DEF 14A: CarMax Sets Date for 2024 Annual Shareholder Meeting, Outlines Key Proposals

CarMax will hold its annual shareholder meeting virtually on June 25, 2024, to vote on director elections, auditor ratification, and executive compensation.

Summary

• CarMax will hold its 2024 annual meeting of shareholders virtually on June 25, 2024.
• Shareholders as of April 19, 2024, are eligible to vote on the election of eleven directors, the ratification of KPMG LLP as the independent registered public accounting firm, and an advisory vote on executive compensation.
• The company highlights its strategic initiatives and accomplishments, including online enhancements and the opening of a new reconditioning facility in Carrollton, Georgia.
• CarMax reports a 10.6% decrease in net revenues to $26.5 billion, a 5.2% decrease in total used unit sales, and a 6.6% decrease in total wholesale units.
• CarMax Auto Finance (CAF) finished the year with income of $568.3 million, a 14.3% decrease over the prior year.
• Net earnings decreased 1.1% to $479.2 million, and net earnings per diluted share decreased 0.3% to $3.02.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While it highlights positive aspects like being named a top company to work for and strategic initiatives, it also acknowledges significant financial declines in revenue, unit sales, and earnings. The overall tone is cautiously optimistic, focusing on long-term strategies despite current challenges.

Positives

• CarMax was named one of Fortune's 100 Best Companies to Work For for the twentieth year in a row.
• The company made enhancements and expanded its ability to source, sell, and finance vehicles.
• A new stand-alone reconditioning facility was opened in Carrollton, Georgia.

Negatives

• Net revenues decreased 10.6% to $26.5 billion.
• Total used unit sales decreased 5.2%, and comparable store used unit sales decreased 6.7%.
• Total wholesale units decreased 6.6%.
• CarMax Auto Finance (CAF) income decreased 14.3% to $568.3 million.
• Net earnings decreased 1.1% to $479.2 million, with net earnings per diluted share at $3.02.

Risks

• The company faces challenging market conditions, including widespread inflationary pressures, higher interest rates, tightened lending standards, and low consumer confidence.
• Cybersecurity breaches are a dynamic and growing risk as reliance on digital operations increases.

Future Outlook

The company expects to post the 2024 Responsibility Report in May 2024 and plans to hold the 2025 annual shareholders meeting on or about June 24, 2025.

Management Comments

• Thomas J. Folliard, Chair of the Board of Directors, expressed pride in the company's achievements and progress despite challenges in the used car industry.
• Folliard stated that the company is prioritizing initiatives to further achieve efficiencies and create better experiences for associates and customers.
• Folliard believes that these steps will ensure that when we come out of this cycle, we will be stronger than ever.

Industry Context

The document acknowledges persistent challenges in the used car industry, including inflationary pressures, higher interest rates, tightened lending standards, and low consumer confidence, reflecting broader economic trends affecting the automotive retail sector.

Comparison to Industry Standards

• The peer group used to benchmark executive compensation includes Advance Auto Parts, AutoNation, AutoZone, Best Buy, Dicks Sporting Goods, Dollar General, Dollar Tree, eBay, Genuine Parts Company, Kohls Corporation, Lowes Companies, Macys, Ross Stores, Sherwin-Williams, Target Corporation, The Gap, The TJX Companies, and Tractor Supply Company.
• These companies are generally comparable retailers or direct competitors, falling within a reasonable range of comparative factors such as revenue, market capitalization, net income, revenue growth, assets and oneand three-year total shareholder return.
• CarMax aims to grow its nationwide share of the age 0-10 used vehicle market to more than 5% by the end of calendar 2025.

Related Party Transactions

• The Board considered transactions between CarMax and CDW Corporation, where director Sona Chawla serves as an executive officer, but determined that the relationship did not impair her independence.

Stakeholder Impact

• Shareholders are asked to vote on key proposals affecting the company's direction and executive compensation.
• Associates are impacted by the company's strategic initiatives and commitment to being a top workplace.
• Customers are impacted by the company's efforts to enhance online experiences and expand appraisal services.
• Communities are impacted by the company's corporate responsibility and sustainability efforts.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its 2024 annual shareholders meeting on June 25, 2024.
• The company expects to post the 2024 Responsibility Report in May 2024.
• The company plans to hold its 2025 annual shareholders meeting on or about June 24, 2025.

Key Dates

Keywords

shareholders, CarMax, directors, compensation, governance, finance, audit, executive, proxy, meeting