2024
Management
Proxy Circular
Annual Meeting – May 9, 2024
Magna International Inc.

emissions

by 2050in salescountries
World’s

manufacturing

facilities

largest automotive parts supplier

team members

renewable electricity globally by 2030

101187-Magna-2024-Proxy-Inside-v4.indd 1

2024-03-27 1:21 PM

Our Vision for the
Car of the Future
The mobility landscape is transforming,
driven by new technology andchanging consumer preferences. As a
dedicated leader, Magna spearheads
innovations that resonate acrossthe automotive industry, positioning
us for the Car of the Future. This
software- and systems-defned vehicle
will be equipped with active safety
features and connected capabilities,
while embracing advancements inelectrifcation. It will be embeddedwith Magna innovations designed
to enhance safety, intelligence,and sustainability.

101187-Magna-2024-Proxy-Inside-v4.indd 2

Our full systems approach and deep productexpertise allows us to understand the complete
picture and deliver solutions that respond to
evolving market opportunities. We continually
make advancements in our areas of expertise,from enhancing driver assistance systems topioneering new eco innovations.
At Magna, every step we take is guided by abroader purpose: to advance mobility for everyone
and everything. We are driven by the vision ofcreating a future where mobility is accessible,
sustainable, and inclusive. By aligning our expertisewith this purpose, we contribute to shaping a better
automotive industry and a more connected world.

2024-03-27 1:21 PM

All-Encompassing Magna Technologies
Eco Innovation means technologies for the future – from aerodynamics
and powertrain to software, manufacturing processes and nearly everything
in between.
These innovations solve complex problems and help our customers fulfll theirvision. They also have a signifcant impact on sustainability and effciency
throughout the value chain and product life cycle.
Flexing Our eDrive Muscle

Strengthening EV Safety and Structure

Magna’s comprehensive hybrid and electric
powertrain portfolio is taking vehicle electrifcation
to the next level of effciency and range. Our next
generation 800V eDrive solution sets new standards ineffciency, power-to-weight ratio, and torque density.
The system will minimize our reliance on aluminumand heavy rare earth materials, and lower CO2
emissions during production by about 20%.

We are leveraging our foundational structures
expertise and contributing to the overall structuraland safety aspects of an EV through our battery
enclosures, offering customers a competitive
advantage in the development of these complex
assemblies featuring a range of state-of-the-art
joining and sealing techniques. This is one of
Magna’s fastest growing businesses.

Expanding Presence in the Value Chain
The LG Magna e-Powertrain joint venture is a key
contributor to our expanded presence in the EV value
chain. With production of motors, inverters, andon-board chargers at a new facility in Mexico andan additional facility under development in Hungary,
we are well positioned to keep pace as global EV
production continues to increase.

Building on Market-Leading Camera Expertise
Our Gen5 front camera module system is a one-box
system that delivers road safety through long-range
and side object detection. With production alreadyunderway, the high-resolution camera’s microcontroller
is scalable for sensor fusion with up to fve radars andoffers leading active safety solutions.

101187-Magna-2024-Proxy-Inside-v4.indd 32024-03-27 1:21 PM

MESSAGE FROM THE CHAIRMAN & CHIEF EXECUTIVE OFFICER

Robert F. MacLellan
ChairmanDear Fellow Shareholders,
We are pleased to invite you to Magna’s upcoming(virtual) annual meeting of shareholders, which will
be held on Thursday, May 9, 2024, at 10:00 am(Eastern time).
Turning the Corner, Building Momentum
Magna’s vision is advancing mobility for everyone
and everything, responsibly. It’s a common purpose
shared by all our employees. It also drives our
passion to deliver results and long-term value
for shareholders.
After multiple disrupted years, 2023 felt like a year inwhich we started turning the corner. Sales, earnings,
and free cash fow were all up in 2023 compared to2022, despite the impact of labour strikes against
certain facilities of three key customers. Given thestrength of Magna’s 2023 operational and fnancial
performance, the Board approved an increase in
the company’s fourth quarter dividend - the 14th
consecutive such increase since 2010.
Our outlook for the next few years forecasts further
growth in sales, earnings, and free cash fow throughcontinued execution of our go-forward strategy.
We are focused on disciplined, proftable growth,

101187-Magna-2024-Proxy-Inside-v4.indd 4

Swamy Kotagiri
Chief Executive Offcer

including in megatrend areas which, together
with operational excellence activities, should drive
margin expansion. We believe we are at the peak of
an investment cycle, largely to support megatrend
growth, with average annual engineering spendingof around $1.2 billion in megatrend areas and around$2.5 billion in CapEx for 2024. CapEx is expected to
decline after this year and both our Engineering-toSales and CapEx-to-Sales ratios should normalize
over the next couple of years as new businesslaunches. With all the factors contemplated in ourbusiness plan, we anticipate signifcant free cash
fow improvement and continued balance sheet
deleveraging allowing us to return to our target
leverage ratio in 2025.
No discussion of our strategy or growth in megatrend
areas would be complete without mention of ouracquisition of Veoneer Active Safety, which closed
in June 2023. With this purchase, we can offer
customers a more comprehensive active safety
portfolio across all relevant sensors, computesystems and software solutions in one of the fastest
growing market segments in the automotive industry.
Our active safety business is forecast to generatearound $3 billion in sales this year and we are wellon-track to realize the synergies expected fromthe purchase.

2024-03-27 1:21 PM

As is always the case, there are potential
opportunities and risks that may impact what
Magna can achieve over the next few years, but
we are moving forward and building momentum by
delivering operational excellence, cost reduction
and productivity improvement initiatives.
The Magna Way
Magna was built on and remains committed to
growing the value of our business in a way thatbalances the interests of our key stakeholders –our customers, our people, the communities inwhich we operate, and our shareholders. In 2023,
we shipped roughly 2 billion sustainable, innovative,
high-quality, cost-effcient products and systems
from our facilities to over 55 OEMs around the world.
Magna received 107 customer awards recognizing
our product quality and operational performance - anincredible effort made possible by the commitment,
dedication, and innovation of our more than 179,000
employees. Their efforts are the foundation of our
success and a key reason why Magna continues tobe named one of Ethisphere’s “World’s Most EthicalCompanies,” Fortune’s “World’s Most Admired
Companies”, and Forbes’ “Best Employers.”
Magna works hard to be a model corporate citizen
globally, as demonstrated by our 2023 pledge toachieve net-zero emissions by 2050 and adopt
100% renewable energy in our operations by 2030.
However, our commitment to sustainability goes wellbeyond emissions and energy: it is best understood
through the deep involvement of Magna employees
in our communities, including through initiatives
aimed at planting trees, raising funds for clean water,
alleviating poverty, supporting disaster relief, andpromoting gender rights and education.
Conducting business in a manner that is stakeholder
centered, responsible and ethical. Balancing people
and proft. This is the Magna way.

Responsive to You
At last year’s annual meeting, shareholders sent theBoard a message through the “Say on Pay” vote. We
heard you and we have responded by taking several
signifcant steps related to the company’s executive
compensation framework. Late in 2023, the Board
approved fve changes to executive compensation
for Magna’s executive management team, including
the elimination of the legacy proft-sharing model.
Rest assured, proft-sharing remains in place where
it is most effective – at the company’s operating
divisions. However, the compensation framework for
executive management has been reworked to better
drive performance, while more closely aligning theinterests of management and shareholders. You canread the details in the TOCC’s Compensation and
Performance Report in this Circular.
In Closing
Our longest-serving director and current Audit
Committee Chair, Peter Bowie, will retire from theBoard at the upcoming annual meeting. Peter joined
Magna’s Board in 2012 and has been a consistentcontributor to the Board and Audit Committee, as
well as a highly effective steward of shareholderinterests throughout. We thank Peter for his many
important contributions over the last 12 years.
We encourage you to participate in Magna’s
upcoming (virtual) annual meeting on May 9, 2024,
and look forward to your support for all twelve
nominees for re-election at the meeting. You can
submit your vote on the matters outlined in thiscircular - by proxy ahead of the meeting, or online
during the meeting.
We thank you for your continued support and lookforward to continuing to engage with you – at theannual meeting and throughout the year.

Robert F. MacLellan

101187-Magna-2024-Proxy-Inside-v4.indd 5

Seetarama (Swamy) Kotagiri

2024-03-27 1:21 PM

Notice of Annual Meeting of
Shareholders
Date:

Thursday, May 9, 2024Time:

10:00 a.m. (Toronto time)

Place:

Virtual-only meeting
via live internet webcast online atwww.virtualshareholdermeeting.com/MGA2024

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 aheadof the Meeting via ProxyVote.com. Simply visit
www.ProxyVote.com, enter your Control Number, Voteyour Shares and ask your Pre-Meeting Questions.

You are receiving this Notice of Magna’s Annual Meeting of Shareholders (the “Meeting”) since you held Magna
Common Shares at the close of business on March 20, 2024. You are entitled to vote your shares at the Meeting,which is being held to:1.

receive Magna’s consolidated financial statements and the report of independent registered public accounting
firm thereon for the fiscal year ended December 31, 2023;2.

elect twelve directors;

3.

reappoint Deloitte LLP as our independent auditor and authorize the Audit Committee to fix the independent
auditor’s remuneration;

4.

vote, in an advisory, non-binding manner, on Magna’s approach to executive compensation (“Say on Pay”)
described in the accompanying Management Information Circular/Proxy Statement (the “Circular”); and5.

transact any other business that may properly come before the Meeting.

As of the date of this Notice, we are not aware of any business to be addressed at the Meeting other than the four
specific items listed above.
The Circular relating to the Meeting contains more information on the matters to be addressed at the Meeting. The
section of the Circular titled “How to Vote Your Shares” contains detailed information to help you understand how tovote your shares within the applicable time limits. The time limit for deposit of proxies may be waived or extended by the
Chair of the Meeting at their discretion.
Magna has elected to use the Notice and Access rules permitted by Canadian securities regulators to deliver the
Circular to both our registered and non-registered shareholders. This means that instead of receiving the Circular by
mail, shareholders will receive a written notification with instructions on how to access the Circular online, together witha form of proxy or voting instruction form, as applicable. The Circular is available on our website at magna.com, on
SEDAR+ at sedarplus.ca and on EDGAR at sec.gov/edgar.
By order of the Board of Directors.

March 27, 2024
Aurora, Ontario

BASSEM A. SHAKEEL
Vice-President, Associate General Counsel and Corporate
Secretary

Contents
Management Information Circular/Proxy Statement
1
6
7

Proxy Summary
Voting Information
How To Vote Your SharesBusiness of the Meeting
10
11
12
13
17
23
27
29
30
51
54

Financial Statements
Election of Directors
Board Overview
Details of the 2024 Nominees
Biographies of 2024 Nominees
Director Compensation
Reappointment of Deloitte LLP as Magna’s Independent Auditor
Say on Pay
Compensation Discussion & Analysis
Summary Compensation Table
Incentive Plans and Awards

Corporate Governance
59
60
61
62
66
70
72
73
75
76
78
79
80

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
Report of the Audit Committee
Report of the Governance, Nominating and Sustainability Committee
Report of the Talent Oversight and Compensation Committee
Report of the Technology Committee

Additional Information
81
82

Additional Information
Definitions and Interpretation

This Circular is being provided to you in connection with the Annual Meeting of Magna’s shareholders (the “Meeting”),
which will be held on Thursday, May 9, 2024, commencing at 10:00 a.m. (Toronto time) via live internet webcast onlineat www.virtualshareholdermeeting.com/MGA2024.

Proxy Summary
In this summary, we highlight certain information you will find in various other parts of this management information circular/
proxy statement (the “Circular”). This summary does not contain all of the information that you should consider. Please
review the entire Circular carefully before casting your vote.

Business of the Meeting
Business of the Meeting

Board Vote
Recommendation

For More
Information

1.

Receive the audited consolidated financial statements and the report of the auditor for the year
ended December 31, 2023

N/A

Page 102.

Vote to elect twelve directors for a term of approximately one-year, ending on the date of thenext annual meeting

FOR

Page 11

3.

Vote to reappoint Deloitte LLP as Magna’s independent auditor and authorize the Audit
Committee to set the independent auditor’s remuneration

FOR

Page 27

4.

Vote on the advisory, non-binding resolution on Magna’s approach to executive compensation(“Say on Pay”)

FOR

Page 29

1. Financial Statements
Magna’s consolidated financial statements for the fiscal year ended December 31, 2023, together with the report ofindependent registered public accounting firm on those statements, will be presented at the Meeting, but no shareholder
vote is required in connection with the financial statements. The report of independent registered public accounting
firm on our financial statements for the fiscal year ended December 31, 2023, was unqualified and without reservation.
Both of these items are contained in our 2023 Annual Report, which is available on our website at www.magna.com.
Selected financial results for 2023 are found below. However, we encourage shareholders to review our complete financial
statements and the report of independent registered public accounting firm thereon.
SALES

DILUTED EPS

U.S. $ MILLIONS

U.S. $

CASH PROVIDED FROMOPERATING ACTIVITIES
U.S. $ MILLIONS

42,797
37,840
4.23

3,149

2,095
2.03

2022

2023

ADJUSTEDRETURN ON
INVESTED CAPITAL(1)

2022

2022

2023

2023

DIVIDENDS PAIDPER SHARE
U.S. $
1.60

1.72

1.80

1.84

2022

2023

1.46

8.5%

2022

1.

10.0%

2023

2019

2020

2021

Adjusted Return on Invested Capital is a non-GAAP financial measure. During 2023, we revised our calculation of Adjusted Return on Invested Capital to
exclude the amortization of acquired intangible assets. The historical presentation of this non-GAAP measure has been updated to reflect the revised
calculation. Definitions and reconciliations to the most directly comparable financial measures calculated in accordance with U.S. GAAP, can be found in thecompany’s Annual Report for the Year Ended December 31, 2023, in the Management’s Discussion and Analysis of Results or Operations and Financial
Position section. The Magna International Inc. 2023 Annual Report has been posted to the company’s website through the Investors link at www.magna.com.

Proxy Summary

1

PROXY SUMMARYManagement Information
Circular/Proxy Statement

2. Election of Directors – 2024 Nominees
Tenure

Age

98

4yrs
Avg.

%

100

Avg. 2023
Votes FOR

%

65yrs
Avg.

2023
Attendance

0-4 yrs: 8 nominees<60 yrs

5-9 yrs: 4 nominees

60-65 yrs : 7 nominees

10+ yrs : 0 nominee

66-70 yrs : 2 nominees>70 yrs

GenderDiversity

DiverseNominees*

Women: 2 nominees

Independence

42%

42%

: 1 nominee

92%
Independent* LGBTQ+ or
underrepresented minority in home country

NOMINEE OVERVIEWNOMINEE

AGE

DIRECTORSINCE

TENURE
LIMIT

Mary S. Chan

61

2017

2029

Chief Operating Officer, Nikola Corporation and Corporate
Director

I

PRINCIPAL OCCUPATIONINDEPENDENCE(1)FINANCIAL
EXPERTISE

COMMITTEEMEMBERSHIPS(2)GNSC/TC

Hon. V. Peter Harder, P.C.

71

2020

2029

Senator and Corporate Director

I

Jan R. Hauser

65

2022

2034

Corporate Director

I

GNSC*/TC

Seetarama S. Kotagiri

55

2021

–

Chief Executive Officer of MagnaM

Jay K. Kunkel

64

2023

2035

Corporate Director

I

✓

AC/TC

Robert F. MacLellan

69

2018

2030

Chairman, Northleaf Capital Partners and Corporate Director

I✓

Board Chair/TC

Mary Lou Maher

63

2021

2033

Corporate Director

I

✓

AC/TC

William A. Ruh

62

2017

2029

Chief Executive Officer, Lifestyle Solutions Real Estate andCorporate Director

I

TC*/TOCC

Dr. Indira V. Samarasekera

71

2014

2026

Senior Advisor, Bennett Jones LLP and Corporate Director

I

TOCC*/TC

Matthew Tsien

63

2023

2035

Corporate Director

I

TOCC/TC

Dr. Thomas Weber

69

2022

2034

Corporate Director

I

Lisa S. Westlake

62

2019

2031

Corporate Director

I

✓

AC/TC
–

GNSC/TC✓

TOCC/TC

Notes:
1.
I = Independent; M = Management.
2.
The Board has 4 (four) standing committees: Audit Committee (“AC”); Governance, Nominating and Sustainability Committee (“GNSC”); Technology
Committee (“TC”); and Talent Oversight and Compensation Committee (“TOCC”). Asterisk (*) denotes Committee Chair.

Additional information about the Nominees, including their biographies, skills and compensation can be found startingon page 12 of the Circular.

2

Proxy Summary

Highlights of our approach to corporate governance include:◾

Active Board engagement in, and approval of strategy◾

Diverse Nominee skills, expertise and backgrounds◾

Strong oversight of management succession planning◾

Board Diversity Policy with gender parity target◾

Environmental, Social and Governance (ESG) oversight◾

Director tenure limit◾

Active shareholder engagement◾

Limitation on director interlocks◾

Advance Notice By-Law◾

Independent Board Chair◾

Annual director election; no slate ballots◾

100% Independent Directors on all Board committees◾

Majority voting policy; prompt disclosure of vote results◾

Independent Directors meet without Management◾

Annual Say on Pay vote◾

Rigorous annual Board/Director effectiveness evaluation◾

Mandatory deferral of director fees◾

Director orientation and continuing education◾

Equity maintenance requirement for directors◾

Commitment to culture of ethics and compliance◾

Trading blackouts and anti-hedging restrictions

PROXY SUMMARYCORPORATE GOVERNANCE OVERVIEW

3. Reappointment of Deloitte LLP as Magna’s
Independent Auditor

94

AUDIT FEES
2023%

Audit / Related Fees

Audit:

52%

Audit-related:

42%

Tax:

6%

Other Permitted: <1%
Total:

100%

>99

%

2023 Votes FOR

10
Fiscal Yrs as auditor

Deloitte LLP (“Deloitte”), an Independent Registered Public Accounting Firm, was first
appointed Magna’s independent auditor on May 8, 2014 and has audited Magna’s
consolidated financial statements for the fiscal years ended December 31, 2014 and after.
Deloitte reports directly to the Audit Committee, which assesses its independence,
oversees its work, evaluates its performance and sets its compensation.

The Audit Committee believes that Deloitte provides value to Magna’s shareholders through its methodical, independent
challenge to Magna’s external financial reporting. Deloitte’s audit approach is based on an audit risk assessment,
which is continuously updated throughout the year. Audit risks identified in the risk assessment are addressed throughtailored audit procedures which reflect Deloitte’s understanding of Magna-specific factors as well as the general businessenvironment in which Magna operates. The firm’s communications to the Audit Committee demonstrate strong audit
quality, professional skepticism and innovation in the audit, including through the effective use of data analytics. The Audit
Committee is satisfied that Deloitte’s integrated audit team consists of audit professionals and specialists who are
qualified and experienced to provide audit services in the regions in which Magna operates. The firm has demonstrated
a commitment to promoting a learning culture within its own team and sharing the firm’s insights, perspectives andbest practices with the Audit Committee, the Board, internal audit, as well as management and Magna’s finance teams.
Additional information about Deloitte, including its independence, services and fees can be found starting at page 27of the Circular.

Proxy Summary3

4. Say on Pay / Executive Compensation
Magna’s executive compensation framework has been structured to promote effective short- and long-term decisionmaking through balanced incentives aimed at profitable growth in a lean manufacturing business, as well as long-termvalue creation in a rapidly evolving industry. Some of the ways we seek to achieve these objectives include:
Compensation Framework Feature
Minimal fixed compensation

Performance-conditioned profit
sharing bonus / STI

Performance-conditioned
multi-metric LTI

PurposeLow base salaries and highly variable compensation help create an owner’s mindset◾
◾

Motivates managers to achieve consistent profitability in order to maintain consistentcompensation◾

Incents profit growth to grow compensation
Promotes entrepreneurialism◾
◾

Drives strong managerial focus on lean/efficient operations through effective managementof costs◾

Connects compensation to the operational impact of everyday decisions
ROIC PSUs incent efficient capital allocation and value creation◾
◾

rTSR PSUs create sensitivity to stock market performance and return of capital toshareholders, 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 anddiscouraging excessive risk-taking◾

No pensions◾

Share maintenance requirement◾

Stock options incent absolute TSR growth
Reinforces an owner’s mindset and incents long-term growth in equity value as a pensionalternative
Reinforces an owner’s mindset◾

Promotes alignment with shareholders◾
◾

Helps mitigate risk
Substantially consistent with those of other employees in the same office/jurisdiction

Benefits

2023 CEO Compensation
Compensation in 2023 for Magna’s CEO, Seetarama S. Kotagiri, consisted of a low base salary, a profit-driven STI, as
well as LTIs tied to value-creation on both an absolute basis and relative to industry peers. Mr. Kotagiri’s base salary andtarget STI represented approximately 30% of his target TDC of $16.0 million, with target LTI values representing
approximately 70% of such target TDC.
2023($)
Base Salary

PERFORMANCE VS.
TARGET

325,000—

Short-term Incentive (Cash)

5,633,000↑ 13%

Long-term Incentives (Equity
ROIC PSUs (3-yr)
rTSR PSUs (3-yr)
Stock Options (7-yr)

4,400,000
2,200,000
4,400,000

Tracking At Target
Tracking Below Target
Out-of-the-Money

16,958,000

↑ 6%

Total

In-line with compensation governance best practices, the TOCC engaged its independent compensation advisor toperform a “realized/realizable” compensation analysis of Mr. Kotagiri’s 2023 compensation to assist the TOCC in
assessing pay outcomes. Realized/realizable compensation provides an indication of how the different elements ofcompensation are actually performing as of a point in time – in this case, December 31, 2023. The graph below shows
realized and realizable compensation values for 2023, relative to actual TDC, which includes base salary, actual STI
earned and target LTI values.

4

Proxy Summary

Profit Sharing

ROIC PSUs

TSR - PSUs

This graph demonstrates that realized/realizable values
for elements of incentive compensation which are more
within Executive Management’s control – the profitdriven STI and the ROIC LTI – tracked closely to forecast(STI) / target (ROIC PSU) levels. Additionally, realized/
realizable values for market-driven elements of incentive
compensation – the rTSR PSUs and stock
options – closely reflect the broader Magna shareholder
experience in 2023. The balance in realized/realizable
2023 CEO compensation indicates a reasonable outcome
overall. Please refer to the CD&A later in this Circular fora full discussion of 2023 realized/realizable compensation,
including a comparison against prior years.

Options$20,000,000$17,500,000

1.00x$15,000,000

0.74x$12,500,000$10,000,000$7,500,000$5,000,000$2,500,000$0Actual TDC1

Realized/
Realizable2
2023

Notes:
1.
Actual TDC consists of Base Salary, actual STI, target LTIs, as disclosed in the Summary Compensation Table.
2.

Realized/realizable compensation consists of Base Salary and actual STI, as disclosed in the Summary Compensation Table, together with the market
value of LTIs granted in the year. Market value of LTIs has been calculated based on the value of Magna Common Shares as of December 29, 2023.

Pay for Performance
The Say on Pay vote at the Meeting represents your opportunity to express to us your view as to whether the company’s
approach to executive compensation generates outcomes that are justified by Magna’s performance. There is no
single way of assessing the relationship between pay and performance, nor any one metric on its own that can convey
a complete picture as to such relationship. However, in light of the alignment between pay and performance as
depicted in the graph below when normalized to exclude the full grant value of the non-recurring, long-term TFG PSUs
granted in 2022, we are satisfied that compensation outcomes are reasonably aligned with performance. We believe that
inclusion of the full grant value of the TFG PSUs would be distortive, since such PSUs were granted to incent the longterm transformation of the company and they are relatively early in their performance period. Nevertheless, we haveseparately shown the relative positioning of Magna CEO compensation inclusive of the grant value of the TFG PSUs in
the interests of full transparency.
Compensation Peers vs. Magna
100%

Deere
& Co
D
Honeywell

3-Year Compensation Rank1

90%
80%

Caterpillar

Magna(Full TFG)

ITW
BorgWarnerr
Parker-Hannifin

70%

Corning
60%

Emerson Electric
c
Jabil

50%

Eaton Corp
40%

Aptiv
Johnson Co
Controls
C

30%

Goodyear

20%

Lear

Adient10%0%0%Magna (No TFG)
10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3-Year TSR Performance Rank

Note:
1.
Represents three-year average CEO compensation, as disclosed in the Summary Compensation Table.

Proxy Summary

5

PROXY SUMMARY

Base SalaryVoting Information
Record Date

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 toreceive notice of and vote at the Meeting.

Outstanding Shares,
Votes and Quorum

As of the Record Date, 287,280,095 Magna Common Shares were issued andoutstanding. Each Magna Common Share is entitled to one vote. A quorum ofshareholders 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.

Principal
Shareholders

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.
NUMBERCOMMONSHARESHELDOF SHARES

Public Shareholders

269,424,634

93.8%

383,8540.1%

17,471,607

6.1%

Magna Directors and Executive Officers (N = 22)
Magna Employee Deferred Profit Sharing Plans (Canada,
U.S., Europe)(1)Public:>93%

North American and European DPSPs:

6%

Directors/Executive Officers:<1%

Total:

100%

PERCENTAGE
OF SHARES

SHAREHOLDER GROUP

Note:
1.

To the best of our knowledge, all of these shares will be voted FOR the election of directors, there-appointment of the auditor and the “Say on Pay” advisory resolution.

Individual Voting

At the Meeting, shareholders will vote for each nominee for election to the Board,
individually. We do not use slate voting.

Majority Voting

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.

Voting Results

Detailed voting results will be promptly disclosed in a press release issued and filed on
the Meeting date.

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 forRegistered 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 electronicdelivery of proxy materials will continue to receive them by email.

6

Voting Information

How To Vote Your SharesYour vote is important. This Circular tells you who can vote, what you will be voting on
and how to vote. Please read the information below to ensure your shares are properly
voted.
Since the Meeting is being held as a virtual-only meeting, there are differences in how
the Meeting will be conducted compared to an in-person meeting. However,shareholders will have an equal opportunity to participate at the meeting online,
regardless of geographic location. This means that shareholders attending online will
have the opportunity to ask questions and vote in real-time. All shareholders areencouraged to cast their votes in advance by proxy as described below.

Registered vs.
Non-Registered
Shareholder

How you vote your shares depends on whether you are a registered shareholder or a
non-registered shareholder. In either case, there are different ways to vote, butshareholders will not be able to attend the Meeting and vote in person since it will be a
virtual-only meeting.
Registered Shareholder: You are a registered shareholder if you hold one or moreshare certificates that indicate your name and the number of Magna Common Sharesthat you own. As a registered shareholder, you will receive a form of proxy from
Broadridge Investor Communications Corporation representing the shares you hold. If
you are a registered shareholder, refer to “How to Vote – Registered Shareholders”.
Non-Registered Shareholder: You are a non-registered shareholder if a securities
dealer, broker, bank, trust company or other nominee holds your shares for you, or forsomeone else on your behalf. As a non-registered shareholder, you will most likely
receive a Voting Instruction Form from Broadridge Investor Communications
Corporation, although in some cases you may receive a form of proxy from thesecurities dealer, broker, bank, trust company or other nominee holding your shares. If
you are a non-registered shareholder, refer to “How to Vote – Non-Registered
Shareholders”.

Proxies Are Being
Solicited by
Management

Management is soliciting your proxy in connection with the matters to beaddressed at the Meeting (or any adjournment(s) or postponement(s) thereof)
to be held at the time set out in the accompanying Notice of Annual Meeting.
We will bear all costs incurred in connection with Management’s solicitation of proxies,
including the cost of preparing and delivering this Circular and accompanying materials.
In addition to the use of mail and email, some of our officers and employees may (for no
additional compensation) also directly solicit proxies by phone, fax or other electronic
methods. Banks, brokerage houses and other custodians, nominees or fiduciaries will
be requested to forward proxy solicitation material to the persons on whose behalf theyhold Magna shares and to obtain authorizations for the execution of proxies. These
institutions will be reimbursed for their reasonable expenses in doing so.

