UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign
Private Issuer Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of March 2024
Commission File Number 001-11444
MAGNA INTERNATIONAL INC. |
(Exact Name of Registrant as specified in its Charter) |
337 Magna Drive, Aurora, Ontario, Canada L4G 7K1 |
(Address of principal executive office) |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F o | Form 40-F ⌧ |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MAGNA INTERNATIONAL INC. | ||
(Registrant) | ||
Date: March 28, 2024 | ||
By: | /s/ “Bassem Shakeel” | |
Bassem A. Shakeel, | ||
Vice-President, Associate General Counsel and Corporate Secretary |
EXHIBITS
| | Date: | | | Thursday, May 9, 2024 | | |
| | Time: | | | 10:00 a.m. (Toronto time) | | |
| | Place: | | | Virtual-only meeting via live internet webcast online at www.virtualshareholdermeeting.com/MGA2024 |
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We have opted to hold a virtual-only meeting, conducted via live internet webcast, in which all shareholders will have an equal opportunity to participate online regardless of geographic location.
Shareholders can submit questions or comments ahead of the Meeting via ProxyVote.com. Simply visit www.ProxyVote.com, enter your Control Number, Vote your Shares and ask your Pre-Meeting Questions.
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March 27, 2024
Aurora, Ontario
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BASSEM A. SHAKEEL
Vice-President, Associate General Counsel and Corporate Secretary
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| | | | | Management Information Circular/Proxy Statement | | | | | | |||
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Proxy Summary
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Voting Information
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How To Vote Your Shares
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| | | | | Business of the Meeting | | | | | | |||
| | | | | | | Financial Statements | | | | | | |
| | | | | | | Election of Directors | | | | | | |
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Board Overview
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Details of the 2024 Nominees
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Biographies of 2024 Nominees
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Director Compensation
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| | | | | | | Reappointment of Deloitte LLP as Magna’s Independent Auditor | | | | | | |
| | | | | | | Say on Pay | | | | | | |
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Compensation Discussion & Analysis
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Summary Compensation Table
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Incentive Plans and Awards
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| | | | | Corporate Governance | | | | | | |||
| | | | | | | Corporate Governance at Magna | | | | | | |
| | | | | | | Governance Environment | | | | | | |
| | | | | | | About the Board | | | | | | |
| | | | | | | Board Independence | | | | | | |
| | | | | | | Board Effectiveness | | | | | | |
| | | | | | | Shareholder Democracy and Engagement | | | | | | |
| | | | | | | Ethical Conduct | | | | | | |
| | | | | | | Sustainability at Magna | | | | | | |
| | | | | | | Board Committees and Committee Reports | | | | | | |
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Report of the Audit Committee
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Report of the Governance, Nominating and Sustainability Committee
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Report of the Talent Oversight and Compensation Committee
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Report of the Technology Committee
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| | | | | Additional Information | | | | | | |||
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Additional Information
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Definitions and Interpretation
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Compensation Framework Feature
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Purpose
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Minimal fixed compensation
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Low base salaries and highly variable compensation help create an owner’s mindset
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Motivates managers to achieve consistent profitability in order to maintain consistent compensation
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Incents profit growth to grow compensation
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Performance-conditioned profit sharing bonus / STI
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Promotes entrepreneurialism
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Drives strong managerial focus on lean/efficient operations through effective management of costs
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Connects compensation to the operational impact of everyday decisions
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Performance-conditioned multi-metric LTI
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ROIC PSUs incent efficient capital allocation and value creation
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rTSR PSUs create sensitivity to stock market performance and return of capital to shareholders, in the form of dividends, as well as alignment with shareholders
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TFG PSUs promote strategic transformation by incenting actions that generate sustainable, long-term growth in equity values
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Capped PSU payouts help mitigate risk by promoting responsible decision-making and discouraging excessive risk-taking
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Stock options incent absolute TSR growth
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No pensions
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Reinforces an owner’s mindset and incents long-term growth in equity value as a pension-alternative
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Share maintenance requirement
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Reinforces an owner’s mindset
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Promotes alignment with shareholders
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Helps mitigate risk
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Benefits
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Substantially consistent with those of other employees in the same office/jurisdiction
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Record Date
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March 20, 2024, is the record date for the Meeting (the “Record Date”). Only holders of our Common Shares as of the close of business on the Record Date are entitled to receive notice of and vote at the Meeting.
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Outstanding Shares, Votes and Quorum
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As of the Record Date, 287,280,095 Magna Common Shares were issued and outstanding. Each Magna Common Share is entitled to one vote. A quorum of shareholders is needed to hold the Meeting and transact business. Under our by-laws, quorum means at least two persons holding, or representing by proxy, at least 25% of our outstanding Common Shares.
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Principal Shareholders
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To our knowledge, no shareholder beneficially owns or exercises control or direction, directly or indirectly, over 10% or more of Magna’s Common Shares which were outstanding as at the Record Date.
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| | | SHAREHOLDER GROUP | | | |
NUMBER
OF SHARES |
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PERCENTAGE
OF SHARES |
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Public Shareholders
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269,424,634
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93.8%
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| Magna Directors and Executive Officers (N = 22) | | | | | | 383,854 | | | | | | | 0.1% | | | ||||
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Magna Employee Deferred Profit Sharing Plans (Canada,
U.S., Europe)(1) |
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17,471,607
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6.1%
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| Note: | | ||||||||||||||||||
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1.
To the best of our knowledge, all of these shares will be voted FOR the election of directors, the re-appointment of the auditor and the “Say on Pay” advisory resolution.
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Individual Voting
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At the Meeting, shareholders will vote for each nominee for election to the Board, individually. We do not use slate voting.
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Majority Voting
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We maintain a majority voting policy, which is described under “Corporate Governance”, and each nominee for election to the Board has agreed to abide by such policy.
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Voting Results
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Detailed voting results will be promptly disclosed in a press release issued and filed on the Meeting date.
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You may request a paper copy of the Circular, at no cost, up to one year from the date the Circular was filed on SEDAR+. You may make such a request at any time prior to or following the Meeting by contacting Broadridge at 1-877-907-7643 (Toll Free for Registered Shareholders and Non-Registered/Beneficial Shareholders – North America) or Direct 1-303-562-9305 (English) / 1-303-562-9306 (French) (Other countries) and follow the instructions. Shareholders who have already signed up for electronic delivery of proxy materials will continue to receive them by email.
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HOW TO VOTE –
REGISTERED SHAREHOLDERS
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HOW TO VOTE –
NON-REGISTERED SHAREHOLDERS
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If you are a registered shareholder, you may vote either by proxy or by completing an online ballot during the Meeting.
Submitting Votes by Proxy
There are four ways to submit your vote by proxy:
smartphone
internet
mail
telephone
The form of proxy contains instructions for each of these methods.
If you are voting by smartphone, internet or telephone, you will need the pre-printed Control Number on your form of proxy.
A proxy submitted by mail must be in writing, dated the date on which you signed it and be signed by you (or your authorized attorney). If such a proxy is being submitted on behalf of a corporate shareholder, the proxy must be signed by an authorized officer or attorney of that corporation. If a proxy submitted by mail is not dated, it will be deemed to bear the date on which it was sent to you.
If you are voting your shares by proxy, you must ensure that your completed, signed and dated proxy form or your smartphone, internet or telephone vote is received by Broadridge Investor Communications not later than 5:00 p.m. (Toronto time) on May 7, 2024. If the Meeting is adjourned or postponed, you must ensure that your completed and signed proxy form or your smartphone, internet or telephone vote is received by Broadridge not later than 48 hours (excluding Saturdays, Sundays and holidays) prior to the time of the Meeting.
Appointment of Proxyholder
Unless you specify otherwise or appoint a proxyholder, the Magna officers whose names are pre-printed on the form of proxy will vote your shares:
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FOR the election to the Magna Board of Directors of all twelve nominees named in this Circular;
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FOR the reappointment of Deloitte LLP as Magna’s independent auditor and the authorization of the Audit Committee to fix the independent auditor’s remuneration; and
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FOR the advisory resolution to accept the approach to executive compensation disclosed in this Circular.
You have the right to appoint someone else (who need not be a shareholder) as your proxyholder; however, if you do, that person must vote your shares on your behalf during the Meeting. To appoint someone else as your proxyholder, insert the person’s name in the space provided on the form of proxy and provide an appointee identification number as indicated.
