UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Mister Car Wash, Inc.
222 E. 5th Street
Tucson, Arizona 85705
April 10, 2024
Dear Fellow Stockholders:
On behalf of the Board of Directors, I cordially invite you to attend the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Mister Car Wash, Inc., a Delaware corporation, which will be held virtually on Thursday, May 23, 2024, at 8:30 a.m., Mountain Standard Time for the purposes described in the accompanying Proxy Statement. Because the Annual Meeting will be held virtually via the Internet, you will not be able to attend the Annual Meeting in person. In order to attend and participate in the Annual Meeting, you must register in advance at www.proxydocs.com/MCW prior to the deadline of May 23, 2024, at 8:30 am Mountain Standard Time. During your registration, you will have an opportunity to submit questions and upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting. We will have technicians ready to assist you with any technical difficulties you may have when accessing the virtual meeting website. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting website log-in page.
In accordance with the Securities and Exchange Commission rules allowing companies to furnish proxy materials to their stockholders over the Internet, we have sent stockholders of record at the close of business on March 28, 2024, a Notice of Internet Availability of Proxy Materials. The notice contains instructions on how to access our Proxy Statement and Annual Report and vote online. If you would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the Internet, please follow the instructions for requesting such materials included in the notice, as well as in the attached Proxy Statement.
Accompanying this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the Annual Meeting.
Your vote is important to us. Please act as soon as possible to vote your shares. It is important that your shares be represented at the meeting whether or not you plan to attend the Annual Meeting. Please vote electronically over the Internet, by telephone, by Alexa, or, if you receive a paper copy of the proxy card by mail, by returning your signed proxy card in the envelope provided. If you decide to attend the virtual Annual Meeting, you will be able to vote electronically during the Annual Meeting, even if you have previously submitted your proxy.
On behalf of the Board of Directors and management, it is my pleasure to express our appreciation for your continued support.
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John Lai |
Chairman, President and Chief Executive Officer |
Mister Car Wash, Inc.
222 E. 5th Street
Tucson, Arizona 85705
Notice of Annual Meeting of Stockholders
Dear Stockholder:
The 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Mister Car Wash, Inc., a Delaware corporation (“the Company”), will be held on Thursday, May 23, 2024. The Annual Meeting will be held in a virtual format only. The Annual Meeting may be accessed by entering the 16-digit control number provided on your proxy card at www.proxydocs.com/MCW. Login will be available starting at 7:30 a.m. and the meeting will begin promptly at 8:30 a.m. Mountain Standard Time, for the following purposes:
These proposals are more fully described in the Proxy Statement accompanying this Notice.
March 28, 2024 has been fixed as the record date for the determination of the stockholders entitled to notice of and to vote at the Annual Meeting or any continuation, postponement, or adjournment thereof (“Record Date”). Only stockholders of record at the close of business as of the Record Date will be entitled to notice of, and to vote at, the Annual Meeting. A list of stockholders will be available at our headquarters at 222 E. 5th Street, Tucson, Arizona 85705 for a period of at least ten days prior to the Annual Meeting. If you would like an opportunity to view the stockholder list, please contact the Corporate Secretary to make arrangements to view the list.
Additionally, the Proxy Statement and our Annual Report are available free of charge at www.investorelections.com/MCW.
Your vote is important. Voting your shares will ensure the presence of a quorum at the Annual Meeting and will save us the expense of further solicitation. Please read the attached Proxy Statement carefully and promptly vote your shares by Internet, telephone, or Alexa voting as described on your proxy card, or by completing, signing, dating, and returning your proxy card.
This Notice of Annual Meeting and Proxy Statement are first being distributed or made available to stockholders on or about April 10, 2024.
By Order of the Board of Directors |
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John Lai |
Chairman, President and Chief Executive Officer |
Tucson, Arizona
April 10, 2024
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This proxy statement contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements are all statements other than those of historical fact and are inherently subject to a number of risks and uncertainties. All statements that address activities, goals, events, trends or developments that we intend, expect, or believe may occur in the future are forward-looking statements. These statements are often identified by the words, “aim,” “anticipate,” “approximately,” “aspire,” “believe,” “continue,” “could,” “should”, “estimate,” “expect,” “forecast,” “goal”, “hope,” “intend,” “may,” “outlook,” “predict,” “plan,” “project,” “potential,” “seek,” “strive,” “target,” “will,” “would”, or similar words, although not all forward-looking statements contain these identifying words. These forward-looking statements address various matters, including our expected implementation of changes to our programs, the outcomes of newly implemented strategies, achievement of our objectives and estimations of future financial results and drivers. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. A variety of factors could cause our future results to differ materially from the anticipated events or results expressed in such forward-looking statements, including competition in the car wash industry; our ability to attract and retain members; ability to retain key employees; labor costs and workforce challenges; economic, political and other risks; real estate leases; market instability; serious disruptions or catastrophic events; seasonal influences; our ability to identify and secure suitable sites for new washes; changes in consumer demand; changes in equipment costs; our ability to expand into new markets; our operating costs generally; acquisition activity; our future financial performance and our ability to pay principal and interest on our indebtedness; failures, interruptions or security breaches of our information systems or technology; general economic conditions; compliance with laws, regulations and orders and changes in laws, regulations and applicable accounting standards; outcomes of litigation, legal proceedings and other legal or regulatory matters. Readers should also review Item 1A, Risk Factors, of our Annual Report on Form 10-K filed on February 23, 2024, for a description of important factors that could cause our future results to differ materially from those contemplated by the forward-looking statements made in this proxy statement, as well as other information we file with the U.S. Securities and Exchange Commission (“SEC”). We caution you not to place undue reliance on the forward-looking statements contained in this proxy statement. The forward-looking statements in this proxy statement speak only as of the date of this proxy statement, and we do not undertake any obligation to publicly update or revise our forward-looking statements, except as required by law.
Table of Contents
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2024 Proxy Statement |
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Proxy Statement
Mister Car Wash, Inc.
222 E. 5th Street
Tucson, Arizona 85705
Proxy Statement
For the Annual Meeting of Stockholders
to be held on May 23, 2024
Introduction
This proxy statement (the “Proxy Statement”) and our annual report for the fiscal year ended December 31, 2023 (the “Annual Report” and, together with this Proxy Statement, the “proxy materials”) are being furnished by and on behalf of the board of directors (the “Board” or “Board of Directors”) of Mister Car Wash, Inc. (the “Company,” “Mister,” “we,” “us,” or “our”), in connection with the solicitation of proxies by the Company and its Board from holders of the outstanding shares of the Company’s common stock for use at the Company’s 2024 annual meeting of stockholders and at any adjournments or postponements thereof (the “Annual Meeting”).
The Annual Meeting will be held in a virtual format at www.proxydocs.com/MCW on Thursday, May 23, 2024, at 8:30 a.m., Mountain Standard Time. To attend the Annual Meeting virtually, you must register in advance at www.proxydocs.com/MCW.
At the Annual Meeting, stockholders will be asked to vote either directly or by proxy on the following matters as more fully described in this Proxy Statement:
A Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including this Proxy Statement and our 2023 Annual Report on Form 10-K, is first being mailed to stockholders on or about April 10, 2024. The Notice also provides instructions on how to vote over the Internet, by phone or by mail. If you receive a Notice by mail, you will not receive printed and mailed proxy materials unless you specifically request them.
Information About the Annual Meeting and Voting
When and where will the Annual Meeting be held?
The Annual Meeting will be held virtually via webcast at www.proxydocs.com/MCW on Thursday, May 23, 2024, at 8:30 a.m., Mountain Standard Time. To attend the Annual Meeting, you must register in advance at www.proxydocs.com/MCW.
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2024 Proxy Statement |
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Proxy Statement
What information is contained in this Proxy Statement?
This Proxy Statement contains information relating to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of our directors and most highly paid officers, and other required information.
What proposals will be voted on at the Annual Meeting?
There are three proposals scheduled to be voted on at the Annual Meeting as more fully described in this Proxy Statement:
Proposal No. 1: Election of the three Class III director nominees named in this Proxy Statement to serve until the 2027 Annual Meeting and until their respective successors have been duly elected and qualified;
Proposal No. 2: Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024; and
Proposal No. 3: Approval, on an advisory basis, of the compensation of our named executive officers.
We will also consider any other business that properly comes before the Annual Meeting.
Are there any matters to be voted on at the Annual Meeting that are not included in this Proxy Statement?
At the date this Proxy Statement went to press, we did not know of any matters which may be properly presented at the Annual Meeting other than those referred to in this Proxy Statement. If any other matters are properly presented at the meeting or any adjournment or postponement thereof for consideration, and you are a stockholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to vote on those matters for you.
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a paper copy of proxy materials?
The rules of the Securities and Exchange Commission (the “SEC”) permit us to furnish proxy materials, including this Proxy Statement and the Annual Report, to our stockholders by providing access to such documents on the Internet instead of mailing printed copies. Stockholders will not receive paper copies of the proxy materials unless they request them. Instead, the Notice of Internet Availability of Proxy Materials (the “Notice and Access Card”) provides instructions on how to access and review on the Internet all proxy materials. The Notice and Access Card also instructs you as to how to vote your shares via the Internet or telephone. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials described in the Notice and Access Card.
What does it mean if I receive more than one Notice and Access Card or more than one set of proxy materials?
It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all your shares. To ensure that all your shares are voted, for each Notice and Access Card or set of proxy materials, please submit your proxy by phone, the Internet, or Alexa or, if you received printed copies of the proxy materials, by signing, dating, and returning the enclosed proxy card in the enclosed envelope.
Can I vote my shares by filling out and returning the Notice and Access Card?
No. The Notice and Access Card identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and Access Card and returning it. If you would like a paper proxy card, you should follow the instructions in the Notice and Access Card. The paper proxy card you receive will also provide instructions as to how to vote your shares via the Internet, telephone, or Alexa. Alternatively, you can mark the paper proxy card with how you would like your shares voted, sign and date the proxy card, and return it in the envelope provided.
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Proxy Statement
Who is entitled to vote at the Annual Meeting?
You may vote all shares of common stock that you owned as of the close of business on the Record Date, March 28, 2024.
As of the Record Date, there were 317,835,082 shares of our common stock issued and outstanding and entitled to be voted at the Annual Meeting.
A list of stockholders will be available at our headquarters at 222 E. 5th Street, Tucson, Arizona 85705 for a period of at least ten days prior to the Annual Meeting.
What are the voting rights of stockholders?
You may cast one vote per share including shares (i) held directly in your name as the stockholder of record and (ii) held for you as the beneficial owner through a stockbroker, bank, or other nominee. There is no cumulative voting.
What is the difference between being a stockholder of record and a beneficial owner?
Many of our stockholders hold their shares through stockbrokers, banks, or other nominees, rather than directly in their own names. As summarized below, there are some differences between being a stockholder of record and a beneficial owner.
Stockholder of record: If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, LLC, you are the stockholder of record, and the Notice and Access Card is being sent directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals named on the proxy card or to vote at the Annual Meeting.
Beneficial owner: If your shares are held in a stock brokerage account or by a bank or other nominee, you are the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your broker or other nominee, who is considered to be the stockholder of record. As the beneficial owner, you have the right to tell your nominee how to vote, and you are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you obtain a legal proxy from your nominee authorizing you to do so. Your nominee has sent you instructions on how to direct the nominee’s vote. You may vote by following those instructions and the instructions on the Notice.
What is a proxy holder?
We have designated John Lai, our Chairman, President and Chief Executive Officer, and Jed Gold, our Chief Financial Officer, to hold and vote all properly-tendered proxies (except votes “withheld”). If you have indicated a vote, they will vote accordingly. If you have left a vote blank, they will vote as the Board recommends. While we do not expect any other business to come up for a vote, if it does, they will vote in their discretion.
How many shares must be present to hold the Annual Meeting?
A quorum must be present at the Annual Meeting for any business to be conducted. The holders of a majority in voting power of the common stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, constitutes a quorum. If you sign and return your paper proxy card or authorize a proxy to vote electronically or telephonically, your shares will be counted to determine whether we have a quorum even if you abstain or fail to vote as indicated in the proxy materials.
Broker non-votes will also be considered present for the purpose of determining whether there is a quorum for the Annual Meeting.
What are “broker non-votes”?
A “broker non-vote” occurs when shares held by a broker, bank, or other nominee in “street name” for a beneficial owner are not voted with respect to a proposal because (1) the broker has not received voting instructions from the stockholder who beneficially owns the shares and (2) the broker lacks the authority to vote the shares at their discretion. Proposals No.
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2024 Proxy Statement |
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Proxy Statement
1 and 3 are each considered a non-discretionary matter, and a broker will lack the authority to vote uninstructed shares at their discretion on each such proposal. Therefore, if you are a beneficial owner and do not provide voting instructions to your broker with respect to these matters, it will result in a broker non-vote with respect to such proposals. Broker non-votes, if any, will have no effect on the outcome of Proposals 1 and 3. Proposal No. 2 is considered a discretionary matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on this proposal.
What if a quorum is not present at the Annual Meeting?
If a quorum is not present or represented at the scheduled time of the Annual Meeting, (i) the Chairman of the Annual Meeting or (ii) a majority in voting power of the stockholders entitled to vote at the Annual Meeting, present in person or by remote communication, if applicable, or represented by proxy, may adjourn the Annual Meeting until a quorum is present or represented.
How do I vote my shares without attending the Annual Meeting?
We recommend that stockholders vote by proxy even if they plan to attend the Annual Meeting and vote in person. If you are a stockholder of record, there are four ways to vote by proxy:
Internet and Telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 8:30 a.m., Mountain Standard Time, on May 23, 2024.
If your shares are held in the name of a bank, broker, or other holder of record, you will receive instructions on how to vote from the bank, broker, or holder of record. You must follow the instructions of such bank, broker, or holder of record for your shares to be voted.
Will there be a question-and-answer session during the Annual Meeting?
As part of the Annual Meeting, we will hold a live Q&A session, during which we intend to answer appropriate questions submitted during or prior to the meeting that are pertinent to the Company and the meeting matters, as time permits. Each
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2024 Proxy Statement |
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Proxy Statement
stockholder is limited to no more than two questions. Questions should be succinct and only cover a single topic. We will not address questions that are, among other things:
How does the Board recommend that I vote?
The Board recommends that you vote:
How many votes are required to approve each proposal?
The table below summarizes the proposals that will be voted on, the vote required to approve each item and how votes are counted:
Proposal |
Votes Required |
Voting Options |
Impact of “Withhold” |
Broker Discretionary Allowed |
Proposal No. 1: Election of Directors |
The plurality of the votes cast. This means that the three nominees receiving the highest number of affirmative “FOR” votes will be elected as Class III directors. |
“FOR” “WITHHOLD”
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None(1) |
No(3) |
Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm |
The affirmative vote of the holders of a majority of the votes cast (excluding abstentions and broker non-votes) on such matter. |
“FOR” “AGAINST” “ABSTAIN” |
None(2) |
Yes(4) |
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Proposal No. 3: Approval, on an advisory basis, of the compensation of our named executive officers |
The affirmative vote of the holders of a majority of the votes cast (excluding abstentions and broker non-votes) on such matter. |
“FOR” “AGAINST” “ABSTAIN” |
None(2) |
No(3) |
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2024 Proxy Statement |
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Proxy Statement
What if I do not specify how my shares are to be voted?
