LKQ Corp. announced Thursday a cooperation agreement with Ancora Catalyst Institutional, LP, and Engine Capital, LP, which includes the appointment of two new independent directors to the LKQ Board of Directors. 

The agreement is for LKQ to add two new directors and form a Finance Committee of its board in exchange for Ancora and Engine Capital, both hedge fund companies, to abide by certain customary standstill restrictions, voting committements and other provisions.

Sue Grove, the founder and president of Excelsior Advisors, LLC, a retail consulting and advisory firm, will hold one of the two positions, according to a press release. She previously sat on the boards of IAA, Inc., and Autozone, Inc. 

Michael Powell, who most recently served as claims process general manager at the Progressive Corp. between 2022 and 2024, will hold the second seat. He previously held multiple other positions at Progressive including central zone claims general manager and claims physical damage business leader. 

“I am pleased to welcome Sue and Michael to our board, who bring executive experience, as well as an understanding of the automotive industry that complements our board,” said Guhan Subramanian, LKQ chairman, in the release. “LKQ is well-positioned to build on the progress we have made through our focus on operational excellence and taking action to simplify, integrate, and rationalize our business to drive better returns. We value the constructive engagement that we have had with Ancora and Engine toward our shared goal of generating increasing value for LKQ’s shareholders.”

Gove and Powell will sit on LKQ’s newly formed Finance Committee, which consists of five seats. The committee will make recommendations to the board on its capital allocation strategy and business portfolio. 

Revenue for LKQ’s third quarter was $3.6 billion, an increase of 0.5% over the third quarter of 2023. 

While overall revenue increased, parts and services organic revenue decreased by 2.8% during the third quarter, according to a press release. 

Justin L. Jude, LKQ president, CEO, and director, said during an earnings call that parts and services revenue was down roughly 4% organically on a per-day basis during Q3. 

The North America market parts and services revenue declined 7.5% on a per-day basis with aftermarket down to a greater extent than salvage parts in Q3, he said. 

The third quarter also extended the trend of year-over-year claim decreases, with claims falling 9.5% following a 7% drop in Q2. 

While claims dropaped 9.5%, Jude said collision volumes were only down 6%. He said this shows that, despite the drop in claims, the company did not lose market share.  

“We believe the decrease in claims are still tied to the economic factors we discussed the last quarter, such as the rising insurance premiums and the decrease in used car pricing,” Jude said. “While we anticipated claims volumes would not rebound quickly in H2, Q3 decrease was higher than we projected and it contributed to an underperformance of revenue relative to guidance. Q3 claims figures suggest the possibility of a longer recovery period than we previously thought, and we are working through this evaluation with our strategy and operations teams as part of our 2025 budget process.”

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The LKQ booth at NACE 2016 is shown. (John Huetter)