the \"Compensation Discussion and Analysis\" be included in this proxy statement and incorporated by reference in Lithia's\n\nAnnual Report on Form 10-K.\n\nSubmitted by the Compensation Committee of the Board of Directors:\n\nShauna F. McIntyre (Chair)\n\nJames E. Lentz\n\nCassandra M. McKinney\n\nLouis P. Miramontes\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n52\n\n06\n\nCompensation Tables\n\nSummary Compensation Table\n\nThe following table provides certain information concerning compensation for each of our 2025 NEOs.\n\nName and\n\nPrincipal Position\n\nYear\n\nSalary\n\nStock\n\nAwards(1)\n\nNon-Equity\n\nIncentive Plan\n\nCompensation\n\nChange in Pension\n\nValue and\n\nNonqualified\n\nDeferred\n\nCompensation\n\nEarnings(2)\n\nAll Other\n\nCompensation\n\n(4)\n\nTotal\n\nBryan B. DeBoer\n\nPresident and Chief\n\nExecutive Officer\n\n2025\n\n$1,300,000\n\n$10,736,203\n\n$3,783,000\n\n$6,256\n\n$70,009\n\n$15,895,468\n\n2024\n\n$1,300,000\n\n$12,953,359\n\n$2,535,000\n\n$—\n\n$7,342\n\n$16,795,702\n\n2023\n\n$1,250,000\n\n$15,312,692\n\n$2,666,040\n\n$—\n\n$7,258\n\n$19,235,990\n\nTina H. Miller\n\nSenior Vice President and\n\nChief Financial Officer\n\n2025\n\n$750,000\n\n$2,067,669\n\n$1,261,000\n\n$939\n\n$76,793\n\n$4,156,401\n\n2024\n\n$750,000\n\n$2,410,122\n\n$845,000\n\n$—\n\n$76,798\n\n$4,081,920\n\n2023\n\n$525,000\n\n$2,564,125\n\n$875,008\n\n$—\n\n$56,714\n\n$4,020,847\n\nDavid G. Stork (3)\n\nSenior Vice President and Chief\n\nAdministrative Officer\n\n2025\n\n$500,000\n\n$619,514\n\n$620,800\n\n$13\n\n$9,509\n\n$1,749,836\n\nGary M. Glandon (3)\n\nSenior Advisor\n\n2025\n\n$537,500\n\n$679,479\n\n$776,000\n\n$—\n\n$10,770\n\n$2,003,749\n\nGeorge N. Hines (3)\n\nFormer Senior Vice President and\n\nChief Innovation and Technology\n\nOfficer\n\n2025\n\n$640,000\n\n$1,028,841\n\n$853,600\n\n$665\n\n$57,994\n\n$2,581,100\n\n2024\n\n$640,000\n\n$1,205,061\n\n$572,000\n\n$—\n\n$57,999\n\n$2,475,060\n\n2023\n\n$600,000\n\n$1,353,357\n\n$546,880\n\n$—\n\n$57,915\n\n$2,558,152\n\nAdam A. Chamberlain (3)\n\nFormer Executive Vice President\n\nand Chief Operating Officer\n\n2025\n\n$343,750\n\n$2,147,608\n\n$—\n\n$97\n\n$81,645\n\n$2,573,100\n\n2024\n\n$662,500\n\n$1,548,518\n\n$975,000\n\n$—\n\n$83,237\n\n$3,269,255\n\n(1) \n\nThese amounts reflect the grant date fair value for performance and time-vesting RSUs granted in the year, computed in accordance with FASB ASC Topic 718\n\nand excluding any estimated forfeitures. These amounts are not paid to or realized by the executive. If the maximum level of performance were to be achieved\n\nfor the awards granted in 2025, the grant date value for those awards would be $24,078,654 for Mr. DeBoer, $4,637,180 for Ms. Miller, $1,389,141 for Mr. Stork,\n\n$1,523,922 for Mr. Glandon, $2,307,464 for Mr. Hines, and $4,944,174 for Mr. Chamberlain. The fair value of the PSUs was calculated using a Monte Carlo\n\nsimulation model, assuming (i) a volatility of 40.45%, (ii) remaining performance period of 2.99 years, (iii) a risk-free interest rate of 4.2%, and (iv) a dividend\n\nyield of 0.61%. For the PSUs, the attainment levels used in the calculation of the grant date fair value was based on the probable outcomes at the time of grant.\n\nFor a more detailed discussion of the assumptions used to determine the grant date fair values and other related information, see Notes 1 and 14 of Notes to\n\nConsolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.\n\n(2) \n\nThese amounts represent the above-market earnings, if any, for cash deferrals to our Executive Management Non-Qualified Deferred Compensation and SERP.\n\nThe methodology for determining what constitutes above-market earnings is the difference between the interest rate as determined by the Compensation\n\nCommittee for that plan year and 120% of the applicable federal long-term rate. For 2025, the annual interest rate for the Executive Management Non-Qualified\n\nDeferred Compensation and SERP was 5.50%, with monthly compounding.\n\n(3)\n\nMr. Chamberlain was not an executive officer prior to 2024 and resigned effective June 1, 2025. Mr. Stork and Mr. Glandon were not named executive officers\n\nprior to 2025. Mr. Glandon ceased to be an executive officer in connection with his transition to senior advisor effective October 1, 2025. Mr. Hines ceased to be\n\nan executive officer on March 1, 2026 when he transitioned to a non-executive role.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n53\n\n(4)\n\nAll Other Compensation in 2025 consisted of the following:\n\nName\n\n401(k) Match\n\nInsurance Premiums (a)\n\nContributions to Nonqualified\n\nDeferred Compensation Plan\n\nOther (b)\n\nTotal\n\nBryan B. DeBoer\n\n$2,500\n\n$4,837\n\n$—\n\n$62,673\n\n$70,009\n\nTina H. Miller\n\n$2,500\n\n$4,293\n\n$70,000\n\n$—\n\n$76,793\n\nDavid G. Stork\n\n$2,500\n\n$7,009\n\n$—\n\n$—\n\n$9,509\n\nGary M. Glandon\n\n$2,500\n\n$8,270\n\n$—\n\n$—\n\n$10,770\n\nGeorge N. Hines\n\n$2,500\n\n$5,494\n\n$50,000\n\n$—\n\n$57,994\n\nAdam A. Chamberlain\n\n$2,500\n\n$4,145\n\n$75,000\n\n$—\n\n$81,645\n\n(a) \n\nInsurance premiums include amounts paid by us on behalf of the executive for short-term disability insurance, long-term disability insurance, long term care\n\ninsurance and life insurance policies.\n\n(b)\n\nRepresents the incremental cost for named executive officers who were permitted to use our corporate aircraft arrangements for non-business travel. Such\n\nusage is subject to availability and the executive's agreement to reimburse the Company for the incremental cost of each flight above an annual usage limit.\n\nOur aircraft usage policy is discussed in greater detail in the [Perquisites](#i431b36b409404887bb1b8c5e327285fa_4005) section of the Compensation Discussion and Analysis, above. Incremental cost for\n\nthis purpose is generally the cost incurred by the Company for the executive's travel under the Company's corporate aircraft service.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n54\n\nGrants of Plan-Based Awards Table for 2025\n\n \n\n \n\n \n\nEstimated Future Payouts Under\n\nNon-Equity Incentive Plan Awards\n\nEstimated Future Payouts Under\n\nEquity Incentive Plan Awards\n\n(# of shares)\n\nGrant Date\n\nFair Value\n\nof Stock\n\nand Option\n\nAwards\n\n($)(4)\n\nName\n\nCommittee\n\nApproval\n\nGrant Date\n\nThreshold\n\n($)\n\nTarget\n\n($)\n\nMaximum\n\n($)\n\nThreshold\n\n(#)\n\nTarget\n\n(#)\n\nMaximum\n\n(#)\n\nBryan B.\n\nDeBoer\n\n2025 STIP\n\n(3)\n\n975,000\n\n1,950,000\n\n3,900,000\n\n—\n\n2025 PSU\n\n11/19/2024\n\n01/02/2025\n\n(1)\n\n—\n\n—\n\n—\n\n10,879\n\n21,757\n\n57,276\n\n8,173,017\n\n2025 RSU\n\n11/19/2024\n\n01/02/2025\n\n(2)\n\n—\n\n—\n\n—\n\n—\n\n7,253\n\n—\n\n2,563,186\n\nTina H.\n\nMiller\n\n2025 STIP\n\n(3)\n\n325,000\n\n650,000\n\n1,300,000\n\n—\n\n2025 PSU\n\n11/19/2024\n\n01/02/2025\n\n(1)\n\n—\n\n—\n\n—\n\n2,095\n\n4,190\n\n11,031\n\n1,573,974\n\n2025 RSU\n\n11/19/2024\n\n01/02/2025\n\n(2)\n\n—\n\n—\n\n—\n\n—\n\n1,397\n\n—\n\n493,695\n\nDavid G.\n\nStork\n\n2025 STIP\n\n(3)\n\n160,000\n\n320,000\n\n640,000\n\n2025 PSU\n\n11/19/2024\n\n01/02/2025\n\n(1)\n\n—\n\n—\n\n—\n\n628\n\n1,255\n\n3,304\n\n471,441\n\n2025 RSU\n\n11/19/2024\n\n01/02/2025\n\n(2)\n\n—\n\n—\n\n—\n\n—\n\n419\n\n—\n\n148,073\n\nGary M.\n\nGlandon\n\n2025 STIP\n\n(3)\n\n200,000\n\n400,000\n\n800,000\n\n2025 PSU\n\n11/19/2024\n\n01/02/2025\n\n(1)\n\n—\n\n—\n\n—\n\n689\n\n1,377\n\n3,625\n\n517,270\n\n2025 RSU\n\n11/19/2024\n\n01/02/2025\n\n(2)\n\n—\n\n—\n\n—\n\n—\n\n459\n\n—\n\n162,209\n\nGeorge N.\n\nHines\n\n2025 STIP\n\n(3)\n\n220,000\n\n440,000\n\n880,000\n\n2025 PSU\n\n11/19/2024\n\n01/02/2025\n\n(1)\n\n—\n\n—\n\n—\n\n1,043\n\n2,085\n\n5,489\n\n783,230\n\n2025 RSU\n\n11/19/2024\n\n01/02/2025\n\n(2)\n\n—\n\n—\n\n—\n\n—\n\n695\n\n—\n\n245,611\n\nAdam A.\n\nChamberlain\n\n2025 STIP\n\n(3)\n\n375,000\n\n750,000\n\n1,500,000\n\n—\n\n2025 PSU\n\n11/19/2024\n\n01/02/2025\n\n(5)\n\n—\n\n—\n\n—\n\n2,176\n\n4,352\n\n11,457\n\n1,634,829\n\n2025 RSU\n\n11/19/2024\n\n01/02/2025\n\n(6)\n\n—\n\n—\n\n—\n\n—\n\n1,451\n\n—\n\n512,779\n\n(1) \n\nThese amounts reflect PSUs which are earned based on our relative revenue growth and relative EPS growth, with a TSR modifier, the material terms of which\n\nare further described under “Compensation Discussion and Analysis – 2025 Compensation Program Design & Result - Long-Term Incentive Plan” above.\n\n(2) \n\nThese amounts reflect time-based RSUs which vest in three equal annual installments over three years.\n\n(3)\n\nThe values reflect the threshold, target, and maximum amounts payable under our Short-Term Incentive Plan for the 2025 performance year, as further\n\ndescribed in the discussion under \"[Short-Term Incentive Plan](#ic4b68f9df5f645149bb3535a26afa3af_127)” section of the Compensation Discussion and Analysis, above. The actual amount paid for 2025 is\n\nincluded in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.\n\n(4)\n\nThese amounts reflect the grant date fair value for awards granted under the 2013 Amended and Restated Stock Incentive Plan. The grant date fair value is\n\ncomputed in accordance with FASB ASC Topic 718 for PSUs and RSUs granted during the applicable year. The attainment level used to calculate the grant\n\ndate fair value for the performance and time-vesting grants was 100% based on the probable outcome at the time of grant. For a more detailed discussion of\n\nthe assumptions used to determine the grant date fair value and other related information, see footnote 1 to the [Summary Compensation Table](#ic4b68f9df5f645149bb3535a26afa3af_148), above, and\n\nNotes 1 and 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.\n\n(5)\n\nThese amounts reflect PSUs with the same vesting schedule as noted in footnote (1), above. In connection with his resignation effective June 1, 2025, the\n\nCompensation Committee modified this award to permit Mr. Chamberlain to continue to vest with respect to a reduced target number of shares, namely 1,088\n\nshares, subject to continued compliance with certain restrictive covenants.\n\n(6)\n\nThese amounts reflect time-based RSUs with the same vesting schedule as noted in footnote (2). In connection with his resignation effective June 1, 2025, the\n\nCompensation Committee modified this award to permit Mr. Chamberlain to continue to vest with respect to a reduced number of shares, namely 363 shares,\n\nsubject to continued compliance with certain restrictive covenants.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n55\n\nOutstanding Equity Awards at 2025 Fiscal Year-End\n\nThe following table sets forth the outstanding equity awards held by our NEOs as of December 31, 2025:\n\nName\n\nGrant Date\n\nNumber of Shares\n\nor Units of Stock\n\nThat Have Not\n\nVested (#)(1)\n\nMarket Value\n\nof Shares or\n\nUnits of Stock\n\nThat Have Not\n\nVested ($)(2)\n\nEquity Incentive Plan\n\nAwards: Number of\n\nUnearned Shares,\n\nUnits\n\nor Other Rights That\n\nHave Not Vested (#)(3)\n\nEquity Incentive Plan\n\nAwards: Market or\n\nPayout Value of\n\nUnearned Shares, Units\n\nor Other Rights That\n\nHave Not Vested ($)(2)\n\nBryan B. DeBoer\n\n1/3/2022\n\n8,422\n\n(4)\n\n2,798,883\n\n2/2/2023\n\n4,108\n\n(4)\n\n1,365,212\n\n2/2/2023\n\n76,129\n\n(7)\n\n25,299,951\n\n1/2/2024\n\n6,062\n\n(5)\n\n2,014,584\n\n1/2/2024\n\n71,457\n\n(8)\n\n23,747,305\n\n1/2/2025\n\n7,253\n\n(6)\n\n2,410,389\n\n1/2/2025\n\n57,276\n\n(9)\n\n19,034,533\n\nTina H. Miller\n\n1/3/2022\n\n1,080\n\n(4)\n\n358,916\n\n2/2/2023\n\n688\n\n(4)\n\n228,643\n\n2/2/2023\n\n12,747\n\n(7)\n\n4,236,211\n\n1/2/2024\n\n1,128\n\n(5)\n\n374,868\n\n1/2/2024\n\n13,294\n\n(8)\n\n4,417,995\n\n1/2/2025\n\n1,397\n\n(6)\n\n464,265\n\n1/2/2025\n\n11,030\n\n(9)\n\n3,665,600\n\nDavid G. Stork\n\n1/3/2022\n\n417\n\n(4)\n\n138,582\n\n2/2/2023\n\n209\n\n(4)\n\n69,457\n\n2/2/2023\n\n3,896\n\n(7)\n\n1,294,758\n\n1/2/2024\n\n338\n\n(5)\n\n112,328\n\n1/2/2024\n\n3,988\n\n(8)\n\n1,325,332\n\n1/2/2025\n\n419\n\n(6)\n\n139,246\n\n1/2/2025\n\n3,304\n\n(9)\n\n1,098,018\n\nGary M. Glandon\n\n2/2/2023\n\n209\n\n(4)\n\n69,457\n\n2/2/2023\n\n3,896\n\n(7)\n\n1,294,758\n\n1/2/2024\n\n367\n\n(5)\n\n121,965\n\n1/2/2024\n\n4,323\n\n(8)\n\n1,436,663\n\n1/2/2025\n\n459\n\n(6)\n\n152,539\n\n1/2/2025\n\n3,625\n\n(9)\n\n1,204,696\n\nGeorge N. Hines\n\n1/3/2022\n\n601\n\n(4)\n\n199,730\n\n2/2/2023\n\n362\n\n(4)\n\n120,303\n\n2/2/2023\n\n6,728\n\n(7)\n\n2,235,916\n\n1/2/2024\n\n564\n\n(5)\n\n187,434\n\n1/2/2024\n\n6,647\n\n(8)\n\n2,208,998\n\n1/2/2025\n\n695\n\n(6)\n\n230,969\n\n1/2/2025\n\n5,489\n\n(9)\n\n1,824,159\n\nAdam A. Chamberlain\n\n1/2/2025\n\n363\n\n(6)\n\n120,636\n\n1/2/2025\n\n2,864\n\n(9)\n\n951,793\n\n(1)\n\nAll shares are related to RSUs subject to time-vesting restrictions.\n\n(2)\n\nAssumes a stock price of $332.33, the closing price of our common stock on December 31, 2025.\n\n(3)\n\nAll shares are related to RSUs subject to performance-vesting restrictions.\n\n(4)\n\nVests 100% on January 1, 2026.\n\n(5)\n\nVests 50% on January 1, 2026 and 50% on January 1, 2027.