In a recent development at Lithia Motors Inc (NYSE:LAD), the company's Board of Directors has officially appointed Cassandra McKinney as a new board member, according to a filing with the Securities and Exchange Commission. The appointment, effective from Monday, fills a vacancy following the expansion of the board from seven to eight directors.
McKinney, who will begin her tenure as a non-employee director, brings to the table a wealth of experience from the banking sector. She currently holds the position of EVP, Retail Bank at Comerica (NYSE:CMA) Bank, where she has been a significant contributor to the bank's management executive committee. Her role at Comerica involves overseeing the Consumer and Small Business banking segments, which generated $965 million in revenue in 2023. McKinney manages a substantial portfolio, which included $27 billion in deposits and loans by the end of 2023, and she oversees a network of over 400 banking centers and more than 600 ATMs/ITMs.
As part of her compensation package at Lithia Motors, McKinney will receive an annual retainer of $100,000, paid in monthly installments and prorated for her service in the 2024-2025 year. Additionally, she will be granted restricted stock units valued at approximately $162,500, which will vest over the year following the company's quarterly board meetings, provided she continues to serve on the board. The company will also enter into an indemnity agreement with McKinney similar to those with other non-management directors.
McKinney's academic credentials include Bachelor’s Degrees in Chemical Engineering from Columbia University and Chemistry from Dillard University. Her appointment also places her on the company's audit and compensation committees.
This strategic move by Lithia Motors, a company classified under the retail-auto dealers and gasoline stations industry, could be seen as an effort to leverage McKinney's considerable experience in retail banking to enhance the company's governance and strategic oversight. The information disclosed in this article is based on a press release statement.
In other recent news, Lithia Motors experienced operational disruptions due to a cybersecurity incident at a third-party service provider, CDK Global (NASDAQ:CDK). The issue led to the suspension of systems supporting dealership functions, affecting business operations. Despite these challenges, Lithia Motors continues to operate using mitigation strategies to minimize customer service disruptions. The impact of this incident on the company's financial condition is still under investigation.
In financial developments, Lithia Motors expanded its share repurchase plan by an additional $350 million, bringing the total repurchase authorization to approximately $660 million. The company also reported a 23% increase in revenues, reaching $8.6 billion for the first quarter of 2024.
Several analyst firms adjusted their outlook on Lithia Motors. Evercore ISI reduced the company's stock price target to $360 due to earnings drag from Pendragon GPUs and increased expenses. Craig-Hallum also adjusted the price target to $310 after considering first-quarter results impacted by operational challenges. Jefferies maintained a Buy rating but lowered the price target to $325 following a first-quarter adjusted earnings per share of $6.11, which fell short of the consensus estimate. These are recent developments in the ongoing financial and operational evolution of Lithia Motors.
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