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth above, as well as with the description of each proposal in this Proxy Statement.
Who will count the votes?
Representatives of Mediant Communications (“Mediant”) will tabulate the votes, and a representative of Mediant will act as inspector of election.
Can I revoke or change my vote after I submit my proxy?
Yes. Whether you have voted by Internet, telephone. Alexa or mail, if you are a stockholder of record, you may change your vote and revoke your proxy by:
If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker, or other nominee. You may also change your vote or revoke your proxy at the Annual Meeting if you obtain a signed proxy from the record holder (broker, bank, or other nominee) giving you the right to vote the shares.
Your most recent proxy card or telephone, Alexa or Internet proxy is the one that is counted. Your attendance at the Annual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the Company before your proxy is voted or you vote at the Annual Meeting.
Who will pay for the cost of this proxy solicitation?
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers, or employees (for no additional compensation) in person or by telephone, electronic transmission, and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses.
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Proposal No. 1 Election of Directors
Proposal No. 1 Election of Directors
Board Size and Structure
Our amended and restated certificate of incorporation, as amended (“Certificate of Incorporation”) provides that the number of directors shall be established from time to time by our Board of Directors. Our Board of Directors has fixed the number of directors at ten. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal.
Our Certificate of Incorporation provides for a classified Board consisting of three classes, designated as Class I, Class II and Class III. Each class of directors must stand for re-election no later than the third annual meeting of stockholders after their initial appointment or election to the Board, provided that the term of each director will continue until the election and qualification of his or her successor, subject to his or her earlier death, resignation, or removal. Generally, vacancies or newly created directorships on the Board will be filled only by vote of a majority of the directors then in office although less than a quorum, or by the sole remaining director. A director appointed by the Board to fill a vacancy will hold office until the next election of the class for which such director was chosen, subject to the election and qualification of his or her successor and his or her earlier death, resignation, retirement, disqualification, or removal.
Current Directors and Terms
Our current directors and their respective classes and terms are set forth below.
Class I Directors - Current Term Ending at 2025 Annual Meeting |
Class II Directors - Current Term Ending at 2026 Annual Meeting |
Class III Directors - Current Term Ending at 2024 Annual Meeting |
John Danhakl |
J. Kristofer Galashan |
Dorvin Donald Lively |
John Lai |
Ronald Kirk |
Atif Rafiq |
Jonathan Seiffer |
Veronica Rogers |
Jodi Taylor |
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Jeffrey Suer |
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Nominees for Director
Messrs. Lively and Rafiq and Ms. Taylor have been nominated by the Board to stand for election as Class III directors at the Annual Meeting. As the directors assigned to Class III, Messrs. Lively and Rafiq and Ms. Taylor’s current terms of service will expire at the Annual Meeting. If elected by the stockholders at the Annual Meeting, Messrs. Lively and Rafiq and Ms. Taylor will each serve for a term expiring at our annual meeting of stockholders to be held in 2027 (the “2027 Annual Meeting”) and the election and qualification of his or her successor or until his or her earlier death, resignation, retirement, disqualification, or removal.
Each person nominated for election as a Class III director has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve. We have no reason to believe that any of the Class III director nominees will be unable to unwilling to serve. If, however, prior to the Annual Meeting, the Board of Directors should learn that any nominee will be unable to serve for any reason, the proxies that otherwise would have been voted for this Class III director nominee will be voted for a substitute nominee as selected by the Board. Alternatively, at the Board’s discretion, the Board may reduce the number of directors.
Information About Board Nominees and Continuing Directors
The following pages contain certain biographical information as of April 10, 2024 for each nominee for director and each director whose term as a director will continue after the Annual Meeting, including all positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which the director or nominee currently serves as a director or has served as a director during the past five years.
Board Composition and Expertise
We believe that each of our directors has the experience, skills, qualities, and time to successfully perform his or her duties as a director and contribute to our Company’s success. In selecting these directors, the Board determined each to be of
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Proposal No. 1 Election of Directors
high integrity and good judgment, with a record of accomplishment in their chosen fields, and displaying the independence of mind and strength of character to effectively represent the best interests of all stockholders and provide practical insights and diverse perspectives. Our directors are diverse in age, gender, tenure, ethnic background, and professional experience: 20% identify as female, 10% identify as African American, 20% identify as Asian, and 10% identify as multiracial. Together they produce a cohesive body in terms of board process, collaboration, and mutual respect for differing perspectives. For more information on Mister’s director nomination process, see “Nominating and Corporate Governance Committee — Director Nomination Process” below.
The information presented below regarding each nominee and continuing director also sets forth specific experience, qualifications, attributes, and skills that led our Board of Directors to the conclusion that such individual should serve as a director in light of our business and structure.
Class III Director Nominees for Terms Expiring at the 2027 Annual Meeting of Stockholders
Class III Director Nominees |
Age |
Director Since |
Current Position with Mister |
Dorvin Donald Lively |
65 |
2021 |
Director |
Atif Rafiq |
50 |
2024 |
Director |
Jodi Taylor |
61 |
2021 |
Director |
Dorvin Donald Lively has served as a member of our board of directors since June 2021. Since January 2023, Mr. Lively has served as Executive Chairman and Chief Executive Officer for Buff City Soap, a franchisor of retail stores that sell various soap and body care products. Mr. Lively also served as the President of Planet Fitness, Inc. from January 2019 until October 2022 when he retired from Planet Fitness. He also served as President and Chief Financial Officer from May 2017 to January 2019. Mr. Lively served as Chief Financial Officer of Planet Fitness, Inc. from July 2013 to May 2017. Prior to Planet Fitness, he held several roles at RadioShack from August 2011 to July 2013, including as Executive Vice President, Chief Financial Officer, interim Chief Executive Officer, and Chief Administrative Officer. Prior to RadioShack, Mr. Lively was Chief Financial Officer of Ace Hardware Corp. His experience also includes previous positions at Maidenform Brands, Toys R Us, The Reader's Digest Association and Pepsi-Cola International. Mr. Lively has also served as a director of European Wax Center, Inc. (Nasdaq: EWCZ) since 2021. Mr. Lively earned a B.S. in accounting from the University of Arkansas. We believe Mr. Lively is well-qualified to serve on our board of directors because of his extensive leadership experience, knowledge of corporate finance matters and experience in the consumer services industry.
Atif Rafiq has served as a member of our board of directors since February 2024. Mr. Rafiq is the CEO & Co-Founder of Ritual, an organization that transforms team-based problems through workflow and AI. He previously served as the President of Customers, Commercial, and Growth at MGM Resorts International from 2019 - 2021, leading a significant portfolio across marketing, sales, revenue management, and more. His career trajectory includes key roles such as Global Chief Information Officer and Chief Digital Officer at Volvo Car AB and senior positions at companies like McDonald's Corporation and Amazon.com Inc. Mr. Rafiq's experience extends to board roles, including at Flutter Entertainment plc and CXApp Inc. Mr. Rafiq has also served as a director of KINS Technology Group, Inc. from 2020 to 2023. He holds an MBA from The University of Chicago and a BA in Mathematics-Economics from Wesleyan University, showcasing a blend of technical acumen and leadership excellence across the digital and commercial sectors.
Jodi Taylor has served as a member of our board of directors since June 2021. Ms. Taylor previously served as an executive officer of Container Store Group, Inc., a publicly traded specialty retailer of storage and organization products, until her retirement in March 2021. She was the Chief Financial Officer from December 2007 through August 2020, the Secretary from October 2013 through March 2021, and the Chief Administrative Officer from July 2016 through March 2021. Prior to joining Container Store Group, Inc., Ms. Taylor spent nine years as the Chief Financial Officer and Secretary of Harold’s Stores, Inc., a regional specialty retailer of high-end apparel. Prior to that role, she served as Chief Financial Officer Secretary and Treasurer of Baby Superstore, Inc. from 1994 through 1997. Since August 2020, Ms. Taylor has served on the board of directors of the J.M. Smucker Company since 2020, where she also serves as Chair of the audit committee. She has also served on the board of directors of Wella Company since March 2023, where she also serves as Chair of the audit committee. She has been a certified public accountant since 1984 (inactive since 2021), starting with an accounting role at Deloitte & Touche L.L.P. We believe Ms. Taylor is qualified to serve on our board of directors due to her experience as an executive officer of a public company and her financial and accounting expertise.
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Proposal No. 1 Election of Directors
Class I Directors Whose Terms Expire at the 2025 Annual Meeting of Stockholders
Class I Directors |
Age |
Director Since |
Current Position with Mister |
John Danhakl |
68 |
2014 |
Director |
John Lai |
60 |
2013 |
Chairman, President, and Chief Executive Officer |
Jonathan Seiffer |
52 |
2014 |
Director |
John Danhakl has served as a member of our board of directors since August 2014. Mr. Danhakl is Managing Partner of Leonard Green & Partners, L.P., a private equity investing firm based in Los Angeles with over $40 billion of committed capital raised since inception. The firm partners with experienced management teams and often with founders to invest in market-leading companies. Mr. Danhakl joined LGP in 1995. Previously, Mr. Danhakl was a Managing Director in the Los Angeles office of Donaldson, Lufkin & Jenrette ("DLJ"). Prior to DLJ, Mr. Danhakl was a Vice President in corporate finance at Drexel Burnham Lambert, Inc. Mr. Danhakl presently serves on the Board of Directors of IQVIA Holdings, Inc. since February 2010, Life Time Group Holdings, Inc. since June 2015. He is a 1980 graduate of the University of California at Berkeley and received an M.B.A. in 1985 from Harvard Business School. We believe Mr. Danhakl is qualified to serve on our board of directors due to his extensive experience investing in and supporting high-growth, market-leading companies, and his experience as a financial analyst.
John Lai has served as the Chairman of our Board of Directors since 2021, and as our President, Chief Executive Officer and as a member of the Board since June 2013. Mr. Lai has been with Mister Car Wash, Inc, and its predecessor entities since 2002, serving as Vice President of Market Development until assuming the role of President and Chief Executive Officer. Mr. Lai has served as a director at the Southern Arizona Leadership Council since December 2019. Mr. Lai received a B.S. from the University of Arizona. We believe that Mr. Lai is qualified to serve on our board of directors based on his understanding of our business and operations and perspective as our President and Chief Executive Officer.
Jonathan Seiffer has served as a member of our board of directors since August 2014. Mr. Seiffer is a Senior Partner at Leonard Green & Partners, L.P. a private equity investing firm, which he joined as an Associate in October 1994. Mr. Seiffer has also served on the board of directors of Signet Jewelers, LTD since 2019, AerSale Corporation since December 2020 and previously served on the Board of Directors of BJ’s Wholesale Club from 2011 to 2020. Mr. Seiffer obtained a B.S. in finance and systems engineering from the University of Pennsylvania. We believe Mr. Seiffer is qualified to serve on our board of directors due to his extensive experience investing in and supporting high-growth, market-leading companies.
Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders
Class II Directors |
Age |
Director Since |
Current Position at Mister |
|
|
|
|
J. Kristofer Galashan |
46 |
2014 |
Director |
|
|
|
|
Ronald Kirk |
69 |
2021 |
Director |
|
|
|
|
Veronica Rogers |
46 |
2021 |
Director |
|
|
|
|
Jeffrey Suer |
38 |
2014 |
Director |
J. Kristofer Galashan has served as a member of our board of directors since August 2014. Mr. Galashan is a Partner of Leonard Green & Partners, L.P. where he joined as an associate in 2002. Mr. Galashan serves on the board of directors of the Container Store Group, Inc. since August 2007, and Life Time Group Holdings, Inc. since June 2015, and previously served on the board of directors for USHG Acquisition Corp. from February 2021 until December 2022, BJ’s Wholesale Club Holdings, Inc. from 2011 to 2019. Mr. Galashan earned a B.A. in Honors Business Administration from the Richard Ivey School of Business at the University of Western Ontario. We believe Mr. Galashan is qualified to serve on our board of directors due to his extensive experience investing in and supporting high-growth, market-leading companies.
Ronald Kirk has served as a member of our board of directors since October 2021. Mr. Kirk has been Senior Of Counsel at the law firm of Gibson, Dunn & Crutcher LLP since April 2013. From 2009 until 2013, Mr. Kirk served as the U.S. Trade Representative under President Obama, where he focused on the development and enforcement of U.S. intellectual property law. Prior to serving as U.S. Trade Representative, from 2005 to 2009, Mr. Kirk was a partner of the law firm of Vinson & Elkins LLP and, from 1994 to 2005, was a partner in the Corporate Securities Practice of Gardere Wynne & Sewell LLP. Mr. Kirk currently serves on the board of Texas Instruments Incorporated and the board of Macquarie Infrastructure Holdings, LLC. Mr. Kirk received a B.A. in Political Science and Sociology from Austin College and a J.D. from University
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2024 Proxy Statement |
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9 |
Proposal No. 1 Election of Directors
of Texas at Austin School of Law. We believe Mr. Kirk is qualified to serve on our board of directors due to his broad leadership experience and experience as an independent director for other public companies.
Veronica Rogers has served as a member of our board of directors since October 2021. Currently Ms. Rogers is a DCI Fellow of Stanford University. Ms. Rogers has served as Senior Vice President, Head of Global Sales and Business Operations of Sony Interactive Entertainment LLC from January 2020 to April 2023 where she led go-to-market strategy globally both physically and digitally, including PlayStation Store and subscription Services with more than 45 million subscribers. From 2006 to 2020, she served in various managerial roles in sales, marketing, and business development at Microsoft Corporation, most recently as Vice President, Device Partner, Sales from 2018 to 2020. Ms. Rogers received a B.A. in Economics and a Master of Arts degree in Economics from the University of Cambridge, as well as a Master of Science degree in European Political Economy and Political Science from the London School of Economics. We believe Ms. Rogers is qualified to serve on our board of directors due to her experience as an executive officer of public companies.
Jeffrey Suer has served as a member of our board of directors since August 2014. Mr. Suer is a Partner of Leonard Green & Partners, L.P. a private equity investing firm. Prior to joining Leonard Green & Partners in August 2013, Mr. Suer previously served as a private equity associate at Apollo Global Management LLC and a mergers and acquisitions analyst at Morgan Stanley. Mr. Suer received an M.B.A. from Harvard Business School, and a B.S. in Mathematics/Economics from the University of California, Los Angeles. We believe Mr. Suer is qualified to serve on our board of directors due to his extensive experience investing in and supporting high-growth, market-leading companies.
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Board Recommendation
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The Board of Directors unanimously recommends a vote FOR the election of each of Dorvin Donald Lively, Atif Rafiq, and Jodi Taylor as a Class III director to hold office until the 2027 Annual Meeting and until his or her respective successor has been duly elected and qualified.
