Lithia Motors : 2025 Proxy Statement

About this update from Lithia Motors, Inc.

Notice of 2026 Annual Meeting of S hareholders and Proxy Statement Thursday, April 30, 2026, at 8:30 a.m. Pacific Daylight Time virtualshareholdermeeting.com/LAD2026 A P R I L 2 0 2 6 OUR VALUES The Fuel behind Lithia & Driveway Earn Customers for Life Create welcoming and trustworthy experiences for our customers. Take Personal Ownership Enjoy the freedom to make the right choices and own our results. Improve Constantly Champion one another's growth to achieve more together. Have Fun! Connect as a team through celebration, positivity, passion, and purpose. Our Vision Leading the modernization of personal transportation solutions wherever , whenever , and however consumers desire. Letter from the Chief Executive Officer Dear Shareholder, We are glad to extend an invitation for you to join us at Lithia & Driveway's virtual 2026 Annual Meeting of Shareholders on Thursday, April 30, 2026, at 8:30 a.m. Pacific Daylight Time where we will discuss our continued progress in executing our strategy to drive profitable growth and modernize personal transportation solutions wherever, whenever, and however customers desire. In 2025, we built momentum as the world's largest omnichannel mobility retailer, delivering another year of consistent financial growth and operational excellence. We optimized our network, continued to enhance our adjacencies, and improved performance while building a durable business through any consumer cycle. Our investments in AI and digital are building customer loyalty through simple, transparent, and convenient customer experiences, while also empowering our team members to improve productivity and focus on what they do best - creating memorable customer experiences. Our results demonstrate our growth and resilience. We achieved double-digit growth in EPS, same-store growth across all business lines, reached record profitability in financing operations led by Driveway Finance Corporation, and continued to diversify our store network. Our strategic partnerships accelerated and we are seeing the benefits of the depth of our platform. Our disciplined capital allocation provides a foundation to capture market share and respond to market conditions to maximize shareholder value. This foundation combines with our relentless focus on operational efficiency to accelerate our growth. For 80 years, our people have been the key to our success. Our mission, Growth Powered by People , reflects the core of our entrepreneurial strategy. As we continue to transform the industry, we remain anchored in our core values to Earn Customers for Life , Improve Constantly , Take Personal Ownership , and Have Fun! In the years ahead, we are committed to unlocking the full potential of our omnichannel platform. Our diversified business model positions us to drive sustainable growth, and we are confident in our ability to continue leading the transformation of automotive retail. Thank you for your partnership and support. Bryan B. DeBoer President & Chief Executive Officer Lithia Motors, Inc. Notice Of Annual Meeting Of Shareholders 2026 Annual Meeting Information Record Date February 27, 2026 Meeting Time 8:30 a.m. (Pacific Daylight Time) Annual Meeting Website www.virtualshareholder meeting.com/LAD 2026 Meeting Date Thursday, April 30, 2026 Items of Business Recommendation COMPANY PROPOSALS Elect the ten director nominees named in this proxy statement; FOR , each nominee Approve, by an advisory vote, named executive officer compensation; FOR Ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year ending December 31, 2026; and FOR SHAREHOLDER PROPOSAL Vote on a shareholder proposal requesting a change to our board leadership structure, if properly presented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AGAINST To the Shareholders of Lithia Motors, Inc. I am pleased to invite you to the 2026 Annual Meeting of Shareholders of Lithia Motors, Inc. (the "Annual Meeting") which will be held virtually at 8:30 a.m. Pacific Daylight Time on Thursday, April 30, 2026. We believe a fully virtual meeting facilitates greater participation by providing easy access to the meeting and allowing shareholders to participate from any location around the world. All of our shareholders will be able to participate in the Annual Meeting online without prohibitive cost or inconvenience. There will be no physical location for shareholders to attend. The Annual Meeting will only occur virtually through an audio webcast, accessible at the link provided above. You may notify the Company of your desire to participate in the Annual Meeting by remote communication by logging into the 2026 Annual Meeting Website, listed above, in advance of the meeting. Log-in will begin at 8:00 a.m. Pacific Daylight Time. To participate in the Annual Meeting, you will need your unique control number included on your proxy card (printed in the box and marked by the arrow) or on the instructions that accompanied your proxy materials. If you have any questions regarding this information or the proxy materials, please visit our website at investors.lithiadriveway.com, or contact our investor relations department at (541) 776-6591. Our proxy statement and 2025 Annual Report on Form 10-K can be accessed directly at the following internet address: https://www.proxyvote.com . Just enter the control number located on your proxy card. We appreciate your continued support of Lithia Motors and look forward to receiving your proxy. Very truly yours, David G. Stork, Senior Vice President and Chief Administrative Officer March 11, 2026 How to Vote Only holders of record of our common stock at the close of business on February 27, 2026, the record date, will be entitled to notice of and to vote at the meeting and any adjournment thereof. A list of shareholders entitled to vote at the Annual Meeting will be available during the entire time of the Annual Meeting at https://www.virtualshareholdermeeting.com/LAD2026 . You may vote or submit questions during the Annual Meeting by following the instructions available on the 2026 Annual Meeting Website. Further information regarding voting rights and the matters to be voted upon is presented in our proxy statement. Important notice regarding the availability of proxy materials for the 2026 Annual Meeting of Shareholders to be held on April 30, 2026. Our proxy statement and 2025 Annual Report on Form 10-K can be accessed directly at the following Internet address: https://www.proxyvote.com . Just enter the control number located on your proxy card. To obtain paper copies of the proxy statement and our 2025 Annual Report on Form 10-K at no charge, written requests should be mailed to the attention of Investor Relations, Lithia Motors, Inc., 150 N. Bartlett Street, Medford, Oregon 97501. YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy via internet, telephone or by completing, signing, dating and returning your proxy card or voting instruction form so that your shares will be represented at the Annual Meeting. Special Note Regarding Forward Looking Statements This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements often use words such as "project," "outlook," "target," "may," "will," "would," "should," "seek," "expect," "plan," "intend," "forecast," "anticipate," "believe," "estimate," "predict," "potential," "likely," "ensure," "goal," "strategy," "future," "maintain," and "continue" or the negative of these terms or other comparable terms. The Company's expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition, and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this document. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, those described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading "Risk Factors," and those that have been or may be described in other reports filed by the Company, including reports on Form 8-K. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation: (i) the profitability of our strategy and growth; (ii) future market conditions, including anticipated vehicle and other sales, gross profit and inventory supply; (iii) our business strategy and plans, including our achieving our long-term financial targets; (iv) the growth, expansion, make-up, and success of our network, including our finding accretive acquisitions that meet our target valuations and acquiring additional stores; (v) annualized revenues from acquired stores or achieving target returns; (vi) the growth and performance of our Driveway e-commerce home solution and DFC, their synergies and other impacts on our business and our ability to meet Driveway and DFC-related targets; (vii) the impact of sustainable vehicles and other market and regulatory changes on our business, including evolving vehicle distribution models; (viii) our capital allocations and uses and levels of capital expenditures in the future; (ix) expected operating results, such as improved store performance, continued improvement of SG&A as a percentage of gross profit and any projections; (x) our anticipated financial condition and liquidity, including from our cash and the future availability of our credit facilities, unfinanced real estate, and other financing sources; (xi) our continuing to purchase shares under our share repurchase program; (xii) our compliance with financial and restrictive covenants in our credit facilities and other debt agreements; (xiii) our programs and initiatives for team member recruitment, training, and retention; and (xiv) our strategies and targets for customer retention, growth, market position, operations, financial results, and risk management. Any forward-looking statement made by us in