Management
Proxy Circular
MAGNA INTERNATIONAL INC.

Annual Meeting
May 9, 2019

M A GN A IN TE RN AT I O N AL I N C .

25MAR201922592409
DEAR MAGNA SHAREHOLDER,
Despite the political and economic volatility that characterized
2018, Magna had another year of strong financial and operational
performance, as well as continued progress in executing thecompany’s long-term strategy. Magna’s 2018 Annual Reporthighlights many of the key milestones achieved during 2018.
Through this letter, I want to share with you some of the ways inwhich the Board, on your behalf, has been carrying out its duties
to support and promote Magna’s long-term success.
As public company directors, we wear two hats – one as overseerof management, and the other as strategic value partners. In ouroversight role, we continue to maintain our focus on effective
corporate governance and sustainability practices, strong internal
controls and prudent risk management. These elements serve toreinforce the trust and confidence placed in the Board by thecompany’s stakeholders – investors, employees, customers andthe communities in which Magna operates. For us, oversight isabout promoting a culture in which employees at every level of thecompany are motivated to do the right things, for the rightreasons, in the right ways and with the right long-term goals
in mind.
Effective oversight is not static – it has to evolve to address theever-changing environment in which a company operates. As you
read the Circular, including the reports of each Board Committee,
you will get a sense of how we have been evolving our oversightefforts – ranging from the Audit Committee’s increasing use of data
analytics to drive audit effectiveness and efficiency, to the
CGCNC’s enhanced focus on management succession
planning/preparedness and human talent management, to theTechnology Committee’s efforts related to Magna’s agility to seize
the opportunities created by the disruptive forces impacting theautomotive industry, as well as its resiliency to address disruptiverisks.

we have also created a Technology Committee of the board toprovide the opportunity for a deeper dive into emerging
technologies and markets. We believe that our collective successin delivering strategic value is reflected in Magna’s consistentfocus on long-term strategic opportunities and threats, thecompany’s efforts to refine its product portfolio, recent businessacquisitions, divestitures and joint ventures, as well as thesignificant investments being made for the long-term in areas suchas vehicle electrification and autonomy, in spite of their impact on
short-term profit.
The Board itself continues to evolve in order to maximize oureffectiveness as your representatives. This year, we have recruitedand are nominating Lisa Westlake for the first time. Lisa brings awealth of expertise in senior executive roles in both finance andtalent management and, assuming her election, we will appoint
Lisa to the CGCNC where her insights will be particularly helpful
as that committee pivots to focus even more of its efforts on
talent management and succession.
Our longest serving independent director and Audit Committee
Chairman, Lawrence Worrall, is retiring this year as planned.
Through his distinguished service since 2005, Lawrence has
consistently driven improvements in audit quality, audit efficiency
and internal audit effectiveness, as well as enterprise risk
management, and his contribution to the Board will be missed. I
would like to extend thanks to Lawrence on behalf of the Board,shareholders and employees.
We look forward to your participation and support at Magna’s
upcoming annual meeting in Markham, Ontario, on May 9, 2019.
As always, we welcome your input and feedback throughout theyear and invite you to reach out to us on topics of interest orconcern to you.

Sincerely,
A board which merely provides oversight cannot support a
company in achieving its full competitive potential. We believe that
Boards must provide strategic value through regular andconstructive, yet independent, engagement with the senior
executive team. This requires directors to be extremely well versed
28MAR201921022918
in evolving industry trends, and demands that the board devote a
William L. Youngsignificant amount of the agenda to strategic matters. To this end,
ChairmanProxy Summary
In this summary, we highlight certain information you will find in various parts of the management information
circular/proxy statement (the ‘‘Circular’’) which follows. This summary does not contain all of the information thatyou should consider. Please review the entire Circular carefully before casting your vote.

BOARD VOTERECOMMENDATIONFOR MORE
INFORMATION

Receive the audited consolidated financial statements and the reportof the auditors for the year ended December 31, 2018

N/A

Page 122

Vote on electing the directors for the ensuing year

FOR

Page 13

3

Vote on reappointing the auditors and authorizing the directors to set
their remuneration

FOR

Page 28

4

Vote on the non-binding advisory resolution to approve thecompensation of our named executive officers (‘‘Say on Pay’’)

FOR

Page 30

5Vote on the shareholder proposal set forth in the Circular

AGAINST

Page 64ITEM

BUSINESS OF THE MEETING

1

PROXY SUMMARY

Business of the Meeting

Selected 2018 Financial Results
SALES(1)

DILUTED EPS(1)U.S. $ MILLIONSCASH FLOW FROMOPERATING ACTIVITIES(1)U.S. $

12%

U.S. $ MILLIONS

13%

11%
36,58840,827
5.87

2017

RETURN ON
EQUITY(1)(2)
19.8%

2018

RETURN ON
INVESTED CAPITAL(1)(2)

2018

2018

3,346

3,718

2017

2018

DIVIDENDS PAID
15%
COMPOUND AVERAGEPER SHARE(3)GROWTH RATE

U.S. $

19.7%

1.10

1.32

1.00
15.6%

2017

2017

6.61

2017

0.88
14.9%

0.76

2018

2014

2015

2016

2017

2018

1. 2017 figures adjusted for adoption of the new revenue standard (Accounting Standards Codification 606).
2. Return on Equity and Return on Invested Capital are non-GAAP financial measures. Definitions and reconciliations to the most directly comparable financial measures calculated in accordance with
U.S. GAAP, can be found in the company’s Annual Report for the Year Ended December 31, 2018, in the Management’s Discussion and Analysis of Results of Operations and Financial Position section.
The Magna International Inc. 2018 Annual Report has been posted on the company’s website through the investors link at www.magna.com.
3. A two-for-one stock split was approved February 24, 2015. Dividends are shown on a post-stock split basis.

27MAR201914585185

Proxy Summary

1Election of Directors – 2019 Nominees
DIRECTOR
DIVERSITY

DIRECTORTENURE

DIRECTORAGE

WOMEN:
36%

AVERAGE:
5 YEARSAVERAGE:
62 YEARS

0-4 years: 4 nominees

Male:

7 nominees

50-59 years: 5 nominees

5-9 years: 6 nominees

Female: 4 nominees

60-69 years: 4 nominees

10+ years: 1 nominee

Total: 11 nominees

70+ years:

2 nominees

Total:

11 nominees

Total:

11 nominees

2018 Average
Votes FOR:

Independent
Nominees:

Financially
Literate:

>99%

82%

100%

Financial
Experts:%
26MAR201912471414

64

William L. Young (Chairman) MBA, PEng
Independent
Joined: 2011
CGCNC (Chair)

19MAR201909405150
Scott B. Bonham MBA
Non-Independent, Non-Executive
Joined: 2012

Cynthia A. Niekamp MBA
Independent
Joined: 2014
Audit Committee

20MAR201923534880
Peter G. Bowie FCA, MBA
Independent
Joined: 2012
Audit Committee

19MAR201909404427
William A. Ruh MSc
Independent
Joined: 2017
Technology Committee; CGCNC

19MAR201909403671

20MAR201910464428

Mary S. Chan MSc

Dr. Indira V. Samarasekera PhD, PEng

Independent
Joined: 2017
Technology Committee

Independent
Joined: 2014
CGCNC

19MAR201909403838
Dr. Kurt J. Lauk MBA, PhD
Independent
Joined: 2011
Technology Committee (Chair)

19MAR201909403985
Donald J. Walker PEng
Management
Joined: 2005

19MAR201909404129
Robert F. MacLellan CPA, MBA
Independent
Joined: 2018
Audit Committee

19MAR201909404865
Lisa S. Westlake MBA
Independent
New Nominee

19MAR201909404272

19MAR201909405003

Additional information about the Nominees, including their biographies, skills and compensation can be foundstarting on page 13 of the Circular.

2

Proxy SummaryReappointment of Deloitte
<1%

35%

AUDIT FEES
2018

95%

>99%

5

Audit / Related Fees

2018 Votes FOR

Fiscal Yrs as auditor

60%

21MAR201916015620
Audit

Audit-related

Tax

Other
Permitted
27MAR201914585052

Deloitte, an Independent Registered Public Accounting Firm, was first appointed Magna’s independent auditors 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 oversees the firm’s 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 through pin-pointing audit procedures which reflect Deloitte’s understanding of Magna-specific factors
as well as the general business environment in which Magna operates. The firm’s communications to the Audit
Committee demonstrate strong audit quality, professional skepticism and innovation in the audit, including throughthe effective use of data analytics. The Audit Committee is satisfied that Deloitte’s integrated audit team consists ofaudit professionals and specialists who are qualified and experienced to provide audit services in the regions inwhich Magna operates. The firm has demonstrated a commitment to promoting a learning culture within its own
team and sharing the firm’s insights, perspectives and best 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 28 of the Circular.

Compensation Structure
Magna’s enhanced compensation framework has been structured to promote effective short- and long-term
decision-making 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

PurposeMinimal fixed compensationPerformance-conditioned profit
sharing bonus / STIPerformance-conditioned
multi-metric LTI






No pensions / retirement benefits
Significant share maintenancerequirement

Benefits

Low base salaries and highly variable compensation help create an owner’s mindset
Motivates managers to achieve consistent profitability in order to maintain consistent compensation
Incents profit growth to grow compensation
Promotes entrepreneurialism
Drives strong managerial focus on lean/efficient operations through effective management of costs
Connects compensation to the operational impact of everyday decisions
ROIC PSUs incent efficient capital allocation and value creationrTSR PSUs create sensitivity to stock market performance and return of capital to shareholders, inthe form of dividends, as well as alignment with shareholders
Capped PSU payouts help mitigate risk by promoting responsible decision-making and discouraging
excessive risk-taking
Stock options incent absolute TSR growth
Reinforces an owner’s mindset and incents long-term growth in equity value as a pension-alternative
Reinforces an owner’s mindset
Alignment with shareholders
Helps mitigate risk
Substantially consistent with those of other employees in the same office/jurisdiction

Proxy Summary

3

PROXY SUMMARY

5%

2018 CEO Compensation
Target total direct CEO compensation for 2018 had previously been set by the CGCNC at $19.830 million,
unchanged from the 2017 target. Actual total direct CEO compensation was $19.952 million as a result of thecompany’s solid profit performance:
COMPENSATION ELEMENT
Base Salary
STI (actual)
LTIs (at target)
Total Direct Compensation
All Other Compensation
Total Compensation (as reported)

AMOUNT
($)

% OF
TOTAL

325,000
7,727,000
11,900,000
19,952,000
121,000
20,073,000

2%
38%
60%
<1%
100%

Total CEO compensation as reported in the Summary Compensation Table in the Circular was approximately 1.4%
lower in 2018 than 2017, although the LTIs represent target amounts. As of December 31, 2018, the ROIC PSUs
and rTSR PSUs were tracking ‘‘at target’’ payout levels, but have an additional two years in the performance
period before actual payouts will be known. Stock options granted in 2018 were ‘‘out-of-the-money’’ as at
December 31, 2018, with approximately six years remaining until expiry.
The CGCNC recommends that you consider CEO compensation in the context of company performance overdifferent time periods. The Compensation and Performance Report which starts at page 31 of the Circular presents
the CGCNC’s perspective. Some of the performance metrics discussed by the CGCNC in that report in thecommittee’s assessment of the alignment between CEO pay and company performance, include:
METRICCEO Total Reported Compensation
Relative TSR vs. rTSR Peer Group
Absolute total return – NYSE

1-YR CHANGE

3-YR CHANGE

5-YR CHANGE

3MAR2019072040111% 3MAR2019072040113% 31JAN2019190653306%
80th %ile
80th %ile
60th %ile
3MAR20190720401118%31JAN20191906533020%31JAN20191906533023%

There is no single way to assess the alignment between pay and performance, but based on all of the factors
highlighted in the Compensation and Performance Report, the CGCNC was satisfied as to such alignment.
A full discussion of our approach to executive compensation can be found starting on page 38 of the Circular.

4

Proxy Summary

Corporate Governance & Sustainability
The highlights of our approach to corporate governance are as follows:
CORPORATE GOVERNANCE OVERVIEW







Annual Say on Pay vote







Annual director election; no slate ballots
Majority voting policy and prompt disclosure of vote results
Advance Notice By-Law
Independent Board Chair
100% of Board Committee members are independent
Committees with full authority to retain independent
advisors
Director orientation and continuing education
Rigorous annual Board/Director effectiveness evaluation
Equity maintenance requirement and mandatory deferral of
director fees creates alignment with shareholders
Anti-hedging restrictions for directors, officers andemployees








PROXY SUMMARY

Active Board engagement in, and approval of strategy
Broad oversight of risk
Strong oversight of management succession planning
Active shareholder engagement
Commitment to culture of ethics and compliance
Diverse range of Nominee skills, expertise andbackgrounds
Diversity statement in Board Charter
Director tenure guideline
Limitation on director interlocks






A full discussion of our approach to corporate governance can be found starting on page 68 of the Circular.
Magna is committed to being a good corporate citizen. For us, this means pursuing our business objectives while
respecting our various stakeholders, including shareholders, employees, customers and the communities in which
we operate. The steps we have taken in a number of areas, including those below, demonstrate how we apply ourapproach to sustainability in our business:






Environmental Responsibility and Stewardship
Fairness and Concern for Employees
Corporate Ethics and Compliance
Supply Chain Responsibility
Giving Back to the Communities in which we Operate

A brief discussion on sustainability at Magna can be found starting on page 81 of the Circular. Our 2019 Annual
Information Form / Annual Report on Form 40-F, which was filed in conjunction with the Circular, contains a
Sustainability Report describing our activities in each of the above areas.

Proxy Summary5

Management Information Circular/Proxy Statement

Table of Contents
Voting Information
How To Vote Your Shares

89Business of the Meeting
Financial Statements
Election of Directors
Nominee Skills & Expertise
Biographies of 2019 Nominees
Director Compensation
Reappointment of Deloitte as Magna’s Independent Auditors
Say on Pay
Compensation and Performance Report
Compensation Discussion & Analysis
Summary Compensation Table
Incentive Plans and Awards
Shareholder Proposal
Magna’s Response

12
13
15
18
24
28
30
31
37
58
60
64
65

Corporate GovernanceCorporate 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 Corporate Governance, Compensation and Nominating Committee
Report of the Technology Committee

68
69
69
71
76
79
81
81
83
84
88
91

Additional Information
Additional Information
Definitions and Interpretation

93
95

26MAR201923403

Date:

Thursday, May 9, 2019Time:

10:00 a.m. (Toronto time)

Place:

Hilton Toronto/Markham Suites Conference Centre
8500 Warden Avenue
Markham, Ontario
Canada

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 22, 2019. You are entitled to vote your shares at the Meeting,which is being held to:1.

receive Magna’s consolidated financial statements and the independent auditors’ report thereon for the
fiscal year ended December 31, 2018;2.

elect eleven directors;

3.

reappoint Deloitte LLP as our independent auditors and authorize the Audit Committee to fix theindependent auditors’ 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’’);5.

vote on the shareholder proposal described in the Circular; and6.

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

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
to vote 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 his or her 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 Circularby mail, shareholders will receive a written notification with instructions on how to access the Circular online,
together with a form of proxy or voting instruction form, as applicable. The Circular is available on our website at
magna.com, on SEDAR at sedar.com and on EDGAR at sec.gov.
A live webcast of the Meeting will be available through Magna’s website at www.magna.com.
By order of the Board of Directors.

28MAR201921015761
March 28, 2019
Aurora, Ontario

BASSEM A. SHAKEEL
Vice-President and Corporate Secretary

NOTICE

Notice of Annual Meeting of
Shareholders

Management Information
Circular/Proxy Statement
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, 2019 commencing at 10:00 a.m. (Toronto time) at the
Hilton Toronto/Markham Suites Conference Centre, 8500 Warden Avenue, Markham, Ontario, Canada.

Voting Information
Record Date

March 22, 2019 is the record date for the Meeting (the ‘‘Record Date’’). Only holdersof our Common Shares as of the close of business on the Record Date are entitled
to receive notice of and to attend (in person or by proxy) and vote at the Meeting.

Outstanding Shares,
Votes and Quorum

As of the Record Date, 323,082,913 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, atleast 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 outstanding as
at the Record Date.
SHAREHOLDER GROUPNUMBEROF SHARESPERCENTAGE
OF SHARES

Magna’s Directors and Executive Officers (N = 19)
Magna Employee Profit Sharing Plans (Canada, U.S., Europe)

3,173,934
20,652,741

1.0%
6.4%

To the best of our knowledge, all of these shares will be voted FOR the election of
directors, the re-appointment of the auditors and the ‘‘Say-on-Pay’’ advisory
resolution, and AGAINST the shareholder proposal described in the Circular.

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 have adopted a majority voting policy which is described under ‘‘Corporate
Governance’’ and each nominee for election to the Board has agreed to abide bysuch 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 this 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 1-855-887-2243 (Registered Holders)or 1-877-907-7643 (Non-Registered Holders) and following the instructions. Shareholders who have already signed up for electronicdelivery of proxy materials will continue to receive them by e-mail.

8

Voting Information

Your Vote Is
ImportantYour 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 areproperly voted.

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 two ways you can voteat the Meeting – by appointing a proxyholder or by attending in person, although thespecifics may differ slightly.
Registered Shareholder: You are a registered shareholder if you hold one or moreshare certificates which indicate your name and the number of Magna Common
Shares which you own. As a registered shareholder, you will receive a form of proxyfrom Computershare representing the shares you hold. If you are a registeredshareholder, 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, orfor someone else on your behalf. As a non-registered shareholder, you will most
likely receive a Voting Instruction Form from either Broadridge Canada or Broadridge
US, although in some cases you may receive a form of proxy from the securities
dealer, broker, bank, trust company or other nominee holding your shares. If you area 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 and place set out in the accompanying Noticeof Annual Meeting. We will bear all costs incurred in connection withManagement’s solicitation of proxies, including the cost of preparing and mailing thisCircular and accompanying materials. Proxies will be solicited primarily by mail,although 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 they hold Magna sharesand to obtain authorizations for the execution of proxies. These institutions will bereimbursed for their reasonable expenses in doing so.

Voting Information

9

VOTING INFORMATION

How To Vote Your Shares

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 orin person at 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

20MAR201921344613 20MAR201921343639
smartphone
20MAR201921343923
internet 20MAR201921344197
mailtelephone

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

The form of proxy contains instructions for each of these methods.
smartphoneinternet 20MAR201921344197
mailtelephone
20MAR201921344613 20MAR201921343639
20MAR201921343923
If you are voting by smartphone, internet or telephone, you will need
the pre-printed Control Number or the QR code, Holder AccountNumber and Access 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 a corporateshareholder, the proxy must be signed by an authorized officer or
attorney of that corporation. If a proxy submitted by mail is not dated,
it will be deemed to bear the date on which it was sent to you.
If you are voting your shares by proxy, you must ensure that yourcompleted and signed proxy form or your smartphone, internet or
telephone vote is received by Computershare not later than
5:00 p.m. (Toronto time) on May 7, 2019. If the Meeting is
adjourned or postponed, you must ensure that your completed andsigned proxy form or your smartphone, internet or telephone vote isreceived by Computershare not later than 48 hours (excluding
Saturdays, Sundays and holidays) prior to the time of the Meeting.
Appointment of Proxyholder
Unless you specify a different proxyholder or specify how you
want your shares to be voted, the Magna officers whose names
are pre-printed on the form of proxy will vote your shares:

FOR the election to the Magna Board of Directors of all of thenominees named in this Circular;

FOR the reappointment of Deloitte as Magna’s independent
auditors and the authorization of the Audit Committee to fix theindependent auditors’ remuneration;

FOR the advisory resolution to accept the approach to
executive compensation disclosed in this Circular; and

AGAINST the shareholder proposal set forth in this Circular.

You have the right to appoint someone else (who need not bea shareholder) as your proxyholder; however, if you do, that
person must vote your shares in person on your behalf at the
Meeting. To appoint someone else as your proxyholder, insert theperson’s name in the blank space provided on the form of proxy orcomplete, sign, date and submit another proper form of proxynaming that person as your proxyholder.

10

Voting Information

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, you must complete and submit
your vote by smartphone, internet, mail or telephone, in accordancewith the instructions on the form. We have been advised by
Broadridge that, on receipt of a properly completed and submitted
form, a form of proxy will be submitted on your behalf.
You must ensure that your completed, signed and dated Voting
Instruction Form or your smartphone, internet or telephone vote isreceived by no later than any deadline specified by
Broadridge, which we expect will be 5:00 p.m. (Toronto time)on May 6, 2019. If the Meeting is adjourned or postponed, youmust ensure that your completed, signed and dated Voting
Instruction Form or your smartphone, internet or telephone vote isreceived by Broadridge Canada or Broadridge US, as applicable, notlater than 72 hours (excluding Saturdays, Sundays and holidays) prior
to the time of the Meeting. If a Voting Instruction Form submitted by
mail or fax is not dated, it will be deemed to bear the date on which
it was sent to you.
Additionally, Magna may use Broadridge’s QuickVote service toassist beneficial shareholders with voting their shares. Broadridge will
tabulate the results of all the instructions received and then provides
the appropriate instructions respecting the shares to be represented
at the Meeting.
In some cases, you may have received a form of proxy instead of a
Voting Instruction Form, even though you are a non-registeredshareholder. Such a form of proxy will likely be stamped by the
securities dealer, broker, bank, trust company or other nominee orintermediary holding your shares and be restricted as to the numberof shares to which it relates. In this case, you must complete theform of proxy and submit it to Computershare as described to theleft under ‘‘How to Vote – Registered Shareholders – Submitting Votes
By Proxy’’.

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

Appointment of Proxyholder (cont’d)

Voting in Person

If you choose to vote by proxy, you are giving the person (referred toas a ‘‘proxyholder’’) or people named on your form of proxy theauthority to vote your shares on your behalf at the Meeting (including
any adjournment or postponement of the Meeting).

If you have received a Voting Instruction Form from your Canadianintermediary and wish to attend the Meeting in person or havesomeone else attend on your behalf, you must complete, sign andreturn the Voting Instruction Form or complete the equivalent
electronic form online, in each case in accordance with the
instructions on the form.

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.
The form of proxy accompanying this Circular gives the proxyholder
discretion with respect to any amendments or changes to mattersdescribed in the Notice of Annual Meeting and with respect to any
other matters which may properly come before the Meeting(including any adjournment or postponement of the Meeting). As ofthe date of this Circular, we are not aware of any amendments,changes or other matters to be addressed at the Meeting.
Voting in Person
If you attend in person, you do not need to complete or return yourform of proxy. When you arrive at the Meeting, a Computersharerepresentative will register your attendance before you enter
the Meeting.
If you vote in person at 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 Voting Instruction Form from your USintermediary and wish to attend the Meeting in person or havesomeone else attend on your behalf, you must complete, sign andreturn the Voting Instruction Form in accordance with the instructions
on the form. Your intermediary will send you a legal proxy giving you
or your designate the right to attend the meeting.
If you have received a form of proxy and wish to attend the Meetingin person or have someone else attend on your behalf, you must
insert your name, or the name of the person you wish to attend on
your behalf, in the blank space provided on the form of proxy. If you
are voting your shares by proxy, you must ensure that yourcompleted and signed proxy form or your phone or internet or
smartphone vote is received by Computershare not later than
5:00 p.m. (Toronto time) on May 7, 2019.
If the Meeting is adjourned or postponed, you must ensure that:

your completed and signed Voting Instruction Form (orequivalent electronic form online) is received by Broadridge
Canada or Broadridge US, as applicable, not later than 72 hours(excluding Saturdays, Sundays and holidays) prior to the time of
the adjourned or postponed Meeting; or

your completed and signed proxy form or your smartphone,internet or telephone vote is received by Computershare notlater than 48 hours (excluding Saturdays, Sundays and holidays)
prior to any adjournment or postponement of the Meeting.

Revoking a Vote Made by Proxy
You have the right to revoke a proxy by ANY of the following
methods:Vote again by phone, internet or smartphone not later than
5:00 p.m. (Toronto time) on May 7, 2019 (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 is received
by Computershare not later than 5:00 p.m. (Toronto time) on
May 7, 2019 (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, 2019 (or not later than
5:00 p.m. on the last business day prior to the date of the
adjourned or postponed Meeting):

When you arrive at the Meeting, a Computershare representative willregister your attendance before you enter the Meeting.
Revoking a Voting Instruction Form or Proxy
If you wish to revoke a Voting Instruction Form or form of proxy forany matter on which a vote has not already been cast, you must
contact your securities dealer, broker, bank, trust company or othernominee or intermediary (for a form of proxy sent to you by suchintermediary) 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 SecretaryDeliver a signed written notice revoking the proxy to the scrutineersof the Meeting, to the attention of the Chair of the Meeting, at or
prior to the commencement of the Meeting (including in the caseof any adjournment or postponement of the Meeting).