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If you are a non-registered shareholder, the intermediary holding on your behalf (and not Magna) has assumed responsibility for (i) delivering these materials to you and (ii) executing your proper voting instructions.
Submitting Voting Instructions
There are four ways to submit your vote by Voting Instruction Form:
smartphone
internet
mail
telephone
The Voting Instruction Form contains instructions for each of these methods.
If you are a non-registered shareholder and have received a Voting Instruction Form from Broadridge Investor Communications, you must complete and submit your vote by smartphone, internet, mail or telephone, in accordance with the instructions on the form.
Your completed, signed and dated Voting Instruction Form or your smartphone, internet or telephone vote must be received by Broadridge not later than 5:00 p.m. (Toronto time) on May 7, 2024. If the Meeting is adjourned or postponed, you must ensure that your completed, signed and dated Voting Instruction Form or your smartphone, internet or telephone vote is received by Broadridge not later than 48 hours (excluding Saturdays, Sundays and holidays) prior to the time of the Meeting. If a Voting Instruction Form submitted by mail or fax is not dated, it will be deemed to bear the date on which it was sent to you.
Additionally, Magna may use Broadridge’s QuickVote™ service to assist beneficial shareholders with voting their shares. Broadridge will tabulate the results of all the instructions received and then provide the appropriate instructions for such shares to be represented at the Meeting.
In some cases, you may have received a form of proxy instead of a Voting Instruction Form, even though you are a non-registered shareholder. Such a form of proxy will likely be stamped by the securities dealer, broker, bank, trust company or other nominee or intermediary holding your shares and be restricted as to the number of shares to which it relates. In this case, you must complete the form of proxy and submit it to Broadridge as described to the left under “How to Vote – Registered Shareholders – Submitting Votes By Proxy”.
If you choose to vote by proxy, you are giving the person (referred to as a “proxyholder”) or people named on your form of proxy the authority to vote your shares on your behalf at the Meeting (including any adjournment or postponement of the Meeting).
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1
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Financial Statements
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Mary S. Chan
MSc
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Hon. V. Peter Harder
P.C., LLD
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Jan R. Hauser
BBA, CPA
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Seetarama S. Kotagiri
MSc
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Jay K. Kunkel
BBA
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Robert F. MacLellan
CPA, MBA
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Mary Lou Maher
FCPA, FCA
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William A. Ruh
MSc
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Dr. Indira V. Samarasekera
PhD, PEng
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Matthew Tsien
MSc
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Dr. Thomas Weber
PhD
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Lisa S. Westlake
MBA
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Accounting/Audit: technical expertise with financial statements and financial reporting matters; understanding of critical accounting policies, technical issues relevant to the internal and external audit, as well as internal controls.
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Automotive: practical experience with automobile manufacturers or suppliers; solid understanding of industry dynamics on a global or regional basis; knowledge of automotive/industrial manufacturing; or experience in comparable capital-intensive manufacturing industries.
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Cybersecurity: an understanding of digital, data management, technology and/or cyber security issues in large, complex enterprises; and/or experience in cybersecurity oversight, including cybersecurity frameworks, risk mitigation strategies and controls.
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Environmental, Social and Governance (“ESG”): sophisticated understanding of environment/climate change, as well as social issues, including human rights and supply chain; ESG governance/oversight; and/or general familiarity with ESG regulatory requirements and reporting frameworks.
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Finance/Financial Advisory: senior financial management roles and/or financial advisory roles; expertise related to capital allocation, capital structure or capital markets.
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Governance/Board: sophisticated understanding of corporate governance practices and norms; prior board experience; expertise with stakeholder management or engagement.
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High-Growth Markets: a track record of operational success or other experience in markets other than North America and Western Europe, such as China.
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Large Cap Company: board, management and/or other applicable experience with companies that have a market capitalization in excess of $10 billion.
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Legal/Regulatory/Public Policy: experience with legal and regulatory compliance oversight; experience in relevant areas of government or public policy.
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Mergers & Acquisitions (“M&A”): management or board-level experience with complex M&A in different industries and/or different geographic regions.
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R&D/Innovation/Technology: domain expertise and skill in technology/innovation; practical experience with technological transformation and disruption.
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Risk Oversight: practical expertise in risk governance, including enterprise risk management frameworks; knowledge/understanding of risk monitoring and mitigation.
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Senior/Executive Leadership: demonstrated track record of leadership, mature judgement, operating success and value creation in complex organizations and/or in progressively challenging roles.
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Strategy Development: board, senior management and/or other experience in strategy development, analysis or oversight.
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Talent Management/Compensation: hands-on experience developing, managing, compensating and motivating employees.
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Jan R. Hauser, BBA, CPA
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Independent
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Audit, Technology
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Massachusetts, U.S.A.
Age: 65 Tenure: ~2 |
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Ms. Hauser, brings to the Board global financial leadership, including more than 35 years dealing with financial reporting and complex business transactions. Ms. Hauser is a corporate director who
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Committee. She also served as PricewaterhouseCoopers’ representative on the Financial Accounting Standard Board’s (FASB) Emerging Issues Task Force and the Financial Accounting Standards Advisory
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previously served as the Vice President, Controller and Chief Accounting Officer of General Electric Company (2013-2018), prior to which she held
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100%
2023 MEETING
ATTENDANCE |
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>99%
2023 ANNUAL MEETING VOTING RESULT
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Council for the FASB. Earlier in her career, she was selected for a fellowship in the Office of the Chief Accountant at the US Securities and
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various roles at PricewaterhouseCoopers (1981-1991 and 1993-2013), including Senior Consulting Partner, Accounting Consulting Services, National Professional Services Group. During her time at PricewaterhouseCoopers, she led diversity efforts for the national office and served on the US Partner Admissions
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Exchange Commission (1991-1993). Ms. Hauser previously served on the board of Vonage Holdings Corporation until its acquisition. Ms. Hauser has a BBA in Accounting(Wisconsin) and is also a licensed CPA.
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| Significant expertise/experience: | | |||
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■ Accounting/Audit
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| | ■ Mergers & Acquisitions | |
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■ Finance/Financial Advisory
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■ Governance/Board
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| | ■ Senior/Executive Leadership | |
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■ High-Growth Markets
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| | ■ Strategy Development | |
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■ Large Cap Company
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■ Talent Management/Compensation
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Seetarama S. Kotagiri MSc
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Management
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Chief Executive Officer
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Michigan, U.S.A.
Age: 55 Tenure: 2+ |
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Mr. Kotagiri was appointed as the Chief Executive Officer of Magna effective January 1, 2021 and he is Management’s sole representative on the Board. With over 30 years of industry experience, including 22 years with Magna, he brings extensive knowledge and understanding of the automotive industry, as well as
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and operations across the Magna group of companies over the last decade before he was appointed Chief Executive Officer in 2021. Prior to joining Magna, Mr. Kotagiri was a Structural Engineer at General Motors. Mr. Kotagiri has been featured in Business Insider’s 100 People Transforming Business and was named by Automotive News as a
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the company’s culture, operations, key personnel, customers, suppliers and the complex drivers of its success. In addition, Mr. Kotagiri has been
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100%
2023 MEETING
ATTENDANCE |
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>99%
2023 ANNUAL MEETING
VOTING RESULT |
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2021 all star in the category CEO, Global Supplier. He is currently a member of the Business Council of Canada and the MIT Presidential CEO Advisory Board and
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instrumental in the company’s growth and evolution through his operational leadership, and has aligned the organization’s strategy around the megatrends shaping future mobility. Mr. Kotagiri is focused on keeping Magna at the forefront of a changing mobility landscape and accelerating the company’s growth for the benefit of employees, shareholders and customers. Mr. Kotagiri held various executive roles in technology
|
| |
serves as an independent director of Johnson Controls International PLC. Mr. Kotagiri has a master’s degree in mechanical engineering from Oklahoma State University with a specialization in materials and structural engineering as well as a Bachelor of Engineering degree from B.V.B. College of Engineering at Karnataka University in India.
|
|
| Significant expertise/experience | | |||
|
■ Automotive
|
| | ■ R&D/Innovation/Technology | |
|
■ High-Growth Markets
|
| | ■ Senior/Executive Leadership | |
|
■ Large Cap Company
|
| | ■ Strategy Development | |
|
■ Mergers & Acquisitions
|
| | ■ Talent Management/Compensation | |
| Mary Lou Maher FCPA, FCA | | |
Independent
|
| |
Audit, Technology
|
|
|
|
| |
Ontario, Canada
Age: 63 Tenure: ~3 |
|
|
Ms. Maher brings to the Board extensive audit and financial experience. She is a highly regarded and widely respected business advisor having advised client CEOs, CFOs and Boards of Directors on a variety of complex issues.