this document is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Other All references in this proxy statement to "LAD," "Lithia," "Lithia Motors," "Lithia & Driveway," the "Company," "we," "us," or "our" refer to Lithia Motors, Inc. and its subsidiaries, except where the context otherwise requires or as otherwise indicated. Our store operations are conducted by our subsidiaries. The content on any website referred to in this proxy statement is not incorporated by reference in this proxy statement unless expressly noted. Table of Contents 01 Lithia Motors, Inc. Proxy Statement 8 06 Compensation Tables 52 2025 Achievements and Performance Highlights 8 Summary Compensation Table 52 Our Company Strategy 9 Grants of Plan-Based Awards Table for 2025 54 Outstanding Equity Awards at Fiscal Year-End 55 02 Directors and Nominees 10 Stock Vested for 2025 56 Employee/Founder Directors 11 Non-Qualified Deferred Compensation 56 Independent Directors 11 Potential Payments Upon Termination or Change in Contro l 57 Summary of Director Experience, Skills and Attributes 12 CEO Pay Ratio 60 Director Nominee Biographies 13 Pay Versus Performance 62 Non-Director Executive Officers 18 07 Proposal No. 1 Election of Directors 64 03 Corporate Governance 20 Board of Directors 20 08 Proposal No. 2 Advisory vote to approve the 65 2025 Board and Committee Composition 20 compensation of our named executive officers Board Committees 21 Director Independence 22 09 Proposal No. 3 Ratification of appointment of 66 Lead Independent Director and Governance Practices 22 independent public accounting firm From our Lead Independent Director 23 Fees Paid to KPMG LLP Related to Fiscal Years 2024 and 67 Director Qualifications and Nominations 24 2025 Our Board's Risk Oversight Role 26 Audit Committee Report 67 Code of Business Conduct and Ethics 27 Selection of KPMG as our Auditor 68 Compensation of Directors 27 Audit Committee Actions 68 2025 Director Compensation 28 Non-Employee Director Stock Ownership Policy; Hedging and 29 10 Proposal No. 4 Shareholder Proposal Requesting 69 Pledging Restrictions that our Board of Directors Appoint an Independent 04 Corporate Responsibility 30 Board Chair Introduction 30 11 Additional Ownership Information 72 Increase GreenCars on the Road 31 Operate Sustainable Stores 31 12 General Information 74 Extend Vehicle Lifecycles 32 Online Meeting 74 Strengthen Our Communities 32 Voting 75 Maximize Employee Health, Wellness & Safety 33 Attending the Annual Meeting 76 Champion an Inclusive, High-Performance Culture 33 Additional Information 78 2026 Shareholder Proposals or Nominations 79 05 Compensation Discussion and Analysis (CD&A) 34 Executive Summary and Compensation Highlights 35 13 Certain Relationships and Related Transactions and 80 Compensation Components 40 Director Independence 2025 Compensation Program Design & Results 41 Base Salary 41 Short-Term Incentive Plan 41 Long-Term Incentive Plan 44 Compensation Decision Making Process 48 Executive Compensation Governance Components 50 01 LITHIA MOTORS, INC. PROXY STATEMENT This proxy statement, the accompanying 2025 Annual Report on Form 10-K, the Notice of Annual Meeting and the proxy card are being furnished to the shareholders of Lithia Motors, Inc., an Oregon corporation, in connection with the solicitation of proxies by the Company for use at our 2026 Annual Meeting of Shareholders (the "Annual Meeting"). The Annual Meeting will only occur virtually through an audio webcast, accessible at https://www.virtualshareholdermeeting.com/LAD2026 on Thursday, April 30, 2026, at 8:30 a.m. Pacific Daylight Time. On or about March 11, 2026, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access this proxy statement and our 2025 Annual Report on Form 10-K. The Notice provides instructions on how to vote online, by mail or by telephone and includes instructions on how to receive a paper copy of the proxy materials by mail. 2025 Achievements & Performance Highlights $32.32 EPS | Up 10% v. prior year $826M Net Income | Up 1% v. prior year $37.6B Revenue | Up 4% v. prior year 11.4% of Shares Repurchased $1.0B Capital Returned via Dividends and Buybacks | Up 148% v. prior year $2.4B Expected Annualized Revenue from Key 2025 Acquisitions In 2025, Lithia & Driveway grew earnings per share by 10% and we recorded the highest revenue in our history as we continued to expand our omnichannel ecosystem. In particular, we accomplished the following: Sold 828,000 units, continuing to establish Lithia & Driveway as the world's largest auto retailer Returned to class-leading growth in used vehicles, delivering 5.8% same-store growth in used vehicle revenue year-over-year Achieved 9.4% growth in aftersales gross profit on a same-store basis, demonstrating the resilience of this high-margin category Increased profitability in Financing Operations, including our captive lender, Driveway Finance Corporation, to $75 million, a $66 million year-over-year increase and scaled to a $4.8 billion portfolio at year-end Provided significant shareholder return with the repurchase of 11.4% of our outstanding shares at a weighted average price of approximately $314 Acquired $2.4 billion in revenue while optimizing our network and improved reach to within 200 miles of 95% of the US population Strengthened our key strategic partnerships with Pinewood.AI, a cloud-native global dealer management system and automotive intelligence platform that delivers a seamless and scalable experience for stores and customers, and continued to mature our investment in Wheels, the largest fleet management company in North America Our Company Strategy Lithia & Driveway (LAD) is the largest global automotive retailer making Auto Done Easy by providing simple, transparent, and convenient experiences throughout the ownership lifecycle. Our comprehensive network of physical locations, e-commerce platforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies delivers profitable growth in a massive and unconsolidated industry. LAD's unique, highly diversified design provides the flexibility and scale to pursue its vision to modernize personal transportation solutions wherever, whenever, and however consumers desire. Our omnichannel ecosystem and international network of stores and customer solutions provide consistent free cash flow to fund our growth through acquisitions and investments while maintaining a strong, disciplined balance sheet. Our growth and scale allow us to improve the reach to our customers, grow our market share, and enhance our product and service offerings. LAD is focused on improving the customer experience through all our channels. We continue to evolve and execute best-in-class customer experiences across our stores and adjacencies to build loyalty and Earn Customers for Life. This strategy underpins our long-term plan and positions us, along with our Driveway and GreenCars brands, store websites, and MyDriveway online customer portal, to meet customers on their terms, creating Auto Done Easy. Driveway Finance Corporation (DFC), our captive finance solution, continues to scale profitably. In 2025 we increased our portfolio to nearly $5B and increased profitability to $75 million across Finance Operations. DFC diversifies our earnings stream, amplifying future profitability. With DFC as our leading captive finance arm, we have room to expand the penetration rate and size of the portfolio with high-quality loans at the top of the customer funnel. Our regenerative cash flow engine enables us to allocate capital efficiently and flexibly. We repurchased over 11% of outstanding shares in 2025 while maintaining balance sheet strength. We completed strategic acquisitions totaling $2.4 billion of annualized revenues, strengthening our network density and luxury mix across key markets. Our capital deployment strategy is opportunistic and responsive to market conditions, maintaining a balanced approach between share repurchases, selective acquisitions, and organic investments. This approach ensures sustainable growth while generating long-term value for shareholders. Our leaders and teams build an atmosphere of high performance and they Take Personal Ownership in driving our collective success. As we achieve ambitious goals while transforming the industry, we find and grow talented team members who enjoy and thrive in entrepreneurial environments. We reward growth and execution through pay for performance, special recognition programs, such as the Lithia & Driveway Partners Group (LPG), and a company-wide focus on developing our best talent. These elements create our unique culture that is reflected in our mission, Growth Powered by People . 02 Directors & Nominees Women 50% 60% Racially Diverse 30% 80% 100% Director/Nominee Diversity Director/Nominee Independence Committee Independence 60% of directors and nominees are gender or ethnically diverse. 80% of directors and nominees are Independent. 100% of Board committee members are Independent. 