Voting Information

7

VOTING INFORMATIONYour Vote Is
Important

These securityholder materials are being sent to both registeredand non-registered owners of Magna Common Shares.

HOW TO VOTE –REGISTERED SHAREHOLDERSHOW TO VOTE –NON-REGISTERED SHAREHOLDERS

If you are a registered shareholder, you may vote either by proxy orby completing an online ballot during the Meeting.
Submitting Votes by Proxy

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.

There are four ways to submit your vote by proxy:

Submitting Voting Instructions

smartphoneinternetmail

telephone

There are four ways to submit your vote by Voting Instruction
Form:

The form of proxy contains instructions for each of these methods.
smartphone
If you are voting by smartphone, internet or telephone, you willneed 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 authorizedattorney). If such a proxy is being submitted on behalf of acorporate shareholder, the proxy must be signed by an authorized
officer or attorney of that corporation. If a proxy submitted by mailis not dated, it will be deemed to bear the date on which it wassent to you.
If you are voting your shares by proxy, you must ensure that yourcompleted, 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 mustensure that your completed and signed proxy form or yoursmartphone, internet or telephone vote is received by Broadridge
not later than 48 hours (excluding Saturdays, Sundays andholidays) prior to the time of the Meeting.
Appointment of Proxyholder
Unless you specify otherwise or appoint a proxyholder, theMagna officers whose names are pre-printed on the form ofproxy will vote your shares:◾

FOR the election to the Magna Board of Directors of all
twelve nominees named in this Circular;◾

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◾

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 theMeeting. 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.

8

Voting Informationinternetmail

telephone

The Voting Instruction Form contains instructions for each of thesemethods.
If you are a non-registered shareholder and have received a Voting
Instruction Form from Broadridge Investor Communications, youmust complete and submit your vote by smartphone, internet, mailor telephone, in accordance with the instructions on the form.
Your completed, signed and dated Voting Instruction Form or yoursmartphone, 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 mustensure 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 wassent 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 suchshares to be represented at the Meeting.
In some cases, you may have received a form of proxy insteadof a Voting Instruction Form, even though you are a nonregistered shareholder. Such a form of proxy will likely bestamped 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 thiscase, 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 formof proxy the authority to vote your shares on your behalf at the
Meeting (including any adjournment or postponement of the
Meeting).

HOW TO VOTE –NON-REGISTERED SHAREHOLDERS (cont’d)

Appointment of Proxyholder (cont’d)

Voting Online During the Meeting

You may indicate on the form of proxy how you want yourproxyholder to vote your shares, or you can let your proxyholder
decide for you. If you do not specify on the form of proxy how you
want your shares to be voted, your proxyholder will have thediscretion to vote your shares as they see fit.

If you have received a Voting Instruction Form and wish to voteonline during the Meeting, you must first appoint yourself as aproxyholder by completing, signing and returning the Voting
Instruction Form or completing the equivalent electronic form
online, in each case, and returning it to Broadridge not later
than 5:00 pm (Toronto time) on May 7, 2024.

The form of proxy accompanying this Circular gives theproxyholder discretion with respect to any amendments orchanges to matters described in the Notice of Annual Meeting andwith respect to any other matters that may properly come before
the Meeting (including any adjournment or postponement of the
Meeting). As of the date of this Circular, we are not aware of any
amendments, changes or other matters to be addressed at the
Meeting.
Voting Online During the Meeting
The Meeting will be held virtually via internet webcast. As aregistered shareholder, you or your duly appointed proxyholder,will be able to cast votes and ask questions during the Meeting. To
do so, you or your duly appointed proxyholder can access the
Meeting on May 9, 2024, at 10:00 am (Toronto time) by visitingwww.virtualshareholdermeeting.com/MGA2024. To
participate in the Meeting, registered shareholders will need thecontrol number pre-printed on the form of proxy. Duly appointed
proxyholders will need the appointee identification number
provided in the form of proxy by the registered holder of the shares
being represented.
If you vote online during the Meeting and had previously
completed and returned your form of proxy, your proxy will be
automatically revoked and any votes you cast on a poll at the
Meeting will count.

If you have received a form of proxy and wish to vote online during
the Meeting, you must insert your name in the blank spaceprovided on the form of proxy. If you are voting your shares by
proxy, you must ensure that your completed and signed proxyform or your phone or internet or smartphone vote is 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 thatyour completed and signed Voting Instruction Form (orequivalent electronic form online) is received by Broadridge notlater than 48 hours (excluding Saturdays, Sundays and holidays)
prior to the time of the adjourned or postponed Meeting.
The Meeting will be held virtually via internet webcast. As a
non-registered shareholder who has duly appointed yourself orsomeone else as proxyholder, you or your duly appointed
proxyholder will be able to cast votes and ask question during
the Meeting. To do so, you or your duly appointed proxyholder
can access the Meeting on May 9, 2024, at 10:00 am (Torontotime) by visitingwww.virtualshareholdermeeting.com/MGA2024. To
participate in the Meeting, you will need the appointee
identification number provided in the voting instruction form forthe shares being represented.

You have the right to revoke a proxy by ANY of the following
methods:

If you have not appointed yourself as a proxyholder inaccordance with the instructions on your Voting Instruction
Form, you can participate in the Meeting as a guest. Guests will
be able to listen to the Meeting proceedings, but will not be able
to vote or ask questions.

◾

Revoking a Voting Instruction Form or Proxy

Revoking a Vote Made by Proxy

Vote again by phone, internet or smartphone not later than
5:00 p.m. (Toronto time) on May 7, 2024 (or not later than
48 hours (excluding Saturdays, Sundays and holidays) prior
to the time of the adjourned or postponed Meeting);◾

Deliver by mail another completed and signed form of proxy,
dated later than the first form of proxy, such that it isreceived by Broadridge not later than 5:00 p.m. (Torontotime) on May 7, 2024 (or not later than 48 hours (excluding
Saturdays, Sundays and holidays) prior to the time of the
adjourned or postponed Meeting);◾

Deliver to us at the following address a signed written noticerevoking the proxy, provided it is received not later than
5:00 p.m. (Toronto time) on May 8, 2024 (or not later than
5:00 p.m. on the last business day prior to the date of the
adjourned or postponed Meeting):

VOTING INFORMATIONHOW TO VOTE –REGISTERED SHAREHOLDERS (cont’d)

If you wish to revoke a Voting Instruction Form or form of proxy
for any matter on which a vote has not already been cast, youmust contact your securities dealer, broker, bank, trust
company or other nominee or intermediary (for a form of proxysent to you by such intermediary) and comply with any
applicable requirements relating to the revocation of votes
made by Voting Instruction Form or proxy.

Magna International Inc.
337 Magna Drive
Aurora, Ontario, Canada L4G 7K1
Attention: Corporate Secretary

Voting Information

9

1

Financial Statements

Magna’s consolidated financial statements for the fiscal year ended December 31, 2023, together with the report ofindependent registered public accounting firm on those statements, will be presented at the Meeting. No shareholder
vote is required in connection with the foregoing. The report of independent registered public accounting firm on our
financial statements for the fiscal year ended December 31, 2023, was unqualified and without reservation. Both of these
items are contained in our 2023 Annual Report, which is available on our website at www.magna.com.
Selected financial results for 2023 are found below. However, we encourage shareholders to review our complete
financial statements and the report of independent registered public accounting firm thereon.
SALES

DILUTED EPS

U.S. $ MILLIONS

U.S. $

CASH PROVIDED FROMOPERATING ACTIVITIES
U.S. $ MILLIONS

42,797
37,840
4.23

3,149

2,095
2.03

2022

2023

ADJUSTEDRETURN ON
INVESTED CAPITAL(1)

2022

2022

2023

2023

DIVIDENDS PAIDPER SHARE
U.S. $
1.60

1.72

1.80

1.84

2022

2023

1.46

8.5%

2022

1.

10

10.0%

2023

2019

2020

2021

Adjusted Return on Invested Capital is a non-GAAP financial measure. During 2023, we revised our calculation of Adjusted Return on Invested Capital to
exclude the amortization of acquired intangible assets. The historical presentation of this non-GAAP measure has been updated to reflect the revised
calculation. Definitions and reconciliations to the most directly comparable financial measures calculated in accordance with U.S. GAAP, can be found in thecompany’s Annual Report for the Year Ended December 31, 2023, in the Management’s Discussion and Analysis of Results or Operations and Financial
Position section. The Magna International Inc. 2023 Annual Report has been posted to the company’s website through the Investors link at www.magna.com.

Business of the Meeting

IN THIS SECTION
12

Board Overview

13

Details of the 2024 Nominees

17

Biographies of 2024 Nominees

23

Director Compensation

ELECTION OF
DIRECTORS

2Election of Directors

The Board recommends that you vote FOR each of the 12 nominees.

Nominee Summary

4yrs
Avg.

Age

98

%

100

Avg. 2023
Votes FOR

%

65yrs
Avg.

2023
Attendance

0-4 yrs: 8 nominees<60 yrs

5-9 yrs: 4 nominees

60-65 yrs : 7 nominees

10+ yrs : 0 nominee

66-70 yrs : 2 nominees>70 yrs

Gender42%
Women

BUSINESS OF THE
MEETING

TenureDiversity
42%
DiverseNominees*: 1 nominee: 2 nominees

Independence

92%
Independent* LGBTQ+ or
underrepresented minority in home country

Business of the Meeting11

NOMINEE OVERVIEW
AGE

DIRECTORSINCE

TENURELIMIT

INDEPENDENCE(1)FINANCIAL
LITERACY

Mary S. Chan

61

2017

2029

Chief Operating Officer of Nikola
Corporation and Corporate Director

I✓

GNSC/TC

Hon. V. Peter Harder, P.C.

71

2020

2029

Senator and Corporate Director

I✓

GNSC*/TCJan R. Hauser

65

2022

2034

Corporate Director

I✓

Seetarama S. Kotagiri

55

2021

–

Chief Executive Officer of MagnaM✓

Jay K. Kunkel

64

2023

2035

Corporate Director

I

✓

✓

AC/TC

Robert F. MacLellan

69

2018

2030

Chairman, Northleaf Capital Partners andCorporate Director

I

✓

✓

Board Chair/TC

Mary Lou Maher

63

2021

2033

Corporate Director

I

✓

✓

AC/TC

William A. Ruh

62

2017

2029

Chief Executive Officer, Lifestyle Solutions
Real Estate and Corporate Director

I✓

TC*/TOCC

Dr. Indira V. Samarasekera

71

2014

2026

Senior Advisor, Bennett Jones LLP and
Corporate Director

I✓

TOCC*/TC

Matthew Tsien

63

2023

2035

Corporate Director

I✓

TOCC/TC

Dr. Thomas Weber

69

2022

2034

Corporate Director

I✓

GNSC/TC

Lisa S. Westlake

62

2019

2031

Corporate Director

I✓

NOMINEE

PRINCIPAL OCCUPATIONFINANCIAL
EXPERTISE✓

COMMITTEEMEMBERSHIPS(2)

AC/TC

–

✓

TOCC/TC

Notes:
1.
I = Independent; M = Management.
2.
The Board has 4 (four) standing committees: Audit Committee (“AC”); Governance, Nominating and Sustainability Committee (“GNSC”); Technology
Committee (“TC”); and Talent Oversight and Compensation Committee (“TOCC”). Every director sits on the Technology Committee. Asterisk (*) denotes
Committee Chair.

Board Overview
Board’s Role
Directors are elected by shareholders to act as stewards of the company. The Board is Magna’s highest decisionmaking body, except to the extent certain rights have been reserved for shareholders under applicable law or Magna’s
articles of incorporation or by-laws. Among other things, the Board is responsible for appointing our Chief Executive
Officer, overseeing Management, shaping and overseeing implementation of our long-term strategy, satisfying itself
that material risks are being managed appropriately, reviewing and approving financial statements, establishing oursystems of corporate governance and executive compensation, as well as overseeing our corporate culture. In fulfilling
their duties, directors are required under applicable law to act in the best interests of the company.

2024 Nomination Process
All twelve nominees for election at the Meeting were elected at our 2023 annual meeting of shareholders and havebeen nominated for re-election based on factors discussed below. One current director who was elected at the 2023
annual meeting, Peter G. Bowie, has reached his term limit and will retire from the Board at the Meeting.
In recommending to the Board the twelve nominees, the GNSC considered a number of factors including:◾
nominees’ respective skills, expertise, and experience in relation to Magna’s business and corporate strategy;

12

Business of the Meeting◾

the diversity of backgrounds and experiences that would be represented across the Board if all nominees areelected;◾

feedback from the annual Board effectiveness evaluation process, which incorporates both a self-evaluation
and a peer review process; and◾

individual voting results from the 2023 annual meeting of shareholders.

◾

exceeds the minimum requirements set out in our Board Charter and the Business Corporations Act (Ontario)(“OBCA”);◾

has skills, experience and expertise that provide the Board with the necessary insight to effectively carry out
its mandate; and◾

will, if re-elected, continue to provide responsible oversight as a steward of the company, including prudent
oversight of Management.

The “Details of the 2024 Nominees” section which follows contains information regarding nominees’ independence,skills, expertise and other relevant information that you should consider in casting your vote.

ELECTION OF
DIRECTORSThe GNSC and the Board are confident that each of the twelve nominees:

Unless otherwise instructed, the Magna officers whose names have been pre-printed on the form of proxyor Voting Instruction Form intend to vote FOR each such nominee.

BUSINESS OF THE
MEETING

Details of the 2024 Nominees
Nominee Independence
Eleven out of twelve, or 92%, of the nominees for election at the Meeting have been affirmatively determined to be
independent.
NOMINEE
Mary S. Chan
Hon. V. Peter Harder
Jan R. Hauser
Seetarama S. Kotagiri
Jay K. Kunkel
Robert F. MacLellan
Mary Lou Maher
William A. Ruh
Dr. Indira V. Samarasekera
Matthew Tsien
Dr. Thomas Weber
Lisa S. Westlake

INDEPENDENT✓✓✓NONINDEPENDENT

✓
✓
✓
✓
✓
✓
✓
✓
✓

BASIS FOR
DETERMINATION
No material relationshipNo material relationshipNo material relationshipManagement
No material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationship

Nominees’ Meeting Attendance
Independent Directors are expected to attend all Board meetings, as well as all meetings of standing Committees on
which they serve, and are welcome to attend any other Committee meetings. However, we recognize that schedulingconflicts are unavoidable from time to time, particularly in the first year of a director’s tenure, and also where meetings arecalled on short notice. Our Board Charter requires Directors to attend a minimum of 75% of regularly scheduled Boardand applicable standing Committee meetings, except where an absence is due to medical or other valid reason. Magna’s
Chief Executive Officer does not serve as a member of any Board Committee, but typically attends most or all Committee
meetings. The Board Chair serves as a member of the Technology Committee, which is a committee of all the
Independent Directors. Although the Board Chair does not serve on any other standing committees, he typicallyattends most or all committee meetings. The twelve nominees achieved 100% attendance at all Board and applicable
Committee meetings as set forth below.

Business of the Meeting

13

NOMINEE
Mary S. Chan
Hon. V. Peter Harder
Jan R. Hauser
Seetarama S. Kotagiri
Jay K. Kunkel
Robert F. MacLellan
Mary Lou Maher
William A. Ruh
Dr. Indira V. Samarasekera
Matthew Tsien
Dr. Thomas Weber
Lisa S. Westlake

BOARD
(#)
9/9
9/9
9/9
9/9
4/4
9/9
9/9
9/9
9/9
4/4
9/9
9/9

AUDIT
(#)
—
—
6/6
—
2/2
6/6
6/6
—
—
—
—
—

GNSC
(#)
5/5
5/5
—
—
—
—
—
—
—
—
2/2
—

TOCC
(#)
—
—
—
—
—
—
—
9/9
9/9
4/4
—
9/9

TECH
(#)
5/5
5/5
5/5
5/5
2/2
5/5
5/5
5/5
5/5
2/2
5/5
5/5

TOTAL
(#)
(%)
19/19 100
19/19 100
20/20 100
14/14 100
8/8 100
20/20 100
20/20 100
23/23 100
23/23 100
10/10 100
16/16 100
23/23 100

2023 Annual Meeting Vote Results
Each of the nominees standing for re-election received a substantial majority of votes “for” their election at our 2023
annual meeting of shareholders, as set forth in the table below.
2023
NOMINEE
Mary S. Chan
Hon. V. Peter Harder
Jan R. Hauser
Seetarama S. Kotagiri
Jay K. Kunkel
Robert F. MacLellan
Mary Lou Maher
William A. Ruh
Dr. Indira V. Samarasekera
Matthew Tsien
Dr. Thomas Weber
Lisa S. Westlake

VOTES FOR
(%)
99.4
99.1
99.6
99.7
99.7
99.4
99.6
95.3
88.0
99.7
99.7
95.2

VOTES WITHHELD
(%)
0.6
0.9
0.4
0.3
0.3
0.6
0.4
4.7
12.0
0.3
0.3
4.8

Nominees’ Equity Ownership
We believe it is important that each director be economically aligned with shareholders. We try to achieve suchalignment in two principal ways:◾

Equity Maintenance Requirement: Each director-at-large is required to hold a minimum of $825,000 of
Magna Common Shares and/or Deferred Share Units (“DSUs”) within five years of joining the Board. Eachcommittee chair is required to hold a minimum of $900,000 of Magna Common Shares and/or Deferred Share
Units (“DSUs”) within five years of joining the Board. The Board Chair is required to hold a minimum of$1,500,000 of Magna Common Shares and/or DSUs within three years of becoming Chair. In assessing
compliance with these requirements, we consider the value of any Magna Common Shares held by a director,
together with the aggregate value of deferred compensation in the form of retainers and fees, excluding
accrued dividend equivalents and without reference to increases or decreases in the market value of suchcompensation.

◾

Mandatory Deferral of Compensation: Until the equity maintenance requirement has been achieved, aminimum of 60% of a director’s annual retainer is paid in the form of DSUs. Once a director has achieved theminimum equity maintenance requirement, a minimum of 40% is automatically deferred in the form ofDSUs, subject to the director’s election to defer a greater amount. DSUs are notional units, the value of which
is tied to the market value of our Common Shares. The value represented by a director’s DSUs can only berealized following their departure from the Board and remains “at risk” until that time.

Taking into account the five-year period in which to accumulate the minimum required value of Common Shares andDSUs, each of Magna’s nominees complies with or exceeds the minimum equity maintenance requirement.

14

Business of the MeetingNOMINEE
Mary S. Chan
Hon. V. Peter Harder
Jan R. Hauser
Seetarama S. Kotagiri
Jay K. Kunkel
Robert F. MacLellan
Mary Lou Maher
William A. Ruh
Dr. Indira V. Samarasekera
Matthew Tsien
Dr. Thomas Weber
Lisa S. Westlake

COMMON SHARES
(#)
—
—
—
187,804
—
—
3,100
—
—
—
—
2,000

DSUS
(#)
32,357
20,244
8,323
298,601(3)2,682
37,23910,36235,24654,5692,682
11,332
15,676TOTAL EQUITY“AT-RISK”(2)($)
1,778,000
1,112,000
457,000$26,728,000
147,000
2,046,000
740,000
1,937,000
2,999,000
147,000
623,000
971,000

EQUITY MAINTENANCEREQUIREMENTSTATUS(1)Exceeds
Exceeds
Complies
Exceeds
Complies
Exceeds
Complies
Exceeds
Exceeds
Complies
Complies
Exceeds

ELECTION OF
DIRECTORS

Holdings by each nominee of Magna Common Shares and/or DSUs, together with the status of compliance with theequity maintenance requirement and the “at-risk” value of their equity as of the Record Date are set forth in the tablebelow.

BUSINESS OF THE
MEETING

Notes:
1.
“Complies” signifies a director who is within their first five years of tenure and accumulating equity value to achieve the minimum equity requirement.
2.
In calculating the value of total equity at risk, we have used the closing price of Magna Common Shares on the NYSE on the Record Date.
3.
Represents ROIC PSUs and rTSR PSUs (at target), but excludes TFG PSUs.

Business of the Meeting15

Nominee Skills and Expertise

P.C., LLDJan R. Hauser

BBA, CPA

Seetarama S. Kotagiri

MSc

Jay K. Kunkel

BBA

Robert F. MacLellan

CPA, MBA

Mary Lou Maher

FCPA, FCA

William A. RuhMSc

Dr. Indira V. Samarasekera

PhD, PEng

Matthew Tsien

MSc

Dr. Thomas Weber

PhD

Lisa S. Westlake

Accounting/Audit: technical expertise with financial statements andfinancial reporting matters; understanding of critical accounting
policies, technical issues relevant to the internal and external audit,
as well as internal controls.
Automotive: practical experience with automobile manufacturers or
suppliers; solid understanding of industry dynamics on a global orregional basis; knowledge of automotive/industrial manufacturing; orexperience in comparable capital-intensive manufacturing industries.
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.
Environmental, Social and Governance (“ESG”): sophisticatedunderstanding 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.
Finance/Financial Advisory: senior financial management roles
and/or financial advisory roles; expertise related to capital allocation,
capital structure or capital markets.
Governance/Board: sophisticated understanding of corporate
governance practices and norms; prior board experience; expertisewith stakeholder management or engagement.
High-Growth Markets: a track record of operational success orother experience in markets other than North America and Western
Europe, such as China.
Large Cap Company: board, management and/or other applicable
experience with companies that have a market capitalization inexcess of $10 billion.
Legal/Regulatory/Public Policy: experience with legal andregulatory compliance oversight; experience in relevant areasof government or public policy.
Mergers & Acquisitions (“M&A”): management orboard-level experience with complex M&A in different
industries and/or different geographic regions.
R&D/Innovation/Technology: domain expertise and skill intechnology/innovation; practical experience with technologicaltransformation and disruption.
Risk Oversight: practical expertise in risk governance, including
enterprise risk management frameworks; knowledge/understandingof risk monitoring and mitigation.
Senior/Executive Leadership: demonstrated track record ofleadership, mature judgement, operating success and value creationin complex organizations and/or in progressively challenging roles.
Strategy Development: board, senior management and/or otherexperience in strategy development, analysis or oversight.
Talent Management/Compensation: hands-on experiencedeveloping, managing, compensating and motivating employees.

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Ranking Legend

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16

Significant expertise/experience
Strong familiarity
General understanding

Business of the Meeting

MBA

Hon. V. Peter Harder➂

Mary S. ChanMSc

The GNSC seeks to recruit candidates who reflect a diversity of skills, experience, perspectives and backgrounds thatare relevant to Magna’s business. While the specific mix may vary from time to time and alternative categories may beconsidered in addition to or instead of those below, the following skills matrix lists the types of experience generally
sought by the GNSC and includes each nominee’s self-assessed ranking of their experience level for each item.

Biographies of 2024 Nominees
Ms. Chan brings to the Board extensive
experienceinconnected
cars,
autonomousandsemi-autonomousvehicles, as well as demonstrated
executive leadership success in themobility communications infrastructure,
products
andservices
industry.
Ms. Chan is currently
the Chief Operating
2023 MEETING
Officerof
NikolaATTENDANCE
Corporation(sinceOctober2023),ahydrogen truck manufacturer. Prior to this role,
she was a managing partner of VectoIQ LLP(2015-2023), an advisory firm that partners withorganizations participating in the transition
towards mobility as a service and an
autonomous vehicle society. Prior to joining
VectoIQ, she served as President, Global
Connected Consumer & OnStar Service of

New Jersey, U.S.A.
Age: 61
Tenure: 6+100%

Other Current Public Company
Boards:◾

SBA Communications
Corporation (Compensation,
Governance & Nomination)

Total 2023 Compensation:$291,000

Equity-at-risk (Record Date):

◾
◾
◾
◾

Hon. V. Peter Harder, P.C., LLD

Ontario, Canada
Age: 71
Tenure: 4+

Other Current Public Company
Boards:None

Total 2023 Compensation:$316,000

Equity-at-risk (Record Date):$1,112,000

General Motors Company (2012-2015), where
she was responsible for building the next
generation of connected vehicle product andservices. At GM, Ms. Chan led the industry-firstlaunch of 4G LTE connectivity across GM’s
global brands in the U.S., China, Europe andMexico. Ms. Chan was
also previously Senior
VP & General Manager,
Enterprise
Mobility
2023 ANNUAL MEETING Solutions & Services,
VOTING RESULT
Dell Inc. (2009-2012),
and had progressive
executive roles, including Executive VP Wireless
Network Business Unit, at Alcatel-Lucent Inc.
(1996-2009). Ms. Chan holds B.Sc. and M.Sc.
degrees in Electrical Engineering (Columbia).

>99%

Significant expertise/experience:$1,778,000◾

GNSC, Technology

Automotive
High-Growth Markets
Large Cap Company
R&D/Innovation/Technology◾
◾
◾

Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Independent
Mr. Harder, who previously served on our
Board from May 2012 to March 2016,
brings to the Board a Canadian-centred,
globally aware perspective that draws
upon his extensive experience in foreign
affairs and international trade. In particular,
he possesses a valuable understanding of theworkings of China’s political establishment,
as well as its economic
drivers, in addition to
Canada-China trade andinvestment
issues.
2023 MEETING
Mr. Harder also brings
ATTENDANCE
demonstrated expertise
regarding compensation
issues and corporate governance. Mr. Hardercurrently serves as a member of the Senate ofCanada and was the first independent
Government Representative in the Senate(2016-2020). Prior to his appointment to the
Senate, Mr. Harder was a long-serving Deputy
Minister in the Government of Canada

100%

GNSC (Chair), Technology(1991-2007). While Deputy Minister of Foreign
Affairs, he served the Prime Minister’s Personal
Representative to the G-8 and as the first cochair of the Canada-China Strategic Working
Group. After leaving the public service in 2007,
Mr. Harder served as the President of theCanada-China Business Council (2008-2015)
and as a director to a number of major
Canadian corporations aswell as charitable and notfor-profit organizations.
Mr.
Harderholds
2023 ANNUAL MEETING degrees
fromthe
VOTING RESULT
University of Waterloo(BA) and Queen’s
University (MA) and has received an honorary
doctorate (LLD) from the University of Waterloo.
Mr. Harder is a member of the King’s Privy
Council of Canada.

>99%

Significant expertise/experience:
◾
◾
◾
◾
◾

Environmental, Social and Governance
Governance/Board
High-Growth Markets
Large Cap Company
Legal/Regulatory/Public Policy

◾
◾
◾
◾

Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Business of the Meeting

17

ELECTION OF
DIRECTORS

Independent

BUSINESS OF THE
MEETING

Mary S. Chan MSc

Jan R. Hauser, BBA, CPA

Massachusetts,
U.S.A.
Age: 65
Tenure: ~2

Other Current Public Company
Boards:◾

Enfusion Inc. (Audit (Chair);Compensation)

Independent
Ms. Hauser, brings to the Board global
financial leadership, including more than
35 years dealing with financial reportingand complex business transactions.
Ms. Hauser is a corporate director who
previously served as theVice President, Controller
and Chief Accounting
Officer of General Electric2023 MEETING
Company (2013-2018),
ATTENDANCE
prior to which she held
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 officeand served on the US Partner Admissions

100%

Audit, Technology
Committee.
She
also
servedasPricewaterhouseCoopers’ representative on
the Financial Accounting Standard Board’s(FASB) Emerging Issues Task Force and the
Financial Accounting Standards Advisory
Council for the FASB.
Earlier in her career, she
was selected for a
fellowship in the Office of2023 ANNUAL MEETING
the Chief Accountant at
VOTING RESULT
the US Securities andExchange
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.