Voting Information

11

VOTING INFORMATIONHOW TO VOTE –REGISTERED SHAREHOLDERS (cont’d)1Financial Statements

13MAR201920120928

Magna’s consolidated financial statements for the fiscal year ended December 31, 2018, together with theindependent auditors’ report on those statements, will be presented at the Meeting. No shareholder vote isrequired in connection with the financial statements or independent auditors’ report. The independent auditors’
report on our financial statements for the fiscal year ended December 31, 2018 was unqualified and without
reservation. Both of these items are contained in our 2018 Annual Report, which is available on our website atwww.magna.com.
Selected financial results for 2018 are found below. However, we encourage shareholders to review our complete
financial statements and the independent auditors’ report thereon.
SALES(1)

DILUTED EPS(1)U.S. $ MILLIONSCASH FLOW FROMOPERATING ACTIVITIES(1)U.S. $

12%

U.S. $ MILLIONS

13%

11%
36,58840,827
5.87

2017

RETURN ON
EQUITY(1)(2)
19.8%

2018

RETURN ON
INVESTED CAPITAL(1)(2)

2018

2018

3,346

3,718

2017

2018

DIVIDENDS PAID
15%
COMPOUND AVERAGEPER SHARE(3)GROWTH RATE

U.S. $

19.7%

1.10

1.32

1.00
15.6%

2017

2017

6.61

2017

0.88
14.9%

0.76

2018

2014

2015

2016

2017

2018

1. 2017 figures adjusted for adoption of the new revenue standard (Accounting Standards Codification 606).
2. Return on Equity and Return on Invested Capital are non-GAAP financial measures. Definitions and reconciliations to the most directly comparable financial measures calculated in accordance with
U.S. GAAP, can be found in the company’s Annual Report for the Year Ended December 31, 2018, in the Management’s Discussion and Analysis of Results of Operations and Financial Position section.
The Magna International Inc. 2018 Annual Report has been posted on the company’s website through the investors link at www.magna.com.
3. A two-for-one stock split was approved February 24, 2015. Dividends are shown on a post-stock split basis.

27MAR201914585185

12

Business of the Meeting2Election of Directors
14
15
17
18
24

ELECTION OF
DIRECTORSIN THIS SECTION ...
2019 Nomination Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nominee Skills and Expertise . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nominees’ Equity Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Biographies of 2019 Nominees . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22MAR201904200226

1 yr

5 yrs

82%

36%

>99%

Term

Avg. Tenure

Independent

Women

Average 2018
Votes FOR

BUSINESS OF THE
MEETING

20MAR201921342479

19MAR201908411680
The Board recommends that you vote FOR each of the 11 nominees.
NOMINEE OVERVIEW
INDEPENDENCE(1)FINANCIAL
LITERACY

FINANCIAL
EXPERTISE

COMMITTEEMEMBERSHIPS

Co-Founder, Intentional Capitaland Corporate Director

NI

✓

✓

–

May 10, 2012

Corporate Director

I

✓

✓

August 10, 2017Managing Partner of VectoIQ LLP
and Corporate Director

I

✓

72

May 4, 2011

Co-Founder & President,
Globe CP GmbH

I

✓

✓

Technology(Chairman)

Robert F. MacLellan

64

May 10, 2018

Chairman, Northleaf CapitalPartners and Corporate Director

I

✓

✓

Audit

Cynthia A. Niekamp

59

May 8, 2014

Corporate Director

I

✓

✓

Audit

William A. Ruh

57

May 11, 2017

Chief Executive Officer, Digital
Lendlease Group

I✓

Technology;
CGCNC

Dr. Indira V. Samarasekera

66

May 8, 2014

Senior Advisor, Bennett Jones LLP
and Corporate Director

I

✓

CGCNC

NOMINEE

AGE

DIRECTOR SINCE

PRINCIPAL OCCUPATION

Scott B. Bonham

57

May 10, 2012

Peter G. Bowie

72

Mary S. Chan

56

Dr. Kurt J. Lauk

Audit
Technology

Donald J. Walker

62

November 7, 2005

Chief Executive Officer of Magna

M✓

Lisa S. Westlake

57

New Nominee

Corporate Director

I

✓

✓

–

William L. Young

64

May 4, 2011

Corporate Director

I

✓

✓

CGCNC
(Chairman)

–

Note:
1.
I = Independent; M = Management; NI = Non-Independent, Non-Executive

Business of the Meeting13

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 thatmaterial risks are being managed appropriately, reviewing and approving financial statements, establishing our systems
of corporate governance and executive compensation, as well as overseeing our corporate culture. In fulfilling theirduties, directors are required under applicable law to act in the best interests of the company.

2019 Nomination Process
Nominees for election at the Meeting include ten directors who were elected at our 2018 annual meeting ofshareholders (Scott B. Bonham; Peter G. Bowie; Mary S. Chan; Dr. Kurt J. Lauk; Robert F. MacLellan; Cynthia A.
Niekamp; William A. Ruh; Dr. Indira V. Samarasekera; Donald J. Walker; and William L. Young) and one candidate (Lisa
S. Westlake) who has been nominated for the first time.
One current director who has served on the Board since 2005, Lawrence D. Worrall, is retiring from the Board at theend of his current term, and thus is not standing for re-election at the Meeting. Mr. Worrall’s distinguished service onbehalf of shareholders includes service as the Chair of the Audit Committee since 2012. Among other things,
Mr. Worrall has consistently driven improvements in audit quality, audit efficiency and internal audit effectiveness, as wellas enterprise risk management.
In recommending to the Board the nominees who currently serve as directors on our Board, the CGCNC considered anumber of factors, including:







the nominees’ respective skills, expertise and experience, as well as the extent to which the nominees meetthe minimum qualifications described above;
results of the Board’s annual self-assessment process, which incorporates both a self-evaluation and a peer
review process;individual voting results from the 2018 annual meeting; andfeedback from the Board’s independent advisors and others.

Ms. Westlake was put forward as a nominee after completion by the CGCNC of a candidate search which was
assisted by the CGCNC’s independent advisor. Following review of an updated Board skills matrix, consideration of
Magna’s strategic priorities and analysis of potential skills gaps in relation to those strategic priorities, the CGCNC
sought candidates possessing strategic human asset expertise. The CGCNC believes that Ms. Westlake’s deep
expertise with human asset management, as well as her financial expertise, make her a compelling candidate forservice on Magna’s Board.
The CGCNC and the Board are confident that each of the eleven nominees:

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; andwill, if elected, provide responsible oversight as a steward of the corporation, including prudent oversightof Management.

Refer to ‘‘Nominees for Election to the Board’’ for detailed information regarding the skills, expertise and other relevant
information which you should consider in casting your vote for each nominee.
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.

14

Business of the Meeting

Nominees for Election to the Board

MBA, PEng

William L. Young

MBA

PEng

Lisa S. Westlake

Donald J. Walker

PhD, PEng

Dr. Indira V. Samarasekera

MSc

William A. Ruh

MBA

CPA, MBA

Cynthia A. Niekamp

Robert F. MacLellan

MBA, PhD

Dr. Kurt J. Lauk

MSc

Mary S. Chan

FCA, MBA

MBA

Peter G. Bowie

Scott B. Bonham

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

ELECTION OF
DIRECTORS

Nominee Skills and Expertise

Accounting/Audit: technical expertise with financial statements and financial
reporting matters; understanding of critical accounting policies, technicalissues relevant to the internal and external audit, as well as internal controls.

➁

➀

➂

➀

➀

➁

➁

➂

➂

➁

➂

Automotive: practical experience with automobile manufacturers or
suppliers; solid understanding of industry dynamics on a global or regional
basis; knowledge of World Class Manufacturing; or experience incomparable capital-intensive manufacturing industries.

➀

➂

➀

➀

➂

➀

➂

➂

➀

➂

➁

➀

➀

➂

➁

➀

➀

➁

➂

➀

➀

➁

➁

➀

➁

➁

➀

➀

➁

➀

➀

➀

➀

High-Growth Markets: a track record of operational success or otherexperience in markets other than North America and Western Europe, suchas China.

➀

➀

➀

➀

➂

➀

➁

➁

➀

➀

➂

Large Cap Company: board, management and/or other applicable
experience with companies that have a market capitalization in excess of$10 billion.

➀

➀

➀

➀

➀

➀

➀

➀

➀

➀

➀

Legal/Regulatory/Public Policy: experience with legal and regulatorycompliance oversight; experience in relevant areas of government or public
policy.

➂

➁

➂

➁

➁

➂

➀

➀

➁

➁

➁

Mergers & Acquisitions (‘‘M&A’’): management or board-level experience
with complex M&A in different industries and/or different geographic regions.

➁

➀

➁

➀

➀

➀

➁

➁

➀

➀

➀

R&D/Innovation/Technology: domain expertise and skill intechnology/innovation; practical experience with technological transformationand disruption.

➀

➂

➀

➀

➂

➁

➀

➀

➀

➁

➂

Risk Oversight: practical expertise in risk governance, including enterpriserisk management frameworks; knowledge/understanding of risk monitoringand mitigation.

➁

➀

➁

➁

➀

➁

➀

➁

➀

➀

➁

Senior/Executive Leadership: demonstrated track record of leadership,mature judgment, operating success and value creation in complex
organizations and/or in progressively challenging roles.

➀

➀

➀

➀

➀

➀

➀

➀

➀

➀

➀

Strategy Development: board, senior management and/or otherexperience in strategy development, analysis or oversight.

➀

➀

➀

➀

➀

➀

➀

➀

➀

➀

➀

Talent Management/Compensation: hands-on experience developing,managing, compensating and motivating employees.

➂

➀

➀

➂

➀

➀

➀

➁

➀

➀

➁

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 governancepractices and norms; prior board experience; expertise with stakeholder
management or engagement.

Ranking Legend➀➁➂

Significant expertise/experience
Strong familiarity
General understanding

Business of the Meeting

15

BUSINESS OF THE
MEETING

31JAN201919063736
31JAN201919055959
31JAN201919054247
31JAN201919052540
31JAN201919053759
31JAN201919045777
31JAN201919070183
31JAN201919051821
31JAN201919050265
28FEB201903435205
31JAN201919065818

Nominee Independence
Nine out of eleven, or 82%, of the nominees for election at the Meeting are independent. A summary of the
independence determination for each nominee is set forth below:

NOMINEE

INDEPENDENT

Scott B. Bonham(1)Peter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan
Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Donald J. Walker
Lisa S. Westlake
William L. YoungNONINDEPENDENTBASIS FOR
DETERMINATION✓

Consultant to Magna
No material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationshipNo material relationshipManagement
No material relationshipNo material relationship

✓
✓
✓
✓
✓
✓
✓
✓
✓
✓

Note:
1.
Mr. Bonham has been determined to be a non-independent, non-executive director as a result of his consulting relationship, the terms of which aredescribed under ‘‘Interests of Management and Other Insiders in Certain Transactions’’ elsewhere in this Circular.

Nominees’ Meeting AttendanceDirectors 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 scheduling conflicts
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
Board and applicable standing Committee meetings, except where an absence is due to medical or other valid
reason. One nominee, Robert F. MacLellan, could not attend one Board and one Audit Committee meeting in his
first year on the Board due to an unresolvable scheduling conflict that pre-dated his election to the Board. The
conflict was known to Magna’s Chairman at the time Mr. MacLellan was first nominated in 2018 and the minimum
attendance requirement was waived for Mr. MacLellan in 2018. The nominees currently serving on the Board
achieved 96% attendance at all Board and applicable Committee meetings (in aggregate), as set forth below.

NOMINEE

BOARD#%

AUDIT(1)#%CGCNC(1)#%

EROC(1)(2)#%TECHNOLOGY(1)#%Scott B. BonhamPeter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan(3)Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Donald J. Walker
William L. Young

7/7
7/7
7/7
7/7
2/3
7/7
7/7
7/7
7/7
7/7

–
5/5
–
2/2
1/2
3/3
2/2
–
–
–

–
–
–

–
–
–

–
–
1/1

–
–
100

–
–
2/2
8/8
–
8/8

–
–
100
100
–
100

–
1/1
–
–
–
–

–
100
–
–
–
–

–
–
3/3
3/3
–
–
3/3
–
–
–

100
100
100
100
67
100
100
100
100
100

–
100
–
100
50
100
100
–
–
–

–
–
100
100
–
–
100
–
–
–

TOTAL
#

%

7/7
12/12
11/11
12/12
3/5
11/11
14/14
15/15
7/7
15/15

100
100
100
100
60
100
100
100
100
100

Notes:
1.
Attendance figures for Audit, CGCNC, EROC and Technology include only those directors who served as members of such committees during 2018.
2.
The EROC was wound-down effective as of March 31, 2018.
3.
Mr. MacLellan was elected to the Board on May 10, 2018.

16

Business of the Meeting2018 Annual Meeting Vote Results
Each of the nominees standing for re-election received a substantial majority of votes ‘‘for’’ his or her election at
our 2018 annual meeting of shareholders, as set forth in the table below.

Scott B. BonhamPeter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan
Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Donald J. Walker
William L. YoungVOTES FOR(%)

VOTES WITHHELD
(%)

99.9
99.8
99.8
99.9
99.8
99.9
99.9
99.6
99.9
99.4

0.1
0.2
0.2
0.1
0.2
0.1
0.1
0.4
0.1
0.6

ELECTION OF
DIRECTORS2018NOMINEE

Nominees’ Equity OwnershipEquity Maintenance Requirement: Each Independent Director other than the Board Chair is required tohold a minimum of $750,000 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.

Mandatory Deferral of Compensation: Until the equity maintenance requirement has been achieved, aminimum of 60% of the Independent Director annual retainer is paid in the form of DSUs. Once an
Independent Director has achieved the minimum equity maintenance requirement, a minimum of 40% is
automatically deferred in the form of DSUs, 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 an Independent Director’s DSUs can only be realized following his or her departure fromthe Board and remains ‘‘at risk’’ until that time.

Each of Magna’s nominees is in compliance with the minimum equity maintenance requirement and many exceed
it. New directors are entitled to a five year period in which to accumulate the minimum required value of Common
Shares and/or DSUs.
The eleven nominees held Magna Common Shares and/or DSUs with the following total value, as of theRecord Date:
NOMINEE
Scott B. BonhamPeter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan
Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Donald J. Walker
Lisa S. Westlake
William L. Young

COMMON SHARES
(#)

DSUS
(#)

TOTAL EQUITY‘‘AT RISK’’(1)($)

EQUITY MAINTENANCEREQUIREMENT

–
7,000
–
110
–
6,600
–
–
1,944,075
2,000
1,860

55,40344,1447,880
30,301
3,917
9,573
9,281
27,820
NIL
NIL
100,464

2,629,000
2,427,000
374,000
1,443,000
186,000
767,000
440,000
1,320,000
92,265,000
95,0004,855,000

Exceeds
Exceeds
Complies
Exceeds
Complies
Exceeds
Complies
Exceeds
Exceeds
New Nominee
Exceeds

Note:1.
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.

Business of the Meeting

17

BUSINESS OF THE
MEETING

We believe it is important that each Independent Director be economically aligned with shareholders. We try toachieve such alignment in two principal ways:

Biographies of 2019 Nominees
Scott B. Bonham MBA

6FEB201923194388

California, U.S.A.
Age: 57
Tenure: ~7

Committees:
None
Other Current Public Company
Boards:Bank of Nova Scotia (Audit;
Corporate Governance)
Loblaw Companies Limited(Audit)Total 2018 Compensation:$822,000
Equity-at-risk (Record Date):$2,629,000

Peter G. Bowie FCA, MBA

6FEB201923200374

Ontario, Canada
Age: 72
Tenure: ~7

Committees:
Audit
Other Current Public Company
Boards:
Stelco Holdings Inc. (Audit(Chair))Total 2018 Compensation:$239,000
Equity-at-risk (Record Date):$2,427,000

NON-INDEPENDENTNON-EXECUTIVE
Mr. Bonham brings to the Board a techinnovation-related not-for-profits including
nology/innovation-centred perspective
the Vector Institute and the Canadian Instiwhich reflects his deep understandingtute for Advanced Research. Mr. Bonhamof the long-term value creation potenhas a B.Sc in electrical engineering
tial possessed by some of the world’s(Queen’s) and an MBA (Harvard).
most innovative companies.
Together with Dr. Indira Samarasekera, Mr.
Mr. Bonham is a corporate director and theBonham serves as a director of the Bank of
Co-Founder of Intentional Capital, a priNova Scotia, which provides routine banking
vately-held real estateservices to Magna.
investment
manageMagna’s fees to thement company that
Bank of Nova Scotia inmanages
properties
2018 represented less2018 MEETING2018 ANNUAL MEETING than 0.01% of theserving Canadian entreATTENDANCEVOTING RESULT
preneurs and start-up
bank’s 2018 revenues
companies. He also coand are not material tofounded GGV Capital, an expansion-stage
Magna or the bank. In addition, Mr. Bonham,
venture capital firm, where he served as atogether with Mr. Young, serves as a director
Partner (2000-2011), and as a Venture Partof CIFAR, a Canadian-based institute forner (2011-2015). Mr. Bonham previously advanced research and study. Effective Janserved in various roles with the Capitaluary 1, 2018, Mr. Bonham became a conGroup Companies (1996-2000), Silicon
sultant to the company. Refer to ‘‘Interests ofGraphics (1992-1996), Booz, Allen & HamilManagement and Other Insiders in Certain
ton (1989-1992) and General Motors ofTransactions’’ for terms of his consulting
Canada. He is currently a board member ofarrangement.

100% >99%

Significant expertise/experience:
Automotive
Finance/Financial AdvisoryHigh-Growth Markets
Large Cap Company

Business of the Meeting

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

INDEPENDENT
Mr. Bowie brings to the Board financial
sectors. Together with Dr. Samarasekera,
expertise, a dedication to Audit ComMr. Bowie currently serves as a director of Stelco
mittee excellence, a strong understandHoldings Inc., Mr. Bowie has a B.Comm (St.
ing of strategy and risk, as well as
Mary’s), as well as an MBA (Ottawa) and has
detailed insight of political and ecoreceived an honorary doctorate (Ottawa). Mr.
nomic dynamics within China.
Bowie completed the Advanced Management
Mr. Bowie is a corporate director who previously
Program (Harvard) and is a Fellow of the Instituteserved as the Chief Executive of Deloitte China
of Chartered Accountants of Ontario, as well asfrom 2003 to 2008, as
the Australian Institute ofwell as senior partner andCorporate Directors. Ina member of the board
2018, Mr. Bowie comand the management
pleted the Certificate of2018
MEETING
2018
ANNUALMEETING
committee of Deloitte
Artificial Intelligence ImpliATTENDANCEVOTINGRESULT
China until his retirement
cations for Business Stratfrom the firm in 2010. Mr.
egy (MIT Sloan School ofBowie was also previously Chairman of Deloitte Business) and also received the Association of
Canada (1998-2000), a member of the firm’s
International Certified Professional Accountants’management committee and a member of thecertifications related to Cybersecurity Fundamenboard and governance committees of Deloittetals for finance and accounting professionals andInternational. He is a past member of the board
cybersecurity risk management. He previouslyof the Asian Corporate Governance Association
served on the board of COSCO Holding Comand has served on a variety of boards in thepany Ltd.
private and non-governmental organization

100% >99%

Significant expertise/experience:
Accounting/Audit
Finance/Financial AdvisoryGovernance/BoardHigh-Growth Markets
Large Cap Company

18









M&A
Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Committees:Technology

Ms. Chan brings to the Board extensive
Motors Company (2012-2015), where she
experience in connected cars, autonowas responsible for building the next genermous and semi-autonomous vehicles,
ation of connected vehicle product and seras well as demonstrated executive
vices. At GM, Ms. Chan led the industry-firstleadership success in the mobility comlaunch of 4G LTE connectivity across GM’s
munications infrastructure, products
global brands in the U.S., China, Europe andand services industry.
Mexico. Ms. Chan was also previously
Ms. Chan has been a
Senior VP & Generalmanaging partner ofManager,Enterprise
VectoIQ LLP (since
Mobility Solutions &2015), an advisory firm
Services,
Dell
Inc.
2018 MEETING2018 ANNUAL MEETING
that partners with orga(2009-2012), and had
ATTENDANCEVOTING RESULT
nizations participating
progressive executive
in the transition towards
roles, including Execumobility as a service and an autonomous
tive VP Wireless Network Business Unit, at
vehicle society. Prior to joining VectoIQ, she
Alcatel-Lucent Inc. (1996-2009). Ms. Chanserved as President, Global Connectedholds B.Sc. and M.Sc. degrees in Electrical
Consumer & OnStar Service of General
Engineering (Columbia).

100% >99%

Other Current Public Company
Boards:
Dialog Semiconductor PLC(Nominating; Compensation)
SBA Communications
Significant expertise/experience:
Corporation (Audit; Nomination/

Automotive
Governance)High-Growth Markets
Microelectronics Technology Inc.
(Audit)
Large Cap Company

R&D/Innovation/Technology
Total 2018 Compensation:$234,000
Equity-at-risk (Record Date):$374,000

Dr. Kurt J. Lauk MBA, PhD

6FEB201923211189

Baden-Württemberg,
Germany
Age: 72
Tenure: ~8Committees:Technology
Other Current Public Company
Boards:NoneTotal 2018 Compensation:$275,000
Equity-at-risk (Record Date):$1,443,000Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

Chairman of theTechnology Committee

INDEPENDENT

Dr. Lauk brings to the Board valuable
extensive European automotive industry
insights regarding the European autoexperience, primarily through his positions
motive industry and the global activities
as Member of the Board of Managementof European OEMs and suppliers, and Head of World Wide Commercial Vehitogether with a focus on long-termcles
DivisionofDaimler
Chryslerstrategy and a strong understanding of(1996-1999), as well as Deputy Chief Executechnology/innovation both within andtive Officer and Chief Financial Officer (withoutside the automotive industry.
responsibility for finance, controlling and
Dr. Lauk is the comarketing) of Audi AG
founder and President(1989-1992). He curof Globe CP GmbH, a
rently serves as a Trusprivate investment firmtee of the International
2018
MEETING
2018
ANNUALMEETINGestablished in 2000. His
Institute for Strategic
ATTENDANCEVOTINGRESULTvariedexperience
Studies in London andincludes service as a
is an honorary profesMemberofEuropeanParliament
sor with a chair for international studies at(2004-2009), including as a Member of Ecothe European Business School in Reichartnomic and Monetary Affairs Committee andshausen, Germany. Dr. Lauk possesses
Deputy Member of the Foreign and Security
both a PhD in international politics (Kiel), as
Affairs Committee. Dr. Lauk possesses
well as an MBA (Stanford).

100% >99%

Significant expertise/experience:
Accounting/Audit
AutomotiveHigh-Growth Markets
Large Cap Company






ELECTION OF
DIRECTORS

6FEB201923205025

New Jersey, U.S.A.
Age: 56
Tenure: 1+

INDEPENDENT

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

Business of the Meeting

19

BUSINESS OF THE
MEETING

Mary S. Chan MSc

Robert F. MacLellan CPA, MBA

6FEB201923213248

Ontario, Canada
Age: 64
Tenure: 1

Committees:
Audit
Other Current Public Company
Boards:
T. Rowe Price Group, Inc.
(Compensation (Chair); Audit)
Total 2018 Compensation:$135,000
Equity-at-risk (Record Date):$186,000

INDEPENDENT

Mr. MacLellan brings to the Board sigcapacities with TDBFG (1995-2003). Priornificant financial and accounting acuboards include WIND Mobile Group, ACE
men, a track record of executive
Aviation Holdings Inc., Birch Hill Equity Partleadership success, blue-chip board
ners and Maple Leaf Sports and Entertainexperience and the perspective of thement Ltd. Mr. MacLellan is currently
institutional investment community.
Chairman of the Board of Right to Play InterMr. MacLellan serves as the non-executive
national, an organization that uses sport andChairman of Northleaf Capital Partners, anplay to empower and educate youth. He is a
independent
globalChartered Accountant
equity and infrastrucand has a B.Comm.
ture fund manager and(Carleton) and an MBA
advisor (since 2009),(Harvard).
2018 MEETING2018 ANNUAL MEETING Mr. MacLellan serves asprior to which he was
ATTENDANCEVOTING RESULTthe Chief Investment
an independent director
Officer of TD Bankof T. Rowe Price Group,
Financial Group (TDBFG) (2003-2008)
Inc., which is Magna’s largest shareholder,
where he was responsible for overseeing thewith over 8% of our outstanding shares as ofmanagement of investments for its
the Record Date. As an independent direcEmployee Pension Fund, The Toronto- tor of T. Rowe Price, Mr. MacLellan has no
Dominion Bank, TD Mutual Funds and TD
involvementin
portfolio
investment
Capital Group. He served in various otherdecisions.

60%* >99%* Mr. MacLellan was elected to the Board on May 10, 2018 and missed one Board meeting and one Audit Committee
meeting due to an unresolvable scheduling conflict that pre-dated his election to the Board. This conflict was known to andwaived by Magna’s chairman at the time Mr. MacLellan was first nominated in 2018.

Significant expertise/experience:
Accounting/Audit
Finance/Financial AdvisoryGovernance/Board
Large Cap Company

M&A

Cynthia A. Niekamp MBA

6FEB201923215476

Michigan, U.S.A.
Age: 59
Tenure: 5

Committees:
Audit
Other Current Public Company
Boards:Ball Corporation (Human
Resources; Finance)
Total 2018 Compensation:$222,000
Equity-at-risk (Record Date):$767,00020

Business of the Meeting






Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

INDEPENDENT
Ms. Niekamp brings to the Board extenPresident & General Manager, BorgWarnersive senior management and board
Torq Transfer Systems (2004-2008);
experience within the global automotive
MeadWestvaco Corporation (1995-2004);
parts industry, including through execuTRW (1990-1995); and General Motors
tive-level general management, P&L,
(1983-1990). Ms. Niekamp, a National
operational, strategy and finance roles.
Association of Corporate Directors fellow,
Ms. Niekamp is a corserves on the advisory
porate director who
board of Purdue Univermost recently served assity School of Industrial
the Senior Vice-PresiEngineering and previ2018 MEETING2018 ANNUAL MEETING
dent, Automotive Coatously served on the
ATTENDANCEVOTING RESULT
ings, of PPG Industries,
boards of Rockwood
Inc. She possesses
Holdings, Delphi Corp.
over 30 years of automotive and otherand Cooper Tire and Rubber, as well as
industrial manufacturing experience through Berkshire Applied Technology Council.
her prior roles at PPG (2009-2016);
Ms. Niekamp has a B.Sc. in industrial engiBorgWarner, where she served as
neering (Purdue), as well as an MBA(Harvard).