\n\n(6)\n\nVests 33% on January 1, 2026 and 2027 and 34% on January 1, 2028.\n\n(7)\n\nPSUs were earned following the completion of their performance period on December 31, 2025 based on (i) our relative revenue growth (ii) an operating margin governor and (iii) a relative\n\nTSR modifier. The Compensation Committee certified and approved attainment at 210% of target in January of 2026, at which points these shared vested and settled.\n\n(8)\n\nPSUs are earned following the completion of their performance period on December 31, 2026, subject to (i) our relative revenue growth rank (ii) our EPS growth ranking and (iii) a relative\n\nTSR modifier. The number of shares and the value for the PSUs reflects payout at maximum because our performance under the metrics mentioned in the prior sentence for the first two\n\nyears of the three-year performance period exceeded target levels.\n\n(9)\n\nPSUs are earned following the completion of their performance period on December 31, 2027, subject to (i) our relative revenue growth rank (ii) our EPS growth ranking and (iii) a relative\n\nTSR modifier. The number of shares and the value for the PSUs reflects payout at maximum because our performance under the metrics mentioned in the prior sentence for the first year of\n\nthe three-year performance period exceeded target levels.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n56\n\nStock Vested for 2025\n\nThe following table summarizes shares acquired on vesting of stock unit awards during 2025 for each NEO:\n\n \n\nStock Awards\n\nName\n\nNumber of Shares Acquired on Vesting (#)\n\nValue Realized on Vesting ($) (1)\n\nBryan B. DeBoer\n\n25,995\n\n9,291,393\n\nTina H. Miller\n\n3,326\n\n1,188,812\n\nDavid G. Stork\n\n1,145\n\n409,257\n\nGary M. Glandon\n\n648\n\n231,615\n\nGeorge N. Hines\n\n1,894\n\n676,972\n\nAdam A. Chamberlain\n\n608\n\n217,317\n\n(1) Equals the value of the shares acquired based on the closing price of our common stock on the vesting date.\n\nNon-Qualified Deferred Compensation\n\nThe table below reflects the contributions, earnings, withdrawals and distributions during 2025 and the account balances as of\n\nDecember 31, 2025 for each NEO under our Executive Management Non-Qualified Deferred Compensation and SERP. Mr. Glandon\n\ndid not participate in our Executive Management Non-Qualified Deferred Compensation and SERP and therefore has no balance in\n\nthe plan.\n\nName\n\nExecutive\n\nContributions in\n\nLast FY(1)\n\nRegistrant\n\nContributions in\n\nLast FY(2)\n\nAggregate Earnings\n\nin Last FY\n\nAggregate\n\nWithdrawals/\n\nDistributions\n\nAggregate Balance\n\nat Last FYE(3)\n\nBryan B. DeBoer\n\n$634,650\n\n$—\n\n$569,504\n\n$—\n\n$10,770,822\n\nTina H. Miller\n\n$—\n\n$70,000\n\n$41,430\n\n$—\n\n$781,988\n\nDavid G. Stork\n\n$—\n\n$—\n\n$363\n\n$—\n\n$6,789\n\nGary M. Glandon\n\n$—\n\n$—\n\n$—\n\n$—\n\n$—\n\nGeorge N. Hines\n\n$—\n\n$50,000\n\n$18,991\n\n$—\n\n$360,015\n\nAdam A. Chamberlain\n\n$—\n\n$75,000\n\n$(184,306)(4)\n\n$—\n\n$52,644\n\n(1)\n\nThe executive contribution amount in this column is included in the Non-Equity Incentive Plan Compensation column of the [Summary Compensation Table](#ic4b68f9df5f645149bb3535a26afa3af_148)above.\n\n(2)\n\nThe registrant contribution amounts in this column are included in the All Other Compensation columns of the  [Summary Compensation Table](#ic4b68f9df5f645149bb3535a26afa3af_148) above.\n\n(3)\n\nThe following amounts included in this column for the Executive Management Non-Qualified Deferred Compensation and SERP were reported in the Summary\n\nCompensation Table as compensation for a prior fiscal year: Mr. DeBoer, $8,097,175; Ms. Miller, $582,472; Mr. Stork: $13; Mr. Hines, $253,681; Mr. Chamberlain,\n\n$150,097.\n\n(4)\n\nIncludes $191,920 in unvested funds forfeited upon Mr. Chamberlain's resignation which was effective on June 1, 2025.\n\nOur Executive Management Non-Qualified Deferred Compensation and SERP permits us to contribute awards for participants that\n\nwill have deferred payout. Under this plan, senior executives may defer receipt of portions of their compensation (up to 50% of base\n\nsalary, and 100% of variable compensation) in any given year, with all deferred amounts earning interest at an annual rate set by the\n\nCompensation Committee. For 2025, the annual interest rate was 5.5%, with monthly compounding.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n57\n\nPotential Payments Upon Termination or Change in Control\n\nPotential Payments Upon Termination of Employment\n\nIn certain circumstances, it is appropriate to provide post-termination benefits. The specific situations in which our executive officers\n\nare eligible for post-termination benefits are discussed in more detail below, but in summary:\n\n•We offer traditional severance for our NEOs upon a “double trigger”, namely upon a qualifying involuntary termination following\n\na change in control. These double trigger benefits limit cash severance to 2x the executive’s base salary and bonus, and offer\n\nacceleration of outstanding equity. \n\n•We are required to submit these double-trigger severance benefits to shareholders for a non-binding vote prior to payment (as\n\npart of a so-called “Say on Golden Parachute” vote). We do not offer equity acceleration apart from a termination in connection\n\nwith a change in control and such a vote. \n\n•From time-to-time and on a limited case-by-case basis, we have entered into separation arrangements with terminated NEOs\n\nthat include benefits like consulting fees and/or continued equity vesting as may be necessary to secure a release and\n\ncompliance with post-termination restrictive covenants.\n\n•The only other post-termination benefits contemplated by our compensation plans are not related to severance, are not overly\n\nrich, do not include equity acceleration, and are paid only in connection with an executive’s death, disability (which are akin and\n\nsubstitutes for life insurance or long-term disability benefits, and modest in amount) or a qualified retirement. These\n\nadditional arrangements are limited to providing continued vesting of equity (i.e., annual vesting, subject to performance for\n\nPSUs, and subject to compliance with service and/or restrictive covenant requirements) and continued vesting of SERP\n\ncontributions, except that SERP contributions also vest upon a death or disability. Our SERP is a cash program where the value\n\nof contributions accrue interest at a reasonable rate determined annually by our Compensation Committee and is not connected\n\nto the valuation of our stock price. \n\n•Besides the required “say on golden parachute” vote, shareholders have the opportunity to annually express their opinion of our\n\nexecutive compensation programs, including these post-termination payments, in our annual “say-on-pay” vote and through our\n\nregular shareholder engagement process.\n\nBenefits payable to NEOs upon death, disability or retirement\n\nFor all RSUs and PSUs granted to NEOs in 2025, if the NEO becomes disabled one year or more after an award is granted, that\n\naward will continue to vest after such disability. Prior to 2025, awards were eligible for such continued vesting on a disability\n\nimmediately at grant, but our PSUs only vested on a pro-rated basis in such circumstances. For all RSUs and PSUs granted to\n\nNEOs, if death occurs one year or more from grant or qualified retirement occurs, the equity awards continue to vest in accordance\n\nwith their terms except that, prior to our 2025 awards, continued vesting on an NEOs death for PSUs was only available on a pro-\n\nrated basis. The criteria for a qualified retirement differs for individual executives and award years but requires, at a minimum, that\n\nan individual’s combined age and service must equal at least 65. To continue retirement vesting in any awards, eligible executives\n\nmust continue to comply with post-retirement assistance requirements and covenants. Lithia believes that this retirement vesting\n\nfeature is appropriate and motivating because it provides protection to long-tenured NEOs considering the vesting and performance\n\nperiod and is a prevalent practice among other companies within the Peer Group. Further, PSUs provide no value to the extent\n\nNEOs violate their post-retirement covenants. As of December 31, 2025, only Mr. Glandon (with respect to his PSUs only) and Mr.\n\nDeBoer satisfied such requirements.\n\nFor all SERP contributions granted to NEOs in 2025, if the NEO becomes disabled or passes away while employed by us, the\n\ncontribution becomes 100% vested. If qualified retirement occurs, the contributions will continue to vest in accordance with their\n\nterms. For this purpose, a qualified retirement means a NEO voluntarily terminates employment and is at least 55 years of age and\n\nhas completed 10 years of service at the time of such termination and as of December 31, 2025, only Mr. DeBoer, who is already\n\nfully vested in his SERP benefit, satisfied such requirements.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n58\n\nThe following table sets forth the estimated benefits that would have been payable to our NEOs who were in office at the end of the\n\nyear under their equity awards and Non-Qualified Deferred Compensation and SERP if each NEOs employment had been\n\nterminated on December 31, 2025 because of death, disability or retirement, and the price per share of our common stock is the\n\nclosing market price on December 31, 2025 (i.e., $332.33) and all performance-based equity awards vest at target.\n\nName\n\nDeath\n\nDisability\n\nRetirement\n\nBryan B. DeBoer\n\n$24,242,809\n\n$24,242,809\n\n$27,247,072\n\nTina H. Miller\n\n$4,098,958\n\n$4,098,958\n\n$—\n\nDavid G. Stork\n\n$1,272,492\n\n$1,272,492\n\n$—\n\nGary M. Glandon\n\n$1,171,796\n\n$1,171,796\n\n$980,374\n\nGeorge N. Hines\n\n$2,131,897\n\n$2,131,897\n\n$—\n\nIncludes all outstanding and unvested equity awards that would continue to vest.\n\nPotential Payments Upon Change in Control\n\nChange in Control and Severance Agreements\n\nLithia believes our executives should be appropriately compensated if the completion of a change in control transaction results in a\n\nloss of their job, and that providing severance payments, accelerating the vesting of RSUs and certain other limited payments\n\nmitigate executives’ potential personal concerns and appropriately align their interests with those of our shareholders in the context\n\nof a potential change in control transaction. Each of our CEO, Executive Vice Presidents, Senior Vice Presidents and Vice\n\nPresidents has a change in control agreement with the Company.\n\nIf we are facing a potential change in control transaction and the proposed transaction would likely negatively affect one or more of\n\nour senior executives, we believe it is risky to assume that those senior executives will work against their financial interest, even if\n\nthe proposed transaction would be in the best interest of our shareholders. We believe that, in such case, our executives should not\n\nbe motivated by financial self-interest but rather should be appropriately compensated if the completion of the transaction results in a\n\nloss of their job. Accordingly, we believe that providing “double-trigger” severance payments, accelerating the vesting of RSUs and\n\ncertain other limited payments are an appropriate means of achieving alignment between the interests of our senior executives and\n\nour shareholders in the context of a potential transaction that would result in a change in control.\n\nChange in Control Agreements\n\nWe are party to double-trigger Change in Control Agreements with our NEOs. Under those agreements, if, after a change in control,\n\nthe executive is terminated without cause or resigns for good reason, each as defined below, we will pay the executive:\n\nEmployee\n\nTitle\n\nSalary\n\nBonus\n\nTime-Vesting RSUs\n\nPerformance-Vesting\n\nRSUs\n\nBryan B. DeBoer\n\nPresident and Chief\n\nExecutive Officer\n\n24 months\n\n2 years\n\nAccelerated vesting\n\nAccelerated vesting\n\nat target\n\nTina H. Miller\n\nSenior Vice President and\n\nChief Financial Officer\n\n24 months\n\n2 years\n\nAccelerated vesting\n\nAccelerated vesting\n\nat target\n\nDavid G. Stork\n\nSenior Vice President,\n\nChief Administrative Officer\n\n24 months\n\n2 years\n\nAccelerated vesting\n\nAccelerated vesting\n\nat target\n\nGary M. Glandon\n\nFormer Senior Vice\n\nPresident, Chief People\n\nOfficer\n\n24 months\n\n2 years\n\nAccelerated vesting\n\nAccelerated vesting\n\nat target\n\nGeorge N. Hines\n\nFormer Senior Vice\n\nPresident, Chief Innovation\n\n& Technology Officer\n\n24 months\n\n2 years\n\nAccelerated vesting\n\nAccelerated vesting\n\nat target\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n59\n\nIn addition, in such circumstances, our executives would also be eligible to receive continuing long-term care insurance premiums for\n\n24 months after the separation date; and continuing health insurance benefits until the earlier of (a) 18 months after the separation\n\ndate, (b) the full COBRA period required by law or (c) when the executive becomes eligible for employer-sponsored health insurance\n\nfrom a subsequent employer.