2.9 Years Independent Director/Nominee Average Tenure 61.9 Years Independent Director/Nominee Average Age 0-2 Years: 3-5 Years: 6-8 Years: 50-59 Years: 60-65 Years: 66-71 Years: Employee/Founder Directors Independent Directors and Nominees Sidney B. DeBoer, 82 Chairman of the Board Founder of Lithia Motors, Inc. Tenure: 29 years* Bryan B. DeBoer, 59 Chief Executive Officer and President Tenure: 18 years Louis P. Miramontes, 71 Lead Independent Director, Audit Chair Managing Partner at KPMG LLP (retired) Audit Committee Financial Expert Tenure: 8 years Other Public Boards: 1 Stacy C. Loretz-Congdon, 66 Independent, Nominating and Governance Chair SVP, CFO and Assistant Secretary, Core-Mark Holding Company, Inc. (retired) Audit Committee Financial Expert Tenure: 3 years 2025 Committee Participation Audit Committee CHAIR Louis P. Miramontes MEMBER James E. Lentz MEMBER Stacy C. Loretz-Congdon MEMBER Cassandra M. McKinney MEMBER Richard J. Bailey Jr. MEMBER Heidi L. O'Neill Compensation Committee CHAIR Shauna F. McIntyre MEMBER James E. Lentz MEMBER Cassandra M. McKinney MEMBER Louis P. Miramontes Nominating & Governance Committee CHAIR Stacy C. Loretz-Congdon MEMBER James E. Lentz MEMBER Shauna F. McIntyre MEMBER Louis P. Miramontes Shauna F. McIntyre, 54 Independent, Compensation Chair CEO of Ensurge Micropower ASA Tenure: 7 years Richard J. Bailey Jr., 55 Independent President of Southern Oregon University Tenure: less than 1 year Priya C. Huskins, 53 Independent SVP and National Director, Arthur J. Gallagher & Co. Nominee Other Public Boards: 2 James E. Lentz, 70 Independent Toyota North America CEO (retired) Tenure: 3 years Cassandra M. McKinney, 65 Independent EVP, Executive Director of Retail, Comerica Bank (retired) Audit Committee Financial Expert Tenure: 2 years Heidi L. O'Neill, 61 Independent President of Consumer, Product, and Brand at Nike, Inc. (retired) Tenure: less than 1 year *Board member tenure reflects years of service since the Company's initial public offering. Summary of Director Experience, Skills and Attributes Skills and Attributes of our Board Our directors bring a balanced mix of skills, qualifications and experience and we believe their diverse backgrounds contribute to an effective and well-balanced board. Listed below is a summary of the diverse skills and attributes of our Board of Directors: Directors with an understanding of accounting, financial reporting, capital allocation processes and financial markets are essential to ensuring effective oversight of our financial resources, risks and processes, and provide valuable advice and insights with respect to establishing a successful capital strategy critical to our ongoing success. Finance Skills and Experience Description Legal and Compliance Directors with risk management and compliance oversight experience guide our Board and management in executing their responsibilities to identify, evaluate and understand the magnitude of various risks facing the Company, and are key in designing appropriate policies and procedures to effectively mitigate and manage those risks. Executive Directors who have experience and expertise with tax, legal, securities and accounting issues are integral in setting Compensation the compensation of our executive officers and designing and implementing effective incentive plans. Risk Directors with experience in risk management guide our risk mitigation strategy beyond mere financial and Management accounting risk, to encompass cyber, enterprise, compensation, supply chain, corporate responsibility and governance risk management. Directors with international or global markets experience bring valuable knowledge and perspective of global industry International dynamics to the Company and its international operations, including exposure to different cultural perspectives and practices and different political and regulatory environments. Directors with senior leadership experience in complex public, private and government organizations, whether as an Strategic & Senior Leadership officer or board member, can effectively oversee the management of the Company and bring a valuable perspective to important operational issues, strategy and initiatives to drive change and growth. These directors are generally highly effective at motivating, managing and inspiring others and have talent, professional development and succession planning skills. Directors with corporate governance experience gained from service on or to company boards provide valuable Board Service insight into the dynamics and operations of the Board and the impact that governance and compensation decisions & Governance have on the Company and stockholders. Their skills support the Company's goals of strong corporate governance practices through Board and management accountability, transparency, legal and regulatory compliance and protection of stockholder interests. Marketing, Advertising & Directors that have effectively engaged both customers and investors guide us as we seek to solidify an omnichannel Investor customer experience while listening to and protecting the interests of our stockholders. Relations Technology, As we continue to drive digital innovation in our market and the broader environment, we rely upon directors with Cybersecurity, experience in innovating across digital platforms and designing systems to protect our electronic infrastructure, as & Digital well as our information and the information of our customers. Innovation Directors with strategic planning and merger and acquisition experience can provide insight as we identify the best Mergers & strategic manner in which to expand our business and drive growth either through innovative strategic initiatives or Acquisitions acquisitions and other business ventures. Such individuals can provide valuable guidance on how to develop a strategic plan and oversee the execution of key strategic initiatives and evaluating our progress of those initiatives. Diversity & Inclusion Directors who have experience and expertise in building cultures that are rich in diversity, inclusion and equal opportunity that can help us incorporate those same ideals into our human capital management strategy. Human Rights Directors who have experience advocating not just for shareholders, but stakeholders, provide valuable insight into & Community protecting the rights of people, our employees and the communities in which we do business, and are advocates of Responsibility social justice. Director and Nominee Biographies Sidney B. DeBoer Biography Why Nominated Sidney B. DeBoer took Lithia Motors public in 1996 and is the Chairman of the Board. Mr. DeBoer served as Chief Executive Officer and Secretary from 1968 through 2011, and then as Executive Chairman through the end of 2015. His charitable work on the Southern Oregon University Foundation Board, Oregon Community Foundation and the Oregon Shakespeare Festival has created a vibrant community for our Company's headquarters. Mr. DeBoer attended Stanford University and the University of Oregon. Bryan B. DeBoer Mr. DeBoer is the Chairman of the Board. Mr. DeBoer's founder's spirit and pioneering work in the public auto retail sector as an automotive dealer has earned him numerous awards and recognition. His familiarity with our business, executive leadership knowledge and industry experience make him uniquely qualified to serve as our Chair. Mr. DeBoer has served on our board since 1968. Biography Why Nominated Prior to becoming CEO, Bryan B. DeBoer was Senior Vice President of Mergers & Acquisitions/Operations and then Chief Operating Officer, driving the growth of Lithia and transforming the Company culture to an entrepreneurial and high-performance model. Upon joining Lithia in 1989, Mr. DeBoer grew through the store positions of Finance Manager, Used Vehicle Manager, General Sales Manager, General Manager and multi-store General Manager. Mr. DeBoer has a B.S. degree, summa cum laude, from Southern Oregon University in Business Administration. He also graduated from the National Automobile Dealers Association Dealer Academy. Mr. DeBoer has been our CEO and President since 2012 and first became a director in 2008. Mr. DeBoer's store experience, passion for mergers and acquisitions and demonstrated ability to develop strong manufacturer relationships drive our growth. His enthusiasm for the car business combined with a visionary spirit set the tone for our innovative and entrepreneurial culture. Richard J. Bailey Jr. Biography Why Nominated Richard J. Bailey Jr. has served as the President and Chief Executive Officer of Southern Oregon University since January 2022, and before that oversaw the resurgence of Northern New Mexico College, where he served as President from October 2016 to January 2022. Prior to that, Mr. Bailey completed a 24-year career with the U.S. Air Force, retiring as a full colonel and command pilot with more than 3,500 flying hours. From 2012 to 2016, Mr. Bailey also taught cybersecurity and cyber strategy for the U.S. Air Force. Dr. Bailey received a bachelor's degree in engineering sciences from the Air Force Academy, a master's degree in international affairs from Washington University (St. Louis), and a doctorate degree in government from Georgetown University. Mr. Bailey joined our Board in October of 2025 and brings with him a track record of operational excellence, strategic oversight, human capital management, and cybersecurity expertise as a full Colonel in the U.S. Air Force and distinguished university president. Mr. Bailey serves on our Audit Committee. Priya C. Huskins Biography Why Nominated Priya C. Huskins is a Senior Vice President and National Director for Arthur J. Gallagher & Co., a commercial insurance brokerage. She assumed this role following Gallagher's acquisition of Woodruff Sawyer & Co. in 2025, where she has served in various positions since 2003, including as a Partner and Senior Vice President since 2005, as a member of Woodruff Sawyer's board of directors since 2016, and as the Presiding Director of that board beginning in 2023. Prior to that, Ms. Huskins was a corporate and securities attorney at the law firm Wilson Sonsini Goodrich & Rosati from 1997 to 2003. She also has sat on the advisory board of the Stanford Rock Center for Corporate Governance since 2012. Since 2007, Ms. Huskins has served on the board of directors of Realty Income Corporation (NYSE: O) where she currently