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10 |
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2024 Proxy Statement |
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Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm
Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm
Appointment of Independent Registered Public Accounting Firm
The Audit Committee appoints our independent registered public accounting firm. In this regard, the Audit Committee evaluates the qualifications, performance and independence of our independent registered public accounting firm and determines whether to re-engage our current firm. As part of its evaluation, the Audit Committee considers, among other factors, the quality and efficiency of the services provided by the firm, including the performance, technical expertise, industry knowledge and experience of the lead audit partner and the audit team assigned to our account; the overall strength and reputation of the firm; the firm’s global capabilities relative to our business; and the firm’s knowledge of our operations. Deloitte & Touche LLP has served as our independent registered public accounting firm since 2018. Upon consideration of these and other factors, the Audit Committee has appointed Deloitte & Touche LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024.
Although ratification is not required by our amended and restated bylaws (“Bylaws”) or otherwise, the Board is submitting the selection of Deloitte & Touche LLP to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm, and it is a good corporate governance practice. If our stockholders do not ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
Representatives of Deloitte & Touche LLP are expected to attend the Annual Meeting and to have an opportunity to make a statement and be available to respond to appropriate questions from stockholders.
Fees Paid to Deloitte & Touche LLP
The following table sets forth the fees of Deloitte & Touche LLP, our independent registered public accounting firm, billed to the Company in each of the last two fiscal years.
|
Year Ended December 31, |
|
||||
|
2023 |
|
2022 |
|
||
Audit Fees |
$ |
1,494,913 |
|
$ |
1,398,000 |
|
Audit-Related Fees |
|
15,000 |
|
|
35,000 |
|
Tax Fees |
|
430,227 |
|
|
502,700 |
|
All Other Fees |
|
— |
|
|
— |
|
Total |
$ |
1,940,140 |
|
$ |
1,935,700 |
|
Audit fees for the fiscal years ended December 31, 2023, and December 31, 2022, consisted of fees billed for professional services rendered for the audit and interim reviews of Mister’s financial statements.
Audit-related fees for the fiscal years ended December 31, 2023, and December 31, 2022, consisted of fees billed for work performed in connection with SEC filings related to registration statements.
Tax fees for the fiscal years ended December 31, 2023, and December 31, 2022, consisted of fees related to federal and state income tax and indirect tax return compliance and consulting matters.
Pre-Approval Policies and Procedures
The formal written charter for our Audit Committee requires that the Audit Committee pre-approve all audit services to be provided to us, whether provided by our principal auditor or other firms, and all other services (review, attest and non-audit) to be provided to us by our independent registered public accounting firm, other than de minimis non-audit services approved in accordance with applicable SEC rules.
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2024 Proxy Statement |
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11 |
Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee has adopted a policy (the “Pre-Approval Policy”) that sets forth the procedures and conditions pursuant to which audit and non-audit services proposed to be performed by our independent registered public accounting firm may be pre-approved. The Pre-Approval Policy generally provides that the Audit Committee will not engage an independent registered public accounting firm to render any audit, audit-related, tax or permissible non-audit service unless the service is either (i) explicitly approved by the Audit Committee (“specific pre-approval”) or (ii) entered into pursuant to the pre-approval policies and procedures described in the Pre-Approval Policy (“general pre-approval”). Unless a type of service to be provided by our independent registered public accounting firm has received general pre-approval under the Pre-Approval Policy, it requires specific pre-approval by the Audit Committee or by a designated member of the Audit Committee to whom the committee has delegated the authority to grant pre-approvals. Any member of the Audit Committee to whom the committee delegates authority to make pre-approval decisions must report any such pre-approval decisions to the Audit Committee at its next scheduled meeting. If circumstances arise where it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval categories or above the pre-approved amounts, the Audit Committee requires pre-approval for such additional services or such additional amounts. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval. For both types of pre-approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence.
On an annual basis, the Audit Committee reviews and generally pre-approves the services (and related fee levels or budgeted amounts) that may be provided by our independent registered accounting firm without first obtaining specific pre-approval from the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time, based on subsequent determinations.
All services reported in the Audit, Audit-Related, Tax and All Other Fees categories above were approved by the audit committee. The above-described services provided to us by Deloitte & Touche LLP prior to our initial public offering, effective June 24, 2021 (“IPO”) were provided under engagements entered into prior to our adoption of our pre-approval policies and, following our IPO, in accordance with such policies.
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Board Recommendation
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The Board of Directors unanimously recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024.
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12 |
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2024 Proxy Statement |
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Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm
Audit Committee Report
The audit committee operates pursuant to a charter which is reviewed annually by the audit committee. Additionally, a brief description of the primary responsibilities of the audit committee is included in this Proxy Statement under the discussion of “Corporate Governance – Audit Committee.” Under the audit committee charter, management is responsible for preparation, presentation and integrity of the Company’s financial statements, the appropriateness of accounting principles and financial reporting policies and for establishing and maintaining our internal control over financial reporting. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States.
In the performance of its oversight function, the audit committee reviewed and discussed with management and Deloitte & Touche LLP, as the Company’s independent registered public accounting firm, the Company’s audited financial statements of the fiscal year ended December 31, 2023, and internal control over financial reporting. The audit committee also discussed with the Company’s independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC. In addition, the audit committee received and reviewed the written disclosures and letters from the Company’s independent registered public accounting firm required by applicable requirements of the PCAOB, regarding such independent registered accounting firm’s communications with the audit committee concerning independence and discussed with the Company’s independent registered public accounting firm their independence from the Company.
Based upon review and discussions described in the preceding paragraph, the audit committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC.
Submitted by the Audit Committee of the Company’s Board of Directors:
Jodi Taylor (Chair)
Dorvin Donald Lively
Ronald Kirk
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2024 Proxy Statement |
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13 |
Proposal No. 3 Approval of an Amendment to the Company’s Amended and Restated Certificate of Incorporation to Reflect Delaware Law Provisions Regarding Officer Exculpation
Proposal No. 3 Vote to Approve, on an Advisory Basis, Our Named Executive Officer Compensation
The Compensation Discussion and Analysis beginning on page 23 of this Proxy Statement describes our executive compensation program and the compensation of our named executive officers for the fiscal year ended December 31, 2023. The Board of Directors is asking stockholders to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers by voting “FOR” the following resolution:
“RESOLVED, that the stockholders of Mister Car Wash, Inc. APPROVE, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”
As described in detail in the section entitled “Compensation Discussion and Analysis”, we maintain an executive compensation program that ties pay to performance and seeks to:
Based on the result of the say-on-pay frequency vote held at our 2023 annual meeting of stockholders, we expect to hold a vote to approve, on an advisory basis, the compensation of our named executive officers on an annual basis going forward.
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Board Recommendation
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The Board recommends a vote FOR Proposal 3, Vote to Approve, on an Advisory Basis, our Named Executive Officer Compensation
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14 |
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2024 Proxy Statement |
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Corporate Governance
Named Executive Officers
The table below identifies and sets forth certain biographical and other information regarding our named executive officers as of April 10, 2024. There are no family relationships among any of our named executive officers or directors.
Named Executive Officer |
Age |
Position |
In Current Position Since |
John Lai |
60 |
President, Chief Executive Officer and Director |
2013 |
Jedidiah Gold |
44 |
Chief Financial Officer |
2019 |
Mary Porter |
53 |
Chief People Officer |
2023 |
Mayra Chimienti |
40 |
Chief Operating Officer |
2022 |
Markus Hartmann |
60 |
General Counsel |
2022 |
See page 8 of this Proxy Statement for the biography of John Lai.
Jedidiah Gold has served as our Treasurer and Chief Financial Officer since July 2019. Mr. Gold previously served as Senior Director Finance, Assistant Treasurer at Yum Brands, Inc. from May 2016 to July 2019, and as Chief Financial Officer MENAPak at KFC Corporation from October 2014 to May 2016. Mr. Gold received a M.B.A. in Finance and Accounting from Indiana University and a B.S. in accounting from the University of Utah.
Mary Porter became our first Chief People Officer in 2023. Ms. Porter previously served as the Vice President of Human Resources for Nordstrom from January 2018 to April 2023, supporting Nordstrom and Nordstrom Rack locations across both the U.S. and Canada, a position she achieved as the culmination of a 27-year long journey with the company. From HR compliance to Talent Acquisition to strategic business support, Mary has experience across many Human Resources functions. Mary earned a Bachelor of Arts degree from the University of Washington.
Mayra Chimienti was promoted to Chief Operating Officer in March 2022 and previously served as our Vice President, Operations Services since July 2017. Ms. Chimienti joined our Company in 2007 and previously served as our Director of Training & Development from March 2013 to July 2017. Ms. Chimienti has served as a director for the Mister Cares Foundation since April 2020. Ms. Chimienti received a B.A. in Media Advertising from the University of Texas, El Paso.
Markus Hartmann has served as our General Counsel since October 2022. Mr. Hartmann previously served as Senior Compliance Officer for Stryker Corporation (Spine Division) from May 2021 to October 2022, as Vice President -General Counsel and Corporate Secretary for Carrols Restaurant Group, Inc. from February 2020 to March 2021, and as Vice President – Technical Compliance NAFTA for Mercedes-Benz Research & Development North America, Inc. (A Daimler company) from November 2018 to February 2020. Mr. Hartmann received a J.D. from Harvard Law School, an M.B.A. from Le Moyne College and a B.A. in Political Science from Colorado College.
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2024 Proxy Statement |
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15 |
Corporate Governance
Corporate Governance
Corporate Governance Guidelines
Our Board of Directors has adopted Corporate Governance Guidelines. A copy of these Corporate Governance Guidelines can be found in the “Governance” section of the “Investor Relations” page of our website located at: www.ir.mistercarwash.com, or by writing to our Corporate Secretary at our offices at 222 E. 5th Street, Tucson, Arizona 85705. In addition to the matters included in our Corporate Governance Guidelines, we strive to adopt practices that will promote the long-term interests of the Company and its stockholders including:
• Board Independence and Qualifications |
• Independent Executive Compensation Consultant |
• Established Whistleblower ("Speaking Up") Policy |
• Annual Board and Committee Self-Evaluations |
• Regular Board and Committee Executive Sessions of Non-Management Independent Directors |
• Audit Committee Approval Required for Related Party Transactions |
• Established Executive Officer and Non-Employee Director Stock Ownership Policy |
• Director Orientation and Continuing Education |
• Accountability. Each share of our common stock as of record date is entitled to one vote per proposal presented to stockholders at our Annual Meeting of Stockholders. |
• Clawback, Anti-Hedging, Anti-Short Sale and Anti-Pledging Policies for Directors, Executive Officers, and other Employees |
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Board Leadership Structure
The Chairman of the Board leads the Board and oversees Board meetings and the delivery of information necessary for the Board’s informed decision making. The Chairman also serves as the principal liaison between the Board and our management. At this time, our Board believes that it is in the best interests of the Company and its stockholder that the positions of Chair and CEO be held by the same person, as this combination provides unified leadership and direction in the management of the Company, contributing to cohesive, strong, and effective long-term vision and strategy. These positions are currently held by John Lai. Our Board of Directors believes that our Chief Executive Officer is best situated to serve as Chairman because, as the Company’s Chief Executive Officer, he has a deep understanding of our business and industry, and is best placed to identify key business and strategic priorities, critical issues that require Board attention and facilitate timely and effective communication between the Board and management, which is essential to effective governance.
We recognize that different leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. Accordingly, the Board will continue to periodically review our leadership structure and make such changes in the future as it deems appropriate and in the best interests of the Company and its stockholders.
Controlled Company Exemption
As Leonard Green & Partners, L.P. (“LGP”) controls more than 50% of the voting power for the election of our directors, we qualify as a “controlled company” within the meaning of the applicable New York Stock Exchange (“NYSE”) rules and regulations (“NYSE rules”). As a “controlled company,” we may elect not to comply with certain corporate governance standards, including the requirements:
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2024 Proxy Statement |
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Corporate Governance
Although we currently comply with the NYSE rules applicable to companies that do not qualify as a “controlled company” we may at any time and from time-to-time avail of some or all of the exemptions listed above for so long as we remain a “controlled company.”
Director Independence
Under our Corporate Governance Guidelines and the applicable NYSE rules, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with us or any of our subsidiaries. In addition, the director must meet the bright-line tests for independence set forth by the NYSE rules.
Our Board has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that none of Mmes. Rogers and Taylor and Messrs. Danhakl, Galashan, Kirk, Lively, Rafiq, Seiffer and Suer, representing nine of our ten directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors qualifies as “independent” as that term is defined under the NYSE rules. In making these determinations, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the director’s beneficial ownership of our common stock and the relationships of our non-employee directors with certain of our significant stockholders.
Board Committees
Our Board of Directors has three standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each of which has the composition and the responsibilities described below. In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Each of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee operates under a written charter, available on the Company website at www.ir.mistercarwash.com.
Director |
Audit Committee |
Compensation Committee |
Nominating and Corporate Governance Committee |
John Danhakl |
|
|
|
J. Kristofer Galashan |
|
✓ |
✓ |
Ronald Kirk |
✓ |
|
✓ |
John Lai |
|
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|
Dorvin Donald Lively |
✓ |
|
|
Atif Rafiq |
|
|
✓ |
Veronica Rogers |
|
CHAIR |
|
Jonathan Seiffer |
|
✓ |
CHAIR |
Jeffrey Suer |
|
|
|
Jodi Taylor |
CHAIR |
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2024 Proxy Statement |
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17 |
Corporate Governance
Audit Committee
Our Audit Committee is responsible for, among other things:
Our Audit Committee currently consists of Dorvin Donald Lively, Ronald Kirk and Jodi Taylor, with Ms. Taylor serving as chair. All members of our Audit Committee meet the requirements for financial literacy under the applicable NYSE rules and regulations. Our Board of Directors has affirmatively determined that each member of our Audit Committee qualifies as “independent” under the NYSE rules applicable to Audit Committee members and Rule 10A-3 of the Exchange Act of 1934, as amended (the “Exchange Act”) applicable to Audit Committee members. In addition, our Board of Directors has determined that each of Ms. Taylor and Mr. Lively qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
Compensation Committee
Our Compensation Committee is responsible for, among other things:
Our Compensation Committee currently consists of J. Kristofer Galashan, Jonathan Seiffer, and Veronica Rogers, with Ms. Rogers serving as chair. Our Board of Directors has determined that each member of our Compensation Committee qualifies as “independent” under the NYSE rules applicable to Compensation Committee members and is a “non-employee director” as defined in Section 16b-3 of the Exchange Act.
Pursuant to the Compensation Committee’s charter, the Compensation Committee has the authority to retain or obtain the advice of compensation consultants, legal counsel, and other advisors to assist in carrying out its responsibilities. Before
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2024 Proxy Statement |
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Corporate Governance
selecting any such consultant, counsel or advisor, the Compensation Committee reviews and considers the independence of such consultant, counsel, or advisor in accordance with applicable NYSE rules. We must provide appropriate funding for payment of reasonable compensation to any advisor retained by the Compensation Committee.