>99%

Total 2023 Compensation:
Significant expertise/experience:$295,000

Equity-at-risk (Record Date):$457,000

◾
◾
◾
◾
◾

◾
◾
◾
◾
◾

Accounting/Audit
Finance/Financial Advisory
Governance/Board
High-Growth Markets
Large Cap Company

Mergers & Acquisitions
Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Ms. Hauser was a director of Proterra Inc. (“Proterra”) when it filed a voluntary petition for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code on August 7, 2023. Proterra’s shares were suspended fromtrading on August 17, 2023. Ms. Hauser’s term as a director of Proterra ended effective March 13, 2024, when
it emerged from bankruptcy protection.

Seetarama S. Kotagiri MSc

Michigan, U.S.A.
Age: 55
Tenure: 2+

Other Current Public Company
Board:◾

Johnson Controls International
PLC (Audit)

Total 2023 Compensation:$16,958,000

Equity-at-risk (Record Date):$26,728,000

Management
Mr. Kotagiri was appointed as the Chief
Executive Officer of Magna effective
January 1, 2021 and he is Management’ssole representative on the Board. With
over 30 years of industry experience,
including 22 years with Magna, he brings
extensive knowledge and understandingof the automotive industry, as well as
thecompany’s
culture, operations,key
personnel,
customers, suppliers
and the complex
2023 MEETING
driversof
its
ATTENDANCE
success. In addition,
Mr. Kotagiri has been
instrumental in the company’s growth andevolution 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

100%

Chief Executive Officer
and operations across the Magna group ofcompanies over the last decade before
he was appointed Chief Executive Officer in
2021. Prior to joining Magna, Mr. Kotagiri wasa 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
2021 all star in the
category CEO, Global
Supplier. He is currently
a member of theBusiness Council of2023 ANNUAL MEETING
Canada and the MIT
VOTING RESULT
Presidential
CEO
Advisory Board andserves as an independent director of Johnson
Controls International PLC. Mr. Kotagiri has amaster’s degree in mechanical engineeringfrom Oklahoma State University with a
specialization in materials and structural
engineering as well as a Bachelor ofEngineering degree from B.V.B. College ofEngineering at Karnataka University in India.

>99%

Significant expertise/experience
◾
◾
◾
◾

18

Business of the Meeting

Automotive
High-Growth Markets
Large Cap Company
Mergers & Acquisitions

◾
◾
◾
◾

R&D/Innovation/Technology
Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Independent
Mr. Kunkel brings to the Board deep
knowledge and experience in the global
automotive industry from the perspectivesof both OEM and supplier, with particularexpertise in Asia. Mr. Kunkel is a corporate
director who mostrecently held senior
executive roles within
the Tenneco group(2018-2020), including
2023 MEETING
Executive Vice President
ATTENDANCE
for Tenneco Federal
Mogul Corporation andPresident for Tenneco’s
Asia operations. Prior to joining Tenneco, he
served as Senior Vice President and CEO of
Asia at Lear Corporation (2013-2018);
Corporate Senior Vice President andTokyo Prefecture,Japan
Age: 64
Tenure: ~1100%

Other Current Public Company
Boards:Varex Imaging Corporation(Audit; Nominating and Corporate
Governance Committee)

Total 2023 Compensation:

◾
◾
◾
◾
◾
◾

Equity-at-risk (Record Date):$147,000

Robert F. MacLellan CPA, MBA

Automotive
Finance/Financial Advisory
Governance/Board
High-Growth Markets
Large Cap Company
Legal/Regulatory/Public Policy

Equity-at-risk (Record Date):$2,046,000

Significant expertise/experience:◾

T. Rowe Price Group, Inc.
(Compensation (Chair); Audit)

Total 2023 Compensation:$520,000

◾
◾
◾
◾
◾

Independent
Mr. MacLellan, who has served as Board
Chair since May 2022, brings to the Boardsignificant financial and accounting
acumen, a track record of executive
leadership success, blue-chip board
experience and the perspective of theinstitutional investment community.
Mr. MacLellan serves as the non-executive
Chairman of Northleaf Capital Partners, an
independent global equity and infrastructure
fund manager and advisor (since 2009),
prior to which he was theChief Investment Officer
of TD Bank Financial
Group (TDBFG) (20032023 MEETING
2008) where he was
ATTENDANCE
responsible for overseeing
the management ofinvestments
for
its
Employee Pension Fund,

Other Current Public Company
Boards:>99%

Significant expertise/experience:$194,000

Ontario, Canada
Age: 69
Tenure: ~6

President of Continental for Asia and China,
and was on the Management Board inGermany (2005-2013); Head, Corporate
Financeand
M&A
AdvisoryforPricewaterhouseCoopers in Japan (20002005); Director, Business
Operations for Visteon
Automotive Systems in
Asia Pacific, Japan (19972000); Vehicle Program
2023 ANNUAL MEETING Manager for Mitsubishi
VOTING RESULT
Motors in Japan (19901996); and Purchasing
Manager, Chassis Systems
and Manager, Asia Planning for USA in Japan(1983-1990). Mr. Kunkel has a BBA from
Western Michigan University, USA.

100%

◾
◾
◾
◾
◾

Accounting/Audit
Environmental, Social and Governance
Finance/Financial Advisory
Governance/Board
Large Cap Company

Mergers & Acquisitions
R&D/Innovation/Technology
Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Board Chair, Technology
The Toronto-Dominion Bank, TD Mutual Funds
and TD Capital Group. He served in various
other capacities with TDBFG (1995-2003). Priorboards include WIND Mobile Group, ACE
Aviation Holdings Inc., Yellow Pages Group and
Maple Leaf Sports and Entertainment Ltd.
Mr. MacLellan is a Chartered Accountant andhas a B.Comm. (Carleton) and an MBA(Harvard). Mr. MacLellan serves as anindependent director of T. Rowe Price
Group, Inc., which is one of Magna’s largest
shareholders. As an
independent directorof T. Rowe Price,
Mr. MacLellan has no2023 ANNUAL MEETING
involvement in portfolio
VOTING RESULT
investment decisions
at T.Rowe Price.

>99%

◾
◾
◾
◾
◾

Mergers & Acquisitions
Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Business of the Meeting

19

BUSINESS OF THE
MEETING◾

Audit, Technology

ELECTION OF
DIRECTORSJay K. Kunkel BBA

Mary Lou Maher FCPA, FCA

Independent

Equity-at-risk (Record Date):

Ms. Maher brings to the Board extensive
audit and financial experience. She is ahighly regarded and widely respectedbusiness advisor having advised client
CEOs, CFOs and Boards of Directors on avariety of complex issues.
Ms. Maher was concurrently the Canadian
Managing
Partner,
QualityandRisk,
KPMG Canada, andGlobalHeadof2023 MEETING
Inclusion and Diversity,
ATTENDANCEKPMGInternationalfrom October 2017 to
February 2021. Ms. Maher was with KPMG since
1983 and had served in various executive andgovernance roles, including CFO and CHRO.
Ms. Maher also has experience serving on notfor-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.

$740,000

Significant expertise/experience:

Ontario, Canada
Age: 63
Tenure: ~3

Other Current Public Company
Boards:◾

Canadian Imperial Bank ofCommerce (Audit (Chair))◾

CAE Inc. (Human Resources(Chair); Audit)

Total 2023 Compensation:$287,000

100%

◾
◾
◾
◾
◾

William A. Ruh MSc

Montana, U.S.A.
Age: 62
Tenure: ~7

Other Current Public Company
Boards:◾

None

Total 2023 Compensation:$307,000

Equity-at-risk (Record Date):$1,937,000

Audit, Technology
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 Famefor the WXN 100 Top Most Powerful Women in
Canada. She also received the Lifetime
Achievement Award from Out on Bay
Street (Proud Strong),
as well as the Senior
Leadership Award forDiversity
fromthe2023 ANNUAL MEETING Canadian Centre for
VOTING RESULT
Diversity and Inclusion.
Ms.
Maher
holds
a Bachelor of Commerce degree from McMaster
University, for which she also serves on the Boardof Governors. Ms. Maher serves as anindependent 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.

>99%

◾
◾
◾
◾

Accounting/Audit
Environmental, Social and Governance
Finance/Financial Advisory
Governance/Board
Large Cap Company

Independent
Mr. Ruh brings to the Board a track recordof success in managing the digitaltransformationoflarge
industrial
companies. He possesses a wealth ofexpertise in advanced software andautomation solutions, including cloudbased platforms, analytics, machinelearning and cybersecurity, developed overthe course of a forty year career in thesoftware industry.
Mr. Ruh is currently the
Chief Executive Officerof Lifestyle Solutions
Real
Estate(sinceJanuary 2024), a real
2023 MEETING
estate and investment
ATTENDANCE
management company.
He also serves on theboard of Podium, a Lendlease company creatinga 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

100%

Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Technology (Chair), TOCC
group. Other previous executive roles included:
serving as the chief executive officer for GE
Digital as well as the senior vice president andChief Digital Officer (CDO) for GE (2011-2018).
Cisco Systems, Inc. (2004-2011) where heheld 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,
Cadmakers, Akrometrix,
Taleris, the American
Chamber of Commerce
Australia and the Bay
Area Council. Mr. Ruh is2023 ANNUAL MEETINGan accomplished author
VOTING RESULTof books and papers.
He has a B.Sc. and
M.Sc. in computer science from California
State University, Fullerton where he is a memberof the Advisory Board for the School ofEngineering.

>95%

Significant expertise/experience:
◾
◾
◾
◾

20

Business of the Meeting

Cybersecurity
Large Cap Company
R&D/Innovation/Technology
Risk Oversight◾
◾
◾

Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Other Current Public Company
Boards:◾

TC Energy (Governance; Human
Resources)◾

Stelco Holdings Inc.
(Environment, Health and Safety(Chair))◾

Intact Financial (Compliance
Review and Corporate
Governance; Human Resources
and Compensation (Chair))Total 2023 Compensation:$328,000

Equity-at-risk (Record Date):$2,999,000

Dr. Samarasekera brings to the Board a
proven record of technical expertise,demonstrated
leadership,tangible
successinbuilding
international
relationships and a long-standing
commitment to R&D/innovation. She was
CGCNC Chair from May 2020 to August2022 and has served as TOCC chair sinceAugust 2022.
Dr. Samarasekera is a corporate director andSenior Advisor atBennett Jones, LLP.
Dr.
Samarasekera
servedasthePresident and Vice2023 MEETING
Chancellor of the
ATTENDANCE
University of Alberta(2005-2015). She isinternationallyrecognized as a leading metallurgicalengineer, including for her work on steel
process engineering for which she wasappointed an Officer of the Order of Canada.

100%

Other Current Public Company
Boards:◾

AGCO Corporation (Audit; Talent
and Compensation)

Total 2023 Compensation:$194,000

Equity-at-risk (Record Date):$147,000

Among other things, Dr. Samarasekera waspreviously a member of Canada’s Science,
Technology and Innovation Council as well as
Canada’s Global Commerce Strategy. She
possesses an M.Sc. in mechanicalengineering (California), as well as a PhD in
metallurgical engineering (British Columbia).
Dr. Samarasekera has also been elected as a
Foreign Associate of the National Academy ofEngineering in the U.S. She currently serveson the board of theCanadian Institute forAdvanced Research.
Dr. Samarasekera wasalso a committee
2023 ANNUAL MEETING member of the TMXVOTING RESULTGroup/InstituteofCorporate Directors
Committee to Chart
the Future of Corporate Governance inCanada.

88%

Significant expertise/experience:◾
◾
◾
◾

Matthew Tsien MSc

Washington, U.S.A
Age: 63
Tenure: ~1

TOCC (Chair), Technology◾
◾
◾

Environmental, Social and Governance
Governance/Board
Large Cap Company
Legal/Regulatory/Public Policy

R&D/Innovation/Technology
Senior/Executive Leadership
Strategy Development

Independent
Mr. Tsien brings to the board extensive
technology and engineering experience
within the automotive industry, particularly
from a large OEM perspective in China.
Mr. Tsien’s career spanned 45 years with
General Motors and its group of companies(1976-2021), where he built a strong trackrecord in areas such as
electrification
andconnectivity. He held
various roles with GM,
including
Executive
2023 MEETING
Vice President, Chief
ATTENDANCETechnology Officer, andPresident,
GeneralMotors Ventures (2020-2021); Executive Vice
President and President, GM China (20142020); Vice President, Planning and Program
Management, GM China and GM International,
and Strategic Alliances for China (2012-2013)
where he was responsible for product100%

TOCC, Technology
planning and program management forinternational markets encompassing Asia,
Russia, the Middle East and Africa. Other priorroles include Executive Vice President, SAICGM-Wuling Automobile China (2009-2011);
Executive Director, Global Technology
Engineering (2005-2008); Executive Director,
Vehicle Systems, North
America
Product
Development (20012005); Electrical Chief
Engineer
Germany2023 ANNUAL MEETING(1999-2000), Regional
VOTING RESULT
Vehicle Line Executive
Australia (1997-1998),
Chief Technology Officer and Director, Business
Planning China (1995-1997); and Director,
Audio Systems Engineering, Delco Electronics(1992-1995). Mr. Tsien has a BS (Kettering), an
MS (Stanford) and an MS (MIT).

>99%

Significant expertise/experience:◾
◾
◾
◾

Automotive
High-Growth Markets
Large Cap Company
R&D/Innovation/Technology◾
◾
◾

Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Business of the Meeting

21

BUSINESS OF THE
MEETING

British Columbia,
CanadaAge: 71
Tenure: ~9

Independent

ELECTION OF
DIRECTORS

Dr. Indira V. Samarasekera PhD, PEng

Dr. Thomas Weber PhD

Baden-Württemberg,
Germany
Age: 69
Tenure: 2+

Other Current Public Company
Boards:◾

None

Total 2023 Compensation:$299,000

Independent
Dr. Weber brings to the Board valuableknowledge and experience regarding
the global automotive industry, withparticular expertise within Europe, as wellas the development and production of
future-oriented
vehicles(including
alternative powertrainsystems). Dr. Weber’s
career spanned a wide
range of demanding
functionsand2023 MEETING
responsibilities relating
ATTENDANCE
to passenger cars within
Daimler AG (19902016), including servingon the Board ofManagement,
responsible
for
Group
Research & Mercedes-Benz Cars Development(2004-2016). Since 2017, he served as adirector of the German National Academy

100%

GNSC, Technologyof Science and Engineering “Acatech” withresponsibility for areas related to “mobility of the
future” and circular economy. In 2023, he waselected as President of Acatech. In addition, he
is an Honorary Professor in the field of
mechanical engineeringand mobility of the
future at the Universityof Stuttgart (since2010).
Dr.
Weber
previously served as amember of Magna’s2023 ANNUAL MEETING
Technology Advisory
VOTING RESULT
Council (2019-2021)
and is a MechanicalEngineer (Stuttgart),with a doctorate inproduction and automation (Fraunhofer
Institute).

>99%

Equity-at-risk (Record Date):
Significant expertise/experience:$623,000◾
◾
◾

Lisa S. Westlake MBA

Florida, U.S.A.
Age: 62
Tenure: ~5

Other Current Public Company
Boards:◾

None

Total 2023 Compensation:

Automotive
R&D/Innovation/Technology
Risk Oversight◾
◾
◾

Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Independent
Ms. Westlake brings to the Board
extensive global experience in bothhuman resources and finance, as well as
an established reputation for her
leadership abilities in organizationaltransformations, leveraging technology
to drive innovation, stakeholder and crisis
management, as well as enterprise risk
management.
Ms. Westlake mostrecently served as the
Chief
Human
2023 MEETING
Resources Officer of
ATTENDANCE
global information andanalytics
services
firm, IHS Markit Ltd. (2017-2018), prior towhich she served in a range of senior human

100%

TOCC, Technology
resources and finance roles with Moody’s
Corporation,
including
Chief
Human
Resources Officer (2008-2017), VicePresident, Investor Relations (2006-2008) andManaging Director, Finance (2004-2006). In acareer that spanned nearly 35 years,
Ms. Westlake also had a range of Financial
Officer and other senior roles at:
AmericanExpress
Company (1996-2003);
The Dun & Bradstreet
Corporation(19892023 ANNUAL MEETING 1995); and Lehman
VOTING RESULT
Brothers (1984-1987).
Ms. Westlake has a
B.A. in biochemistry (Dartmouth), as well as
an MBA (Columbia).

>95%$291,000

Equity-at-risk (Record Date):$971,00022

Business of the Meeting

Significant expertise/experience:
◾
◾
◾
◾
◾

Finance/Financial Advisory
Governance/Board
High-Growth Markets
Large Cap Company
Mergers & Acquisitions

◾
◾
◾
◾

Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Director Compensation

We have structured director compensation with the aim of attracting and retaining skilled directors and aligning theirinterests with the interests of our long-term shareholders. To accomplish these objectives, we believe that suchcompensation must be competitive with that paid by our S&P/TSX60 peer companies, as well as the global automotive
and industrial peers in our executive compensation peer group. Additionally, we believe that a significant portion ofsuch compensation must be deferred until departure from the Board, thus tying the redemption value to the market valueof our Common Shares and placing it “at risk” to align the interests of directors with those of shareholders. For purposesof director compensation, non-independent, non-executive directors are compensated on the same basis as
Independent Directors. Magna’s Chief Executive Officer, the sole member of Management on the Board, does notreceive any incremental compensation for such Board service.

Compensation Structure

ELECTION OF
DIRECTORS

Objectives of Director Compensation

RETAINER / FEE TYPEAMOUNT($)

3X EQUITY MAINTENANCE($)

Comprehensive Board Chair Annual Retainer

500,000

1,500,000

Comprehensive Committee Chair Annual Retainer

300,000

900,000

Comprehensive Director-At-Large Annual Retainer

275,000

825,000

Per Meeting Fee (applicable solely to meetings in excess of 25 meetings in aggregate)

1,000

Travel Time Fee (half day/full day)

2,000 / 4,000

Special Committee Chair Retainer

To be set on Committee formation

Each director is entitled to a period of five years from the date of election or appointment to the Board in which to meetthe pre-2023 equity maintenance requirements of $750,000 (for all directors except the Board Chair whose equity
maintenance requirement remains $1,500,000), and an additional three years to achieve the increase in equity
maintenance holdings from the pre-2023 requirement of $750,000 (and $1,500,000 for the Board Chair) to theirrespective current equity maintenance requirements as reflected in the table above. In assessing compliance with theserequirements, we consider the value of any Magna Common Shares held by a director, together with the aggregate
value of deferred compensation in the form of retainers and fees, excluding accrued dividend equivalents and without
reference to increases or decreases in the market value of such compensation.
The GNSC has responsibility for reviewing director compensation and typically reviews it approximately every two to
three years, with the most recent such review completed in 2022.

Business of the Meeting

23

BUSINESS OF THE
MEETING

The current schedule of retainer and fees payable to Independent Directors, in effect since January 1, 2023, is set forth
below.

2023 Directors’ Compensation
The table below sets forth a summary of the compensation earned by all Independent Directors directors during theyear ended December 31, 2023.
FEES
EARNED(1)
CASH
($)

NAME

% OF
TOTAL FEESSHARE-BASEDAWARDS(2)NON-EQUITYDEFERRED TO
OPTION-BASED INCENTIVE PLAN PENSION
% OF
DSUS
AWARDSCOMPENSATION VALUE($)
TOTAL FEES
($)
($)
($)

ALL
OTHER ($)

TOTAL
($)

Mary S. Chan

NIL—

291,000

100

NIL

NIL

NIL

NIL

291,000

Hon V. Peter Harder

NIL—

316,000

100

NIL

NIL

NIL

NIL

316,000

Jan R. Hauser

NIL—

295,000

100

NIL

NIL

NIL

NIL

295,000

Jay K. Kunkel

124,000

64

70,000

36

NIL

NIL

NIL

NIL

194,000

NIL—

520,000

100

NIL

NIL

NIL

NIL

520,000

71,00025

216,000

75

NIL

NIL

NIL

NIL

287,000

NIL—

307,000

100

NIL

NIL

NIL

NIL

307,000

Dr. Indira V. Samarasekera

49,00015

279,000

85

NIL

NIL

NIL

NIL

328,000

Matthew Tsien

124,000

64

70,000

36

NIL

NIL

NIL

NIL

194,000

NIL—

299,000

100

NIL

NIL

NIL

NIL

299,000

181,000

62

110,000

38

NIL

NIL

NIL

NIL

291,000

Robert F. MacLellan
Mary Lou Maher
William A. Ruh

Dr. Thomas Weber
Lisa S. WestlakePeter G. Bowie

NIL—

320,000

100

NIL

NIL

NIL

NIL

320,000

Dr. Kurt J. Lauk65,00052

60,000

48

NIL

NIL

NIL

5,000(3)130,000

Notes:
1.
Consists of all retainers and fees paid to the director in cash. NIL indicates that 100% of the retainers and fees earned were deferred in the form of DSUs.
2.
Consists of retainers and fees deferred in the form of DSUs pursuant to the DSU Plan (as defined under “Deferred Share Units”).
3.
Dr. Lauk received a retirement gift valued at $5,000, upon his retirement from the Magna Board on May 11, 2023.

Deferred Share Units
Mandatory Deferral Creates Alignment With Shareholders
We maintain a Non-Employee Director Share-Based Compensation Plan (the “DSU Plan”), which governs the retainers
and fees that are deferred in the form of DSUs. In addition to the 60% of the annual retainer that is automaticallydeferred, each Independent Director may annually elect to defer up to 100% (in increments of 10%) of their total annual
cash compensation from Magna (including Board and Committee retainers, meeting attendance fees, work and travel
day payments and written resolution fees). Once the minimum equity maintenance requirement has been met, 40% of theannual retainer is automatically deferred in the form of DSUs, subject to a director’s election to defer a greater proportion.
All DSUs are fully vested on the date allocated to a director under the DSU Plan. Amounts deferred under the DSU
Plan cannot be redeemed until a director’s departure from the Board. The mandatory deferral aims to align the interests
of Independent Directors with those of shareholders.

DSU Value is “At Risk”
DSUs are notional stock units. The value of a DSU increases or decreases in relation to the NYSE market price of one
Magna Common Share, and dividend equivalents are credited in the form of additional DSUs at the same times and in thesame amounts as dividends that are declared and paid on our Common Shares. Upon a director’s departure from theBoard, we deliver Magna Common Shares in satisfaction of the after-tax redemption value of the DSUs.

24

Business of the MeetingOutstanding Share-Based Awards
The following table sets forth outstanding share-based awards (DSUs) for all Independent Directors as at December 31,
2023. Aside from the deferral of compensation in the form of DSUs, directors are not eligible to receive or be granted
any other forms of equity for service on the Board.
OPTION-BASED AWARDSSHARE-BASED AWARDS
MARKET OR
PAYOUT VALUEOF SHAREBASEDAWARDS
THAT HAVENOT VESTED
($)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

MARKET OR
PAYOUT VALUEOF VESTEDSHARE-BASEDAWARDS NOTPAID OUT OR
DISTRIBUTED(1)($)
1,826,000
1,111,000
446,000
116,000
2,056,000
732,000
1,989,000
3,135,000
116,000
595,000
1,009,000

NIL

NIL

4,325,000

OF

NAME
Mary S. Chan
Hon. V. Peter Harder
Jan R. Hauser
Jay K. Kunkel
Robert F. MacLellan
Mary Lou Maher
William A. Ruh
Dr. Indira V. Samarasekera
Matthew Tsien
Dr. Thomas Weber
Lisa S. WestlakePeter G. Bowie

NUMBER OF
SECURITIESUNDERLYINGUNEXERCISEDOPTIONS
(#)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

OPTION
EXERCISE
PRICE
($)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

OPTION
EXPIRATIONDATE(MM/DD/YY)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

VALUE OFUNEXERCISED
IN-THEMONEYOPTIONS
($)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL

NIL

NIL

NIL

Note:
1.
Represents the value of Independent Directors’ aggregate DSU balance, which includes dividends credited in the form of additional DSUs, based on theclosing price of Magna Common Shares on the NYSE on December 29, 2023.

Incentive Plan-Awards – Value Vested During the YearThe values of share-based awards (DSUs) which vested in the year ended December 31, 2023, are set forth below inrespect of each director who served during 2023.

NAME

OPTION-BASED AWARDS –VALUE VESTEDDURING THE YEAR($)

SHARE-BASED AWARDS –VALUE VESTEDDURING THE YEAR(1)($)

NON-EQUITY INCENTIVE
PLAN COMPENSATION –VALUE EARNEDDURING THE YEAR($)

Mary S. Chan

NIL

343,000

NIL

Hon. V. Peter Harder

NIL

346,000NIL

Jan R. Hauser

NIL

305,000

NIL

Jay K. Kunkel

NIL

72,000NIL

Robert F. MacLellan

NIL

576,000

NIL

Mary Lou Maher

NIL

230,000

NIL

William A. Ruh

NIL363,000

NIL

Dr. Indira V. Samarasekera

NIL

371,000

NIL

Matthew Tsien

NIL

72,000NIL

Dr. Thomas Weber

NIL

313,000

NIL

Lisa S. Westlake

NIL

135,000

NIL

Peter G. Bowie

NIL

448,000

NIL

Dr. Kurt J. Lauk(2)NIL

96,000

NIL

Note:
1.
Represents the aggregate grant date value of retainers and fees deferred in the form of DSUs in 2023 as disclosed in the table under the heading “2023
Directors’ Compensation”, together with dividends credited in the form of additional DSUs on Independent Directors’ aggregate DSU balance (which includes
DSUs granted in prior years) as follows:Business of the Meeting

25

BUSINESS OF THE
MEETINGSHARESOR UNITS
THAT
HAVE
NOT
VESTED
(#)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

ELECTION OF
DIRECTORSNUMBERDIVIDENDS ON
AGGREGATE DSUS($)

DIVIDENDS ON
AGGREGATE DSUS($)

2.

Mary S. Chan

52,000Dr. Indira V. Samarasekera

Hon. V. Peter Harder

30,000Matthew Tsien

92,0002,000

Jan R. Hauser

10,000Dr. Thomas Weber

14,000Jay K. Kunkel

2,000

Lisa S. Westlake

25,000Robert F. MacLellan

56,000Peter G. Bowie

128,000

Mary Lou Maher

14,000Dr. Kurt J. Lauk(2)36,000William A. Ruh

56,000Dr. Lauk retired from the Board on May 11, 2023.

Trading Blackouts and Restriction on Hedging Magna Securities
Trading Blackouts
Directors are subject to the terms of our Insider Trading and Reporting Policy and Code of Conduct & Ethics, both ofwhich restrict directors from trading in Magna securities while they have knowledge of material, non-public information.
One way in which we enforce trading restrictions is by imposing trading “blackouts” on directors for specified periods
prior to the release of our financial statements and as required in connection with material acquisitions, divestitures orother transactions. The regular quarterly trading blackouts commence at 11:59 p.m. on the last day of each fiscal quarterand end 48 hours after the public release of our quarterly financial statements. Special trading blackouts related tomaterial transactions extend to 48 hours after the public disclosure of the material transaction or other conclusion of thetransaction.

Anti-Hedging Restrictions
Directors are not permitted to engage in activities that would enable them to improperly profit from changes in ourstock price or reduce their economic exposure to a decrease in our stock price. Prohibited activities include “puts”,“collars”, equity swaps, hedges, derivative transactions and any transaction aimed at limiting a director’s exposure to aloss or risk of loss in the value of the Magna securities that they hold.

26

Business of the Meeting

The Audit Committee recommends that you vote FOR reappointment of Deloitte.