100% >99%

Significant expertise/experience:
Automotive
Finance/Financial AdvisoryGovernance/BoardHigh-Growth Markets
Large Cap Company






M&A
Senior/Executive Leadership
Strategy Development
Talent Management/Compensation

William A. Ruh MSc

Other Current Public Company
Boards:NoneTotal 2018 Compensation:$264,000
Equity-at-risk (Record Date):$440,000

100% >99%

Significant expertise/experience:
Large Cap Company

Legal/Regulatory/Public Policy
R&D/Innovation/Technology






Dr. Indira V. Samarasekera PhD, PEng

6FEB201923223817

British Columbia,
CanadaAge: 66
Tenure: ~5Committees:
CGCNC
Other Current Public Company Boards:
Bank of Nova Scotia (Human
Resources; Corporate Governance)TransCanada Corporation (Audit;
Governance)Stelco Holdings Inc.
Total 2018 Compensation:$258,000
Equity-at-risk (Record Date):$1,320,000

Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

INDEPENDENT

Dr. Samarasekera brings to the Board a Innovation Council as well as Canada’s Global
proven record of technical expertise, Commerce Strategy. She possesses an M.Sc
demonstrated leadership, tangible suc- in mechanical engineering (California), as wellcess in building international relationships as a PhD in metallurgical engineering (British
and a long-standing commitment to R&D/ Columbia) and is a professional engineer
innovation.
(P.Eng. – British Columbia) who has been
Dr. Samarasekera is a corporate director and elected as a Foreign Associate of the National
Senior Advisor at Bennett Jones, LLP. Dr. Academy of Engineering in the U.S.
Samarasekera served as
TogetherwithMr.
the President and ViceScott Bonham, Dr.
Chancellor of the UniverSamarasekera serves assity of Alberta froma director at the Bank of2018 MEETING2018 ANNUAL MEETING Nova Scotia, which pro(2005-2015). She is interATTENDANCEVOTING RESULT
nationally recognized asvides routine banking
a leading metallurgicalservices to Magna.
engineer, including for her work on steel proMagna’s fees to the Bank of Nova Scotia incess engineering for which she was appointed
2018 represented less than 0.01% of the
an Officer of the Order of Canada. Among otherbank’s 2018 revenues and are not material tothings, Dr. Samarasekera was previously a
Magna or the bank. In addition,member of Canada’s Science, Technology and
Dr. Samarasekera currently serves on the
Stelco Holdings Inc. board with Mr. Bowie.

100% >99%

Significant expertise/experience:
Governance/Board
Large Cap Company

Legal/Regulatory/Public Policy

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

Business of the Meeting

21

ELECTION OF
DIRECTORS

Committees:

CGCNC

Technology

Mr. Ruh brings to the Board a track
where he held global responsibility for develrecord of success in managing the digioping advanced services and solutions;tal transformation of a large industrial
Software AG, Inc. (2001-2004); and The
company. He also possesses a wealth Advisory Board Company (2000-2001),of expertise in advanced software andamong others. In addition to his executive
industrial internet solutions, including
management roles, Mr. Ruh played an
cloud-based platforms, analytics, andinstrumental role in establishing the Indusinformation technology/cybersecurity, trial Internet Consortium by bringing
developed over the
together government,
course of a thirty year
academia and industry
career in the software
leaders to establish
industry.
standards, best prac2018 MEETING2018 ANNUAL MEETING tices and processes for
Mr. Ruh is the Chief
ATTENDANCEVOTING RESULT
Executive Officer, Digital
the industrial internet.
of Lendlease Group, an
Mr. Ruh is an author
international property and infrastructure and a speaker on such topics as emerging
group. Prior to joining Lendlease, he served
business models, cloud computing, analytas the chief executive officer for GE Digital asics, mobile computing, agile development,
well as the senior vice president and Chieflarge scale distributed systems, andDigital Officer (CDO) for GE (2011-2018).
machine to machine communications. He
Other pervious roles included executive
has a B.Sc. and M.Sc. in computer scienceroles at: Cisco Systems, Inc. (2004-2011)
from (California State).

BUSINESS OF THE
MEETING

6FEB201923221889

New South Wales,
Australia
Age: 57
Tenure: ~2

INDEPENDENT

Donald J. Walker PEng

6FEB201923225905

Ontario, Canada
Age: 62
Tenure: ~13

Committees:
None
Other Current Public Company
Boards:NoneTotal 2018 Compensation:$20,073,000
Equity-at-risk (Record Date):$92,265,000

MANAGEMENT

Mr. Walker, Magna’s Chief Executive Influential Individuals; Canadian Business
Officer, is Management’s sole represenMagazine’s 2016 ranking of Canada’s Most
tative on the Board. He brings extensive
Powerful Business People; and Motor Trend
knowledge and understanding of theMagazine’s 2017 Power List. In addition,
automotive industry, as well as the
Mr. Walker was named Toronto Star’s Top 5
company’s culture, operations, key per- Newsmakers to watch in 2017. Mr Walker
sonnel, customers, suppliers and thewas also recognized by the Glassdoor
complex drivers of its success. He has Employees’ Choice Award as one of the Top
demonstrated a commitment to transparent
CEO’s in Canada in both 2017 and 2018
and effective leadership, responsiveness toand in 2018, was selected as one of thethe Board and integrity in all aspects of theAutomotive News All-Stars.
company’s business, while pushing theMr. Walker previously served as Magna’sorganization to reach its
Co-Chief
Executive
full potential throughOfficer (2005-2010) andWorld Class ManufacPresident and Chiefturing, innovation andExecutive
Officer
2018 MEETING2018 ANNUAL MEETING (1994-2001). He wasleadershipdevelopATTENDANCEVOTING RESULT
ment. Mr. Walker conformerly the President,
tinues to actively shape
Chief Executive Officer
Magna’s strategic vision and mission in conand Chairman of Intier Automotive Inc.
junction with the Board, with an unwavering (2001-2005), spent seven years at General
focus on excellence in execution/implemen- Motors in various engineering and manufactation and legal/regulatory compliance, as
turing positions. He is currently the Chair ofwell as prudence in stewardship over the
the Canadian Automotive Partnership Councompany’s assets, employees, reputationcil (CAPC), which serves to identify bothand value. Mr. Walker was Canada’s 2014
short- and long-term priorities to help ensure
Outstanding CEO of the Year. He was also
the future health of the automotive industry
named to Fortune Magazine’s Businessperin Canada. Mr. Walker is a professional engison of the Year list in 2015; Financial Postneer (P.Eng. – Ontario) with a B.Sc in
Magazine’s 2016 Power List of 25 Most
mechanical engineering (Waterloo).

100% >99%

Significant expertise/experience:
Automotive
Finance/Financial AdvisoryGovernance/BoardHigh-Growth Markets
Large Cap Company

M&A

22

Business of the Meeting

Chief Executive Officer







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

Lisa S. Westlake MBA

Other Current Public Company
Boards:NoneTotal 2018 Compensation:
N/A – New Nominee
Equity-at-risk (Record Date):$95,000

Significant expertise/experience:Finance/Financial AdvisoryGovernance/BoardHigh-Growth Markets
Large Cap Company

M&A

William L. Young MBA, PEng

4FEB201914042969

Massachusetts, U.S.A.
Age: 64
Tenure: ~8Committees:
CGCNC
Other Current Public Company
Boards*:
Intact Financial Corporation
Total 2018 Compensation:$500,000
Equity-at-risk (Record Date):$4,855,000






Risk OversightSenior/Executive Leadership
Strategy Development
Talent Management/Compensation

Chairman of the Board
Chairman of the CGCNC

INDEPENDENT

Mr. Young, the Chairman of the Board
lished in 1998. He is also a founding partner(since 2012), brings to the Board anof Westbourne Management Group (sinceinclusive, consensus-building leader1988). Mr. Young possesses significant
ship style, anchored by strong business
operational experience, as well as extensive
acumen developed across a broad
mergers and acquisitions experience. He
range of businesses and industries. He
currently serves on the boards of the Canahas been highly effective in cultivating a condian Institute for Advanced Research, as
structive but independent relationship withwell as the Canadian Partnership Against
Management, as wellCancer. In addition,
as open, candid diaMr. Young serves,
logue with shareholders
togetherwithand shareholder repreMr. Bonham, as a direc2018 MEETING2018 ANNUAL MEETING tor of CIFAR, a Canasentative organizations.
ATTENDANCEVOTING RESULT
In his capacity as Chairdian-based institute forman of the CGCNC, Mr.
advanced research andYoung has been instrumental in the evolution
study. Mr. Young is Chair Emeritus of theof Magna’s unique compensation structure Board of Trustees of Queen’s University
in a manner which reasonably preserves its(Kingston, Ontario) (which he chaired fromcore elements while responsively addressing 2006 to 2012) and has significant private
constructive feedback received from sharecompany board and board leadership expeholders and others.
rience over the last 20 years, including a
Mr. Young is a corporate director with extennumber of European and U.S.-based comsive experience in private equity. He copanies. Mr. Young is a professional engineer
founded and was a partner of Monitor Clip(P.Eng. – Ontario) with a B.Sc in chemical
per Partners, a private equity firm estabengineering (Queen’s) and an MBA (Harvard).

100% >99%* Mr. Young was a director of Pharmetics (2011) Inc., aprivate company, until he resigned in connection with thesale of Pharmetics in September 2017. Approximately fivemonths after the sale, in February 2018, Pharmetics filed a
Notice of Intention to Make a Proposal under the
Bankruptcy and Insolvency Act (Canada) and was
Significant expertise/experience:subsequently declared bankrupt as of March 16, 2018.


Governance/Board
Large Cap Company
M&A




Senior Leadership
Strategy Development

Business of the Meeting

23

ELECTION OF
DIRECTORS

Committees:
CGCNC (if elected)

Ms. Westlake brings to the Board extenresources and finance roles with Moody’s
sive global experience in both humanCorporation, including Chief Human
resources and finance, as well as an
Resources Officer (2008-2017), Vice-Presiestablished reputation for her leaderdent, Investor Relations (2006-2008) andship abilities in organizational transforManaging Director, Finance (2004-2006). In
mations, leveraging technology to drivea career which spans nearly 35 years,
innovation, stakeholder and crisis manMs. Westlake also had a range of Financial
agement, as well as enterprise risk
Officer and other senior roles at: American
management.
Express
Company
Ms. Westlake most
(1996-2003); The Dunrecently served as the& Bradstreet CorporaChief
Humantion (1989-1995); andNEW NOMINEEResources Officer ofLehmanBrothers
global information and(1984-1987). Ms. Westanalytics services firm,lake has a B.A. in bioIHS Markit Ltd. (2017-2018), prior to which
chemistry (Dartmouth), as well as an MBA
she served in a range of senior human(Columbia).

BUSINESS OF THE
MEETING

13MAR201901053274

New Jersey, U.S.A.
Age: 57
New Nominee

INDEPENDENT

Director Compensation
Objectives of Director Compensation
We have structured the compensation for our Independent Directors with the aim of attracting and retaining skilled
independent directors and aligning their interests with the interests of our long-term shareholders. To accomplishthese objectives, we believe that such compensation 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 of such compensation must be deferred until departure from theBoard, thus tying the redemption value to the market value of our Common Shares and placing it ‘‘at risk’’ to alignthe interests of Independent Directors with those of shareholders. Management directors do not receive anycompensation for serving as directors.

Compensation Structure
We compensate Independent Directors through a combination of:

Annual Retainer: Independent Directors are paid an annual retainer of $150,000, of which $90,000(60%) is automatically deferred in the form of DSUs and $60,000 (40%) is paid in cash. In addition to the
portion automatically deferred in the form of DSUs, Independent Directors may defer up to 100% of their
cash compensation in the form of DSUs. Once an Independent Director has achieved the minimum equity
maintenance requirement ($750,000 over five years), a minimum of $60,000 (40%) is automaticallydeferred in the form of DSUs, subject to the director’s election to defer a greater amount.



Board Chair Retainer: The Chair is paid a flat annual retainer of $500,000 for all work performed in any
capacity other than as a special committee chair. Of such amount, $300,000 (60%) is automaticallydeferred in the form of DSUs and $200,000 (40%) is paid in cash, subject to the Chair’s election to defer
up to 100% of his or her cash compensation in the form of DSUs. Once the Board Chair has achieved
the minimum equity maintenance requirement ($1,500,000 over three years), a minimum of $200,000(40%) is automatically deferred in the form of DSUs, subject to the Board Chair’s election to defer agreater amount.

Committee Chair and Committee Member Retainers: In recognition of the additional workload of our
Committee Chairs and Committee members, additional retainers are paid to each Independent Director
acting in any such capacity. These retainers are set at $25,000 for each standing Board Committee. In
the case of special committees which may be formed from time to time, the retainer is set at $25,000,
unless otherwise determined by the Board. Committee Chair retainers are payable in cash, subject to an
Independent Director’s election to defer up to 100% of his or her cash compensation in the formof DSUs.



Meeting and Work Fees: Meeting and work fees are intended to compensate Independent Directors
based on their respective contributions of time and effort to Magna matters. The amounts of these fees
are listed in the fee schedule below and are payable in cash, subject to an Independent Director’s election
to defer up to 100% of his or her cash compensation in the form of DSUs.

The CGCNC has responsibility for reviewing Independent Director compensation and typically reviews it
approximately every two years, with the last such review in 2017.

24

Business of the Meeting

The current schedule of retainers and fees payable to our Independent Directors is set forth below. No changes
were made to the fee schedule in 2018.
RETAINER/FEE TYPEAMOUNT($)

Comprehensive Board Chair annual retainer

500,000

Independent Director annual retainer
Committee member annual retainer
Additional Committee Chair annual retainer
Audit
CGCNC
Technology Committee
Special Committees (unless otherwise determined by the Board)
Per meeting fee
Written resolution
Additional services (per day)Travel days (per day)

150,000
25,000ELECTION OF
DIRECTORS

25,00025,00025,00025,000
2,000
400
4,000
4,000

The following table sets forth a summary of the compensation earned by all individuals who served as Independent
Directors during the year ended December 31, 2018.

FEES
NAME

Scott B. BonhamPeter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan(4)Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Lawrence D. Worrall
William L. Young
Lady Barbara Judge(5)EARNED(1)
% OF
($)
FEES

SHAREBASEDAWARDS(2)
% OF
($)
FEES

OPTIONBASEDAWARDS($)

NON-EQUITYINCENTIVE PLAN
COMPENSATION($)

PENSION
VALUE
($)

ALL
OTHER
($)

TOTAL
($)

NIL
NIL
NIL
215,000
NIL
132,000
NIL
NIL
200,000
NIL

–
–
–
78
–
59
–
–
77
–

150,000
239,000
234,000
60,000135,000
90,000264,000
258,000
60,000500,000

100
100
100
22
100
41
100
100
23
100

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

672,000(3)
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

822,000
239,000
234,000
275,000
135,000
222,000
264,000
258,000
260,000
500,000

NIL–

122,000

100

NIL

NIL

NIL

NIL

122,000

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 formof 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.
Mr. Bonham provides consulting services to Magna for a fee of $56,000 per month, as described under ‘‘Interests of Management and Other Insiders
in Certain Transactions.’’4.
Mr. MacLellan was elected to the Board on May 10, 2018.
5.
Lady Judge retired from the Board on May 10, 2018.

Business of the Meeting

25

BUSINESS OF THE
MEETING2018 Independent Directors’ Compensation

Deferred Share Units
Mandatory Deferral Creates Alignment With Shareholders
We maintain a Non-Employee Director Share-Based Compensation Plan (the ‘‘DSU Plan’’) which governs theretainers and fees that are deferred in the form of DSUs. In addition to the 60% of the annual retainer that is
automatically deferred, each Independent Director may annually elect to defer up to 100% (in increments of 10%)of his or her 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 the annual retainer is automatically deferred in the form of DSUs,
subject to an Independent Director’s election to defer a greater proportion. All DSUs are fully vested on the date
allocated to an Independent Director under the DSU Plan. Amounts deferred under the DSU Plan cannot be
redeemed until an Independent Director’s departure from the Board. The mandatory deferral aims to align theinterests 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 sametimes and in the same amounts as dividends that are declared and paid on our Common Shares. Upon an
Independent Director’s departure from the Board, we will deliver Magna Common Shares equal to the number ofwhole DSUs credited to the Independent Director in satisfaction of the redemption value of the DSUs.

Outstanding Share-Based Awards
The following table sets forth outstanding share-based awards (DSUs) for all individuals who served as
Independent Directors during the year ended December 31, 2018:
OPTION-BASED AWARDSSHARE-BASED AWARDSNUMBERSHARESOR UNITS
THAT
HAVE
NOT
VESTED(#)

MARKET OR
PAYOUT VALUEOF SHAREBASEDAWARDS
THAT HAVENOT VESTED($)

MARKET OR
PAYOUT VALUEOF VESTEDSHARE-BASEDAWARDS NOTPAID OUT OR
DISTRIBUTED(1)($)

OF

NUMBER OF
SECURITIESUNDERLYINGUNEXERCISEDOPTIONS(#)

OPTION
EXERCISEPRICE($)

OPTION
EXPIRATIONDATE(MM/DD/YY)

VALUE OFUNEXERCISED
IN-THEMONEYOPTIONS($)

Scott B. BonhamPeter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan
Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Lawrence D. Worrall
William L. Young

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

2,462,000
1,948,000
312,000
1,352,000
133,000
417,000
369,000
1,211,000
2,524,000
4,445,000

Lady Barbara Judge(2)

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NAME

Notes:
1.
Represents the value of Independent Directors’ aggregate DSU balance, which includes dividends credited in the form of additional DSUs, based on
the closing price of Magna Common Shares on the NYSE on December 31, 2018.
2.
Lady Judge retired from the Board on May 10, 2018 and redeemed all outstanding DSUs prior to December 31, 2018.

26

Business of the MeetingIncentive Plan-Awards – Value Vested During the YearThe values of option-based and share-based awards (DSUs) which vested in the year ended December 31, 2018
are set forth below in respect of each of our Independent Directors:

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

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

Scott B. BonhamPeter G. Bowie
Mary S. Chan
Dr. Kurt J. Lauk
Robert F. MacLellan
Cynthia A. Niekamp
William A. Ruh
Dr. Indira V. Samarasekera
Lawrence D. Worrall
William L. Young

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

219,000
292,000
241,000
98,000137,000
101,000
272,000
290,000
132,000
623,000

NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL

Lady Barbara Judge(2)NIL203,000

NIL

Notes:
1.
Represents the aggregate grant date value of retainers and fees deferred in the form of DSUs in 2018 as disclosed in the table ‘‘2018 Independent
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:
DIVIDENDS ON
AGGREGATE DSUS($)

2.

DIVIDENDS ON
AGGREGATE DSUS($)

Scott B. Bonham

69,000William A. Ruh

8,000

Peter G. Bowie

53,000Dr. Indira V. Samarasekera

32,000Mary S. Chan

7,000

Lawrence D. Worrall

72,000Dr. Kurt J. Lauk38,000William L. Young

123,000

Robert F. MacLellan

2,000

Lady Barbara Judge

81,000Cynthia A. Niekamp

11,000Lady Judge retired from the Board on May 10, 2018.

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, bothof which 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 or other transactions. The regular quarterly trading blackouts commence at 11:59 p.m. on
the last day of each fiscal quarter and end 48 hours after the public release of our quarterly financial statements.
Special trading blackouts related to material transactions extend to 48 hours after the public disclosure of thematerial transaction or other conclusion of the transaction.

Anti-Hedging Restrictions
Directors are not permitted to engage in activities which would enable them to improperly profit from changes inour 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 a director’s
exposure to a loss or risk of loss in the value of the Magna securities which he or she holds.

Business of the Meeting

27

BUSINESS OF THE
MEETINGNAME

ELECTION OF
DIRECTORSOPTION-BASED AWARDS –VALUE VESTEDDURING THE YEAR($)

Reappointment of
Deloitte as Magna’s
Independent Auditors

3

13MAR201920121196

95%

>99%

5

Audit / Related Fees

2018 Votes FOR

Fiscal Yrs as auditor
21MAR201916015620

Deloitte, an Independent Registered Public Accounting Firm, was first appointed Magna’s independent auditors 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 oversees the firm’s 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 through pin-pointing audit procedures which reflect Deloitte’s understanding of Magna-specific factors
as well as the general business environment in which Magna operates. The firm’s communications to the Audit
Committee demonstrate strong audit quality, professional skepticism and innovation in the audit, including throughthe effective use of data analytics. The Audit Committee is satisfied that Deloitte’s integrated audit team consists ofaudit professionals and specialists who are qualified and experienced to provide audit services in the regions inwhich Magna operates. The firm has demonstrated a commitment to promoting a learning culture within its own
team and sharing the firm’s insights, perspectives and best practices with the Audit Committee, the Board, internal
audit, as well as management and Magna’s finance teams.

Accordingly, the Audit Committee recommends that you vote
FOR reappointment of Deloitte.
Deloitte’s Independence
In order 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 have not previously been pre-approved. In assessing the impact of any proposed services on
auditor independence, the Audit Committee considers whether:

28

the services are consistent with applicable auditor independence rules;

Business of the Meetingthe independent auditors are 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; andthe 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. There were no such hirings in 2018.

Services and Fees
Services provided by independent auditors may fall into one of the following categories: audit services, auditrelated 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 2018 were treated as exempt from pre-approval pursuant to thede minimis provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

REAPPOINTMENT OFDELOITTE



<1%

5%
35%

AUDIT FEES
2018

%

60

Audit

Audit-related

Tax

27MAR201914585052
Other Permitted

2018% OF TOTALTYPE OF SERVICES

FEES
($)

Audit(1)
Audit-related(2)Tax(4)
Other Permitted(5)Total

9,276,000
5,340,000
695,000
60,00015,371,000

60
35
5
<1
100

FEES
($)

2017
% OF TOTAL

8,466,000
4,641,000(3)516,000
47,00013,670,000

62
34
4
<1
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 andquarterly 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 the audit of our internal control over financial reporting for purposes ofSection 404 of the Sarbanes-Oxley Act of 2002.
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 ofcertain 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 2018 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, as well as otherassurance services.
3.
Fees in the amount of $4,601,000 for services related to statutory audits of certain foreign subsidiaries in2017 have been reclassified from the ‘‘Audit’’ to the ‘‘Audit-related’’ fee category.
4.
Tax compliance, planning and advisory services, excluding any such services required in order to comply withthe standards of the PCAOB which are included under ‘‘Audit Services’’. The tax services actually provided
by Deloitte in respect of 2018 consisted of: domestic and international tax advisory, compliance and researchservices, as well as transfer pricing advisory services.
5.
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 Formintend to vote FOR the resolution reappointing Deloitte.
Representatives of Deloitte are expected to attend 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.

Business of the Meeting

29

BUSINESS OF THE
MEETING

Pursuant to this approval process, the Audit Committee approved and Magna was billed the following fees forservices provided by Deloitte in respect of 2018 and 2017:

Say on Pay

42018
Say on Pay

IN THIS SECTION ...
Compensation and Performance Report. . . . . . . . . . . . . . . . . . . .
Compensation Discussion & Analysis . . . . . . . . . . . . . . . . . . . . . .
Summary Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . . . .
Incentive Plans and Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31
37
58
60

26MAR201923403728
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 10, 2018 annual meeting of shareholders,which was supported by a strong majority (97%) of the votes cast on the resolution. Although
Say on Pay votes are non-binding, the CGCNC will consider the results when assessing futurecompensation decisions.

20MAR201921344335
The text of the resolution 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.’’
Our approach to executive compensation is set out in detail in the Compensation and Performance Report and the
CD&A in this Circular. Included in these sections 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 these sections of this Circular.

The Board recommends that you vote FOR our Say on Pay resolution
Unless otherwise instructed, the Magna officers whose names have been pre-printed on the form ofproxy or Voting Instruction Form intend to vote FOR the Say on Pay resolution.

30

Business of the Meeting

Compensation and Performance
Report
The Board has delegated to the CGCNC the responsibility for making recommendations relating to executive
compensation. The CGCNC has worked closely with its independent advisors, as well as with Executive
Management, to structure an executive compensation framework which seeks to promote:effective short- and long-term decision-making through balanced incentives aimed at profitable growth ina lean manufacturing business; as well aslong-term value creation in a rapidly evolving industry.

Every compensation system must also offer competitive compensation in order to be successful in attracting,motivating and retaining world-class managers, including through the opportunity to achieve superior compensation
for superior performance. The CGCNC believes that Magna’s enhanced compensation framework is proving itself
to be successful in achieving these objectives.
This report discusses 2018 compensation outcomes in the context of Magna’s 2018 performance, to assist you in
casting your vote on the advisory vote on executive compensation, based on an informed view. The CD&A sectionof the Circular which follows contains details regarding:the compensation decision-making practices followed by the CGCNC which seek to promote the
CGCNC’s independence in reaching its decisions and provide shareholders with assurance that suchdecisions are fair, balanced and appropriate, taking into consideration all relevant factors;the structure of Magna’s enhanced compensation framework; and

specifics of the compensation outcomes for Magna’s five most highly paid executive officers.

The CGCNC has approved the CD&A section of this Circular which follows and we encourage you to consider thisreport together with the CD&A before voting on our advisory vote on executive compensation.