Compensation Consultants
The Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the Compensation Committee has engaged the services of Exequity LLP (“Exequity”) as its independent outside compensation consultant.
As requested by the Compensation Committee, in 2023, Exequity’s services to the Compensation Committee included: providing named executive officer compensation advisory services, helping evaluate our compensation philosophy and objectives and providing guidance in administering our executive compensation program.
All named executive officer compensation services provided by Exequity during 2023 were conducted under the direction or authority of the Compensation Committee, and all work performed by Exequity was approved by the Compensation Committee. Neither Exequity nor any of its affiliates maintains any other direct or indirect business relationships with us or any of our subsidiaries. The Compensation Committee evaluated whether any work provided by Exequity raised any conflict of interest for services performed during 2023 and determined that it did not.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is responsible for, among other things:
Our Nominating and Corporate Governance Committee currently consists of J. Kristofer Galashan, Ronald Kirk, Atif Rafiq, and Jonathan Seiffer, with Mr. Seiffer serving as chair. Our Board has determined that each member of our Nominating and Corporate Governance Committee qualifies as “independent” under NYSE rules applicable to Nominating and Corporate Governance Committee members.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2023, those who served on the Compensation Committee were Veronica Rogers, Jonathan Seiffer, and J. Kristofer Galashan. During 2023, no member of the Compensation Committee was an officer or employee of the Company at any time during 2023 or as of the date of this Proxy Statement, nor was any such individual a former officer of the Company. In 2023, no member of our Compensation Committee had any relationship or transaction with us that would require disclosure as a “related person transaction” under Item 404 of SEC Regulation S-K in this Proxy Statement other than the information provided under the section entitled “Certain Transactions with Related Persons.” See also “Compensation Discussion and Analysis – 2023 Director Compensation” for a description of compensation paid to members of the Compensation Committee.
Board and Board Committee Meetings and Attendance
During fiscal 2023, our Board of Directors met five times, the Audit Committee met eight times, the Compensation Committee met four times and the Nominating and Corporate Governance Committee met five times. In 2023, each of our directors attended at least 75% of the meetings of the Board and committees on which he or she served as a member.
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2024 Proxy Statement |
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19 |
Corporate Governance
Independent Director Executive Sessions
Our independent directors meet in executive sessions without management on a regularly scheduled basis. A presiding director is selected on a rotating basis from among the independent directors in alphabetical order of last name and serves as the lead non-management director of those sessions.
Director Attendance at Annual Meeting of Stockholders
Our Corporate Governance Guidelines require the attendance of our Board members at our annual meetings of stockholders. All members of our Board of Directors attended the annual meeting of stockholders held in 2023.
Director Nomination Process
The Nominating and Corporate Governance Committee is responsible for recommending candidates to serve on the Board and its committees. In considering whether to recommend any particular candidate to serve on the Board or its committees or for inclusion in the Board’s slate of recommended director nominees for election at the annual meeting of stockholders, the Nominating and Corporate Governance Committee considers the criteria set forth in our Corporate Governance Guidelines. Specifically, the Nominating and Corporate Governance Committee considers candidates of high integrity and good judgment who have a record of accomplishment in their chosen fields, and who display the independence of mind and strength of character to effectively represent the best interests of all stockholders and provide practical insights and diverse perspectives. The following table demonstrates the desired relevant skills and experiences of candidates the Nominating and Corporate Governance Committee considers to positively impact our strategic growth initiatives:
Strategic Initiatives |
|
Desired Relevant Skills/Experience |
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Increase convenience and awareness by expanding our Footprint and increasing retail and membership traffic |
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Growth Leadership — Management and financial stewardship of a growing public company |
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Enhance the member experience through digital innovation |
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Technology or Digital — Demonstrable understanding of technology, digital platforms, or data security and analytics |
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Attract and retain diverse talent at every level |
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Talent Development — Building employee knowledge and skills to maximize their potential development |
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Develop next generation wash products and services |
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Marketing / Brand Management — Development and management of well-known brands or products and services similar to ours |
|
|
|
Make a sustainable impact in the communities in which we operate |
|
People / Community Conscious — Social mission implementation and good stewardship of environmental and human resources. |
In addition to the skills and experiences highlighted in the table above, the Nominating and Corporate Governance Committee also considers the following criteria when evaluating director candidates:
We consider diversity, such as gender, race, ethnicity and membership of underrepresented communities, a meaningful factor in identifying director nominees and view such diversity characteristics as meaningful factors to consider, but do not have a formal diversity policy. The Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure. In determining whether to recommend a director for re-election, the Nominating and Corporate Governance Committee may also consider potential conflicts of interest with the candidate’s other personal and professional pursuits, the director’s tenure, performance, past attendance at meetings, and participation in and contributions to the activities of the Board in the context of the Board evaluation process and other perceived needs of the Board.
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2024 Proxy Statement |
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Corporate Governance
In identifying prospective director candidates, the Nominating and Corporate Governance Committee may seek referrals from other members of the Board, management, stockholders, and other sources, including third party recommendations. The Nominating and Corporate Governance Committee also may, but need not, retain a search firm in order to assist it in identifying candidates to serve as directors of the Company. Mr. Lively, Mr. Rafiq, and Ms. Taylor, our Class III director nominees, were recommended to serve as members of our Board by a third-party search firm. The Nominating and Corporate Governance Committee uses the same criteria for evaluating candidates regardless of the source of the referral or recommendation. In their consideration, the Board focused primarily on the information discussed in each of the Board member’s biographical information set forth above.
We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. This process resulted in the Board’s nomination of the incumbent directors named in this Proxy Statement and proposed for election by you at the Annual Meeting.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, and such candidates will be considered and evaluated under the same criteria described above. Any recommendation submitted to the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected and must otherwise comply with the requirements under our Bylaws for stockholders to recommend director nominees. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Corporate Secretary, Mister Car Wash, Inc., 222 E. 5th Street, Tucson, Arizona 85705. All recommendations for director nominations received by the Corporate Secretary that satisfy our Bylaws’ requirements relating to such director nominations, will be presented to the Nominating and Corporate Governance Committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent, and information requirements set forth in our Bylaws. These timing requirements are also described under the caption “Stockholder Proposals and Director Nominations.”
In addition, we are party to the Stockholders Agreement (as defined below) which provides for, among other things, certain director nominee designation rights in favor of LGP (each such nominee, an "LGP Designee"). Each of John Danhakl, J. Kristofer Galashan, Jonathan Seiffer and Jeffrey Suer are LGP Designees. See "Certain Transactions with Related Parties - Stockholders Agreement" below.
Board Role in Risk Oversight
The Board of Directors has overall responsibility for overseeing the Company’s strategy and risk management process. As part of regular Board and committee meetings, the Board focuses on the Company’s general management of risks relevant to the Company. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the Board of Directors in reviewing our business strategy is an integral aspect of the Board’s assessment of management’s tolerance for risk and its determination of what constitutes an appropriate level of risk for the Company. While the full Board has retained general oversight of risks, including cyber-related risks and ESG related risks, it discharges its duties both as a full board and through its standing committees. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the Board is also regularly informed of particular risk management matters through committee reports and in connection with its general oversight and approval of corporate matters.
The Audit Committee is responsible for reviewing and discussing the Company’s policies with respect to risk assessment and risk management, including guidelines and policies to govern the process by which the Company’s exposure to risk (including risks related to cybersecurity and other technology issues) is handled, and shall oversee management of financial risks and other material risks applicable to the Company. Through its regular meetings with management and our independent auditors, the Audit Committee reviews and discusses our management’s assessment of risk exposures including liquidity, credit and operational risks and the process in place to monitor such risks and review results of operations, financial reporting, and assessments of internal controls over financial reporting. The Compensation Committee assists the Board by overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. The Nominating and Corporate Governance Committee assists the Board by managing risks associated with the independence of the Board. In addition, our Board receives periodic detailed operating performance reviews from management.
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Corporate Governance
The Company’s management is responsible for day-to-day risk management, including the primary monitoring and testing function for company-wide policies and procedures, and management of the day-to-day oversight of the risk management strategy for the ongoing business of the Company. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, and compliance and reporting levels. With respect to cybersecurity and other information technology risks, management provides periodic reports to the Audit Committee, as well as our plans to mitigate cybersecurity risks and to respond to any breaches.
The Board and its committees receive regular reports from management on potential risks to the Company in the context of, among other things, the following: key accounting and disclosure developments; corporate compliance program matters including corrective actions if any; material legal and regulatory matters; enterprise risk management reporting; annual review and approval of the corporate goals and objectives; a review of compensation policies/practices to assess risks to the Company; routine review of the succession planning policy for named executive officers; review of ESG risks, cybersecurity, and information technology related risks; and review of the Company’s credit, liquidity and operations practices and associated risks.
Committee Charters and Corporate Governance Guidelines
Our Corporate Governance Guidelines, charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and other corporate governance information are available under the Governance section of the Investor Relations page of our website located at www.ir.mistercarwash.com, or by writing to our Corporate Secretary at our offices at 222 E. 5th Street, Tucson, Arizona 85705.
Code of Business Conduct and Ethics
We have adopted a Code of Conduct (the “Code of Conduct”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer or controller, or persons performing similar functions.
Our Code of Conduct is available under the Governance section of the Investor Relations page of our website located at www.ir.mistercarwash.com. In addition, we intend to post on our website all disclosures that are required by law or the NYSE rules concerning any amendments to, or waivers of, any provisions of our Code of Conduct.
Anti-Hedging Policy
Our Board of Directors has adopted an Insider Trading Compliance Policy, which applies to our directors, officers, and employees. The policy prohibits our directors, officers, and employees from purchasing financial instruments, such as prepaid variable forward contracts, equity swaps, collars, and exchange funds, or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities. All such transactions involving our equity securities, whether such securities were granted as compensation or are otherwise held, directly or indirectly, are prohibited.
Communications with the Board
Any stockholder or any other interested party who desires to communicate with our Board of Directors, the Chairman, a specified Board Committee, Independent Presiding Director, or our non-management directors as a group, may do so by directing such correspondence to the following address: Board of Directors, Mister Car Wash, Inc., 222 East 5th Street, Tucson, Arizona 85705, Attn: Corporate Secretary. Each communication should specify the applicable addressee or addressees to be contacted, as well as the general topic of the communication. The Company initially will receive and process communications before forwarding them to the appropriate addressee. The Corporate Secretary will forward the communication to the appropriate director or directors as appropriate.
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Compensation Discussion and Analysis
Compensation Discussion and Analysis
General
In this Compensation Discussion and Analysis (“CD&A”), we provide an overview and analysis of the compensation awarded to or earned by our named executive officers identified in the Summary Compensation Table below (each, an “NEO”) during fiscal 2023, including the elements of our compensation program for NEOs, material compensation decisions made under that program for fiscal 2023 and the material factors considered in making those decisions. Our NEOs for the year ended December 31, 2023, are:
Executive Summary
2023 Performance Highlights and Pay for Performance
Our executive compensation programs are designed to deliver pay in accordance with corporate financial performance. We believe that the compensation of our NEOs for fiscal year 2023 was aligned with the Company’s performance during 2023 while facing macroeconomic headwinds. Highlights of that performance include:
* For a reconciliation of adjusted EBITDA to the most directly comparable U.S. GAAP measure, see “Definitions and Reconciliations of Non-GAAP Financial Measures” in Appendix A.
2023 Compensation Highlights
Consistent with our compensation philosophy, key compensation decisions for 2023 included the following:
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Compensation Discussion and Analysis
Compensation Philosophy
Compensation Governance and Best Practices
We are committed to having strong governance standards with respect to our compensation programs, procedures, and practices. Our key compensation practices include the following:
What We Do |
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What We Do Not Do |
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✓ |
Emphasize performance-based, at-risk compensation. |
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X |
Do not grant uncapped cash incentives or guaranteed equity compensation. |
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✓ |
Use equity compensation to promote executive retention and reward long-term value creation. |
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X |
Do not reprice our stock option awards. |
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✓ |
Weight the overall pay mix towards incentive compensation for senior executives. |
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X |
No hedging or pledging of Company stock. |
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✓ |
Engage an independent compensation consultant to advise our Compensation Committee. |
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X |
No tax gross-ups on change-in-control. |
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✓ |
Maintain robust stock ownership guidelines. |
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Hold annual Say-on-Pay advisory vote for stockholders. |
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Executive Compensation Objectives and Philosophy
The primary objective of our executive compensation program is to attract, motivate, and reward leaders with the skills and experience necessary to successfully execute on our strategic plan to maximize stockholder value while maintaining our people-first culture. Our executive compensation program is designed to:
We strive to set our overall total compensation at a market-competitive level. In determining total compensation for executives, the Compensation Committee considers competitive market data from our peer group, experience, individual performance, scope of position and the competitive demand for proven executive talent, as described further below under “Determination of Executive Compensation.”
Determination of Executive Compensation
Role of Board of Directors/Compensation Committee/Executive Officers
The Compensation Committee is responsible for establishing and overseeing our executive compensation programs and reviews and determines the compensation to be provided to our NEOs, other than with respect to our CEO, whose compensation is determined by the board of directors (the “Board”).
In setting executive compensation, the Compensation Committee considers a number of factors, including the recommendations of our Chief Executive Officer (other than with respect to the Chief Executive Officer’s own compensation) and our human resources team, current and past total compensation, competitive market data and analysis provided by the Compensation Committee’s independent compensation consultant, Company performance and each executive’s impact on
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Compensation Discussion and Analysis
performance, each executive’s relative scope of responsibility and potential, each executive’s individual performance and demonstrated leadership, and internal equity pay considerations. Our Chief Executive Officer’s recommendations are based on his evaluation of each NEO’s individual performance and contributions, of which our Chief Executive Officer has direct knowledge. Our Board makes decisions regarding our Chief Executive Officer’s compensation, following recommendations from the Compensation Committee.
Role of Compensation Consultant
To design a competitive executive compensation program that will continue to attract top executive talent and reflect our compensation philosophy, our Compensation Committee has retained Exequity as an independent compensation consultant to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives and provide guidance in administering our executive compensation program. The Compensation Committee has evaluated Exequity’s independence pursuant to the requirements of NYSE and SEC rules and has determined that Exequity does not have any conflicts of interest in advising the Compensation Committee.