94%

Audit / Related Fees

>99%

2023 Votes FOR

10
Fiscal Yrs as auditor

Deloitte, an Independent Registered Public Accounting Firm, was first appointed Magna’s independent auditor on
May 8, 2014 and has audited Magna’s consolidated financial statements for the fiscal years ended December 31, 2014
and after. Deloitte reports directly to the Audit Committee, which assesses its independence, oversees its work,
evaluates its performance and sets its compensation.
The Audit Committee believes that Deloitte provides value to Magna’s shareholders through its methodical, independent
challenge to Magna’s external financial reporting. Deloitte’s audit approach is based on an audit risk assessment,
which is continuously updated throughout the year. Audit risks identified in the risk assessment are addressed throughtailored audit procedures that reflect Deloitte’s understanding of Magna-specific factors as well as the general businessenvironment in which Magna operates. The firm’s communications to the Audit Committee demonstrate strong audit
quality, professional skepticism and innovation in the audit, including through the effective use of data analytics. The Audit
Committee is satisfied that Deloitte’s integrated audit team consists of audit professionals and specialists who are
qualified and experienced to provide audit services in the regions in which Magna operates. The firm has demonstrated
a commitment to promoting a learning culture within its own team and sharing the firm’s insights, perspectives andbest practices with the Audit Committee, the Board, internal audit, as well as management and Magna’s finance teams.

Deloitte’s Independence
Deloitte is independent with respect to the company within the applicable rules and regulations adopted by the
Securities Exchange Commission (SEC) and the Public Company Accounting Oversight Board (United States) (PCAOB)
and within the meaning of the rules of professional conduct of the Chartered Professional Accountants of Ontario. Inorder to protect Deloitte’s independence, the Audit Committee has a process for pre-approving all services provided by,
and related fees to be paid to, Deloitte. This process includes quarterly review of any incremental services proposed to
be provided by Deloitte, together with associated costs. Audit Committee approval is required for any services that havenot previously been pre-approved. In assessing the impact of any proposed services on auditor independence, theAudit Committee considers whether:◾

the services are consistent with applicable auditor independence rules;◾

the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as
familiarity with Magna’s business, people, culture, accounting systems and risk profile; and◾

the services enhance Magna’s ability to manage or control risks and improve audit quality.

The Audit Committee has also established a process to pre-approve the future hiring (if any) of current and former
partners and employees of Deloitte engaged on Magna’s account in the prior three fiscal years. There were no suchhires in 2023.

Business of the Meeting

27

BUSINESS OF THE
MEETING

3

REAPPOINTMENT OFDELOITTE

Reappointment of
Deloitte LLP as Magna’s
Independent Auditor

Services and Fees
Services provided by the independent auditor may fall into one of the following categories: audit services, audit-related
services, tax services and other permitted services. The nature of the services in each of these categories is detailed
below.
None of the services provided by Deloitte in 2023 were treated as exempt from pre-approval pursuant to the deminimis provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Pursuant to this approval process, the Audit Committee approved and Magna was billed the following fees for services
provided by Deloitte in respect of 2023 and 2022:
2023
TYPE OF SERVICES

AUDIT FEES
2023

FEES
($)
10,199,000

52

9,773,000

57

8,198,000

42

6,589,000

39

1,069,000

6685,000

4

Other Permitted
Total
52%
42%

Tax:

6%

Other Permitted: <1%
Total:

100%% OF TOTAL

Audit-related(2)(4)

Audit-related:

FEES
($)

Audit(1)Tax(3)

Audit:

2022% OF TOTAL

7,000

<1

48,000<1

19,473,000100

17,095,000

100

Notes:
1.
Services performed in order to comply with the standards of the Public Company Accounting Oversight Board(United States) (“PCAOB”), including integrated audit of the consolidated financial statements and quarterly reviews.
In some cases, these may include an appropriate allocation of fees for tax services or accounting consultations,to the extent such services were necessary to comply with the standards of the PCAOB. This category includes theaudit of our internal control over financial reporting for purposes of Section 404 of the Sarbanes-Oxley Act of2002.
2.
Assurance and related services, including such things as due diligence relating to mergers and acquisitions,accounting consultations and audits in connection with acquisitions, services related to statutory audits of certain
foreign subsidiaries, attest services that are not required by statute or regulation and consultation concerning financial
accounting and reporting standards. Audit-related services actually provided by Deloitte in respect of 2023
consisted of: services related to statutory audits of certain foreign subsidiaries, assurance service and procedures
related to attest engagements not required by statute or regulation, due diligence relating to mergers and acquisitions,as well as other assurance services.
3.
Tax compliance, planning and advisory services, excluding any such services required in order to comply with thestandards of the PCAOB that are included under “Audit Services”. The tax services actually provided by Deloitte inrespect of 2023 consisted of: domestic and international tax advisory, compliance and research services, as well astransfer pricing advisory services.
4.
All permitted services not falling under any of the previous categories.

Unless otherwise instructed, the persons designated in the form of proxy or Voting Instruction Form intend
to vote FOR the resolution reappointing Deloitte.
Representatives of Deloitte are expected to participate at the Meeting, will have the opportunity to make a statement if
they so desire and are expected to be available to respond to appropriate questions from shareholders.

28

Business of the Meeting30

Compensation Discussion & Analysis

51

Summary Compensation Table

54

Incentive Plans and Awards

SAY ON PAY

IN THIS SECTION

The Board recommends that you vote FOR our Say on Pay resolution

77%
2023
Say on Pay

At the Meeting, shareholders will again have the opportunity to cast an advisory, non-binding voteon Magna’s approach to executive compensation – this is often referred to as “Say on Pay”. We
most recently held a Say on Pay vote at our May 11, 2023, annual meeting of shareholders, which
was supported by a majority (77%) of the votes cast on the resolution.
Following the 2023 result, the TOCC initiated a review of the Corporation’s executive
compensation framework. That review resulted in five significant changes, including theelimination of profit sharing percentages and diversification of short-term incentive
metrics.

Our approach to executive compensation, including changes made in response to the 2023 Say on Pay vote, is set out
in detail in the CD&A in this Circular. Included in the CD&A is a detailed discussion and benchmarking results
demonstrating the relationship between executive compensation and corporate performance over a three-year period.
We encourage you to carefully read the CD&A.
The text of the Say on Pay resolution to be voted on at the Meeting reads as follows:“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 theaccompanying Management Information Circular/Proxy Statement.”
Although Say on Pay votes are non-binding, the TOCC will consider the results when assessing future compensation
decisions.
Unless otherwise instructed, the Magna officers whose names have been pre-printed on the form of proxyor Voting Instruction Form intend to vote FOR the Say on Pay resolution.

Business of the Meeting

29

BUSINESS OF THE
MEETING4

Say on Pay

Compensation Discussion &Analysis
Key Terms Used in This Section

30

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 grouprTSR 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

Business of the Meeting

Compensation and Performance
ReportMarch 27, 2024

We believe that executive compensation is a critical tool in driving desired
management behaviours to achieve strategic objectives within the context ofa company’s culture, business, and industry. Magna operates a lean, capitalintensive manufacturing business in a highly competitive, rapidly transforming,heavily disrupted, global industry. In this context, the company’s executive
compensation system seeks to promote:◾
operational efficiency and annual profitability;◾
value creation over the medium term;◾
sustained, long-term stock price growth;◾
alignment with shareholders; and◾
talent attraction, motivation and retention.

The TOCC supports the Board byassessing compensation andbenchmarking data within thecontext of corporate performance,
corporate strategy, risk
considerations, as well as the generalobjectives underlying Magna’ssystem of executive compensation.
Based on Committee members’
expertise and judgement, as well as
the perspectives and advice of the
TOCC’s independent advisors, the
TOCC makes recommendations to
the Board to assist it in fulfilling its
responsibilities related to executive
compensation matters.

Magna’s Strong Performance in 2023
After multiple challenging years, 2023 was a strong year in terms of Magna’s overall performance. Highlights include:◾
outperformance in financial results (discussed further below, including solid year-over-year improvements in
top- and bottom-line results, as well as cash generation);◾
progress with the transition of Magna’s product portfolio, including through the completion of the acquisition
and integration of Veoneer Active Safety;◾
success in securing $12 billion in business awards which will generate returns in future years;◾
significant achievements in operational excellence, including structural cost reductions, inflationary cost
recoveries and digitization initiatives;◾
a ramp-up of Magna’s sustainability efforts, including through a net-zero commitment and continued realizationof near term decarbonization targets; and◾
receipt of 107 customer recognition awards, as well as being named one of Ethisphere’s “World’s Most
Ethical Companies” (for the third consecutive year) and one of Fortune’s “World’s Most Admired Companies”.
Selected 2023 financial results include:
2023

2022

Sales

$42,797 million$37,840 million↑ 13%

Income from operations before income taxes$1,606 million$878 million

↑ 83%

$4.23

$2.03

↑108%

$5.49

$4.24

↑ 29%

10.0%

8.5%

↑ 1.5%

Diluted Earnings per Share
Adjusted Diluted Earnings per Share
Adjusted Return on Invested Capital

CHANGEThe company’s strong year was achieved in the context of an industry which continues to transform while being
challenged in the short-term by elevated inflation and interest rates. Additionally, in North America, labour strikes against
selected facilities of General Motors, Ford and Stellantis in the fourth quarter of 2023 reduced vehicle production
volumes. A full discussion of Magna’s 2023 financial performance can be found in the Management’s Discussion andAnalysis of Results of Operations and Financial Position for the year ended December 31, 2023, which is contained in
Magna’s 2023 Annual Report.

Business of the Meeting

31

BUSINESS OF THE
MEETINGAs members of the Talent Oversight and Compensation Committee (the“TOCC”), we are pleased to share with you in this CD&A our approach to
executive compensation at Magna, including 2023 compensation decisions
and outcomes in the context of overall performance.

CD&A

Dear Fellow Shareholders,

The financial, operational and strategic positives from 2023 did not fully translate into share price and total shareholder
return (TSR) performance. On a one-year basis, Magna’s absolute share price performance lagged industry peers and oneyear TSR performance relative to the companies in the rTSR peer group was at the 35th percentile. Significant equitybased incentives are in place to align the interests of Management and shareholders, with the majority of such incentives
tied to financial and TSR performance conditions. As you will read in the following sections, the value of those equity
incentives, including the 2021 rTSR PSUs redeemed early in 2024 and outstanding stock options, fully reflect theshareholder experience, thus demonstrating the alignment between pay and performance. As business awards fromrecent years begin production and Magna's capital and other investments begin generating returns, we expect
Magna's share price and TSR to improve, with equity incentives closely reflecting such improvement.

Executive Compensation Decisions in 2023
There were four areas in which the TOCC made compensation decisions in 2023:
1.

NEO Target Compensation: In connection with his appointment as CEO effective January 1, 2021,
Mr. Kotagiri’s target compensation was set below median for CEOs in the company’s executive compensation
peer group, with the stated intention of migrating that target towards the median as Mr. Kotagiri gained
experience and demonstrated success in the role. Based on continued success in driving Magna’s strategy
and results, Mr. Kotagiri’s 2022 target of $15.0 million was increased to $16.0 million for 2023 – in-line withmedian target compensation for peer group CEOs – with all of the increased target value allocated to long-term
incentives.
Target compensation for other NEOs was also set or adjusted in 2023, as follows:
In connection with his appointment as CFO effective January 1, 2022, Mr. McCann’s target compensation
was set based on the same approach taken with Mr. Kotagiri, as described above. Following strong
performance as CFO in 2022, Mr. McCann’s 2023 target compensation was set at $3.5 million, which iscurrently below the median of executive compensation peer group CFOs.
◾
Mr. Farrell and Mr. Rucker were appointed to their current roles effective January 1, 2023. In connection
with their appointments, the TOCC approved 2023 target compensation amounts of $4.5 million and$3.3 million, respectively. These amounts reflect a range of factors, including seniority, compensationlevels in their prior roles, scale of the operating groups under their responsibility and executive compensation
peer group benchmarks.
◾
Target compensation for Mr. Wilds was originally set in 2020 in connection with his appointment to hiscurrent role. With continued demonstration of success, Mr. Wilds’ target compensation has been
progressively increased, including an increase to $3.5 million for 2023.
◾

The TOCC periodically assesses NEO compensation against benchmarks in the company’s executive
compensation peer group. Given the importance of retaining high-performing talent, the TOCC expects tomigrate target compensation levels towards the peer group median for equivalent roles, subject to demonstrationof continued strong performance by the applicable NEO.

32

2.

Short-Term Incentives: For 2023, STIs for NEOs and other members of Executive Management continued
to consist of a profit sharing bonus, calculated as a specified percentage of Magna’s Pre-Tax Profit. As part ofthe 2023 compensation setting process, the TOCC established profit sharing percentages aligned to drive
the company’s 2023 business plan. While Magna’s profit sharing mechanism differs from STI mechanisms inpeer companies’ compensation systems, the process of aligning profit sharing percentages to current businessplan is analogous to the annual compensation and target setting processes applied by peer companies’
compensation committees. Consistent with prior years, the amortized value of Magna’s share purchasewarrants in Fisker Inc., together with quarterly mark-to-market gains on such warrants, have both been
excluded in calculating the bonus base on which STIs were determined.

3.

Long-Term Incentives: The TOCC recommended, and the Board approved, the grant of 2023 LTIs on abasis consistent with Magna’s existing LTI structure. Accordingly, each NEO received a grant of LTIs split among
ROIC PSUs (40% of LTI), rTSR PSUs (20% of LTI) and time-vested stock options (40% of LTI). Performance
ranges and payout scales for the PSUs were left unchanged; however, adjustments to the ROIC PSU calculation
were approved as discussed immediately below.

Business of the MeetingR&D Expenditures to Generate Returns Outside the ROIC PSU Performance Period: In 2023, we
continued an approach initiated in 2021 with respect to the calculation of ROIC for purposes of ROIC PSUs.
The three-year performance period of the ROIC PSUs poses a challenge to the extent that long-term investments
being made for future growth cannot generate returns during the performance period. If such expenditures
are not added back to income for purposes of calculating ROIC, there may be a structural disincentive tomaking the investments. Magna has been investing heavily in electronics/advanced driver assistancesystems (“ADAS”), electric mobility and corporate R&D (such investments collectively referred to as “EE&C
Expenditures”), all of which reduce Net Income and thus ROIC for purposes of the ROIC PSUs. Given the scaleof such investments and the expected time frame before they generate returns, such expenditures were
excluded in calculating 2023 ROIC for purposes of the 2021 ROIC PSUs (redeemed in February 2024), the2022 ROIC PSUs (to be redeemed in February 2025) and the 2023 ROIC PSUs (to be redeemed in
February 2026).

2023 CEO Compensation

CD&A

4.

Compensation in 2023 for Magna’s CEO, Seetarama S. Kotagiri, consisted of a low base salary, a profit-driven STI, as
well as LTIs tied to value-creation on both an absolute basis and relative to industry peers. Mr. Kotagiri’s base salary andtarget STI represented approximately 30% of his target TDC of $16.0 million, with target LTI values representing
approximately 70% of such target TDC.

Base Salary

PERFORMANCE VS.
TARGET

325,000—

Short-term Incentive (Cash)

5,633,000↑ 13%

Long-term Incentives (Equity
ROIC PSUs (3-yr)
rTSR PSUs (3-yr)
Stock Options (7-yr)

4,400,000
2,200,000
4,400,000

Tracking At Target
Tracking Below Target
Out-of-the-Money

16,958,000

↑ 6%

Total

In-line with compensation governance best practices, the TOCC engaged its independent compensation advisor toperform a “realized/realizable” compensation analysis of Mr. Kotagiri’s 2023 compensation to assist the TOCC in
assessing pay outcomes. Realized/realizable compensation provides an indication of how the different elements ofcompensation are actually performing as of a point in time – in this case, December 31, 2023. The graph below shows
realized and realizable compensation values relative to actual TDC, which includes base salary, actual STI earned andtarget LTI values.
Base Salary

Profit Sharing

ROIC PSUs

TSR - PSUs

Options

Transformational Grant$20,000,000

1.00x$17,500,000

1.00x$15,000,000

1.00x

0.74x

$12,500,000

1.00x$10,000,000$7,500,000

0.52x

0.58x

$5,000,000$2,500,000

0.00x
$0
Actual TDC1

Realized/
Realizable2
2021

Actual TDC1

Realized/
Realizable2
2022 (No TFG)

GDFV3Realized/
Realizable2

Actual TDC1

2022 (Only TFG)

Realized/
Realizable2
2023

Notes:
1.
Actual TDC consists of Base Salary, actual STI, target LTIs, as disclosed in the Summary Compensation Table.
2.

Realized/realizable compensation consists of Base Salary and actual STI, as disclosed in the Summary Compensation Table, together with the market
value of LTIs granted in the year. Market value of LTIs has been calculated based on the value of Magna Common Shares as of December 29, 2023.

3.

GDFV represents the target / grant date fair value of the TFG PSUs, as disclosed in the Summary Compensation Table for 2022.

Business of the Meeting

33

BUSINESS OF THE
MEETING2023($)

As we reflect on the realized/realizable analysis above we believe there are four key takeaways for shareholders:◾
the strong operational and financial performance achieved in 2023 is evident in realized/realizable
compensation values for 2023 as compared to 2022 and 2021;◾
realized/realizable values for elements of incentive compensation which are more within Executive
Management's control – the profit-driven STI and the ROIC LTI – tracked closely to forecast (STI) / target(ROIC PSU) levels;◾
realized/realizable values for market-driven elements of incentive compensation – the rTSR PSUs and stock
options – closely reflect the broader Magna shareholder experience in 2023; and◾
the balance in realized/realizable 2023 compensation indicates a reasonable outcome overall.
Additionally, the rigour in design of the Transformational Grant (“TFG”) PSUs (granted in 2022) is demonstrated by thefact that such PSUs have no realized/realizable value as of December 31, 2023. Nevertheless, the TFG PSUs were
implemented as a tool to incent the long-term transformation of the company's business and were neither designed nor
expected to generate realizable value in the short-term.

2023 Say on Pay and Actions Taken in Response
In light of shareholder feedback received in 2023, as well as our experience following multiple consecutive
compensation years in which the company’s legacy executive compensation system demonstrated challenges inmeeting core objectives without TOCC/Board intervention, the TOCC initiated a review of the company’s executive
compensation framework in May 2023.

Compensation Redesign – Guiding Principles
As a starting point for this review, the TOCC and Executive Management agreed on a set of guiding principles for thedevelopment of a revised compensation framework, including the following:
◾
◾
◾

◾
◾
◾

base salaries must provide an appropriate level of fixed compensation and support the goals of executive
talent attraction and retention;
the cash STI must continue to promote entrepreneurialism, innovation, and value creation, but with lessextreme compensation volatility than under the legacy system;
the STI must continue delivering “pay for performance” in alignment with the interests of shareholders, withgreater precision around performance that is within management influence, while enhancing execution of theannual business plan;
equity based LTIs must be the primary driver of executive compensation and management behaviour;
discretionary adjustments should be limited to exceptional circumstances; andsuperior long-term performance should lead to superior compensation outcomes.

Five Significant Changes Approved for 2024+
Given the interconnectedness of entrepreneurialism, culture, and profit sharing compensation within the company, the
TOCC tasked Executive Management with bringing forward an initial proposal for a revised compensation framework
which met the mutually agreed principles. In developing the initial proposal, Executive Management was directed towork collaboratively with the TOCC’s compensation advisor.
Over the course of five TOCC meetings held between July and November 2023, the TOCC and its compensation
advisor reviewed, provided input on, and shaped all aspects of, a revised framework, which the Board approved in
November 2023. This new framework took effect for compensation beginning January 1, 2024, and reflects fivesignificant changes from the legacy compensation system, as outlined below:◾

Compensation Mix: the compensation mix for members of Executive Management has been set as follows:
CASH(BASE SALARY + STI)
(%)

ROLE
CEO
Other NEOs
Other Executive Management

EQUITY (LTIS)(1)
(%)

30

70

40

60

40-50

50-60

Note:
1.

34

In determining the proportion of equity for each individual, we will include an amortized 20% of the value of the 2022 TFG grant.

Business of the Meeting

Although 2023 CEO and CFO compensation mix was consistent with the above, the compensation mix forother NEOs and other members of Executive Management varied by individual and role in 2023. The abovechanges to compensation mix are intended to enhance the focus on long-term performance as the key driverof compensation outcomes, while better aligning the interests of Executive Management and shareholders.
Base Salaries: fixed compensation under the new framework has transitioned to the following:CEOPROPORTION OF
TARGET TDC(%)

1,250,000~7

Other NEOs

750,000~15-20

Other Executive Management

500,000~15-25The new framework retains the principle of below-market fixed compensation in the three salary tiers above,
but diverges from the company’s legacy approach of maintaining a consistent $325,000 base salary for all
members of Executive Management. The changes above better differentiate fixed compensation for different
roles and compensation levels, while realigning fixed compensation as a proportion of Target TDC to levels
which are closer to, but still below, market norms.
◾

CD&A

ROLE

BASE SALARY($)

STI Metrics: consistent with compensation best practices and feedback received from shareholders, the STI
in the new framework has been diversified to add Free Cash Flow as a second metric. The balance of the
two STI metrics has been established as follows:

METRICPROPORTION OF STI(%)

Pre-Tax Profit

75%

Free Cash Flow25%

Maintenance of Pre-Tax Profit as the critical short-term metric serves to maintain alignment between Executive
Management and other levels of management in the organization, particularly the company’s manufacturing
Divisions, for which profit sharing percentages remain in place to continue driving lean operating behaviours andentrepreneurial thinking. The addition of Free Cash Flow is intended to drive greater focus on generating
cash from operations and capital expenditures.
◾

Profit Sharing Percentages: under the new framework, the legacy profit sharing percentage mechanism
has been eliminated for members of Executive Management. Instead, STI opportunities are based onconventional target setting processes, with targets aligned to the annual business plan. Importantly, profit
sharing remains unchanged at the company’s manufacturing Divisions, where the current model remains mosteffective. While the change to the Pre-Tax Profit mechanism for Executive Management represents a significant
break from the company’s legacy approach for Executive Management, it better differentiates the role of
Executive Management from other levels of management in driving performance, while aligning to market
norms.

◾

LTIs: the performance range applicable to the company’s ROIC PSUs up to and including the ROIC PSUs
granted in 2023 was set when the ROIC PSUs were introduced in 2017 and has not been changed since. Under
the new framework, the performance range for ROIC PSUs will be assessed and calibrated for each threeyear grant to better reflect the company’s operating reality and capital investment plans in its three-yearbusiness plan. This change in approach aligns Magna with market norms, improves transparency and eliminates
the adjustments to ROIC, such as the EE&C Expenditures discussed earlier. Aside from this change, theapproach to LTIs remains consistent with the past — rTSR PSUs and stock options remain in place and therelative proportions of the three LTI vehicles remains unchanged with ROIC PSUs, rTSR PSUs and stock
options comprising 40%, 20% and 40%, respectively, of the aggregate LTI.

The TOCC believes the foregoing changes are appropriately structured to achieve the guiding principles, retain a strong
focus on profitability and capital efficiency as key drivers of performance, and maintain alignment in behavioral incentives
with other levels of management. Such changes have been designed to better align Magna’s executive compensation
system to market norms and best practices, while further enhancing the pay/performance link, all of which serves tostrengthen the alignment between the interests of shareholders and management. The TOCC will diligently monitor
forecast compensation outcomes under the new framework throughout 2024 and report on those outcomes in thecompany’s 2025 proxy circular.

Business of the Meeting

35

BUSINESS OF THE
MEETING◾

Pay for Performance
The Say on Pay vote at the Meeting represents your opportunity to express to us your view as to whether the company’s
approach to executive compensation generates outcomes that are justified by Magna’s performance. There is no
single way of assessing the relationship between pay and performance, nor any one metric on its own that can convey
a complete picture as to such relationship. However, in light of the alignment between pay and performance as
depicted in the graph below when normalized to exclude the full grant value of the non-recurring, long-term TFG PSUs,
we are satisfied that compensation outcomes are reasonably aligned with performance. We believe that inclusion of
the full grant value of the TFG PSUs would be distortive, since such PSUs were granted to incent the long-termtransformation of the company and they are relatively early in their performance period. Nevertheless, we have separately
shown the relative positioning of Magna CEO compensation inclusive of the grant value of the TFG PSUs in theinterests of full transparency.
Compensation Peers vs. Magna
100%

Deere
& Co
D
Honeywell

3-Year Compensation Rank1

90%
80%

Caterpillar

Magna(Full TFG)

ITW
BorgWarnerr
Parker-Hannifin

70%

Corning
60%

Emerson Electric
c
Jabil

50%

Eaton Corp
40%

Aptiv
Johnson C
Controls
o30%

Goodyear

20%

Lear

Adient10%0%0%Magna (No TFG)
10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3-Year TSR Performance Rank

Note:
1.

Represents three-year average CEO compensation, as disclosed in the Summary Compensation Table.

In Closing
At Magna’s May 9, 2024 annual meeting, you will have the opportunity to express your views on Magna’s approach to
executive compensation through the advisory Say on Pay vote. In casting your vote, we trust that you will carefully
consider the perspectives we have shared in this CD&A and we look forward to your support on Magna’s Say on Pay
resolution.
Dr. Indira V. Samarasekera(Committee Chair)

36

Business of the Meeting

William A. Ruh

Matthew Tsien

Lisa S. Westlake

Section Summary
The balance of this CD&A is divided into the following sections:
SECTIONDESCRIPTION

PAGE

Discusses the role of compensation in our corporate culture and the objectives of our executive
compensation program and other matters

37

B

Addresses the Board’s responsibility for executive compensation, as well as the scope of the TOCC’s roleand discusses the TOCC’s process for making compensation decisions

39

C

Provides an overview and detailed description of the elements of our executive compensation program

41

D

Describes our compensation risk mitigation practices

50

CD&A

A

The Summary Compensation Table follows on page 51.

A. Compensation Philosophy & Objectives
Our unique, entrepreneurial corporate culture seeks to balance the interests of key stakeholders, such as shareholders,
employees and management, including by establishing a framework for each such type of stakeholder to share in our
profitability. We believe that our corporate culture has been a critical factor in our past growth and success and expect itwill continue to be a critical factor in our ability to create long-term shareholder value. In particular, the employee andmanagement profit sharing elements of our culture have proven to be essential to our ability to attract and retain ourskilled, entrepreneurial employees and managers, as well as to create effective incentives for them to achieve strong
performance in a cyclical and highly competitive industry.

Approach to Employee Compensation
Magna is committed to an operating philosophy based on fairness and concern for people. This philosophy is part ofour “Fair Enterprise” culture in which employees and management share the responsibility to help ensure our success.
Our Employee’s Charter sets out this philosophy through the following fundamental principles:
◾
◾
◾
◾
◾
◾
◾

job security;
safe and healthful workplace;fair treatment;competitive wages and benefits;
employee equity and profit participation;communication and information; andan employee hotline.

Our commitments to employees in respect of each of the above principles is described in more detail in our Annual
Information Form / Annual Report on Form 40-F filed concurrently with this Circular.
Two of the above principles in the Employee’s Charter directly address employee compensation:
Competitive Wages and Benefits: we are committed to providing our employees with information that enables
them to compare their total compensation, including wages and benefits, with those earned by employees of directcompetitors and local companies with which our subsidiaries compete for employees. Where an employee’s
compensation is found not to be competitive, it will be adjusted.
Employee Equity and Profit Participation: we believe that our employees should share in our financial successthrough profit sharing by participating employees. In addition to rewarding employees for their contribution to our
success, this assists them in saving for retirement since a portion of the profit-sharing bonus is deferred into
employee-directed retirement savings funds within our U.S. 401(k) plan, Canadian group RRSP and similararrangements elsewhere.