Enhanced Compensation Framework – Transition Update
As we have previously reported to shareholders, the CGCNC initiated the transition from Magna’s legacy
compensation structure to the enhanced framework described in the CD&A. Compensation for Magna’s Chief
Executive Officer and Chief Financial Officer was structured and set under the enhanced framework effective for2017, with the transition of other members of Executive Management intended to be completed effective for 2019.
In fact, the CGCNC and the Chief Executive Officer successfully transitioned compensation for the company’s Chief
Technology Officer (2017), Chief Marketing Officer (2018), Chief Legal Officer (2018) and President of Magna
Europe (2018) ahead of schedule. Effective as of the beginning of 2019, compensation for Magna’s Chief

Business of the Meeting

31

BUSINESS OF THE
MEETING

Dear Shareholder,

COMPENSATION/PERFORMANCE

March 28, 2019

Operating Officer, Chief Human Resources Officer and certain of the company’s Vice-Presidents was moved onto
the enhanced framework, substantially completing the transition.
For the last few years, we have highlighted to shareholders our intent to migrate total NEO compensation levels
towards the median of Magna’s compensation peer group, except where factors such as superior performance,experience and tenure justify above-median compensation. When Mr. Walker’s compensation transitioned to theenhanced framework at the start of 2017, his target total compensation was set at a level which was 9% lower
than his forecast compensation under the legacy structure. While Mr. Walker’s target total compensation has been
held constant since 2017, the CGCNC has set target 2019 total compensation for the company’s Chief Financial
Officer and Chief Operating Officer 9% lower than their forecast 2019 levels. We believe this demonstrates ourcommitment to managing executive compensation levels, without creating risk of unwanted executive turnover.
Moreover, the CGCNC together with the Chief Executive Officer have worked to moderate expectations regarding
future compensation levels for potential successors to members of Executive Management.

2018 CEO Compensation Outcome
Prior to 2018, the CGCNC recommended and the Board approved a target total direct compensation package for
Mr. Walker of $19.830 million, split 40% base salary and short-term incentives (cash profit sharing bonus) and 60%
long-term incentives (ROIC PSUs, rTSR PSUs and stock options). Actual total direct compensation for 2018 was$19.952 million, which was 0.6% above target as a result of the impact of the company’s profit performance on
the short-term incentive formula.
Long-term incentives granted to Mr. Walker in 2018 consisted of ROIC PSUs and rTSR PSUs based on three-year
performance, as well as time-vested stock options. The stock options were ‘‘out-of-the-money’’ at the end of
2018, but have approximately six more years of life. Based solely on the first year of the three-year performance
period, both types of PSUs are currently tracking ‘‘at target’’. In the case of his 2018 rTSR PSUs, Magna’s 2018
rTSR performance was at the 80th percentile of the rTSR Peer Group, although absolute 2018 TSR was negative.
While this demonstrates that the company did well to preserve shareholder value on a relative basis in 2018, thefact remains that all shareholders lost value on an absolute basis. In the case of such an outcome over the full
three-year performance period of an rTSR PSU grant, the payout would be capped at the target level. Thismechanism, implemented by the CGCNC in 2017, serves to align management and shareholders with respect toabsolute TSR, while still rewarding management for preserving value on a relative TSR basis.
Mr. Walker’s 2018 compensation outcome reflects a decrease in reported total compensation over the prior year
and on a three-year basis, although it reflects a modest increase on a five-year basis, as follows:
1-YR CHANGE

3MAR2019072040111%

3-YR CHANGE

3MAR2019072040113%

5-YR CHANGE

31JAN2019190653306%

While Mr. Walker’s 2018 compensation level may remain above the median of his industry peers, the strength andconsistency of the company’s performance under his leadership, his standing as the most experienced automotive
CEO in the company’s executive compensation peer group, his continued alignment with the CGCNC regarding
compensation objectives, as well as his responsiveness to the Board regarding long-term corporate strategy andleadership development all justify above-median compensation in the CGCNC’s view.

32

Business of the Meeting

Magna’s Financial and Operating Performance in 2018
In 2018, Magna again achieved record financial results in Sales, Diluted Earnings per Share and Cash flow fromoperations. Selected 2018 financial results and metrics include:$40.83 billion
31JAN20191906533012%$3.00 billion 28FEB201900490740$6.61
31JAN20191906533013%$3.72 billion
31JAN20191906533011%
19.7%
3MAR2019072040110.1%
14.9%
3MAR2019072040110.7%

Note:
1.
Return on Equity and Return on Invested Capital are non-GAAP financial measures which we believe are useful to both management and investors intheir analysis of our results of operations, and reflect our ability to generate returns.

Return of capital – dividends
Return of capital – share repurchases

2018

2016-2018$448 million$1.83 billion$1.23 billion$4.00 billion

A full discussion of Magna’s 2018 financial performance can be found in the Management’s Discussion andAnalysis of Results of Operations and Financial Position for the year ended December 31, 2018, which iscontained in Magna’s 2018 Annual Report.
In addition to solid financial performance during a year challenged by political, economic, trade and stock market
volatility, Magna had a solid year with respect to operations and continued execution of the company’s long-term
strategy. Magna’s ‘‘traditional’’ business units continued to win profitable new business awards by building on theirlegacy of strong execution and innovation. The profitability and cash generation from these businesses provides thecompany with the financial flexibility to continue investing in innovative new product areas related to electrification,
autonomy and smart mobility, some of which may not generate immediate returns.
Operational highlights from 2018 include:
important new, takeover and replacement program ‘‘wins’’ across the company’s reporting segments,
including the launch of the company’s first-ever Seating business with BMW in North America andEurope, as well as the industry-first launch of a high-volume active air dam for the 2019 Dodge
Ram pickup;successful launches of the new Mercedes G-Class, Jaguar I-Pace and BMW Z4 complete vehicle
assembly programs;the launch of seven new production plants in North America, Europe and Asia; and
significant improvements in operational underperforming manufacturing divisions.
Strategic highlights include:
unveiling of an industry-first high-definition radar for autonomous driving features and applications;
new business award from BMW for solid-state LiDAR for future autonomous driving platforms;
formation of a multi-year partnership with ride-hailing service Lyft, Inc., to develop and manufactureself-driving systems at scale;establishment of a joint venture with Beijing Electric Vehicle Co., Ltd. (BJEV) to develop a pure
electric vehicle, and a memorandum of understanding with BJEV to enter into a second joint venture
to build electric vehicles in our first complete vehicle assembly facility outside of Europe;
formation of a joint venture with Rohinni LLC to produce ultra-thin micro-LED lighting solutions;

Business of the Meeting

33

COMPENSATION/PERFORMANCE

Sales
Income from operations before income taxes
Diluted Earnings per Share
Cash flow from operations
Return on Equity(1)Return on Invested Capital(1)VS. 2017

BUSINESS OF THE
MEETING

2018





the acquisitions of OLSA SpA (lighting), Viza Geca SL (seat mechanisms) and Haptronik GmbH(motion control software); andagreement to divest the company’s Fluid Pressure & Controls group for approximately $1.23 billion(before assumption of net debt and pension liabilities) and subject to customary closing adjustments
for net working capital.

Magna’s Total Shareholder Return Performance
Calendar 2018 was a challenging year in terms of stock market performance for many companies. On an absolutebasis, Magna’s total shareholder return declined 18% on NYSE and 11% on the TSX, in each case between
December 31, 2017 and December 31, 2018. Over the same period, the total return of the S&P 500 index
declined 6%, while the S&P/TSX total return declined 9%. However, when viewed over three-year and five-year
periods, Magna’s total return was positive on both exchanges:
TOTAL RETURN

MAGNA: NYSE

S&P 500

MAGNA: TSX

S&P/TSX

3MAR2019072040113MAR201907204011
18%
3MAR201907204011
4%11%
3MAR2019072040119%
20%
30%
19%
20%
31JAN20191906533031JAN201919065330
31JAN20191906533031JAN201919065330
23%
50%
58%
22%
31JAN20191906533031JAN201919065330
31JAN20191906533031JAN201919065330

1-year3-year5-yearTSR ($)The graph below shows the five-year total return of Magna Common Shares on the TSX and NYSE as comparedto the S&P/TSX and S&P500 composite indices, respectively, assuming investment of C$100 and $100 on
December 31, 2013 and reinvestment of dividends.
200

200

150

150

100

100

50

50

0
2013

2014

Magna Common Shares (TSX)

2015

2016

S&P/TSX Total Return

2018

28MAR201912444855

S&P500 Total Return

FISCAL YEARS

2017

Magna Common Shares (NYSE)DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2013
2014
2015
2016
2017
2018

Magna Common Shares (TSX)
S&P/TSX Total Return

C$100
C$100

C$146.65
C$110.55

C$133.31
C$101.36

C$141.90
C$122.73

C$177.45
C$133.89

C$158.04
C$121.99

Magna Common Shares (NYSE)
S&P500 Total Return

$100
$100

$134.39$113.69$102.04$115.26$111.87$129.05$149.48$157.22$122.76$150.33

If a shareholder had invested C$100 in Magna Common Shares on the TSX on December 31, 2013, thecumulative value of that investment would have been over 58% higher by December 31, 2018. In the case of an

34

Business of the MeetingPercentile
1-yr & 3-yr
rTSR

60th
Percentile
5-yr
rTSR
19MAR201911105541

Recognizing that market fluctuations are normal and outside Management control,
and also that the performance of Magna’s total return in relation to market indicesdoes not tell a complete story, the CGCNC assesses Magna’s total return
performance against the peer companies in Magna’s rTSR Peer Group. Thisapproach allows for a more focused comparison against the companies which we
believe are competitors for investment capital. On both a one-year and three-yearbasis, Magna’s rTSR return was at the 80th percentile compared to the rTSR peergroup. Over a five-year period, Magna’s rTSR was at the 60th percentile compared to
the rTSR peer group. We believe that Magna’s strong rTSR performance
demonstrates that shareholder value continues to be created over the medium- tolong-term.

Pay for Performance
The Say on Pay vote at the Meeting represents your opportunity to tell us whether you are satisfied that thecompany’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
which can convey a complete picture as to such relationship. As we considered the issue, we concluded thatcompensation outcomes are justified by performance, based on the following:









Magna continues to grow profitably, even in challenging economic and industry conditions;healthy profits and strong cash flow generation are enabling the company to both reinvest for future
growth in strategic areas, as well as return capital to shareholders;the company remains effective in generating solid gains on each dollar of shareholders’ equity;
shareholder value continues to be created, as demonstrated by:a return on invested capital that exceeds the company’s average cost of capital;
one-year, three-year and five-year TSR outperformance compared to the rTSR peer group; andstrong absolute TSR performance over three- and five-year periods;absolute TSR growth over a five-year period which significantly outpaced the growth in CEO
compensation (as reported) over that same period;
declining CEO compensation (as reported) on a one-year and three-year basis; andthe success achieved by the CGCNC in realigning NEO compensation levels over the last twocompensation years, in spite of the strong performance described above.

In prior years, we have also presented a pay for performance graph showing CEO compensation and three-year
TSR performance for Magna, as compared to the company’s executive compensation peer group. This peer groupdiffers from the rTSR peer group referenced earlier, in that executive compensation peer companies are closer toMagna in size and scale across multiple metrics than rTSR per group companies. (Section B of the CD&A includes
detailed discussions of the two peer groups, including the companies included in each.) The executive
compensation peer group is used by the CGCNC in benchmarking NEO compensation and when assessing
potential changes to compensation of an NEO. There are only four North American-based automotive peers fromthe rTSR peer group which meet the screening criteria for the executive compensation peer group. As a result, theexecutive compensation peer group contains industrial companies which meet the screening criteria, but have very
different businesses and business cycles. This results in the executive compensation peer group being an imperfectcomparator group for three-year TSR / pay for performance purposes. Nevertheless, the CGCNC considered theBusiness of the Meeting

35

BUSINESS OF THE
MEETING

80th

COMPENSATION/PERFORMANCE

investment of $100 in Magna Common Shares on the NYSE on the same date, the total cumulative value of thatinvestment would have been almost 23% higher by December 31, 2018.

alignment between CEO pay and performance for Magna as compared to the executive compensation peer group,
as depicted in the graph below.

Peers vs. Magna100%

Raytheon
Honeywell

3-Year Total Compensation Rank

90%

Magna
Ingersoll-Rand

80%

Deere & Co

70%

Stanley B&D
ITW

60%

Cummins50%

Lear
Parker-Hannifin

40%

Caterpillar
Eaton Corp

30%
Emerson Electric

20%

Goodyear
BorgWarner

10%

Johnson Controls

0%

PACCAR

0%

10%

20%

30%

40%

50%

60%

70%

80%

3-Year TSR Performance Rank

90%

100%

20MAR201921344056

As was the case in 2017, the analysis against Magna’s executive compensation peer group suggests a
misalignment between Magna’s pay and performance. While not discounting the message from this analysis, the
CGCNC is satisfied that Magna’s performance, as discussed earlier in this report, justifies the level of executive
compensation. Moreover, we intend to continue migrating Magna’s executive compensation levels lower, as
successors to the most highly-paid NEOs take office. We believe that this should result in more consistent pay for
performance messaging across different comparative methodologies in the coming years.

In Closing
The CGCNC is pleased with the substantial completion of implementation of Magna’s enhanced executive
compensation system and we are satisfied with the compensation outcomes being generated in relation to overall
performance. While the transition away from the company’s legacy system has been gradual, the CGCNC has
been methodical in implementing the change without creating disruption to the senior leadership team at a time of
rapid change in the automotive industry.
At our May 9, 2019 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 give
careful consideration to the perspectives we have shared in this report, and our recommendation that you vote
FOR Magna’s Say on Pay resolution.
We look forward to your support at our 2019 annual meeting.
William L. Young(Chairman)
William A. Ruh

36

Business of the Meeting

Dr. Indira V. SamarasekeraCompensation Discussion &Analysis
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 CGCNC’s independent legal advisors, Fasken Martineau
DuMoulin LLP

Hugessen:

the CGCNC’s independent compensation advisor, Hugessen
Consulting

LTIs:

long-term incentives in the form of PSUs and stock options

Named Executive Officers or NEOs:

our five most highly compensated executive officers

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 thecompany’s rTSR PSUs

STI

short-term incentive in the form of a profit sharing bonus

TSR:

Total Shareholder Return

Section Summary
This CD&A is divided into the following sections:
SECTIONDESCRIPTION

PAGE

A

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

38

B

Addresses the Board’s responsibility for executive compensation, as well as the scope of the CGCNC’s
role and discusses the CGCNC’s process for making compensation decisions

40

C

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

45

D

Describes our compensation risk mitigation practices

57

The Summary Compensation Table follows on page 58.

Business of the Meeting

37

BUSINESS OF THE
MEETING

CD&A:

CD&A

Key Terms Used in This Section

A. Compensation Philosophy & Objectives
Corporate Culture and Compensation
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 it will continue to be a critical factor in our ability to create long-term shareholder
value. In particular, the employee and management profit sharing elements of our culture have proven to be
essential to our ability to attract and retain our skilled, entrepreneurial employees and managers, as well as tocreate 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 partof our ‘‘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 six 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 whichenables them to compare their total compensation, including wages and benefits, with those earned by
employees of direct competitors 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
success. Accordingly, 10% of our qualifying annual pre-tax profits before profit sharing is shared among
participating employees in the form of cash or cash and Magna equity. In addition to rewarding employees fortheir contribution to our success, this helps create an ‘‘owner’s mindset’’ among employees and aligns theirinterests with those of shareholders. We are proud of the fact that the aggregate number of Magna Common
Shares held in the Employee Equity and Profit Participation Plan for our Canadian, U.S. and European
employees make participating employees (collectively) one of our single largest shareholding group. For
participating employees in countries where equity participation is not practical, we offer profit sharing in cash.
In some countries, employees share in our profits through a statutory profit sharing arrangement rather thanour Employee Equity and Profit Participation Plan. Corporate, Operating Group and other managers on
management profit sharing programs are not eligible to participate in the Employee Equity and Profit
Participation Plan.
Employees who participate in the Employee Equity and Profit Participation Plan typically receive the equity portionof their profit share in the form of deferred compensation, which is intended to promote employees’ efforts to savemoney for their retirement years. In connection with its oversight responsibilities related to talent management andemployee pension plans, the CGCNC receives annual reports relating to aggregate annual profit sharing through38

Business of the Meetingthe Employee Equity and Profit Participation Plan. Among other things, this enables the CGCNC to consider
aggregate management profit sharing for Executive Management in relation to aggregate profit sharing for
employee participation in the Employee Equity and Profit Participation Plan.

Magna’s strategy is to create long-term value for shareholders through continued growth and success as a leading
global mobility technology company. We operate a complex business in a highly competitive, cyclical, leanmanufacturing industry in which disciplined cost management, manufacturing 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, which is creating opportunities and challenges from trends such as the
migration of value towards electronics, disruptive technologies, trends towards electric, autonomous and sharedvehicles, as well as the emergence of digital/data-driven business models. Realizing value from these opportunities
will, among other things, require careful capital allocation decisions, disciplined acquisition choices, methodical
equity investments in strategic partners and investments in innovation/R&D, which may not generate immediate
returns.

CD&A

Executive Compensation Philosophy

Compensation Framework Feature

PurposeMinimal fixed compensationPerformance-conditioned profit
sharing bonus / STIPerformance-conditioned
multi-metric LTI






Low 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
management of costs
Connects compensation to the operational impact of everyday decisions
ROIC PSUs incent efficient capital allocation and value creationrTSR PSUs create sensitivity to stock market performance and return of capital toshareholders, in the form of dividends, as well as alignment with shareholders
Capped PSU payouts help mitigate risk by promoting responsible decision-making anddiscouraging excessive risk-taking
Stock options incent absolute TSR growth

No pensions / retirement benefits

Reinforces an owner’s mindset and incents long-term growth in equity value as apension-alternative

Significant share maintenancerequirement

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-classmanagers. We seek to provide executives with competitive compensation packages, including the opportunity toachieve 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 competitive compensation packages.
As discussed earlier, the profit sharing elements of our executive compensation program were developed within thecontext of an entrepreneurial culture which, 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, ourexecutive compensation program seeks to encourage and reward responsible business decision-making andreasonable risk-taking. We seek to achieve this through a variety of methods, which are discussed in Section D ofthis CD&A.

Business of the Meeting

39

BUSINESS OF THE
MEETING

Magna’s enhanced 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 leanmanufacturing business, as well as long-term value creation in a rapidly evolving industry. Some of the ways weseek to achieve these objectives include:B. Compensation Decision-Making: Responsibility and Process
Role of Our Board
Our Board oversees our system of executive compensation including by satisfying itself that our system is effective
in attracting, retaining and motivating skilled executives who can achieve our strategic objectives. The Board alsoannually assesses the company’s performance and that of the Chief Executive Officer in relation to pre-defined
objectives approved by the Board.

Role of the CGCNC
The Board has delegated to the CGCNC responsibility for annually reviewing, considering and making
recommendations related to executive compensation matters generally. More specifically, the CGCNC has beendelegated responsibility for making recommendations with respect to the application of our executive
compensation program to members of Executive Management, including the NEOs discussed in this CD&A.
While some NEOs, such as our Chief Executive Officer and Chief Financial Officer, are usually invited to participate
in CGCNC meetings, final compensation decisions affecting NEOs are typically made by the CGCNC without any
NEOs present in order to ensure the independence of the decision-making process.

Role of Our Chief Executive Officer
The CGCNC looks to the Chief Executive Officer to assess the performance of and make recommendations
regarding the compensation levels of his direct reports. Such performance assessments are considered by the
CGCNC in the context of LTI awards to members of the executive team, as well as proposed compensation
changes for such executives. The CGCNC also looks to the Chief Executive Officer to put forward his generalrecommendation regarding LTI awards to all other proposed recipients.

CGCNC Selects and Retains Its Own Independent Advisors
In reviewing, considering and making recommendations on executive compensation matters, the CGCNC
considers the advice of its independent advisors, Hugessen and Fasken, both of which have been selected andretained directly by the CGCNC. The CGCNC met in camera with its independent advisors as part of each of the
CGCNC’s meetings attended by them during 2018.

Role of the Independent Compensation Advisor
Hugessen has acted as the CGCNC’s compensation advisor since December 2012. Hugessen only provides
board-side advice, had no relationship with Magna or its Board prior to December 2012 and does not provide any
services to Magna other than the advisory services provided to the CGCNC. One or more representatives ofHugessen are invited to attend CGCNC meetings at which executive compensation matters are discussed.
Hugessen reports directly to and seeks its instructions directly from the CGCNC and communicates as neededwith the CGCNC 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 the CGCNC with contextual information relating to compensation best practices andemerging trends. The services provided by Hugessen to the CGCNC in 2018 included:






40

analysis of Magna’s relative performance and NEO compensation;
recommendations related to the updated peer group approved by the CGCNC in February 2018;advice regarding the continued implementation of Magna’s enhanced compensation framework, including
the transition of multiple executives onto the new framework during 2018 or for 2019;consideration of and recommendations related to 2019 target compensation levels;

Business of the Meeting

advice related to LTI grants, including the CGCNC’s discretionary adjustment to the calculation of ROIC
for purposes of ROIC PSUs, as discussed below; andongoing review and advice on compensation recommendations presented for CGCNC approval.

Hugessen’s advice was only one of a number of factors (discussed below) which were reviewed and considered by
the CGCNC in making its executive compensation recommendations to the Board.
The fees billed by Hugessen for the services it provided to the CGCNC in 2018 and 2017 were:

Executive compensation services provided to CGCNC
All other services for Magna
Total

2018

2017

(C$)

(%)

(C$)

(%)

130,000
NIL
130,000

100
NIL

283,000
NIL
283,000

100
NIL

CD&A

DESCRIPTION OF SERVICESCGCNC Considers a Wide Range of Factors in its Executive Compensation
Decisions
In connection with executive compensation decisions, the CGCNC 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 our Chief Executive Officer with respect to his direct reports;
the advice and recommendations of the CGCNC’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.

BUSINESS OF THE
MEETING

In making recommendations to the Independent Directors, the CGCNC does not rely solely on any one of theabove or other factors.

CGCNC Discretion
The CGCNC maintains complete discretion with respect to target total direct compensation levels under theenhanced framework, as well as the form of STIs and LTIs and the performance goals/targets applied to LTI
compensation. Under the new compensation framework, the CGCNC has the discretion to reduce profit sharing
percentages on 12 months’ advance notice to the executive. Changes to the profit sharing percentages under ourlegacy compensation system required up to 24 months’ advance notice.
In addition, situations may arise from time to time with respect to the ROIC PSUs or rTSR PSUs which require the
CGCNC to apply discretion to ensure consistency and comparability in goal-setting and measurement. One suchsituation arose during 2018, with respect to the treatment of Magna’s $200 million equity investment in Lyft, Inc.,
as it relates to the ROIC PSUs. This investment was a unique, strategic opportunity to advance Magna’sdevelopment of autonomous driving capabilities. On its own, the equity investment would have the effect ofBusiness of the Meeting41

depressing ROIC performance, which could have served as a disincentive to making the strategic investment.
Separate from the equity investment, Magna’s strategic relationship with Lyft also includes a sharing ofautonomous driving research and development costs for a minimum of two years. These expenditures by Magnaalso have the effect of reducing ROIC performance. Recognizing the need to maintain fair and balanced incentives,
the CGCNC approved the exclusion of the $200 million equity investment from the calculation of ROIC for
purposes of the ROIC PSUs, and further excluded the accounting gain realized on such shares in the second
quarter of 2018. Furthermore, the CGCNC determined that any gain or loss on future sale of the Lyft shares would
be addressed as follows:

in case of a loss, the entire loss will be recorded in the year of sale for purposes of the ROIC
calculation; andin the event of a gain, only the portion of the gain above a ROIC target rate of 14% will be recognized for
purposes of the ROIC calculation in the year, subject to a cap/maximum recognized gain of $400 million.

As the investment in Lyft also impacts the calculation of profit sharing bonuses / STIs, the CGCNC determined toinclude the gain or loss on future sale of the Lyft shares, subject to the cap/maximum recognized gain of$400 million, in calculating pre-tax profit and the resulting NEO STI bonuses in the year of sale.
The CGCNC and Executive Management have a common understanding that, as part of the Board’s review of theterms of any proposed material acquisition or disposition, the CGCNC will work with Executive Management to
identify potential changes to executives’ current employment contract terms, including profit sharing percentages,
to ensure that executive compensation arrangements remain appropriate following such transactions.

Target Compensation Setting
Under Magna’s enhanced new compensation framework, the CGCNC determines target total direct compensation
for the Chief Executive Officer, who proposes to the CGCNC target total direct compensation levels for his direct
reports. The CGCNC assesses proposed target total direct compensation levels in the context of the various
factors described above and approves the target. It determines the target amounts to be granted in the form of
long-term equity, based on a 60%/40% equity/cash split for the Chief Executive Officer, 55%/45% split for the
Chief Financial and Chief Operating Officer and 50%/50% split for each other member of Executive Management.
Taking into account the various factors listed above, as well as the pay mix under the new compensation
framework, the CGCNC maintained target 2018 total direct compensation for the company’s Chief Executive
Officer and Chief Financial Officer unchanged from their respective 2017 levels and set target 2018 total directcompensation for the Chief Technology Officer and Chief Marketing Officer, as follows:
TARGET TOTAL DIRECTCOMPENSATION
($)

Name
Donald J. Walker
Vincent J. Galifi
Seetarama S. Kotagiri
James J. Tobin

19,830,000
8,750,000
4,309,000
3,315,000

Compensation for the company’s Chief Operating Officer was not set and structured on the basis of the enhanced
compensation framework during 2018, but was transitioned for 2019.

Executive Compensation Peer GroupIn setting target total compensation levels for members of Executive Management under the enhanced
compensation framework, the CGCNC considers benchmarking data from Magna’s executive compensation peergroup. Such data provides the CGCNC 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 in setting compensation within areasonable competitive range.