\n\nThe Change in Control Agreements also contain non-solicitation, non-competition and non-disparagement provisions, but (i) those\n\nprovisions are dependent on the executive electing to receive the change in control benefits identified above and (ii) the Company’s\n\nremedy if the executive violates the non-competition provisions is limited to causing the executive to forfeit profit sharing or other\n\nbonus compensation that has not yet been paid to the executive.\n\nIf applicable, the non-solicitation and non-competition provisions are effective for two years following the date of the executive’s\n\nseparation from service with us. If applicable, the non-disparagement provision is effective for three years from that date. The\n\nChange in Control Agreements also contain provisions regarding non-disclosure (for three years from the date of the executive’s\n\nseparation from service) and assignment of interest in all creative works that are not dependent on the executive receiving any\n\nchange in control benefits under the agreement.\n\nUnder the Change in Control Agreements:\n\nA “Change in Control” occurs if: (A) the Company merges or consolidates with another entity and, as a result, less than 50% of the\n\ncombined voting power of the resulting entity immediately after the merger or consolidation is held by persons who were the holders\n\nof the Company’s voting securities immediately before the merger or consolidation; (B) any person, entity, or group of persons or\n\nentities, other than through merger or consolidation, acquires 50% or more of the total fair market value or total voting power of the\n\nCompany’s outstanding stock (excluding such a change through the transfer of the Company’s outstanding stock or interests in Lithia\n\nHolding to the Sidney B. DeBoer Trust or the election of Bryan DeBoer or the Sidney B. DeBoer Family Trust as the manager of\n\nLithia Holding) or acquires substantially all of the Company’s assets; (C) any one person, or more than one person acting as a\n\ngroup, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or\n\npersons) ownership of stock of the Company possessing 50% or more of the total voting power of the stock of the Company\n\n(excluding such a change through the transfer of the Company’s outstanding stock or interests in Lithia Holding to the Sidney B.\n\nDeBoer Trust or the election of the Sidney B. DeBoer Family Trust as the manager of Lithia Holding); or (D) a majority of the\n\nmembers of the Company’s Board of Directors are removed from office by a vote of the Company’s shareholders over the\n\nrecommendation of our Board or replaced during any 12-month period by directors whose appointment or election is not endorsed by\n\na majority of the members of the Company’s Board of Directors before the date of the appointment or election;\n\n“Cause” for termination of employment means any one or more of the following: (A) willful misfeasance, gross negligence or conduct\n\ninvolving dishonesty in the performance of the executive’s duties, as determined by our Board of Directors; (B) conviction of a crime\n\nin connection with the executive’s duties or any felony; (C) conduct significantly harmful to the Company, as reasonably determined\n\nby our Board of Directors, including but not limited to intentional violation of law or of any significant policy or procedure of the\n\nCompany; (D) refusal or failure to act in accordance with a stipulation, requirement or directive of our Board of Directors (provided\n\nsuch directive is lawful); or (E) failure to faithfully or diligently perform any of the duties of the executive’s employment which are\n\nspecified in the Change in Control Agreement, articulated by our Board of Directors, or are usual and customary duties of the\n\nexecutive’s employment if the executive has not corrected the problem or formulated a plan for its correction with our Board (if such\n\nfailure is not susceptible to immediate correction) within 30 days after notice to the executive; and\n\n“Good Reason” for an executive’s resignation means (A) any one or more of the following occurs without the executive’s consent: (1)\n\na material diminution of the executive’s base compensation (unless consistent with an across- the-board pay reduction for all senior\n\nmanagement and not in excess of 20%); (2) a material change in the geographic location at which the executive must perform\n\nservices for the Company; (3) a material diminution in the executive’s authority, duties or responsibilities, or (4) any action or inaction\n\nby the Company that constitutes a material breach of the Change in Control Agreement; (B) the executive provides notice to the\n\nCompany of the existence of the condition within 90 days of the initial existence of the condition; (C) the Company has 30 days\n\nfollowing receipt of such notice to remedy the condition and fails to do so; and (D) the executive resigns within twelve months of such\n\nevent occurring. For purposes of clause (A)(3) of the previous sentence, whether a material diminution in the executive’s authority\n\nhas occurred shall be determined in part by comparing the authority and positions of the persons to whom the executive directly\n\nreports immediately prior to the Change in Control or the announcement of the Change in Control with the authority and positions of\n\nthe persons to whom the executive directly reports immediately after the claimed diminution in the executive’s authority. For\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n60\n\nexample, if the executive was the CEO of the Company before the Company was acquired by a competing business, a material\n\ndiminution in the CEO’s authority would include, but not be limited to, the CEO not serving as the CEO of the consolidated competing\n\nbusiness after its acquisition of the Company.\n\nNotwithstanding the provision for change in control benefits in the Change in Control Agreements, each Change in Control\n\nAgreement contains a provision stating that if any benefit payable by us to the executive, including, without limitation, the change in\n\ncontrol benefits specified in the agreement, would constitute an “excess parachute payment” as defined in Section 280G of the\n\nInternal Revenue Code, those benefits shall be reduced to the largest amount that will result in no portion of the benefits being\n\nsubject to the excise tax imposed by Section 4999 of the Internal Revenue Code. While the executive may select which particular\n\nbenefits will be reduced to comply with this provision, the determination of the amount of reduction in the benefits required is made\n\nby mutual agreement of us and the executive and, if no agreement is possible, by our independent registered public accountants.\n\nNon-Qualified Deferred Compensation and SERP Plan\n\nUnder our Executive Management Non-Qualified Deferred Compensation and SERP Plan, discretionary benefits contributed to a\n\nparticipant’s account by us fully vest upon a change in control, as defined under Code Section 409A or Treasury Regulations issued\n\nthereunder, even if the NEO’s employment is not terminated. Vested discretionary benefits are paid to a participant in an annual\n\ninstallment method over ten years.\n\nOther Termination Payments\n\nIn connection with his resignation that was effective June 1, 2025, the Compensation Committee permitted Mr. Chamberlain to\n\ncontinue to vest in a portion of his 2025 long-term incentive grants in exchange for Mr. Chamberlain's abiding by certain restrictive\n\ncovenants, including non-competition, non-solicitation, and non-disparagement covenants. As a result, the target number of shares\n\nunder Mr. Chamberlain's 2025 PSUs was reduced from 4,352 shares to 1,088 shares and Mr. Chamberlain's 2025 RSUs were\n\nreduced from 1,451 shares to 363 shares. Apart from these reduced equity awards, Mr. Chamberlain forfeited all unvested equity as\n\nof his resignation date and did not receive any other termination related payments.\n\nQuantitative Disclosure of Payments Upon Termination or Change in Control\n\nThe following table provides quantitative disclosure of estimated payouts to our continuing NEOs assuming a change in control and\n\nassociated triggering events occurred under the Change in Control Agreements on December 31, 2025, and the price per share of\n\nour common stock is the closing market price of $332.33 on December 31, 2025. The amounts listed in the table below are in\n\naddition to benefits generally available to our employees upon termination of employment, such as distributions from the 401(k) plan\n\nand accrued vacation.\n\nName\n\nCurrent Annual\n\nSalary\n\nSeverance\n\nPayments(1)\n\nSeverance\n\nRelated\n\nBenefits(2)\n\nValue of Stock\n\nAwards That\n\nWould Vest(3)\n\nValue of Long-\n\nTerm Incentive\n\nBenefits that\n\nWould Vest(4)\n\nAdditional\n\nPayment under\n\nCash Incentive\n\nPlan for 2025(5)\n\nTotal\n\nBryan B.\n\nDeBoer\n\n$1,300,000\n\n$2,600,000\n\n$20,356\n\n$36,887,965\n\n$—\n\n$6,318,000\n\n$45,826,321\n\nTina H.\n\nMiller\n\n$750,000\n\n$1,500,000\n\n$15,187\n\n$6,496,387\n\n$141,209\n\n$2,106,000\n\n$10,258,783\n\nDavid G.\n\nStork\n\n$500,000\n\n$1,000,000\n\n$32,661\n\n$1,989,660\n\n$—\n\n$1,036,800\n\n$4,059,121\n\nGary M.\n\nGlandon\n\n$300,000\n\n$600,000\n\n$24,104\n\n$1,963,738\n\n$—\n\n$1,296,000\n\n$3,883,842\n\nGeorge N.\n\nHines\n\n$640,000\n\n$1,280,000\n\n$24,104\n\n$3,324,962\n\n$111,040\n\n$1,425,600\n\n$6,165,706\n\n(1)\n\nPayable in 24 monthly installments.\n\n(2)\n\nBased on current cost of providing 18 months (the full COBRA period) of COBRA benefits for our NEOs.\n\n(3)\n\nPayable by delivery of shares of Lithia stock immediately following a change in control.\n\n(4)\n\nPayable in equal annual installments over 10 years. The value of the long-term incentive is based on the unvested value of those benefits, calculated as of\n\nDecember 31, 2025 and would be payable even if the NEO’s employment was not terminated.\n\n(5)\n\nPayable in a lump sum immediately following a change in control. Amounts are in addition to amounts reported in the Summary Compensation Table under \"Non-equity\n\nIncentive Plan.”\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n61\n\nCEO Pay Ratio\n\nAs required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-\n\nK, Lithia provides information about the relationship of the annual total compensation of our employees and the annual total\n\ncompensation of our CEO.\n\nWe identified the median of the annual total compensation of all our employees using gross earnings for 2025, including any equity\n\nvesting in the year, for each individual, employed by us as of December 31, 2025, excluding the CEO. Gross earnings for employees\n\nin the United Kingdom and Canada were also converted to USD based on the average daily exchange rate for the year.\n\nIn determining the identity of our median employee, we excluded approximately 1,075 employees of 17 acquisitions in 2025, namely:\n\nStohlman Subaru, Elk Grove Subaru, Mercedes-Benz of Collierville & Jackson, Milton Keynes Hyundai, Renault Manchester,\n\nWarrington Hyundai, Napleton Palm Beach Hyundai Genesis & Acura, Hatfields JLRs, Evans Halshaw BYD Rotherham, Evans\n\nHalshaw BYD Chesterfield, Stivers Decatur Subaru, Orange County Hyundais, Beverly Hills Porsche & Santa Monica Audi \n\nFines Ford, BYD Wolverhampton Open Point, BYD Mansfield,and Ford Middlesbrough.\n\nAfter identifying the median employee, we calculated annual total compensation for such employee using the same methodology we\n\nuse for our CEO's compensation. As a result, for 2025:\n\n•the annual total compensation of the employee identified at median of our company (other than the CEO), was $58,390.\n\n•the annual total compensation of the CEO was $15,895,468;\n\nBased on this information, for 2025, the ratio of the annual total compensation of Bryan DeBoer, our Chief Executive Officer, to the\n\nmedian of the annual total compensation of all employees was estimated to be 272 to 1.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n62\n\nPay Versus Performance\n\nAs discussed in our Compensation Discussion and Analysis section, our executive compensation program is designed to reflect a\n\nstrong focus on pay-for-performance to drive superior financial results and value creation and strongly align our executives’ interests\n\nwith those of our shareholders. The following table sets forth compensation information of our Principal Executive Officer (PEO) and\n\nour non-PEO named executive officers (NEOs) along with total shareholder return, net income and revenue performance results, for\n\nour fiscal years ending in 2021, 2022, 2023, 2024, and 2025, in accordance with Item 402(v) of Regulation S-K.