PACCAR has excellent corporate governance policies and practices that enhance stockholder returns. Its policies ensure that the Company is governed in accordance with the highest standards of integrity and in the best interest of its stockholders.
PACCAR’s Board of Directors is comprised of 11 directors who bring a diversity of perspectives, skills and business experience relevant to the Company’s global operations. Each director has achieved significant success in business, education or public service and has demonstrated the highest ethical standards and integrity as well as mature judgment, objectivity, practicality and a willingness to ask difficult questions. The directors are committed to work together to reach consensus for the betterment of the stockholders and the long-term viability of the Company. In selecting nominees for the Board of Directors, the Nominating and Governance Committee recognizes the importance of having a diversity of gender, heritage and backgrounds to ensure that a variety of opinions and perspectives are represented on the Board; accordingly, initial lists of candidates from which new director nominees are chosen will include qualified female and racially/ethnically diverse candidates.
PACCAR’s Corporate Governance Guidelines are available at https://www.paccar.com/about- us/board-of-directors/governance-guidelines/ and are structured to ensure the Board has the necessary authority and practices to evaluate business operations and to make decisions independent of PACCAR’s management. Each director is expected to act with integrity, understand the importance of representing the entire shareholder constituency and increasing shareholder value, contribute actively and objectively at Board and Committee meetings and participate in management evaluation and succession planning.
Key facts about the Board of Directors include:
PACCAR’s compensation programs are directed by the Compensation Committee of the Board of Directors, which is composed exclusively of independent directors. The objective of the programs is to attract and retain high-quality executives, link incentives to the Company’s performance and align the interests of management with those of stockholders. The Company emphasizes pay for performance and uses equity-based incentive programs designed to compensate executives for generating outstanding performance for stockholders. Each of the Company’s Say-on-Pay proposals was approved by 95% or more of the shares voted in 2011, 2014, 2017 and 2020.
Key compensation practices include:
The Company’s corporate governance structure provides for meaningful and significant stockholder input in director elections and governance. Stockholders have the opportunity to include their own proposals and director nominees for election in the Company’s proxy and to present them at the annual meeting of stockholders. The Nominating and Governance Committee of the Board of Directors regularly reviews developments in corporate governance and recommends governance enhancements to the Board of Directors.
PACCAR’s excellent stockholder rights and corporate governance practices include:
The Company’s audit committee is made up of four independent directors. The committee reviews the Company’s annual and quarterly financial statements, monitors the integrity and effectiveness of the audit process and reviews the corporate compliance programs. It also monitors the Company’s system of internal controls over financial reporting and oversees the internal audit function.