42

Business of the Meeting

Magna’s executive compensation peer group consists of 18 companies from a broad comparator universe
composed primarily of North American public companies which are direct industry peers or capital goods
comparables. The broad universe of comparator companies was identified and screened by Hugessen using athree-tiered approach, with broader screening criteria for companies in the automotive industry and narrower
criteria for companies in other industries, as follows:
Automotive:

1/5x to 5x Magna’s Total Revenue and Total Enterprise Value (‘‘TEV’’)

Close Capital Goods:

1/3x to 3x Magna’s Total Revenue and TEV

Other Capital Goods:

1/2x to 1.5x Magna’s Total Revenue and TEV

CD&A

In recommending potential companies for inclusion in the peer group, Hugessen considered feedback from the
CGCNC and Management and also applied its judgment to the results of the quantitative screens discussed
above. Based on the above approach, the executive compensation peer group approved by the CGCNC in
February 2018 consists of the following companies:
EXECUTIVE COMPENSATION PEER GROUP
Illinois Tool Works Inc.
Ingersoll-Rand PLC
Johnson Controls Inc.
Lear Corp.
PACCAR Inc.
Parker-Hannifin Corp.
Raytheon Company
Stanley Black & Decker, Inc.
The Goodyear Tire & Rubber Company

BUSINESS OF THE
MEETING

Adient plc
BorgWarner Inc.
Caterpillar Inc.
Cummins Inc.
Deere & Company
Delphi Technologies PLC
Eaton Corp.
Emerson Electric Co.
Honeywell International Inc.

The foregoing peer group reflects the following changes from the company’s prior executive compensation peergroup:


addition of capital goods peers Caterpillar Inc., Honeywell International Inc., Johnson Controls Inc.,
Raytheon Company and The Goodyear Tire & Rubber Company, based on their proximity and relevanceto Magna; andremoval of Navistar International Corp., based on the addition of more relevant peers referenced above.

These changes to the peer group were made following a regular review of the composition and size of the peergroup. Since Magna’s prior peer group (consisting of 14 peers) was relatively compact, the CGCNC faced
challenges when trying to draw conclusions from comparative rankings, as one or two companies at either
extreme tended to distort the benchmark analysis. Accordingly, the CGCNC engaged Hugessen in 2017 to review
the executive compensation peer group and present its recommendations.
Early in 2018, Hugessen advised the CGCNC that, while Magna was the largest or one of the largest companies
compared to the former peer group in terms of financial measures such as Total Revenue, EBITDA and Total
Assets, it was below median of the peer group in terms of TEV. As a result, the former peer group did not reflect a
sufficiently broad range of peer companies in terms of scale and complexity. After screening for potential additions
to the peer group to better balance the size range within the peer group, Hugessen identified the four peer
additions above. By adding these peers, Magna remained in the top quartile of the peer group in terms of financial
measures, although no longer the largest, and it remained below the median in terms of TEV. Magna’s positioningin size relative to the executive compensation peer group is demonstrated by the graphs below.

Business of the Meeting

43Magna vs Pay Benchmarking Comparator Group
Legend$50,000

180,000$45,000

160,000$40,000

75th Percentile
50th Percentile
25th Percentile

140,000

Magna$Millions USD$35,000
120,000$30,000
100,000$25,000
80,000$20,000
60,000$15,000
40,000$10,000

20,000$5,000$--Total
Revenues

Total
Assets

EBITDA

Total Enterprise
Value

Employees

6MAR201923232126

All figures presented are as of December 31, 2018

In terms of benchmarking impact, market compensation levels at the 25th, 50th, 75th and 90th percentiles for mostpositions were generally higher in the modified peer group due to the addition of some larger peers. However, thisoutcome was seen as reasonable due to the continued growth in the scale and complexity of Magna relative tothe prior peer group. Moreover, since the CGCNC has been engaged in an exercise of realigning or moderating
NEO compensation, the modifications to the peer group are not expected to result in inflation of NEO
compensation.
No further changes have been made to the executive compensation peer group since the foregoing changes wereadopted in February 2018.

rTSR Peer GroupThe CGCNC also uses a rTSR peer group to determine rTSR PSU payouts. The rTSR peer group consists of
12 automotive suppliers selected from a comparator universe of publicly traded North American companies in theautomotive industry. The selected peers are considered to be Magna’s most direct competitors for business andinvestor capital, based on such factors as coverage by equity research analysts, as well as inclusion in industry
indices and in the peer groups of peer companies. The rTSR peer group also contains the following, each of whichcounts as the equivalent of a single company within the peer group:

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

As a result, the complete rTSR peer group consists of the following:rTSR PEER GROUP
Adient plc
American Axle Manufacturing & Holdings Inc.
Autoliv, Inc.
BorgWarner Inc.
Dana Holding Corporation
Delphi Technologies plc
FiatChrysler / Ford / General Motors (Composite Peer)

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Business of the Meeting

Gentex Corp.
Lear Corp.
Linamar Corp.
Martinrea International Inc.
Tenneco Inc.
Visteon Corp.
Continental / Faurecia / Valeo (Composite Peer)S&P 500 Index

C. Elements of Magna’s 2018 Executive Compensation Program
Magna’s Named Executive Officers in 2018 were:

Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri

James J. Tobin

Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Chief Technology Officer and President, Power &VisionChief Marketing Officer and President, Magna Asia

Employment Contracts

CD&A

One of Magna’s 2017 NEOs, Jeffrey O. Palmer, retired in July 2018.
Each NEO is subject to an employment agreement which specifies various key
terms, including:







target total compensation, as well as base salary, STI percentage and target LTI
values;standard benefits to be provided;
terms on which compensation can be clawed-back;the securities maintenance amount applicable to the executive; andthe basis on which the executive’s employment may be terminated.

Our 2018 compensation program for the NEOs consisted of the following elements:

Overview

1
Base
Salary1.
Base Salaries:2
Short-Term
Incentive

3Long-Term
Incentives

4
Beneﬁts

14FEB201903052776

We maintain base salaries for NEOs which are positioned significantly below basesalaries in our peer group. These low base salaries are intended to:

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

During 2018, the NEOs received identical base salaries of $325,000.
NAME
Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

BASE SALARY($)
325,000
325,000
325,000
325,000
325,000

Business of the Meeting

45

BUSINESS OF THE
MEETING2018 NEOs

2.
Short-Term
Incentive

STIs for all NEOs are annual profit sharing bonuses, which are completely ‘‘at-risk’’.
In order to create maximum incentive to achieve profitability, profit sharing bonuses
are earned from the first dollar of profit. This form of incentive is deeply rooted in ourentrepreneurial culture, has been a critical factor in our past success and we believe
will be an important factor in our future success.
The STI for each NEO other than Mr. Skudutis in 2018 consisted solely of a cash
bonus based on our ‘‘Income from operations before income taxes’’ (‘‘Pre-Tax
Profits’’), as stated in our audited financial statements for the fiscal year ended
December 31, 2018. The use of Pre-Tax Profits, an audited financial measure,provides simplicity and enhanced transparency to the Board, shareholders and theNEOs whose compensation is determined based on that metric.
Profit sharing percentages and STIs for the four NEOs on the enhanced
compensation framework were as follows in 2018:
PROFITSHARINGPERCENTAGE(%)
Donald J. Walker
Vincent J. Galifi
Seetarama S. Kotagiri
James J. Tobin

0.266
0.126
0.055
0.042

PRE-TAXPROFIT
($)

2,904,760,000

STI($)
7,727,000
3,660,000
2,098,000(1)1,220,000

Note:
1.

Includes a $500,000 discretionary cash bonus reflecting Mr. Kotagiri’s success in advancing critical strategic
priorities related to powertrain electrification and vehicle autonomy.

During 2018, Mr. Skudutis’ compensation remained on our legacy profit sharing
structure, which is based on Pre-Tax Profits Before Profit Sharing. Pre-Tax Profits
Before Profit Sharing is based on Income from operations before income taxes asreported in our financial statements, adjusted to (among other things) add-backemployee profit sharing and aggregate incentive bonuses for specified members of
our executive management team, including the NEOs. The profit sharing bonus paid
to Mr. Skudutis in 2018 was paid in a mix of cash (60%) and deferred equity in theform of RSUs (40%).
Mr. Skudutis’ specified profit sharing percentage (0.300%) represents the maximum
percentage of our Pre-Tax Profits Before Profit Sharing that he was entitled toreceive – his actual or effective profit sharing percentage differed from the specified
percentage, since profit sharing declines as our Pre-Tax Profits Before Profit Sharing
exceeds certain defined thresholds, as follows:46

Business of the Meeting

PRE-TAX PROFITSBEFORE PROFIT SHARINGPROPORTION OF SPECIFIEDPROFIT SHARING PERCENTAGE$0 to $1.5 billion$1.5 billion to $1.75 billion$1.75 billion to $2.0 billion$2.0 billion to $2.25 billion>$2.25 billion

100%
85%
70%
60%
50%

Tommy J. Skudutis

2018
EFFECTIVEPROFITSHARINGPERCENTAGE
(%)

STI
($)

0.30000.2391

7,348,000

Mr. Skudutis has transitioned to the enhanced compensation framework effective
January 1, 2019.

Recognition ofIndividual and Team
Performance

The profit share to which an NEO is entitled is intended to reflect the executive’s
individual contribution to management team performance. However, the direct link to
Magna’s profits ultimately reflects Magna’s overall performance.

CGCNC Discretion
Over Profit Shares

Under our enhanced compensation framework, the CGCNC has the discretion to
reduce profit sharing percentages on 12 months’ advance notice.
In addition, in conjunction with the Board’s approval of a material acquisition or
disposition, the CGCNC may equitably adjust profit sharing percentages to ensure
executive compensation arrangements remain appropriate following any suchtransaction.

STI Paid in Quarterly
Installments

The STI paid to NEOs under the enhanced compensation framework, as well as the
cash portion of the STI under our legacy compensation system, is paid ininstallments. Installments for the first three fiscal quarters of each year are paid
following the end of each fiscal quarter, based on our year to date profits. Following
the end of each fiscal year, we calculate the profit sharing bonus each NEO isentitled to for that fiscal year, subtract the installments paid for the first threequarters and pay the difference as the final installment.

RSUs Deferred in
Quarterly Installments

Under our legacy compensation system, the STI is split between cash (60%) and
RSUs (40%). Installments of the RSU portion of the annual profit sharing bonus paid
to Mr. Skudutis for the first three fiscal quarters of 2018 were credited to him
following the end of each fiscal quarter, based on our year to date Pre-Tax Profits
Before Profit Sharing. The number of RSUs deferred was calculated by taking 40%of the dollar value of his quarterly profit share and dividing it by the average of theclosing prices of our Common Shares on NYSE over the twenty trading days endingon the last business day of the fiscal quarter. Following the end of the fiscal year, we
calculated the amount to which Mr Skudutis was entitled, subtracted theinstallments credited for the first three quarters and deferred an amount equal to thedifference. Dividends on RSUs are paid in cash at the same time and in the sameamounts as dividends on our Common Shares.

Business of the Meeting

47

BUSINESS OF THE
MEETING

NAME

2018
SPECIFIEDPROFITSHARINGPERCENTAGE
(%)

CD&A

Due to the impact of the foregoing profit sharing step-downs, the specified andeffective profit sharing percentages for Mr. Skudutis were as follows in 2018:

3.
Long-Term
Incentives:

LTIs for all of the NEOs consist 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 value granted by the
CGCNC in the form of LTIs in respect of 2018 was in the form of performanceconditioned PSUs, the maximum realizable number of which is capped at 200% of
target. The PSUs are completely ‘‘at risk’’ since performance below specified
thresholds can result in no PSUs being paid out.
LTIs in the form of PSUs (at target) and stock options granted to NEOs in respect of2018 were as follows:
NAME

ROIC PSUS($/#)

rTSR PSUS($/#)

STOCK OPTIONS($/#)

TOTAL LTI($)

Donald J. Walker$4,760,000
85,734$1,932,000
34,798$ 350,000
6,304$1,165,000(1)20,981$ 664,000
11,692$2,380,000
42,867$ 966,000
17,399$ 175,000
3,152$ 580,000(1)10,445$ 332,000
5,846$4,760,000
425,000$1,932,000
176,562$ 350,000
30,094$ 830,000
73,568$ 664,000
50,571

11,900,000

Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

4,830,000
875,000
2,575,000
1,660,000

Note:
1.

ROIC PSUs

Includes a $500,000 discretionary PSU bonus, of which $335,000 was granted in ROIC PSUs and $165,000
in rTSR PSUs. These discretionary PSUs reflect Mr. Kotagiri’s success in advancing critical strategic priorities
related to powertrain electrification and vehicle autonomy.

The ROIC PSUs are intended to incent and reward capital-efficient value creation
over a three-year performance period. The performance period for the ROIC PSUs
granted in respect of 2018 is January 1, 2018 to December 31, 2020.
The number of ROIC PSUs realized by an NEO following the performance perioddepends on the target number granted by the CGCNC, Magna’s return on invested
capital performance in relation to its cost of capital and the payout scale approvedby the CGCNC. The maximum number of ROIC PSUs which can be realized iscapped 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 will deliver
Common Shares acquired on the market under our share repurchase program, withdividends paid in cash based on the final number of ROIC PSUs.

48

Business of the Meeting

ROIC is defined as: after-tax operating profits, divided by invested capital. For
purposes of the calculation of ROIC:

equity income from non-controlled joint ventures will be included in calculating
profits;
Magna’s tax rate will be applied at an assumed rate of 25%;
invested capital will be calculated as the difference between (a) total assets,(excluding cash and deferred tax assets) and (b) non-debt short-term liabilities,
and will be averaged on a five-fiscal quarter basis; andcapitalized operating leases will be excluded from the calculation of non-debt
short-term liabilities.

Certain other adjustments may also apply, with the CGCNC having discretion toaddress various situations in order to ensure consistency and comparability in ROIC
goal-setting and measurement. For example, Magna’s equity investment in Lyft, Inc.,and any gain or loss on disposition of its stake, will be addressed in the manner
described under ‘‘CGCNC Discretion’’ in Section B of this CD&A.

CD&A



PERFORMANCE LEVEL
Maximum
TargetThreshold (Cost of Capital)
Below Threshold

ROIC
(%)

PAYOUT(% OF TARGET)

19.0%
13.5% to 14.5%
9%
–

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 the55th percentile of the rTSR peer group, then 50% of the target number of ROIC
PSUs will be paid out.
In determining the payout scale for the ROIC PSUs, the CGCNC considered an
ROIC back-testing analysis covering the time period from 1998 to 2018. Over suchtime period, the back-testing analysis implied that the number of ROIC PSUs paidout would have been roughly at target had they been in place throughout that time
period, with zero PSUs or a number of PSUs below-target paid-out in roughly
one-third of those years. Such results were within the range of market practice,according to the CGCNC’s compensation advisor.

Business of the Meeting

49

BUSINESS OF THE
MEETING

The following table sets out the payout scale for the ROIC PSUs (interpolation
applies for points between the payout levels):Since Magna operates in a cyclical industry, we average the implied payout for eachof the three individual years of the performance period to determine the actual ROICPSU payout. This means that a year of ROIC performance which is below our costof capital will count as 0% in the payout calculation, but cannot be a negative
percentage. The effect of this is that the ROIC PSU payout will not directly
correspond to our three-year compound average ROIC. During automotive industry
downturn years, it is possible that ROIC could be negative, due to a deterioration in
EBIT tied to a significant drop in vehicle production volumes. Based on back-testing,negative ROIC would not be expected in normal industry downturns, but it was
experienced during the 2008-2009 global recession. By calculating ROIC PSU
payout based on the average implied payouts for each of the years of theperformance period, extreme outlier years (such as 2008) cannot have adisproportionate impact on the payout calculation. The feature also operates to placea 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 the rTSR peer group approved by the CGCNC. The
performance period for the rTSR PSUs granted in respect of 2018 is January 1,
2018 to December 31, 2020.
The number of rTSR PSUs realized by an NEO following the performance perioddepends on the target number granted by the CGCNC, Magna’s three-year rTSR
performance and the payout scale approved by the CGCNC. The number of rTSR
PSUs which can be realized is capped at 200% of target and no rTSR PSUs would
be paid for rTSR performance below the 25th percentile of the rTSR peer group. The
dollar value of compensation realized by an NEO following the performance period
will depend on the final number of rTSR PSUs paid-out, as well as the trading priceof our Common Shares. When rTSR PSUs are redeemed following the performance
period, we will deliver Common Shares acquired on the market under our share
repurchase program, with dividends paid in cash based on the final number of rTSR
PSUs.
The following table sets out the payout scale for the rTSR PSUs (interpolation
applies for points between the payout levels):

PERFORMANCE LEVEL
Maximum
Above Target
TargetBelow Target
Threshold

THREE-YEAR
rTSR(PERCENTILE)

PAYOUT(% OF TARGET)> 75th
65th
50th
35th
< 25th

200%
150%
100%
50%
0%

As an exception to the foregoing payout scale, if the company’s three-year rTSR isgreater than the target level, but absolute three-year TSR is negative, the number ofrTSR PSUs paid out will be capped at the target level. This feature recognizes thatpayouts should not exceed target where shareholders have experienced adeterioration in the absolute value of their holdings.

50

Business of the MeetingStock options serve as a tool to incent absolute share price returns over the
medium- to long-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 theseventh anniversary of the grant date. The CGCNC is committed to responsible
option granting practices, including by maintaining annual option grants to allparticipants 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 priceon the NYSE.

Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

CD&A

Stock options are typically granted in late February or early March of a year.
Consistent with the approach to all LTI grants under the new compensation
framework, stock options in respect of 2018 compensation were granted to theNEOs as follows:
GRANT
DATE

EXERCISEPRICE($)

NO. OFOPTIONSCOMPENSATION
VALUE
($)

March 19, 2018
March 19, 2018
February 25, 2019
March 19, 2018
May 14, 2018
May 14, 2018

55.64
55.64
54.44
55.64
63.17
63.17

425,000
176,562
30,094
62,144
11,42450,5714,760,000
1,932,000
350,000
680,000
150,000
664,000

Stock Option Plans

Stock option grants are made under our 2009 Incentive Stock Option Plan, which
was approved by shareholders in May 2010. The 2009 Option Plan is discussed infurther detail under ‘‘Incentive Plan Awards’’.

Post-Retirement
Hold-Back

If an NEO ceases to be employed by Magna (including any affiliates) within one year
following the date of a stock option exercise, he must hold shares with a market
value (at the exercise date) equal to the net after-tax gain until the one-year
anniversary of the exercise date.

Anti-Hedging
Restrictions

Executives are not permitted to engage in activities which would enable them toimproperly 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 a loss or risk of loss in the value of the Magna securities
which he 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 a plan 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 he or 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 2018.

Business of the Meeting

51

BUSINESS OF THE
MEETING

Stock Options

Benefits

Benefits provided to NEOs are the same as those provided to other employees inthe same country, with a few exceptions discussed below. As discussed earlier,
Magna does not provide a defined benefit pension plan or other retirement benefits
to NEOs, consistent with our compensation approach to employees generally.

Medical, Dental andDisability Benefits

NEOs receive the same medical, dental and disability benefits as other employees inthe same country.

CEO and CFO Life
Insurance
Premiums
Are Reimbursed

NEOs other than Donald Walker and Vincent Galifi receive the same insurance
benefits as those available to other employees in the same country. In addition tothese standard insurance benefits, we reimbursed life insurance premiums on
insurance policies for Donald Walker and Vincent Galifi. During 2018, the premiums
reimbursed were as follows:

4.

Donald Walker:
Vincent Galifi:$121,000(1)$44,000(1)

Note:
1.

Converted from C$ at the BoC exchange rate on December 31, 2018.

Life insurance premium reimbursements are not grossed-up for income tax.

‘‘Perks’’ are Limited

We provide limited ‘‘perks’’ to NEOs consisting of occasional access to corporate
aircraft for personal use and access to corporate facilities, in each case when not
required for business purposes and subject to reimbursement as discussed below.

Occasional
Personal Use of
Corporate Aircraft
Is Subject to Partial
Reimbursement

NEOs are permitted occasional access to corporate aircraft for personal use, in
accordance with policies approved by the CGCNC. Any personal use must be
reimbursed at 150% of an equivalent business class airfare for the same route.
However, the difference between the ‘‘aggregate variable operating cost’’ of thepersonal flight and the amount reimbursed by the executive is treated as a ‘‘perk’’and is disclosed in the Summary Compensation Table under ‘‘All Other
Compensation’’.
We add together all variable costs for operating the aircraft for a fiscal year, including
fuel, maintenance, customs charges, landing and handling fees, data andcommunications charges and any other similar costs and divide that total by the
number of hours flown during the year to calculate a cost per flight hour. The cost
per flight hour multiplied by the flight hours for a personal flight, minus the amountreimbursed by the executive, is the value of the ‘‘perk’’.

Other Perks

52

NEOs are entitled to access the Magna Golf Club adjacent to the company’s head
office for business purposes. Applicable charges relating to personal use are paid forby the executive at the club’s regular rates.

Business of the Meeting

Executive Equity
Ownership

NAME

MAINTENANCEREQUIREMENT($)

NO. OFSHARES
AND RSUSHELD AS OF
12/31/18(#)

Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

10,000,000
4,000,000
4,000,000
2,000,000
1,250,000

1,985,813
861,348
222,882
99,04584,045EQUITY

12/31/18
VALUE OFSHARES
AND RSUS($)
90,255,000
39,148,000
10,130,000
4,502,000
3,820,000

CD&A

Each NEO is subject to a securities maintenance requirement set forth in his
employment contract. If an NEO falls below the securities maintenance requirement,
his bonus would be withheld until he demonstrates compliance with the requirement.

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

Each NEO is entitled to 12 months’ severance pay, plus one additional month ofseverance pay for each year employed by Magna (including any subsidiaries), to a
maximum of 24 months’ severance (the ‘‘Notice Period’’) in the event of termination
without cause. Based on their years of service to Magna, each NEO would beentitled to 24 months’ severance pay if terminated without cause.

NAME
Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

TENURE WITHMAGNA
(YEARS)

SEVERANCEENTITLEMENT(# MONTHS)

30+
30+
27+
18+
16+

24
24
24
24
24

Severance payments are based on the average of an NEO’s base salary and STIs
for the 12 fiscal quarters prior to the termination.
A summary showing the treatment of each compensation element in different
termination scenarios is set forth below under ‘‘Summary of Treatment ofCompensation on Resignation, Retirement, Termination or Change in Control’’.

Business of the Meeting

53

BUSINESS OF THE
MEETING

Executive
Management
Securities
MaintenanceRequirements

Change in Control
Protections
Double-Trigger

We maintain ‘‘double trigger’’ change in control protection for the 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 a change 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 willneed to be addressed by the CGCNC. 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 which is more than
100 kms from where he is based at the time of the change in control; or
any other action which would constitute constructive dismissal at law.

Prior to the implementation of the enhanced compensation framework, Magna’schange in control protection for NEOs used to include as an element of ‘‘good
reason’’ the completion of a financing, sale, merger, reorganization or othertransaction related to a change in control, which would reasonably be expected toreduce the STI bonus base by 20% over the following two-year period from the last
Board-approved business plan. This element of the definition of ‘‘good reason’’ waseliminated from the NEO employment contracts under Magna’s enhanced
compensation framework.

54

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

Retirement

Termination –CauseTermination –No Cause

Base Salary

Pro-rated to effectivedate

Pro-rated to effectivedate

Pro-rated to effective
dateAnnual Bonus – Cash

Pro-rated to effectivedate

Pro-rated to effectivedate

Pro-rated to effective
date

Average ofcompensation
excluding LTIs for thelast 12 fiscal quarters
paid out over
severance period(up to 24 months) as
salary continuation(bi-weekly) or
lump-sum.

Average ofcompensation
excluding LTIs for thelast 12 fiscal quarters
paid out over
severance period(up to 24 months) as
salary continuation(bi-weekly) or
lump-sum.

ROIC PSUs andrTSR PSUs

PSUs granted in yearof resignation areredeemed on regularpayout date, subject topayout conditions
established at time of
grant (0% to 200%)
and pro ration toreflect the proportionof the year worked.

PSUs granted in yearof retirement areredeemed on regularpayout date, subject topayout conditions
established at time of
grant (0% to 200%).

Forfeiture ofunredeemed PSUs

PSUs granted in yearof termination areredeemed on regularpayout date, subject topayout conditions
established at time of
grant (0% to 200%)
and pro ration toreflect the proportionof the year worked.

PSUs granted in yearof termination areredeemed on regularpayout date, subject topayout conditions
established at time of
grant (0% to 200%)
and pro ration toreflect the proportionof the year worked.

Stock Options

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

Unvested andunexercised options
expire on earlier of
option expiry date andthree years after
effective date ofretirement. In case ofretirement in 2019 orafter, option expiry
does not accelerate,
provided NEO is a‘‘Good Leaver’’.(1)All unexercised options
expire on effective dateof termination.

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

Vested options can be
exercised until earlierof option expiry dateand 12 months after
Notice Period(as defined above).
Unvested options
accelerate and can be
exercised until samedate.

Benefits & Perks

None

None

None

None

None

Pension

None

None

None

None

None

Note:
1.
‘‘Good Leaver’’ applies where a retiring NEO does not receive severance and enters into a retirement agreement approved by the Board which
establishes a reasonable notice period prior to the NEO’s retirement date, outlines his transitional responsibilities and reaffirms his non-competition andnon-solicitation obligations.