\n\nPay Versus Performance Table\n\nValue of Initial Fixed $100 Investment\n\nBased On:\n\nSummary\n\nCompensation\n\nTable Total for\n\nPEO\n\nCompensation\n\nActually Paid to\n\nPEO (1)\n\nAverage\n\nSummary\n\nCompensation\n\nTable Total for\n\nNon-PEO NEOs (2)\n\nAverage\n\nCompensation\n\nActually Paid to\n\nNon-PEO NEOs\n\n(1) (2)\n\nCompany Total\n\nShareholder\n\nReturn\n\nPeer Group Total\n\nShareholder\n\nReturn (3)\n\nNet\n\nIncome\n\n(millions)\n\nRevenue\n\n(millions)\n\n2025\n\n$15,895,468\n\n$22,817,359\n\n$2,612,837\n\n$2,227,492\n\n$117.15\n\n$146.89\n\n$825.9\n\n$37,634.9\n\n2024\n\n$16,795,702\n\n$20,673,914\n\n$4,550,369\n\n$5,310,903\n\n$125.10\n\n$166.99\n\n$802.0\n\n$36,188.2\n\n2023\n\n$19,235,990\n\n$29,392,849\n\n$4,715,979\n\n$6,355,137\n\n$114.46\n\n$153.08\n\n$1,000.8\n\n$31,042.3\n\n2022\n\n$11,125,717\n\n$3,939,506\n\n$2,805,572\n\n$1,740,328\n\n$70.64\n\n$112.90\n\n$1,251.0\n\n$28,187.8\n\n2021\n\n$10,532,359\n\n$14,008,918\n\n$2,323,172\n\n$2,821,850\n\n$101.84\n\n$148.69\n\n$1,060.1\n\n$22,831.7\n\n(1)    In accordance with the requirements of Item 402(v) of Regulation S-K, 2025 “compensation actually paid” (CAP) to our PEO and average CAP\n\nfor our non-PEO NEOs was calculated by making the following adjustments to the total compensation reported in the [Summary Compensation](#ic4b68f9df5f645149bb3535a26afa3af_148)\n\n[Table](#ic4b68f9df5f645149bb3535a26afa3af_148), above. The equity award related adjustments described below reflect the fair value (or change in fair value) for performance- and time-\n\nvesting RSUs, computed in accordance with FASB ASC Topic 718 on the relevant dates.\n\nPEO and Average Non-PEO Compensation Actually Paid Reconciliation\n\nThe following represents amounts for our CEO and the averages of the indicated amounts for our non-PEO named executive\n\nofficers.\n\nPEO\n\nNEO Avg.\n\nSummary Compensation Table (SCT) Total\n\n$15,895,468\n\n$2,612,837\n\nAmounts reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings”\n\nColumn of the SCT\n\n($6,256)\n\n($343)\n\nAmounts Reported under the “Stock Awards” Column of the SCT\n\n($10,736,203)\n\n($1,308,622)\n\nAmounts Reported under the “Option Awards” Column of the SCT\n\n$0\n\n$0\n\nTotal Deductions from SCT\n\n($10,742,459)\n\n($1,308,965)\n\n“Service Cost” for Pension Plans\n\n$0\n\n$0\n\n“Prior Service Cost” for Pension Plans\n\n$0\n\n$0\n\nFair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year\n\n$9,637,626\n\n$885,557\n\nChange in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years\n\n$8,026,573\n\n$567,813\n\nFair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year\n\n$0\n\n$0\n\nChange in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the\n\nFiscal Year\n\n$151\n\n$9\n\nFair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet\n\nVesting Conditions in the Fiscal Year\n\n$0\n\n($529,759)\n\nValue of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation\n\n$0\n\n$0\n\nAll Other Adjustments\n\n$17,664,350\n\n$923,620\n\nCompensation Actually Paid\n\nSCT Total less Total Deduction from SCT plus (minus) All Other Adjustments\n\n$22,817,359\n\n$2,227,492\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n06: Compensation Tables\n\n63\n\n(2)  The non-PEO named executive officers included for purposes of determining the average compensation for our named executive officers each\n\nyear, is as follows:\n\nYear\n\nNEOs:\n\n2025\n\nTina H. Miller, David G. Stork, Gary M. Glandon, George N. Hines, Adam A. Chamberlain.\n\n2024\n\nTina H. Miller, Adam A. Chamberlain, Christopher S. Holzshu, George N. Hines\n\n2021 - 2023\n\nTina H. Miller, Christopher S. Holzshu, Scott A. Hillier, George N. Hines\n\n(3)  Peer group TSR is calculated using the Auto Peers reflected in our Stock Performance Graph in the 2025 Annual Report on Form 10-K, which is\n\nthe same peer group used for calculating peer group TSR in our last-filed pay versus performance table. For each year indicated, those Auto\n\nPeers consisted of Penske Automotive Group, AutoNation, Sonic Automotive, Group 1 Automotive, Asbury Automotive Group, and CarMax.\n\nPerformance Measures\n\nTable of Performance Measures\n\nThis table presents the performance measures the Compensation\n\nCommittee considers to have been the most important in its\n\nexecutive compensation program linking pay to performance for\n\n2025, with revenue serving as the single most important financial\n\nmetric. The role of each of these performance measures on our\n\nNEOs’ compensation is discussed in the Compensation Discussion\n\nand Analysis section.\n\nRevenue (financial)\n\nEarnings Per Share (financial)\n\nTotal Shareholder Return (financial)\n\nNet Income (financial)\n\nCorporate Responsibility and Strategic (non-financial)\n\nDescription of Relationships Between Company and Peer Group TSR, and Between Compensation\n\nActually Paid and Specified Performance Measures\n\nThe graphs below reflects the relationship between (i) our TSR and our peer group’s TSR, and (ii) the PEO and average Non-PEO\n\nNEO compensation actually paid (CAP) and our TSR, net income, and revenue, respectively. For the purpose of the below charts, all\n\ndata is calculated as described in the footnotes of the above Pay Versus Performance table.\n\n         \n\n*Consistent with the above Pay Versus Performance table, peer group TSR is calculated using the\n\nAuto Peers reflected in our Stock Performance Graph in the 2025 Annual Report on Form 10-K.\n\nFor each year indicated, those Auto Peers consisted of Penske Automotive Group, AutoNation,\n\nSonic Automotive, Group 1 Automotive, Asbury Automotive Group, and CarMax.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n07: Proposal No. 1\n\n64\n\n07\n\nPROPOSAL NO. 1\n\nElection of Directors\n\nOur Board has nominated each of the following persons for election as a director:\n\nNominee Name\n\nAge\n\nHas Been a Director Since/(During)*\n\nIndependent\n\nSidney B. DeBoer\n\n82\n\n1996\n\nNo\n\nBryan B. DeBoer\n\n59\n\n2008\n\nNo\n\nPriya C. Huskins\n\n53\n\nNominee\n\nYes\n\nRichard J. Bailey Jr.\n\n55\n\n2025\n\nYes\n\nJames E. Lentz\n\n70\n\n2022\n\nYes\n\nStacy C. Loretz-Congdon\n\n66\n\n2023\n\nYes\n\nShauna F. McIntyre\n\n54\n\n2019\n\nYes\n\nCassandra M. McKinney\n\n65\n\n2024\n\nYes\n\nLouis P. Miramontes\n\n71\n\n2018\n\nYes\n\nHeidi L. O’Neill\n\n61\n\n2025\n\nYes\n\n*Director service since the company's initial public offering.\n\nTerm\n\nIf elected, each nominee will hold office until the next annual meeting or until his or her successor is elected and qualified. Ms.\n\nHuskins has been nominated as a new nominee. If elected, her term will begin on April 30, 2026.\n\nElection by Majority Vote\n\nTo be elected, the number of votes cast “for” a director’s election must exceed the number of votes cast “against” that director. We\n\nhave no reason to believe that any of the nominees will be unable or unwilling to serve if elected. However, if any nominee should\n\nbecome unable or unwilling to serve, proxies may be voted for another person nominated by our Board of Directors.\n\nBiographical Information on our Nominees\n\nOur Board believes that the combination of the qualifications, skills and experiences of the nominees will contribute to an effective\n\nand well-functioning Board. Our Board and the Nominating and Governance Committee believe that individually, and as a group, the\n\nnominees possess the necessary qualifications to provide for future oversight of our business consistent with their fiduciary duties to\n\nshareholders. Included in each director nominee’s biography, above, is a description of the experience, skills, tenure and attributes of\n\neach nominee.\n\nOur Board of Directors unanimously recommends a vote FOR each of the nominees named above.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n08: Proposal No. 2\n\n65\n\n08\n\nPROPOSAL NO. 2\n\nAdvisory vote to approve the compensation of our named\n\nexecutive officers\n\nWe are asking shareholders to approve the following advisory resolution to approve the compensation of our named executive\n\nofficers reported in this proxy statement:\n\nRESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Compensation Discussion\n\nand Analysis, the Summary Compensation Table and related tables, notes and narrative discussion in the Proxy Statement for the\n\nCompany’s 2026 Annual Meeting of Shareholders, is approved.\n\nThe advisory vote, which is required by Section 14A of the Exchange Act, is a vote to approve or disapprove the overall\n\ncompensation package of our executive officers and not any one specific element of the compensation package or on the\n\ncompensation received by any one person. The advisory vote is non-binding. However, the Compensation Committee and Board will\n\nreview and consider the results of the advisory vote when making future decisions about executive compensation. Because we\n\ntypically determine annual compensation before the advisory vote on the prior year’s compensation is cast, however, if we determine\n\nto make a change in our practices based on shareholder feedback, there may be a delay in implementing those changes.\n\nWe urge shareholders to read the detailed information about our compensation philosophy and objectives included in the\n\n[Compensation Discussion and Analysis](#ic4b68f9df5f645149bb3535a26afa3af_109) (\"CD&A\"), above, which provides context for the Summary Compensation Table and related\n\ninformation. As discussed in the CD&A, we believe our compensation programs align the interests of our executives and our\n\nshareholders, help us attract and retain experienced executive talent, and focus our executives on performance and achievement of\n\nour short-, mid- and long-term strategic goals and objectives. We believe the overall compensation paid in 2025 was appropriate,\n\nparticularly considering our financial results in 2025.\n\nOur Board has adopted a policy providing for an annual say-on-pay vote until the next required shareholder vote on the frequency of\n\nsuch votes.\n\nVote Required\n\nThe votes that shareholders cast \"for” must exceed the votes that shareholders cast \"against” to approve, on an advisory basis, the\n\ncompensation of our named executive officers.\n\nOur Board of Directors unanimously recommends a vote FOR the advisory resolution to approve\n\nthe compensation of our named executive officers.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n09: Proposal No. 3\n\n66\n\n09\n\nPROPOSAL NO. 3\n\nRatify the appointment of KPMG LLP as our Independent Registered\n\nPublic Accounting Firm for the Year Ending December 31, 2026\n\nWe Engaged KPMG After a Rigorous Review Process\n\nThe Audit Committee of our Board has appointed KPMG LLP, independent registered public accountants, as auditor for the year\n\nending December 31, 2026. As the Company’s independent auditor, KPMG is responsible to audit, and express an opinion on, our\n\nfinancial statements and our internal control over financial reporting and to discuss with our Audit Committee certain required matters\n\nand other matters deemed appropriate.\n\nKPMG has served as the Company’s independent registered public accounting firm continuously since 1993. Before reappointing\n\nKPMG as the Company’s independent auditor for 2026, the Audit Committee carefully considered KPMG’s qualifications as an\n\nindependent registered public accounting firm. This included a review of KPMG’s performance in prior years, its knowledge of the\n\nCompany and its operations as well as its reputation for integrity and competency in the fields of accounting and auditing.\n\nThe Audit Committee believes that retaining KPMG again in 2026 is in the best interests of the Company and its shareholders, and\n\ntherefore the Audit Committee requests that shareholders ratify the appointment. If the appointment of the independent registered\n\npublic accounting firm is not ratified by shareholder vote, the Audit Committee may appoint another independent registered public\n\naccounting firm or may decide to maintain its appointment of KPMG. A representative of KPMG is expected to be present at the\n\nAnnual Meeting. The representative will be given the opportunity to make a statement on behalf of his or her firm if such\n\nrepresentative desires, and will be available to respond to appropriate shareholder questions. KPMG served as the Company’s\n\nindependent accountants for the year ended December 31, 2025, and reported on the Company’s consolidated financial statements\n\nfor that fiscal year.\n\nThe Audit Committee believes that, if handled properly, there are numerous benefits of a long-term independent auditor relationship,\n\nincluding:\n\nHigher Audit Quality: Through 33 years of experience with the Company KPMG has gained institutional knowledge of and deep\n\nexpertise regarding our operations and primary business segments, accounting policies and practices and internal controls over\n\nfinancial reporting;\n\nEfficient Fee Structure: KPMG’s aggregate fees are competitive with peer companies because of KPMG’s familiarity with the\n\nCompany and industry expertise; and\n\nAvoidance of Disruption: Onboarding a new independent auditor requires a significant time and cost commitment that could distract\n\nfrom management’s and the Audit Committee’s focus on financial reporting and internal controls.