Use of Peer Groups
While the Compensation Committee does not establish compensation levels solely based on a review of competitive data or benchmark to any particular level, it believes such data is a useful tool in its deliberations as our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate and retain qualified executive officers. To gain an understanding of current compensation practices and assess the competitiveness of our compensation program, the Compensation Committee reviews pay of executives serving in similar positions at peer group companies. The Compensation Committee reviews the composition of the peer group annually in consultation with Exequity and considers the following:
In its review of the peer group for 2023 compensation decisions, the Compensation Committee removed Peloton Interactive, Inc because of overall business fit. The peer group used for 2023 compensation decisions consisted of the following companies:
• BJ’s Wholesale Club Holdings, Inc. |
• Leslie’s, Inc. |
• Shake Shack, Inc. |
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• Bright Horizons Family Solutions, Inc. |
• National Vision Holdings, Inc. |
• Terminix Global Holdings, Inc. |
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• Driven Brands Holdings, Inc. |
• Ollie’s Bargain Outlet Holdings, Inc. |
• Valvoline, Inc. |
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• Five Below, Inc. |
• Petco Health & Wellness Company, Inc. |
• The Wendy’s Company |
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• Floor & Décor Holdings, Inc. |
• Planet Fitness, Inc. |
• Wingstop, Inc. |
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• Grocery Outlet Holding Corp. |
• Rollins, Inc. |
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For 2024 compensation decisions, the Compensation Committee approved additional changes to the peer group to position the Company closer to median size statistics. The following seven companies were removed from the peer group: BJ’s Wholesale Club Holdings, Inc.; Five Below, Inc.; Floor & Decor Holdings, Inc.; Rollins, Inc.; Terminix Global Holdings, Inc.; The Wendy’s Company; and Wingstop Inc. The following four companies were added to the peer group: Dave & Buster’s Entertainment, Inc.; Papa John’s International, Inc.; Dine Brands Global, Inc.; and First Watch Restaurant Group, Inc.
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Compensation Discussion and Analysis
Elements of Compensation
The primary elements of our NEOs’ compensation and the main objectives of each are:
In addition, our NEOs are eligible to participate in our health and welfare programs and our 401(k) plan on the same basis as our other employees. We also maintain severance and change in control arrangements, which aid in attracting and retaining executive talent and help executives to remain focused and dedicated during potential transition periods due to a change in control. Each of these elements of compensation for 2023 is described further below.
Base Salary
The base salaries of our NEOs are an important part of their total compensation package, and are intended to reflect their respective positions, experience, duties, and responsibilities. Base salary is a visible and stable fixed component of our compensation program. Base salaries provide our NEOs with a reasonable degree of financial certainty and stability. Our Compensation Committee, and with respect to our Chief Executive Officer, the Board, annually reviews and determines the base salaries of our executives and evaluates the base salaries of new hires at the time of hire.
The Compensation Committee determined in February 2023 that our NEOs, including our Chief Executive Officer, would not receive base salary increases for 2023. However, effective October 1, 2023, Ms. Chimienti’s base salary was increased from $325,000 to $350,000 commensurate with changes in the Operations function and increased responsibilities therewith. Our NEOs’ annualized base salaries were as set forth below:
Name |
|
2023 Base Salary Rate as of 12/31/2023 |
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|
John Lai |
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$ |
1,000,000 |
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Jedidiah Gold |
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$ |
475,000 |
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Mary Porter |
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$ |
375,000 |
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Mayra Chimienti |
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$ |
350,000 |
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Markus Hartmann |
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$ |
350,000 |
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Cash Incentive Compensation
We consider cash incentive bonuses to be an important component of our total compensation program and to provide incentives necessary to retain executive officers. For 2023, each NEO was eligible to receive an annual performance-based cash bonus based on a specified target annual bonus award amount, expressed as a percentage of the NEO’s base salary. In fiscal 2023, our NEOs participated in our annual cash incentive bonus program at the following target percentages of base salary:
Name |
|
Target Bonus as a Percentage of Base Salary |
John Lai |
|
100% |
Jedidiah Gold |
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50% |
Mary Porter |
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40% |
Mayra Chimienti |
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40% |
Markus Hartmann |
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40% |
Such target bonuses were not increased from the prior year and were approved by the Compensation Committee following consideration of the factors set forth above under “Determination of Executive Compensation.” For 2023, Ms. Porter was eligible to receive a prorated annual bonus based on her employment start date.
Our 2023 Executive Bonus Program was based on the achievement of a single Company performance metric of adjusted EBITDAR to plan. Adjusted EBITDAR is defined as net income before interest expense, net, income tax provision,
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Compensation Discussion and Analysis
depreciation and amortization expense, gain on sale of assets stock-based compensation expense and related taxes, acquisition expenses, non-cash rent expense, other nonrecurring charges, cash rent expense, bonus expense and acquired store EBITDA. Adjusted EBITDAR was used because it incentivizes profitability irrespective of the timing of sale-leaseback transactions the Company may pursue. Adjusted EBITDAR is a non-GAAP measure. For definitions and reconciliation to the most directly comparable U.S. GAAP measure, see “Definitions and Reconciliations of Non-GAAP Financial Measures” in Appendix A. Adjusted EBITDAR is not a substitute for or superior to the comparable financial measure under GAAP.
The adjusted EBITDAR target (or plan) for 2023 was $410.3 million. Minimum payouts required a threshold achievement level of 92% adjusted EBITDAR to plan, with target performance achieved at 100% of plan, and maximum achievement at 108% of plan. For actual performance between the specified threshold, target, and maximum levels, the resulting payout percentage would be interpolated on a linear basis. The following table sets forth each NEO’s bonus payout opportunity (as a percentage of target) upon various performance achievement levels:
Adjusted EBITDAR Plan Attainment (%)1 |
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Payout % |
<92% |
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0% |
92% |
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50% |
94% |
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60% |
95% |
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70% |
97% |
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80% |
98% |
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90% |
100% |
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100% |
102% |
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110% |
103% |
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120% |
105% |
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130% |
106% |
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140% |
108%+ |
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150% |
Based on the achievement of adjusted EBITDAR of $394.1 million, which was 96.03% attainment of adjusted EBITDAR to plan, the NEOs earned payouts under the 2023 Executive Bonus Program at 75.2% of target. The Compensation Committee did not exercise its discretion to adjust bonus payouts for 2023. For 2023, Ms. Chimienti was eligible to receive an annual bonus prorated on her salary adjustment effective October 1, 2023, and Ms. Porter was eligible to receive a prorated annual bonus based on her employment start date. The amounts of the NEOs’ 2023 performance bonuses are set forth in the column entitled “Non-Equity Incentive Plan Compensation” in the “2023 Summary Compensation Table” below.
In addition to annual cash incentives, Ms. Porter was also entitled to a one-time $62,000 sign-on bonus when she joined the Company in April 2023. If Ms. Porter's employment is terminated before her one-year anniversary, she will be obligated to repay the full amount of the bonus.
No other cash incentives were paid to our NEOs in 2023.
Equity-Based Long-Term Incentive Awards
We view equity-based compensation as a critical component of our balanced total compensation program. Equity-based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns the interest of our executives with those of our stockholders.
Our Compensation Committee believes it is essential to provide equity-based compensation to our executive officers to link the interests and risks of our executive officers with those of our stockholders, reinforcing our commitment to ensuring a strong linkage between company performance and pay.
Specifically, in March 2023, we made the following grants of stock options and RSUs to each of the NEOs in the table below:
Name |
Number of Shares Underlying Stock Options |
|
Number of RSUs |
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John Lai |
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657,894 |
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324,324 |
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Jedidiah Gold |
|
123,355 |
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60,810 |
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Mayra Chimienti |
|
41,118 |
|
|
20,270 |
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Markus Hartmann |
|
41,118 |
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20,270 |
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Compensation Discussion and Analysis
In June 2023, we made the following grant of stock options and RSUs to Ms. Porter following her commencement of employment with the Company:
Name |
Number of Shares Underlying Stock Options |
|
Number of RSUs |
|
||
Mary Porter |
|
63,938 |
|
|
30,712 |
|
These grants were approved by the Compensation Committee and the Board following consideration of the factors set forth above under “Determination of Executive Compensation.” The target annual grant values for each of the NEOs are as follows: Mr. Lai and Mr. Gold are determined by the Board each year; Ms. Chimienti - $250,000; Mr. Hartmann - $250,000; and Ms. Porter - $250,000. However, for 2023, Mr. Lai’s, Mr. Gold’s, Ms. Chimienti’s, and Mr. Hartmann’s grants were one and half times their respective target annual grant values to promote executive retention. Each of their grants vest in four ratable installments on each of the of the first four anniversaries of the grant date, subject to continued service through the applicable vesting dates. Ms. Porter’s grants of stock options and RSUs included an annual grant (following set target amount) and supplementary grant made in connection with her commencement of employment with us in April 2023. The supplementary grant was half the total value and was intended to replace the value of awards Ms. Porter forfeited from her prior employer. Such grants will vest in three ratable installments on each of the first three anniversaries of the grant date, subject to Ms. Porter's continued service through the applicable vesting dates.
Retirement Savings, Health, and Welfare Benefits
We currently maintain a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. The Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k)-plan. Currently, we provide matching contributions in the 401(k)-plan equal to 50% of a participant’s salary deferrals up to 3% of his or her compensation, subject to limits provided in the Code. These matching contributions vest after one year of service. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k)-plan, and making matching contributions, adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies.
We also maintain a non-qualified deferred compensation plan in which certain of our eligible employees, including certain of our named executive officers, participate. Under this plan, participants may defer the payment of eligible salary and incentive compensation until certain specified payment dates. For 2023, contributions made by our NEOs to our deferred compensation plan are represented in the “2023 Summary Compensation Table” below.
Employee Benefits and Perquisites
All our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, including:
In addition, certain of our key employees (including our named executive officers) are eligible to participate in supplemental executive disability insurance. The amount of executive disability insurance premiums paid by us on behalf of each named executive officer are set forth below in the “2023 Summary Compensation Table” in the column entitled “All Other Compensation.”
Other Benefits and Perquisites
We maintain a Company aircraft that is used primarily for business air travel by our executive officers. From time to time, Mr. Lai uses the Company aircraft for personal air travel pursuant to guidelines approved by our board of directors. On certain occasions, Mr. Lai’s family members and guests may accompany him on a flight. For 2023, the value of the aggregate incremental costs associated with Mr. Lai’s personal usage of Company aircraft was $312,569. We determine the
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Compensation Discussion and Analysis
incremental costs of the personal use of Company aircraft based on the variable operating costs to us, which include: (i) aircraft fuel expenses per hour of flight; (ii) certain variable repair and maintenance expenses; (iii) remote hangar, landing, ramp, and airport fees; (iv) customs, foreign permit, and similar fees; (v) crew travel expenses; (vi) supplies and catering; and (vii) passenger ground transportation. Flights where there are no passengers on Company aircraft (so-called “deadhead” flights), are allocated to Mr. Lai when in connection with personal use. Because Company aircraft is used primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as aircraft permanent hangar rent, insurance, depreciation, and pilot salaries.
In connection with Ms. Chimienti’s promotion to Chief Operating Officer in late 2022, the Company agreed to provide her with one year of executive coaching and cover the cost for her to receive her executive MBA degree. For 2023, the value of the costs associated with the coaching and MBA was $85,777.
In connection with her relocation to Arizona, Ms. Porter was entitled to executive relocation benefits. In addition to her household move, Ms. Porter received a cash relocation bonus in the amount of $15,000 in 2023. In addition, Mr. Hartmann was entitled to executive relocation benefits in 2023.
In addition, we provide Mr. Lai with a car allowance and all NEOs with cell phone allowances. The actual car and cell phone allowance amounts paid to our named executive officers for 2023 are set forth above in the “2023 Summary Compensation Table” in the column entitled “All Other Compensation.”
We believe the benefits and perquisites described above are necessary and appropriate to provide a competitive compensation package to our named executive officers.
Tax Gross-Ups
We provide tax gross-up payments to our named executive officers in limited, unique circumstances to cover their personal income taxes that may pertain to compensation or perquisites provided to them. Mr. Lai received a tax gross-up of $82,255 in 2023 associated with the income associated with his Company aircraft usage. Mr. Hartmann received a tax gross-up of $13,842 in 2023 associated with his relocation. Ms. Porter received a tax gross of $15,315 associated with her relocation. No other named executive officers received a tax gross-up from the Company in 2023.
Severance and Change in Control Arrangements
We are party to an employment agreement with Mr. Lai and maintain an Executive Severance Plan in which our other named executive officers participate, which provides for severance benefits and payments upon certain terminations without cause or resignations for good reason. Our Compensation Committee believes that these types of arrangements are necessary to attract and retain executive talent and are a customary component of executive compensation. In particular such arrangements can mitigate a potential disincentive for our NEOs when they are evaluating a potential acquisition of the Company and can encourage retention through the conclusion of the transaction. The payments and benefits provided under our severance and change in control arrangements are designed to be competitive with market practices. A description of these arrangements, as well as information on the estimated payments and benefits that our NEOs would have been eligible to receive as of December 31, 2023, are set forth in “Potential Payments Upon Termination or Change in Control” below.
Other Policies and Considerations
Stock Ownership Guidelines
In connection with our IPO, we adopted executive officer and director stock ownership guidelines that are applicable to our executive officers, including our named executive officers, and non-employee directors other than those directors affiliated with LGP or an affiliate thereof. Our executive officers and applicable non-employee directors are expected to satisfy the applicable guidelines set forth below within five years of the later of (i) the effective date of our IPO on June 24, 2021, and (ii) the date of such individual’s appointment to a position with the Company that is subject to such guidelines, and to hold at least such minimum value in shares of common stock for so long as they are an executive officer or non-employee director, as applicable, thereafter.
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Compensation Discussion and Analysis
Executive |
Salary Multiple Threshold ($) |
Chief Executive Officer |
5x annual base salary |
Other Executive Officers |
3x annual base salary |
Directors |
5x annual cash retainer |
Derivatives Trading, Hedging, and Pledging Policies
Our Insider Trading Policy provides that no employee, officer, or director may acquire, sell, or trade in any interest or position relating to the future price of Company securities, such as a put option, a call option, or a short sale, or engage in hedging transactions. In addition, our Insider Trading Policy provides that no employee, officer, or director may pledge Company securities as collateral to secure loans. This prohibition means, among other things, that these individuals may not hold Company securities in a “margin” account, which would allow the individual to borrow against their holdings to buy securities.
Clawback Policy
Effective December 1, 2023, in accordance with SEC and NYSE requirements, the Company adopted a new Compensation Clawback Policy (the “Clawback Policy”), which provides for the reasonably prompt recovery (or clawback) of certain excess incentive-based compensation received during an applicable three-year recovery period by current or former executive officers in the event the Company is required to prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws. Excess incentive-based compensation for these purposes generally means the amount of incentive-based compensation received during the applicable 3-year recovery period by such executive officer that exceeds the amount of incentive-based compensation that would have been received by such executive officer had it been determined based on the restated amounts, without regard to any taxes paid. Incentive-based compensation potentially subject to recovery under the Clawback Policy is generally limited to any compensation granted, earned or vested based wholly or in part on the attainment of one or more financial reporting measures.
The Clawback Policy does not condition such clawback on the fault of the executive officer, but the Company is not required to recoup amounts in limited circumstances set forth in the Clawback Policy where the Compensation Committee has made a determination that recovery would be impracticable. The Company may not indemnify any such executive officer against the loss of such recovered compensation in the event of a mandatory accounting restatement.