Ms. Maher was concurrently the Canadian
|
| |
Ms. Maher has been recognized for her work on inclusion and diversity, receiving the Wayne C. Fox Distinguished Alumni Award from McMaster University and was inducted into the Hall of Fame for the WXN 100 Top Most Powerful Women in Canada. She also received the Lifetime Achievement Award from Out on Bay
|
| ||||||
|
Managing Partner, Quality and Risk, KPMG Canada, and Global Head of Inclusion and Diversity, KPMG International from October 2017 to
|
| |
100%
2023 MEETING
ATTENDANCE |
| |
>99%
2023 ANNUAL MEETING
VOTING RESULT |
| |
Street (Proud Strong), as well as the Senior Leadership Award for Diversity from the Canadian Centre for Diversity and Inclusion. Ms. Maher holds
|
|
|
February 2021. Ms. Maher was with KPMG since 1983 and had served in various executive and governance roles, including CFO and CHRO. Ms. Maher also has experience serving on not-for-profit boards, including being Chair of Women’s College Hospital and a member of the CPA Ontario council. In addition, Ms. Maher founded KPMG Canada’s first ever National Diversity Council and was the executive sponsor of pride@kpmg.
|
| |
a Bachelor of Commerce degree from McMaster University, for which she also serves on the Board of Governors. Ms. Maher serves as an independent director of the Canadian Imperial Bank of Commerce (CIBC), which provides routine banking services to Magna. Magna’s fees to CIBC in 2023 represented less than 0.01% of the bank’s 2023 revenues and are not material to Magna or the bank.
|
|
| Significant expertise/experience: | | |||
|
■ Accounting/Audit
|
| | ■ Risk Oversight | |
|
■ Environmental, Social and Governance
|
| | ■ Senior/Executive Leadership | |
|
■ Finance/Financial Advisory
|
| | ■ Strategy Development | |
|
■ Governance/Board
|
| | ■ Talent Management/Compensation | |
|
■ Large Cap Company
|
| | | |
| William A. Ruh MSc | | |
Independent
|
| |
Technology (Chair), TOCC
|
|
|
|
| |
Montana, U.S.A.
Age: 62 Tenure: ~7 |
|
|
Mr. Ruh brings to the Board a track record of success in managing the digital transformation of large industrial companies. He possesses a wealth of expertise in advanced software and automation solutions, including cloud-based platforms, analytics, machine learning and cybersecurity, developed over the course of a forty year career in the software industry.
|
| |
group. Other previous executive roles included: serving as the chief executive officer for GE Digital as well as the senior vice president and Chief Digital Officer (CDO) for GE (2011-2018). Cisco Systems, Inc. (2004-2011) where he held global responsibility for developing advanced services and solutions; Software AG, Inc. (2001-2004); and The Advisory Board Company (2000-2001), among others. Mr. Ruh has served on the boards of Pivotal Software,
|
| ||||||
|
Mr. Ruh is currently the Chief Executive Officer of Lifestyle Solutions Real Estate (since January 2024), a real estate and investment management company. He also serves on the
|
| |
100%
2023 MEETING
ATTENDANCE |
| |
>95%
2023 ANNUAL MEETING
VOTING RESULT |
| |
Cadmakers, Akrometrix, Taleris, the American Chamber of Commerce Australia and the Bay Area Council. Mr. Ruh is an accomplished author of books and papers. He has a B.Sc. and
|
|
|
board of Podium, a Lendlease company creating a platform for property development (since February 2024). Prior to this role, he was the Chief Executive Officer, Digital of Lendlease Group, an international property and infrastructure
|
| |
M.Sc. in computer science from California State University, Fullerton where he is a member of the Advisory Board for the School of Engineering.
|
|
| Significant expertise/experience: | | |||
|
■ Cybersecurity
|
| | ■ Senior/Executive Leadership | |
|
■ Large Cap Company
|
| | ■ Strategy Development | |
|
■ R&D/Innovation/Technology
|
| | ■ Talent Management/Compensation | |
|
■ Risk Oversight
|
| | | |
|
Dr. Thomas Weber PhD
|
| |
Independent
|
| |
GNSC, Technology
|
|
|
|
| |
Baden-Württemberg,
Germany Age: 69 Tenure: 2+ |
|
|
Dr. Weber brings to the Board valuable knowledge and experience regarding the global automotive industry, with particular expertise within Europe, as well as the development and production of
|
| |
of Science and Engineering “Acatech” with responsibility for areas related to “mobility of the future” and circular economy. In 2023, he was elected as President of Acatech. In addition, he is an Honorary Professor in the field of
|
| ||||||
|
future-oriented vehicles (including alternative powertrain systems). Dr. Weber’s career spanned a wide range of demanding functions and responsibilities relating to passenger cars within Daimler AG (1990-2016), including serving on the Board of
|
| |
100%
2023 MEETING
ATTENDANCE |
| |
>99%
2023 ANNUAL MEETING
VOTING RESULT |
| |
mechanical engineering and mobility of the future at the University of Stuttgart (since 2010). Dr. Weber previously served as a member of Magna’s Technology Advisory Council (2019-2021) and is a Mechanical Engineer (Stuttgart), with a doctorate in
|
|
|
Management, responsible for Group Research & Mercedes-Benz Cars Development (2004-2016). Since 2017, he served as a director of the German National Academy
|
| |
production and automation (Fraunhofer Institute).
|
|
| Significant expertise/experience: | | |||
|
■ Automotive
|
| | ■ Senior/Executive Leadership | |
|
■ R&D/Innovation/Technology
|
| | ■ Strategy Development | |
|
■ Risk Oversight
|
| | ■ Talent Management/Compensation | |
|
Lisa S. Westlake MBA
|
| |
Independent
|
| |
TOCC, Technology
|
|
|
|
| |
Florida, U.S.A.
Age: 62 Tenure: ~5 |
|
|
Ms. Westlake brings to the Board extensive global experience in both human resources and finance, as well as an established reputation for her leadership abilities in organizational transformations, leveraging technology to drive innovation, stakeholder and crisis management, as well as enterprise risk
|
| |
resources and finance roles with Moody’s Corporation, including Chief Human Resources Officer (2008-2017), Vice-President, Investor Relations (2006-2008) and Managing Director, Finance (2004-2006). In a career that spanned nearly 35 years, Ms. Westlake also had a range of Financial Officer and other senior roles at:
|
| ||||||
|
management.
Ms. Westlake most recently served as the Chief Human Resources Officer of global information and analytics services
|
| |
100%
2023 MEETING
ATTENDANCE |
| |
>95%
2023 ANNUAL MEETING
VOTING RESULT |
| |
American Express Company (1996-2003); The Dun & Bradstreet Corporation (1989-1995); and Lehman Brothers (1984-1987). Ms. Westlake has a
|
|
|
firm, IHS Markit Ltd. (2017-2018), prior to which she served in a range of senior human
|
| |
B.A. in biochemistry (Dartmouth), as well as an MBA (Columbia).