\n\nThe Company and the Audit Committee are also aware that a long-tenured auditor may be believed by some to pose an\n\nindependence risk. To address these concerns, there are safeguards for auditor independence, including:\n\nAudit Committee Oversight: The Audit Committee’s oversight includes regular private sessions with KPMG, discussions with KPMG\n\nregarding the scope of its audit, an annual evaluation when determining whether to engage KPMG, and direct involvement by the\n\nAudit Committee and its Chair in the periodic transition to a new lead engagement partner in connection with the mandatory five-year\n\nrotation of that position;\n\nLimits on Non-Audit Services: The Audit Committee pre-approves audit and permissible non-audit services to be performed by\n\nKPMG in accordance with its pre-approval policy; and\n\nRegulatory Framework: Because KPMG is an independent registered public accounting firm, it is subject to PCAOB inspections,\n\npeer reviews and PCAOB and SEC oversight.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n09: Proposal No. 3\n\n67\n\nFees Paid to KPMG LLP Related to Fiscal Years 2025 and 2024\n\n \n\n2025\n\n2024\n\nAudit fees for 2025 and 2024 consist of fees for professional services\n\nrendered for the annual audit of our consolidated financial statements\n\nand internal control over financial reporting, reviews of our interim\n\nconsolidated financial statements included in quarterly reports, and\n\nservices that are normally provided by our independent registered public\n\naccounting firm in connection with statutory and regulatory filings or\n\nengagements, including relating to the SEC. Audit fees increased year-\n\nover-year primarily due to an increase in services connected to\n\nregulatory filings and acquisition activity.\n\nAudit Fees\n\n$4,930,000\n\n$4,484,673\n\nAudit-Related Fees\n\n$200,850\n\n$206,000\n\nTax Fees\n\n$0\n\n$0\n\nAll Other Fees\n\n$1,780\n\n$1,780\n\n \n\n$5,132,630\n\n$4,692,453\n\nAudit-related fees for 2025 and 2024 cover agreed upon procedures associated with asset-backed securities offerings during\n\nthe year.\n\nAll other fees were related to software licensing fees during the years presented.\n\nPre-Approval Policies\n\nExcept as permitted under federal law and SEC rules, all audit and non-audit services performed by KPMG, and all audit services\n\nperformed by other independent registered public accounting firms, must be pre-approved by the Audit Committee. The Audit\n\nCommittee has delegated authority to its Chair to pre-approve permitted services in between regular meetings, with such actions to\n\nbe ratified at the next Audit Committee meeting. All projects reflected in the foregoing table were pre-approved by the Audit\n\nCommittee. KPMG may not perform for us any prohibited services as defined by the Sarbanes-Oxley Act of 2002 including any\n\nbookkeeping or related services, information systems consulting, internal audit outsourcing, legal services and management or\n\nhuman resources functions. Non-audit services and fees are evaluated by the Audit Committee in assessing the auditor’s\n\nindependence.\n\nVote Required\n\nThe votes that shareholders cast \"for” must exceed the votes that shareholders cast \"against” on this matter to ratify the appointment\n\nof KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2026.\n\nOur Board of Directors unanimously recommends that the shareholders vote FOR the ratification of\n\nthe appointment of KPMG LLP as our independent registered public accounting firm for the\n\nyear ending December 31, 2026.\n\nAudit Committee Report\n\nThe Audit Committee reports to the Board and is responsible for assisting the Board in fulfilling its oversight responsibilities relating\n\nto: (a) the preparation and integrity of the Company’s financial statements; (b) the engagement of the independent registered public\n\naccounting firm, the annual evaluation of their performance, qualifications and independence, and negotiation of fees; (c) the\n\nimplementation and evaluation of the Company’s internal accounting and financial controls, procedures and policies; and (d) the\n\ncompliance with certain legal and regulatory requirements, including programs and policies established by management or our\n\nBoard. The Audit Committee is composed solely of independent directors. The Audit Committee regularly reviews financial\n\ninformation contained in the Company’s quarterly earnings releases, and reviews the appropriateness of non-GAAP financial\n\nmeasures disclosed by the Company. The current Audit Committee charter is available on our website at investors.lithiadriveway.com\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n09: Proposal No. 3\n\n68\n\nIn discharging our responsibilities, we have met with the Company’s management and its independent registered public accounting\n\nfirm, KPMG LLP, to review the Company’s accounting functions and the audit process. We have also met regularly with the\n\nCompany’s Director, Internal Audit, to review the nature and extent of the Company’s internal controls, the review procedures\n\nperformed by internal audit regarding such controls and the frequency and results of such reviews. In each case, we discussed the\n\nconsideration of geographic expansion, increased virtual work environments and the potential impact on internal controls.\n\nSelection of KPMG as our Auditor\n\nThe Audit Committee selects, oversees and evaluates the performance of the independent auditor. In selecting KPMG as our\n\nindependent auditor, the Audit Committee considered that KPMG has been our auditor for 33 years, the firm's global reach and auto\n\nretail industry expertise. The Audit Committee also utilized the Center for Audit Quality’s External Auditor Assessment Tool to assist\n\nin evaluating KPMG as our independent auditor. This tool is used annually by the Audit Committee.\n\nConsistent with requirements, the audit partner and concurring review partner rotate at least every five years. A new lead partner\n\nrotated on in 2023. The Audit Committee approves the firm's final selection of the new lead engagement partner.\n\nAudit Committee Actions\n\nWe hereby report that the Audit Committee has:\n\n1.Reviewed and discussed with management and the Company’s independent registered public accounting firm,\n\nKPMG LLP, together and separately, the Company’s audited consolidated financial statements contained in the Company’s\n\nAnnual Report on Form 10-K for the 2025 fiscal year;\n\n2.Discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company\n\nAccounting Oversight Board and the SEC; and\n\n3.Received from KPMG the written disclosures and the letter required by applicable requirements of the Public\n\nCompany Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning\n\nindependence, and discussed with KPMG its independence and any relationships that may impact their objectivity and\n\nindependence.\n\nWe also discussed and reviewed the results of the independent registered public accounting firm’s audit of the Company’s financial\n\nstatements, the quality and adequacy of the Company’s internal control over financial reporting, and issues relating to auditor\n\nindependence. In addition, we discussed and reviewed the identification of the critical audit matter with management and with\n\nKPMG throughout the year.\n\nBased on our review and discussions with the Company’s management and independent registered public accountants, we\n\nrecommended to our Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for\n\nthe fiscal year ended December 31, 2025, for filing with the SEC.\n\nSubmitted by:\n\nLouis P. Miramontes (Chair)\n\nJames E. Lentz\n\nStacy C. Loretz-Congdon\n\nCassandra M. McKinney\n\nRichard J. Bailey Jr.\n\nHeidi L. O'Neill\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n10: Proposal No. 4\n\n69\n\n10\n\nPROPOSAL NO. 4\n\nShareholder Proposal Requesting that Our Board of Directors Appoint an\n\nIndependent Board Chair\n\nWe have been advised by John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, California 90278, owner of at least 10\n\nshares of common stock, that he intends to present the following shareholder proposal at the Annual Meeting. For the proposal to be\n\nvoted on at the Annual Meeting, the proponent or a qualified representative of the proponent must attend the meeting and present\n\nthe proposal. The Company and the Board disclaim any responsibility for the content of the proposal and the statement in support of\n\nthe proposal, which are presented in the form received from the proponent.\n\nSTATEMENT OF PROPOSING SHAREHOLDER:\n\nProposal 4 - Independent Board Chairman\n\nShareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in\n\norder that 2 separate people hold the office of the Chairman and the office of the CEO as soon as possible.\n\nThe Chairman of the Board shall be an Independent Director. A Lead Director shall not be a substitute for an independent Board\n\nChairman.\n\nThe Board shall have the discretion to select an interim Chairman of the Board, who is not an Independent Director, to serve while\n\nthe Board is required to seek an Independent Chairman of the Board on an accelerated basis. This policy could be phased in when\n\nthere is a contract renewal for our current CEO or for the next CEO transition although it is better to adopt it now.\n\nAn independent Board Chairman at all times improves corporate governance by bringing impartiality, objective oversight, and\n\nexternal expertise to board decisions, mitigating conflicts of interest, enhancing transparency, and boosting shareholder confidence.\n\nThis detached perspective allows the chairman to focus on shareholder interests, strengthen management accountability, and\n\nprovide critical checks and balances, ultimately contributing to long-term sustainability and credibility.\n\nNow could be a ripe time for a change since Lithia Motors stock was at $418 in 2021 and at only $310 late in 2025 despite a robust\n\nstock market.\n\nA wrongful death lawsuit was filed against a Texas Lithia dealership following a fatal car crash during a customer's test drive. The\n\nsalesperson who accompanied the customer on the test drive was allegedly drunk, testing positive for alcohol and possibly cocaine\n\nafter the crash. The customer was reportedly driving the Dodge Challenger at 120 mph when the Challenger struck another car,\n\nkilling a woman.\n\nFinancial analysts revised their revenue and earnings per share estimates for Lithia downwards for 2025.\n\nAnalysts have noted a trend of contracting gross profit per vehicle (GPU). New vehicle GPUs declined sequentially in Q3 2025.\n\nAn October 23, 2025 article said that despite top-line growth, Lithia faces \"ongoing pressure from slim and slipping profit margins,\n\nelevated costs, and a stretched balance sheet.\" Selling, General, and Administrative costs increased as a percentage of gross profit\n\nin Q3.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n10: Proposal No. 4\n\n70\n\nAn October 2025 Yelp review described a frustrating service experience at a Lithia dealership, including damage to a car and issues\n\nwith repairs. This is consistent with earlier complaints about management and customer service at Lithia dealerships. Consumer\n\nreviews and discussions on social media reflect growing dissatisfaction with Lithia-owned dealerships.\n\nA Reddit user reported a decline in service quality and a \"nightmare delay\" for a warranty repair after Lithia bought their local Subaru\n\ndealership. An October 2025 Facebook post accused a Lithia dealership in New Mexico of using misleading promotional offers and\n\nrunning a credit check 15-times against the customer's wishes.\n\nPlease vote yes:\n\nIndependent Board Chairman - Proposal 4\n\nBOARD OF DIRECTORS STATEMENT IN OPPOSITION TO INDEPENDENT\n\nCHAIR SHAREHOLDER PROPOSAL 4\n\nThe Board has carefully considered this proposal and has determined that it is not in the best interests of the Company and its\n\nshareholders. The Board believes the Company’s current Board leadership structure, combined with the Company’s strong corporate\n\ngovernance practices, best serves the Company and our shareholders. Contrary to statements in the proposal, the Company already\n\nhas two separate people holding the office of the Chair of the Board and the office of Chief Executive Officer, and those positions\n\nhave been filled by separate individuals for more than 14 years.\n\nThe Board values flexibility in determining its leadership structure.