DEF: CarParts.com Announces 2025 Annual Meeting of Stockholders, Director Elections and Executive Compensation on the Agenda

CarParts.com will hold its 2025 Annual Meeting of Stockholders on June 13, 2025, to vote on director elections, auditor ratification, and executive compensation.

Summary

• CarParts.com, Inc. will hold its 2025 Annual Meeting of Stockholders on June 13, 2025, at the company's offices in Torrance, California.
• Stockholders of record as of April 23, 2025, are entitled to vote at the meeting.
• The agenda includes the election of Class I directors (Jay K. Greyson, Jim Barnes, and Ana Dutra), ratification of the appointment of RSM US LLP as independent auditors for fiscal year 2025, and an advisory vote on executive compensation.
• The Board of Directors recommends voting for all director nominees and for the ratification of RSM as the independent auditor.
• The proxy statement and annual report on Form 10-K for the year ended December 28, 2024, are available online.
• The company's Board consists of eight directors, with three Class I directors up for election to a three-year term expiring at the 2028 Annual Meeting.
• The company has adopted a Code of Ethics and Business Conduct applicable to all directors, officers, and employees.
• The Board has determined that all directors, except for David Meniane, meet the requirements for independence under Nasdaq Rules.
• The Nominating and Corporate Governance Committee oversees the company's ESG processes, policies, and performance.
• The company's executive compensation program is designed to attract, motivate, and retain talented executives in the e-commerce industry.
• The Compensation Committee utilized data from a peer group of technology-enabled companies to make compensation decisions for the NEOs.
• The company's 2024 compensation structure includes short-term and long-term incentives tied to financial performance.
• The company's executive compensation program has previously received strong shareholder support, with 88.9% approval at the 2024 Annual Meeting.
• The company has entered into employment agreements with its NEOs, which include severance and change of control provisions.
• The company maintains a stock ownership policy for executive officers and directors to align their interests with those of stockholders.
• The company has a Clawback Policy in place to recover erroneously awarded incentive compensation from executive officers.
• The company has a 2021 Officer and Director Share Purchase Plan and a 2021 Employee Stock Purchase Plan (ESPP) in place.
• As of April 1, 2025, Oaktop Capital Management II, L.P. is the largest stockholder with 7.8% ownership.

Sentiment

Score: 6

Explanation: The document is primarily informational, outlining the agenda for the annual meeting and providing details on corporate governance and executive compensation. While the company's financial performance in 2024 did not meet the minimum thresholds for bonus payouts, the document highlights the company's commitment to ESG practices and diversity and inclusion, which are positive factors. The sentiment is neutral to slightly positive.

Positives

• The company has a strong corporate governance framework, including a Code of Ethics and Business Conduct and corporate governance guidelines.
• The company has an independent Board of Directors, with all but the CEO meeting the requirements for independence under Nasdaq Rules.
• The company is committed to ESG practices, with oversight by the Nominating and Corporate Governance Committee.
• The company's executive compensation program is designed to align executive interests with stockholder value creation and is performance-based.
• The company maintains a stock ownership policy for executive officers and directors to further align their interests with those of stockholders.
• The company has a Clawback Policy in place to recover erroneously awarded incentive compensation from executive officers.
• The company's executive compensation program has previously received strong shareholder support.
• The company has a 2021 Officer and Director Share Purchase Plan and a 2021 Employee Stock Purchase Plan (ESPP) in place.

Negatives

• The company's financial performance in 2024 did not meet the minimum thresholds for bonus payouts under the annual incentive bonus plan.
• The company's long-term incentive performance-vesting restricted stock unit awards granted in 2024 did not meet the minimum relative total shareholder return for 2024 versus constituents of the Russell 2000 index, and therefore none of these Performance Shares vested.

Risks

• The company's future performance is subject to risks and uncertainties, including those related to the business, the economy, competitive pressures, and supply chain disruptions.
• The company's dependence on search engines to attract customers is a risk factor.
• Increases in transportation, labor, and commodity pricing could increase the company's costs.
• Operating restrictions in the company's credit agreement pose a risk.
• Customs issues or delays could impact the company's operations.
• Cybersecurity risks are a concern, as highlighted by the Audit Committee's oversight of risk management functions.

Future Outlook

The company aims to build upon ESG progress made thus far and continue to develop its long-term ESG roadmap.

Industry Context

The document provides insight into CarParts.com's corporate governance, executive compensation practices, and shareholder engagement, which are all important aspects of operating in the competitive e-commerce industry. The company's focus on ESG and diversity and inclusion aligns with broader industry trends and investor expectations.

Comparison to Industry Standards

• The document mentions that the Compensation Committee utilized data from a peer group of technology-enabled companies with an internet or applications software focus to make compensation decisions for the NEOs.
• The peer group included companies such as America's Car-Mart, Quotient Technology, Brightcove, Revolve Group, Duluth Holdings, Shutterstock, Edgio, Stoneridge, Gentherm, The Buckle, Holley, The Lovesac Company, Magnite, Motorcar Parts of America, PetMed Express, Purple Innovation, The RealReal, ThredUp, and Turtle Beach.
• The median revenue and market capitalization of these firms were approximately $654,000,000 and $369,000,000, respectively, at the time the peer group was selected.
• The company's executive compensation program is designed to be competitive within this peer group.

Related Party Transactions

• The company has entered into indemnification agreements with its directors and executive officers.
• The company has a 2021 Officer and Director Share Purchase Plan and a 2021 Employee Stock Purchase Plan (ESPP) in place.

Stakeholder Impact

• Stockholders are invited to attend the Annual Meeting and vote on the proposals.
• The company's executive compensation program is designed to align management's interests with those of stockholders.
• The company's commitment to ESG practices and diversity and inclusion may impact employees, customers, and suppliers.
• The company's financial performance and strategic decisions may impact creditors.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its 2025 Annual Meeting of Stockholders on June 13, 2025.
• The Board and Compensation Committee will consider the outcome of the advisory vote on executive compensation when making future compensation decisions.
• The company aims to build upon ESG progress made thus far and continue to develop its long-term ESG roadmap.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Executive Compensation, Board of Directors, Corporate Governance, Director Election, Auditor Ratification, Stockholders, CarParts.com, RSM US LLP