chairs the Compensation and Talent Committee and sits on the Nominating/Governance Committee. Since 2021, she has been a member of the board for NMI Holdings, Inc. (Nasdaq: NMIH), where she currently serves as a member of the Compensation committee and Governance and Nominating committee. Ms. Huskins is also a member of the board of the Long Term Stock Exchange, a role she has held since 2022. She previously served as lead independent director of Anzu SPAC I (Nasdaq: ANZUU), which became Envoy Medical, Inc. (Nasdaq: COCH), from 2021 to 2023. Ms. Huskins holds a Juris Doctorate degree from the University of Chicago Law School and an undergraduate degree from Harvard College. If elected, Ms. Huskins will bring to the Board more than 25 years of recognized leadership as a teacher, writer, advisor and practitioner on a broad range of board governance matters, including risk oversight, executive compensation, complex legal and regulatory matters, and shareholder relations. James E. Lentz Biography Why Nominated James E. Lentz spent the majority of his more than 40 year career in the auto industry at Toyota, where he served as Chief Executive Officer for Toyota Motor North America from 2013 until his retirement in 2020. During his 38 years with Toyota, Mr. Lentz oversaw all business for Toyota's North American region, including manufacturing, research and development, sales, marketing, product support, and corporate resources. Mr. Lentz led and contributed to several key milestones in Toyota's history, including the Scion brand launch and the recognition of Toyota and Lexus brands as leaders in customer experience. He has been named "Marketer of the Year" by Advertising Age, an "All-Star" by Automotive News, and "Industry Leader of the Year" by the Automotive Hall of Fame. Mr. Lentz also serves as an advisor to several private companies. Mr. Lentz earned both his undergraduate degree and M.B.A. in Finance from the University of Denver. Stacy C. Loretz-Congdon Mr. Lentz joined our Board in October of 2022. With his tenured career in the automotive industry, and extensive experience in corporate resources, Mr. Lentz is lending his significant industry and leadership expertise while serving on our Compensation, Audit and Nominating and Governance committees. Biography Why Nominated Stacy C. Loretz-Congdon, in 2016 and after 26 years of service, retired from Core-Mark Holding Company, Inc., one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry and a Fortune 500 company which merged with Performance Food Group Company (NYSE: PFGC) in 2021. Ms. Loretz-Congdon served in various capacities at Core-Mark, including as Senior Vice President, Chief Financial Officer and Assistant Secretary, as well as a member of Core-Mark's Information Technology Steering Committee and the Investment Committee, from December 2006 to May 2016. Ms. Loretz-Congdon also served on the board of Core-Mark Families Foundation, a non-profit providing scholarships to children, from 2015 to 2023, and previously served on the board of Farmer Bros. Co (Nasdaq: FARM), including as Audit Committee Chair, until the end of her term in February 2025. She has been named as one of the Top 50 female CFOs in the Fortune 500 by Business Insider and Convenience Store News named her Woman of the Year (both in 2015). Prior to joining Core-Mark, Ms. Loretz-Congdon was an auditor for Coopers & Lybrand. Ms. Loretz- Congdon received her Bachelor of Science degree in Accounting from California State University, San Francisco. Ms. Loretz-Congdon joined our Board in April 2023. She brings to our Board her deep experience in accounting and the oversight of Fortune 500 public company finance functions, including all corporate finance disciplines, strategy execution, risk mitigation, investor relations, as well as involvement with human capital management and technology initiatives. She is also an audit committee financial expert as defined under SEC rules, and serves on our Audit Committee and chairs our Nominating and Governance Committee. Shauna F. McIntyre Biography Why Nominated Shauna F. McIntyre has spent the majority of her 30-year career leading and scaling technology-driven businesses at the intersection of industrial automation, energy, and mobility and is a four-time CEO with experience revitalizing companies for growth. Since August of 2025, she has served as CEO of Ensurge Micropower ASA (OL: ENSU), a microbattery developer and manufacturer. Prior to that, she was the Deputy CEO of Northvolt North America from August 2024 to November 2024, and CEO of Cuberg, Northvolt's advanced energy storage subsidiary, from February 2024 to August 2024. Ms. McIntyre ran an advisory practice to private equity and other firms from June 2022 to February 2024. She also restructured operations for Electric Last Mile Solutions (NASDAQ: ELMS) while serving as their interim CEO from February 2022 to June 2022, navigating the company through its bankruptcy process. Prior, she scaled Sense Photonics technology business to a successful exit as their CEO from April 2020 until October 2021. Ms. McIntyre was also the program lead for Google's automotive services from May 2018 to April 2020. Ms. McIntyre holds an M.B.A. from Harvard Business School and an M.S. and B.S in Mechanical Engineering from University of California, Berkeley and the University of California, Los Angeles, respectively. Cassandra M. McKinney Ms. McIntyre joined our Board in April 2019. Ms. McIntyre brings a wealth of knowledge and expertise to our Board in a wide variety of subjects within the automotive industry, including manufacturing, cyber security, technology, innovation, E-commerce, finance, management and operations. Ms. McIntyre was selected to serve on our Board of Directors because of her valuable strategic, industry and leadership experience. Ms. McIntyre chairs our Compensation Committee and serves on our Nominating and Governance Committee. Biography Why Nominated Cassandra M. McKinney has over 30 years of experience as a senior executive, primarily with prominent banking institutions. Prior to her retirement from Comerica Bank (NYSE: CMA) in April of 2025, she had served as Comerica's EVP, Retail Bank since April of 2020 and as a member of Comerica's Management Executive Committee where she was responsible for the company's Consumer and Small Business banking segment. Prior to that role, Ms. McKinney served as SVP, Director Retail Bank Product and Operations Group for Comerica from 2016 to 2020. Prior to working in the banking sector, Ms. McKinney spent 11 years with IBM (NYSE: IBM) in technology information systems and sales and service management. Ms. McKinney also served as a Director and on the Education Committee for the Consumer Banking Association, and is a member of the Executive Leadership Counsel of The Links Incorporated. She holds Bachelor's Degrees in Chemical Engineering from Columbia University and Chemistry from Dillard University. Ms. McKinney joined our Board in July of 2024 and brings to our Board her executive experience in banking, accounting, financial reporting, strategy, innovation, retail and value creation. Ms. McKinney serves on both our Audit and Compensation committees. Ms. McKinney is an audit committee financial expert as defined under SEC rules. Louis P. Miramontes Biography Why Nominated Louis P. Miramontes has been an independent financial advisor since 2014. Mr. Miramontes serves on the board of directors of Oportun Financial Corporation (Nasdaq: OPRT), where he is a member of the Audit and Nominating and Governance committees, and previously served on the board of directors of Rite Aid Corporation until August 2023. He also provides advisory services to a real estate development company. Previously, Mr. Miramontes had a distinguished 38-year career at KPMG until his retirement in 2014, where he served in many leadership roles, including managing partner of the San Francisco office and Senior Partner for the Latin America region. He provided audit services to public and private clients in the retail, financial services, and real estate sectors. Mr. Miramontes holds a B.S. degree in Business Administration from California State University, East Bay. Mr. Miramontes joined our Board in 2018 and has extensive experience in accounting, financial reporting and corporate governance. He is our Lead Independent Director, chairs our Audit Committee and serves on our Nominating and Governance Committee and our Compensation Committee. Mr. Miramontes is also an audit committee financial expert as defined under SEC rules. Heidi L. O'Neill Biography Why Nominated Heidi L. O'Neill is an experienced corporate leader, executive and board member. She recently concluded a 27 year tenure with Nike, Inc. (NYSE: NKE) in May of 2025, where she retired as President of Consumer, Product, and Brand at Nike, Inc. In that role, Ms. O'Neill led the integration of global men's, women's and kid's consumer and sport teams, the entire global product and innovation engine, and global brand marketing and sports marketing. Prior to that, Ms. O'Neill held a variety of leadership roles at Nike, including President of Consumer and Marketplace, President of Nike Direct, and leading Nike's North America apparel business as VP/GM. Ms. O'Neill currently serves as a board member for Spotify Technology S.A. (NYSE: SPOT), a role she has held since 2017, where she is a member of the People Experience and Compensation Committee. Ms. O'Neill is also a board member for Hyatt Hotels Corporation (NYSE: H), a role she has held since 2023, where she is a member of the Talent and Compensation Committee. Ms. O'Neill studied journalism at the University of Colorado-Boulder. Ms. O'Neill