|
|
| Significant expertise/experience: | | |||
|
■ Finance/Financial Advisory
|
| | ■ Risk Oversight | |
|
■ Governance/Board
|
| | ■ Senior/Executive Leadership | |
|
■ High-Growth Markets
|
| | ■ Strategy Development | |
|
■ Large Cap Company
|
| | ■ Talent Management/Compensation | |
|
■ Mergers & Acquisitions
|
| | | |
| CD&A: | | | the Compensation Discussion & Analysis section of this Circular | |
| executive compensation peer group: | | | the group of companies discussed in Section B of this CD&A, against which the compensation of our Executives is compared or benchmarked | |
| Fasken: | | | the Board’s independent legal advisor, Fasken Martineau DuMoulin LLP | |
| Hugessen: | | |
the Board’s independent compensation advisor, Hugessen Consulting
|
|
| LTIs: | | | long-term incentives primarily in the form of PSUs and stock options | |
| Named Executive Officers or NEOs: | | | our five most highly compensated executive officers | |
| Pre-Tax Profit: | | | Income from operations before income taxes | |
| PSUs: | | | performance stock units | |
| ROIC: | | |
the company’s return on invested capital, calculated as set forth in Section C of this CD&A
|
|
| RSUs: | | | restricted stock units | |
| rTSR | | | TSR, relative to the rTSR peer group | |
| rTSR peer group: | | | the group of companies discussed in Section B of this CD&A, against which Magna’s rTSR is measured in connection with the company’s rTSR PSUs | |
| STI | | | short-term incentive in the form of an annual cash bonus | |
| TDC | | | total direct compensation | |
| TFG PSUs | | | the special, non-recurring Transformational Grant PSUs granted in September 2022 to incent the long-term, strategic transformation of Magna | |
| TSR: | | | Total Shareholder Return | |
|
Dr. Indira V. Samarasekera
(Committee Chair) |
| |
William A. Ruh
|
| |
Matthew Tsien
|
| |
Lisa S. Westlake
|
|
|
Compensation Framework Feature
|
| | |
Purpose
|
|
|
Minimal fixed compensation
|
| | |
■
Low base salaries and highly variable compensation help create an owner’s mindset
■
Motivates managers to achieve consistent profitability in order to maintain consistent compensation
■
Incents profit growth to grow compensation
|
|
|
Performance-conditioned profit sharing bonus / STI
|
| | |
■
Promotes entrepreneurialism
■
Drives strong managerial focus on lean/efficient operations through effective management of costs
■
Connects compensation to the operational impact of everyday decisions
|
|
|
Performance-conditioned multi-metric LTI
|
| | |
■
ROIC PSUs incent efficient capital allocation and value creation
■
rTSR PSUs create sensitivity to stock market performance and return of capital to shareholders, in the form of dividends, as well as alignment with shareholders
■
TFG PSUs promote strategic transformation by incenting actions that generate sustainable, long-term growth in equity values
■
Capped PSU payouts help mitigate risk by promoting responsible decision-making and discouraging excessive risk-taking
■
Stock options incent absolute TSR growth
|
|
|
No pensions
|
| | |
■
Reinforces an owner’s mindset and incents long-term growth in equity value as a pension-alternative
|
|
|
Share maintenance requirement
|
| | |
■
Reinforces an owner’s mindset
■
Alignment with shareholders
■
Helps mitigate risk
|
|
|
Benefits
|
| | |
■
Substantially consistent with those of other employees in the same office/jurisdiction
|
|
|
Employment Contracts
|
| |
Each NEO is subject to an employment agreement that specifies various key terms, including:
|
|
| | | |
■
target total TDC, as well as base salary, STI percentage and target LTI values;
|
|
| | | |
■
standard benefits to be provided;
|
|
| | | |
■
compensation claw-back terms;
|
|
| | | |
■
the securities maintenance amount applicable to the executive; and
|
|
| | | |
■
terms applicable in different end of employment scenarios.
|
|
|
Overview
|
| | Our 2023 compensation program for the NEOs consisted of the following elements: | |
|
|
| |||
|
1.
Base Salaries:
|
| |
We maintain base salaries for NEOs that are positioned significantly below base salaries in our executive compensation peer group. These low base salaries are intended to:
■
maximize the incentive for each executive to pursue profitability for the benefit of all of Magna’s stakeholders;
■
reinforce the link between executive pay and corporate performance; and
■
reflect and reinforce our entrepreneurial corporate culture.
During 2023, the NEOs received identical base salaries of $325,000.
|
|
|
2.
Short-Term
Incentive |
| |
The 2023 STI for each NEO was an annual profit sharing bonus, which was completely “at-risk” and capped at 200% of the target STI value. In order to create maximum incentive to achieve profitability, the profit sharing bonus was earned from the first dollar of profit.
|
|
| | | | STI payouts for the NEOs in respect of 2023 were as set forth in the table below. | |
|
Recognition of Individual and Team Performance
|
| |
An NEO’s profit share reflects a number of factors specific to the individual, including nature of the role, seniority/tenure and other factors. However, the direct link to Magna’s profits ultimately reflects Magna’s overall performance.
|
|
|
TOCC Discretion Over Profit Shares
|
| |
The TOCC maintains discretion over profit sharing percentages, as well as certain factors that may impact the calculation of Pre-Tax Profit for compensation purposes.
|
|
| | | |
ROIC is defined as:
ROIC is calculated as A ÷ B, where:
A = (Net Income before Interest and Income Taxes − Equity Income) multiplied by (1 − assumed Tax Rate of 25%), plus Equity Income
B = Total Assets (excluding Cash, Deferred Tax Assets and Operating Lease Right of Use Assets) less Current Liabilities (excluding Short-term Borrowings, Long-term Debt due within one-year and Current portion of Operating Lease Liabilities)
The TOCC may exercise discretion to address various situations in order to ensure consistency and comparability in ROIC goal-setting and measurement. Such an adjustment was made by the TOCC, in respect of 2023 ROIC, as discussed in the Compensation and Performance Report earlier in this CD&A.
The table below sets forth the payout scale for the ROIC PSUs (interpolation applies for points between the payout levels). The payout scale for the ROIC PSUs remains unchanged from 2022.
|
|
| | | |
As an exception to the foregoing payout scale, if Magna’s ROIC (determined in the manner discussed below) is below the Threshold / Cost of Capital but three-year rTSR as determined for purposes of the rTSR PSUs is greater than or equal to the 55th percentile of the rTSR peer group, then 50% of the target number of ROIC PSUs will be paid out.
|
|
| | | |
Since Magna operates in a cyclical industry, we average the implied payout for each of the three individual years of the performance period to determine the actual ROIC PSU payout. This means that a year of ROIC performance that is below our cost of capital will count as 0% in the payout calculation, but cannot be a negative percentage. The effect of this is that the ROIC PSU payout will not directly correspond to our three-year compound average ROIC. By calculating ROIC PSU payout based on the average implied payouts for each of the years of the performance period, extreme outlier years cannot have a disproportionate impact on the payout calculation. The feature also operates to place a cap on ROIC performance above the maximum level, thus preventing positive outlier years from having a disproportionate impact on the payout calculation.
|
|
|
rTSR PSUs
|
| |
The rTSR PSUs are intended to incent and reward creation of shareholder value, relative to the companies in our rTSR peer group. The performance period for the rTSR PSUs granted in respect of 2023 is January 1, 2023 to December 31, 2025.
|
|
| | | |
The number of rTSR PSUs realized by an NEO following the performance period depends on the target number granted, Magna’s three-year rTSR performance and the payout scale approved by the TOCC. The number of rTSR PSUs that can be realized is capped at 200% of target, and no rTSR PSUs would be paid for rTSR performance below the 25th percentile of the rTSR peer group. The dollar value of compensation realized by an NEO following the performance period will depend on the final number of rTSR PSUs paid out, as well as the trading price of our Common Shares. When rTSR PSUs are redeemed following the performance period, we deliver Common Shares acquired on the market under our share repurchase program, with dividends paid in cash based on the final number of rTSR PSUs.
|
|
|
4.
Benefits
|
| |
Benefits provided to NEOs are the same as those provided to other employees in the same country, with a few exceptions discussed below. As discussed earlier, Magna does not provide a defined benefit pension plan to NEOs, consistent with our compensation approach to employees generally.
|
|
| | | |
NEOs receive the same medical, dental insurance and disability benefits as other managerial employees in the same country.
|
|
| | | |
During 2023, we provided limited “perks” to NEOs, including limited access to corporate aircraft for personal use, when not required for business purposes and subject to reimbursement of the “aggregate variable operating cost” of the personal flight. The “aggregate variable operating cost” consists of all variable costs for operating the aircraft for the personal flight, including fuel, maintenance, customs charges, landing and handling fees, data and communications charges, deadhead flight expenses and any other similar costs. Since Magna’s variable cost is fully reimbursed, there is no disclosable perk amount in the Summary Compensation Table.
|
|
| | | |
Magna maintains corporate access privileges to the dining room, boardroom and other facilities of a third-party owned golf course adjacent to the company’s head office. As part of such access, NEOs may utilize the golf club’s facilities for personal use at their own expense.
|
|
| Executive Equity Ownership | | | | |
|
Executive Management Equity Maintenance Requirements
|
| |
Each NEO is subject to an equity maintenance requirement set forth in his employment contract. If an NEO’s total TDC is increased, their equity maintenance requirement also increases, subject to a three-year period in which to achieve the new level. In assessing compliance with the equity maintenance requirement, NEOs’ whole shares and equivalents (RSUs, as well as PSUs at target) are counted. Unexercised stock options are not counted in determining compliance with the equity maintenance requirement. Each NEO exceeds the minimum equity maintenance requirement.
|
|
|
Termination/Severance
|
| | | |
|
Termination/Severance Payments Are Limited to a Maximum of 24 Months Compensation
|
| |
All NEOs are entitled to 24 months’ severance (the “Notice Period”) in the event of termination without cause. Severance payments are based on the average of an NEO’s base salary and STIs for the 12 fiscal quarters prior to the termination.
