Company: CPSS
Filing Date: 2025-10-28
Form Type: DEF 14A
Source: 0001683168-25-007815
Chunk: 42

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-10-28
Form: DEF 14A
Chunk 42
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 designed to be superior to compensation offered by our competitors                                                                  |
| Long-Term Incentive    | Stock options | ·                    | Align interests of executives with those of shareholders;                                                                                                                          |
| Compensation           |               | ·                    | Target long-term incentive award size designed to retain executives through long-term vesting and the potential for wealth accumulation, contingent on benefit to the shareholders |

The Compensation Committee has from time to time considered providing additional
elements of executive compensation. It has considered elements such as restricted stock awards, restricted stock units, compensation contingent
on a change in control, defined benefit pension plans, deferred cash compensation, and supplemental retirement plans (supplemental in
the sense that they exceed the limits for tax advantaged treatment). To date, the Compensation Committee has elected not to pay compensation
in such forms, having determined that the Company’s objectives are better met by one or more of the elements of compensation that
it does pay.

| 26 |

Regarding restricted stock and restricted stock units, the Compensation
Committee has noted that any form of equity equivalent to or closely tied to common stock does serve to meet the objective of aligning
officers’ personal interest with that of the shareholders generally. The Compensation Committee believes, however, that the objective
is better met by grants of stock options than by grants of share equivalents, because recipients of the grants will face the same degree
of variance in results at a lesser cost to the Company, when option grants are compared to grants of restricted stock units. Further,
unlike restricted stock, option grants will not provide a reward to the holder absent an improvement over time in the Company’s
stock price. The Compensation Committee has elected not to provide material perquisites as compensation, having determined that
cash is a better medium of exchange.

Regarding compensation that would be payable contingent on a change in
control of the Company, the Compensation Committee believes that there are certain legitimate objectives to be met by such contingent
compensation. As of the date of this proxy statement, however, no such contingent compensation plans are in place. Regarding
defined benefit pension plans, deferred cash compensation and supplemental retirement plans, the Compensation Committee believes that
the Company’s retention objective is better met by straight cash payments, whether in the form of base salary or in the form of
bonus compensation. In particular with respect to plans for deferred compensation, the Committee believes those make sense
for the Company and for the recipient only on the basis of assumptions regarding future tax rates payable by each. Having no assurance
that