\n\nThe Company does not have a formal policy requiring the positions of Board Chair and Chief Executive Officer to be separated or\n\nrequiring the position of Chair to be filled by only an independent director. Instead, the Company’s governance documents provide\n\nour Board with flexibility to select the leadership structure that is best for the Company based on its leadership needs at any\n\nparticular time. Although the Company has separated the roles of Chair and Chief Executive Officer for over 14 years, adopting a\n\nrigid requirement to split these positions and require an independent Chair would deprive the Board of flexibility to select the most\n\nqualified and appropriate individual to lead the Board as Chair depending on the circumstances. We believe that the Company and\n\nits shareholders benefit from this flexibility and that the Board is best positioned to make this determination.\n\nThe Board has carefully considered its current leadership structure and believes its current leadership structure is appropriate and in\n\nthe best interests of the Company and its shareholders. In particular, the Board believes that its current leadership structure allows\n\nSidney B. DeBoer, the founder of the Company, to bring his strength as a long-time leader at Lithia to the role of Chair, while allowing\n\nBryan B. DeBoer, the Company’s Chief Executive Officer and President, to focus on developing and implementing the Company’s\n\nstrategies and supervising day‐to‐day business operations. The Board also believes that the current separation of the roles of Chair\n\nand Chief Executive Officer provides a clear delineation of responsibilities for each position and fosters greater accountability of\n\nmanagement. Consistent with its current practice, the Board will continue to review the Company’s leadership structure and assess\n\nthe needs of the Company and will make any necessary changes based on the circumstances.\n\nThe Board has a strong Lead Independent Director with meaningful responsibilities.\n\nThe Board has appointed a Lead Independent Director on an annual basis for the past 19 years. The Board continually evaluates its\n\nleadership structure and, consistent with its ongoing review, in 2025 the Board appointed Louis P. Miramontes as Lead Independent\n\nDirector. Mr. Miramontes is an experienced public company director, having served on multiple public company boards, including as\n\nchair of the audit committee and as chair of the compensation committee on those boards. He is a qualified financial executive and\n\naudit committee financial expert. Mr. Miramontes had a 38-year career at KPMG, where he served in many leadership roles in the\n\nUnited States and Latin America, and he was named to the NACD Directorship 100 in 2024. Accordingly, the Board’s appointment of\n\nMr. Miramontes as Lead Independent Director demonstrates the Board values a strong Lead Independent Director.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n10: Proposal No. 4\n\n71\n\nOur Corporate Governance Guidelines require the Board to select an independent director to serve as the Lead Independent\n\nDirector if the Chair of the Board is not independent. Under our Corporate Governance Guidelines, the Lead Independent Director\n\nis given meaningful and clearly defined responsibilities, which include:\n\n•presiding at the executive sessions of independent directors;\n\n•chairing Board meetings in the Chair’s absence;\n\n•communicating any concerns of the independent directors to the Board, Chair or management;\n\n•being available to engage directly with major shareholders where appropriate;\n\n•working with the Chair, management and the independent directors to ensure topics and major discussion items important\n\nto the independent directors are addressed at meetings;\n\n•liaising with and guiding the Board’s committee chairs as appropriate from time to time; and\n\n•providing leadership to the Board if circumstances arise in which the role of the Chair/CEO may be or may be perceived to be,\n\nin conflict.\n\nIn accordance with good corporate governance, our Board annually reassesses these responsibilities to align them with the evolving\n\nneeds and circumstances of the Company and its shareholders.\n\nThe Company’s strong corporate governance practices and company performance demonstrate the\n\neffectiveness of the Company’s existing Board leadership structure.\n\nThe Board believes that strong corporate governance standards enhance long-term shareholder value, and the Company has\n\nadopted corporate governance policies that promote effective, independent Board oversight, including:\n\n•7 of 9 directors are independent, including the Lead Independent Director;\n\n•All members of Board committees are independent;\n\n•Annual election of all directors by majority of votes cast in uncontested elections;\n\n•Engaged and highly qualified board of directors;\n\n•Directors not considered independent after serving on the Board for 15 or more years;\n\n•Mandatory independent director retirement age of 79;\n\n•Robust shareholder engagement program;\n\n•Board-approved proxy access permitting eligible shareholders to nominate director candidates;\n\n•Independent directors meet in executive session at each regularly scheduled Board meeting;\n\n•Annual review of director, committee and Board effectiveness, facilitated by a third party; and\n\n•Annual 360-degree review of CEO effectiveness, facilitated by a third party.\n\nAdditionally, as described in detail in the “[Letter from the Chief Executive Officer](#ic4b68f9df5f645149bb3535a26afa3af_10),” the Company has become the largest omnichannel\n\nmobility retailer and during 2025 delivered another year of strong financial and operational performance, including double-digit\n\ngrowth in EPS, same-store growth across all business lines, and record profitability in financing operations led by Driveway Finance\n\nCorporation. The Company’s continued success is a testament to the strength and effectiveness of the Board and its policies and\n\npractices.\n\nThe Board believes the rigid approach to the Company’s leadership structure requested by the proposal is unnecessary and not in\n\nthe best interests of the Company or our shareholders. Accordingly, the Board unanimously recommends a vote AGAINST proposal\n\nregarding an independent Board chair.\n\nOur Board of Directors unanimously recommends a vote AGAINST this shareholder proposal.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n11: Additional Ownership Information\n\n72\n\n11\n\nAdditional Ownership Information\n\nSecurity Ownership of Certain Beneficial Owners and Management\n\nThe following table sets forth, as of February 27, 2026 (unless otherwise noted in the footnotes to the table), certain information with\n\nrespect to ownership of our common stock of (i) persons known by us to be beneficial owners of more than 5% of our common stock,\n\n(ii) each director and director nominee, (iii) each named executive officer, and (iv) all current executive officers, directors, and\n\ndirector nominees as a group. Except as noted below, the address of each shareholder in the table is Lithia Motors, Inc., 150 N.\n\nBartlett Street, Medford, Oregon 97501. Unless otherwise indicated, all persons named as beneficial owners of the Company’s\n\ncommon stock have sole voting power and sole dispositive power with respect to the shares indicated as beneficially owned.\n\nBeneficial Owner\n\nShares Beneficially Owned (#)\n\nPercent\n\nOwned\n\nThe Vanguard Group(1)\n\n2,823,349\n\n12.12%\n\n100 Vanguard Blvd; Malvern, PA 19355\n\nAbrams Capital Management, LP(2)\n\n2,490,534\n\n10.69%\n\n222 Berkeley St, 21st Floor; Boston, MA 02116\n\nBlackrock, Inc(3)\n\n2,352,180\n\n10.10%\n\n55 East 52nd Street; New York, NY 10055\n\nHarris Associates L.P.(4)\n\n2,024,667\n\n8.69%\n\n111 South Wacker Drive Suite 4600; Chicago, IL 60606\n\nDimensional Fund Advisors LP(5)\n\n1,326,655\n\n5.69%\n\n6300 Bee Cave Road, Building One, Austin, TX  78746\n\nSidney B. DeBoer(6)\n\n25,615\n\n*\n\nBryan B. DeBoer\n\n188,586\n\n*\n\nTina H. Miller\n\n13,683\n\n*\n\nDavid G. Stork\n\n4,790\n\n*\n\nRichard J. Bailey Jr(7)\n\n342\n\n*\n\nPriya C. Huskins\n\n—\n\n*\n\nJames E. Lentz(6)\n\n2,545\n\n*\n\nStacy C. Loretz-Congdon(6)\n\n1,810\n\n*\n\nShauna F. McIntyre(6)\n\n1,376\n\n*\n\nCassandra M. McKinney(6)(8)\n\n1,300\n\n*\n\nLouis P. Miramontes(6)(9)\n\n5,679\n\n*\n\nHeidi L O'Neill(7)\n\n342\n\n*\n\nAll current executive officers and directors as a Group (14 persons)(10)\n\n251,221\n\n*\n\n* Less than one percent\n\n(1)\n\nBeneficial ownership as of December 29, 2023 as reported by The Vanguard Group in a Schedule 13G/A filed on February 13, 2024. The Schedule 13G/A reports shared voting power with respect\n\nto 9,384 shares, sole dispositive power with respect to 2,785,093 shares and shared dispositive power with respect to 38,256 shares.\n\n(2)\n\nBeneficial ownership as of September 30, 2025 as reported by Abrams Capital Management, L.P., Abrams Capital Partners II, L.P., Abrams Capital, LLC, Abrams Capital Management, LLC, and\n\nDavid Abrams in a Schedule 13G/A filed on November 4, 2025. The Schedule 13G/A reports shared voting and dispositive power with respect to 2,490,534 shares by Abrams Capital\n\nManagement, L.P., Abrams Capital Management, LLC, and David Abrams, with respect to 2,347,051 shares by Abrams Capital, LLC, and with respect to 1,941,198 shares by Abrams Capital\n\nPartners II, L.P.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n11: Additional Ownership Information\n\n73\n\n(3)\n\nBeneficial ownership as of December 31, 2023 as reported by BlackRock, Inc. in a Schedule 13G/A filed on January 25, 2024. The Schedule 13G/A reports sole voting power with respect to\n\n2,259,988 shares and sole dispositive power with respect to 2,352,180 shares.\n\n(4)\n\nBeneficial ownership as of December 31, 2023 as reported by Harris Associates L.P. and Harris Associates, Inc. in a Schedule 13G filed on February 14, 2024. The Schedule 13G/A reports sole\n\nvoting power with respect to 2,024,577 shares and sole dispositive power with respect to all of the shares.\n\n(5)\n\nBeneficial ownership as of June 30, 2025 as reported by Dimensional Fund Advisors LP in a Schedule 13G filed on February 14, 2025. The Schedule 13G reports sole voting power with respect to\n\n1,326,655 shares and sole dispositive power with respect to all of the shares.\n\n(6)\n\nIncludes 168 shares for each specified person underlying RSUs vesting within 60 days, for which the specified person does not have voting and dispositive power.\n\n(7)\n\nIncludes 171 shares for each specified person underlying RSUs vesting within 60 days, for which the specified person does not have voting and dispositive power.\n\n(8)\n\nIncludes shares underlying 1,132 deferred stock units without voting rights under a Deferred Compensation Agreement with the Company.\n\n(9)\n\nIncludes shares underlying 1,458 deferred stock units without voting rights under a Deferred Compensation Agreement with the Company.\n\n(10)\n\nIncludes 1,350 shares underlying RSUs vesting within 60 days for which current executive officers, directors and director nominees as a group do not have voting and dispositive power and shares\n\nunderlying 2,590 deferred stock units for which current executive officers, directors and director nominees as a group do not have voting rights.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n12: General Information\n\n74\n\n12\n\nGeneral Information\n\nAbout the Annual Meeting\n\nOnline Meeting\n\nOur Board of Directors has authorized us to conduct the Annual Meeting solely online via the Internet through online shareholder\n\ntools as described in the Notice of Internet Availability of Proxy Materials (the \"Notice\"). We believe a fully virtual meeting facilitates\n\ngreater participation by providing easy access to the meeting. This format empowers shareholders to participate fully from any\n\nlocation around the world.\n\nMailing Date\n\nOn or about March 11, 2026, we mailed to our shareholders the Notice containing instructions on how to access this proxy statement\n\nand our 2025 Annual Report on Form 10-K. The Notice provides instructions on how to vote online or by telephone and includes\n\ninstructions on how to receive a paper copy of the proxy materials by mail.\n\nMatters for Consideration at the Annual Meeting\n\nProposal\n\nBoard Vote\n\nRecommendation\n\nVote Requirement for\n\nApproval\n\nEffect of\n\nAbstention\n\nEffect of Broker\n\nNon-Vote\n\nProposal No. 1: The election of ten\n\ndirector nominees named in this\n\nproxy statement.\n\nFOR ALL\n\nFor each director, a majority\n\nof votes cast.\n\nNo effect.\n\nNo effect. Broker non-votes\n\ndo not count as votes cast.\n\nProposal No. 2: An advisory vote to\n\napprove the compensation of our\n\nnamed executive officers.\n\nFOR\n\nMajority of votes cast.\n\nNo effect.\n\nNo effect. Broker non-votes\n\ndo not count as votes cast.\n\nProposal No. 3: To ratify the\n\nappointment of KPMG LLP as our\n\nindependent registered public\n\naccounting firm for the year ending\n\nDecember 31, 2026.