A summary showing the treatment of each compensation element in different termination scenarios is set forth below under “Summary of Treatment of Compensation on Resignation, Retirement, Termination or Change in Control”.
|
|
|
Element of
Compensation |
| | |
Resignation
|
| | |
Retirement
|
| | |
Termination –
Cause |
| | |
Termination –
No Cause |
| | |
Termination
Without Cause on Change in Control(1) |
|
|
Base Salary
|
| | |
Pro-rated to effective
date |
| | |
Pro-rated to effective
date |
| | |
Pro-rated to effective
date |
| | |
Average of compensation excluding LTIs for the last 12 fiscal quarters paid out over severance period (up to 24 months) as salary continuation (bi-weekly) or lump-sum.
|
| | |
Average of compensation excluding LTIs for the last 12 fiscal quarters paid out over severance period (up to 24 months) as salary continuation (bi-weekly) or lump-sum.
|
|
|
Annual Bonus – Cash
|
| | |
Pro-rated to effective
date |
| | |
Pro-rated to effective
date |
| | |
Pro-rated to effective
date |
| | |||||||
|
ROIC PSUs and rTSR PSUs
|
| | | Forfeiture of unredeemed PSUs. | | | |
PSUs granted in complete years prior to the termination date are redeemed on the regular payout date, subject to performance conditions established at time of grant (0% to 200%). PSUs granted in year of retirement are redeemed on regular payout date, subject to performance conditions established at time of grant (0% to 200%) and pro ration to reflect the proportion ot the year worked.
|
| | | Forfeiture of unredeemed PSUs | | | |
PSUs granted in complete years prior to the termination date are redeemed on the regular payout date, subject to performance conditions established at time of grant (0% to 200%). PSUs granted in year of termination are redeemed on regular payout date, subject to payout conditions established at time of grant (0% to 200%) and pro ration to reflect the proportion of the year worked.
|
| | |
Plan administrator can take such steps as necessary to the convert or exchange outstanding PSUs into securities of substantially equivalent value in any entity participating in or resulting from a change in control.
|
|
|
TFG PSUs
|
| | | Forfeiture of unredeemed PSUs | | | |
PSUs associated with a hurdle that has been achieved will be paid out in accordance with terms established at time of grant, subject to pro ration to reflect the proportion of the performance period worked
|
| | | Forfeiture of unredeemed PSUs | | | | Forfeiture of unredeemed PSUs | | | |
The Plan administrator may accelerate the vesting of TFG PSUs associated with a hurdle that had been achieved prior to announcement of the change in control.
|
|
|
Stock Options
|
| | |
Unvested and unexercised options expire on earlier of option expiry date and three months after effective date of resignation.
|
| | |
Unvested and unexercised options expire on earlier of option expiry date and three years after effective date of retirement.
|
| | |
All unexercised options are cancelled on effective date of termination.
|
| | |
Unvested and unexercised options expire on earlier of option expiry date and three months after effective date of termination.
|
| | |
Vested options can be exercised until earlier of option expiry date and 12 months after Notice Period (as defined above). Unvested options accelerate and can be exercised until same date.
|
|
|
RSUs
|
| | |
Unredeemed RSUs are forfeited in the event of voluntary resignation.
|
| | |
RSUs are redeemed on regular redemption date.
|
| | |
Unredeemed RSUs are forfeited on the effective date of termination.
|
| | |
RSUs are redeemed on regular redemption date.
|
| | |
RSUs are redeemed on regular redemption date.
|
|
|
Benefits & Perks
|
| | | None | | | | None | | | | None | | | | None | | | | None | |
|
Pension
|
| | | None | | | | None | | | | None | | | | None | | | | None | |
|
Overall Level of Compensation Risk is Reasonable in Light of Nature of Magna’s Business and Industry
|
| |
The TOCC has considered whether Magna’s executive compensation system may encourage excessive risk taking. The TOCC concluded that the potential risks created by any particular element of the system are appropriately mitigated by other elements and that the overall level of risk is reasonable in light of the nature of Magna’s business and the automotive industry. In reaching this conclusion, the TOCC considered the methods described below, which are employed to help establish an appropriate balance between risk and reward, as well as to encourage responsible decision-making:
■
Board/TOCC oversight of executive compensation generally;
■
independent advice and recommendations on compensation matters provided by compensation consultants and legal advisors directly selected and retained by the TOCC;
■
Board/TOCC discretion to determine target total compensation and adjust profit sharing percentages without notice and in connection with approval of M&A transactions;
■
complete Board/TOCC discretion over the form of STIs and LTIs;
■
mix of compensation vehicles and metrics;
■
links between executive compensation and consequences of management decision-making;
■
the 200% cap on STIs;
■
the 200% cap on the maximum number of ROIC and rTSR PSUs that can be realized;
■
compensation clawbacks consistent with the new clawback requirements set out in Section 303A.14 of The New York Stock Exchange Listed Company Manual;
■
forfeiture risk applicable to PSUs, stock options and RSUs in certain circumstances;
■
significant levels of personal wealth “at risk” due to equity maintenance requirements;
■
post-retirement holdback of option shares resulting from option exercise occurring within one-year prior to retirement; and
■
anti-hedging restrictions.
|
|
| | | |
Beyond the compensation-specific features which help mitigate risk, the TOCC also assesses the broader context of Board oversight and controls which serve to mitigate the potential for excessive risk taking by Executive Management. These controls include:
■
Annual Board approval of rolling three-year business plans and seven-year strategic plans;
■
Board approval of annual capital expenditures budget;
■
Board control over return of capital to shareholders through dividends and annual share repurchase budgets; and
■
Board approval of all acquisitions or dispositions with an enterprise value in excess of $250 million, as well as joint ventures or partnerships requiring an investment of such amount.
|
|
| | | |
When these four “levers” are considered along with the compensation features above, the TOCC is satisfied that the theoretical potential for excessive risk taking by Executive Management is sufficiently moderated by a broad range of Board controls and compensation disincentives.
|
|
|
Stock Option Plan
|
| |
Stock option grants are made under the 2009 Plan, which was approved by shareholders on May 6, 2010 and is administered by the TOCC.
|
|
|
Eligible Participants Under 2009 Plan
|
| |
Under the 2009 Plan, stock options may be granted to employees of and consultants to Magna and its subsidiaries. The TOCC does not foresee options being granted to consultants, except in limited circumstances such as where an individual performs services for Magna through a consulting arrangement for tax or other similar reasons. No options have been granted to consultants since 2010 and no such grants are contemplated.
|
|
| Limits on Insider Participation | | |
The maximum number of Common Shares:
|
|
| | | |
■
issued to Magna “insiders” within any one-year period; and
■
issuable to Magna insiders at any time,
|
|
| | | |
under the 2009 plan, 2022 Treasury PSU Plan and any other security-based compensation arrangement (as defined in the TSX Company Manual) shall not exceed 10% of Magna’s total issued and outstanding Common Shares.
|
|
| Option Exercise Prices Are at or Above Market Price on Date of Grant | | |
Exercise prices are determined at the time of grant, but cannot be less than the closing price of a Common Share on the NYSE on the trading day immediately prior to the date of grant.
|
|
|
3-Year Option Vesting; 7-Year Option Life
|
| |
Time-vested options granted under the 2009 Plan vest in equal proportions on each of the first three anniversaries of the grant date, unless otherwise determined by the TOCC. Subject to accelerated expiry of time-vested options in certain circumstances, options granted under the 2009 Plan expire seven years after grant, unless otherwise determined by the TOCC. On cancellation or surrender of options under the 2009 Plan, the underlying shares are added back to the number of Common Shares reserved for issuance and are available for re-grant.