joined our Board in October of 2025, and brings her deep executive, leadership, retail, marketing and brand design experience to our Board. She is also a seasoned director with experience overseeing companies in the midst of growth. Ms. O'Neill serves as a member of our Audit Committee. Other Executive Officers Chuck D. Lietz Senior Vice President, Finance Biography Charles (Chuck) D. Lietz is our Senior Vice President, Finance, a role he has held since February 2023. Mr. Lietz joined Lithia in April 2019 as our Vice President, Finance, and served in that role until his elevation to Senior Vice President. In his current role, Mr. Lietz oversees Driveway Finance Corporation (DFC), our captive finance company. Prior to joining Lithia, Mr. Lietz was the Managing Director of U.S. Bank's (NYSE:USB) Dealer Commercial Services group and as the Business Office Director for Precision Interconnect, a division of Tyco International's medical products group. Mr. Lietz holds a bachelor's degree in accounting from the University of Portland (Oregon), as well as a master's degree in business administration from Washington State University. Katie L. Macaddino Senior Vice President, People and Culture Biography Katherine (Katie) L. Macaddino is our Senior Vice President, People & Culture, a role she has held since January 2026. Ms. Macaddino joined Lithia in 2021 with responsibilities over our People and Culture strategy, first as a Director and then as a Senior Director, before her elevation to Senior Vice President. Before joining Lithia, Ms. Macaddino was a Director, Technologist Learning and Development, with Intel Corporation (NASDAQ: INTC). Ms. Macaddino holds a master's degree in human resources management from Cornell University and a bachelor's degree in business management from Portland State University (Oregon). Tina H. Miller Senior Vice President and Chief Financial Officer (CFO) Biography Tina H. Miller is our Senior Vice President, Chief Financial Officer (CFO), leading the accounting, tax, corporate finance, financial planning and analysis, risk management and treasury functions, and has served in this role since August 2019. She joined Lithia in 2005, working in internal audit and corporate accounting before being promoted to Corporate Controller in 2015 and Vice President in 2018. Before Lithia, Ms. Miller worked as an auditor at Ernst & Young in their assurance practice. She graduated from Santa Clara University with a B.S. in Accounting and is a licensed CPA in Oregon. Biography David G. Stork Senior Vice President and Chief Administrative Officer David G. Stork is our Senior Vice President and Chief Administrative Officer and began serving in that role in 2021. Prior to that, Mr. Stork served as our Chief Legal Officer starting when he joined Lithia in December 2018. Before joining Lithia, David was General Counsel and Head of Compliance at JELD-WEN, Inc., and served as General Counsel and Director of risk management for Krause Gentle Companies. His expertise in innovation, diversification, risk management, compliance, mergers and acquisitions and the enhancement of intellectual property are beneficial as Lithia grows and diversifies. Mr. Stork holds a bachelor's degree in Literature and Economics from Luther College and a Juris Doctorate from the University of Minnesota Law School. 03 CORPORATE GOVERNANCE Board Leadership and Structure Board of Directors Our 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 Board has set the number of directors at ten, effective as of the Annual Meeting. There is no requirement that directors attend our Annual Meeting, but directors are encouraged to do so. Our Board held eighteen meetings in 2025. Each incumbent director attended at least 80% of all meetings of the Board and of the Board committees on which the director served. All of our directors then in office attended our 2025 Annual Meeting of Shareholders. 2025 Board and Committee Composition The Board has three standing committees, each of which operates under a charter that has been approved by the Board. The Chair of each committee reviews and discusses the agendas and materials for meetings with senior management in advance of distribution to the other committee members, and reports to the Board on actions taken at each committee meeting. The following table sets forth the current membership of each committee. Priya C. Huskins is nominated for election to the Board at the Annual Meeting. The Board will consider committee appointments for Ms. Huskins if she is elected to the Board. CB Sidney B. DeBoer Nominating & Governance Compensation Audit Director Bryan B. DeBoer Richard J. Bailey Jr. I • James E. Lentz I • • • Stacy C. Loretz-Congdon I • C Shauna F. McIntyre I C • Cassandra M. McKinney I • • Louis P. Miramontes LI C • • Heidi L. O'Neill I • CB = Chairman of the Board I = Independent Director LI = Lead Independent Director C = Committee Chairman Board Committees Our Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Each committee member is an independent director under New York Stock Exchange (NYSE) listing standards, including, with respect to members of the Audit Committee and the Compensation Committee, under the enhanced independence standards that apply to members of those committees. A written copy of our committee charters, Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Shareholder Communications Policy may be obtained by contacting our Investor Relations Department, Lithia Motors, Inc., 150 N. Bartlett Street, Medford, Oregon 97501. These documents are also available on our Investor Relations website at investors.lithiadriveway.com. The Audit Committee Our Audit Committee is responsible for the engagement, evaluation and oversight of our independent auditors; the review of our financial statements and financial disclosure; the assessment of our accounting practices and policies and risk management; the review of our internal audit function and effectiveness of internal controls; and approving related party transactions; among other duties. The Audit Committee serves as a conduit to promote open communication between the independent auditors, the accounting department, the Company's internal auditors, management and the Board in furtherance of our commitment to accurate financial reporting, sound financial risk practices, and ethical behavior. The Audit Committee routinely meets in executive session with representatives from KPMG, our Chief Financial Officer and our Director of Internal Audit. Our Director of Internal Audit reports directly to the chair of the Audit Committee. The Audit Committee held eight meetings during 2025. To ensure sufficient attention to the duties of our Audit Committee, committee members may not serve on more than two other public company audit committees. In addition to meeting the independence requirement for audit committee members, each current member of the Audit Committee also meets the financial literacy and experience requirements contained in the corporate governance listing standards of the NYSE. Our Board has reviewed the qualifications and experience of the nominees standing for election and has determined that both Mses. Loretz-Congdon and McKinney and Mr. Miramontes satisfy the requirements of an "audit committee financial expert" as defined by SEC rules. The Compensation Committee Our Compensation Committee is responsible for our executive compensation philosophy and design. The Compensation Committee annually reviews the performance of, and determines the salary and the variable, long-term and other compensation for, our Chief Executive Officer. The Compensation Committee also reviews and approves the compensation for other executive officers and reviews and recommends the compensation for non-employee Board members. The primary purpose of the Compensation Committee is to discharge the responsibilities of the Board relating to the compensation of the CEO and our other executive officers and make recommendations to the Board with respect to compensation of our non-employee directors. The Compensation Committee has overall responsibility for evaluating and, as appropriate, approving or recommending to the Board compensation plans, policies and programs of the Company as they affect the executive officers. The Compensation Committee is also responsible for providing input to the Board regarding executive officer succession and talent development, and reviewing the Company's policies, programs and initiatives regarding human capital management and providing guidance to the Board and management on these matters. The Compensation Committee has the authority, in its sole discretion, to select, retain and obtain the advice of a compensation consultant and outside legal counsel as necessary to assist with the execution of its duties and responsibilities. In 2025, the Compensation Committee retained Pay Governance LLC ("Pay Governance") to provide advice and counsel. Pay Governance provided compensation advice with respect to our named executive officers as detailed in the "Compensation Discussion and Analysis" sections of this proxy statement among other executive compensation advice. The Compensation Committee administers our employee benefits plans with respect to the participation of our executive officers, including our 2013 Amended and Restated Stock Incentive Plan, 2009 Employee Stock Purchase Plan, Short-Term Incentive Plan and Executive Management Non-Qualified Deferred Compensation and Supplemental Executive Retirement Plan (SERP). The Compensation Committee certifies and approves payments based on performance measures. The Compensation Committee held six meetings in 2025. See " Compensation