\n\nFOR\n\nMajority of votes cast.\n\nNo effect.\n\nBroker discretion to vote.\n\nProposal No. 4: To vote on a\n\nshareholder proposal requesting that\n\nour Board appoint an independent\n\nBoard chair.\n\nAGAINST\n\nMajority of votes cast.\n\nNo effect.\n\nNo effect. Broker non-votes\n\ndo not count as votes cast.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n12: General Information\n\n75\n\nItems of Business\n\nBoard Recommendation\n\n1.To elect the ten director nominees named in this proxy statement; . . . . . . . . . . . . . . . . . .\n\n☑ FOR each director nominee\n\n2.Approve, by an advisory vote, named executive officer compensation; . . . . . . . . . . . . . .\n\n☑ FOR\n\n3.Ratify the appointment of KPMG LLP as our independent registered public accounting\n\nfirm for fiscal year ending December 31, 2026; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n☑ FOR\n\n4.To vote on a shareholder proposal requesting that our Board appoint an independent\n\nBoard chair. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n☒ AGAINST\n\nAs of the date of this proxy statement, we are unaware of any matters that may properly be presented at the Annual Meeting. If any\n\nother matters are properly presented for consideration at the meeting, the persons named as proxies on the enclosed proxy card, or\n\ntheir duly constituted substitutes, will be deemed authorized to vote those shares for which proxies have been given or otherwise act\n\non such matters in accordance with their judgment.\n\nProxies\n\nThe Board has designated Tina Miller, Senior Vice President and Chief Financial Officer, and Alyse Ringrose, Corporate Controller\n\nas the proxy holders for the Annual Meeting. All properly executed proxies will be voted (except to the extent that authority to vote\n\nhas been withheld) as specified by the shareholder. Proxies submitted without specification will be:\n\n•Voted FOR the ten director nominees listed in this proxy statement;\n\n•Voted FOR the approval of our compensation of the named executive officers;\n\n•Voted FOR the ratification of the appointment of KPMG as our independent registered public accounting firm for 2026;\n\n•Voted AGAINST a shareholder proposal requesting that our Board appoint an independent Board chair.\n\nVoting\n\nWho Can Vote\n\nOnly holders of record of our common stock at the close of business on February 27, 2026, the record date, will be entitled to notice\n\nof and to vote at the meeting and any adjournment thereof. A list of shareholders entitled to vote at the Annual Meeting will be\n\navailable during the entire time of the Annual Meeting at the 2026 Annual Meeting Website. You may vote or submit questions during\n\nthe Annual Meeting by following the instructions available on the 2026 Annual Meeting Website during the Annual Meeting.\n\nAs of the record date, there were 23,299,555 shares of common stock outstanding and entitled to vote. Each share of common stock\n\noutstanding is entitled to one vote. Our executive officers and directors hold or control 251,221 shares of common stock outstanding\n\nrepresenting approximately 1.1% of the votes available to be cast at the Annual Meeting.\n\nQuorum\n\nFor a quorum to exist at the Annual Meeting, there must be represented, in person or by proxy, shares representing a majority of the\n\nvotes entitled to be cast at the meeting. Proxies that expressly abstain from voting on a particular proposal and broker non-votes will\n\nbe counted for purposes of determining whether a quorum exists at the Annual Meeting.\n\n“Shareholder of Record” and “Beneficial Ownership”\n\nIf your shares are owned directly in your name in an account with our stock transfer agent, Broadridge, you are considered the\n\n“shareholder of record” of those shares in your account. If your shares are held in an account with a broker, bank, or other nominee\n\nas custodian on your behalf, you are considered a “beneficial shareholder” of those shares, which are held in street name. The\n\nbroker, bank, or other nominee is considered the shareholder of record for those shares. As the beneficial owner, you have the right\n\nto instruct the broker, bank, or other nominee on how to vote the shares in your account. In order for your shares to be voted in the\n\nway you would like, you must provide voting instructions to your broker, bank, or other nominee by the deadline provided in the proxy\n\nmaterials you receive from your broker, bank, or other nominee. If you do not provide voting instructions to your broker, bank, or\n\nother nominee, whether your shares can be voted on your behalf depends on the type of item being considered for vote. Under\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n12: General Information\n\n76\n\nNYSE rules, brokers are permitted to exercise discretionary voting authority only on “routine” matters. Therefore, your broker may\n\nvote on Proposal No. 3 (“Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for\n\n2026”) even if you do not provide voting instructions because it is considered a routine matter. Your broker is not permitted to vote on\n\nthe other agenda items if you do not provide voting instructions because those items involve matters that are not considered routine.\n\nFor Proposal No. 1 (election of ten director nominees), Proposal No. 2 (advisory vote to approve the compensation of our named\n\nexecutive officers), Proposal No. 4 (a shareholder proposal requesting that our Board appoint an independent Board chair, if properly\n\npresented) if you do not provide voting instructions your shares will not be counted as votes cast for or against.\n\nTo vote by proxy:\n\nShareholder of Record\n\nIf you are a Beneficial Shareholder\n\nPlease promptly complete, sign, date, and return\n\nthe enclosed proxy card. You may also grant a\n\nproxy by calling 1-800-690-6903 or via the\n\nInternet by visiting www.proxyvote.com.\n\nPlease vote your shares by following the instructions set\n\nforth in the Notice provided by your broker, bank, trust,\n\nor other holder of record. In most cases, you may be\n\npermitted to submit your voting instructions by mail, by\n\ntelephone or via the Internet.\n\nHow to Vote\n\nWhether you are a shareholder of record or a beneficial shareholder, you may direct how your shares are voted without\n\nparticipating in the Annual Meeting. We encourage shareholders to vote well before the Annual Meeting, even if they plan to\n\nattend the virtual meeting, by completing proxies online or by telephone (at 1-800-690-6903), or, if they received printed copies\n\nof these materials, by mailing their proxy cards. Shareholders who attend the virtual Annual Meeting should follow the instructions\n\nat www.proxyvote.com to vote or submit questions during the meeting. Voting online during the meeting will also replace any\n\nprevious votes.\n\nHow You Can Revoke Your Proxy or Change Your Vote\n\nShareholders of record may revoke their proxy at any time before the electronic polls close by submitting a later-dated vote online\n\nduring the Annual Meeting, via the Internet, by telephone, by mail, or by delivering instructions to our Corporate Secretary before the\n\nAnnual Meeting. Beneficial shareholders may revoke any prior voting instructions by contacting the broker, bank, or other nominee\n\nthat holds their shares or by voting online during the Annual Meeting. Any written notice revoking a proxy should be sent to Lithia\n\nMotors, Inc., Attention: Corporate Secretary, 150 N. Bartlett Street, Medford, Oregon 97501.\n\nParticipating in the Annual Meeting\n\nAdmission\n\nIf you plan to participate in the Annual Meeting, please be aware that the Annual Meeting will be held virtually. There will be no\n\nphysical location for shareholders to attend. In addition, please note the requirements to attend the meeting virtually, as described\n\nbelow. If you do not comply with the procedures described here for attending the Annual Meeting virtually, you will not be able to\n\nparticipate in the Annual Meeting.\n\nTo attend virtually, vote at, and submit questions during, the Annual Meeting, visit www.virtualshareholdermeeting.com/LAD2026 and\n\nenter the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, voting instructions form, or proxy\n\ncard. Questions may be submitted in advance of the Annual Meeting by visiting www.virtualshareholdermeeting.com/LAD2026 and\n\nentering your 16-digit control number. Further information regarding voting rights and the matters to be voted upon is presented in\n\nthis proxy statement.\n\nRegistered shareholders who have misplaced their original proxy materials listing their unique control number can find that\n\ninformation by visiting www.shareholder.broadridge.com/bcis/ and selecting the option to create a profile in the top right- hand corner.\n\nAdditionally, if you have difficulty accessing the Annual Meeting through the 2026 Annual Meeting Website, a phone number will be\n\nposted on the website to connect you to technical support.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n12: General Information\n\n77\n\nAsking Questions\n\nOnce online access to the Annual Meeting is open, shareholders may submit questions, if any, on\n\nwww.virtualshareholdermeeting.com/LAD2026. You will need your unique control number included on your proxy card (printed in the\n\nbox and marked by the arrow) or on the instructions that accompanied your proxy materials. Questions pertinent to meeting matters will\n\nbe answered during the meeting, subject to time constraints.\n\nDiscretionary Authority\n\nWe do not know of any matters to be voted on by shareholders at the Annual Meeting other than those included in this proxy\n\nstatement. If any matter, other than those presented in this proxy statement, is properly presented at the meeting, your executed\n\nproxy gives the Proxies discretionary authority to vote your shares in accordance with their best judgment with respect to the matter.\n\nAnnual Meeting Voting Results\n\nOur inspector of elections will tabulate the vote at the Annual Meeting. We will provide voting results on our website and in a Current\n\nReport on Form 8-K filed with the SEC.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n12: General Information\n\n78\n\nAdditional Information\n\nSolicitation Expenses\n\nThe Company is soliciting proxies for the Annual Meeting. All expenses associated with this solicitation, including the cost of\n\npreparing, assembling and mailing the Notice, proxy statement, 2026 Annual Report to Shareholders, and form of proxy will be borne\n\nby us. Our directors, officers and employees may communicate with shareholders by telephone, facsimile, email or personal contact\n\nto solicit proxies. These individuals will not be specifically compensated for doing so. We will reimburse brokerage houses and other\n\ncustodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation materials to the\n\nbeneficial owners of our common stock.\n\nElectronic Delivery of Proxy Materials\n\nMaking the proxy materials available to shareholders via the Internet saves us the cost of printing and mailing documents and will\n\nreduce the impact of the Annual Meeting on the environment. If you received only a Notice, you will not receive a printed copy of the\n\nproxy materials unless you request it. All shareholders will have the ability to access the proxy materials on a website referred to in\n\nthe Notice or request to receive a printed set of the proxy materials at no charge. Instructions on how to access the proxy materials\n\non the internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy\n\nmaterials in printed form by mail or electronically by email on an ongoing basis by following the instructions on the website referred\n\nto in the Notice.\n\nHouseholding of Proxy Materials\n\nShareholders of record who have the same address receive only one copy of the Notice Regarding the Availability of Proxy Materials\n\nor the Proxy Statement and Annual Report on Form 10-K, as applicable, unless we receive contrary instructions from one or more of\n\nthe shareholders. This procedure reduces the Company’s printing and mailing costs and the environmental impact of its annual\n\nmeetings. Shareholders who participate in householding continue to receive separate proxy forms. Householding does not affect\n\ndividend check mailings.\n\nAny shareholder who would prefer to have a separate copy of the Notice Regarding the Availability of Proxy Materials, Proxy\n\nStatement or Annual Report on Form 10-K delivered to him or her at the shared address for this and future years may elect to do so\n\nby calling (877) 331-3084 or by writing to Edward Impert, our Secretary, at 150 N. Bartlett Street, Medford, Oregon 97501. A copy of\n\nthe materials will be sent promptly to the shareholder following receipt of a written or oral request by a shareholder to receive a copy\n\nof the Notice Regarding the Availability of Proxy Materials, the Proxy Statement or Annual Report on Form 10-K. The foregoing\n\ncontact information can also be used by shareholders sharing an address to request delivery of a single copy of the Notice\n\nRegarding the Availability of Proxy Materials, the Proxy Statement or Annual Report on Form 10-K if they are receiving multiple\n\ncopies of any of those documents.