Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 948

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 5
Chunk 948
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 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 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.

Regarding restricted stock and restricted stock
units, the 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 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 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 Committee believes that there are certain legitimate objectives to be met by such contingent
compensation. As of the date of this report, however, no such contingent compensation plans are in place. Regarding defined benefit pension
plans, deferred cash compensation and supplemental retirement plans, the 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 such assumptions would be correct, the Committee has
chosen not to put into place any special deferred compensation programs for the company’s executive officers. Those officers do
participate in a Company-sponsored tax-deferred savings plan, commonly known as a 401(k) plan, on the same terms available to Company
employees generally.

The Committee may in the future revisit its conclusions
as to any of the components discussed above, or may consider other forms of compensation.

The Base Salary Element

With respect to the retention objective, the Committee
considers an executive’s