Business of the Meeting

55

BUSINESS OF THE
MEETING

Element ofCompensation

CD&A

Resignation

Termination
Without Cause on
Change inControlSummary of
Incremental
Severance,
Termination andChange in Control
Payments

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

Donald J. Walker
Severance
ROIC PSUsrTSR PSUs
Stock Options
Benefits & Perks
PensionResignation

Retirement

Termination –
Cause

NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

Termination
Without Cause

Termination Without
Cause on Change
in Control

23,233,000
NIL
NIL
NIL
NIL
NIL

23,233,000
NIL
NIL
2,734,000
NIL
NIL

Total
Vincent J. Galifi
Severance
ROIC PSUsrTSR PSUs
Stock Options
Benefits & Perks
Pension25,967,000
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

10,455,000
NIL
NIL
NIL
NIL
NIL

Total
Tommy J. Skudutis
Severance
ROIC PSUsrTSR PSUs
Stock Options
Benefits & Perks
Pension

11,459,000
NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

15,389,000
NIL
NIL
NIL
NIL
NIL

Total
Seetarama S. Kotagiri
Severance
ROIC PSUsrTSR PSUs
Stock Options
Benefits & Perks
Pension

NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

1,269,000
NIL
NIL
NIL
NIL
NIL

Total

1,269,000
NIL
NIL
254,000
NIL
NIL
1,523,000

NIL
NIL
NIL
NIL
NIL
NIL
Total

15,389,000
NIL
NIL
566,000
NIL
NIL
15,955,000

NIL
NIL
NIL
NIL
NIL
NIL

James J. Tobin
Severance
ROIC PSUsrTSR PSUs
Stock Options
Benefits & Perks
Pension

10,455,000
NIL
NIL
1,004,000
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

NIL
NIL
NIL
NIL
NIL
NIL

5,071,000
NIL
NIL
NIL
NIL
NIL

5,071,000
NIL
NIL
256,000
NIL
NIL
5,327,000

Note:
1.

56

Represents the in-the-money value of options, the vesting of which is accelerated in case of a change incontrol followed by an act of ‘‘good reason’’ resulting in a ‘‘double-trigger change’’ in control, using the closing
price of Magna Common Shares on the TSX on December 31, 2018, converted at the BoC exchange rate onsuch date for options denominated in C$.

Business of the Meeting

D. Compensation Risk Management






















Board/CGCNC oversight of executive compensation generally;
independent advice and recommendations on compensation matters provided
by compensation consultants and legal advisors directly selected and retainedby the CGCNC;
Board/CGCNC discretion to determine target total compensation and adjust
profit-sharing percentages on notice or in case of M&A transactions;complete Board/CGCNC discretion over LTI structure;mix of compensation vehicles and metrics;
links between executive compensation and consequences of management
decision-making, including due to dollar-for-dollar impact of impairments andrestructuring charges on profit-sharing pool;
performance conditioning of PSUs and 200% cap on the maximum number of
PSUs which can be realized;
compensation clawback in the event of a financial restatement (excluding a
restatement resulting from retroactive application of a change to GAAP);
forfeiture risk applicable to PSUs, stock options and unreleased restricted
shares 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; andanti-hedging restrictions.

Business of the Meeting

57

CD&A

The CGCNC has considered whether Magna’s executive compensation system may
encourage excessive risk taking. The CGCNC concluded that the potential risks
created by any particular element of the system are appropriately mitigated by otherelements and that the overall level of risk is reasonable in light of the nature of
Magna’s business and the automotive industry. In reaching this conclusion, the
CGCNC considered the methods described below which are employed to help
establish an appropriate balance between risk and reward, as well as to encourage
responsible decision-making:

BUSINESS OF THE
MEETING

Overall Level ofCompensation Risk is
Reasonable in Light ofNature of Magna’s
Business and Industry

Summary Compensation Table
The following table sets forth a summary of all compensation earned in respect of 2018, 2017 and 2016 by theindividuals who were our Named Executive Officers in respect of 2018. All amounts are presented in U.S. dollars
and any applicable amounts in other currencies have been converted to U.S. dollars.
NON-EQUITY INCENTIVE
PLAN COMPENSATION($)
SHARE-OPTION-BASEDAWARDS(1)BASED
AWARDS(2)LONG-PENSION

TERM

VALUE

($)

ANNUAL(3)($)

ALL OTHERCOMPENSATION
($)

TOTAL
COMPENSATION
($)

($)

($)

4,760,000

7,727,000

NIL

NIL

7,140,000

4,760,000

7,978,000

121,000

20,073,000

NIL

NIL

155,000(4)325,000

9,050,000

1,188,000

20,358,000

10,902,000

NIL

NIL

123,000(4)2018

325,000

2,898,000

21,588,000

1,932,000

3,660,000

NIL

NIL

44,0002017

325,000

8,859,000

2,898,000

1,932,000

3,779,000

NIL

NIL

64,000(5)2016

8,998,000

325,000

3,522,000

410,000

4,361,000

NIL

NIL

45,000(5)8,663,000

2018

325,000

3,464,000

350,000

4,409,000

NIL

NIL

25,0008,573,000

2017

325,000

3,522,000

350,000

4,496,000

NIL

NIL

18,000(6)8,711,000

2016

325,000

3,492,000

390,000

4,361,000

NIL

NIL

33,000(6)8,601,000

Seetarama S. Kotagiri
Executive Vice-President
and Chief Technology Officer

2018

325,000

1,745,000

830,000

2,098,000

NIL

NIL

NIL

4,998,000

2017

325,000

1,281,000

374,000

1,294,000

NIL

NIL

NIL

3,274,000

2016

325,000

948,000

180,000

1,018,000

NIL

NIL

NIL

2,471,000

James J. Tobin
Chief Marketing Officer
and President, Magna Asia

2018

325,000

996,000

664,000

1,220,000

NIL

NIL

NIL

3,205,000

2017

325,000

1,354,000

170,000

1,648,000

NIL

NIL

NIL

3,497,000

2016

325,000

1,329,000

176,000

1,599,000

NIL

NIL

NIL

3,429,000

NAME AND PRINCIPAL POSITIONYEARSALARY($)($)

Donald J. Walker
Chief Executive Officer

2018

325,000

7,140,000

2017

325,000

2016
Vincent J. Galifi
Executive Vice-President
and Chief Financial Officer
Tommy J. Skudutis
Chief Operating Officer

Notes:
1.
Amounts disclosed in this column represent the grant value (at target) of PSUs and, where applicable, the grant date fair value of annual profit sharing
bonuses deferred in the form of RSUs.
2.
Amounts disclosed in this column represent the compensation value intended to be conferred by the Board in the form of the stock options. In valuingsuch options, the CGCNC initially made reference to the value of a time-vested stock option determined using the Black-Scholes option pricing
model, as set forth in the table below. Where the inputs and assumptions used in the Black-Scholes option pricing model would have resulted in avalue below 20% of the option exercise price, which the CGCNC deemed to be unreasonably low, the CGCNC imposed a ‘‘floor’’ value of 20% of theexercise price.
The Black-Scholes option pricing model requires the input of a number of assumptions, including expected dividend yields, expected stock pricevolatility, expected time until exercise and risk-free interest rates. 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 besignificantly impacted.
The weighted average assumptions used in measuring the Black-Scholes fair value and ‘‘floor value’’ of stock options applicable to 2018, 2017 and2016 NEO compensation are as follows:
FEBRUARY 25,
2019(a)58

AUGUST 14,
2017(d)MARCH 8,2017(e)FEBRUARY 27,
2017(f)

2.51%

2.61%

2.62%

1.74%

2.02%

1.92%

Expected dividend yield

2.00%

2.00%

2.00%

2.00%

2.00%

2.00%

Expected volatility (rounded)

27%

26%

25%

25%

26%

26%

Expected time until exercise

4.5 years

4.5 years

4.5 years

4.5 years

4.5 years

4.5 years$11.63$13.13$11.20

$8.53

$8.35

$8.35

—

—

—

$9.12

$8.55

$8.61

‘‘Floor Value’’

d.
e.
f.

MARCH 19,2018(c)Risk-free interest rate

Grant Date Fair Value per option(Black-Scholes)

a.
b.
c.

MAY 14,
2018(b)

Options granted to T. Skudutis (in respect of 2018 compensation).
Options granted to S. Kotagiri and J. Tobin (in respect of 2018 compensation).
Options granted to D. Walker, V. Galifi, S. Kotagiri (all in respect of 2018 compensation) and T. Skudutis and J. Tobin (in respect of 2017
compensation).
Options granted to S. Kotagiri (in respect of 2017 compensation).
Options granted to D. Walker and V. Galifi (in respect of 2017 compensation).
Options granted to T. Skudutis, S. Kotagiri and J. Tobin (in respect of 2016 compensation).

Business of the Meeting

Amounts disclosed in this column represent annual profit sharing bonuses paid in cash.
Amounts disclosed in this column consist of:Amounts reimbursed by Magna in respect of premiums paid by Mr. Walker
on a life insurance policy

2018
($)
121,000

Personal use of corporate aircraft
Total
5.

2016
($)

132,000

123,000

NIL

32,000NIL

121,000

155,000

123,000

Amounts disclosed in this column consist of:
DESCRIPTION

2018
($)

Amounts reimbursed by Magna in respect of premiums paid by Mr. Galifi
on a life insurance policy
Personal use of corporate aircraft
Total
6.

2017
($)

2017
($)

2016
($)

44,00048,00045,000NIL

16,000NIL

44,00064,00045,000

Amounts disclosed in this column consist of:
DESCRIPTION
Personal use of corporate aircraft

2018
($)

2017
($)
25,0002016($)
18,00033,000SUMMARYCOMPENSATION TABLEDESCRIPTION

BUSINESS OF THE
MEETING

3.
4.

Business of the Meeting59Incentive Plans and Awards
Stock Option Plans

Stock option grants are made under the 2009 Plan, which was approved byshareholders on May 6, 2010 and is administered by the CGCNC.

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 CGCNC 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 were granted to consultants in 2018 or to date in 2019.

2009 Plan Limits

The maximum number of Common Shares:

issued to Magna ‘‘insiders’’ within any one-year period; andissuable to Magna insiders at any time,

under the option plans and any other security-based compensation arrangements(as defined in the TSX Company Manual) cannot exceed 10% of our total issued
and outstanding Common Shares, respectively.

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 theclosing price of a Common Share on the TSX (for options denominated in Canadiandollars) or NYSE (for options denominated in U.S. dollars) on the trading day
immediately prior to the date of grant.

3-Year Option Vesting;
7-Year Option Life

Time-vested options granted under the 2009 Plan vest in equal proportions on eachof the first three anniversaries of the grant date, unless otherwise determined by the
CGCNC. 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 CGCNC. On cancellation or surrender of options
under the 2009 Plan, the underlying shares are added back to the number ofCommon Shares reserved for issuance and are available for re-grant.

Amending the2009 Plan

The 2009 Plan gives the Board the power to amend the plan, except for thefollowing 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 capitalreorganizations);
a reduction in the exercise price of an option;
an extension of an option term (excluding certain limited extensions to allow theexercise of options which expire during or within two business days after theend of a trading blackout);
an increase in the 10% limit on option shares issuable to insiders, as describedabove; andamendment of the amending provision of the plan.

There were no amendments to the 2009 Plan during 2018.

60

Business of the Meeting

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

EquityCompensation Plan
Information

As of December 31, 2018 and the Record Date, compensation plans under which
our Common Shares are authorized for issuance are as follows:

PLAN CATEGORY

Equity compensation plans approved by
securityholders:2009 Plan

WEIGHTED-AVERAGE

ISSUED UPON EXERCISE OFOUTSTANDING OPTIONS,WARRANTS AND RIGHTS

EXERCISE PRICE OFOUTSTANDING OPTIONS,WARRANTS AND RIGHTS

12/31/2018(#)

RECORDDATE(#)

7,977,830

9,424,053

12/31/2018($)

RECORDDATE($)$46.30$47.97

NUMBER OF SECURITIESREMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDEREQUITY COMPENSATION PLANS
12/31/2018(#)

RECORDDATE(#)

6,361,239

4,704,484

Taking into account the 1,632,664 options granted in calendar 2018, Magna’sburn-rate option dilution and overhang were as follows as of December 31, 2018:

BUSINESS OF THE
MEETING

Option Burn-Rate,
Dilution and Overhang

NUMBER OF SECURITIES TO BE

INCENTIVE PLANS
AND AWARDS

Copies of
Option Plans on
Magna.com

0.5% 2.4% 4.4%
Burn-Rate(1)Option Dilution(2)Option15MAR201911493304
Overhang(3)Notes:
1.

Represents stock options granted in calendar 2018, expressed as a proportion of the number of Magna
Common Shares which were outstanding as of December 31, 2018.

2.

Represents all stock options previously granted but not exercised as of December 31, 2018, expressed as aproportion of the number of Magna Common Shares which 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, 2018, expressed as a proportion of the number of Magna Common Shares which were
outstanding as of such date.

Business of the Meeting61Outstanding Option
and Share-BasedAwardsOutstanding option-based awards for each of our Named Executive Officers as ofDecember 31, 2018 were as follows:

OPTION-BASED AWARDSNUMBER OF
SECURITIESUNDERLYINGUNEXERCISEDOPTIONS(1)(#)
Donald J. Walker

Total
Vincent J. Galifi

Total
Tommy J. Skudutis

Total
Seetarama S. Kotagiri

Total
James J. Tobin

Total

264,000
320,414417,878
137,979
556,725
425,000
2,121,996
92,000112,782
144,186
47,619225,964
175,562
799,113101,270
136,628
45,296
31,250314,444
24,50037,88861,047
20,90641,00862,144
11,424258,917
36,39840,00045,846
61,773
20,441
15,17950,571
270,208

OPTION
EXERCISEPRICE

OPTION
EXPIRATIONDATE(MM/DD/YY)

C$53.35$54.53$38.23$43.05$42.73$55.6403/04/21
02/25/22
02/28/23
02/26/24
03/07/24
03/18/25

C$53.35$54.53$38.23$43.05$42.73$55.6403/04/21
02/25/22
02/28/23
02/26/24
03/07/24
03/18/25$54.53$38.23$43.05$55.6402/25/22
02/28/23
02/26/24
03/18/25$48.05$54.53$38.23$43.05$45.62$55.64$63.1703/04/21
02/25/22
02/28/23
02/26/24
08/13/24
03/18/25
05/13/25$27.76$48.05$54.53$38.23$43.05$55.64$63.1703/03/20
03/04/21
02/25/22
02/28/23
02/26/24
03/18/25
05/13/25

VALUE OFUNEXERCISED
IN-THEMONEYOPTIONS(2)($)
1,667,000
NIL
3,017,000
331,000
1,514,000
NIL
6,530,000
581,000
NIL
1,041,000
114,000
615,000
NIL
2,351,000
NIL
986,000
109,000
NIL
1,095,000
NIL
NIL
441,000
50,000NIL
NIL
NIL
491,000
644,000
NIL
NIL
446,000
49,000NIL
NIL
1,139,000

SHARE-BASED AWARDS
MARKET OR
MARKET OR
PAYOUTPAYOUT
VALUE OFNUMBER OF
VALUE OFVESTEDSHARE-BASED SHARE-BASED SHARE-BASEDAWARDS THAT AWARDS THAT AWARDS NOTHAVE NOTHAVE NOTPAID OUT OR
VESTED(3)VESTED(3)DISTRIBUTED(#)($)($)(4)
331,742

15,078,000

NIL

132,183

6,008,000

NIL

34,7301,578,000

8,605,000

56,1512,552,000

2,790,000

29,355

1,334,000

1,066,000

Notes:
1.
Includes both vested and unvested options.
2.
Determined using the closing price of Magna Common Shares on the TSX on December 31, 2018 and the BoC exchange rate on such date for
options denominated in C$. Value shown reflects in-the-money value of all options, whether or not exercisable as of December 31, 2018.
3.
Represents ROIC PSUs and rTSR PSUs, at target.
4.
Represents the market value of previously granted, unreleased restricted shares and any RSUs which had not been redeemed as at December 31,
2018. The value shown was determined using the closing price of Magna Common Shares on the NYSE on December 31, 2018.

62

Business of the Meeting

The values of option-based and share-based awards which vested, and non-equity
incentive plan compensation earned, during the year ended December 31, 2018, areset forth below:

OPTION-BASED AWARDS –VALUE VESTED
NAME
Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

DURING THE YEARSHARE-BASED AWARDS –VALUE VESTED(1)

DURING THE YEAR

(2)

NON-EQUITY INCENTIVE PLAN
COMPENSATION – VALUEEARNED DURING THE YEAR(3)

($)

($)

($)

5,598,000
2,042,000
1,238,000
700,000
559,000

238,000
95,000213,000
115,000
66,0007,727,000
3,660,000
4,409,000
2,098,000
1,220,000

Notes:
1.
Represents the vesting date value of previouly granted stock options which vested during 2018 and assumes that any such options which werein-the-money were exercised on the vesting date.
2.
In the case of each NEO other than Mr. Skudutis, the amounts in this column represent dividends credited on unreleased RSUs granted in prior years.
For Mr. Skudutis, the amount in this column represents the value of profit sharing bonuses deferred in the form of RSUs in respect of 2018, all ofwhich vested in 2018, together with dividends credited on their aggregate RSU balance, which includes RSUs granted in prior years.
3.
Represents the value of profit sharing bonuses paid in cash in respect of 2018.

INCENTIVE PLANS
AND AWARDS

Incentive Plan
Awards – Value
Vested During
the Year

LTIs awarded to NEOs in respect of 2016 consisted of ROIC PSUs (40%), rTSR PSUs (20%) and stock options (40%).
The ROIC PSUs and rTSR PSUs, which covered a performance period from January 1, 2016 to December 31, 2018,
vested on February 21, 2019, following review by the CGCNC and Board approval of the payouts.
The 2016 ROIC PSU payout was at the 132% level on a payout scale of 0% to 200%, as follows:
ROIC Performance
Payout Level
3-yr Avg. Payout

2016

2017

2018

17.2%
160%

16.1%
136%
132%

14.5%
100%

The 2016 rTSR PSU payout was at the 200% level on a payout scale of 0% to 200%, based on a TSR rank offourth out of 16, which placed Magna at the 80th percentile of the rTSR peer group, as follows:
rTSR PEER

TSR
(%)

RANK

Gentex Corp.
S&P500FiatChrysler/Ford/GM
Magna
Lear Corporation
Martinrea International Inc.
Dana Incorporated
Visteon Corporation

37.8
33.5
20.2
16.8
5.7
3.6
2.5
-6.5

1
2
3
4
5
6
7
8

rTSR PEER

TSR
(%)

RANK

Autoliv, Inc.
BorgWarner Inc.
Continental/Faurecia/Valeo
Linamar Corporation
Tenneco Inc.
American Axle Mfg. Holdings
Adient plc
Delphi Technologies plc

-9.5
-11.8
-25.5
-34.0
-37.0
-43.9
-53.6
-64.2

9
10
11
12
13
14
15
16

As a result of the foregoing, the number of 2016 ROIC PSUs and 2016 rTSR PSUs realized by each NEO effective
February 21, 2019, was as follows:
NAME
Donald J. Walker
Vincent J. Galifi
Tommy J. Skudutis
Seetarama S. Kotagiri
James J. Tobin

ROIC PSUS
AT TARGET(#)

ROIC PSUSREALIZED(#)

rTSR PSUS ATTARGET(#)

rTSR PSUSREALIZED(#)

27,049
9,335
8,880
4,098
4,007

35,705
12,322
11,722
5,409
5,289

13,525
4,668
4,440
2,049
2,004

27,050
9,336
8,880
4,098
4,008

Business of the Meeting

63

BUSINESS OF THE
MEETING

2016 PSU Awards – Performance and Payout

5

Shareholder Proposal

13MAR201914295157

The following proposal has been submitted by The Catherine Donnelly Foundation, a holder of
4,000 Common Shares of Magna (approximately 0.001% of Magna’s issued and outstanding capital asof the Record Date), for consideration at the meeting. The shareholder proposal, including the
supporting statement, is included exactly as submitted to us by the proposing shareholder.
The Board and management recommend that you vote AGAINST this shareholder proposal

The Shareholder Proposal
Resolved:That the Board of Directors expand its annual disclosure to shareholders, at reasonable cost and omitting
proprietary information, to include key performance indicators (KPIs) on human capital management and humanrights due diligence related to the company’s global manufacturing sites and its global supply chain. The report
should include:1.

2.

Within global manufacturing sites: Comprehensive workforce metrics including the number of temporary
workers at Magna’s manufacturing sites, health and safety KPIs, responsible labour recruitment measurescurrently in use, and the number and types of complaints received and remedies offered under its
grievance mechanism; andWithin the global supply chain: KPIs on the number of supplier audits conducted, the most salient humanrights risks identified and corrective measures implemented to avoid adverse human rights impacts.

In order to provide comparable and consistent information, the metrics reported should align with internationallyrecognized good practice for reporting such as the Global Reporting Initiative (GRI) and/or the Workforce
Disclosure Initiative (WDI) along with guidance provided through industry initiatives, such as Automotive Industry
Action Group.

Supporting Statement
In recent years, Magna has been expanding its manufacturing and sourcing activities in or near growth markets
such as China, India, Thailand and Mexico where certain risks tend to be higher as a result of less stringent
regulatory oversight. These risk factors include, but are not limited to, a weaker enforcement of fundamental rights
and principles at work, including freedom of association, the weak management of health and safety issues,
excessive and sometimes illegal working hours, forced labour, and a disproportionate reliance on temporary andmigrant workers.
While Magna has taken the encouraging step of including a sustainability report in the Annual Information Form it
published in 2018, the report provides insufficient metrics to help investors ascertain the company’s approach to64

Business of the Meeting

Magna’s Response
Magna has carefully considered the Shareholder Proposal and has determined that it currently provides anappropriate level of general disclosure on the applicable topics and that it would not be practicable to provide thelevel of detail sought by The Catherine Donnelly Foundation, the shareholder which has brought the proposal
forward. For all of the reasons contained in this response, the Board and management recommend thatshareholders vote AGAINST the Shareholder Proposal.
Unless otherwise instructed, the Magna officers whose names have been pre-printed on the form ofproxy or Voting Instruction Form intend to vote AGAINST the shareholder proposal.
For each of the last three years, Magna has openly engaged with SHARE, an organization that was representing
The Catherine Donnelly Foundation and other shareholders in such shareholder engagement discussions. Our mostrecent discussions with representatives of SHARE covered a number of the topics addressed in the Shareholder
Proposal, as well as other sustainability/ESG topics. While we volunteered to consider a number of potential areas
where disclosure enhancements could be made, we did not commit to disclosure of specific metrics, nor toallowing representatives of SHARE to preview our draft 2019 disclosure in preference to other shareholders.
We regularly assess our disclosure against large cap market norms in Canada, as well as against our automotive
peers. We take these disclosure obligations seriously and voluntarily provide shareholders with an overall level of
disclosure which exceeds both regulatory minimum standards and the level of voluntary disclosure made by mostof our industry peers. When we receive extensive requests for disclosure of data/metrics, we balance the requests
against factors such as the:






cost/benefit of gathering data in the context of our decentralized operating model;
potential impact of disclosure on our competitive position;
extent to which proprietary, confidential or otherwise competitively sensitive information would need to bedisclosed to provide a full response; andlikelihood of the requested information being used by parties which are adversarial to Magna.

We believe that the overall level of our disclosure represents a fair and reasonable balance between the interests ofthe company as a whole and those of various stakeholder groups.

Business of the Meeting

65

BUSINESS OF THE
MEETING

Auto parts suppliers face increasing scrutiny by their Original Equipment Manufacturer clients over their
management of environmental and social issues. The Automotive Industry Action Group and Drive Sustainability,
the two leading auto industry bodies, recently updated their Global Automotive Sustainability Practical Guidance
which calls on companies to disclose information regarding their labour force and health and safety practices.
Some of Magna’s largest clients, including Ford, Fiat Chrysler and Volkswagen all participated in the revision of the
Principles thereby creating an added incentive for Magna to demonstrate good performance.

SHAREHOLDERPROPOSAL

human capital management and human rights due diligence and remedy in its global manufacturing operations andsupply chain. For instance, it does not disclose any metrics on health and safety performance (e.g.: number offatalities), it does not provide a breakdown of permanent versus temporary employees nor does it provide metrics
on the types of complaints received and corrective action plans adopted to remedy adverse human rights impacts.
Given that the company employees more than 174,000 employees across 348 manufacturing sites in 28 countries,
this gap in disclosure undermines the ability of investors to ascertain the key risks described above.

The Shareholder Proposal recognizes Magna’s recent actions to enhance our disclosure, through the introduction
in 2018 of the Sustainability Report in our Annual Information Form/Annual report on Form 40-F (which is alsoavailable on our website (www.magna.com) under ‘‘Company – Sustainability’’). For 2019, we have further evolved
and enhanced the disclosure in the Sustainability Report, where practicable, and we will continue to seek ways to
do so in the future. While we cannot satisfy the expectations of each and every shareholder, our management-led
investor relations outreach together with our Board-led shareholder engagement continues to suggest to us thatshareholders are generally satisfied with our sustainability efforts and the overall level of our disclosure on
sustainability topics. We will continue to engage with our shareholders and will assess each request for additional
disclosure on its merits, in light of the factors above.

Workforce Metrics
Magna has over 174,000 employees in 348 manufacturing operations and 91 product development, engineeringand sales centres in 28 countries. In our decentralized operating model, each individual manufacturing operation is
an autonomous business unit operating under the authority of a general manager who has the authority todetermine the levels of full-time, part-time and contract employees at his or her facility. Such decisions are basedon production levels at the facility, which vary due to fluctuations in vehicle production levels of applicable
customers. Accordingly:

contract employee metrics are not meaningful in isolation from detailed, proprietary production data by
product type, customer, operating facility and geographic region, the disclosure of which would place
Magna at a significant competitive disadvantage; andaggregation of the number or proportion of contract employees across all 348 manufacturing facilities in
28 countries at a point in time would represent overly generalized information which would not be reliable
for meaningful conclusions, and could be misinterpreted if presented in isolation from a significant amountof proprietary production data.