Executive Compensation Philosophy
Magna’s strategy is to create long-term value for shareholders through continued growth and success as a leading
global automotive supplier and mobility technology company. We operate a complex business in a highly competitive,
cyclical, lean manufacturing industry in which disciplined cost management, operational excellence, effective program
management, as well as constant innovation are critical to short-term profitability. At the same time, the automotive
industry is undergoing significant change, including through the accelerating importance of powertrain electrification,

Business of the Meeting

37

BUSINESS OF THE
MEETING

Corporate Culture and Compensation

software/electronics, ADAS and new mobility models. Realizing value from these opportunities will, among other things,
require careful capital allocation decisions, disciplined acquisition and investment choices, and expenditures oninnovation/R&D, which may not generate immediate returns and may adversely impact payouts under the STI’s andsome of the LTI’s in Magna’s core executive compensation system. Accordingly specific elements of compensation may
evolve in the future as the company’s business and industry continue to evolve.
Magna’s compensation framework has been structured to promote effective short- and long-term decision-making in
the above context through balanced incentives aimed at profitable growth in a lean manufacturing business, as well as
long-term value creation in a rapidly evolving industry. Some of the ways we seek to achieve these objectives include:
Compensation Framework Feature
Minimal fixed compensation

Performance-conditioned profit
sharing bonus / STI

Performance-conditioned
multi-metric LTI

PurposeLow base salaries and highly variable compensation help create an owner’s mindset◾
◾

Motivates managers to achieve consistent profitability in order to maintain consistentcompensation◾

Incents profit growth to grow compensation
Promotes entrepreneurialism◾
◾

Drives strong managerial focus on lean/efficient operations through effective managementof costs◾

Connects compensation to the operational impact of everyday decisions
ROIC PSUs incent efficient capital allocation and value creation◾
◾

rTSR PSUs create sensitivity to stock market performance and return of capital toshareholders, 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 anddiscouraging excessive risk-taking◾

No pensions◾

Share maintenance requirement◾

Stock options incent absolute TSR growth
Reinforces an owner’s mindset and incents long-term growth in equity value as a pensionalternative
Reinforces an owner’s mindset◾

Alignment with shareholders◾
◾

Helps mitigate risk
Substantially consistent with those of other employees in the same office/jurisdiction

Benefits

Additionally, all compensation systems must be successful in attracting, motivating and retaining world-class managers.
We seek to provide executives with competitive compensation packages, including the opportunity to achieve superior
compensation for superior performance. The next section of this CD&A describes the process through which
compensation decisions are made, including compensation benchmarking practices we use to help structure competitivecompensation packages.
As discussed earlier, the profit sharing elements of our executive compensation program were developed within thecontext of an entrepreneurial culture that, by definition, requires some degree of risk-taking in order to achieve growth.
Recognizing that the consequences of excessive risk-taking may be felt most acutely by shareholders, our executive
compensation program seeks to encourage and reward responsible business decision-making and reasonable risktaking. We seek to achieve this through a variety of methods, which are discussed in Section D of this CD&A.
In November 2023, Magna implemented a new Policy on Recovery of Erroneously Awarded Incentive-Based
Compensation in compliance with the requirements of The New York Stock Exchange and SEC. The policy applies tocurrent executive officers, as well as any former ones who had served as an executive officer during the prior threecompleted fiscal years immediately preceding the date the company is required to prepare an accounting restatement
correcting materially non-compliant financial statements. Subject to certain conditions, the clawback extends to theamount of incentive-based compensation received by the current or former executive officer in excess of the amountthey would have otherwise received, had such compensation been determined based on the applicable restated financial
statements.

38

Business of the Meeting

B. Compensation Decision-Making: Responsibility and Process
Role of the Board
The Board oversees our system of executive compensation including by satisfying itself that our system is effective inattracting, retaining and motivating skilled executives who can achieve our strategic objectives. The Board also annuallyassesses the company’s performance and that of the Chief Executive Officer in relation to predefined objectives
approved by the Board.

The Board has delegated to the TOCC responsibility for annually reviewing, considering and making recommendations
related to executive compensation matters generally. More specifically, the TOCC has been delegated responsibility formaking recommendations with respect to the application of our executive compensation program to members of
Executive Management, including the NEOs discussed in this CD&A.

CD&A

Role of the TOCC

While some NEOs, such as the Chief Executive Officer and Chief Financial Officer, are usually invited to participate in
TOCC meetings, final compensation decisions affecting NEOs are typically made by the TOCC without any NEOs present
in order to ensure the independence of the decision-making process.

The TOCC looks to the Chief Executive Officer to assess the performance, and make recommendations regarding
target compensation levels, of his direct reports. Such performance assessments are considered by the TOCC in thecontext of LTI awards to members of Executive Management, as well as proposed compensation setting and LTI awards
for such executives. The TOCC also looks to the Chief Executive Officer to put forward his general recommendation
regarding LTI awards for other proposed recipients.

Role of the Independent Advisors
In reviewing, considering and making recommendations on executive compensation matters, the TOCC considers theadvice of the Board’s independent advisors, Hugessen and Fasken, including through in camera sessions as part of eachof the TOCC’s meetings attended by them.
Hugessen has acted as the Board’s compensation advisor since December 2012 and only provides board-side advice.
One or more representatives of Hugessen are invited to attend TOCC meetings at which executive compensation
matters are discussed. On executive compensation matters, Hugessen reports directly to and seeks its instructions
directly from the TOCC, communicating as needed directly with the TOCC Chair between meetings.
The scope of Hugessen’s services generally includes advice related to executive and director compensation program
structure and design, benchmarking data and observations, as well as pay for performance analytics. In addition,
Hugessen provides contextual information relating to compensation best practices and emerging trends. The services
provided by Hugessen in 2023 included:
◾
◾
◾
◾
◾
◾

analysis of Magna’s NEO compensation, including pay for performance considerations;advice, analysis and considerations related to 2023 compensation decisions including those discussed in theCompensation and Performance Report earlier in this CD&A;
consideration of and recommendations related to 2023 target compensation levels;
advice related to 2023 STIs and LTIs;
ongoing review and advice on compensation recommendations presented for TOCC approval; andchanges to Magna’s approach to executive compensation for 2024.

Hugessen’s advice was only one of a number of factors (discussed below) that were reviewed and considered by the
TOCC in making its executive compensation recommendations to the Board.
The fees billed by Hugessen for the services it provided in 2023 and 2022 were as set forth below.
DESCRIPTION OF SERVICES
Executive compensation advisory services
All other services for Magna
Total

2023

2022

(C$)

(%)

(C$)

(%)

319,000

100

287,000

100

NIL

NIL

NIL

NIL

319,000

100

287,000

100

Business of the Meeting

39

BUSINESS OF THE
MEETING

Role of the Chief Executive Officer

TOCC Considers a Wide Range of Factors in its Executive Compensation Decisions
In connection with executive compensation decisions, the TOCC will normally consider a wide range of factors, including:
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾

Magna’s core operating and compensation philosophies and principles;alignment of management, employee and shareholder interests to create long-term shareholder value;
our financial, operating, stock price, ROIC, TSR and rTSR performance;long-term strategic objectives;compensation risk considerations;compensation benchmarking data;
pay for performance alignment data;
individual executive performance;
performance of prior LTI grants;
the recommendations of the Chief Executive Officer with respect to his direct reports;
the advice and recommendations of the TOCC’s independent advisors;
accounting impact and potential dilution to shareholders from equity compensation;
feedback received from shareholders and other stakeholders;
general information relating to executive compensation trends and developments; andretention, succession and other relevant considerations.

In making recommendations to the Board, the TOCC does not rely solely on any one of the above or other factors.

Application of Measured Discretion
The Board through the TOCC, maintains authority over target TDC levels, the form and respective proportions of STIs
and LTIs, as well as the performance goals/targets applied to LTI compensation. Situations requiring application of
measured discretion may arise from time to time with respect to the calculation of the bonus base for profit sharing,
the ROIC PSUs or rTSR PSUs. Additionally, the Board and Executive Management have a common understanding that,as part of the Board’s review of the terms of any proposed material acquisition or disposition, the TOCC will work with
Executive Management to identify potential changes to executives’ current employment contract terms to ensure that
executive compensation arrangements remain appropriate following such transactions.

Target Compensation Setting
Under Magna’s executive compensation framework, the Board, through the TOCC, determines target TDC for the Chief
Executive Officer, who proposes target TDC levels for his direct reports. The TOCC assesses proposed target TDC
levels in the context of the various factors described above and determines the target amounts to be granted in the formof long-term equity, based for 2023 on a 70%/30% equity/cash split for the Chief Executive Officer and a 55%/45%
split for the Chief Financial Officer. The equity/cash split for other members of Executive Management varies dependingon the role. Target TDC for each NEO in 2023 was as set forth in the table below.

NAME

TARGET TDC($)

Seetarama S. Kotagiri

16,000,000

Patrick W.D. McCann

3,500,000

John H. Farrell

4,545,000

Tom Rucker

3,500,000

Eric J. Wilds

3,500,000

Executive Compensation Peer GroupIn assessing target TDC levels for members of Executive Management, the TOCC considers benchmarking data from
Magna’s executive compensation peer group. Such data provides the TOCC with a basis for determining Magna’s pay
for performance, including through “back-testing” of realizable pay. It also serves as a market reference point insetting compensation within a reasonable competitive range.
Magna’s executive compensation peer group currently consists of 15 companies from a broad comparator universe
composed primarily of North American public companies that are direct automotive industry peers, as well as capital
goods and technology hardware/equipment comparables. The broad universe of comparator companies was identified
and screened by Hugessen based on a range of 1/5x to 5x Magna’s Total Revenue and Total Enterprise Value (“TEV”).
Magna’s executive compensation peer group was last refreshed early in 2022 to streamline the peer group (from 17 to 15)
and incorporate relevant technology comparables in light of Magna’s increasing deployment of capital in areas such as
electrification, ADAS and new mobility. No changes were made to the peer group in 2023.

40

Business of the Meeting

AUTOMOTIVECAPITAL GOODS

Adient plc

Caterpillar Inc.

Aptiv plc

Deere & Company

BorgWarner Inc.

Eaton Corp.

Lear Corporation

Emerson Electric Co.

The Goodyear Tire & Rubber Company

Honeywell International Inc.
Illinois Tool Works Inc.
Johnson Controls Inc.
Parker-Hannifin Corporation

CD&A

TECHNOLOGY HARDWARE & EQUIPMENT
Corning Incorporated
Jabil Inc.

The TOCC also uses a peer group against which performance is assessed for purposes of the rTSR PSUs. The rTSR
peer group consists of 10 automotive suppliers selected from a comparator universe of publicly traded North Americancompanies in the automotive industry. The selected peers are considered to be Magna’s most direct competitors forbusiness and investor capital, based on such factors as coverage by equity research analysts, as well as inclusion inindustry indices and in the peer groups of peer companies. The rTSR peer group also contains the following, each ofwhich counts as the equivalent of a single company within the peer group:◾
◾
◾

a composite peer consisting of the two publicly traded, North American automobile OEMs;a composite peer consisting of three publicly traded European automotive suppliers; andthe S&P500 index.

The rTSR peer group remains unchanged from 2022 and consists of the following:rTSR PEER GROUP
Adient plc

Gentex Corp.

American Axle Manufacturing & Holdings Inc.

Lear Corp.

Autoliv, Inc.

Linamar Corp.

BorgWarner Inc.

Martinrea International Inc.

Dana Incorporated

Visteon Corp.

Ford / General Motors (Composite Peer)Continental / Forvia / Valeo (Composite Peer)S&P 500 Index

C. Elements of Magna’s 2023 Executive Compensation Program
2023 NEOs

Magna’s Named Executive Officers in 2023 were:◾

Seetarama S. Kotagiri

Chief Executive Officer◾

Patrick W.D. McCann

Chief Financial Officer◾

John H. Farrell

President, Body & Exterior Systems and Seating◾

Tom Rucker

President, Power & Vision and Complete Vehicles◾

Eric J. Wilds

Chief Sales & Marketing Officer

John Farrell and Tom Rucker are new NEOs in 2023, replacing Vincent Galifi and Tommy
Skudutis, each of whom is transitioning to retirement. Mr. Farrell previously served as
President of Cosma International and Mr. Rucker previously served as President of
Magna Powertrain, in each case until December 31, 2022. Compensation for Mr. Farrell
and Mr. Rucker prior to 2023 reflected incentives aligned with their respective OperatingGroup. Effective January 1, 2023, Mr. Farrell and Mr. Rucker were appointed to theircurrent roles and their compensation substantially aligned with Magna’s executive
compensation structure.

Business of the Meeting

41

BUSINESS OF THE
MEETINGrTSR Peer GroupEmployment Contracts

Each NEO is subject to an employment agreement that specifies various key terms,
including:

Overview◾

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.

Our 2023 compensation program for the NEOs consisted of the following elements:

1
Base
Salary2
Short-Term
Incentive

3Long-Term
Incentives

4
Beneﬁts1.

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:Base Salaries:◾

maximize the incentive for each executive to pursue profitability for the benefit of allof Magna’s stakeholders;
reinforce the link between executive pay and corporate performance; andreflect and reinforce our entrepreneurial corporate culture.

◾
◾

During 2023, the NEOs received identical base salaries of $325,000.

2.
Short-Term
Incentive

NAME

BASE SALARY($)

Seetarama S. Kotagiri

325,000

Patrick W.D. McCann

325,000

John H. Farrell

325,000

Tom Rucker

325,000

Eric J. Wilds

325,000

The 2023 STI for each NEO was an annual profit sharing bonus, which wascompletely “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 fromthe first dollar of profit.

STI payouts for the NEOs in respect of 2023 were as set forth in the table below.

PROFIT SHARE(%)
Seetarama S. Kotagiri
Patrick W.D. McCannJohn H. Farrell
Tom Rucker
Eric J. Wilds

0.33030.11130.16780.11130.1113

ADJUSTED
PRE-TAX PROFITBONUS BASE($)

1,705,000,000

STI($)
5,633,000
1,898,000
2,862,000
1,898,000
1,898,000

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.

42

Business of the Meeting

The STI paid to NEOs is paid in installments. Installments for the first three fiscal
quarters of each year are normally paid following the end of each fiscal quarter, basedon our year-to-date profits. Following the end of each fiscal year, we calculate theprofit sharing bonus to which each NEO is entitled for that fiscal year, subtract the
installments paid for the first three quarters and pay the difference as the final
installment.

3.

LTIs for NEOs in 2023 consisted of ROIC PSUs, rTSR PSUs and regular stock
options. The three-part LTI is structured to reward a broad range of value-creating
behaviour using multiple metrics. A majority (60%) of the total 2023 LTI value grantedby the TOCC was in the form of performance-conditioned PSUs, the maximum
realizable number of which is capped at 200% of target. The PSUs are completely “atrisk” since performance below specified thresholds can result in no PSUs being paidout.

Long-Term
Incentives:

LTIs granted to NEOs in respect of 2023 were as set forth in the table below.
NAME

Seetarama S. Kotagiri
Patrick W.D. McCannJohn H. Farrell
Tom Rucker
Eric J. Wilds

ROIC PSUs

ROIC PSUS($/#)
4,400,000
75,813640,000
11,027720,000
12,406640,000
11,027640,000
11,027

rTSR PSUS($/#)
2,200,000
37,907320,000
5,514
360,000
6,203
320,000
5,514
320,000
5,514

STOCK OPTIONS($/#)
4,400,000
231,579
640,000
33,684720,000
37,895640,000
33,684640,000
33,684

AGGREGATECORE LTI($)
11,000,000
1,600,000
1,800,000
1,600,000
1,600,000

The ROIC PSUs are intended to incent and reward capital-efficient value creation over athree-year performance period. The performance period for the ROIC PSUs granted in
respect of 2023 is January 1, 2023 to December 31, 2025.
The number of ROIC PSUs realized by an NEO following the performance perioddepends on the target number granted, Magna’s return on invested capital performancein relation to its cost of capital and the payout scale approved by the TOCC. The
maximum number of ROIC PSUs that can be realized is capped at 200% of target, but
no PSUs may ultimately be earned if ROIC performance falls below the payout
threshold.
The dollar value of compensation realized by an NEO following the performance period
will depend on the final number of ROIC PSUs paid out, as well as the trading price of
our Common Shares.
When ROIC 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 ROIC PSUs.

Business of the Meeting

43

BUSINESS OF THE
MEETING

STI Paid in Quarterly
Installments

CD&A

This discretion can be exercised to increase or decrease profit sharing percentages in
the course of the annual STI target-setting process to align forecast profit sharing
opportunities with the current business plan. In addition, in conjunction with theBoard’s approval of a material acquisition or disposition, the TOCC may equitably
adjust profit sharing percentages to ensure executive compensation arrangements
remain appropriate following any such transaction. As discussed earlier in this CD&A,
profit sharing percentages have been eliminated for 2024 onwards.

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 theCompensation and Performance Report earlier in this CD&A.
The table below sets forth the payout scale for the ROIC PSUs (interpolation applies forpoints between the payout levels). The payout scale for the ROIC PSUs remains
unchanged from 2022.
PERFORMANCE LEVEL
Maximum
TargetThreshold (Cost of Capital)
Below Threshold

ROIC
(%)
19.0
13.5 to 14.5
9–

PAYOUT(% OF TARGET)
200
100
50
0

As an exception to the foregoing payout scale, if Magna’s ROIC (determined in themanner 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 capitalwill 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 perioddepends on the target number granted, Magna’s three-year rTSR performance and thepayout scale approved by the TOCC. The number of rTSR PSUs that can be realized iscapped 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 ofrTSR 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 Sharesacquired on the market under our share repurchase program, with dividends paid in
cash based on the final number of rTSR PSUs.

44

Business of the Meeting

PAYOUT(% OF TARGET)

Maximum

>75th

200

Above Target

65th

150

Target50th

100

Below Target

th

35

50

Threshold

<25th

0

As an exception to the foregoing payout scale, if the company’s three-year rTSR isgreater than the target level, thus demonstrating value creation, but absolute three-year
TSR is negative, the number of rTSR PSUs paid out will be capped at the target level.
This feature recognizes that payouts should not exceed target where shareholders haveexperienced a deterioration in the absolute value of their holdings.

Stock Options

Stock options serve as a tool to incent absolute share price returns over the medium tolong term (three to seven years). Magna’s stock options vest in equal one-third tranches
on the first three anniversaries of the grant date and expire on the seventh anniversary of
the grant date. The TOCC is committed to responsible option granting practices,
including by maintaining annual option grants to all participants below 1% of our issued
and outstanding shares. Options are not priced during trading blackouts and are
granted at an exercise price equal to market price on the NYSE.
Stock options are typically granted in late February or early March of a year. Stock
options in respect of 2023 compensation were granted on March 2, 2023, at an
exercise price of $56.12.
Stock option grants are made under our 2009 Incentive Stock Option Plan, which wasapproved by shareholders in May 2010. The 2009 Option Plan is discussed in further
detail under “Incentive Plans and Awards”.
If an NEO ceases to be employed by Magna (including any affiliates) within one year
following the date of a stock option exercise, they must hold shares with a market value(at the exercise date) equal to the net after-tax gain until the one-year anniversary of theexercise date.

Anti-Hedging
Restrictions

Executives are forbidden from engaging in activities that would enable them to improperly
profit from changes in our stock price or reduce their economic exposure to a decrease in
our stock price. Prohibited activities include “puts”, “collars”, equity swaps, hedges,
derivative transactions and any transaction aimed at limiting an executive’s exposure to aloss or risk of loss in the value of the Magna securities that he or she holds.

Automatic Securities
Disposition Plans

Executives are permitted to enter into automatic securities disposition plans (“ASDPs”),
which are also known as Rule 10b5-1 Plans. Such plans allow executives to establish aplan for the sale of Common Shares held by the executive and exercise of stock options
granted to them, subject to meeting all legal requirements applicable to such plans.
Among other things, an executive may only enter into, modify or terminate a plan while heor she is not under a trading blackout or otherwise in possession of material undisclosed
information. None of the NEOs had an ASDP in place during 2023.

Business of the Meeting

45

BUSINESS OF THE
MEETINGTHREE-YEAR
rTSR(PERCENTILE)PERFORMANCE LEVEL

CD&A

The table below sets forth the payout scale for the rTSR PSUs (interpolation applies forpoints between the payout levels). The payout scale for the rTSR PSUs remains
unchanged from 2022.

4.
Benefits

Benefits provided to NEOs are the same as those provided to other employees in thesame 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 othermanagerial 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 toreimbursement 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 handlingfees, 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 amountin the Summary Compensation Table.
Magna maintains corporate access privileges to the dining room, boardroom and otherfacilities of a third-party owned golf course adjacent to the company’s head office. As partof such access, NEOs may utilize the golf club’s facilities for personal use at their own
expense.

Executive Equity
Ownership
Executive Management
Equity MaintenanceRequirements

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 andequivalents (RSUs, as well as PSUs at target) are counted. Unexercised stock options are
not counted in determining compliance with the equity maintenance requirement. EachNEO exceeds the minimum equity maintenance requirement.

NAME

EQUITYMAINTENANCEREQUIREMENT($)

QUALIFYINGEQUITY(#)

VALUE OFQUALIFYING EQUITY(1)($)

EQUITYMAINTENANCEREQUIREMENTSTATUS

Seetarama S. Kotagiri

8,000,000

403,689

23,850,000

Exceeds

Patrick W.D. McCann

1,500,000

53,2493,146,000

Exceeds

John H. Farrell

1,800,000

69,241

4,091,000

Exceeds

Tom Rucker

1,400,000

43,0462,543,000

Exceeds

Eric J. Wilds

1,400,000

64,4693,809,000

Exceeds

Note:1.

As of December 29, 2023.

Termination/
Severance
Termination/Severance
Payments Are Limited
to a Maximum of 24
Months Compensation

46

All NEOs are entitled to 24 months’ severance (the “Notice Period”) in the event oftermination without cause. Severance payments are based on the average of an NEO’sbase 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”.

Business of the MeetingWe maintain “double trigger” change in control protection for our North American-based
NEOs; however, such protection does not provide any enhanced severance. The
primary benefit is the acceleration of any unvested stock options in the event that achange in control is followed by termination of employment or constructive dismissal for“good reason”. In a change in control scenario, treatment of outstanding stock options
will need to be addressed by the TOCC. Depending on the nature of the acquiror,
outstanding options could become exercisable into equity of the acquiror. However,outstanding options could also be accelerated, in which case there would be no
incremental benefit to the executive of his change in control protection.
The definition of “good reason” for purposes of the change in control protection applies
only in the event of the following:◾

a material reduction in the executive’s position, duties, authority or responsibilities;◾

Magna requiring the executive to work at a location that is more than 100 kms from
where he is based at the time of the change in control; or◾

any other action that would constitute constructive dismissal at law.

BUSINESS OF THE
MEETING

Double-Trigger

CD&A

Change in Control
Protections

Business of the Meeting47

Summary of Treatmentof Compensation on Resignation,
Retirement, Termination,
or Change in Control

Element ofCompensation
Base Salary

Resignation
Pro-rated to effectivedate
Pro-rated to effective
date

Retirement
Pro-rated to effectivedate
Pro-rated to effective
date

ROIC PSUs and rTSR
PSUs

Forfeiture ofunredeemed PSUs.

TFG PSUs

Forfeiture ofunredeemed PSUs

Stock Options

Unvested andunexercised options
expire on earlier of
option expiry date andthree months after
effective date ofresignation.

PSUs granted incomplete years prior to
the termination date
are redeemed on theregular payout date,subject to performance
conditions establishedat time of grant (0% to200%). PSUs granted
in year of retirement
are redeemed on
regular payout date,subject to performance
conditions establishedat time of grant (0% to200%) and pro ration
to reflect the proportion
ot the year worked.
PSUs associated witha hurdle that has beenachieved will be paidout in accordance withterms established attime of grant, subject
to pro ration to reflect
the proportion of theperformance period
workedUnvested andunexercised options
expire on earlier of
option expiry date andthree years after
effective date ofretirement.

RSUs

Unredeemed RSUs areforfeited in the event ofvoluntary resignation.

RSUs are redeemed on
regular redemption
date.

Benefits & Perks
Pension

None
None

None
None

Annual Bonus – Cash

Notes:
1.
Assumes Magna is a continuing entity following the Change in Control.

48

Business of the Meeting

Termination –CausePro-rated to effectivedate
Pro-rated to effective
date

Forfeiture ofunredeemed PSUs

Forfeiture ofunredeemed PSUs

Termination –No Cause
Average ofcompensation
excluding LTIs for thelast 12 fiscal quarters
paid out over
severance period (upto 24 months) as salarycontinuation (bi-weekly)
or lump-sum.
PSUs granted incomplete years prior to
the termination date
are redeemed on theregular payout date,subject to performance
conditions establishedat time of grant (0% to200%). PSUs granted
in year of termination
are redeemed on
regular payout date,subject to payout
conditions establishedat time of grant (0% to200%) and pro ration
to reflect the proportionof the year worked.
Forfeiture ofunredeemed PSUs

Termination
Without Cause on
Change inControl(1)Average ofcompensation
excluding LTIs for thelast 12 fiscal quarters
paid out over
severance period (upto 24 months) as salarycontinuation (bi-weekly)
or lump-sum.
Plan administrator cantake such steps asnecessary to theconvert or exchange
outstanding PSUs into
securities ofsubstantially equivalentvalue in any entity
participating in or
resulting from a change
in control.

The Plan administrator
may accelerate thevesting of TFG PSUs
associated with ahurdle that had beenachieved prior toannouncement of thechange in control.

All unexercised options
are cancelled on
effective date of
termination.

Unvested andunexercised options
expire on earlier of
option expiry date andthree months after
effective date of
termination.

Unredeemed RSUs areforfeited on theeffective date of
termination.
None
None

RSUs are redeemed on
regular redemption
date.

Vested options can be
exercised until earlier of
option expiry date and
12 months after Notice
Period (as defined
above). Unvested
options accelerate andcan be exercised until
same date.
RSUs are redeemed on
regular redemption
date.

None
None

None
None

The table below shows the value of the estimated incremental payments or benefits thatwould accrue to each NEO upon termination of their employment following resignation,
normal retirement, termination without cause, termination with cause and termination
without cause on change in control. For stock options, the values shown represent thein-the-money value of any grants the vesting of which would accelerate as a result ofeach termination circumstance below.

Resignation

Retirement

Termination –CauseTermination
Without Cause($)

Termination Without
Cause on Change
in Control($)

Severance

NIL

NIL

NIL

8,953,000

8,953,000

ROIC PSUs

NIL

NIL

NIL

NIL

NIL

rTSR PSUs

NIL

NIL

NIL

NIL

NIL

TFG PSUs

NIL

NIL

NIL

NIL

NIL

Stock Options

NIL

NIL

NIL

NIL

685,000

Benefits & Perks

NIL

NIL

NIL

NIL

NIL

Pension

NIL

NIL

NIL

NIL

NIL

8,953,000

9,638,000

Total

CD&A

Seetarama S. Kotagiri

Patrick W.D. McCannSeverance

NIL

NIL

NIL

2,675,000

2,675,000

ROIC PSUs

NIL

NIL

NIL

NIL

NIL

rTSR PSUs

NIL

NIL

NIL

NIL

NIL

TFG PSUs

NIL

NIL

NIL

NIL

NIL

Stock Options

NIL

NIL

NIL

NIL

100,000

Benefits & Perks

NIL

NIL

NIL

NIL

NIL

Pension

NIL

NIL

NIL

NIL

NIL

2,675,000

2,775,000

Total

BUSINESS OF THE
MEETING

Summary of
Incremental
Severance,
Termination andChange in Control
Payments

John H. Farrell
Severance

NIL

NIL

NIL

4,745,000

4,745,000

ROIC PSUs

NIL

NIL

NIL

NIL

NIL

rTSR PSUs

NIL

NIL

NIL

NIL

NIL

TFG PSUs

NIL

NIL

NIL

NIL

NIL

Stock Options

NIL

NIL

NIL

NIL

112,000

Benefits & Perks

NIL

NIL

NIL

NIL

NIL

Pension

NIL

NIL

NIL

NIL

NIL

4,745,000

4,857,000

Total
Tom Rucker
Severance

NIL

NIL

NIL

3,397,000

3,397,000

ROIC PSUs

NIL

NIL

NIL

NIL

NIL

rTSR PSUs

NIL

NIL

NIL

NIL

NIL

TFG PSUs

NIL

NIL

NIL

NIL

NIL

Stock Options

NIL

NIL

NIL

NIL

100,000

Benefits & Perks

NIL

NIL

NIL

NIL

NIL

Pension

NIL

NIL

NIL

NIL

NIL

3,397,000

3,497,000

Total
Eric J. Wilds
Severance

NIL

NIL

NIL

2,850,000

2,850,000

ROIC PSUs

NIL

NIL

NIL

NIL

NIL

rTSR PSUs

NIL

NIL

NIL

NIL

NIL

TFG PSUs

NIL

NIL

NIL

NIL

NIL

Stock Options

NIL

NIL

NIL

NIL

100,000

Benefits & Perks

NIL

NIL

NIL

NIL

NIL

Pension

NIL

NIL

NIL

NIL

NIL

2,850,000

2,950,000

Total
Note:
1.