Discussion and Analysis ", below, for more information on our compensation philosophy and how the Compensation Committee determines the compensation of our executive officers. The Compensation Committee assessed the independence of Pay Governance pursuant to SEC and NYSE rules and determined that no conflict of interest exists that would prevent Pay Governance from independently representing the Compensation Committee. In making this assessment, the Compensation Committee considered each of the factors set forth by the Securities and Exchange Commission (SEC) and the NYSE with respect to Pay Governance's independence, including that Pay Governance provided no services for the Company other than pursuant to its engagement by the Compensation Committee. The Compensation Committee also determined there were no other factors the Compensation Committee should consider in connection with the assessment or that were otherwise relevant to the Compensation Committee's engagement of Pay Governance. The Nominating and Governance Committee Our Nominating and Governance Committee is responsible for assisting our Board in identifying outstanding individuals to become Board members; recommending to our Board nominees for each annual meeting of shareholders; overseeing evaluations of the Board and its committees; developing, periodically reviewing, monitoring and recommending to the Board effective corporate governance policies and procedures; and developing and enforcing our Code of Business Conduct and Ethics. The Nominating and Governance Committee also reviews and provides guidance to our Board and management about the Company's policies and practices that relate to corporate social responsibility and sustainability, as referred to the Nominating and Governance Committee by the Board. The Nominating and Governance Committee held four meetings in 2025. Director Independence Our Corporate Governance Guidelines require our Board to be comprised of a majority of independent directors. Generally, under NYSE listing standards, a director is not independent if the director has a direct or indirect material relationship with Lithia or its management. In accordance with its charter, the Nominating and Governance Committee annually reviews the independence of all non-employee director nominees and reports its findings to the full Board, which makes a determination about the independence of each nominee. The Board and the Nominating and Governance Committee review and discuss all transactions and relationships between each director nominee and any member of the director's immediate family and Lithia, its consolidated subsidiaries and affiliates, and management, both in the context of the specific independence standards enumerated in the NYSE listing standards, as well as other business and personal relationships that could compromise the independent judgment of a director. In making this determination relationships considered included the charitable contributions to Southern Oregon University Foundation described below under Certain Relationships and Transactions with Related Persons on page 80 . The contributions did not exceed $1 million per year. Other than the NYSE listing standards, we do not adhere to categorical standards for determining independence; rather, we review and evaluate the specific facts and circumstances of each transaction and relationship to determine whether the director is independent. As a result of this review, our Board affirmatively determined that each of Mses. Huskins, Loretz-Congdon, McIntyre, McKinney and O'Neill and Messrs. Bailey, Lentz, and Miramontes is independent under NYSE listing standards and, prior to his departure from our Board at the 2025 Annual Shareholder Meeting, David J. Robino was independent under NYSE listing standards. Lead Independent Director and Governance Practices Lithia's governance documents provide our Board with flexibility to select the leadership structure that is best for the Company. If the Chair of our Board is not an independent director, our Board annually selects an independent director to serve as the "Lead Independent Director" responsible for coordinating the activities of the independent directors, ensuring the Board and management address matters important to the independent Board members and fulfilling the Lead Independent Director duties set forth in Lithia's Corporate Governance Guidelines. If the Chair of our Board is an independent director, our Board of Directors may nonetheless select a Lead Independent Director from one of the other independent directors. Bryan 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 for 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 on developing and implementing the Company's strategies. Mr. Robino, our prior Lead Independent Director, did not stand for re-election at our 2025 Annual Meeting of Shareholders. Therefore, in 2025, our Board elected Louis P. Miramontes to serve as our Lead Independent Director for the 2025 - 2026 Board year. Mr. Miramontes is an experienced independent member of our Board and has been recognized as governance leader by the National Association of Corporate Directors. Letter from the Lead Independent Director This letter highlights some of the ways our Board is working to provide independent oversight of management and stewardship of your interests. Independent Board Oversight: The Lead Independent Director position is a key component of our Board's overall independence. The duties and responsibilities of this role are outlined in detail in our Corporate Governance Guidelines, which provide that the Lead Independent Director coordinates the activities of all the independent directors, may organize and conduct separate meetings of the independent directors without management present, helps to plan board agendas, liaises with and guides board committee chairs as needed, and provides board leadership whenever the acting Board Chair or CEO have a real or perceived conflict. Board Refreshment: Board succession is an important responsibility of the Board and ensures we have the right mix of directors to oversee Lithia's growth. Mr. David Robino, our prior Lead Independent Director, did not stand for re-election at our 2025 Annual Shareholder Meeting. We thank Mr. Robino for his service. In addition, we added five new independent directors to our Board since 2023, including most recently Mr. Bailey and Ms. O'Neill in 2025 and the nomination of Ms. Huskins just this year. These directors bring invaluable operational, strategic and governance expertise to our Board. As a result, and if Ms. Huskins is elected, our Board will have grown to 10 directors, of whom 8 are independent. We also use director age and tenure limits designed to foster a refreshed but experienced and independent board. Board Practices: We also continue to implement the following best governance practices: The Chair of the Board and the CEO are separate. The Board's involvement is critical to Lithia's comprehensive strategic review conducted annually. The Board regularly receives information concerning, and provides input on, succession planning. Our Board and management annually engage shareholders and remain responsive to their input, as discussed in the Compensation Discussion and Analysis, below. The Board and its committees met 36 times in 2025. Annually, an independent third party facilitates a "360 degree" review of our CEO with the other Board members and the officers reporting directly to the CEO. The results of that review are shared with the independent directors. An independent third party also annually conducts a review of the performance of each director, each Board committee, and the Board as a whole. We have adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics (each of which is available on our website at investors.lithiadriveway.com), and an insider trading policy. Independent directors may not serve longer than 15 years or past the age of 79. All of our directors are elected annually. There is majority voting in uncontested director elections. The Board has adopted proxy access permitting eligible shareholders to nominate director candidates. The Board designates a director to lead our cybersecurity oversight efforts. Directors and executive officers all are required to satisfy minimum stock ownership requirements. The Board is committed to continuing to serve your interests, and we thank you for your support. Louis P. Miramontes Lead Independent Director Director Qualifications and Nominations The Nominating and Governance Committee is responsible for identifying and evaluating potential director nominees for election to our Board each year. The Nominating and Governance Committee seeks a selection of directors who as a group will possess diverse skills and knowledge, including in such area as finance, marketing, management, and technology, as well as automotive retailing, and that will contribute to the Board's overall effectiveness and the Company's overall corporate goals and responsibility to its shareholders. Board Succession Planning and Recruitment Identifying and recommending individuals for appointment or elections to our Board are core responsibilities of the Nominating and Governance Committee. The Nominating and Governance Committee carries out this responsibility through a year-round process described below : 1 Evaluation of Board Composition The Nominating and Governance Committee evaluates the Board's membership needs based on a variety of factors. 2 Candidate Recruitment The Nominating and Governance Committee identifies individuals through a variety of methods, including independent search firms and shareholder recommendations. 