Health and Safety KPIs
Our Sustainability Report includes extensive discussion of our commitment to employee health and safety, as
reflected in our Employee’s Charter, and as assessed through our global program of health and safety
audits/inspections. This program covers health, safety, industrial hygiene, industrial ergonomics and emergency
preparedness policies/action plans, and incorporates international, regional, and country-specific standards.
Updates are presented to the CGCNC, a Board committee comprised solely of independent directors, twice per
year.

Responsible Labour Recruitment Measures
We are committed to an operating philosophy based on fairness and concern for people. This philosophy is part of
our Fair Enterprise culture in which employees and management share the responsibility to help ensure our
success. Our Employee’s Charter, a foundational document in our business, describes our commitments toemployees. Additionally, we recently adopted a Global Labour Standards Policy, which codifies existing practices
consistent with our Fair Enterprise culture, and provides a framework for our commitment to fundamental humanrights and international labour relations. Our Employee’s Charter and Global Labour Standards Policy, together withother elements of our approach to labour relations, are described in more detail in the Sustainability Report.

66

Business of the MeetingGrievance Mechanism Metrics
Magna maintains multiple mechanisms to enable employees and other stakeholders to identify and elevateconcerns, including:an ‘‘open door’’ policy;
Fairness Committees and Employee Advocates, both of which are described in our sustainability
report; andour employee Hotline.

We have considered whether Hotline metrics can be disclosed, but concluded that the risks of disclosure exceed
any potential benefit.

Supply Chain
Our Sustainability Report provides details on our supply chain management program. This includes details on thescope of our expectations of suppliers, as contained in our Supplier Code of Conduct and Ethics (the ‘‘Supplier
Code’’) and Global Working Conditions, as well as the nature of due diligence we conduct on our supply base.
Suppliers found to be in violation of the Supplier Code or Global Working Conditions face the risk of termination.
For 2019, we have added a statement to the Sustainability Report confirming that we did not become aware of
any human rights violations through our supply chain review procedures in 2018. As stated in the Sustainability
Report, we continue to support and participate in industry efforts to develop common standards related to supply
chain sustainability.

Business of the Meeting

67

SHAREHOLDERPROPOSALBUSINESS OF THE
MEETINGCorporate Governance
IN THIS SECTION ...
Governance Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
About the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Board Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Board Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholder Democracy and Engagement . . . . . . . . . . . . . . . . . . . . . . .
Ethical Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sustainability at Magna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69
69
71
76
79
81
81

28MAR201918160069

Corporate Governance At Magna
Magna believes that strong corporate governance practices are essential to fostering stakeholder trust andconfidence, management accountability and long-term shareholder value. This commitment to sound and effective
governance starts 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; andfosters a culture of integrity and ethical conduct.

The manner in which these important characteristics support the Board in fulfilling its stewardship role are detailed
in this section. Details about our Nominees for election at the Meeting, including their biographies, skills andexperience, tenure and compensation can be found in the ‘‘Business of the Meeting – Election of Directors’’ sectionof 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.sedar.com). The Board Charter is reviewed at least
annually and updated as needed to reflect evolving best practices in corporate governance.
CORPORATE GOVERNANCE OVERVIEW
Active Board engagement in, and approval of strategy
Broad oversight of risk
Strong oversight of management succession planning
Active shareholder engagement
Commitment to culture of ethics and compliance
Diverse range of Nominee skills, expertise andbackgrounds
Diversity statement in Board Charter
Director tenure guideline
Limitation on director interlocks








Annual Say on Pay vote

68

Corporate GovernanceAnnual director election; no slate ballots
Majority voting policy and prompt disclosure of vote results
Advance Notice By-Law
Independent Board Chair
100% of Board Committee members are independent
Committees with full authority to retain independent
advisors
Director orientation and continuing education
Rigorous annual Board/Director effectiveness evaluation
Equity maintenance requirement and mandatory deferral of
director fees until retirement creates alignment withshareholders
Anti-hedging restrictions for directors, officers andemployees












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 regulation by 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 GovernanceStandards, our practices meet or exceed them in all material respects. Any differences between our governancepractices and NYSE’s Corporate Governance Standards are discussed in the ‘‘Statement of Significant GovernanceDifferences (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.

About the Board
Board Size and Term

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
possess the following attributes:








personal and professional integrity;
significant achievement in his or her field;
experience and expertise relevant to our business;a reputation for sound and mature business judgment;
the commitment and ability to devote the necessary time and effort in order to conduct his or her 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 andCommittee meetings. However, we recognize that scheduling conflicts are unavoidable from time to time,
particularly in the case of meetings which are called on short notice. Accordingly, directors are subject to a

Corporate Governance69

CORPORATEGOVERNANCE

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 nine and fourteen directors, withan average of eleven. For 2019, eleven 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 businessand 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 andaddress planned director retirements effectively. Each director is elected for a one-year term expiring at our next
annual meeting of shareholders.

minimum attendance requirement of 75% for all regularly scheduled Board and Committee meetings, except wherean absence is due to a medical or other valid reason.
In order to be able to devote the necessary time and effort to the activities of the Board and its committees, we do
not allow directors to sit on a total of more than four public company boards without the prior approval of the
CGCNC. A director who serves as a chief executive officer (or equivalent position) of a public company, may only
serve on the board of one public company other than the company of which he or she is a chief executive officer.
Our chief executive officer is allowed to serve on the board of one other public company, but does not currently
serve on any other boards.

Board Leadership
Our Board is led by an independent Board Chair who is annually selected by the Independent Directors fromamong themselves. William Young has served as our independent Chairman since May 2012.
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:







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 CGCNC; 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.

Board Committee Structure
The Board carries out its duties in part through standing Committees. Each Independent Director is expected toserve on at least one standing Committee, but may attend the meetings of any other 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 effectiveness of the Board and its Committees.
The Board currently maintains three standing committees to assist it in carrying out its duties:

Audit Committee;
CGCNC; andTechnology Committee.

All of the Board Committees are chaired by Independent Directors and operate under Committee Charters, which areavailable on our website (www.magna.com) and on SEDAR (www.sedar.com). 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 2018.

70

Corporate GovernanceDirector Compensation
Compensation for our Independent Directors is structured to attract and retain skilled independent directors andalign their interests with the interests of our long-term shareholders. The details of our director compensation
structure and 2018 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 judgment, as well as prudent andeffective oversight on behalf of shareholders. Assuming all of the Nominees listed in this Circular are elected with amajority of votes, nine out of eleven, or 82%, of the directors on our Board will be ‘‘independent’’. This exceeds
the minimum 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 majorityof directors be independent.

Definition of Independence
A Magna director is considered to be independent only after the Board has affirmatively determined that thedirector has no direct or indirect material relationship which could interfere with the exercise of his or her
independent judgment. This approach to determining director independence draws upon the definitions containedin Section 1.4 of National Instrument 52-110 (‘‘NI 52-110’’) and Section 303A.02 of the NYSE’s Corporate
Governance Listing Standards, as well as the specific relationships identified in those instruments as precluding aperson from being determined to be an independent director.

In determining whether any candidate for service on the Board is independent, information is typically compiled
from a variety 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; andpublicly available information. The CGCNC is provided with a summary of all such relationships (whether or notmaterial) known by Magna based on the foregoing sources. Following the CGCNC’s consideration and assessmentof such information, it presents its recommendation to the Board for approval.

Additional Ways In Which Independence is Fostered
Aside from the two-thirds independence requirement, there are other ways in which Board independence isfostered, 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 fromManagement;
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;

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CORPORATEGOVERNANCE

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 he or she is a partner, member, executive officer, managing director or
person in 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.

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
well as 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 Committees, Committee 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
well as 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. Current Board interlocks
are as follows:
PUBLIC COMPANY
The Bank of Nova Scotia

DIRECTOR
Indira V. Samarasekera
Scott B. Bonham

Stelco Holdings Inc.

Indira V. SamarasekeraPeter G. Bowie

COMMITTEESHuman Resources;
Corporate Governance
Audit & Conduct Review;
Corporate Governance
Environment, Health and Safety (Chair)
Audit (Chair)

The CGCNC is satisfied that these interlocks do not impair the ability of these directors to exercise independentjudgement as members of the Board. None of our directors serve on any board together with a member of
Magna’s Management.

CEO Position Description
A position description has been developed for the Chief Executive Officer to further promote the independence of
the Board and to define the limits of the Chief Executive’s authority. His basic duties and responsibilities include:











72

overall direction of Magna’s operations, including top-level customer contact;
development and implementation of Magna’s product, geographic, customer, merger/acquisition andgrowth strategies;
promotion of Magna’s decentralized, entrepreneurial corporate culture, as well as its culture of integrity;
development of Magna’s management reporting structure;
management succession planning;
together with the CGCNC, determination of compensation for members of Corporate Management;
human resources management;interaction with the Board on behalf of Management; andcommunication with key stakeholders.

Corporate Governance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
declare his or her interest, depart the portion of the meeting during which the matter is discussed and abstain fromvoting on the matter. However, as permitted by the OBCA, directors are permitted to vote on their own
compensation for serving as directors.
The CGCNC is generally responsible for reviewing and making recommendations to the Board regarding related
party transactions. In the case of a related party transaction which is material in value, the unconflicted membersof the Board may choose to establish a special committee composed only of Independent Directors to review andmake recommendations 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 andmaking recommendations regarding related party transactions, the CGCNC seeks to ensure that transaction terms
reflect those which 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 2018.

Board’s Stewardship Role
The Board is responsible for the overall stewardship of Magna. To this end, the Board: supervises the managementof the business and affairs of Magna in accordance with the legal requirements set out in the OBCA, as well asother applicable law; and, jointly with Management, seeks to create long-term shareholder value. The Board’s
stewardship role, specific responsibilities, compositional requirements and various other matters are set forth in our
Board Charter.

Corporate Governance Framework
Our corporate governance framework is centered on the following Board responsibilities:


Corporate Culture and Approach to Corporate Governance: Magna maintains a uniqueentrepreneurial corporate culture which we believe has been critical to our past success and expect willbe critical to our future success. The Board oversees Magna’s culture and overall approach to corporate
governance, including by determining the specific policies and practices which the Board believes to be in
the best interests of the company. The Board has delegated to the CGCNC 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 memberof Executive Management and the creation by the Executive Management team of a culture of integrityand ethical business conduct throughout the company.

Corporate Governance73

CORPORATEGOVERNANCE

Consistent with the standard of care for directors under the OBCA, each director on the Board seeks to act
honestly and in good faith with a view to the best interests of the corporation and to exercise the care, diligenceand skill that a reasonably 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 the corporation’’ as opposed to the ‘‘best interests of shareholders’’. This distinction
effectively recognizes that while individual shareholders may have conflicting interests, investment intents andinvesting horizons, the stewards of a corporation must act with a view to the interests of the corporation as awhole. 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 the impact of its decisions on its affectedstakeholders, including shareholders, other security holders and employees.



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 longterm objectives established through the company’s strategic planning process. The Board has delegatedto the CGCNC the responsibility for making recommendations on executive compensation matters. The
CD&A section of this Circular contains a detailed discussion of how the Board and CGCNC 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, theBoard 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 plansaddressing key positions within the company, including the Chief Executive Officer’s, as well as aleadership development system which supports the company’s succession planning objectives moregenerally.

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 and Operating Group 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
approach to product portfolio, key customers, geographic footprint, core and emerging technologies,
R&D priorities, acquisitions/divestitures, capital structure, talent management and other areas ofstrategy;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’sbusinesses and business units, together with Management actions to mitigate such risks;approves a capital expenditure budget for the year;approves a three-year consolidated business plan and updated strategic plan; andjointly identifies with Executive Management action plans to address at subsequent Board meetings
any open questions/issues arising from the business planning/strategy session.
The company’s strategy is discussed in the ‘‘Compensation and Performance Report’’ as well as the
CD&A earlier in this Circular, and is described further in the Annual Information Form/Annual Report on
Form 40-F filed concurrently with this Circular.

74

Capital Allocation: In approving capital, the Board is focused on ensuring that the company can deliveron the Board-approved, long-term strategic priorities, while still meeting its near-term product andprogram commitments to customers. Updates regarding changes in capital expenditure needs from theapproved 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.

Corporate Governance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 toaddress 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 the same coin’’, but that management decision-making must be infused withboth an awareness and understanding of such risks, as well as a clear understanding of the limits of riskthat the Board will accept.
The Board maintains risk oversight responsibility for strategic risks and has delegated specific areas ofrisk oversight to its standing Committees so that the directors on such Committees can bring their
particular knowledge 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:
Board

Strategic risk including CEO succession, operations, capital structure and product portfolio

Audit Committee

CGCNC



Financial ReportingCorporate GovernanceTaxationCompensation

Material Litigation/Regulatory Risk

Ethics and Legal Compliance

Leadership
Development/Succession PlanningEnterprise-wide Cybersecurity andITSustainability, including health andsafety and environmental
complianceTechnology CommitteeTechnology risks, including
product-embedded and solution
software cybersecurity risksDisclosure: We have established and maintain policies and procedures designed to ensure that material
information is 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
comprised of 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 Governancesection.



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, aswell as major corporate policies. We believe that the identification and definition of Board responsibility forthe foregoing items promotes Board independence.

Corporate Governance75

CORPORATEGOVERNANCE

Each Committee’s mandate and activities, including those related to risk oversight, are described further
in the Committee Reports in this Circular.

Board EffectivenessRecruitment and Nomination Process
The CGCNC recommends to the Board the nominees for election at each annual meeting of the company’s
shareholders. In carrying out this function, the CGCNC annually reviews:






the composition of the Board relative to Magna’s strategic priorities;
feedback regarding Board composition received during the annual Board effectiveness evaluation;
the diversity of skills, experience, perspectives and backgrounds already represented on the Board;planned or pending director retirements; andother factors.

It then seeks to address any potential gaps through recruitment of one or more additional directors identified withthe assistance of a professional search firm. Potential candidates may also be recommended by existing directors,
members of Management, external advisors, shareholders or others. The names of candidates identified by any
such parties are provided to the search firm retained by the CGCNC for its recommendation as to suitability. The
CGCNC will typically interview a short-list of three to five candidates for each Board seat it seeks to fill. Once the
CGCNC has identified its preferred candidate(s), it will seek feedback from the Board as a whole.
A detailed description of our 2019 recruitment process and subsequent nomination of Lisa A. Westlake can befound in the ‘‘Business of the Meeting – Election of Directors’’ section of this Circular.

Diversity
We believe that shareholders benefit from a strong, independent board composed of highly-engaged directors
representing a diverse range of skills, experience, perspectives and backgrounds. Rather than adopting specificdiversity targets, which tend to be arbitrary, the Board has tasked the CGCNC 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, religion, physicalability and sexual orientation. The CGCNC uses a professional search firm which operates under firm instruction
not to exclude any candidate on the basis of any personal characteristic or attribute which is unrelated to theindividual’s ability to carry out his or her duties as a director. The Board is satisfied that the above approach has
been effective in achieving a diverse Board, as exemplified by the balance of female directors (36% of theNominees), as well as the range of industries, cultural, geographic, functional and other perspectives represented
by the Nominees.
Diversity within our employee population is also important to us and we strive to create an inclusive work
environment throughout the company. Among other things, we have built strategic partnerships with a number ofassociations and non-profit organizations dedicated to mentoring and advancing career development andinclusiveness for women, including the Women’s Executive Network, Catalyst, Inc. and Inforum.
Currently, 5% of our senior corporate and Operating Group leaders are female. Recognizing that this level ofgender representation is not sufficient, we established a Diversity & Inclusion Council with senior functional andbusiness leaders globally, sponsored by our Chief Executive Officer. The D&I Council, which meets quarterly toprovide guidance to the business and focus on key diversity objectives, adopted a council Charter that outlines ourcommitment to advance diversity and inclusion across Magna.
The Board as a whole continues to advocate for improved gender representation and encourage Executive
Management to take actions to improve gender representation in leadership positions and other key constituencies

76

Corporate Governancewithin the company’s workforce. In addition to their strong advocacy, the female directors of the Board havesought opportunities to mentor and share their experiences with the company’s high-performing female employees.
Our approach to diversity is described in greater detail in our Sustainability Report.

Age and Term Limits
We have not established firm age or tenure limits for directors, which may be arbitrary. The CGCNC is committed
to ensuring that Independent Directors remain active, engaged and effective participants on the Board and thatthey 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 as a general rule serve for up to twelve years.
Expected director retirement dates based on the twelve-year tenure guideline, are as follows:
Name

Retirement Year

Kurt J. Lauk

2023

William L. Young

2023

Peter G. Bowie

2024

Scott B. Bonham

2024

Indira V. Samarasekera

2026

Cynthia A. Niekamp

2026

William A. Ruh

2029

Mary S. Chan

2029

Robert F. MacLellan

2030

Lisa S. Westlake

2031

Annual Board Effectiveness Assessment

Board Effectiveness
Questionnaire
Detailed questionnairecompleted by eachdirector, which
includes selfassessment and peer
review components

Individual Interviews

Confidential
one-on-one interviewsof each director by the
Board Chair 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 interviewsof each director by an
external facilitator, toelicit feedback
regarding the Board
Chair’s performance,
as well as any otherfeedback which a
director may prefer tocommunicate
anonymously

Feedback

Implementation of
Changes

Following completionof the questionnaire
and interview
components, theBoard Chair and theexternal facilitator
review overall findings
with the CGCNC. Suchfindings and the
CGCNC’srecommendations arethen presented to anddiscussed with the
Board

Board Chair and theChief Executive Officer
meet to agree on anaction plan to address
the feedback andimplement the Board’s
recommendations

20MAR201921342215

Corporate Governance77

CORPORATEGOVERNANCE

Magna maintains an annual Board effectiveness assessment process which aims to assist in the identification ofshort and long-term Board priorities, as well as the assessment of the overall functioning of the Board, its
Committees and individual directors. The effectiveness assessment, which is overseen by the CGCNC, typicallyconsists of the following components:

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:















our business and operations;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;
our system of internal controls;
our internal audit program;the external auditors’ audit approach and areas of emphasis;
our human resources policies and practices, including succession planning;
our 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 a continuing education program to assist them in furthering theirunderstanding of our business and operations and the automotive industry, as well as emerging trends and issues,
including in such areas as:








corporate governance;risk management;
approach to talent management;
executive compensation;
ethics and compliance;
mergers and acquisitions; andlegal/regulatory matters.

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
or other 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 Directors and encourage Independent Directors to attend conferences, seminars andwebinars organized by such organizations. Additionally, directors are routinely provided with reading materials on a
range of topics from a number of respected external sources, including: investor representative organizations suchas the Canadian Coalition for Good Governance; various Canadian and U.S. 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 and updates relating to Magna, its competitors and the automotive industry.

78

Corporate GovernanceBoard and Committee education topics during 2018 included the following:
TOPIC

PRESENTER

ATTENDED BY

Future of NAFTAManagement

Full Board

Automotive Industry Trends

Management

Full Board / Full Tech. Cmte.

Car of the FutureManagement

Full Board

e-Drive Systems

Management

Full Board / Full Tech. Cmte.

Advanced Driver Assistance Systems

Management

Full Board / Full Tech. Cmte.

Operating Group Reviews

Operating Groups

Full Board

Future of Manufacturing

Management

Full Tech. Cmte.

Critical Accounting Policies and Financial Reporting Process

Management

Full Audit Cmte.

New Accounting Standards

Management

Full Audit Cmte.

New Segment Reporting Overview

Management

Full Audit Cmte.

Cybersecurity

Management

Full Audit Cmte.

European General Data Protection Regulation (GDPR) Overview

Management

Full Audit Cmte.

Corporate Governance Developments

Management

Full CGCNC

Global Macroeconomic Updates

Management

Full EROC / Full Board

Global Property Risk Control Program

Management

Full EROC

Shareholder Democracy and Engagement
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’’ theirvote for director nominees. A ‘‘withhold’’ vote is an abstention or non-vote instead of a vote against thenominee. 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 legallyelected as a director but receives more ‘‘withhold’’ votes than ‘‘for’’ votes must immediately tender aresignation to the Chair of the CGCNC.
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 itemof business at the meeting.
Unless there are exceptional circumstances, the CGCNC 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 CGCNC accepts a director’s resignation under our majority voting policy, it may recommend
and the Independent 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; orcall a special meeting of shareholders at which a nominee other than the one who resigned will be
proposed for election.

Corporate Governance79

CORPORATEGOVERNANCE

Magna’s approach to corporate governance reflects the following basic principles of shareholder democracy: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 theelection of 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 theinformation, 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.sedar.com).

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
meeting of shareholders. The Board will give serious consideration to the voting results for shareholder
proposals, even if they are only advisory in nature.
Proposals of shareholders intended to be presented at our Annual Meeting of Shareholders to be held in2020 must be received by us at our principal executive offices on or before March 9, 2020 in order to be
included in our 2020 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 involve the issuance of 25% or more of our issued and outstanding Common Shares, we willobtain shareholder approval before proceeding with the transaction.

Shareholder Engagement
We value constructive dialogue with shareholders and potential investors and regularly engage with shareholders
and shareholder 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 Mr. Young, the Chairman of the Board and the CGCNC.
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 teamas part of our regular investor relations activities. Feedback communicated by shareholders and investors to the
Executive Management team is shared with the CGCNC on a quarterly basis and the Chairman reports to the
CGCNC and the full Board on a quarterly basis regarding shareholder engagement activities conducted by him.
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

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Corporate Governance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 Secretary or Chief Human Resources Officer. No waivers of the Code were requested or granted
in 2018.
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 theapplication of 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 multiple elements, including both live
and online training on legal compliance and ethics topics generally, as well as the application of our compliancepolicies and procedures to factual scenarios.
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 are received 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 isconducted.

Sustainability at Magna
Magna is committed to being a responsible corporate citizen. For us, this means pursuing our business objectives
while respecting our various stakeholders, including shareholders, employees, customers, and the communities inwhich we operate. The steps we have taken in the following areas demonstrate how we apply our approach tosustainability in our business:

Magna strives to be an industry leader in health, safety and environmental practices in all operations throughtechnological innovation and process efficiencies to minimize the impact of our operations on the environment andto provide safe and healthful working conditions. We do so by complying with, and exceeding where reasonably
possible, all applicable health, safety and environmental laws and regulations and conforming with our internal
standards based on generally accepted environmental practices and industry codes of practice; regularly evaluating
and monitoring past and present business activities impacting on health, safety and environmental matters;
improving the efficient use of natural resources, including energy and water; minimizing waste streams andemissions; implementing effective recycling in manufacturing operations, in each case, through the use of locallyset continuous improvement targets; utilizing innovative design and engineering to reduce the environmental impactof our products during vehicle operation and at end of life; ensuring that a systematic review program is
implemented and monitored at all times for each of our operations, with a goal of continuous improvement inhealth, safety and environmental matters; and reporting on these matters to the CGCNC twice a year.

Corporate Governance81

CORPORATEGOVERNANCE

Environmental Responsibility and StewardshipFairness and Concern for Employees
We are 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 principles: job security; a safe andhealthful workplace; fair treatment; competitive wages and benefits; employee equity and profit participation;communication and information; and the Magna Hotline.

Corporate Ethics and Compliance
We are committed to conducting business in a legal and ethical manner globally. Magna’s Code of Conduct andEthics, which applies equally to all of our directors, executive officers and employees, articulates our complianceoriented values and our expectations generally. It also establishes our standards of conduct in a number of areas.
In order to help our employees understand the values, standards and principles underlying our Code, we have
implemented an ethics and legal compliance program, with various elements including live and online training,which aims to assist employees in understanding the values, standards and principles underlying the Code, as wellas the application of such values, standards and principles to real-life situations.

Supply Chain Responsibility
Magna’s Supplier Code of Conduct and Ethics (the ‘‘Supplier Code’’) outlines the expectations we have for every
company that supplies goods or services to Magna, relating to, among other things, ethical business conduct,
employee rights, and environmental safety and compliance. We expect the standards set out in the Supplier Codeto be met by our suppliers, even in jurisdictions where meeting such standards may not be considered part of theusual business culture and a failure to do so can result in the termination by Magna of the supply relationship. No
suppliers were terminated in 2018 as a result of a violation of working conditions or human rights. We also
continue to support and participate in industry efforts to develop common standards relating to business ethics,
environmental standards, working conditions and employee rights. We will continue to engage with our suppliers toraise awareness of the importance of sustainability in our supply chain.

Giving Back to the Communities in which we Operate
Magna recognizes that sustainability goes beyond our processes and products and we believe it is important togive back to the communities in which we are based. We have a long history of supporting social and charitablecauses, primarily in the communities in which our employees live and work. We also encourage and support ouremployees who devote their time, energy and passion to making a positive contribution to their workplace andcommunities through direct giving, special events, fundraising and volunteer work. To further enhance employee
fundraising efforts our Magna Matching Program matches donations by Magna employees to qualified non-profit
initiatives, up to specified amounts.

Sustainability Report
Our 2019 Annual Information Form/Annual Report on Form 40-F, which was filed in conjunction with this Circular,
contains a Sustainability Report describing our activities in each of these areas.

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

Audit Committee;
CGCNC; andTechnology Committee.

Committee Reports

CORPORATEGOVERNANCE

A report of each standing Board Committee follows. Each report summarizes the Committee’s mandate,composition and principal activities in respect of 2018 and to date in 2019. In addition, a separate CGCNC reporton compensation and performance can be found on page 31 of this Circular.