Section 409A
The Compensation Committee takes into account whether components of the compensation for our executive officers will be adversely impacted by the penalty tax imposed by Section 409A of the Code and aims to structure these components to be compliant with or exempt from Section 409A to avoid such potential adverse tax consequences.
Section 162(m)
Section 162(m) of the Code disallows a tax deduction to public companies for compensation in excess of $1 million paid to “covered employees,” which generally includes all NEOs. While the Compensation Committee may take the deductibility of compensation into account when making compensation decisions, the Compensation Committee will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us.
“Golden Parachute” Payments
Sections 280G and 4999 of the Code provide that certain executive officers and other service providers who are highly compensated or hold significant equity interests may be subject to an excise tax if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we, or a successor, may forfeit a tax deduction on the amounts subject to this additional tax. While the Compensation Committee may take the potential forfeiture of such tax deduction into account when making compensation decisions, it will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not
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Compensation Discussion and Analysis
deductible by us. We do not provide any tax gross-up to cover excise taxes under Section 4999 in connection with a change in control.
Accounting for Share-Based Compensation
We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718, (“ASC Topic 718”), for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options and RSUs, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards.
Compensation Committee Report
The material in this report is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission (the “SEC”) for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall the material in this section be deemed to be “soliciting material” or incorporated by reference in any registration statement or other document filed with the SEC under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
The Compensation Committee has reviewed and discussed the Company’s Compensation Discussion and Analysis section in this Proxy Statement with management. Based upon such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Compensation Committee:
Veronica Rogers, Chair
Jonathan Seiffer
J. Kristofer Galashan
|
2024 Proxy Statement |
|
31 |
Compensation Discussion and Analysis
Executive Compensation Tables
2023 Summary Compensation Table
The following table contains information about the compensation earned by each of our NEOs during our most recently completed fiscal years ended December 31, 2023, December 31, 2022, and December 31, 2021, to the extent applicable.
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock |
Option |
Non-Equity |
All Other |
Total ($) |
John Lai |
2023 |
1,000,000 |
|
2,999,997 |
2,999,997 |
752,095 |
415,610 |
8,167,699 |
President and Chief |
2022 |
1,000,000 |
|
— |
— |
600,000 |
419,387 |
2,019,387 |
Executive Officer |
2021 |
821,538 |
|
6,000,000 |
6,800,000 |
876,247 |
248,926 |
14,746,711 |
|
|
|
|
|
|
|
|
|
Jedidiah Gold |
2023 |
475,000 |
|
562,493 |
562,499 |
178,623 |
6,761 |
1,785,376 |
Chief Financial |
2022 |
470,577 |
|
— |
— |
142,500 |
6,761 |
619,838 |
Officer |
2021 |
357,692 |
|
1,125,000 |
1,275,000 |
188,223 |
14,320 |
2,960,235 |
|
|
|
|
|
|
|
|
|
Mary Porter(4) |
2023 |
252,404 |
62,000 |
249,996 |
249,998 |
80,052 |
75,330 |
969,780 |
Chief People |
|
|
|
|
|
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mayra Chimienti |
2023 |
329,808 |
|
187,498 |
187,498 |
99,668 |
93,607 |
898,079 |
Chief Operating |
2022 |
318,736 |
|
50,000 |
50,000 |
76,715 |
42,269 |
537,720 |
Officer |
2021 |
274,681 |
|
300,000 |
340,000 |
105,781 |
3,000 |
1,023,462 |
|
|
|
|
|
|
|
|
|
Markus Hartmann |
2023 |
350,000 |
|
187,498 |
187,498 |
105,293 |
62,170 |
892,459 |
General Counsel |
2022 |
48,462 |
|
62,500 |
62,499 |
14,959 |
32,386 |
220,806 |
|
|
|
|
|
|
|
|
|
|
|
|
Car |
|
Cell |
|
Personal |
|
Relocation |
|
|
Executive Coaching/MBA ($) |
|
|
|
Company |
|
Tax |
|
|||||||||||||||||||||||||
John Lai |
|
|
|
|
9,000 |
|
|
|
|
|
3,000 |
|
|
|
|
|
312,569 |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
8,786 |
|
|
|
|
|
82,255 |
|
|
|
Jedidiah Gold |
|
|
|
|
|
|
|
|
|
1,200 |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
5,561 |
|
|
|
|
|
— |
|
|
|
|
Mary Porter |
|
|
|
|
|
|
|
|
|
800 |
|
|
|
|
|
— |
|
|
|
|
|
55,683 |
|
|
|
|
|
— |
|
|
|
|
|
3,532 |
|
|
|
|
|
15,315 |
|
|
|
|
Mayra Chimienti |
|
|
|
|
|
|
|
|
|
3,000 |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
85,777 |
|
|
|
|
|
4,830 |
|
|
|
|
|
— |
|
|
|
|
Markus Hartmann |
|
|
|
|
|
|
|
|
|
1,200 |
|
|
|
|
|
— |
|
|
|
|
|
38,691 |
|
|
|
|
|
— |
|
|
|
|
|
8,437 |
|
|
|
|
|
13,842 |
|
|
|
(4) Ms. Porter commenced employment with us April 17, 2023.
32 |
|
2024 Proxy Statement |
|
Compensation Discussion and Analysis
Grants of Plan-Based Awards in Fiscal 2023
The following table provides information relating to grants of plan-based awards made during fiscal 2023 to our NEOs.
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) |
|
All Other Stock Awards: Number of Shares of Stock or Units (#) |
|
All Other Option Awards: Number of Securities Underlying Options (#) |
|
Exercise or Base Price of Option Awards ($/Sh) |
|
Grant Date Fair Value of Stock and Option Awards ($) |
|
|||||||||||
Name |
Grant Date |
Threshold($) |
|
Target($) |
|
Maximum($) |
|
|
|
|
|
|
|
|
|
|||||||
John Lai |
|
|
500,000 |
|
|
1,000,000 |
|
|
1,500,000 |
|
|
|
|
|
|
|
|
|
||||
|
3/1/2023(2) |
|
|
|
|
|
|
|
- |
|
|
657,894 |
|
|
9.25 |
|
|
2,999,997 |
|
|||
|
3/1/2023(2) |
|
|
|
|
|
|
|
324,324 |
|
|
- |
|
|
- |
|
|
2,999,997 |
|
|||
Jedidiah Gold |
|
|
118,750 |
|
|
237,500 |
|
|
356,250 |
|
|
|
|
|
|
|
|
|
||||
|
3/1/2023(2) |
|
|
|
|
|
|
|
- |
|
|
123,355 |
|
|
9.25 |
|
|
562,499 |
|
|||
|
3/1/2023(2) |
|
|
|
|
|
|
|
60,810 |
|
|
- |
|
|
- |
|
|
562,493 |
|
|||
Mary Porter |
|
|
75,000 |
|
|
150,000 |
|
|
225,000 |
|
|
|
|
|
|
|
|
|
||||
|
6/1/2023(3) |
|
|
|
|
|
|
|
- |
|
|
63,938 |
|
|
8.14 |
|
|
249,998 |
|
|||
|
6/1/2023(3) |
|
|
|
|
|
|
|
30,712 |
|
|
- |
|
|
- |
|
|
249,996 |
|
|||
Mayra Chimienti |
|
|
70,000 |
|
|
140,000 |
|
|
210,000 |
|
|
|
|
|
|
|
|
|
||||
|
3/1/2023(2) |
|
|
|
|
|
|
|
- |
|
|
41,118 |
|
|
9.25 |
|
|
187,498 |
|
|||
|
3/1/2023(2) |
|
|
|
|
|
|
|
20,270 |
|
|
- |
|
|
- |
|
|
187,498 |
|
|||
Markus Hartmann |
|
|
70,000 |
|
|
140,000 |
|
|
210,000 |
|
|
|
|
|
|
|
|
|
||||
|
3/1/2023(2) |
|
|
|
|
|
|
|
- |
|
|
41,118 |
|
|
9.25 |
|
|
187,498 |
|
|||
|
3/1/2023(2) |
|
|
|
|
|
|
|
20,270 |
|
|
- |
|
|
- |
|
|
187,498 |
|
NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE
Summary of Executive Compensation Arrangements
Below is a written description of our employment arrangements with certain of our named executive officers. We have entered into offer letters with Mr. Gold, Ms. Porter, Ms. Chimienti, and Mr. Hartmann.
John Lai
In June 2021, we entered into an employment agreement with Mr. Lai in connection with our initial public offering (the “CEO Agreement”).
Pursuant to the CEO Agreement, Mr. Lai is entitled to an annual base salary of $1,000,000 and an annual performance-based bonus based on the achievement of performance targets set by our board of directors or its delegate with a target bonus opportunity of 100% of his annual base salary. Under the CEO Agreement, Mr. Lai is also entitled to personal use of the Company’s aircraft pursuant to the terms and guidelines set forth in the Company’s aircraft usage policy then in effect.
Mr. Lai will be entitled to severance benefits in the event of certain qualifying terminations of employment pursuant to the Severance Plan, as described below.
The CEO Agreement also provides for a Code Section 280G “cutback” such that payments or benefits that he receives in connection with a change in control will be reduced to the extent necessary to avoid the imposition of any excise tax under Code Sections 280G and 4999 if such reduction would result in a greater after-tax payment amount to Mr. Lai.
The CEO Agreement contains perpetual confidentiality and non-disparagement covenants as well as 18-month post-termination non-competition and non-solicitation covenants.
|
2024 Proxy Statement |
|
33 |
Compensation Discussion and Analysis
Jedidiah Gold
We are party to an offer letter with Mr. Gold dated June 10, 2019, providing for his employment as Chief Financial Officer. The offer letter provides Mr. Gold is entitled to an initial base salary of $300,000 and eligible for an annual performance-based bonus with a target opportunity of 30% of his annual base salary. Additionally, 15,403 stock options were requested at the first Board meeting following offer. Further, Mr. Gold was entitled to executive relocation benefits.
Mary Porter
We are party to an offer letter with Ms. Porter dated March 1, 2023, providing for her employment as Chief People Officer. The offer letter provides Ms. Porter is entitled to an initial base salary of $375,000 and eligible for an annual performance-based bonus with a target opportunity of 40% of her annual base salary and an initial equity grant of RSUs and stock options with an aggregate grant value of $500,000. Further, Ms. Porter was entitled to executive relocation benefits, including a $15,000 net lump sum for incidentals. Ms. Porter was also entitled to a one-time $62,000 sign-on bonus when she joined the Company in April of 2023. If Ms. Porter's employment is terminated before her one-year anniversary, she will be obligated to repay the full amount of the bonus.
Mayra Chimienti
We are party to an offer letter with Ms. Chimienti dated March 16, 2022,, providing for her employment as Chief Operating Officer. The offer letter provides Ms. Chimienti is entitled to an initial base salary of $325,000 and eligible for an annual performance-based bonus with a target opportunity of 40% of her annual base salary and an annual equity grant of RSUs and stock options with an aggregate grant value of $250,000.
Markus Hartmann
We are party to an offer letter with Mr. Hartmann dated September 28, 2022, providing for his employment as General Counsel. The offer letter provides Mr. Hartmann is entitled to an initial base salary of $350,000 and eligible for an annual performance-based bonus with a target opportunity of 40% of his annual base salary and an annual equity grant of RSUs and stock options with an aggregate grant value of $250,000. Further, Mr. Hartmann was entitled to executive relocation benefits, consisting of a $25,000 bonus as well as relocation assistance.
Executive Severance Plan
In connection with our IPO, we adopted the Executive Severance Plan, or the Severance Plan, pursuant to which our senior executives, including our named executive officers, may receive severance benefits in connection with certain terminations of employment. This Plan was recently modified by the Compensation Committee of the Board. Each capitalized term not defined in this section shall have the meaning ascribed to it in the Severance Plan.
In the event an eligible participant is terminated by the Company without Cause, or an eligible participant employee terminates his or her employment for Good Reason, in each case, at any time other than during the period beginning six (6) months before and ending on twenty-four (24) after a Change in Control (the “Protection Period”), then such participant will be entitled to receive:
34 |
|
2024 Proxy Statement |
|
Compensation Discussion and Analysis
In the event an eligible participant is terminated by the Company without Cause, or terminates his or her employment for Good Reason, in each case, during the Protection Period, then such participant will be entitled to receive:
Receipt of severance benefits under the Severance Plan is subject to: (a) the eligible participant’s compliance with certain restrictive covenants, including (i) 18-month post-termination non-competition and non-solicitation of customers and employees’ covenants, (ii) a perpetual confidentiality covenant and (iii) a perpetual non-disparagement covenant in favor of the Company; and (b) the covered employee’s execution of a general release of claims.
In addition, in the event of death or Disability, an eligible participant will be entitled to receive accelerated vesting of such participant’s outstanding equity to the extent provided in any written agreement between such participant and the Company.