3 Candidate Evaluation Candidates are evaluated on whether they exhibit certain core attributes that our Nominating and Governance Committee looks for in all candidates, as well as particular needs of the Board at the time. 4 Recommendation to Board The Nominating and Governance Committee recommends selected candidates to the full Board for nomination or appointment to the Board. Evaluation of Board Composition: Each year the Nominating and Governance Committee evaluates the size and composition of the Board to assess whether they are appropriate in light of the Company's evolving needs. In this evaluation, the committee considers the Company's strategic direction, current director qualifications, the results of Board and committee self-assessments, and legal and investor relations review. As part of the nomination process, the Nominating and Governance Committee annually reviews and evaluates the skills, talents, other characteristics and contributions of the current directors in the context of the desired composition of our Board, our operating requirements and the interests of our shareholders. The committee also reviews and interviews candidates for our Board whose background and experience suggest the candidates may be valuable board members considering the current Board composition. The Nominating and Governance Committee may propose to nominate current Board members or add new Board members, either as additional directors or in transition of current Board members. Potential candidates may be suggested by various sources, including management, Board members, shareholders, business leaders and other industry executives and directors. We may from time-to-time engage a director search firm. The search firm Egon Zehnder was engaged in connection with the appointment of Mr. Bailey, and Ms. O'Neill and the nomination of Ms. Huskins. Specifically, the Nominating and Governance Committee evaluates potential director nominee candidates based on broad criteria that include the individual's skills, experience and other factors in the context of the current composition of our Board, including the Board's overall diversity. Among other aspects, the Nominating and Governance Committee evaluates the following factors when evaluating director nominees: business experience, other directorships, business and personal relationships with management, educational background, expertise in finance and accounting, knowledge of financial reporting and the business of the Company, and industry experience. In this context, diversity encompasses differences of viewpoint, personal and professional experience, expertise in specific areas, and other individual qualities and backgrounds. Our Nominating and Governance Committee Charter provides that the Nominating and Governance Committee will endeavor to incorporate diversity, including gender, race and ethnicity, among the list of candidates when filling any Board vacancy. At a minimum, director nominees must have the ability to dedicate sufficient time to Board activities, and independent director nominees must meet applicable NYSE independence standards and not have any conflicts of interest with the Company. The Nominating and Governance Committee reviews its effectiveness in balancing these criteria when assessing the composition of our Board. Directors are not considered independent if they have been on the Board for 15 or more years, and no person may serve as an independent director after attaining the age of 79. If a director is an active member of the board of directors of more than three other public companies, then the Nominating and Governance Committee, when performing its annual review of the composition of the Board, will take into consideration the competing time requirements of the director in fulfilling the directors' duties as a member of our Board. We require all of our directors to annually sign an acknowledgment of their confidentiality obligations and obligations under our insider trading policy and other applicable policies to reinforce their commitment to protect our confidential information and our business reputation and to comply with applicable securities laws. We seek to attract and retain high-quality candidates for Board membership regardless of the origin of the recommendation, and there are no differences in the manner in which the Nominating and Governance Committee evaluates nominees for director based on whether the nominee is recommended by a shareholder or the committee itself. The Nominating and Governance Committee will consider potential nominees recommended by any record or beneficial shareholder. See " Shareholder Proposals or Nominations - Shareholder Director Recommendations " below. Our Board's Risk Oversight Role Our Board monitors the risks facing our business by evaluating our risk management processes, including the processes established to monitor how management reports material risks to our Board and how our executive team manages the various risks that our Company faces. Our Board annually reviews the potential risks we face, including cyber risks, environmental risks and the potential impact of new laws and industry and competitive developments on our business, and the potential severity and likelihood of the risk. It considers immediate or short-term risks, while also evaluating and monitoring risks that could develop in severity or likelihood over time. Our Board collaborates with management on developing the Company's annual risk management plan and, as part of that process, helps management ensure that those risks and uncertainties are considered in ongoing operations and in the Company's risk management plan. Our Board has delegated responsibility for certain areas of its risk oversight to its standing committees. The Board and our Board committees are charged with the following risk oversight responsibilities. Board of Directors Enterprise Risk Management Cybersecurity Policies, practices and contributions regarding the environment, sustainability and social issues. Audit Committee M aterial financial risk exposures and the process by which management assesses and manages financial risk Ethics and legal compliance Transactions with related parties Compensation Committee Risks related to compensation policies and programs CEO and management succession planning Human capital management, and employee relations Nominating and Governance Committee Board succession planning Board structure Code of Business Conduct and Ethics compliance and enforcement Corporate sustainability and social responsibility, as referred by the Board While our Board oversees risk management, our management is charged with managing risk through effective internal controls and processes, which facilitate the identification and management of risks. Management regularly discusses risk management with our Board, which requests and receives presentations from internal subject matter experts on topics of risk. Management also retains advisors or experts, as necessary, who can provide meaningful assistance in determining, assessing or managing areas of risk, beyond the Company's own capabilities. Cybersecurity We are committed to maintaining robust cybersecurity practices and proactively work to protect the privacy of our customers, ensure the confidentiality, integrity and availability of our operation, and prevent cyber crimes against us. We operate with an internal policy and control framework for data protection, which is compliant with regulatory requirements and employs advanced technology and resources for cyber protection. This includes continuous monitoring, intrusion detection systems, and anomaly detection mechanics to promptly identify unusual activities or security breaches. Our Board oversees our cybersecurity and data protection strategy and appoints a director to lead the Board's efforts. Our Board has designated Shauna McIntyre; Ms. McIntyre holds an NACD CERT certificate in cybersecurity oversight and also maintains familiarity with developments and practices in cybersecurity, which better enable Ms. McIntyre, and therefore the Board, to oversee the Company's cybersecurity strategy. Management regularly reports risk exposures to the Board as well as the steps taken to monitor and control the risks, including quarterly reports on our cybersecurity posture, current and future risks, and potential incidents or vulnerabilities. As part of that review, George Hines, our former Chief Innovation and Technology Officer, led our information technology and cyber protection strategy in 2025, and interacted directly with our Board. With the involvement of the designated director, we also obtain reports, evaluations and recommendations regarding our policies and systems from third parties with cybersecurity and information technology expertise. Currently, our Board believes assigning a director to lead the Board's cybersecurity risk oversight and thereby reviewing cyber risks and security amongst the full Board, better serves its oversight responsibility than assigning cyber risk oversight to a committee. Code of Business Conduct and Ethics We adopted a Code of Business Conduct and Ethics that applies to all of our officers, directors and employees, including our principal executive, financial and accounting officers. A complete copy of our Code of Business Conduct and Ethics is available on our website at investors.lithiadriveway.com. You may request a copy by mail from our Investor Relations Department, Lithia Motors, Inc., 150 N. Bartlett Street, Medford, Oregon 97501. We intend to publicly disclose any amendment to and any waiver of the Code of Business Conduct and Ethics on our website. Compensation of Directors