|
|
| Amending the 2009 Plan | | |
The 2009 Plan gives the Board the power to amend the plan, except for the following types of amendments, which require shareholder approval:
|
|
| | | |
■
increases to the number of shares reserved for issuance under the plan (excluding an equitable increase in connection with certain capital reorganizations);
■
a reduction in the exercise price of an option;
■
an extension of an option term (excluding certain limited extensions to allow the exercise of options that expire during or within two business days after the end of a trading blackout);
■
an increase in the 10% limit on option shares issuable to insiders, as described above under “Limits on Insider Participation”; and
■
amendment of the amending provision of the plan.
|
|
| | | | There were no amendments to the 2009 Plan during 2022. | |
| Available Option Plan on Magna.com | | |
The full text of the 2009 Plan is available on our website (www.magna.com).
|
|
|
Equity Compensation Plan Information
|
| |
As of December 31, 2023, equity compensation plans approved by shareholders under which our Common Shares are authorized for issuance are set forth in the table below.
|
|
|
Option Burn-Rate, Dilution and Overhang
|
| |
Taking into account the 523,442 options granted in calendar 2023, Magna’s burn-rate option dilution and overhang were as follows as of December 31, 2023:
|
|
|
0.2%
Burn-Rate(1)
|
| |
2.1%
Option Dilution(2)
|
| |
2.7%
Option Overhang(3)
|
|
|
Treasury PSU Plan Burn-Rate, Dilution and Overhang
|
| |
No TFG PSUs were granted in calendar 2023. Taking into account all previously granted and outstanding TFG PSUs, Magna’s Treasury PSU burn-rate, dilution and overhang were as follows as of December 31, 2023:
|
|
|
NIL
Burn-Rate(1)
|
| |
0.6%
Dilution(2)
|
| |
1.0%
Overhang(3)
|
|
|
Incentive Plan Awards – Value Vested During the Year
|
| |
The values of option-based and share-base awards that vested, and non-equity incentive plan compensation earned, during the year ended December 31, 2023, are set forth below.
|
|
|
rTSR PEER
|
| | |
TSR
(%) |
| | |
RANK
|
| | | | | | |
rTSR PEER
|
| | |
TSR
(%) |
| | |
RANK
|
| ||||||||||||
| Adient plc | | | | | | 57.7 | | | | | | | 1 | | | | | | | | | Gentex | | | | | | -0.6 | | | | | | | 8 | | |
| Visteon | | | | | | 50.7 | | | | | | | 2 | | | | | | | | | BorgWarner Inc. | | | | | | -1.8 | | | | | | | 9 | | |
| Linamar | | | | | | 33.0 | | | | | | | 3 | | | | | | | | | Lear Corporation | | | | | | -2.4 | | | | | | | 10 | | |
| S&P 500 | | | | | | 28.9 | | | | | | | 4 | | | | | | | | | Dana Incorporated | | | | | | -8.0 | | | | | | | 11 | | |
| Fiat/Ford/GM | | | | | | 20.9 | | | | | | | 5 | | | | | | | | | Martinrea International Inc. | | | | | | -11.9 | | | | | | | 12 | | |
|
Magna
|
| | | |
|
14.4
|
| | | | |
|
6
|
| | | | | | | | American Axle Mfg. Holdings | | | | | | -16.5 | | | | | | | 13 | | |
| Autoliv | | | | | | -0.1 | | | | | | | 7 | | | | | | | | | Continental/Faurecia/Valeo | | | | | | -54.2 | | | | | | | 14 | | |
| |
Board
|
| |
| |
■
Strategic risks including CEO succession, operations, capital structure, product portfolio, impact of megatrends and changes in technologies, as well as customer-related risks
■
Cybersecurity
|
| |
| |
Audit Committee
|
| | | | | | |
GNSC
|
| | | | | | |
Technology
Committee |
| | | | | | |
TOCC
|
| |
| |
■
Internal controls and IT general controls
■
Financial reporting
■
Disclosure controls
■
Taxation
■
Material litigation/regulatory risk
■
Ethics and legal compliance
■
Domain 1 (Enterprise) and Domain 2 (Manufacturing) cybersecurity
|
| | | | | | |
■
Corporate governance
■
Enterprise risk management process
■
Board succession planning
■
Sustainability, including environmental compliance
|
| | | | | | |
■
Technology, R&D/innovation risks
■
Domain 3 (Product and Solution) cybersecurity
|
| | | | | | |
■
Executive compensation
■
Talent management
■
Leadership development and succession planning
■
Occupational health and safety compliance
|
| |
|
Name
|
| | |
Retirement Year
|
| |||
| Dr. Indira V. Samarasekera | | | | | | 2026 | | |
| William A. Ruh | | | | | | 2029 | | |
| Mary S. Chan | | | | | | 2029 | | |
| Hon. V. Peter Harder | | | | | | 2029 | | |
| Robert F. MacLellan | | | | | | 2030 | | |
| Lisa S. Westlake | | | | | | 2031 | | |
| Mary Lou Maher | | | | | | 2033 | | |
| Dr. Thomas Weber | | | | | | 2034 | | |
| Jan R. Hauser | | | | | | 2034 | | |
| Jay K. Kunkel | | | | | | 2035 | | |
| Matthew Tsien | | | | | | 2035 | | |
|
Peter G. Bowie (Chair)
Jan R. Hauser Jay K. Kunkel Mary Lou Maher
—
Comprised of 100% Independent Directors.
—
All members are “financially literate” within the meaning of the Canadian Securities Administrators rules and the corporate governance listing standards of the New York Stock Exchange.
—
Each committee member had 100% attendance at all meetings.
—
At each meeting, the committee
■
met in camera without Management present.
■
met in camera with the external independent auditor.
■
met in camera with internal auditors.
The Committee is satisfied that it has carried out its duties and responsibilities in accordance with its Charter.
|
| |
Mandate
The Audit Committee’s primary role is to satisfy itself on behalf of shareholders that the company’s financial statements are accurate in all material respects and can be relied upon by shareholders. This necessarily involves diligent oversight of the company’s: system of internal controls; finance and accounting policies; internal and external audits; relationship with the independent auditors; financial risk mitigation strategies; and the integrity of its financial reports and disclosures.
Composition
The Audit Committee Charter requires that the committee be composed of between three and five Independent Directors, each of whom is “financially literate” and at least one of whom is a “financial expert”, as those terms are defined under applicable law. Audit Committee members cannot serve on the audit committees of more than three boards of public companies in total.
The Audit Committee complied with these requirements throughout 2023.
There was a change to Audit Committee composition during 2023, as follows:
■
appointment of Jay K. Kunkel in May 2023.
In appointing members to the Audit Committee, the Board considers the relevant expertise brought to the Audit Committee by each member, including through the financial leadership and oversight experience gained by each of them in their principal occupations and/or other boards on which they serve.
2023 Accomplishments and Key Areas of Focus
Through the Audit Committee’s work during 2023 and the first few months of 2024, the Audit Committee has fulfilled all of the requirements under its Charter, including satisfying itself regarding the integrity of Magna’s financial statements and financial reporting. Early in 2023, the Audit Committee also oversaw and approved amendments to its Charter which expressly define the Audit Committee’s responsibilities with respect to enterprise and manufacturing environment cybersecurity, as well as financial statement disclosure of sustainability matters.
Specific elements of the Audit Committee’s work in respect of 2023 included:
Financial Reporting and Internal Controls
■
received presentations from the company’s Chief Financial Officer and other members of the Finance Department at each quarterly meeting;
■
reviewed significant accounting policies and critical accounting estimates/judgements;
■
satisfied itself, on behalf of shareholders, as to:
■
disclosure of and accounting for Veoneer Active Safety Business Combination, which was identified as a Critical Audit Matter for the 2023 audit;
■
disclosure controls and procedures, as well as the effectiveness of internal controls over financial reporting; and
■
approved and recommended to the Board all quarterly and annual financial statements, MD&A and earnings press releases.
Oversight of Internal Audit
■
reviewed and approved the Internal Audit work plan and budget; and
■
received quarterly updates regarding the execution of the Internal Audit work plan, as well as Management follow-up on items identified by the IAD, including through in camera sessions at each quarterly Audit Committee meeting.