Represents the in-the-money value of options, the vesting of which is accelerated in case of a change in control
followed by an act of “good reason” resulting in a “double-trigger change” in control, using the closing price ofMagna Common Shares on the NYSE on December 29, 2023.

Business of the Meeting49

D. Compensation Risk Management
Overall Level ofCompensation Risk is
Reasonable in Light ofNature 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 createdby 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 businessand the automotive industry. In reaching this conclusion, the TOCC considered themethods 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 bycompensation 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&Atransactions;◾

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 decisionmaking;◾

the 200% cap on STIs;◾

the 200% cap on the maximum number of ROIC and rTSR PSUs that can berealized;◾

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 maintenancerequirements;◾

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 strategicplans;◾

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 ofsuch 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 andcompensation disincentives.

50

Business of the MeetingSummary Compensation Table
PLAN COMPENSATION($)
NAME AND PRINCIPAL POSITION

Seetarama S. Kotagiri
Chief Executive Officer

Patrick W.D. McCann
Chief Financial Officer

John H. Farrell
President, Body & Exterior
Systems and Seating
Tom Rucker
President, Power & Vision
and Complete Vehicles
Eric J. Wilds
Chief Sales andMarketing Officer

YEAR

SALARY($)

SHARE-BASEDOPTION-BASEDAWARDS

AWARDS

($)

($)

(1)

(2)

ANNUAL(3)
($)

LONG-

PENSION

TERM

VALUE

($)

($)

ALL OTHERCOMPENSATION
($)

TOTAL
COMPENSATION
($)

2023

325,000

6,600,000

4,400,000

5,633,000

NIL

NIL

NIL

16,958,000

2022

325,000

20,520,000

3,680,000

3,446,000

NIL

NIL

NIL

27,971,000
10,870,000

2021

325,000

4,320,000

2,880,000

3,345,000

NIL

NIL

NIL

2023

325,000

960,000

640,000

1,898,000

NIL

NIL

NIL

3,823,000

2022

325,000

3,750,000

500,000

710,000

NIL

NIL

NIL

5,285,000

2021

325,000

180,000

120,000

429,000

NIL

NIL

NIL

1,054,000

2023

325,000

1,080,000

720,000

2,862,000

NIL

NIL

NIL

4,987,000

2022

500,000

3,945,000

405,000

1,431,000

NIL

NIL

NIL

6,281,000

2021

300,000

275,000

325,000

1,850,000

NIL

NIL

NIL

2,750,000

2023

325,000

960,000

640,000

1,898,000

NIL

NIL

NIL

3,823,000

2022

500,000

3,508,000

218,000

1,110,000

NIL

NIL

NIL

5,336,000

2021

325,000

510,000

140,000

1,112,000

NIL

NIL

NIL

2,087,000

2023

325,000

960,000

640,000

1,898,000

NIL

NIL

NIL

3,823,000

2022

325,000

3,750,000

500,000

710,000

NIL

NIL

NIL

5,285,000

2021

325,000

750,000

500,000

692,000

NIL

NIL

NIL

2,267,000

Notes:
1.
Amounts disclosed in this column represent the grant value (at target) of PSUs and, In the case of Mr. Rucker for 2022, the amount disclosed also includes
RSUs. Amounts disclosed in this column for 2022 also include the aggregate compensation value intended to be conferred by the Board in the form of
TFG PSUs. The aggregate compensation value of the TFG PSUs for each NEO differs from the aggregate grant date fair value of the TFG PSUs granted in
2022, as computed in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 718, Stock Compensation. Generally, the aggregate
grant date fair value is the amount that Magna expects to expense for accounting purposes over the award’s vesting schedule and does not correspondto the actual economic value, if any, that the NEOs will realize upon the vesting or settlement of the TFG PSUs. In particular, the actual values of TFG PSUs
received are different from the accounting expense because they depend on performance. The amounts disclosed for the TFG PSUs are based on theprobable outcome of the market-condition goals, determined using a Monte Carlo simulation model that incorporates into the valuation the possibility thatthe market condition may not be satisfied and that the value could be NIL. Assumptions, factors and methodologies used in our computations pursuant toTopic 718 include the following:
ASSUMPTIONVALUEValuation Date Stock Price$54.29

Expected Volatility

38.49%

Risk Free Rate

3.72%

Expected Dividend Yield Used When Simulating Stock Price Appreciation(a)0.00%

Expected Dividend Yield Used for Award Holders(b)0.00%

Notes:a.
Mathematically equivalent to reinvesting dividends in Magna Common Shares.
b.

Assumed value of 0.00% since TFG PSU grantees receive dividend equivalents.

A Monte Carlo simulation is a generally accepted statistical technique used, in this instance, to simulate a range of possible future unit prices for Magnaover the remaining Performance Period. The purpose of this modeling is to use a probabilistic approach for estimating the fair value for purposes of financial
accounting under Topic 718 and IFRS-2. Based on the assumptions above, the summary of results from the Monte Carlo simulation was as follows:
SUMMARY OF RESULTS
Valuation Date Stock Price$54.29Remaining Performance Period

5.0 yrs

Hurdle 1 Estimated Fair Value$39.41

Hurdle 2 Estimated Fair Value$30.05

Hurdle 3 Estimated Fair Value$22.97

Hurdle 4 Estimated Fair Value$17.71
Weighted Average Estimated Fair Value$27.33Weighted Average Estimated Fair Value as a % of Stock Price

50.3%

Business of the Meeting

51

BUSINESS OF THE
MEETINGNON-EQUITY INCENTIVE

SUMMARYCOMPENSATION TABLE

The following table sets forth a summary of all compensation earned in respect of 2023, 2022 and 2021 by theindividuals who were our Named Executive Officers in respect of 2023. All amounts are presented in U.S. dollars andhave been rounded to the nearest thousand.

2.

Amounts disclosed in this column represent the compensation value intended to be conferred by the Board in the form of the stock options as discussed in
the Compensation Discussion & Analysis section of this Circular. In valuing such options, the TOCC initially makes reference to the value of a time-vested
stock option determined using the Black-Scholes option pricing model. For stock option grants up to and including the 2021 grant, the TOCC (including its
predecessor committees) applied the calculated Black-Scholes value to determine the number of stock options to be granted for the applicablecompensation value, subject to a floor of 20% of the market/option exercise price of Magna Common Shares at the date of grant. The 20% floor represents
a prudent practice intended to prevent an excessive number of stock options being granted in any year. For stock options granted in each of 2022 and2023, the TOCC assessed the calculated Black-Scholes values against the median and average trends in Black-Scholes values for the company’s stock
options over a rolling ten-year period, but ultimately applied the calculated Black-Scholes value to each such grant.
The Black-Scholes option pricing model requires the input of a number of assumptions, including expected time until exercise, expected stock pricevolatility, risk-free interest rates and expected dividend yields. Although the assumptions used reflect our best estimates, they involve inherent uncertainties
based on market conditions generally outside Magna’s control. If other assumptions are used, the stock option value disclosed could be significantly
impacted. The weighted average assumptions used in measuring the Black-Scholes fair value for the stock options granted in each of 2023, 2022 and
2021, as well as the “floor value” of stock options granted in 2021, are as follows:

3.

52

2023

2022

2021

Grant date stock price (NYSE)$56.12$75.71$83.27

Expected time until exercise

5.0 yrs

4.5 yrs

4.5 yrs

Expected volatility

38.0%

34.2%

33.6%

Risk Free Rate

4.3%

1.9%

0.5%

Expected dividend yield

2.0%

2.0%

2.0%

Grant Date Fair Value per option (rounded)$19.00$19.00$18.00

Actual Black-Scholes ratio

33.9%

25.1%

21.6%

Applied ratio / Floor value

—

—

20%

Amounts disclosed in this column represent annual profit sharing bonuses paid in cash.

Business of the Meeting

Magna’s Total Shareholder Return Performance

250

200

200

150

150

100

100

50

50

0
2018

2019

2020

2021

2022

Magna Common Shares (TSX)

S&P/TSX Total Return

Magna Common Shares (NYSE)

S&P500 Total Return

DECEMBER 31,
2018

DECEMBER 31,
2019

DECEMBER 31,
2020

DECEMBER 31,
2021

SUMMARYCOMPENSATION TABLE

250

2023

DECEMBER 31,
2022

DECEMBER 31,
2023

Magna Common Shares (TSX)

C$100.00

C$118.38

C$154.87

C$179.44

C$137.17

C$146.05

S&P/TSX Total Return

C$100.00

C$122.88

C$129.76

C$162.32

C$152.83

C$170.79

Magna Common Shares$100.00$124.32$165.91$193.49$138.14$150.28

S&P500 Total Return$100.00$131.49$155.68$200.37$164.08$207.21

If a shareholder had invested C$100 in Magna Common Shares on the TSX on December 31, 2018, the cumulativevalue of that investment would have grown to over C$146 by December 31, 2023. In the case of an investment of $100
in Magna Common Shares on the NYSE on the same date, the total cumulative value of that investment would havegrown to over $150 by December 31, 2023. In each such case, the cumulative growth in value lagged the applicableindex by the end of the five-year period. Potential considerations include the differential impact of COVID-related lockdowns
semiconductor chip shortages, inflationary cost increases and economic cyclicality on Magna as compared to othercompanies and industries represented in the indices.
In spite of the growth in indexed total returns over the five-year period, Magna’s CEO compensation, indexed to the2018 level, declined. If Magna’s CEO proxy-disclosed compensation as of December 31, 2018 represented $100, theequivalent compensation as of December 31, 2023 represented approximately $84 of value. This decline reflects theplanned CEO succession in 2021 at a lower target TDC, and other factors.

Business of the Meeting

53

BUSINESS OF THE
MEETINGTSR ($)The graph below shows the five-year total return of Magna Common Shares on the TSX and NYSE as compared to the
S&P/TSX and S&P500 composite indices, respectively, assuming investment of C$100 and $100 on December 31,
2018 and reinvestment of dividends.

Incentive Plans and Awards
Stock Option Plan

Stock option grants are made under the 2009 Plan, which was approved byshareholders 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 toconsultants, 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 arecontemplated.

Limits on Insider
Participation

The maximum number of Common Shares:◾
◾

issued to Magna “insiders” within any one-year period; andissuable 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 dateof 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 forissuance and are available for re-grant.

Amending the2009 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 theexercise 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 describedabove under “Limits on Insider Participation”; andamendment of the amending provision of the plan.

There were no amendments to the 2009 Plan during 2022.

Available Option Plan
on Magna.com

54

The full text of the 2009 Plan is available on our website (www.magna.com).

Business of the Meeting

Eligible Participants
Under 2022 Treasury
PSU Plan

Current, actively employed employees of Magna or any of Magna’s subsidiaries are
eligible for grants under the 2022 Treasury PSU Plan. Members of Magna’s Board of
Directors and independent consultants are not eligible participants. However, if aneligible participant transitions from an employment relationship to a consulting
relationship, this change is not treated as a termination for purposes of awards madeunder the Plan.

Limits on Insider
Participation

The maximum number of Common Shares:◾
◾

issued to Magna “insiders” within any one-year period; andissuable to Magna insiders at any time,

under the 2022 Treasury PSU Plan, 2009 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. Other than this limit, the2022 Treasury PSU Plan does not provide for a maximum number of Common Sharesthat may be issued to one participant.

Vesting Terms

Unless otherwise specified at the time of grant, following completion of the performance
period applicable to PSUs granted under the 2022 Treasury PSU Plan will assess
Magna’s actual performance in relation to the applicable performance goals anddetermine the number of PSUs that vest.

Performance Period

The TOCC will determine the duration of the PSU performance period applicable to any
grant of PSUs, which shall not be less than three years, nor more than seven years.

Plan Amendment

The 2022 Treasury PSU Plan permits the Board to amend the plan, except for thefollowing types of amendments, which require shareholder approval:
◾
◾
◾
◾

◾

an increase in the number of Common Shares reserved for issuance under the2022 Treasury PSU Plan, except as a result of a reorganization of Magna’s capital;
an amendment to remove or exceed the 10% limit on insider participation
described above under “Limits on Insider Participation”;
an amendment to the definition of “eligible participants” to permit participation by
non-employee directors;
an amendment that permits a PSU grant to be transferred to a person other than aPermitted Assign (as defined in National Instrument 45-106 of the Canadian
Securities Administrators), or for normal estate settlement purposes; andan amendment to the section of the 2022 Treasury PSU Plan specifying mattersrequiring shareholder approval, except where such an amendment adds matters tobe subject to shareholder approval.

There have been no amendments to the 2022 Treasury PSU Plan since its ratification byshareholders on May 3, 2022.

Treasury PSU Plan
Available on
Magna.com

The full text of the 2022 Treasury PSU Plan is available on our website(www.magna.com).

Business of the Meeting

55

INCENTIVE PLANS
AND AWARDS

PSUs settled in shares issued from treasury may be granted under the 2022 Treasury
PSU Plan, which was approved by shareholders on May 3, 2022 and is administered by
the TOCC.

BUSINESS OF THE
MEETING

2022 Treasury PSU
Plan

EquityCompensation Plan
Information

As of December 31, 2023, equity compensation plans approved by shareholders underwhich our Common Shares are authorized for issuance are set forth in the table below.

COMMON SHARES TO BE
ISSUED UPON EXERCISEOF OUTSTANDING OPTIONS,WARRANTS AND RIGHTSNAME OF PLAN(#)

WEIGHTED AVERAGE
EXERCISE PRICE OFOUTSTANDING OPTIONS,WARRANTS AND RIGHTS

(%)

($)

58.20

2009 Incentive Stock Option Plan

5,891,433

2.12022 Treasury PSU Plan

1,646,543(1)0.5(1)COMMON SHARESREMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDEREQUITY COMPENSATION PLAN

—(2)

(#)

(%)

1,741,931

0.6

1,353,457

0.5

Note:
1.

Represents the maximum number of Magna Common Shares that would be issued if all four performance hurdles of the TFG PSUs have been attained. No
Common Shares will be issued if a hurdle is not attained by December 31, 2027. In the event only some hurdles are attained by such date, only the
Common Shares associated with such attained hurdles would be issued:

SHARE PRICE HURDLE($)

AGGREGATE NUMBER OFCOMMON SHARESASSOCIATED WITH HURDLE(#)

1 / +50%

85.61

329,309

2 / +100%114.14493,962

3 / +150%

142.68493,963

4 / +200%

171.28329,309—

1,646,543

HURDLE / % INCREASE VS. BASELINE STOCK PRICE ($57.07)

Total
2.

Not applicable. See Note 1 to the Summary Compensation Table for a discussion of the aggregate compensation value and aggregate grant date fair valueof the TFG PSUs, including the weighted average estimated fair value per TFG PSU.

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)Notes:

Treasury PSU Plan
Burn-Rate, Dilution andOverhang

1.

Represents stock options granted in calendar 2023, expressed as a proportion of the number of Magna Common
Shares that were outstanding as of December 31, 2023.

2.

Represents all stock options previously granted but not exercised as of December 31, 2023, expressed as aproportion of the number of Magna Common Shares that were outstanding as of such date.

3.

Represents all stock options available for grant and all stock options previously granted but not exercised as ofDecember 31, 2023, expressed as a proportion of the number of Magna Common Shares that were outstanding
as of such date.

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)Notes:

56

1.

Represents all Treasury PSUs granted in calendar 2023, expressed as a proportion of the number of Magna
Common Shares that were outstanding as of December 31, 2023.

2.

Represents all Treasury PSUs granted but not vested as of December 31, 2023, expressed as a proportion of thenumber of Magna Common Shares that were outstanding as of such date.

3.

Represents all Treasury PSUs available for grant and all Treasury PSUs granted but not vested as of December 31,
2023, expressed as a proportion of the number of Magna Common Shares that were outstanding as of such date.

Business of the MeetingOutstanding option-based awards for each of our Named Executive Officers as ofDecember 31, 2023 are set forth in the table below.

NUMBER OF
SECURITIESUNDERLYINGUNEXERCISEDOPTIONS(1)(#)
20,90641,00862,144
11,42471,367
138,700
172,931
190,614231,579

Seetarama S. Kotagiri

Total
Patrick W.D. McCann

Total

Total

Total

54.44
51.55
83.27
75.71
56.12

02/24/26
02/23/27
02/21/28
02/13/29
03/01/30

55.64
54.44
51.55
83.27
75.71
56.12

03/18/25
02/24/26
02/23/27
02/21/28
02/13/29
03/01/30$43.05$55.64$54.44$51.55$83.27$75.71$56.12

02/26/24
03/18/25
02/24/26
02/23/27
02/21/28
02/13/29
03/01/30

168,588

VALUE OFUNEXERCISED
IN-THEMONEYOPTIONS(2)($)
335,000
552,000
214,000–
331,000
1,044,000––
685,000

MARKET OR
PAYOUT
VALUE OFVESTEDSHARE-BASEDAWARDS NOTPAID OUT OR
DISTRIBUTED($)(4)NILNUMBER OF
SHARE-BASEDAWARDS THATHAVE NOTVESTED(3)(#)
787,583

MARKET OR
PAYOUT
VALUE OFSHARE-BASEDAWARDS THATHAVE NOTVESTED(3)($)
46,530,000

137,878

8,146,000

NIL

139,995

8,271,000

385,000

135,220

7,989,000

231,000

145,4678,594,000

NIL

3,162,000
186,000
31,00040,00040,00088,000––100,000
485,000
43,000237,000––
112,000
392,000

89,68813,93812,48913,75838,79730,02325,89933,684

Total

02/26/24
03/18/25
02/24/26
05/12/26
02/23/27
02/21/28
02/13/29
03/01/30

150,045
5,357
7,309
23,278
8,406
11,65433,684Eric J. Wilds$43.05$55.64$54.44$54.44$51.55$83.27$75.71$56.12

116,166
9,315
31,523
19,51551,79737,895

Tom Rucker$43.05$45.62$55.64$63.17$54.44$51.55$83.27$75.71$56.12OPTION
EXPIRATIONDATE(MM/DD/YY)
02/26/24
08/13/24
03/18/25
05/13/25
02/24/26
02/23/27
02/21/28
02/13/29
03/01/30

940,673
11,614
8,929
8,598
8,598
11,6397,205
25,89933,684

John H. Farrell

OPTION
EXERCISEPRICESHARE-BASED AWARDS

18,00034,000175,000––
100,000
327,000
223,000
43,00064,000292,000––
100,000
722,000

Notes:
1.
Includes both vested and unvested options.
2.
Determined using the closing price of Magna Common Shares on the NYSE on December 29, 2023. Value shown reflects in-the-money value of all
options, whether or not exercisable as of December 29, 2023.
3.
Represents ROIC PSUs and rTSR PSUs, at target, together with the number of TFG PSUs granted on a special, non-recurring basis in September 2022.
4.
Represents the market value of any RSUs that had not been redeemed as at December 29, 2023. The value shown was determined using the closing
price of Magna Common Shares on the NYSE on December 29, 2023.

Business of the Meeting

57

INCENTIVE PLANS
AND AWARDSOPTION-BASED AWARDS

BUSINESS OF THE
MEETING

Outstanding Option
and Share-BasedAwardsIncentive
Plan Awards – Value
Vested During theYear

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.

OPTION-BASED AWARDS –VALUE VESTEDNAMEDURING THE YEAR

(1)SHARE-BASED AWARDS –VALUE VESTEDDURING THE YEAR

($)

($)

NON-EQUITY INCENTIVE PLAN
COMPENSATION – VALUE

(2)

(3)
EARNED DURING THE YEAR($)

Seetarama S. Kotagiri

104,000

1,188,000

5,633,000

Patrick W.D. McCann

9,000

85,0001,898,000

John H. Farrell

24,00019,0002,862,000

Tom Rucker

17,00097,0001,898,000

Eric J. Wilds

29,000200,000

1,898,000

Notes:
1.
Represents the vesting date value of previouly granted stock options that vested during 2023 and assumes that any such options that were in-the-money
were exercised on the vesting date.
2.
Represents the vesting date value of 2020 ROIC PSUs and 2020 rTSR PSUs for each of the NEOs other than Mr. Farrell, together with dividends thereon,
as of February 11, 2023, as well as dividends on previously granted RSUs for each of the NEOs other than Mr. Wilds.
3.
Represents the value of profit sharing bonuses paid in cash in respect of 2023.

2020 PSU Awards – Performance and Payout in 2023
The ROIC PSUs and rTSR PSUs, which covered a performance period from January 1, 2020 to December 31, 2022,
vested on February 3, 2023, following review by the TOCC and Board approval of the payouts.
The 2020 ROIC PSU payout was at the 59% level on a payout scale of 0% to 200%, as follows:
2020

2021

2022

ROIC Performance

6.2%

13.3%

11.6%

Payout Level

0%

98%

79%

3-yr Avg. Payout

58%

The 2020 rTSR PSU payout was at the 140% level on a payout scale of 0% to 200%, based on a TSR rank of sixth outof 14, which placed Magna at the 62nd percentile of the rTSR peer group, as follows:
rTSR PEER

TSR
(%)

RANK

rTSR PEER

TSR
(%)

RANK

Adient plc

57.7

1

Gentex-0.68Visteon

50.7

2

BorgWarner Inc.

-1.8

9

Linamar

33.0

3

Lear Corporation

-2.4

10

S&P 500

28.9

4Dana 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

As a result of the foregoing, the number of 2020 ROIC PSUs and 2020 rTSR PSUs realized by each NEO effective
February 3, 2023, was as follows:
ROIC PSUS
AT TARGET(#)

ROIC PSUSREALIZED(#)

rTSR PSUS ATTARGET(#)

rTSR PSUSREALIZED(#)

Seetarama S. Kotagiri

27,615

16,29213,80819,331

Patrick W.D. McCann

NAME

2,317

1,367

1,159

1,622

John H. Farrell

NIL

NIL

NIL

NIL

Tom Rucker

2,317

1,367

1,159

1,622

Eric J. Wilds

4,635

2,734

2,317

3,243

58

Business of the MeetingCorporate Governance
IN THIS SECTION
60

Governance Environment

61

About the Board

62

Board Independence

66

Board Effectiveness70

Shareholder Democracy and Engagement

72

Ethical Conduct73

Sustainability at Magna

Corporate Governance at Magna
Magna believes that strong corporate governance practices are essential to fostering stakeholder trust and confidence,
management accountability and long-term shareholder value. This commitment to sound and effective governancestarts with a diverse, experienced and highly skilled Board that:◾

is informed, active and engaged;◾

functions independently of Management;◾

embraces evaluation and continuous development;◾

values transparency and is accountable to stakeholders; and◾

fosters a culture of integrity and ethical conduct.

The manner in which these important characteristics support the Board in fulfilling its stewardship role is detailed in thissection. Details about our Nominees for election at the Meeting, including their biographies, skills and experience,tenure and compensation, can be found in the “Business of the Meeting – Election of Directors” section of this Circular.
Our approach to corporate governance is set forth in our Board Charter, which is available on our website(www.magna.com) and has been filed on SEDAR+ (www.sedarplus.ca). The Board Charter is reviewed at least annuallyand updated as needed to reflect evolving best practices in corporate governance.

Active Board engagement in, and approval of strategy◾

Diverse Nominee skills, expertise and backgrounds◾

Strong oversight of management succession planning◾

Board Diversity Policy with gender parity target◾

Environmental, Social and Governance (ESG) oversight◾

Director tenure limit◾

Active shareholder engagement◾

Limitation on director interlocks◾

Advance Notice By-Law◾

Independent Board Chair◾

Annual director election; no slate ballots◾

100% Independent Directors on all Board committees◾

Majority voting policy; prompt disclosure of vote results◾

Independent Directors meet without Management◾

Annual Say on Pay vote◾

Rigorous annual Board/Director effectiveness evaluation◾

Mandatory deferral of director fees◾

Director orientation and continuing education◾

Equity maintenance requirement for directors◾

Commitment to culture of ethics and compliance◾

Trading blackouts and anti-hedging restrictions

Corporate Governance59

CORPORATEGOVERNANCECORPORATE GOVERNANCE OVERVIEW◾

Governance Environment
Regulation
Magna’s Common Shares are listed on the TSX (stock symbol: MG) and the NYSE (stock symbol: MGA). In addition to
being subject to regulation by these stock exchanges, we are subject to securities and corporate governance regulationby the Canadian Securities Administrators (“CSA”), including the Ontario Securities Commission, which is Magna’s
primary securities regulator. Magna is also regulated by the United States Securities and Exchange Commission (“SEC”)
as a “foreign private issuer”.
We meet or exceed all of the guidelines established by the CSA in National Policy 58-201 – Corporate Governance
Guidelines. Additionally, although we are not required to comply with most of NYSE’s Corporate Governance Standards,
our practices meet or exceed them in all material respects. Any differences between our governance practices and
NYSE’s Corporate Governance Standards are discussed in the “Statement of Significant Governance Differences (NYSE)”
which can be found on our website (www.magna.com).

Best Practices
Magna also monitors the voting policies, corporate governance guidelines and recommended best practices of ourlargest institutional shareholders, shareholder representative organizations, such as the Canadian Coalition for Good
Governance, as well as proxy advisory firms, such as Institutional Shareholder Services and Glass Lewis & Co.

Governance Framework
The diagram below summarizes our governance structure, with key elements described in the sections that follow.
INDEPENDENTAUDITORAPPOINTREPORT

INTERNAL
AUDITREPORT

AUDITCOMMITTEEGNSCSHAREHOLDERSELECTAPPOINTREPORT

BOARD
OF
DIRECTORSDIVISIONALMANAGEMENT

Corporate Governance

REPORTEXECUTIVE
MANAGEMENTOPERATINGGROUPMANAGEMENT60APPOINTAPPOINTAPPOINTINDEPENDENTADVISORENGAGECORPORATEMANAGEMENTTECHNOLOGYCOMMITTEETOCCAPPOINTINDEPENDENTADVISORSAbout the Board
Board Size and Term
Our articles of incorporation permit a Board size of between five and fifteen directors, with the exact number to be
determined by the Board. Over the last ten years, our Board has ranged between ten and thirteen directors, with anaverage of eleven. For 2024, twelve nominees have been put forward for election by shareholders. The Board believes
that this is an appropriate number of nominees in light of the scale and complexity of Magna’s business and the markets
in which we operate, as well as the range of skills needed to effectively oversee the company’s strategy and risks,
provide strategic guidance and advice to Executive Management, staff Board Committees and address planned director
retirements effectively. Each director is elected for a one-year term expiring at our next annual meeting of shareholders.

Minimum Qualifications for Service as a Director of Magna
In addition to the minimum qualifications specified in the OBCA, our Board Charter requires that each director possesses
the following attributes:
◾
◾
◾
◾
◾
◾

personal and professional integrity;
significant achievement in their field;
experience and expertise relevant to our business;a reputation for sound and mature business judgement;
the commitment and ability to devote the necessary time and effort in order to conduct their duties effectively;
andgeneral ability to read and understand financial statements.

