Corporate Governance

PACCAR has excellent corporate governance policies and practices that enhance stockholder returns. Its policies ensure that the Company is governed in accordance with the highest standards of integrity and in the best interest of its stockholders.

Board of Directors

PACCAR’s Board of Directors is comprised of 11 directors who bring a diversity of perspectives, skills and business experience relevant to the Company’s global operations. Each director has achieved significant success in business, education or public service and has demonstrated the highest ethical standards and integrity as well as mature judgment, objectivity, practicality and a willingness to ask difficult questions. The directors are committed to work together to reach consensus for the betterment of the stockholders and the long-term viability of the Company. In selecting nominees for the Board of Directors, the Nominating and Governance Committee recognizes the importance of having a diversity of gender, heritage and backgrounds to ensure that a variety of opinions and perspectives are represented on the Board; accordingly, initial lists of candidates from which new director nominees are chosen will include qualified female and racially/ethnically diverse candidates.

PACCAR’s Corporate Governance Guidelines are available at and are structured to ensure the Board has the necessary authority and practices to evaluate business operations and to make decisions independent of PACCAR’s management. Each director is expected to act with integrity, understand the importance of representing the entire shareholder constituency and increasing shareholder value, contribute actively and objectively at Board and Committee meetings and participate in management evaluation and succession planning.

Key facts about the Board of Directors include:

  • 73% of PACCAR’s directors are independent.
  • Two of the 11 directors are women.
  • One director serves as the lead independent director.
  • The Board is required to evaluate its performance on an annual basis.
  • Directors are required to own PACCAR stock and/or deferred stock units in an amount equal to five times their annual cash retainer.
  • All directors on the Compensation, Nominating & Governance and Audit Committees are independent.
  • The average compensation of non-employee directors is comparable to the median of company peers.
  • The Board has a mandatory retirement age of 72.

Executive Compensation

PACCAR’s compensation programs are directed by the Compensation Committee of the Board of Directors, which is composed exclusively of independent directors. The objective of the programs is to attract and retain high-quality executives, link incentives to the Company’s performance and align the interests of management with those of stockholders. The Company emphasizes pay for performance and uses equity-based incentive programs designed to compensate executives for generating outstanding performance for stockholders. Each of the Company’s Say-on-Pay proposals was approved by 95% or more of the shares voted in 2011, 2014, 2017 and 2020.

Key compensation practices include:

  • PACCAR does not have an employment agreement with its CEO or any other officer.
  • No employees are eligible for multi-year guaranteed bonuses.
  • PACCAR does not discount, backdate, reprice or retroactively grant equity awards and prohibits the buy-out of underwater options.
  • The Company prohibits the hedging or pledging of Company stock or purchasing of stock on margin by executive officers.
  • The CEO does not have a golden parachute.
  • The CEO is required to own PACCAR stock in an amount equal to five times the CEO’s annual base salary.
  • PACCAR discloses full information on the performance measures used in the long-term incentives granted to executives.
  • The Company does not provide for excise tax gross-ups on change-in-control payments.

Shareholder Rights

The Company’s corporate governance structure provides for meaningful and significant stockholder input in director elections and governance. Stockholders have the opportunity to include their own proposals and director nominees for election in the Company’s proxy and to present them at the annual meeting of stockholders. The Nominating and Governance Committee of the Board of Directors regularly reviews developments in corporate governance and recommends governance enhancements to the Board of Directors.

PACCAR’s excellent stockholder rights and corporate governance practices include:

  • PACCAR has one class of stock with equal voting rights.
  • All common shareholders are entitled to vote for all current director nominees.
  • Directors are elected annually.
  • Shareholders have a proxy access right.
  • Shareholders holding 25% of PACCAR’s total outstanding shares may convene a special meeting.
  • There are no material restrictions on shareholders’ right to call special meetings.
  • The Company does not have a controlling shareholder.
  • The Company does not have a poison pill in effect.

Audit and Risk Oversight

The Company’s audit committee is made up of four independent directors. The committee reviews the Company’s annual and quarterly financial statements, monitors the integrity and effectiveness of the audit process and reviews the corporate compliance programs. It also monitors the Company’s system of internal controls over financial reporting and oversees the internal audit function.

  • There are four financial experts serving on PACCAR’s audit committee.
  • The Company has not restated its financial statements for any period within the past five years.
  • The Company has timely released all financial disclosure filings in the past five years.
  • The Company has disclosed no material weaknesses in its internal controls in the past five years.
  • Non-audit fees represented 2% of total auditor fees in 2019.
  • A regulator has not taken action against a director or officer of the company in the past five years.

Additional governance information can be found at and in PACCAR’s Proxy Statement at