Outstanding Equity Awards at 2023 Fiscal Year-End Table
The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each NEO as of December 31, 2023.
|
|
Option Awards |
Stock Awards |
|
|||||||||||||
Name |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
|
Number of Securities Underlying Unexercised Options (#) Unexercisable |
|
Option Exercise Price ($) |
|
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
|
Market Value of Shares or Units of Stock That Have Not Vested ($) (1) |
|
|||||
John Lai |
9/3/2014(2) |
|
4,360,133 |
|
|
- |
|
|
0.46 |
|
9/2/2024 |
|
- |
|
|
- |
|
|
9/3/2014(2) |
|
1,710,000 |
|
|
- |
|
|
0.66 |
|
9/2/2024 |
|
- |
|
|
- |
|
|
6/25/2021(3) |
|
400,000 |
|
|
600,000 |
|
|
15.00 |
|
6/25/2031 |
|
240,000 |
|
|
2,073,600 |
|
|
3/1/2023(4) |
|
- |
|
|
657,894 |
|
|
9.25 |
|
3/1/2033 |
|
324,324 |
|
|
2,802,159 |
|
Jedidiah Gold |
9/9/2019(6) |
|
1,301,256 |
|
|
177,432 |
|
|
2.12 |
|
9/8/2029 |
|
- |
|
|
- |
|
|
6/25/2021(3) |
|
75,000 |
|
|
112,500 |
|
|
15.00 |
|
6/25/1931 |
|
45,000 |
|
|
388,800 |
|
|
3/1/2023(4) |
|
- |
|
|
123,355 |
|
|
9.25 |
|
3/1/2033 |
|
60,810 |
|
|
525,398 |
|
Mary Porter |
6/1/2023(5) |
|
- |
|
|
63,938 |
|
|
8.14 |
|
6/1/2033 |
|
30,712 |
|
|
265,352 |
|
Mayra Chimienti |
9/3/2014(2) |
|
128,608 |
|
|
- |
|
|
0.46 |
|
9/2/2024 |
|
- |
|
|
- |
|
|
9/3/2014(2) |
|
105,423 |
|
|
- |
|
|
0.66 |
|
9/2/2024 |
|
- |
|
|
- |
|
|
5/14/2019(6) |
|
148,608 |
|
|
- |
|
|
0.46 |
|
11/22/2026 |
|
- |
|
|
- |
|
|
5/14/2019(6) |
|
222,912 |
|
|
- |
|
|
0.66 |
|
5/13/2029 |
|
- |
|
|
- |
|
|
6/25/2021(3) |
|
20,000 |
|
|
30,000 |
|
|
15.00 |
|
6/25/2031 |
|
12,000 |
|
|
103,680 |
|
|
6/1/2022(7) |
|
2,495 |
|
|
7,485 |
|
|
12.33 |
|
6/1/2032 |
|
3,042 |
|
|
26,283 |
|
|
3/1/2023(4) |
|
- |
|
|
41,118 |
|
|
9.25 |
|
3/1/2033 |
|
20,270 |
|
|
175,133 |
|
Markus Hartmann |
12/1/2022(8) |
|
4,811 |
|
|
9,623 |
|
|
10.27 |
|
12/1/2032 |
|
4,057 |
|
|
35,052 |
|
|
3/1/2023(4) |
|
- |
|
|
41,118 |
|
|
9.25 |
|
3/1/2033 |
|
20,270 |
|
|
175,133 |
|
|
2024 Proxy Statement |
|
35 |
Compensation Discussion and Analysis
36 |
|
2024 Proxy Statement |
|
Compensation Discussion and Analysis
Option Exercises and Stock Vested in Fiscal 2023
|
Option Awards(1) |
|
|
Stock Awards(2) |
|
||||||||
Name |
Number of Shares Acquired on Exercise (#) |
|
Value Realized on Exercise ($) |
|
|
Number of Shares Acquired on Vesting (#) |
|
Value Realized on Vesting ($) |
|
||||
John Lai |
|
2,207,440 |
|
$ |
17,370,499 |
|
|
|
80,000 |
|
$ |
678,400 |
|
Jedidiah Gold |
|
- |
|
$ |
- |
|
|
|
15,000 |
|
$ |
127,200 |
|
Mayra Chimienti |
|
125,000 |
|
$ |
1,102,158 |
|
|
|
4,000 |
|
$ |
33,920 |
|
Mayra Chimienti |
|
- |
|
$ |
- |
|
|
|
1,013 |
|
$ |
8,246 |
|
Markus Hartman |
|
- |
|
$ |
- |
|
|
|
2,028 |
|
$ |
15,616 |
|
Nonqualified Deferred Compensation Table
We maintain the Mister Car Wash Deferred Compensation Plan for a select group of our highly compensated employees, in which certain of our NEOs participate other than Ms. Porter, Ms. Chimienti and Mr. Hartmann. The following table contains information regarding non-qualified deferred compensation plans.
Name |
|
Executive |
|
Registrant |
|
Aggregate |
|
Aggregate |
|
|
Aggregate |
|
|||||||||||||
John Lai |
|
|
31,513 |
|
|
|
|
— |
|
|
|
|
117,616 |
|
|
|
|
— |
|
|
|
|
|
876,272 |
|
Jedidiah Gold |
|
|
35,628 |
|
|
|
|
— |
|
|
|
|
43,439 |
|
|
|
|
— |
|
|
|
|
|
270,854 |
|
Mary Porter |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
Mayra Chimienti |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
Markus Hartmann |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
The Mister Car Wash Deferred Compensation Plan allows eligible participants to defer up to 90% of their base salary and/or incentive plan compensation as well as any refunds from our 401(k) Plan. Participants may elect investment measurement options selected by the Company in whole percentages. These investment options do not represent actual ownership of or ownership rights in the applicable funds; they serve the purpose of valuing the account and the corresponding obligation of the Company.
At the time of annual enrollment, participants also make distribution elections for the upcoming year’s contributions. Actual distributions are made pursuant to those elections.
Potential Payments Upon Termination or Change in Control
In connection with our IPO, we adopted the Severance Plan, pursuant to which our senior executives, including our named executive officers, may receive severance benefits in connection with certain terminations of employment.
In addition to the severance benefits provided under the Severance Plan, as described above, pursuant to the option and restricted stock unit award agreements entered into by our NEOs under the 2021 Incentive Award Plan, in the event of (i) the executive’s termination by the Company without “cause” or by the executive for “good reason” during the twenty-four month period following a change in control of the Company, or by reason of such executive’s termination due to death or disability, such outstanding option and/or restricted stock unit awards will vest in full; and (ii) executive’s qualifying retirement, the portion of the option or restricted stock unit award which would have vested within twelve months following the date of the Company’s receipt of a written notice of resignation by the executive at a time when he or she is retirement eligible will accelerate and vest.
Mr. Gold’s outstanding options granted in September 2019 under the 2014 Plan are also subject to full acceleration upon a change in control pursuant to his option award agreements.
|
2024 Proxy Statement |
|
37 |
Compensation Discussion and Analysis
Estimated Potential Payments
The following table summarizes the payments that would be made to our NEOs upon the occurrence of certain qualifying terminations of employment or a change in control, in any case, occurring on December 31, 2023. Amounts shown do not include (i) accrued but unpaid base salary through the date of termination or (ii) other benefits earned or accrued by the NEO during his employment that are available to all salaried employees, such as accrued vacation.
|
|
|
|
|
|
Termination |
|
|
||||||||||||
|
|
Termination |
|
|
|
Without Cause |
|
|
||||||||||||
|
|
Without Cause |
|
|
|
or for Good |
|
|
||||||||||||
|
|
or for Good |
|
|
|
Reason / |
|
Termination |
||||||||||||
|
|
Reason / |
|
Change in |
|
Cause in |
|
due to |
||||||||||||
|
|
Cause (no |
|
Control (no |
|
Connection |
|
Death or |
||||||||||||
|
|
Change in |
|
Termination) |
|
with a Change |
|
Disability |
||||||||||||
Name |
Benefit |
Control) ($) |
|
($) (1) |
|
in Control ($) |
|
($) |
||||||||||||
John Lai |
Cash |
|
1,500,000 |
|
(4) |
|
|
|
|
|
|
5,000,000 |
|
(7) |
|
|
|
|
||
|
Equity Acceleration (2) |
|
|
|
|
|
|
|
|
|
4,875,759 |
|
|
|
|
4,875,759 |
|
|
||
|
Continued Healthcare |
|
29,726 |
|
(5) |
|
|
|
|
|
|
39,634 |
|
(8) |
|
|
|
|
||
|
Total |
|
1,529,726 |
|
(3) |
|
|
|
|
|
|
9,915,393 |
|
|
|
|
4,875,759 |
|
|
|
Jedidiah Gold |
Cash |
|
712,500 |
|
(4) |
|
|
|
|
|
|
1,306,250 |
|
(9) |
|
|
|
|
||
|
Equity Acceleration (2) |
|
0 |
|
|
|
|
1,156,857 |
|
|
|
|
914,198 |
|
|
|
|
914,198 |
|
|
|
Continued Healthcare |
|
23,801 |
|
(5) |
|
|
|
|
|
|
23,801 |
|
(8) |
|
|
|
|
||
|
Total |
|
736,301 |
|
(3) |
|
|
1,156,857 |
|
|
|
|
2,244,249 |
|
|
|
|
914,198 |
|
|
Mary Porter |
Cash |
|
375,000 |
|
(6) |
|
|
|
|
|
|
937,500 |
|
(9) |
|
|
|
|
||
|
Equity Acceleration (2) |
|
|
|
|
|
|
|
|
|
297,321 |
|
|
|
|
297,321 |
|
|
||
|
Continued Healthcare |
|
19,817 |
|
(5) |
|
|
|
|
|
|
29,726 |
|
(8) |
|
|
|
|
||
|
Total |
|
394,817 |
|
(3) |
|
|
|
|
|
|
1,264,547 |
|
|
|
|
297,321 |
|
|
|
Mayra Chimienti |
Cash |
|
350,000 |
|
(6) |
|
|
|
|
|
|
875,000 |
|
(9) |
|
|
|
|
||
|
Equity Acceleration (2) |
|
|
|
|
|
|
|
|
|
305,096 |
|
|
|
|
305,096 |
|
|
||
|
Continued Healthcare |
|
19,817 |
|
(5) |
|
|
|
|
|
|
29,726 |
|
(8) |
|
|
|
|
||
|
Total |
|
369,817 |
|
(3) |
|
|
|
|
|
|
1,209,822 |
|
|
|
|
305,096 |
|
|
|
Markus Hartmann |
Cash |
|
350,000 |
|
(6) |
|
|
|
|
|
|
875,000 |
|
(9) |
|
|
|
|
||
|
Equity Acceleration (2) |
|
|
|
|
|
|
|
|
|
210,185 |
|
|
|
|
210,185 |
|
|
||
|
Continued Healthcare |
|
19,817 |
|
(5) |
|
|
|
|
|
|
29,726 |
|
(8) |
|
|
|
|
||
|
Total |
|
369,817 |
|
(3) |
|
|
|
|
|
|
1,114,911 |
|
|
|
|
210,185 |
|
|
2023 Director Compensation
Name |
|
Fees Earned or Paid in Cash ($) |
|
|
Stock Awards ($)(1) |
|
Total ($) |
|
|||
Jodi Taylor |
|
|
100,000 |
|
|
|
99,999 |
|
|
199,999 |
|
Veronica Rogers |
|
|
96,945 |
|
(2) |
|
99,999 |
|
|
196,944 |
|
Dorvin Lively |
|
|
75,000 |
|
|
|
99,999 |
|
|
174,999 |
|
Ronald Kirk |
|
|
83,917 |
|
(3) |
|
99,999 |
|
|
183,916 |
|
Susan Docherty |
|
|
— |
|
|
|
— |
|
|
— |
|
38 |
|
2024 Proxy Statement |
|
Compensation Discussion and Analysis
The table below shows the aggregate numbers of unvested stock awards held as of December 31, 2023, by each non-employee director.
Name |
|
Unvested Stock Awards Outstanding at FYE |
|
|
Jodi Taylor |
|
|
12,195 |
|
Veronica Rogers |
|
|
12,195 |
|
Dorvin Lively |
|
|
12,195 |
|
Ronald Kirk |
|
|
12,195 |
|
In connection with our IPO, we adopted a non-employee director compensation policy that is applicable to each of our non-employee directors (other than those who are affiliated with LGP, who are not compensated for their director responsibilities). Pursuant to this non-employee director compensation policy, each such non-employee director will receive a mixture of cash and equity compensation.
Pursuant to this policy, each eligible non-employee director will receive an annual cash retainer of $75,000 that will be paid quarterly in arrears. The chairperson of the Audit Committee will receive an additional annual cash retainer of $25,000, the chairperson of the Compensation Committee will receive an additional annual cash retainer of $25,000, and the chairperson of the Nominating and Corporate Governance Committee will receive an additional annual cash retainer of $25,000.
Also, pursuant to this policy, we intend to grant all eligible non-employee directors an initial equity award of restricted stock units that has a grant date value of $100,000 upon election to our Board of Directors, and thereafter an annual equity award of restricted stock units that has a grant date value of $100,000, in each case, which will vest in full on the earlier of (i) the next occurring annual meeting of our stockholders or (ii) the first anniversary of the grant date, subject to the non-employee director’s continued service through the applicable vesting date.
Compensation Risk Assessment
We have assessed our compensation programs for all employees and concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us. Management has evaluated our executive and employee compensation and benefits programs to determine if these programs’ provisions and operations create undesired or unintentional risk of a material nature. The risk assessment process includes a review of program policies and practices; analysis to identify risks and risk controls related to our compensation programs; and determinations as to the sufficiency of risk identification, the balance of potential risk to potential reward, the effectiveness of our risk controls and the impacts of our compensation programs and their risks to our strategy. Although we periodically review all compensation programs, we focus on the programs with variability of payout, with the ability of a participant to directly affect payout and the controls on participant action and payout. In relation to this, we believe that our incentive compensation arrangements provide incentives that do not encourage risk taking beyond our ability to effectively identify and manage significant risks and are compatible with effective internal controls and our risk management practices.
The Compensation Committee monitors our compensation programs on an annual basis in coordination with the independent compensation consultant and expects to make modifications as necessary to address any changes in our business or risk profile.
|
2024 Proxy Statement |
|
39 |
Compensation Discussion and Analysis
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of as of December 31, 2023, with respect to the shares of the Company’s common stock that may be issued under the Company’s existing compensation plans.
Plan Category |
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
|
Weighted |
|
|
|
Number of |
|||||||||
Equity compensation plans approved by security holders(2) |
|
|
23,415,393 |
|
(3) |
|
|
$ |
3.25 |
|
|
|
|
|
27,563,183 |
|
(4) |
Equity compensation plans not approved by security holders |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
Totals |
|
|
23,415,393 |
|
|
|
|
$ |
3.25 |
|
|
|
|
|
27,563,183 |
|
|
The number of shares available for issuance under our ESPP increases automatically on January 1 of each calendar year of the Company beginning in 2022 and ending in 2031, in an amount equal to the lesser of (i) 0.5% of the aggregate number of outstanding shares of our common stock on the final day of the immediately preceding calendar year and (ii) such smaller number of shares determined by our board of directors.
There are no shares available for future issuance under the Rollover Plan or the 2014 Plan.
CEO Pay Ratio
In accordance with the requirements set forth by Item 402(u) of Regulation S-K, we are required to disclose the median of the annual total compensation of our employees, the annual total compensation of our CEO, John Lai, and the ratio of these two amounts. The Company has identified the median employee for 2023 in accordance with SEC rules as described below.
To identify the median employee, we annualized 2023 pay for all full-time and part-time permanent employees who were actively employed as of December 31, 2023. We otherwise calculated the annual total compensation for fiscal year 2023 of our median employee in the same manner that we determine the total compensation of our NEOs for purposes of the Summary Compensation Table. Our entire workforce is exclusively US-based.
As wash operations rely on many part-time hourly employees and turnover and job changes among those positions is consistently high, the methodology for calculating total annual compensation relies on the annualization of crew members’ available work history in their job as of the snapshot date selected.
The pay ratio reported by other companies may not be comparable to the pay ratio reported above due to methodological differences allowable under the SEC’s rules. Other companies have different employee populations and compensation practices and utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay
40 |
|
2024 Proxy Statement |
|
Compensation Discussion and Analysis
ratios. Neither the Compensation Committee nor Company management used the pay ratio measure in making compensation decisions.