External Audit Independence and Effectiveness
■
satisfied itself as to Deloitte’s continued independence from Management;
■
received reports from Deloitte regarding Deloitte’s tailored risk assessment and incremental audit procedures of key areas;
■
reviewed and approved Deloitte’s integrated audit plan, preliminary and final fees, as well as scope of and fees for additional audit and all non-audit services arising through the year;
■
discussed audit, accounting and internal controls matters, as well as all required communications, with Deloitte, including through in camera sessions at each quarterly Audit Committee meeting;
■
assessed with Deloitte all audit risks identified as significant, as well as Deloitte’s audit responses to address such risks;
■
reviewed with Deloitte its integrated audit results;
|
|
|
Hon. V. Peter Harder (Chair)
Mary S. Chan Dr. Thomas Weber
—
Comprised of 100% Independent Directors.
—
Each committee member had 100% attendance at all meetings.
—
At each meeting, the committee met in camera without Management present.
The Committee is satisfied that it has carried out its duties and responsibilities in accordance with its Charter.
|
| |
Mandate
The GNSC assists the Board in fulfilling its oversight responsibilities with respect to corporate governance, Board succession planning, director compensation and sustainability oversight.
Composition
The GNSC Charter requires that the committee be composed of between three and five Independent Directors. The GNSC complied with this requirement in 2023.
In appointing members to the GNSC, the Board considers the relevant expertise brought to the GNSC by each member, including through the leadership, governance and other experience gained by each of them in their principal occupations and/or other boards on which they serve.
There were a number of changes to the GNSC composition during 2023, as follows:
■
retirement of Dr. Kurt Lauk as a GNSC member in May 2023, on his retirement from the Board; and
■
appointment of Dr. Thomas Weber in May 2023.
2023 Accomplishments and Key Areas of Focus
During 2023 and the first few months of 2024, the GNSC held eight regular meetings, each of which included an in-camera session without Management present, and fulfilled all of the requirements under its Charter, including with respect to Magna’s overall system of corporate governance, Board composition, sustainability and other matters. Some of the GNSC’s significant activities and accomplishments in these areas include:
Corporate Governance
■
reviewed and approved the nominees for election and assessed the director’s independence;
■
oversaw annual Board, committee and peer effectiveness evaluation; and
■
received updates highlighting key Canadian, U.S. and international regulatory and governance developments, as well as proxy advisory firms’ voting policies.
Board Renewal
■
reviewed/assessed updated skills matrix and Board renewal roadmap;
■
oversaw Technology Committee Chair succession and recommended the appointment of William A. Ruh as Chair;
■
developed search profile and oversaw independent search consultant’s efforts resulting in the recruitment of Jay K. Kunkel and Matthew Tsien in 2023; and
■
recommended to the Board the appointment of Jay K. Kunkel to the Audit Committee; Matthew Tsien to the TOCC, and Thomas Weber to the GNSC.
Sustainability
■
satisfied itself as to the continued effectiveness of Magna’s ESG management programs;
■
satisfied itself regarding Magna’s progress with the carbon neutrality commitments within its sustainability strategy, as well as the evolution of this strategy to a net-zero commitment;
■
received presentations on global human rights/supply chain regulatory requirements and Magna’s compliance initiatives; and
■
reviewed and recommended Board approval of the 2023 Sustainability Report.
Risk Oversight
■
received presentations on Magna’s “mission-critical risks” as well as other top risk areas, together with risk mitigation activities.
Committee Approval of Report
This report is dated as of March 27, 2024, and is submitted by the GNSC.
|
|
|
William A. Ruh (Chair)
Peter G. Bowie Mary S. Chan Hon V. Peter Harder Jan R. Hauser Jay K. Kunkel Robert F. MacLellan Mary Lou Maher Dr. Indira A. Samarasekera Matthew Tsien Dr. Thomas Weber Lisa S. Westlake
—
Comprised of 100% Independent Directors.
—
Each committee member had 100% attendance at all meetings.
—
At each meeting, the committee met in camera without Management present.
The Committee is satisfied that it has carried out its duties and responsibilities in accordance with its Charter.
|
| |
Mandate
The Technology Committee assists the Board in fulfilling its oversight responsibilities with respect to disruptive and other technological trends and risks, as well as the company’s efforts to address them.
Composition
The Technology Committee is a Committee of all the Independent Directors of the Board.
There were a number of changes to the Technology Committee composition during 2023, as follows:
■
retirement of Dr. Kurt Lauk as Technology Committee chair in May 2023, on his retirement from the Board;
■
appointment of William A. Ruh as Technology Committee chair in May 2023; and
■
appointment of Jay Kunkel and Matthew Tsien to the Technology Committee in connection with their election to the Board in May 2023.
2023 Accomplishments and Key Areas of Focus
During 2023 and the first few months of 2024, the Technology Committee fulfilled the requirements of its Charter.
Some of the Technology Committee’s significant activities and accomplishments in respect of 2023 include:
Technology Trends, Opportunities & Risks
■
engaged in “deep dive” reviews of various topics, including:
■
digital transformation;
■
automation and factory of the future;
■
battery enclosures technology landscape;
■
highly integrated (automotive) systems; and
■
considered Domain 3 (product and solution software) cybersecurity in the context of the software defined vehicle.
Research & Development
■
reviewed and assessed Magna’s R&D/innovation initiatives in relation to Magna’s strategy.
Technology Investments and M&A Strategy
■
quarterly reviewed status of Magna’s investments in technology start-ups and investment funds, including as to investment rationale, technology, intellectual property key learnings, overall value proposition and investment performance.
Committee Approval of Report
This report is dated as of March 27, 2024, and is submitted by the Technology Committee.
|
|
|
Certain Defined Terms
|
| |
In this document, referred to as this “Circular”, the terms “you” and “your” refer to the shareholder, while “we”, “us”, “our”, the “company” and “Magna” refer to Magna International Inc. and, where applicable, its subsidiaries. In this Circular, a reference to “fiscal year” is a reference to the fiscal or financial year from January 1 to December 31 of the year stated.
We also use the following defined terms throughout this Circular:
|
|
|
AC:
|
| |
the Audit Committee of our Board.
|
|
|
Board:
|
| |
our Board of Directors.
|
|
|
BoC:
|
| |
the Bank of Canada.
|
|
|
C$:
|
| | Canadian dollars. | |
|
Deloitte:
|
| |
Deloitte LLP
|
|
|
DSUs:
|
| |
deferred share units.
|
|
|
GNSC:
|
| |
the Governance, Nominating and Sustainability Committee of our Board.
|
|
|
Independent
Directors: |
| |
our directors or nominees who have been determined to be independent on the basis described under “Nominees for Election to the Board – Nominee Independence”.
|
|
|
NYSE:
|
| |
The New York Stock Exchange.
|
|
|
OBCA:
|
| | the Business Corporations Act (Ontario). | |
|
TC:
|
| |
the Technology Committee of our Board.
|
|
|
TOCC:
|
| |
the Talent Oversight and Compensation Committee of our Board.
|
|
|
TSX:
|
| |
the Toronto Stock Exchange.
|
|
|
Currency, Exchange Rates and Share Prices
|
| |
Dollar amounts in this Circular are stated in U.S. dollars, unless otherwise indicated, and have been rounded to the nearest thousand. In a number of instances in this Circular, information based on our share price has been calculated on the basis of the closing price of our Common Shares on the NYSE.
|
|
|
Information Currency
|
| |
The information in this Circular is current as of March 27, 2024, unless otherwise
stated. |
|
| Websites not incorporated by Reference | | |
Information contained on or otherwise accessible through Magna’s website and other websites, though referenced herein, does not form part of and is not incorporated by reference into this Circular.