Beyond the above minimum qualifications for service, we expect all of our directors to attend all Board and Committee
meetings. However, we recognize that scheduling conflicts are unavoidable from time to time, particularly in the case of
meetings that are called on short notice. Accordingly, directors are subject to a minimum attendance requirement of
75% for all regularly scheduled Board and Committee meetings, except where an absence is due to a medical or othervalid reason.
In order to be able to devote the necessary time and effort to the activities of the Board and its committees, directors
serving on the Board may not sit on more than four public company boards (including ours) without the prior approval of
the GNSC. A director on our Board who serves as a chief executive officer (or equivalent position) of another publiccompany may not serve on the board of any other public company (other than the company of which they are the chief
executive officer) while serving on our Board without the prior approval of the GNSC. Our chief executive officer isallowed to serve on the board of one other public company, and was recently elected to serve as an independent director
on the board of another public company.

Board Leadership
CORPORATEGOVERNANCE

Our Board is led by an independent Board Chair who is annually selected by the Independent Directors from among
themselves. Robert F. MacLellan has served as our independent Chairman since May 2022.
The Board Chair’s basic duties include presiding over Board meetings, including in camera sessions at each suchmeeting involving the Independent Directors, overseeing Board Committees and coordinating Board activities with
Committee Chairs. Other duties of the Board Chair, as described in the Board Charter, include:
◾
◾
◾
◾
◾
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agenda-setting for Board meetings;
representing the Board in discussions with third parties;
representing the Board in discussions with Executive Management;
generally ensuring that the Board functions independently of Executive Management;
assisting in recruiting director candidates who have been identified by the GNSC; andoverseeing the annual evaluation process of the Board and its Committees.

The Board can delegate additional responsibilities to the Board Chair at any time. Any change to the responsibilities
listed in the Board Charter must be approved by the Board.

Corporate Governance61

Board Committee Structure
The Board carries out its duties in part through four standing Committees:◾

Audit Committee;◾

Governance, Nominating and Sustainability Committee;◾

Talent Oversight and Compensation Committee; and◾

Technology Committee.

Each Independent Director is expected to serve on the Technology Committee and one other standing Committee, but
may attend the meetings of any Committee. Committee staffing assignments are made with the aim of best matching
the skills and expertise of Independent Directors to the Committee mandates in order to maximize the overall effectivenessof the Board and its Committees.
All of the Board Committees are staffed and chaired by Independent Directors, and operate under Committee Charters,
which are available on our website (www.magna.com) and on SEDAR+ (www.sedarplus.ca). Each Committee has
prepared a report appearing later in this Circular, summarizing the Committee’s mandate and membership, highlighting
key accomplishments and identifying major areas of focus.
In addition to the Board’s standing Committees, the Board may establish special committees composed entirely of
Independent Directors to review and make recommendations on specific matters or transactions. There were no special
committees during 2023.

Director Compensation
Compensation for our Independent Directors is structured to attract and retain skilled independent directors and aligntheir interests with the interests of our long-term shareholders. The details of our director compensation structure and2023 independent director compensation can be found in the “Business of the Meeting – Director Compensation”
section of this Circular.

Board Independence
Shareholders are best served by a strong Board which exercises independent judgement, as well as prudent andeffective oversight on behalf of shareholders. Assuming all the Nominees listed in this Circular are elected with a majorityof votes, eleven out of twelve, or 92%, of the directors on our Board will be “independent”. This far exceeds theminimum two-thirds independence requirement contained in our Board Charter and recommended by the Canadian
Coalition for Good Governance, as well as the recommendation in National Policy 58-201 that a majority of directors be
independent.

Definition of Independence
A Magna director is considered to be independent only after the Board has affirmatively determined that the director
has no direct or indirect material relationship that could interfere with the exercise of their independent judgement. Thisapproach to determining director independence draws upon the definitions contained in Section 1.4 of National
Instrument 52-110 (“NI 52-110”) and Section 303A.02 of the NYSE’s Corporate Governance Listing Standards, as wellas the specific relationships identified in those instruments as precluding a person from being determined to be an
independent director.
Audit Committee members are subject to a higher standard of independence than other directors, consistent with
Section 1.5 of NI 52-110. Under this standard, a person cannot be considered an independent director for purposes of
Audit Committee membership if (among other things) he or she is a partner, member, executive officer, managing
director or person in a similar position at an accounting, consulting, legal, investment banking or financial advisory
services firm providing services to Magna (including any subsidiary) for consulting, advisory or other compensatory fees.
In determining whether any candidate for service on the Board is independent, information is typically compiled from avariety of sources, including: written questionnaires completed by directors/candidates; information previously provided
to us by directors; our records relating to relationships with accounting, consulting, legal, investment banking or
financial advisory services firms, together with information provided to us by such firms; and publicly available information.
The GNSC is provided with a summary of all such relationships (whether or not material) known by Magna based on
the foregoing sources. Following the GNSC’s consideration and assessment of such information, it presents its
recommendation to the Board for approval.

62

Corporate GovernanceAdditional Ways in Which Independence is Fostered
Aside from the two-thirds independence requirement, there are other ways in which Board independence is fostered,including:
◾
◾
◾
◾
◾
◾
◾

separation of the roles of Board Chair and Chief Executive Officer, together with position descriptions defining
such roles;a requirement that the Chief Executive Officer resign from the Board when he or she retires from Management;
the use of in camera sessions at every Board and Committee meeting;the right of the Board and each Committee to engage independent legal, financial and other advisors at
Magna’s expense;
limitations on board interlocks;
Board and Committee Chairs’ authority over meeting agendas and attendees; andIndependent Directors’ right to discuss any matter with any employee or any advisor to the company, as wellas any independent advisor retained by the Board or a Committee.

Committee Independence
The Board believes that Committee independence is critical to enabling the Board to exercise prudent and effective
oversight. In addition to permitting only Independent Directors to serve on the Audit Committee, GNSC and TOCC,
independence is promoted in a number of ways, including the:
◾
◾
◾
◾
◾
◾

use of in camera sessions at every Committee meeting;right of each Committee to retain independent advisors at Magna’s expense;
inclusion in each Committee Charter of a position description for the Committee Chair;Committee Chairs’ authority over meeting agendas and attendees;
Committee members’ right to discuss any matter with any employee or any advisor to the company, as wellas any independent advisor retained by the Board or a Committee; andright of any Committee member to call a Committee meeting.

Interlocks
Our Board Charter limits the number of boards on which our directors can serve together. There are currently no Board
interlocks.

CEO Position Description

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development of Magna’s overall corporate strategy (including product, geographic, customer, merger/
acquisition and growth strategies) and capital allocation priorities, in conjunction with the Board of Directors;
overall direction of Magna’s operations and implementation of strategy in conjunction with the senior leadership
team;
formulation or approval of critical corporate policies and programs;
promotion of Magna’s decentralized, entrepreneurial culture, as well as its culture of integrity;
development of Magna’s management reporting structure;
selection of senior leadership team and oversight of succession planning for critical positions;
together with the Board, determination of compensation for members of Magna’s Executive Management;interaction with the Board on behalf of Management; andcommunication with key stakeholders.

Director Conflicts of Interest and Related Party Transactions
Where a director has a conflict of interest regarding any matter before the Board, the conflicted director must declaretheir interest, depart the portion of the meeting during which the matter is discussed and abstain from voting on thematter. However, the OBCA permits directors to vote on their own compensation for serving as directors.
The GNSC is generally responsible for reviewing and making recommendations to the Board regarding related party
transactions. In the case of a related party transaction that is material in value, the unconflicted members of the Board

Corporate Governance

63

CORPORATEGOVERNANCE

A position description has been developed for the Chief Executive Officer to further promote the independence of theBoard and to define the limits of the Chief Executive’s authority. His basic duties and responsibilities include:may choose to establish a special committee composed solely of Independent Directors to review and makerecommendations to the Board. Related party transactions include those between Magna (including any subsidiary)
and a director, officer or person owning more than 10% of our Common Shares. In reviewing and making
recommendations regarding related party transactions, the GNSC seeks to ensure that transaction terms reflect thosethat would typically be negotiated between arm’s length parties, any value paid in the transaction represents fair market
value and that the transaction is in the best interests of the company. There were no such related party transactions
during 2023.

Board’s Stewardship Role
The Board is responsible for the overall stewardship of Magna. To this end, the Board: supervises the management of
the business and affairs of Magna in accordance with the legal requirements set out in the OBCA, as well as otherapplicable law; and, jointly with Management, seeks to create long-term shareholder value. The Board’s stewardshiprole, specific responsibilities, compositional requirements and various other matters are set forth in our Board Charter.
Consistent with the standard of care for directors under the OBCA, each director on the Board seeks to act honestly andin good faith with a view to the best interests of the corporation and to exercise the care, diligence and skill that areasonably prudent person would exercise in comparable circumstances. The standard of care under Ontario corporate
law differs from that of some other common law jurisdictions, by requiring directors to act in the “best interests of thecorporation” as opposed to the “best interests of shareholders”. This distinction effectively recognizes that while individual
shareholders may have conflicting interests, investment intents and investing horizons, the stewards of a corporationmust act with a view to the interests of the corporation as a whole. Consistent with case law developed under the OBCA
and equivalent federal and provincial corporate statutes in Canada, Magna’s Board seeks to consider and balance theimpact of its decisions on its affected stakeholders, including shareholders, other security holders and employees.

Primary Board Responsibilities
The Board Charter identifies the following as the Board’s primary responsibilities:
◾

◾

◾

◾

Corporate Culture and Approach to Corporate Governance: Magna maintains a unique entrepreneurial
corporate culture that we believe has been critical to our past success and expect will be critical to our future
success. The Board oversees Magna’s culture and overall approach to corporate governance, including bydetermining the specific policies and practices that the Board believes to be in the best interests of thecompany. The Board has delegated to the GNSC the responsibility for making recommendations with respect
to corporate governance matters.
Oversight of Executive Management: The Board appoints the Chief Executive Officer, assesses his
performance, determines his compensation and provides strategic advice to him and other members of the
Executive Management team. Additionally, the Board satisfies itself as to the integrity of each member of
Executive Management and the creation by the Executive Management team of a culture of integrity and ethicalbusiness conduct throughout the company.
Executive Compensation: The Board oversees our system of executive compensation by structuring
incentives aimed at attracting, retaining and motivating skilled executives to responsibly achieve the long-term
objectives established through the company’s strategic planning process. The Board has delegated to the
TOCC the responsibility for making recommendations on executive compensation matters. The CD&A sectionof this Circular contains a detailed discussion of how the Board and TOCC fulfill their responsibilities related
to executive compensation decisions.
Succession Planning: The Board satisfies itself that the company has developed appropriate succession
plans identifying potential future candidates for all positions within Executive Management, management of
Magna’s Operating Groups and other key positions in the company. In fulfilling these responsibilities, the Board
aims to satisfy itself that Magna’s succession processes:◾
have been structured to enable the Board to promptly address an unplanned succession event involving
members of Executive Management;◾
will facilitate seamless transitions of members of Executive Management and Operating Groupmanagement, as such managers retire, are promoted to new roles or leave the company; and◾
include robust and effective talent management practices to identify, reward, retain, develop andpromote high-performing employees.
The Board receives regular updates on Magna’s leadership development and succession planning activities,
from our Chief Executive Officer and our Chief Human Resources Officer. Additionally, the Board has multiple
opportunities each year to meet and engage with key managers and high-performing employees. Overall,the Board is satisfied that Magna has in place appropriate succession plans addressing key positions within

64

Corporate Governance◾

◾

The company’s strategy is discussed in the company’s Annual Information Form/Annual Report on Form 40-F
filed concurrently with this Circular.
Capital Allocation: In approving capital, the Board is focused on ensuring that the company can deliver on
the Board-approved, long-term strategic priorities, while still meeting its near-term product and programcommitments to customers. Updates regarding changes in capital expenditure needs from the approved
budget are presented quarterly, and further Board approval is required where the company’s capital
expenditures are forecast to exceed the Board-approved amount for that year.
Enterprise Risk Management: The Board satisfies itself as to the existence of effective processes to
identify and mitigate (to the extent practicable) Magna’s principal business risks. In fulfilling its oversight
responsibility, the Board satisfies itself that Management has implemented appropriate strategies to address
the strategic and competitive challenges faced by the company over different time horizons, manage day-to-day
operational risks, promote legal and regulatory compliance and ethical conduct, safeguard corporate assets
and maintain appropriate financial and internal controls designed to protect the integrity of Magna’s financial
statements. The Board’s approach to enterprise risk recognizes that risk and reward are “flip sides of thesame coin”, but that management decision-making must be infused with both an awareness and understandingof such risks, as well as a clear understanding of the limits of risk that the Board will accept.
The Board maintains risk oversight responsibility for strategic risks and has delegated specific areas of risk
oversight to its standing Committees so that the directors on such Committees can bring their particularknowledge and expertise to the risks falling within the Committee’s authority. The key risks overseen by the
Board and each standing Board Committee are as follows:

Corporate Governance65

CORPORATEGOVERNANCE◾

the company, including the Chief Executive Officer’s, as well as a leadership development system that
supports the company’s succession planning objectives more generally.
Strategic Planning: The Board oversees the development and implementation of the company’s long-term
strategy, as well as its near-term (typically three-year) business plan. In fulfilling this responsibility, the Board
meets with Executive Management in two or more dedicated sessions each year, during which the Board:◾
assesses strategic priorities in light of automotive industry trends and developments;◾
engages with, and provides advice and guidance to, Executive Management on the company’s approachto product portfolio, key customers, geographic footprint, core and emerging technologies, R&D
priorities, acquisitions/divestitures, talent management and other areas of strategy;◾
considers consolidated and Operating Group three-year business plans, together with sensitivity
analyses of the consolidated business plan;◾
evaluates short-, medium- and long-term risks that could erode the value of the company’s businesses
and business units, together with Management actions to mitigate such risks;◾
engages in scenario planning to model the impact of events such as potential economic downturns;◾
provides input on capital allocation priorities, as well as capital structure, and approves a capital
expenditure budget for the year;◾
approves a three-year consolidated business plan and updated strategic plan; and◾
jointly identifies with Executive Management action plans to address at subsequent Board meetings any
open questions/issues arising from the business planning/strategy session.

Board◾

Strategic risks including CEO succession, operations, capital structure, product portfolio, impact of megatrends and changes intechnologies, as well as customer-related risks◾

Cybersecurity

Audit Committee

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Technology
Committee

GNSC

TOCC

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Internal controls andIT general controls◾

Corporate
governance◾

Technology, R&D/
innovation risks◾

Executivecompensation◾

Financial reporting◾

◾

Talent management

Disclosure controls◾

◾

Board succession
planning

Domain 3 (Productand Solution)
cybersecurity◾

◾

Enterprise risk
management process

Leadershipdevelopment andsuccession planning◾

Sustainability,
includingenvironmental
compliance◾

Occupational healthand safetycompliance◾

Taxation◾

Material litigation/
regulatory risk◾

Ethics and legal
compliance◾

Domain 1 (Enterprise)and Domain 2(Manufacturing)
cybersecurity

Each Committee’s risk mandate is described further in the Committee’s Charter. Further risk oversight areas
are added from time to time, as applicable, in the course of annual Committee Charter reviews. Moreover,director orientation and education activities related to risk topics are not limited to those in a Committee’sCharter.
Disclosure: We have established and maintain policies and procedures designed to ensure that material
information disclosed to stakeholders is timely, factual, accurate and in compliance with the applicableregulatory and legal requirements to which Magna is subject. We maintain a disclosure committee comprisedof senior management, tasked with reviewing and approving all material information and public regulatory
filings prior to such information being made public and/or filed with applicable regulatory agencies. Each Board
Committee also reviews the material information relevant to its mandate to be included in regulatory filings
prior to consideration and approval by the Board.
Shareholder Engagement: Our Board recognizes that being accessible and engaging in open, regulardialogue with shareholders is a vital element of strong corporate governance. The shareholder engagement
activities of the Board are discussed in greater detail later in this Corporate Governance section.
Fundamental Corporate Actions: In addition to identifying the above responsibilities, the Board Charter
helps to define the role of the Board with respect to various fundamental actions, such as financial statements,
material public disclosure documents, business plans and capital expenditure budgets, material financing
documents, major organizational restructurings, material acquisitions and divestitures, as well as major corporate
policies. We believe that the identification and definition of Board responsibility for the foregoing items
promotes Board independence.

Board EffectivenessRecruitment and Nomination Process
The GNSC recommends to the Board the nominees for election at each annual meeting of the company’s shareholders.
In carrying out this function, the GNSC considers factors such as the following in determining potential gaps:

66◾

Magna’s most recent strategic plan;◾

feedback on director recruitment priorities from the annual board effectiveness evaluation process;◾

updated Board skills matrix and succession planning roadmap;◾

Board composition, independence, diversity and other factors;◾

Board Committee staffing needs and regulatory requirements; andCorporate Governance◾

advice from the Board’s independent search firm.

It then seeks to address any potential gaps through recruitment of one or more additional directors identified with theassistance of a professional search firm. Potential candidates may also be recommended by existing directors, membersof Management, external advisors, shareholders or others. The names of candidates identified by any such parties areprovided to the search firm retained by the GNSC for its recommendation as to suitability. The GNSC will typically interview
a short list of three to five candidates for each Board seat it seeks to fill.

Diversity Policy and Targets
Board Diversity
We believe that shareholders benefit from a strong, independent board composed of highly engaged directors who
represent a diversity of knowledge, skills, experience, perspectives and backgrounds that will assist the Board in fulfillingits duties. As such, the Board has tasked the GNSC with the responsibility of establishing director recruitment
procedures that are aimed at eliciting a diverse range of candidates, without discrimination on the basis of any diversity
attributes, including age, gender, cultural background, national origin, religion, physical ability, and sexual or genderorientation.
The Board adopted a Board Diversity Policy targeting gender parity by December 31, 2023, subject to a minimum of
not less than 30% female directors prior to that time, and successfully achieved this target. Consistent with therecommendations of the Canadian Coalition for Good Governance, gender parity will be achieved if the balance between
male and female directors ranges between 40% and 60% over a rolling three-year time frame. The Board has not
adopted specific targets relating to other diversity attributes; however, the Board considers these factors in striving for acomposition that is generally reflective of Magna’s customers, shareholders and employees, as well as the geographic
markets in which it operates.
Currently, the GNSC uses a professional search firm that operates under instruction to elicit a diverse range of candidates,with none excluded on the basis of personal characteristics or attributes unrelated to the individual’s ability to carry out
their duties as a director. The Board is satisfied that the approach thus far has been effective in achieving a diverse Board,
as exemplified by the balance of female directors (42% of the Nominees), as well as the proportion of Nominees (42%)
representing diversity attributes of LGBTQ+ or underrepresented minority in their home country.

Management Diversity

On a global basis, approximately 28% (2022: 28%) of the employees in our wholly owned operations are women. A
total of approximately 4,958 (2022: 4,900) employees in our wholly owned operations occupy critical roles with885 ( 2022: 873) of such employees, or 18% (2022: 18%), being women. Underrepresentation of women in our workforce
is most pronounced in IT, operations and product engineering career streams, a consistent trend throughout the
automotive industry.
Recognizing the importance of improving gender diversity within key technical career streams, many of the organizations
we have partnered with promote gender diversity in technical career streams. Our current strategic partnerships
include: Automotive Women’s Alliance; Build a Dream; Centre for Automotive Diversity, Inclusion & Advancement (CADIA);
Catalyst; FIRST Robotics – Girls in STEM; her Career; Institute of Electrical and Electronic Engineers (IEEE); Indspire;
Inforum; KnowledgeStart; National Society of Black Engineers; Queen’s University Engineering Society; Society of
Hispanic Professional Engineers; Society of Women Engineers (SWE); WISE (Women in Science and Engineering) and
Women in Manufacturing.
The Board as a whole continues to advocate for improved gender representation and other diversity in leadership andother critical roles, as well as STEM career streams. In addition to their strong advocacy, the female directors of the Board,currently representing more than one-third of our Board of Directors, have also sought opportunities to mentor andshare their experiences with the company’s high-performing female employees.
Our approach to diversity is described in greater detail in our Sustainability Report.

Corporate Governance67

CORPORATEGOVERNANCE

Diversity within our employee population is also important to us and we strive to create an inclusive work environment
throughout the company. We have taken a number of steps in this regard, including: development and implementation of
a diversity awareness program; creation of a Global Diversity & Inclusion Council headed by two senior leaders;fostering the establishment of employee resource communities (“ERCs”), including Women’s exchange (Wx), Race &Ethnicity (Eg) and Pride (Pr); as well as establishment of strategic partnerships with a broad range of organizations
dedicated to raising the profile of women in the automotive industry.

Age and Term Limits
The GNSC is committed to ensuring that Independent Directors remain active, engaged and effective participants on
the Board and that they are able to function independently of Management. Decisions regarding continued service on the
Board by an Independent Director are based primarily on the Board’s skills needs and the Independent Director’s
performance, as determined through the Board’s annual effectiveness evaluation, which includes peer review components.
Subject to the foregoing, an Independent Director may serve for a maximum of twelve years.
Expected director retirement dates of current Independent Directors based on the twelve-year tenure limit are set forthin the table below
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

Annual Board Effectiveness Assessment
Magna maintains an annual Board effectiveness assessment process which aims to assist in the identification of shortand long-term Board priorities, as well as the assessment of the overall functioning of the Board, its Committees andindividual directors. The effectiveness assessment, which is overseen by the GNSC, typically consists of the following
components:
Board Effectiveness
Questionnaire
Detailed questionnairecompleted by eachdirector, which
includes selfassessment and peer
review components

Feedback

Implementation of
Changes

Following completionof the questionnaire
and interview
components, the
GNSC Chair and theexternal facilitator
debrief the Board Chair
and review overallfindings with the
GNSC. Such findings
and the GNSC’s
recommendations arethen presented to anddiscussed with the
Board

GNSC Chair, Board
Chair and the Chief
Executive Officer meetto agree on an action
plan to address the
feedback andimplement the Board’s
recommendations

Individual Interviews

Confidential
one-on-one interviewsof each director by the
GNSC Chair and an
external facilitator tofollow‐up oncomments made in thequestionnaires, elicit
any other feedback
and communicate toeach director general
feedback from the peer
review questions in
the questionnaire

Confidential
one‐on‐one
discussions with eachdirector by the external
facilitator, to elicit
feedback regarding theBoard Chair’s
performance, as wellas any other feedback
which a director may
prefer to communicate
anonymously

Director Orientation and Education
We are committed to ensuring that Independent Directors are provided with a comprehensive orientation aimed atproviding them with a solid understanding of a broad range of topics, including:
◾
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◾
◾
◾
◾

68

our business, operations and investments;
consolidated and Operating Group strategic and business plans;
trends and risks impacting the automotive industry;
our capital structure;
key enterprise risks and risk mitigation policies and practices;
cybersecurity risks and risk mitigation;
our system of internal controls;

Corporate Governance

◾
◾
◾
◾
◾
◾
◾
◾

our internal audit program;the external auditors’ audit approach and areas of emphasis;
our human resources policies and practices, including talent management, diversity and inclusion, as well as
succession planning;
our approach to sustainability and environmental and health/safety policies and practices;
our Code of Conduct & Ethics, as well as our legal compliance program;
our system of corporate governance;
fiduciary duties and legal responsibilities applicable to directors of an Ontario corporation; andother matters.

We also aim to provide all directors with continuing education to assist them in furthering their understanding of ourbusiness and operations and the automotive industry, as well as emerging trends and issues, including in such areasas:◾
corporate governance;◾
trends and technologies relevant to our operations, products and customers;◾
significant risks and risk management mitigation processes;◾
approach to talent management;◾
executive compensation;◾
ethics and compliance;◾
mergers and acquisitions; and◾
legal/regulatory matters.
Board and Committee education topics during 2023 are set forth in the table below.

Global Macroeconomic Update
Car of the Future Evolution
Digital Transformation
Cybersecurity
China Update
BEV Update
Operational Excellence
Automotive Supplier Study
Sustainability Strategy
Succession Planning
Culture and Employee Engagement
Diversity and Inclusion
Cybersecurity & IT
Finance Transformation
Ethics & Legal Compliance
Financial Reporting of Sustainability Matters
Tax Update
Insurance Update
Treasury Update
SAP S/4HANA Implementation
Mission Critical Risks
Sustainability — Human Rights/ Supply Chain Legislation Regulatory Update
Artificial Intelligence and Board Governance
Climate Change Disclosure
Sustainability — net-zero Pledge
Flexible Manufacturing
Automation and Factory of the Future
Car of the future: SW/HW emerging vehicle ecosystem
Battery Enclosures Technology Landscape
Highly Integrated (Automotive) Systems

PRESENTERManagement
Management
Management
Management
Management
Management
Management
Deloitte
Management
Management
Management
Management
Management
Management
Management
Management
Management
Management
Management
Management
Management
Management
FaskenFaskenManagement
Management
Management
Management
Management
Management

ATTENDED BY
Full Board
Full Board
Full Board
Full Board
Full Board
Full Board
Full Board
Full Board
Full Board
Full Board & TOCC
TOCC
TOCC
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
GNSC
GNSC
GNSC
GNSC
GNSC
Technology Committee
Technology Committee
Technology Committee
Technology Committee
Technology Committee

CORPORATEGOVERNANCE

TOPIC

Our director education program is developed based on priorities identified by the Board and may include various
elements, including: site visits to our facilities; video overviews of manufacturing facilities; guided visits to major autoshows; in-boardroom presentations by members of Management, external advisors or others; third-party led training
programs; membership in organizations representing independent directors; and subscriptions to relevant periodicals orother educational resources.
Independent Directors are encouraged to participate in additional director education activities of their choosing, at our
expense. We maintain Board memberships to the Institute of Corporate Directors, as well as the National Association of

Corporate Governance69

Corporate Directors and encourage Independent Directors to attend conferences, seminars and webinars organized bythese or other organizations. Additionally, directors are routinely provided with thought leadership materials on a
range of topics from a number of respected external sources, including: investor representative organizations such as
the Canadian Coalition for Good Governance; various law, accounting, management consulting and executive
compensation firms; automotive industry news sources; and general publications relating to public companies. Further,
we regularly distribute media articles relating to Magna and the automotive industry, as well as analyst reports andupdates relating to Magna, its competitors and the automotive industry.

Shareholder Democracy and Engagement
Shareholder Democracy
Magna’s approach to corporate governance reflects the following basic principles of shareholder democracy:◾

One Share, One Vote: We have a single class of shares, with each share entitled to one vote.

◾

Majority Voting: Under applicable corporate law, shareholders can only vote “for” or “withhold” their vote fordirector nominees. A “withhold” vote is an abstention or non-vote instead of a vote against the nominee. As
a result, a single “for” vote can result in a nominee being elected, no matter how many votes were withheld. We
have adopted a majority voting policy in our Board Charter, under which we treat “withhold” votes as if they
were votes against a nominee in the case of an uncontested election (i.e. one in which the number of nominees
equals the number of Board positions). A nominee who is legally elected as a director but receives more“withhold” votes than “for” votes must immediately tender a resignation to the Chair of the GNSC.
Detailed voting results are promptly disclosed in a press release issued after each shareholder meeting, sothat shareholders can easily understand the level of support for each nominee, as well as each other item ofbusiness at the meeting.
Unless there are exceptional circumstances, the GNSC and Board must accept the resignation, effective
within no more than 90 days after the annual meeting. We will promptly disclose in a press release thedetermination made by the Board and, in the event they reject a resignation under the majority voting policy,
we will disclose the nature of the exceptional circumstances underlying the refusal to accept the resignation.
Where the GNSC accepts a director’s resignation under our majority voting policy, it may recommend and theIndependent Directors may accept one of the following three outcomes:◾
leave the resulting vacancy unfilled;
fill the vacancy by appointing someone other than the director who resigned; or◾

call a special meeting of shareholders at which a nominee other than the one who resigned will be
proposed for election.