Pay Versus Performance
As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between compensation actually paid (CAP), as defined in Item 402(v), and Company performance.
|
Summary |
|
|
|
Average |
|
Average |
|
Value of Initial Fixed $100 |
|
|
|
|
|
||||||||||
Year |
Table Total for |
|
Compensation |
|
Named |
|
Compensation |
|
Total |
|
Peer Group |
|
Net |
|
|
|
||||||||
2023 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
2022 |
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
|
||||||
2021 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
Year |
|
Value of Equity |
|
Year End Value of |
|
Change in Fair |
|
Year-Over-Year Change in Value of Awards |
|
Value of Awards |
|
Total Equity |
||||||||||||||||||||||||
PEO 2023 |
|
|
$ |
( |
) |
|
|
|
$ |
|
|
|
|
$ |
( |
) |
|
|
|
$ |
( |
) |
|
|
|
$ |
|
|
|
|
$ |
( |
) |
|
||
NEO 2023 |
|
|
$ |
( |
) |
|
|
|
$ |
|
|
|
|
$ |
( |
) |
|
|
|
$ |
( |
) |
|
|
|
$ |
|
|
|
|
$ |
( |
) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The valuation methodologies used to calculate fair values for each measurement date did not materially differ from those disclosed at the time of grant.
|
2024 Proxy Statement |
|
41 |
Compensation Discussion and Analysis
Analysis of the Information Presented in the Pay versus Performance Table
The graphics below depict the relationship between CAP for the PEO and NEOs with the Company TSR, peer group TSR, GAAP net income, and adjusted EBITDAR. Changes in CAP are largely attributable to changes in stock price. In general, CAP increases as stock price increases, and vice versa. CAP for 2021 includes the value of awards vesting prior to the IPO on June 25, 2021.
Tabular List of Financial Performance Measures
The most important (and only) financial performance measures used by the Company to link executive compensation actually paid to the Company’s PEO and NEOs, for the most recently completed fiscal year, to the Company’s performance is:
|
42 |
|
2024 Proxy Statement |
|
Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information relating to the beneficial ownership of our common stock as of March 28, 2024, by:
The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. Shares of our common stock that a person has the right to acquire within 60 days of March 28, 2024 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the individuals and entities named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them, subject to any applicable community property laws.
Unless otherwise indicated below, the address for each beneficial owner listed is c/o Mister Car Wash, Inc., 222 E. 5th Street, Tucson, Arizona 85705.
Name of Beneficial Owner |
|
Number of Shares |
|
Percentage Beneficially |
|
|
|||||
Holders of More than 5%: |
|
|
|
|
|
|
|
|
|
||
Green Equity Investors VI, L.P., Green Equity Investors Side VI, L.P., LGP Associates VI-A LLC and LGP Associates VI-B LLC (1) |
|
|
219,213,079 |
|
|
|
|
|
66.4 |
% |
|
Wasatch Advisors LP(2) |
|
|
16,156,000 |
|
|
|
|
|
4.9 |
% |
|
Named Executive Officers and Directors: |
|
|
|
|
|
|
|
|
|
||
John Lai(3) |
|
|
8,658,287 |
|
|
|
|
|
2.6 |
% |
|
Jedidiah Gold(4) |
|
|
1,195,257 |
|
|
|
|
*% |
|
|
|
Mary Porter(5) |
|
|
— |
|
|
|
|
*% |
|
|
|
Mayra Chimienti(6) |
|
|
817,664 |
|
|
|
|
*% |
|
|
|
Markus Hartmann(7) |
|
|
4,809 |
|
|
|
|
*% |
|
|
|
Joseph Matheny(8) |
|
|
975,948 |
|
|
|
|
*% |
|
|
|
John Danhakl(1) |
|
|
— |
|
|
|
|
*% |
|
|
|
Jonathan Seiffer(1) |
|
|
— |
|
|
|
|
*% |
|
|
|
Jeffrey Suer(1) |
|
|
— |
|
|
|
|
*% |
|
|
|
J. Kristofer Galashan(1) |
|
|
— |
|
|
|
|
*% |
|
|
|
Jodi Taylor(9) |
|
|
27,453 |
|
|
|
|
*% |
|
|
|
Dorvin Donald Lively(10) |
|
|
127,453 |
|
|
|
|
*% |
|
|
|
Ronald Kirk(11) |
|
|
24,651 |
|
|
|
|
*% |
|
|
|
Veronica Rogers(12) |
|
|
24,651 |
|
|
|
|
*% |
|
|
|
Atif Rafiq(13) |
|
|
3,203 |
|
|
|
|
*% |
|
|
|
All executive officers and directors as a group (15 persons)(14) |
|
|
231,072,455 |
|
|
|
|
|
70.0 |
% |
|
* Represents less than 1%.
|
2024 Proxy Statement |
|
43 |
Security Ownership of Certain Beneficial Owners and Management
44 |
|
2024 Proxy Statement |
|
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who beneficially own more than 10% of our common stock to file with the SEC reports of their ownership and changes in their ownership of our common stock. A late Form 4 was filed on December 6, 2023 on behalf of Mr. Hartmann with respect to the vesting of previously awarded RSUs on December 1, 2023 and the withholding of shares for tax purposes as a result of the vesting of such RSUs on December 4, 2023. To our knowledge, based solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2023 filed with the SEC and on written representations by our directors and executive officers, all other required Section 16 reports under the Exchange Act for such persons were filed on a timely basis during the year ended December 31, 2023.
Policies and Procedures on Transactions with Related Parties
Our Board of Directors recognizes the fact that transactions with related parties present a heightened risk of conflicts of interests or improper valuation (or the perception thereof). Our Board of Directors has adopted a written policy on transactions with related parties that is in conformity with the requirements for issuers having publicly held common stock that is listed on the NYSE. Under such policy, a related party transaction (as defined in the policy), and any material amendment or modification to a related party transaction, will be reviewed and approved or ratified by a committee of the Board of Directors composed solely of independent directors who are disinterested or by the disinterested members of the Board of Directors.
In connection with the review and approval or ratification of a related party transaction:
In addition, the related party transaction policy provides that the committee or disinterested directors, as applicable, in connection with any approval or ratification of a related party transaction involving a non-employee director or director nominee, should consider whether such transaction would compromise the director or director nominee’s status as an “independent,” or “non-employee” director, as applicable, under the rules and regulations of the SEC. Each of the transactions described below entered into following the adoption of our related party transaction policy was approved in accordance with such policy.
Stockholders Agreement
In August 2014, we entered into a stockholders agreement with LGP, certain of our executive officers and certain other stockholders.
In connection with the IPO, we amended and restated the stockholders agreement (the “Stockholders Agreement”) to eliminate certain provisions (but maintain those related to the registration rights, which are described below) and to provide specific board rights and obligations. The Stockholders Agreement includes provisions pursuant to which we granted the
|
2024 Proxy Statement |
|
45 |
right to cause us, in certain instances, at our expense, to file registration statements under the Securities Act covering resales of our common stock held by LGP, and the right to LGP and certain other stockholders to piggyback on such registration statements in certain circumstances. These shares represent approximately 66.4% of our common stock as of March 28, 2024. These shares also may be sold under Rule 144 under the Securities Act, depending on their holding period and subject to restrictions in the case of shares held by persons deemed to be our affiliates. The Stockholders Agreement also requires us to indemnify such stockholders in connection with any registrations of our securities. In addition, the Stockholders Agreement provides that LGP is entitled to designate individuals to be included in the slate of nominees recommended by our board of directors for election to our board of directors, to ensure that the composition of our board of directors and its committees complies with the provisions of the Stockholders Agreement related to the composition of our board of directors and its committees.
Indemnification Agreements
Our amended and restated bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law (“DGCL”), subject to certain exceptions contained in our amended and restated bylaws. In addition, our amended and restated certificate of incorporation provides that our directors and officers will not be liable for monetary damages for breach of fiduciary duty to the fullest extent permitted by the DGCL.
We have entered into indemnification agreements with each of our executive officers and directors. The indemnification agreements provide the indemnitees with contractual rights to indemnification, and expense advancement and reimbursement, to the fullest extent permitted under the DGCL, subject to certain exceptions contained in those agreements.
There is no pending litigation or proceeding naming any of our directors or officers for which indemnification is being sought, and we are not aware of any pending litigation that may result in claims for indemnification by any director or executive officer.
Stockholder Proposals and Director Nominations
Stockholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at our annual meeting of stockholders to be held in 2025 (the “2025 Annual Meeting”) pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our Corporate Secretary at our offices at 222 E. 5th Street, Tucson, Arizona 85705, in writing not later than December 11, 2024.
Stockholders intending to present a proposal at our 2025 Annual Meeting, but not to include the proposal in our proxy statement, or to nominate a person for election as a director, must comply with the requirements set forth in our Bylaws. Our Bylaws require, among other things, that our Corporate Secretary receive written notice from the stockholder of record of their intent to present such proposal or nomination not earlier than the 120th day and not later than the 90th day prior to the first anniversary of the preceding year’s annual meeting of stockholders. Therefore, we must receive notice of such a proposal or nomination for the 2025 Annual Meeting no earlier than January 23, 2025, and no later than February 22, 2025. The notice must contain the information required by our Bylaws. If the date of the 2025 Annual Meeting is more than 30 days before or more than 60 days after May 23, 2025, then our Corporate Secretary must receive such written notice not later than the 90th day prior to the 2025 Annual Meeting or, if later, the 10th day following the day on which public disclosure of the date of such meeting is first made by us. SEC rules permit management to vote proxies in its discretion in certain cases if the stockholder does not comply with this deadline and, in certain other cases notwithstanding the stockholder’s compliance with this deadline.
We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these or other applicable requirements.
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 24, 2025.
46 |
|
2024 Proxy Statement |
|
Stockholder Proposals and Director Nominations
In connection with our solicitation of proxies for our 2025 Annual Meeting, we intend to file a proxy statement and WHITE proxy card with the SEC. Stockholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed with the SEC without charge from the SEC’s website at: www.sec.gov.
|
2024 Proxy Statement |
|
47 |
Householding
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding” provides cost savings for companies and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request prompt delivery of a copy of this Proxy Statement and the Annual Report by contacting Mediant Communications at www.investorelections.com/MCW, by emailing your control number to [email protected], or by phone at 866-648-8311.
48 |
|
2024 Proxy Statement |
|
2023 Annual Report
Our 2023 Annual Report, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, is being mailed with this Proxy Statement to those stockholders that receive this Proxy Statement in the mail. Stockholders that receive the Notice and Access Card can access our 2023 Annual Report, including our Annual Report on Form 10-K for 2023, at www.proxydocs.com/MCW.
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, has also been filed with the SEC. It is available free of charge at the SEC’s website at www.sec.gov. Upon written request by a stockholder, we will mail without charge a copy of our Annual Report on Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits. Exhibits to the Annual Report on Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. All requests should be directed to the Corporate Secretary, Mister Car Wash, Inc., 222 E. 5th Street, Tucson, Arizona 85705.
Your vote is important. Please promptly vote your shares by following the instructions for voting on the Notice and Access Card or, if you received a paper or electronic copy of our proxy materials, by completing, signing, dating, and returning your proxy card or by Internet or telephone voting as described on your proxy card.
By Order of the Board of Directors |
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John Lai |
Chairman, President and Chief Executive Officer |
Tucson, Arizona
April 10, 2024
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Appendix A: Definitions and Reconciliations of Non-GAAP Financial Measures
Reconciliation of “Net Income” to “Adjusted EBITDAR”
In thousands (unaudited) |
Year Ended December 31, 2023 |
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Net income |
$ |
80,130 |
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Interest expense, net |
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75,104 |
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Income tax provision |
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22,911 |
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Depreciation and amortization expense |
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69,991 |
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Gain on sale of assets |
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125 |
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Stock-based compensation expense |
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24,310 |
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Acquisition expenses |
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3,471 |
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Non-cash rent expense |
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5,043 |
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Other |
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4,840 |
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Adjusted EBITDA |
$ |
285,925 |
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Cash rent expense |
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99,843 |
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Bonus expense |
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10,668 |
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Acquired store EBITDA |
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(2,366 |
) |
Adjusted EBITDAR |
$ |
394,070 |
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2023 Plan EBITDAR |
$ |
410,346 |
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2023 Attainment |
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96.03 |
% |
Non-GAAP Financial Measures
This document includes financial information that does not conform to U.S. GAAP and is considered non-GAAP measures. Management uses these measures internally for planning, forecasting, and evaluating the performance of the Company’s segments, including allocating resources. Our management believes that these non-GAAP measures best reflect the ongoing performance of the Company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year-over-year results. These non-GAAP measures supplement the Company’s U.S. GAAP disclosures and should not be considered as an alternative to net income as a measure of financial performance or any other performance measure derived in accordance with U.S. GAAP and should not be construed as an inference that the Company’s future results will be unaffected by unusual or nonrecurring items. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Non-GAAP measures included in this Proxy Statement are defined below.
Adjusted EBITDAR
The Company’s calculation of Adjusted EBITDAR for purposes of determining bonus compensation is equivalent to its presentation of Adjusted EBITDA as described in “Key Performance Indicators and Non-GAAP Measures” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC, except further adjusted for the Company’s cash rent expense, bonus expense and acquired store EBITDA. Adjusted EBITDAR for 2023 took into account all operating locations as of January 1, 2023, plus all greenfield locations, but excluded any sites acquired during 2023. Adjusted EBITDAR is a non-GAAP financial measure.
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styleIPC P.O. BOX 8016, CARY, NC 27512-9903 Have your ballot ready and please use one of the methods below for easy voting: Your vote matters! Have the 12 digit control number located in the box above availablewhen you access the website and follow the instructions. Your control number Scan QR for digital voting Internet: Mister Car Wash, Inc. Annual Meeting of Stockholders www.proxypush.com/MCW • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote For Stockholders of record as of March 28, 2024 Thursday, May 23, 2024 8:30 AM, Mountain Standard Time Annual Meeting to be held live via the Internet - Please visit www.proxydocs.com/MCW for more details Phone: 1-866-447-0865 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions Mail: • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: envelope provided 8:30 AM, Mountain Standard Time, May 23, 2024. “Alexa, Vote My Proxy” • Open Alexa app and browse skills • Search “Vote my Proxy” • Enable skill This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints John Lai and Jedidiah Gold (the "Named Proxies"), and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Mister Car Wash, Inc. which the undersigned is entitled to vote at said meeting and any adjournment or postponements thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting or postponement and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION. This proxy, when properly executed, will be voted in the manner directed herein. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE Copyright © 2024 BetaNXT, Inc. or its affiliates. All Rights Reserved
Mister Car Wash, Inc. Annual Meeting of Stockholders Please make your marks like this: The Board recommends you vote FOR all Class III director nominees, and FOR Proposals 2 and 3. BOARD OF DIRECTORS PROPOSAL YOUR VOTE RECOMMENDS 1. Election of three Class III director nominees to serve until the 2027 Annual Meeting FOR WITHHOLD 1.01 Dorvin Donald Lively FOR #P2# #P2# 1.02 Atif Rafiq FOR #P3# #P3# 1.03 Jodi Taylor FOR #P4# #P4# FOR AGAINST ABSTAIN 2. To ratify, the appointment of Deloitte & Touche LLP as the independent registered public FOR #P5# #P5# #P5# accounting firm of the Company for its fiscal year ending December 31, 2024. 3. To approve, on an advisory basis, the compensation paid to the named executive officers of the FOR #P6# #P6# #P6# Company. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. You must register to attend the meeting online and/or participate at www.proxydocs.com/MCW Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Signature (if held jointly)
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