Non-Employee Director Compensation Our directors serve from election at each annual meeting of shareholders until the following annual meeting or until the director's successor is elected and qualified. The Compensation Committee annually reviews non-employee director compensation and recommends any applicable changes to our Board. The Compensation Committee engages independent consultants to review the market competitiveness of the compensation paid to the non-employee directors compared to Company peers. The Compensation Committee engaged Pay Governance in 2025 to help review and assess non-employee director compensation for the 2025-2026 Board service year. Pay Governance recommended, and the Board approved, changes to the director compensation program to retain competitive positioning for the 2025-2026 Board service year. The changes include an increase to the cash retainer amounts and equity grants, as set forth below and places the compensation at the median compared to Company peers, which are the same companies in the peer group used for executive compensation comparisons. The changes in the director compensation program are effective for the 2025-2026 Board service year. Accordingly, the actual compensation paid to a non-employee director in the 2025 calendar year is earned under two separate compensation programs. Except for Sidney B. DeBoer, directors who are employees of the Company are not compensated separately for their service as directors. As noted in the Non-Employee Director Compensation Table, for his services as a director, Sidney B. DeBoer receives the same compensation, in the same form, as the Company pays to its non-employee directors. Separately, Sidney B. DeBoer receives payments for his prior services rendered as an employee that are described below under " Certain Relationships and Transactions with Related Persons " on page 80 . Executive officers of the Company do not recommend or determine non-employee director compensation. Our non-employee directors are currently Mses. Loretz-Congdon, McIntyre, McKinney, O'Neill and Messrs. Bailey, Lentz and Miramontes. We pay a majority of our non-employee directors' compensation as equity awards. The Compensation Committee believes that paying a majority of the annual compensation in equity provides non-employee directors with a vested interest in our long-term financial success and aligns their interests with those of our shareholders. The compensation structure for our non-employee directors for the 2025-2026 service year was as follows: $100,000 in cash (no increase from the 2024-2025 calendar year) paid in 12 monthly installments over the service period. An additional $30,000 in cash to each director who holds the position of Compensation Committee or Audit Committee chair (a $5,000 increase from the 2024-2025 calendar year), $30,000 in cash (a $5,000 increase from the 2024-2025 calendar year) to our Nominating and Governance Committee chair, and $40,000 (a $5,000 increase from the 2024-2025 calendar year) to any director who serves as our Lead Independent Director or as chairman of the Board. In each case, these additional cash amounts are also paid in 12 monthly installments over the service period. An award for a number of restricted stock units ("RSUs"), which are settled in shares of our common stock, with a value of $195,000 (no increase from the 2024-2025 board service year). The number of RSUs awarded is based on the average closing share price for the 20 trading days prior to the award grant date. RSU awards to our non-employee directors are granted immediately after our annual shareholder meeting and vest over one year, with 25% vesting on the first business day of the month after each regularly scheduled quarterly meeting of our Board if the director continues to serve on that day. All equity grants to non-employee directors are subject to our stock ownership policy. See " Non-Employee Director Stock Ownership Policy; Hedging and Pledging Restrictions " below. 2025 Director Compensation Non-Employee Director Compensation Table The following table summarizes compensation paid to non-employee directors and to our Chairman during calendar year 2025, which amounts represent the 2025 portion of both the 2024-2025 Board term and the 2025-2026 Board term. Name Fees Earned or Paid in Cash (1) Stock Awards (2) Total Compensation Richard J. Bailey Jr. (3) $25,000 $107,978 $132,978 Sidney B. DeBoer (4) $166,667 $186,462 $353,129 James E. Lentz $100,000 $186,462 $286,462 Stacy C. Loretz-Congdon $116,667 $186,462 $303,129 Shauna F. McIntyre $128,333 $186,462 $314,795 Cassandra M. McKinney $100,000 $186,462 $286,462 Louis P. Miramontes $155,000 $186,462 $341,462 Heidi L. O'Neill (3) $25,000 $107,978 $132,978 David J. Robino (5) $53,333 $0 $53,333 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 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 forfeitures. (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 and other information related to our stock awards). 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. 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. DeBoer under his September 14, 2015 Transition Agreement or otherwise, which are described under "Certain Relationships and Related Transactions and Director Independence" on page 80 . 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. The following table sets forth all stock units held by each non-employee director as of December 31, 2025. Mr. David Robino's service on the Board ended at our 2025 Annual Shareholder Meeting and therefore he did not hold any unvested stock awards as of December 31, 2025: Name Unvested Stock Awards (#) Richard J. Bailey Jr. 171 Sidney B. DeBoer 168 James E. Lentz 168 Stacy C. Loretz-Congdon 168 Shauna F. McIntyre 168 Cassandra M. McKinney 168 Louis P. Miramontes 168 Heidi L. O'Neill 171 Deferred Compensation Agreements with Non-Employee Directors We offer our non-employee directors the opportunity to defer receipt of all or a portion of their compensation by entering into a deferred compensation agreement with the Company. Under this agreement, participants who elect to defer compensation may defer receipt of all or a portion of their cash compensation under our deferred compensation plan and any stock award pursuant to our 2013 Stock Incentive Plan (including cash deferred into stock). Deferrals are paid following a separation from the Board in a lump sum, 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. McKinney and Mr. Miramontes elected to defer their stock compensation issued for the 2025 - 2026 Board service year. Non-Employee Director Stock Ownership Policy; Hedging and Pledging Restrictions We expect our non-employee directors to acquire and hold a sufficient number of shares of our common stock to meaningfully participate in the risks and rewards of ownership with our shareholders and to appropriately align the interests of directors with our long-term goals. Accordingly, under our Stock Ownership Policy for Directors, non-employee directors are required to own and maintain shares of our common stock having a market value equal to at least five times the annual base cash compensation paid to the director within five years after the director's initial appointment to our Board. (If a director does not or ceases to comply with the policy, the director is expected to retain 100% of the net after-tax shares received upon the settlement of any equity incentive award and not otherwise transfer any shares until the stock ownership minimums are attained). In determining compliance with the policy, share ownership includes RSUs subject to time-vesting and indirect share ownership. We have adopted an Insider Trading Policy and procedures applicable to our directors, officers, and employees, and have implemented processes for the Company that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the NYSE listing standards. Our Insider Trading Policy and our Stock Ownership Policy for directors specify that they may not (1) engage in hedging or monetization transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds or (2) hold Company securities in a margin account or otherwise pledge Company securities as collateral for a loan, except as specifically approved by the Board. 04 CORPORATE RESPONSIBILITY Our Commitment to all Stakeholders Introduction Lithia & Driveway's long-term growth depends on the trust of our customers, our employees, and the communities we serve. As our organization expands across North America and the United Kingdom, we continue to integrate sustainability into our operating model, guided by six goals that strengthen our environmental stewardship, operational efficiency, workplace culture, and local impact. We strive to Improve Constantly by reducing our footprint, advancing sustainable mobility, elevating our people, and deepening our community partnerships. Environmental Goals Social Goals Goal 1 Increase GreenCars on the Road Our GreenCars resource leads the way in consumer education on electric vehicles. Goal 4 Strengthen Our Communities We cultivate bonds, build bridges & foster engagement in the communities we serve. Goal 2 Operate Sustainable Stores We improve operations with facility updates & ENERGY STAR certification. Goal 5 Maximize Employee Health, Wellness & Safety Our leaders nurture workplaces where team members feel engaged, inspired, and respected. Goal 3 Extend Vehicle Lifecycles Selling and serving value-autos keeps good cars on the road longer. Goal 6 Champion an Inclusive, High-Performance Culture A culture of belonging fuels innovation, teamwork, and our mission of Growth Powered by People.

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