◾

Advance Notice By-Law: Shareholders wishing to nominate a candidate for election to our Board at anannual meeting of shareholders or any special meeting where one of the purposes of the meeting is the electionof directors, may do so by complying with the advance notice provisions of our corporate By-Law. These
provisions, which are intended to provide a fair and transparent process for shareholder nominations set out,
among other things that timely written notice of the nomination(s) must be provided by the nominating
shareholder to Magna’s Corporate Secretary within the timelines, and must include the information, specified
in the By-Law. The full text of our By-Law is available on our website (www.magna.com) and filed on SEDAR+(www.sedarplus.ca).

◾

Shareholder Proposals and Communication: Subject to meeting certain technical requirements,
shareholders are entitled under applicable corporate law to put forward proposals to be voted on at a meetingof shareholders. The Board will give serious consideration to the voting results for shareholder proposals,
even if they are only advisory in nature.

◾

70

◾

Proposals of shareholders intended to be presented at our Annual Meeting of Shareholders to be held in
2025 must be received by us at our principal executive offices on or before March 10, 2025, in order to be
included in our 2025 Management Information Circular/Proxy Statement.
Corporate Transactions Involving the Issuance of 25% or More of Our Issued and Outstanding
Common Shares: Corporate transactions involving the issuance of a significant proportion of Common Shares
may be material and should be approved by shareholders. In the event of a transaction which would involvethe issuance of 25% or more of our issued and outstanding Common Shares, we will obtain shareholder
approval before proceeding with the transaction.

Corporate GovernanceShareholder Engagement
We value constructive dialogue with shareholders and potential investors and regularly engage with shareholders andshareholder representative organizations throughout the year to better understand their perspectives regarding Magna.
Where possible, we consider the feedback received from such meetings in refining Magna’s policies, practices and/or
public disclosures.
The Board’s shareholder engagement activities are led by Robert F. MacLellan, the Chairman of the Board. Board-led
discussions typically relate to matters such as corporate governance and executive compensation. Significant shareholder
and investor outreach is also conducted by members of our Executive Management team as part of our regularinvestor relations activities, as well as by members of our sustainability team as part of our ongoing engagement on
ESG topics. Feedback communicated by shareholders and investors to the Executive Management team is shared with
the Board on a quarterly basis and the Chairman advises the full Board regarding shareholder engagement activities
conducted by him.

TYPE OF ENGAGEMENTFREQUENCY

WHO ENGAGESWHO WE ENGAGE WITH, WHAT WE TALK ABOUT

Earnings
conference calls

Quarterly

Executive Management

With the investment community to discuss the company’s mostrecently released financial and operating results.

Bank-sponsoredinvestor conferences

Continuous

Executive Management

With existing and potential institutional shareholders to discuss
the company’s business and operations. Typically includes a
webcasted investor fireside chat with Executive Management
and the conference host’s sell-side analyst as moderator.

Investor Days
(Virtual or Live)As needed,
typically every
1-2 years

Executive Management

Presentations on our long-term outlook and strategy as well as
new products and innovations. Includes sell-side analysts andinstitutional investors. Live events include productdemonstrations and often a media press conference.

Annual Meetingof Shareholders

Annually

Board of Directors andExecutive Management

Holders of our common shares are invited to attend the Annual
Meeting of Shareholders and are entitled to vote on the businessof the meeting including the annual say-on-pay vote on
executive compensation. They also have the opportunity to ask
questions relating to the business of the meeting or any othermatters from the Board and Executive Management.

News releases

As required

Executive Management

Released to the media throughout the year to disclose material
information or newsworthy topics.

Non-deal investor
road shows

Continuous

Executive Management

Meetings with existing and potential institutional shareholders to
discuss the company’s business and operations, answer
questions and obtain feedback.

Other Conferences

Continuous

Executive Management

Participate in industry conferences through productdemonstrations, press conferences, panel discussions and otherspeaking engagements. Audience includes investmentcommunity, media, industry participants.

Meetings, calls anddiscussions

Continuous

Executive Management
and Investor Relations

With existing and potential shareholders as well as sell-side
analysts to discuss the company’s business and operations,address any shareholder-related concerns and provide public
information.

Meetings, calls anddiscussions

As needed

Board of Directors

With existing shareholders to discuss the company’s businessand address any shareholder related concerns.

Shareholders wishing to engage with the Board may do so by contacting the Board Chair, any Committee Chair or any
other Independent Director through the office of the company’s Corporate Secretary, as follows:
337 Magna Drive
Aurora, Ontario
CanadaL4G 7K1
Telephone: (905) 726-2462
shareholderengagement@magna.com

Corporate Governance71

CORPORATEGOVERNANCE

The following table provides an overview of the various types of shareholder engagement activities conducted by the
Board of Directors and Executive Management, encompassing interactions with existing and prospective shareholders,
as well as other stakeholders:Ethical Conduct
Ethical Business Conduct
We maintain a Code of Conduct & Ethics, which is disclosed on the corporate governance section of our website(www.magna.com) in multiple languages. The Code, which is administered and overseen by the Audit Committee, applies
equally to all of our directors, officers and employees. The Code is reviewed regularly and proposed amendments
must be approved by the Board. Any waivers of the Code for directors or executive officers must be approved by the
Audit Committee, while waivers for other employees must be approved by our Chief Legal Officer, Corporate Secretaryor Chief Human Resources Officer. No waivers of the Code were requested or granted in 2023.
We maintain an ethics and legal compliance training program (“ELC Program”), which aims to assist employees inunderstanding the values, standards and principles underlying the Code of Conduct & Ethics, as well as the applicationof such values, standards and principles to real-life situations encountered by employees in different roles. Our ELC
Program, which is overseen by the Audit Committee, involves specialized compliance training modules which target
specific functional audiences and high-risk regions. In addition to providing training on legal compliance and ethics topics
generally, these specialized programs are designed to be interactive and incorporate real-life scenarios and exercises.
We maintain a confidential and anonymous whistle-blowing line known as the Magna Hotline, which is overseen by the
Audit Committee. Stakeholders may make submissions to the Magna Hotline by phone or internet. Submissions arereceived and tracked by an independent third-party service provider. Non HR-related reports to the Hotline are reviewed
by Magna’s Internal Audit Department and, when appropriate, an investigation is conducted in accordance with our
Policy on Internal Ethics Investigations.

72

Corporate GovernanceSustainability at Magna
At Magna we are committed to making a difference through our products and processes, as well as care and concern
for our people and the communities in which they live.

Magna’s Climate Change Commitment
We recognize the reality of climate change and its impact on the planet. As a result, we are focused on doing the rightthings today so that our corporate interests do not come at the expense of the viability of life for the generations that follow.
Although combating climate change requires a collective global response, Magna is determined to play its part inaddressing this existential threat to our planet. We took a significant step in 2023 by submitting near-term (to 2030) and netzero (2050) Science-based Targets.
In support of our net-zero commitments, we are targeting 100% renewable electricity usage in our European operations
by 2025, and in our global operations by 2030. To date, 75 (2023: 61) Divisions globally have achieved this target).
Approximately 22% of our electricity usage in 2023 was renewable, and we exceeded our 1-year stretch goal of reducing
energy intensity by 10% from the prior year (achieving an 11% reduction).
Our progress to date with respect to net-zero commitment is detailed in our Sustainability Report which forms part of
our Annual Information Form/Annual Report on Form 40-F.
Overall, our approach to sustainable value creation involves:◾
designing, engineering, manufacturing and delivering innovative product solutions for our customers, which
achieve shared goals of reduced weight, lower fuel consumption and reduced carbon emissions;◾
optimizing and innovating our manufacturing processes for resource and input efficiency, as well as productquality;◾
enhancing the energy efficiency of our plants and transitioning to 100% renewable energy by 2030 to achieve
our SBT requirement to reduce scope 1 and 2 emissions by 42% from a 2021 baseline;◾
engaging our supply chain to reduce Scope 3 emissions 25% by 2030 from a 2021 baseline;◾
staying focused on our SBTi [-verified] commitment to reduce scope 1, 2 and 3 emissions 90% by 2050 froma 2021 baseline;◾
treating our employees fairly and looking out for their health, safety and general well-being;◾
serving as a good community partner, particularly in the communities in which our employees live and work;and◾
enhancing the sustainability of our supply chain with respect to human rights and working conditions throughcommunication, monitoring, and where necessary, corrective action.
Our Sustainability Report aims to provide our stakeholders with a better
understanding of how we approach the creation of sustainable, long-term value
Governanceand our management of sustainability-related risks. The report has been structured
to align with the International Sustainability Standards Board (ISSB) IFRS S1 andS2 Climate Related Disclosures Standards, as well as the Sustainability Accounting
StrategyStandards Board’s (“SASB”) Auto Parts accounting standard, where possible.
This includes, for the first time, reporting of our (2021 baseline) Scope 3 emissions.
RiskManagement
While the Sustainability Report may not currently provide stakeholders with all of
the information sought through the ISSB and SASB frameworks; we continue to
evolve and enhance our disclosure as our collection and validation of theapplicable data improves. While the ISSB and SASB Auto Parts frameworks
Metrics andTargets
primarily address climate-related factors, the Sustainability Report aims to go
beyond such items to give stakeholders a better understanding of the broad range
of environmental, social and governance initiatives that define our approach tosustainable value creation.
For convenience, we have repeated below a summary of ISSB, SASB and other metrics appearing in our Sustainability
Report. However, we encourage readers to read the full report to gain a full understanding of the environmental,social and governance factors that define our approach to sustainability.

Corporate Governance73

CORPORATEGOVERNANCE

Approach to Sustainable Value Creation

TOPICISSB CODE

Emissions

METRICUNIT OF MEASURE

MAGNA 2023 DATA(2)CHANGE FROM
2021 BASELINE(3)ISSB S2, 29(a)(i)

Scope 1 emissions

Metric Tons (t) CO2e424,561 t↓ 2.7%ISSB S2, 29(a)(i)

Scope 2 emissions(1)Metric Tons (t) CO2e

1,150,656 t↑ 5.6%ISSB S2, 29(a)(i)

Scope 3 emissions(3)Metric Tons (t) CO2e

58,655,441 t(4)—CHANGE FROM
2019 BASELINE(3)TOPIC

SASB CODEMETRICUNIT OF MEASURE

MAGNA 2023 DATA(2)EnergyManagement

TR-AP-130a.1

Aggregate amount of energy
consumed

Gigajoules (GJ)
MegaWatt hours (MWh)20,077,657 GJ
5,577,127 MWh↓ 11.0%% of energy consumed
supplied from electrical grid

Percentage (%)

59.2%↑ 240 bps

% of energy consumed that isrenewable energy

Percentage (%)

12.9%

—

Energy intensity

MegaWatt hours (MWh) /Sales (USDm)

130 MWh / USDm

↓ 19.8%Energy intensity reduction

MegaWatt hours (MWh) /Sales (USDm)

Target: ≥5% p.a.
Actual: 10.6% (2023)—

Aggregate amount of waste
generated frommanufacturing operations

Metric Tons (t)1,365,712 t—% of waste generated that ishazardous

Percentage (%)

3.9%

—

% of waste generated thatwas recycled

Percentage (%)

91.8%

—

% hazardous waste diverted
from landfill

Percentage (%)

91.8%

—

Waste diversion from landfill

Percentage (%)

Target: ≥95% p.a.
Actual: 96.2% (2023)—

Annual water withdrawals

Megalitres (ML)6,571 ML↓ 15.1%

Water reduction

Percentage (%)

Target: 1.5% p.a.
15% by 2030 (vs. 2019)
Actual: 15% (2023)—

Annual remediation expenses

Reporting Currency (USD)<$1.0m

No Change

Aggregate remediation
balance for known events

Reporting Currency (USD)$18.8m↑ 40.3%

Environmental violations >$10,000 USD

Number

1—

Amount paid as a result ofsuch environmental violations

Reporting Currency (USD)$30,000—

Total amount of monetarylosses incurred as a result oflegal proceedings associatedwith anti-competitive
behaviour regulations

Reporting Currency (USD)

NIL—

Accident frequency rate

1.0 = 1 injury / illness per
100 employees working
40 hours/week, 50 weeks/year

0.50↓ 51.9%Accident severity rate

10.0 = 10 lost work days /100 employees working
40 hours/week, 50 weeks/year

10.22↓ 17.3%

Percentage (%)

28%

—

—

Waste
Management

TR-AP-150a.1

—

Water
Management

Environmental
Management

Competitive
Behaviour

Health and Safety

Gender Diversity——

TR-AP-520a.1——% of employees who are
women(5)% Women in Critical Positions

Percentage (%)

18%—% Women on the Board of
Magna

Percentage (%)

38%(6)↑ 200 bps

Notes:(1)Market-based emissions calculation method.
(2)2023 data with respect to emissions, and water withdrawals have been verified by an independent third-party verification firm. Energy management, waste
management, and health and safety data is preliminary.
(3)
Items indicated by a dash were not tracked in applicable baseline year. We have used a 2021 baseline for our emissions reporting in line with our SBTi nearterm and net zero targets. We have used a 2019 baseline for other metrics consistent with our previous sustainability reports. Our 2023 Scope 1 and 2
emissions represent reductions of 17.8% and 28.5%, respectively against our original 2019 baseline.
(4)
Scope 3 emissions data reported is based on 2021 and represents our baseline Scope 3 emissions calculated in connection with our SBTi near-term and netzero targets submission in 2023. We performed an inventory covering all 15 Scope 3 emissions categories. Our Scope 3 emissions data includes all
relevant categories. Categories 8, 13, and 15 are not relevant to Magna.
(5)Wholly owned operations only.
(6)
As of May 9, 2024, the percentage of women on the Board will be 42%, assuming election of all nominees for Magna’s annual meeting of shareholders.

74

Corporate GovernanceBoard Committees andCommittee Reports
Committees
This Board currently maintains four standing committees to assist it in carrying out its duties:◾
◾
◾
◾

Audit Committee;
Governance, Nominating and Sustainability Committee;
Talent Oversight and Compensation Committee; andTechnology Committee.

The Board has delegated certain responsibilities to each Board committee as described below and further in eachcommittee’s charter. All four of our Board committees are comprised entirely of Independent Directors. Each committee
member had 100% attendance at all committee meetings held in 2023.
The following table outlines the Board committee composition as of the date of this Circular. The GNSC, at least,
annually reviews Board committee memberships and recommends to the Board the allocation of Board members forappointment to each of the Board committees based on the needs of the individual committees.

(1)

Peter G. Bowie

GNSC

TOCC

TC
✓

Chair

Mary S. Chan
Hon. V. Peter Harder

✓

✓

Chair

✓

Jan R. Hauser(1)✓✓Jay K. Kunkel(1)

✓

✓

✓

✓

Robert F. MacLellan(1)✓(Board Chair)

Mary Lou Maher(1)William A. Ruh
Dr. Indira V. Samarasekera
Matthew Tsien
Dr. Thomas Weber
Lisa S. Westlake
(1)

(1)

✓

Chair

Chair

✓

✓

✓

✓

✓
✓

✓

All members of the Audit Committee, together with Mr. MacLellan and Ms. Westlake, meet the requirements to be considered financial experts.

Committee Reports
A report of each standing Board Committee follows. Each report summarizes the Committee’s mandate and principal
activities in respect of 2023 and to date in 2024. In addition, a separate TOCC report on compensation and performancecan be found on page 31 of this Circular.

Corporate Governance75

CORPORATEGOVERNANCE

AC(1)DIRECTORBOARD COMMITTEES AND
COMMITTEE REPORTS

All Committee Charters have been filed on SEDAR+ (www.sedarplus.ca) and are also available in the Leadership &Governance section of Magna’s website (www.magna.com ).

Report of the Audit CommitteePeter G. Bowie (Chair)
Jan R. Hauser
Jay K. Kunkel
Mary Lou Maher— Comprised of 100% Independent Directors.
— All members are “financially literate” within themeaning of the Canadian Securities
Administrators rules and the corporate
governance listing standards of the New York
Stock Exchange.
— Each committee member had 100% attendanceat 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.

MandateThe Audit Committee’s primary role is to satisfy itself on behalf of shareholders that thecompany’s financial statements are accurate in all material respects and can be relied uponby shareholders. This necessarily involves diligent oversight of the company’s: system ofinternal controls; finance and accounting policies; internal and external audits; relationshipwith 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 threeand five Independent Directors, each of whom is “financially literate” and at least one ofwhom 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 ofpublic 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 leadershipand oversight experience gained by each of them in their principal occupations and/or otherboards 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, theAudit 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 andmanufacturing environment cybersecurity, as well as financial statement disclosure ofsustainability 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 wellas 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 andincremental 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 theyear;◾ 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;

76

Corporate Governance◾ performed an annual audit effectiveness assessment of Deloitte;◾ reviewed and discussed with Deloitte the Critical Audit Matter (Veoneer Active Safety

Business Combination) identified for inclusion in Deloitte’s report on Magna’s 2023
financial statements; and◾ continued to monitor the integration of audit quality indicators, as well as audit quality

initiatives and developments to promote continuous audit improvement.
Ethics and Compliance◾ received updates from Magna’s Chief Compliance Officer regarding the company’s Ethics

and Legal Compliance Program, including administration of the Code of Conduct andEthics, compliance training initiatives and activities of the company’s Compliance Council.
Whistle-Blowing◾ reviewed summaries of non-HR matters reported and investigated through Magna’s

Hotline; and◾ satisfied itself that the Hotline provides an effective mechanism for the reporting of fraud

and/or breaches of the Code of Conduct and Ethics.
Topical “Deep Dives”◾ received presentations and updates with respect to Cybersecurity and IT, Financial

Reporting of Sustainability Matters, Finance Transformation, SAP S/4HANA
Implementation, Financial Reporting Risks, Tax, Insurance and Treasury.

Management is responsible for the preparation and presentation of Magna’s consolidated
financial statements, the financial reporting process and the development and maintenanceof Magna’s system of internal controls. The company’s external auditor is responsible for
performing an independent audit on, and issuing its reports in respect of Magna’s
consolidated financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (“PCAOB”), as well as the effectiveness of
Magna’s internal control over financial reporting, in accordance with the standards of the
PCAOB. The Audit Committee monitors and oversees these processes in accordance with
the Audit Committee Charter and applicable law.
Based on these reviews and discussions, including a review of Deloitte’s Report on
Financial Statements and Report on Internal Controls, the Audit Committee recommended
to the Board and the Board approved Magna’s consolidated financial statements andMD&A in respect of the fiscal year ended December 31, 2023.

CORPORATEGOVERNANCE

The Audit Committee is satisfied that it has fulfilled the duties and responsibilities assigned
to it under its charter in respect of the year ended December 31, 2023. This report is dated
as of March 27, 2024, and is submitted by the Audit Committee.

AUDIT COMMITTEEREPORT

Committee Approval of Report

Corporate Governance77

Report of the Governance,
Nominating and Sustainability
Committee
Hon. V. Peter Harder (Chair)
Mary S. Chan
Dr. Thomas Weber— Comprised of 100% Independent Directors.
— Each committee member had 100% attendanceat 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.

MandateThe GNSC assists the Board in fulfilling its oversight responsibilities with respect tocorporate 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 otherexperience gained by each of them in their principal occupations and/or other boards onwhich 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 theBoard; 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, eachof which included an in-camera session without Management present, and fulfilled all of therequirements under its Charter, including with respect to Magna’s overall system ofcorporate 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 andgovernance 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 ofWilliam 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-zerocommitment;◾ received presentations on global human rights/supply chain regulatory requirements andMagna’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.

78

Corporate GovernanceReport of the Talent Oversightand Compensation Committee
Dr. Indira Samarasekera (Chair)
William A. Ruh
Matthew Tsien
Lisa S. Westlake

The TOCC assists the Board in fulfilling its oversight responsibilities with respect toleadership development, executive succession planning, executive and incentive
compensation, employee health and safety as well as talent management.

— Comprised of 100% Independent Directors.

Composition— Each committee member had 100% attendanceat all meetings.

The TOCC Charter requires that the committee be composed of between three and five
Independent Directors. The TOCC complied with this requirement in 2023.

— At each meeting, the committee met in camera
without Management present.

In appointing members to the TOCC, the Board considers the relevant expertise brought to
the TOCC by each member, including through the leadership development and executive
succession planning, executive compensation and talent management experience gainedby each of them in their principal occupations and/or other boards on which they serve.
There was a change to the TOCC composition during 2023, as follows:◾ appointment of Matthew Tsien as a TOCC member in May 2023.

2023 Accomplishments and Key Areas of Focus
During 2023 and the first few months of 2024, the TOCC fulfilled all of the requirements
under its Charter, including with respect to Magna’s overall system of talent management,
leadership development and succession planning, executive compensation, employee
health and safety and other matters. Some of the TOCC’s significant activities andaccomplishments in these areas include:
Talent Management, Development and Diversity◾ monitored succession plan status for critical leadership roles;◾ received presentations on:◾ management and leadership development programs;

TOCC
REPORT◾ culture and employee engagement;◾ diversity and inclusion; and◾ the status of enhancements to the company’s pension plans and retirement savings

programs.
Executive Compensation◾ reviewed the peer group used for executive compensation benchmarking and affirmed it

without changes;◾ received updated benchmarking results for the five most highly compensated roles;◾ recommended Board approval of 2023 target TDC levels, profit sharing percentages and2021 ROIC PSU and rTSR PSU payouts;◾ recommended Board approval of the decision items described in the CD&A earlier in thisCircular;◾ initiated a review of the executive compensation framework and recommended Board

approval of the new compensation framework which took effect on January 1, 2024;◾ reviewed and recommended Board approval of a new compensation clawback policy;and◾ satisfied itself on behalf of shareholders that there remains an appropriate linkage

between pay and performance in Magna’s system of executive compensation, as well asa range of incentives which continue to be effective in attracting, motivating and retaining
key employees, while appropriately balancing risk and reward.
Employee Health & Safety◾ received updates on occupational health and safety incidents, audits and inspections;and◾ satisfied itself as to the continued effectiveness of Magna’s occupational health/safety

management programs, generally.
Committee Approval of Report
This report is dated as of March 27, 2024, and is submitted by the TOCC.

Corporate Governance79

CORPORATEGOVERNANCE

The Committee is satisfied that it has carried out its
duties and responsibilities in accordance with its
Charter.

MandateReport of the Technology Committee
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

MandateThe Technology Committee assists the Board in fulfilling its oversight responsibilities withrespect to disruptive and other technological trends and risks, as well as the company’sefforts 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 retirementfrom the Board;— Comprised of 100% Independent Directors.

◾ appointment of William A. Ruh as Technology Committee chair in May 2023; and— Each committee member had 100% attendanceat all meetings.

◾ appointment of Jay Kunkel and Matthew Tsien to the Technology Committee in— At each meeting, the committee met in camera
without Management present.

2023 Accomplishments and Key Areas of Focus

The Committee is satisfied that it has carried out its
duties and responsibilities in accordance with its
Charter.

connection with their election to the Board in May 2023.

During 2023 and the first few months of 2024, the Technology Committee fulfilled therequirements of its Charter.
Some of the Technology Committee’s significant activities and accomplishments in respectof 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 ofthe 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.

80

Corporate GovernanceAdditional Information
Interests ofManagement andOther Insiders in
CertainTransactions

Dr. Indira Samarasekera serves on the board of the Canadian Institute for Advanced
Research (“CIFAR”), a not-for-profit focused on advanced research and study. Magna
has made a multi-year commitment to CIFAR, which included C$150,000 in 2023. The
amount of Magna’s contribution to CIFAR is not material to Magna. Dr. Samarasekera
does not receive any compensation from CIFAR for her service on the CIFAR board.

Indebtedness of
Directors, Executive
Officers andEmployees

None of Magna’s present or former directors or executive officers (including any of theirassociates) were indebted at any time during 2023 to Magna or its subsidiaries. As at
the Record Date, present and former employees of Magna and its subsidiaries owed
Magna and its subsidiaries of approximately $25,000 in aggregate.

Directors’ andOfficers’ Insurance

Effective September 1, 2023, Magna renewed its directors’ and officers’ liability
insurance for a one-year renewal period. This insurance provides, among othercoverages, coverage of up to $330 million (in the aggregate for all claims made during
the policy year) for officers and directors of Magna and its subsidiaries, subject to aself-insured retention of $5.0 million for all claims. This policy does not provide coveragefor losses arising from the intentional breach of fiduciary responsibilities under statutory
or common law or from violations of or the enforcement of pollutant laws andregulations. The aggregate premium payable in respect of the policy year September 1,
2023 to September 1, 2024 for the directors’ and officers’ liability portion of thisinsurance policy was $3.7 million.

Contacting the
Board

Shareholders wishing to communicate with the Board Chair or any other director may
do so through the office of the Corporate Secretary at 337 Magna Drive, Aurora,
Ontario, Canada, L4G 7K1, telephone (905) 726-2462 or by email
shareholderengagement@magna.com.

Approval of Circular

The Board has approved the contents and mailing of this Circular.

Magna files an Annual Information Form with the Ontario Securities Commission and Annual Report on Form 40-F with the U.S.
Securities and Exchange Commission. A copy of Magna’s most recent Annual Information Form, this Circular and the Annual
Report containing Magna’s consolidated financial statements and MD&A, will be sent to any person upon request in writing
addressed to the Secretary at Magna’s principal executive offices set out in this Circular. Such copies will be sent to any
shareholder without charge. Copies of Magna’s disclosure documents and additional information relating to Magna may beobtained by accessing the disclosure documents available on the internet on the Canadian System for Electronic Document
Analysis and Retrieval (SEDAR+) at www.sedarplus.ca. Financial information is provided in Magna’s comparative consolidated
financial statements and MD&A for fiscal 2023. For more information about Magna, visit Magna’s website at www.magna.com.

Additional Information

81

ADDITIONAL
INFORMATION

Bassem A. Shakeel
Vice-President and Corporate Secretary
March 27, 2024

Definitions and Interpretation
Certain DefinedTerms

In this document, referred to as this “Circular”, the terms “you” and “your” refer to theshareholder, 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 31of the year stated.

AC:
Board:
BoC:
C$:
Deloitte:
DSUs:
GNSC:
Independent
Directors:
NYSE:
OBCA:
TC:
TOCC:
TSX:
Currency, Exchange
Rates and Share
Pricesthe Audit Committee of our Board.

We also use the following defined terms throughout this Circular:
our Board of Directors.
the Bank of Canada.
Canadian dollars.
Deloitte LLP
deferred share units.
the Governance, Nominating and Sustainability Committee of our Board.
our directors or nominees who have been determined to be independent on the basis
described under “Nominees for Election to the Board – Nominee Independence”.
The New York Stock Exchange.
the Business Corporations Act (Ontario).
the Technology Committee of our Board.
the Talent Oversight and Compensation Committee of our Board.
the Toronto Stock Exchange.
Dollar amounts in this Circular are stated in U.S. dollars, unless otherwise indicated, andhave 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.

REFERENCE DATE

Information
Currency
Websites notincorporated by
Reference

82

NYSE SHARE
PRICE
(US$)

December 29, 2023

59.08

March 20, 2024

54.95

The information in this Circular is current as of March 27, 2024, unless otherwise
stated.
Information contained on or otherwise accessible through Magna’s website and otherwebsites, though referenced herein, does not form part of and is not incorporated byreference into this Circular.

Definitions and Interpretation

Transfer Agent and Registrar
TSX Trust Company
301-100 Adelaide Street West
Toronto, Ontario M5H 4H1
Telephone: 1 (800) 387 0825
or 416-682-3860
Fax:
1 (888) 249 6189 or
1 (514) 985 8843
Email:
shareholderinquiries@tmx.com
www.tsxtrust.com

Exchange Listings
Common Shares
Toronto Stock Exchange MG
New York Stock Exchange MGA

Corporate Office
Magna International Inc.
337 Magna Drive,
Aurora, Ontario, Canada L4G 7K1
Telephone: (905) 726-2462
Fax: (905) 726-7164
www.magna.com

Magna International Inc.
337 Magna Drive
Aurora, Ontario
Canada L4G 7K1
Telephone: 905 726 2462