|
|
PROXY FORM CONTROL NO.:➔ SCAN TO VIEW MATERIAL AND VOTE NOW STEP 1 REVIEW YOUR VOTING OPTIONS BY TELEPHONE: YOU MAY ENTER YOUR VOTING INSTRUCTIONS BY TELEPHONE AT: ENGLISH: 1-800-474-7493 OR FRENCH: 1-800-474-7501 BY MAIL: THIS PROXY FORM MAY BE RETURNED BY MAIL IN THE ENVELOPE PROVIDED. REMINDER: PLEASE REVIEW THE ACCOMPANYING MANAGEMENT PROXY CIRCULAR BEFORE VOTING. ONLINE: VOTE AT PROXYVOTE.COM USING YOUR COMPUTER OR MOBILE DATA DEVICE. YOUR CONTROL NUMBER IS LOCATED BELOW. G-V502122020 PLEASE SEE OVER Annual Meeting Magna International Inc. (the “Corporation”) WHEN: WHERE: PROXY DEPOSIT DATE: Tuesday, May 7, 2024 by 5:00 pm EDT Thursday, May 9, 2024 at 10:00 am EDT www.virtualshareholdermeeting.com/MGA2024 The control number has been assigned to you to identify your shares for voting. You must keep your control number confidential and not disclose it to others other than when you vote using one of the voting options set out on this form. Should you send this form or provide your control number to others, you are responsible for any subsequent voting of, or subsequent inability to vote, your shares. INSTRUCTIONS: 1. This Form of Proxy is solicited by and on behalf of Management of the Corporation. 2. You have the right to appoint a person, who need not be a shareholder, other than the person(s) specified on the other side of this form to attend and act on your behalf at the virtual Annual Meeting of Magna International Inc. (the "Meeting"). If you wish to appoint a person: • Write the name of your designate on the “Appointee” line and provide a unique APPOINTEE IDENTIFICATION NUMBER for your Appointee to access the Meeting in the space provided on the other side of this form, sign and date the form, and return it by mail, or • Go to ProxyVote.com and insert the name of your designate in the “Change Appointee(s)” section and provide a unique APPOINTEE IDENTIFICATION NUMBER on the voting site for your Appointee to access the Meeting. You MUST provide your Appointee the EXACT NAME and EIGHT CHARACTER APPOINTEE IDENTIFICATION NUMBER to access the Meeting. Appointees can only be validated at the Meeting using the EXACT NAME and EIGHT CHARACTER APPOINTEE IDENTIFICATION NUMBER you enter. IF YOU DO NOT CREATE AN EIGHT CHARACTER APPOINTEE IDENTIFICATION NUMBER AND PROVIDE IT TO YOUR APPOINTEE, YOUR APPOINTEE WILL NOT BE ABLE TO ACCESS THE MEETING. 3. This Form of Proxy confers discretionary authority to vote on amendments or variations to the matters identified in the Notice of the Meeting and with respect to other matters that may properly be brought before the Meeting or any adjournment or postponement thereof. This Form of Proxy will not be valid and not be acted upon or voted unless it is completed and delivered as outlined herein. 4. If the Common Shares are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this Form of Proxy. If you are voting on behalf of a corporation or another individual, documentation evidencing your power to sign this Form of Proxy with signing capacity stated may be required. 5. In order to expedite your vote, you may use the Internet or a touch-tone telephone, and entering the control number noted above. The Internet or telephone voting service is not available on the day of the Meeting. The telephone system cannot be used if you designate another person to attend on your behalf. If you vote by Internet or telephone, do not mail back this Form of Proxy. 6. If the Form of Proxy is not dated, it will be deemed to bear the date on which it was mailed to the shareholder. 7. This Form of Proxy will be voted as directed by the shareholder. If no voting preferences are indicated on the reverse, this Form of Proxy will be voted as recommended on the reverse of this form or as stated in the management proxy circular, except in the case of your appointment of an Appointee. 8. Unless prohibited by law or you instruct otherwise, your Appointee(s) will have full authority to attend and otherwise act at, and present matters to the Meeting and any adjournment or postponement thereof, and vote on all matters that are brought before the Meeting or any adjournment or postponement thereof, even if these matters are not set out in this form or in the management proxy circular. 9. If these voting instructions are given on behalf of a body corporate, set out the full legal name of the body corporate, and the name and position of the person giving voting instructions on behalf of the body corporate. 10. If the items listed in the management proxy circular are different from the items listed on the other side of this form, the management proxy circular will be considered correct. 11. This Form of Proxy should be read in conjunction with the accompanying management proxy circular. |
STEP 4 THIS DOCUMENT MUST BE SIGNED AND DATED SIGNATURE(S) *INVALID IF NOT SIGNED* MMD D Y Y STEP 3 COMPLETE YOUR VOTING DIRECTIONS HIGHLIGHTED TEXT ITEM(S): CONTROL NO.: ➔ ACCOUNT NO: CUSIP: CUID: RECORD DATE: PROXY DEPOSIT DATE: MEETING DATE: MEETING TYPE: STEP 2 APPOINT A PROXY (OPTIONAL) APPOINTEE(S): E-R2 MAXIMUM 22 CHARACTERS - PLEASE PRINT CLEARLY PLEASE PRINT APPOINTEE NAME INSIDE THE BOX CREATE AN EIGHT (8) CHARACTER IDENTIFICATION NUMBER FOR YOUR APPOINTEE ➔ ➔ MUST BE EIGHT CHARACTERS IN LENGTH - PLEASE PRINT CLEARLY Change Appointee If you wish to designate another person to attend, vote and act on your behalf at the Meeting, or any adjournment or postponement thereof, other than the person(s) specified above, go to www.proxyvote.com or print your name or the name of the other person attending the Meeting in the space provided herein and provide a unique APPOINTEE IDENTIFICATION NUMBER USING ALL BOXES for your Appointee to access the Meeting. You may choose to direct how your Appointee shall vote on matters that may come before the Meeting or any adjournment or postponement thereof. Unless you instruct otherwise your Appointee will have full authority to attend, vote, and otherwise act in respect of all matters that may come before the Meeting or any adjournment or postponement thereof, even if these matters are not set out in the proxy form or the circular for the Meeting. You can also change your Appointee online at www.proxyvote.com. You MUST provide your Appointee the EXACT NAME and an EIGHT (8) CHARACTER APPOINTEE IDENTIFICATION NUMBER to access the Meeting. Appointees can only be validated at the Meeting using the EXACT NAME and EIGHT (8) CHARACTER APPOINTEE IDENTIFICATION NUMBER you enter below. PROXY FORM FOR FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD FOR WITHHOLD WITHHOLD FOR Election of Director: Mary S. Chan 1B Election of Director: Hon. V. Peter Harder 1C Election of Director: Jan R. Hauser 1D 1E 1F 1G 1H 1I 1J 1A 1K Election of Director: Dr. Thomas Weber 1L 02 03 Robert F. MacLellan (Chairman), or failing him, Seetarama S. Kotagiri (CEO), or failing him, Bassem A. Shakeel, Corporate Secretary Wednesday, March 20, 2024 Tuesday, May 7, 2024 by 5:00 pm EDT Thursday, May 9, 2024 at 10:00 am EDT Annual Meeting Magna International Inc. (the “Corporation”) ELECTION OF DIRECTORS: Election of Director: Lisa S. Westlake Reappointment of Deloitte LLP as the independent auditor of the Corporation and authorization of the Audit Committee to fix the independent auditor's remuneration. Resolved, on an advisory basis and not to diminish the roles and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in the accompanying management information circular/proxy statement. Election of Director: Seetarama S. Kotagiri (CEO) Election of Director: Jay K. Kunkel Election of Director: Robert F. MacLellan Election of Director: Mary Lou Maher Election of Director: William A. Ruh Election of Director: Matthew Tsien Election of Director: Dr. Indira V. Samarasekera AGAINST ANNUAL INTERIM VOTING RECOMMENDATIONS ARE INDICATED BY OVER THE BOXES (FILL IN ONLY ONE BOX “ ” PER ITEM IN BLACK OR BLUE INK) 90 * TO RECEIVE ANNUAL AND/OR INTERIM FINANCIAL STATEMENTS AND ACCOMPANYING MANAGEMENT'S DISCUSSION AND ANALYSIS, PLEASE MARK THE APPLICABLE BOX. |
Exhibit 22.3
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statement Nos. 333-270086 and 333-277377 on Form F-10 and 333-271114, 333-210449 and 333-128257 on Form S-8 of our reports dated February 22, 2024, relating to the consolidated financial statements of Magna International Inc. (the “Company”), and the effectiveness of the Company’s internal control over financial reporting, appearing in this Current Report, dated March 28, 2024, on Form 6-K of the Company for the year ended December 31, 2023.
/s/ Deloitte LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
March 28, 2024