Corporate Governance83

Report of the Audit Committee
MandateThe Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to financial and financial
reporting matters. The mandate of the Audit Committee, which has been filed on SEDAR (www.sedar.com) and isavailable on our website (www.magna.com) includes oversight responsibilities relating to:













Magna’s independent auditors;
internal audit department;internal control over financial reporting;critical accounting policies;
material risk exposures relating to financial and financial reporting matters and Magna’s actions to identify,
monitor and mitigate such exposures;financial disclosures;
Magna’s enterprise-wide Information Technology system, as well as cybersecurity risks and Magna’s
actions to identify, monitor and mitigate such exposures;
legal and regulatory compliance, including our ethics and legal compliance (‘‘ELC’’) training program;
our Code of Conduct; andwhistle-blowing and financial integrity, including Magna’s whistle-blowing hotline.

Composition
The Audit Committee Charter requires that the committee be composed of between three and five Independent
Directors, each of whom is ‘‘financially literate’’ and at least one of whom is a ‘‘financial expert’’, as those terms aredefined under applicable law. Audit Committee members cannot serve on the audit committees of more than threeboards of public companies in total. The Audit Committee complied with these requirements throughout 2018.
SERVES ON 3
INDEPENDENTFINANCIALLY
LITERATE

FINANCIAL
EXPERT

OR FEWER
AUDITCOMMITTEES2018
ATTENDANCE

Lawrence D. Worrall (Chairman)
Peter G. Bowie
Robert F. MacLellan (from May 10, 2018)
Cynthia A. Niekamp (from May 10, 2018)

✓
✓
✓
✓

✓
✓
✓
✓

✓
✓
✓
✓

✓
✓
✓
✓

100%
100%
50%(1)
100%

Dr. Kurt J. Lauk (until May 10, 2018)
William A. Ruh (until May 10, 2018)

✓
✓

✓
✓

✓
✓

✓
✓

100%
100%

MEMBERS

Note:
1.
Robert MacLellan was absent from one Audit Committee meeting in 2018 due to an unresolvable scheduling conflict that pre-dated his election to
the Board and was known to and waived by the Board Chairman at the time Mr. MacLellan was recruited to join the Board. The conflict was known
to Magna’s Chairman at the time Mr. MacLellan was first nominated in 2018 and the minimum attendance requirement was waived for Mr. MacLellanin 2018.

In appointing the current members to the Audit Committee, the Board considered the relevant expertise brought to
the Audit Committee by each member, including through the financial leadership and oversight experience gainedby each of them in their principal occupations and/or other boards on which they serve, as described in theirbiographies elsewhere in this Circular. The Audit Committee’s composition changed significantly during 2018
due to the realignment of the Board’s committee structure. Ms. Niekamp’s appointment reflects both her

84

Corporate Governanceautomotive/operational management and financial expertise, while Mr. MacLellan’s appointment reflects his
extensive financial and Audit Committee expertise. Dr. Lauk resigned from the Audit Committee to serve as the
Chair of the Technology Committee. Mr. Ruh joined both the Technology Committee and CGCNC.

2018 Accomplishments and Key Areas of Focus

Interaction with Management: Meeting with and reviewing presentations from the company’s Chief
Financial Officer and/or other members of Magna’s Finance Department at each quarterly Audit
Committee meeting. In the case of the Audit Committee Chairman, such interaction involves regular
engagement with Management and the Internal Audit Department (‘‘IAD’’) between quarterly Audit
Committee meetings.

Interaction with Internal Audit: Discussing internal audit, accounting and internal controls matters withthe company’s Vice-President, Internal Audit, including during in camera sessions at each quarterly Audit
Committee meeting. Also includes meetings and discussions involving the Audit Committee Chairman andthe Vice-President, Internal Audit, between such quarterly meetings.

Internal Audit Effectiveness: Reviewing and approving the IAD’s annual work plan and budget.
Following-up quarterly with the Vice-President, Internal Audit, regarding the status and effectiveness ofManagement’s follow-up on items identified by the IAD.

Interaction with External Auditors: Discussing audit, accounting and internal controls matters with
Deloitte, including during in camera sessions at each quarterly Audit Committee meeting. Also includes
meetings and discussions involving the Audit Committee Chairman and representatives of Deloitte
between such quarterly meetings.

External Audit Effectiveness: Evaluating the effectiveness of the external audit and Deloitte, including
through the Audit Committee’s review and assessment of the proposed external audit plan, as well as thequality of Deloitte’s reporting and communications to the Audit Committee. The Audit Committee annuallyconducts a formal audit effectiveness assessment, the results of which are communicated to Deloitte inorder to continue to drive continuous improvement in the external audit.

External Audit Quality: Monitoring the integration of audit quality improvements that resulted from theintroduction in 2016 of measurable audit quality indicators in Magna’s external audit globally. The Audit
Committee continues to monitor audit quality initiatives and developments, in order to gain further insights
into the factors that promote audit quality and provide a useful ongoing benchmark regarding bestpractices in the use of audit quality indicators.

Internal Controls: Reviewing with Deloitte the effectiveness of Magna’s systems of internal controls,
Management’s assessment of the effectiveness of such controls, as well as Deloitte’s audits of thecompany’s internal controls over financial reporting and consolidated financial statements.

Corporate Governance85

CORPORATEGOVERNANCEAUDIT COMMITTEEREPORT

The Audit Committee’s primary role is to satisfy itself on behalf of shareholders that the company’s financial
statements are accurate in all material respects and can be relied upon by shareholders. This necessarily involves
diligent oversight of the company’s: system of internal controls; finance and accounting policies; internal andexternal audits; relationship with Deloitte; financial risk mitigation strategies; and the integrity of its financial reports
and disclosures. Through the Audit Committee’s work during 2018 and the first few months of 2019, the Audit
Committee has fulfilled all of the requirements under its charter, including satisfying itself regarding the integrity of
Magna’s financial statements and financial reporting. Accordingly, the Audit Committee recommended and theBoard approved Magna’s 2018 consolidated audited financial statements. Some of the specific elements of work inthis regard included:Financial Disclosures: Reviewing, discussing with Management and Deloitte, and approving Magna’squarterly and annual financial statements and MD&A, earnings press releases, annual and quarterly
outlooks and other items. As part of its efforts, the Audit Committee satisfied itself regarding theappropriateness of the company’s new reporting segments and financial statement disclosures required inconnection with the new revenue recognition accounting standard (CASC 606 Revenue from Contracts
with Customers).



Finance / Financial Reporting Risk: Considering and assessing key financial and financial reporting
risks, as well as Management’s risk mitigation activities.



Critical Accounting Policies: Reviewing Magna’s critical accounting policies, as well as pending andemerging regulatory developments related to accounting and audit matters. Throughout 2018, the Audit
Committee monitored the company’s readiness to report in accordance with the new ASC 862 – Leases
accounting standard adopted by the Corporation effective January 1, 2019. This included review anddiscussion with Management and Deloitte of financial statement disclosures required in connection with
the new standard, the related controls and processes implemented by Management and audit procedures
to be performed by Deloitte.



Cybersecurity: Monitoring cybersecurity risk, including through receipt of periodic reports relating to key
information and IT security initiatives, incident monitoring and reporting, as well as risk mitigation efforts.



Ethics and Compliance: Receiving semi-annual updates from the company’s Chief Compliance Officer
regarding the Corporation’s Ethics and Legal Compliance Program, including administration of our Codeof Conduct, compliance training initiatives and the activities of the company’s Compliance Council.



Whistle-blowing Line: Receiving summaries of matters reported through Magna’s whistle-blowing
hotline, monitoring investigations of such matters, generally overseeing the administration of the hotline
and satisfying itself that such hotline provides an effective mechanism for the reporting of fraud and/or
breaches of the Code of Conduct and Ethics.

For 2019, the Audit Committee will continue to focus on the accuracy of the company’s financial statements andeffectiveness of internal controls. In addition, the Audit Committee has identified the following areas of focus
for 2019:

86



Critical Audit Matters: The Audit Committee is overseeing Magna’s participation in Deloitte’s global
Critical Audit Matters (‘‘CAMs’’) pilot. CAMs are matters that have been communicated to the Audit
Committee, are related to accounts or disclosures that are material to the financial statements, andinvolve especially challenging, subjective, or complex auditor judgment. Commencing in 2019, the PCAOB
will require that auditor’s reports on financial statements include a discussion of the CAMs in order toenhance the relevance and usefulness of the report. Magna’s participation in the CAMs pilot is intended
to provide valuable insights into the new reporting requirement, including the manner in which CAMs are
addressed by Management from a financial reporting perspective, and by Deloitte from an audit
perspective.

Finance Team Succession: In light of the continued evolution of the finance function, including thegrowing use of technology and data analytics tools, the Audit Committee continues to work withManagement to satisfy itself that the company has developed appropriate succession plans for financepersonnel in key positions within the corporate office and at the company’s Operating Groups.

Corporate GovernanceCommittee Approval of ReportManagement is responsible for the preparation and presentation of Magna’s consolidated financial statements, thefinancial reporting process and the development and maintenance of Magna’s system of internal controls. The
company’s external auditors are responsible for performing an independent audit on, and issuing their reports in
respect of:

Magna’s consolidated financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (‘‘PCAOB’’); andthe 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 Charterand applicable law.



inclusion of the consolidated financial statements in Magna’s Annual Report;

MD&A; andother forms and reports required to be filed with applicable Canadian securities commissions, the SEC,
the TSX and NYSE.

6FEB201923232404

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Lawrence D. Worrall(Chairman)

Peter G. Bowie

Robert F. MacLellan

Cynthia A. Niekamp

Corporate Governance

CORPORATEGOVERNANCE

The Audit Committee is satisfied that it has fulfilled the duties and responsibilities assigned to it under its charter inrespect of the year ended December 31, 2018. This report is dated as of March 28, 2019 and is submitted by the
Audit Committee.

AUDIT COMMITTEEREPORT

Based on these reviews and discussions, including a review of Deloitte’s Report on Financial Statements andReport on Internal Controls, the Audit Committee has recommended to the Board and the Board has approved thefollowing in respect of the fiscal year ended December 31, 2018:87

Report of the Corporate
Governance, Compensation and
Nominating Committee
MandateThe CGCNC assists the Board in fulfilling its oversight responsibilities with respect to corporate governance andexecutive compensation, as well as both executive and Board succession planning. The mandate of the CGCNC,
which has been filed on SEDAR and is available in the Leadership & Governance section of Magna’s website(www.magna.com), includes oversight responsibilities relating to:Magna’s overall system of corporate governance;the relationship between the Board and Executive Management;the effectiveness of the Board and its Committees;compensation for Executive Management, as well as incentive and equity compensation generally;

Independent Director compensation;



talent management and succession planning;nomination of candidates for election by shareholders;

Magna’s approach to sustainability; and

assessing material risks relating to the above, as well as Magna’s actions to identify, monitor and mitigate
such risks.

Composition
The CGCNC Charter requires that the committee be composed of between three and five Independent Directors.
The CGCNC complied with this requirement throughout 2018.
MEMBERSINDEPENDENT

2018 ATTENDANCE

William L. Young (Chairman)
William A. Ruh (from May 10, 2018)
Dr. Indira V. Samarasekera

✓
✓
✓

100%
100%
100%

Lady Barbara Judge (until May 10, 2018)

✓

100%

In appointing the current members to the CGCNC, the Board considered the relevant expertise brought to the
CGCNC by each member, including through the leadership, compensation and governance experience gained byeach of them in their principal occupations and/or other boards on which they serve, as described in their

88

Corporate Governancebiographies elsewhere in this Circular. The CGCNC’s composition changed during 2018 through the retirement of
Lady Barbara Judge from the committee and the Board, as well as the appointment of Mr. Ruh. Subject to herelection at the Meeting, the CGCNC intends to recommend the appointment of Ms. Westlake to the CGCNC, while
Mr. Ruh is expected to resign from the CGCNC to focus his Committee efforts on the Technology Committee.

2018 Accomplishments and Key Areas of Focus

Compensation Framework: The CGCNC completed the implementation of Magna’s new compensation
framework for executive officers beyond the Chief Executive Officer, Chief Financial Officer and Chief
Technology Officer. As planned, the compensation of each member of Executive Management has beentransitioned to the new framework effective on or before January 1, 2019.



Board Diversity Policy: The CGCNC recommended enhancements to the Board Charter which affirm
the company’s commitment to a diverse Board which is generally reflective of the company’s customers,
shareholders, employees and the communities in which Magna operates. Enhancements to the Board
Charter also reinforced the use of recruitment procedures which are intended to elicit a broad range ofcandidates without discrimination on the basis of any diversity attributes. All of the CGCNC’s
recommendations were adopted by the Board.

Director Tenure Guideline: The CGCNC also recommended the adoption of a formal tenure guideline
under which directors will generally serve on the Board for no more than twelve years. The CGCNC’s
recommendations were adopted by the Board through approval of an amendment to the Board Charter.
A table disclosing planned retirement year for each Independent Director was included in Magna’s proxy
circular for the 2018 annual meeting, and an updated table is included in this Circular.



Director Succession: Consistent with the objectives of the director tenure guideline, the CGCNC
initiated a director search to address the planned retirement of Lawrence Worrall at the upcoming
Meeting. The search resulted in the recruitment, nomination and election of Robert MacLellan. Early in
2019, the CGCNC initiated a further search to add an independent director with expertise in strategic
human asset management and compensation setting, reflecting the CGCNC’s efforts to continue evolving
the Board’s collective skillset in-line with the company’s strategy. The result of the search was theidentification, recruitment and nomination for election of Ms. Westlake.

Executive Succession Planning: In addition to receiving regular updates regarding the continued
implementation of the company’s broad-based Leadership Development and Succession program(‘‘LDS’’), the CGCNC worked with its external advisor, as well as Magna’s Chief Executive Officer andChief Human Resources Officer, to monitor progress with leadership development plans for the company’s
top leadership candidates. The CGCNC remains satisfied with the company’s succession planning
practices which facilitated seamless retirement transitions for Magna’s Chief Legal Officer during 2018 andChief Human Resources Officer in 2019.



Talent Management: In 2018, the CGCNC identified oversight of talent management practices as a
critical work plan topic in support of the company’s strategic goals. Accordingly, the committee received apresentation on the core elements of Magna’s talent management program, with a particular focus onprograms supporting the company’s efforts to attract, recruit and retain the people needed for Magna’s

Corporate Governance89

CORPORATEGOVERNANCE



CGCNC
REPORT

During 2018 and the first few months of 2019, the CGCNC fulfilled all of the requirements under its Charter,
including with respect to Magna’s overall system of corporate governance, executive and incentive compensation,
Board composition, succession planning and other matters. Some of the CGCNC’s significant activities andaccomplishments in these areas in respect of 2018 include:continued growth and success. Early in 2019, the CGCNC recommended and the Board approved anamendment to the committee’s Charter adding oversight of talent management to the CGCNC’s list of
responsibilities.


Sustainability: Having expanded the committee’s mandate in 2018 to include sustainability oversight(which had previously been overseen by the former Enterprise Risk Oversight Committee of the Board),
the CGCNC received presentations regarding Magna’s overall approach to sustainability and sustainability
priorities, as well as the company’s occupational health/safety and environmental management programs
and audit performance.

Shareholder Engagement: Mr. Young, in his capacity as Chairman of the Board and the CGCNC,
continued to directly engage with institutional shareholders during 2018 in order to better understand theirviews regarding corporate governance, executive compensation, board oversight of strategy andother matters.

Looking forward, the CGCNC’s 2019 work plan prioritizes talent management, sustainability and both executive as
well as Board succession planning, although executive compensation oversight remains a core element of
its agenda.

Committee Approval of Report
Based on the foregoing and all of the other activities undertaken or overseen by the CGCNC, the CGCNC is
satisfied that it has fulfilled the duties and responsibilities assigned to it under its charter in respect of the year
ended December 31, 2018. This report is dated as of March 28, 2019 and is submitted by the CGCNC.

90

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William L. Young(Chairman)

William A. Ruh

Dr. Indira V. Samarasekera

Corporate GovernanceReport of the Technology
Committee
Mandate

technology trends, opportunities and risks;Magna’s R&D/innovation initiatives, including their effectiveness in relation to the company’s strategy;

technology partnerships, investments and acquisitions;material M&A transactions aimed at addressing technological trends, opportunities or gaps in Magna’s
product or service portfolio;

product-embedded and solution software cybersecurity risk exposures, together with the company’s
actions to identify, monitor and mitigate such exposures; andalignment between Magna’s overall approach to technology and the Board’s strategic priorities.

TECHNOLOGYCOMMITTEE REPORTThe Technology Committee assists the Board in fulfilling its oversight responsibilities with respect to disruptive andother technological trends and risks, as well as the company’s efforts to address them. The mandate of theTechnology Committee, which has been filed on SEDAR and is available in the Leadership & Governance sectionof Magna’s website (www.magna.com), includes oversight responsibilities relating to:Composition

MEMBERS
Dr. Kurt J. Lauk (Chair)
Mary S. Chan
William A. Ruh

INDEPENDENT

2018 ATTENDANCE

✓
✓
✓

100%
100%
100%

CORPORATEGOVERNANCE

The Technology Committee Charter requires that the committee be composed of between three and five
Independent Directors. The Technology Committee complied with this requirement throughout 2018.

In appointing the current members to the Technology Committee, the Board considered the relevant expertise
brought to the committee by each member, including through the manufacturing and technology management
experience gained by each of them in their principal occupations and/or other boards on which they serve, as
described in their biographies elsewhere in this Circular. The Technology Committee was formed effective as ofApril 1, 2018 and each member was appointed with effect as of that date.

Corporate Governance91

2018 Accomplishments and Key Areas of Focus
During 2018 and the first few months of 2019, the Technology Committee fulfilled all of the requirements under its
Charter, particularly with respect to trends, opportunities and risks related to vehicle electrification. Some of theTechnology Committee’s significant activities and accomplishments in respect of 2018 include:Committee Work Plan: As the Technology Committee was formed in April and met three times during
2018, the committee’s first meeting was an organizational meeting in which the majority of the time wasspent discussing work plan and topical priorities for 2018 and 2019. The Technology Committee
prioritized powertrain electrification, advanced driver assistance systems/autonomous driving, newmobility/mobility-as-a-service and additive manufacturing as the core technologies around which its work
plan and agendas would be based.

Technology Trends, Opportunities and Risks: The Technology Committee dedicated much of its 2018
meeting time to ‘‘deep dives’’ related to powertrain electrification and other trends impacting the global
powertrain industry. This included the committee’s review of the Corporation’s powertrain business,current and future powertrain/driveline product portfolio, competitive strengths/weaknesses, strategy,
resources, and other items.

Venture Capital Investment Strategy: The Technology Committee received presentations relating to the
Corporation’s venture capital investment approach, with details such as investment rationale, value
proposition and future strategy in respect of each of Magna’s direct (start-up) and indirect (venture capitalfund) investments. Additionally, potential future investments were reviewed and discussed with theTechnology Committee to further the committee’s understanding of the role of Magna’s venture capital
strategy within the company’s overall strategy.



R&D Organizational Structure and Priorities: The Technology Committee had the opportunity todevelop its understanding of the Corporation’s R&D organization, organizational structure, domain areas
domain lead engineers, respective roles of Corporate and Operating Group R&D teams andR&D priorities.

Looking forward, the Technology Committee’s 2019 work plan prioritizes advanced driver assistancesystems/autonomous driving, new mobility/mobility-as-a-service and advanced manufacturing as key substantive
areas for ‘‘deep dives’’.

Committee Approval of Report
Based on the foregoing and all of the other activities undertaken or overseen by the Technology Committee, thecommittee is satisfied that it has fulfilled the duties and responsibilities assigned to it under its charter in respect of
the year ended December 31, 2018. This report is dated as of March 28, 2019 and is submitted by theTechnology Committee.

92

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Dr. Kurt J. Lauk (Chair)

Mary S. Chan

William A. Ruh

Corporate GovernanceAdditional Information
Effective January 1, 2018, Scott Bonham became a consultant to the company.
Under the consulting agreement between Mr. Bonham and a subsidiary of thecompany, Mr. Bonham provides venture capital and technology advisory services to
Magna for a fee of $56,000 per month ($672,000 per year). The scope of
responsibilities has been established by mutual agreement with Magna’s Chief
Executive Officer and the services rendered by Mr. Bonham will be under the general
overall direction of Magna’s Chief Executive Officer and Chief Technology Officer. The
consulting contract runs for a three-year term from January 1, 2018 to
December 31, 2020, subject to earlier termination on six months’ advance notice.
As Mr. Bonham was asked to remain on the Board as a non-independent,
non-executive director, he will continue to receive an annual Board retainer of$150,000 payable entirely in the form of DSUs, in order to maintain alignment withshareholders generally and the Independent Directors serving on the Board. As a
non-independent director, Mr. Bonham does not sit on any Board Committees.
Mr. Bonham, together with William Young serve together on the board of theCanadian 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 2018, and will involve the same amount for each of2019 and 2020. Neither Mr. Bonham nor Mr. Young participated in the discussion on
the proposal to fund CIFAR, which funding was approved by the CGCNC in theabsence of Mr. Young. The amount of Magna’s contribution to CIFAR is not material
to Magna. Neither Mr. Young nor Mr. Bonham receive any compensation from CIFAR
for service on the CIFAR board.
Mr. Bonham also serves on the board of Vector Institute (‘‘Vector’’), a not-for-profit
focused on artificial intelligence. In 2017, Magna committed to funding Vector
C$2.5 million over 10 years and, in 2018, Magna contributed C$500,000 in
furtherance of its commitments for 2017 and 2018. The amount of Magna’scommitment is not material to Magna. Mr. Bonham does not receive anycompensation from Vector for his service on the Vector board.
During 2018, a non-independent trust (the ‘‘Trust’’) which exists to make orderlypurchases of Magna shares for employees for transfer to the Employee Equity andProfit Participation Program, borrowed up to $34 million from Magna to facilitate thepurchase of Common Shares. At December 31, 2018, the Trust’s indebtedness to
Magna was $34 million.

Additional Information

93

ADDITIONAL
INFORMATIONInterests ofManagement andOther Insiders in
CertainTransactions

Indebtedness of
Directors, Executive
Officers andEmployees

None of Magna’s present or former directors or executive officers (including any of
their associates) were indebted at any time during 2018 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 $100,000 in aggregate.

Directors’ andOfficers’ Insurance

Effective September 1, 2018, Magna renewed its directors’ and officers’ liability
insurance for a one-year renewal period. This insurance provides, among othercoverages, coverage of up to $300 million (in the aggregate for all claims madeduring the policy year) for officers and directors of Magna and its subsidiaries,
subject to a self-insured retention of $5 million for securities claims and $1 million for
all other claims. This policy does not provide coverage for losses arising from theintentional breach of fiduciary responsibilities under statutory or common law or fromviolations of or the enforcement of pollutant laws and regulations. The aggregate
premium payable in respect of the policy year September 1, 2018 to September 1,
2019 for the directors’ and officers’ liability portion of this insurance policy wasapproximately $1.8 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.

28MAR201921015761
Bassem A. Shakeel
Vice-President and Corporate Secretary
March 28, 2019
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 theAnnual 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 Magnamay be obtained by accessing the disclosure documents available on the internet on the Canadian System for Electronic
Document Analysis and Retrieval (SEDAR) at www.sedar.com. Financial information is provided in Magna’s comparative
consolidated financial statements and MD&A for fiscal 2018. For more information about Magna, visit Magna’s website
at www.magna.com.

94

Additional Information

Definitions and Interpretation
Certain DefinedTerms

In this document, referred to as this ‘‘Circular’’, the terms ‘‘you’’ and ‘‘your’’ refer tothe shareholder, while ‘‘we’’, ‘‘us’’, ‘‘our’’, the ‘‘company’’ and ‘‘Magna’’ refer toMagna International Inc. and, where applicable, its subsidiaries. In this Circular, areference to ‘‘fiscal year’’ is a reference to the fiscal or financial year from January 1
to December 31 of the year stated.
We also use the following defined terms throughout this Circular:

Board:

our Board of Directors.

BoC:

the Bank of Canada.
Canadian dollars.

CGCNC:

the Corporate Governance, Compensation and Nominating Committee of our Board.

Deloitte:

Deloitte LLP

DSUs:deferred share units.

EROC:

the former Enterprise Risk Oversight Committee of our Board, which waswound-down effective as of March 31, 2018.

Independent
Directors:

our directors or nominees who have been determined to be independent on thebasis described under ‘‘Nominees for Election to the Board – Nominee
Independence’’.

NYSE:

The New York Stock Exchange.

OBCA:

the Business Corporations Act (Ontario).

TSX:
Currency, Exchange
Rates and Share
Pricesthe Toronto Stock Exchange.
Dollar amounts in this Circular are stated in U.S. dollars, unless otherwise indicated,and have been rounded to the nearest thousand. In a number of instances in thisCircular, information based on our share price has been calculated on the basis of theCanadian dollar closing price of our Common Shares on the TSX and converted to
U.S. dollars based on the BoC exchange rate on the applicable date.

REFERENCE DATE
December 31, 2018
March 22, 2019

Information
Currency
Websites notincorporated by
Reference

NYSE SHARE
PRICE
(US$)

TSX SHARE
PRICE
(C$)

BOC EXCHANGE
RATE(C$1.00 = US$)

45.45
47.45

61.97
63.70

0.73300.7457The information in this Circular is current as of March 22, 2019, 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

95

DEFINITIONS AND
INTERPRETATIONC$:Transfer Agent and Registrar
Computershare Trust Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario, Canada M5J 2Y1
Telephone:
1 (800) 564-6253
Computershare Trust Company N.A.
462 S. 4th Street
Louisville, Kentucky, USA 40202
Telephone:
1 (800) 962-4284
From all other countries
Telephone:
1 (514) 982-7555
www.computershare.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.com

MAGNA INTERNATIONAL INC.
337 Magna Drive
Aurora, Ontario
Canada L4G 7K1(905) 726 2462