\n\nAnnual Report on Form 10-K\n\nWe will provide, without charge, a copy of our Annual Report on Form 10-K as filed with the SEC. Written requests should be mailed\n\nto the attention of Investor Relations, Lithia Motors, Inc., 150 N. Bartlett Street, Medford, Oregon 97501. You may also find our Form\n\n10-K on our website at www.lithiamotors.com.\n\nOther Materials\n\nAll materials filed by us with the SEC may be obtained through the SEC’s website at www.sec.gov.\n\nCommunications with the Board\n\nOur Board has adopted a Shareholder Communication Policy to promote efficient shareholder and interested party communications\n\nwith our Board and management. Our Investor Relations Department is responsible for receiving and routing all shareholder and\n\ninterested party communications. Corporate governance issues are the responsibility of the Nominating and Governance Committee.\n\nOur Audit Committee handles concerns or allegations regarding possible violations of accounting or financial reporting matters.\n\nManagement is the more appropriate group for handling all other matters and we encourage you to contact them accordingly.\n\nAll correspondence with our Board or its members must be in writing, directed to the attention of either our Board of Directors or an\n\nindividual director and delivered to: Investor Relations Department, Lithia Motors, Inc., 150 N. Bartlett Street, Medford, Oregon\n\n97501. The Investor Relations Department will review communications to our Board or individual directors and direct the\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n12: General Information\n\n79\n\ncommunication to the named Board member if the communication relates to important Company policies, or to management, if the\n\nmatter is better addressed by management. The Investor Relations Department copies the Lead Independent Director and our\n\nGeneral Counsel on all communications. A complete copy of our Shareholder Communication Policy is available on our website at\n\ninvestors.lithiadriveway.com and interested persons may obtain a written copy from the Investor Relations Department.\n\n2026 Shareholder Proposals or Nominations\n\nShareholder Proposals\n\nSEC rules require that any shareholder proposal to be included in our proxy materials for consideration at next year’s annual\n\nmeeting be received by us at our principal executive office no later than November 11, 2026 (120 days prior to the anniversary\n\nof the mailing of the prior year’s Notice of Internet Availability). Shareholders who wish to nominate one or more director candidates\n\nfor election to the Board to be included in our proxy materials for consideration at next year’s annual meeting must do so in\n\naccordance with our Bylaws, which require that notice of such a nomination be delivered to our Secretary at our principal executive\n\noffices no earlier than October 12, 2026 and no later than November 11, 2026 (no earlier than 150 days and no later than 120 days\n\nprior to the anniversary of the mailing of the prior year’s proxy materials), and must include the information required by our Bylaws.\n\nShareholders who otherwise wish to present proposals for action at next year’s annual meeting must do so in accordance with our\n\nBylaws, which require shareholders to give us advance written notice of a director nomination or other business to be conducted at\n\nany meeting of shareholders. To be timely, the written notice for next year’s annual meeting must be received by our Secretary\n\nbetween December 31, 2026 and January 30, 2027 (at least 90 days, and no earlier than 120 days, before the first anniversary of\n\nour preceding year’s annual meeting) and must include the information required by our Bylaws. Our mailing address is 150 N.\n\nBartlett Street, Medford, Oregon 97501.\n\nShareholder Director Recommendations\n\nThe Nominating and Governance Committee will consider potential director nominees recommended by any record or beneficial\n\nshareholder. Shareholders may recommend individuals to the Nominating and Governance Committee for consideration as potential\n\ndirector nominees by submitting a written recommendation to the Chairman of the Nominating and Governance Committee in\n\naccordance with our Shareholder Communication Policy. To be considered for nomination to the following year’s Board, the written\n\nrecommendation must be received at our principal executive office at 150 N. Bartlett Street, Medford, Oregon 97501. In addition to\n\nthe requirements under our Bylaws with respect to advance notice of any nomination, a shareholder who intends to solicit proxies for\n\na director nominee in accordance with the SEC’s universal proxy rule must comply with the additional requirements of Rule\n\n14a-19(b).\n\nThe written recommendation of a director nominee must include the candidate’s name, appropriate biographical information,\n\nincluding information about the candidate’s qualifications and background materials, a statement that the person submitting the\n\nrecommendation is a shareholder entitled to vote in the election of directors and a consent to serve as director signed by the\n\nrecommended individual. If the necessary information is received in a timely manner and the shareholder and recommended\n\nindividual timely cooperates with our due diligence and other processes, the Nominating and Governance Committee will evaluate\n\nthe shareholder-recommended candidate using substantially the same process, and applying substantially the same criteria, as it\n\nuses to evaluate all other candidates. For information regarding minimum qualifications for directors and specific qualities and skills\n\nthat the Nominating and Governance Committee believes are necessary for our directors to possess, see “[Director Qualifications](#ic4b68f9df5f645149bb3535a26afa3af_34)\n\n[and Nominations](#ic4b68f9df5f645149bb3535a26afa3af_34)” above. Recommended candidates are submitted to our Board to be considered as director nominees. If our Board\n\ndetermines to nominate a shareholder-recommended candidate, the candidate’s name will be included in our proxy and on the ballot\n\nat our annual meeting of shareholders.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n13: Certain Relationships and Related Transactions and Director Independence\n\n80\n\n13\n\nCertain Relationships and Related\n\nTransactions and Director Independence\n\nThe Audit Committee, or another appropriate independent committee, and, where appropriate, our Board of Directors review all\n\ntransactions between us and any related person, which includes, all of our nominees for director, directors and executive officers and\n\ntheir immediate family members and all persons known to us to be the beneficial owner of more than five percent of our voting\n\nsecurities and their immediate family members, that exceed $120,000 and in which the related person has a direct or indirect\n\nmaterial interest. Although we do not maintain a written policy or have written procedures for such review, our Code of Business\n\nConduct and Ethics imposes an obligation on each of our directors and senior executive officers to disclose any actual or apparent\n\nconflict of interest involving such person and Lithia. Further, each of our directors and NEOs signs a detailed questionnaire used in\n\nthe preparation of this proxy statement that requires the disclosure of, among other things, any related-person transaction. The Audit\n\nCommittee or other independent committee and our Board review and determine whether to approve or disapprove such\n\ntransactions in accordance with the Code of Business Conduct and Ethics, based on (i) whether the proposed transaction is on\n\nterms that are no less favorable to us than the terms generally made available by us to an unaffiliated third party under similar\n\ncircumstances and (ii) the extent of the related party’s interest in the proposed transaction.\n\nSidney B. DeBoer is the father of Bryan B. DeBoer, who is a Director and our Chief Executive Officer, and Mark DeBoer, who is the\n\nCompany's Vice President of Real Estate. There are no other family relationships between our executive officers and directors.\n\nOn September 14, 2015, the Company entered into a Transition Agreement with Sidney B. DeBoer, the Chairman of the Company, to\n\nreflect Mr. DeBoer’s changing role at the Company. Under the agreement, effective December 31, 2015, Mr. DeBoer ceased to be an\n\nexecutive officer of the Company, and the Company ceased paying Mr. DeBoer a base salary and contributing to his account under\n\nthe Company’s Executive Management Non-Qualified Deferred Compensation and SERP. Mr. DeBoer also ceased to be eligible to\n\nparticipate in performance-based compensation arrangements, including under the Company’s Short-Term Incentive Plan and under\n\nits Stock Incentive Plan. Under the Transition Agreement the Company pays Mr. DeBoer annual amounts for his prior services\n\nrendered as an employee of the Company equal to $1,050,000 and a $42,000 vehicle allowance, and the Company reimburses Mr.\n\nDeBoer for amounts payable under the four split-dollar insurance policies described below in this section. A Special Meeting of\n\nShareholders was held on January 21, 2019, where 99.95% of voting shareholders agreed that adding a sunset to the Transition\n\nAgreement was in the best interests of the shareholders. Under the amendment to the Transition Agreement that adds the sunset,\n\nthe Transition Agreement ends on the earlier of Mr. DeBoer’s death or December 31, 2035.\n\nThe Company entered into a Director Service Agreement, effective January 1, 2016, with Sidney B. DeBoer. Under the agreement,\n\nfor so long as Mr. DeBoer serves as a member of the Board, the Company will pay him the same compensation, in the same form\n\n(cash or equity), as the Company pays to its non-employee directors (as that amount is established by the Board from time to time).\n\nSidney B. DeBoer was permitted to utilize the Company’s access to FlexJet’s corporate aircraft service for personal travel provided\n\nhe reimburses all flight related and incremental costs to the Company, including FlexJet’s hourly rate for each flight.\n\nWe maintain four split-dollar “whole-life” insurance policies covering Sidney B. DeBoer, each worth $3,727,600 on maturity and\n\nMr. DeBoer has the right to designate the beneficiary or beneficiaries of the death benefit of each policy. Lithia owns and pays the\n\npremium for each of the four policies, and pursuant to the amended Transition Agreement described above, Lithia will continue to\n\npay the premiums for each of the four policies until the earlier of Mr. DeBoer’s death or December 31, 2035. Lithia will receive the\n\ngreater of the cash surrender value or cumulative premiums paid at the maturity of each policy.\n\nIn 2025, Mark DeBoer, son of Sid DeBoer and brother of Bryan DeBoer, received a salary of $360,000, incentive compensation of\n\n$320,000 and other compensatory arrangements totaling $12,921.\n\nLithia Motors, Inc. 2026 Proxy Statement\n\n13: Certain Relationships and Related Transactions and Director Independence\n\n81\n\nMr. Bailey has served as President of SOU since January 2022. In 2025 and so far in 2026, the Company has donated\n\napproximately $949,999 and $0, respectively, to the Southern Oregon University Foundation, which is affiliated with SOU and has a\n\nmission of securing private philanthropic contributions to advance SOU. These donations are part of a 10-year commitment of\n\nsupport to SOU made by the Company in July 2022 that demonstrates the Company’s longtime relationship with SOU.\n\nDELINQUENT SECTION 16(a) REPORTS\n\nSection 16(a) of the Exchange Act requires our directors, executive officers, and beneficial owners of more than 10% of our common\n\nstock to file reports with the SEC indicating their holdings of, and transactions in, Lithia’s equity securities. Based solely on a review\n\nof copies of these reports, we believe that all of our executive officers, directors, and 10% owners timely complied with all Section\n\n16(a) filing requirements for fiscal 2025 except for the following: on May 14, 2025, an amended Form 4 was filed for Mr. Sidney\n\nDeBoer to correct a Form 4 originally filed on August 23, 2024 to report an additional transaction that was inadvertently omitted from\n\nthe original filing due to an administrative error; on October 10, 2025 a late Form 4 reporting one transaction was filed for Richard\n\nBailey Jr. as a result of a delay in receiving Mr. Bailey’s new EDGAR filing codes from the SEC; and on November 4, 2025, a late\n\nForm 3 was filed by Abrams Capital Management, L.P., Abrams Capital Management, LLC and David Abrams."}