STANDARD MOTOR PRODUCTS, INC.

How We Set Compensation. On an annual basis, the Compensation Committee reviews and approves the

compensation of our named executive officers, including the amounts of salary, cash incentive awards and equity-based

compensation provided to each executive. In determining total executive compensation packages, the Compensation

Committee generally considers various measures of Company and industry performance including revenue, operating

income, cash flow, return on invested capital, sales growth, gross margin and total shareholder return. The Compensation

Committee does not assign these performance measures relative weights. The Compensation Committee considers these

performance measures as key indicators of Company performance and exercises its business judgment in determining

compensation after considering all of these measures, collectively, as well as taking into account the market data and peer

group information discussed below.

The Compensation Committee also evaluates the total compensation of each executive, and each element of

compensation separately, to ensure that it will be effective in motivating, retaining and incentivizing the executive. The

Compensation Committee’s evaluation takes into consideration, among other factors, each executive’s individual

performance, both in general and against specific goals and targets established for the executive, and the desire to maintain

internal pay equity and consistency among our executives.

Our named executive officers generally participate in the same executive compensation plans and arrangements

available to our other executive officers. The Compensation Committee divides executive officers into three separate

categories for the purposes of establishing the levels of cash and equity incentive awards. Each category consists of one or

more officers who are grouped together for incentive compensation purposes and receive the same target incentive awards.

For example, with respect to our annual restricted stock awards, our Chief Executive Officer, Chief Operating Officer,

Chief Commercial Officer and Chief Financial Officer are in the first category; our Chief Legal Officer is in the second

category; and our other executives are in the third category. One purpose of the categories is to equalize incentive

opportunities for individuals with similar levels of responsibility. This practice is intended to improve internal pay equity

among our executives. Considerations of internal pay equity among executives are also factored into the Compensation

Committee’s consideration of the market data and peer group information discussed below with respect to base salary and

target bonus compensation.

Market Data, Peer Comparisons & Independent Consultants. In establishing total compensation for our

executives, the Compensation Committee reviews the practices of specific peer group companies to compare the

Company’s compensation programs with other manufacturing companies of comparable size and stature. Our Chief

Executive Officer and other members of management provide input on the selection of the peer group companies, and the

Compensation Committee makes the final determination of which companies to include. Executive compensation

information for the market data and peer group companies is compiled by management from proxy statements and other

public filings, as well as surveys and other databases to which we subscribe.

Our Compensation Committee believes that peer group comparison is a useful tool because it is a reflection of the

market in which we compete for talent and provides credibility for our compensation programs with both our employees

and our shareholders. The Compensation Committee also reviews this information for context and a frame of reference for

decision-making; but it is not the sole source of information on which executive compensation is determined. Other factors

such as internal equity, individual and business performance, and the perceived degree of alignment between the job duties

of our executive with the job description to which his or her compensation is being compared are also considered.

Additionally, the Compensation Committee may, from time to time, engage an independent consultant to assess

the Company’s executive compensation program. In 2024, the Compensation Committee engaged Frederic W. Cook &

Co., Inc., an independent compensation consulting firm, to assess the Company’s overall executive compensation design

and program.

Role of Management. The Compensation Committee seeks and considers input from senior management in many

of its decisions. Annually, our Chief Executive Officer reviews with the Compensation Committee annual salary, short-

term incentive compensation program targets and long-term incentive compensation program compensation for each of our

executives (excluding our CEO). In addition, following the end of each fiscal year, our Chief Executive Officer evaluates

each executive officer’s performance for the prior fiscal year (other than his own performance) and discusses the results of

his evaluations with the Compensation Committee. Other executive officers assist in the evaluations for those officers

reporting to them. In addition to considering an individual’s attainment of the business goals and objectives established for

him or her by the Compensation Committee for the prior year, the Chief Executive Officer’s evaluations of each executive

officer’s performance may be based in part upon subjective factors, including the Chief Executive Officer’s evaluations of

the contributions made by the executive officer to the Company’s overall results and achievement of its strategic goals.

These evaluations include consideration of the level of responsibility of each executive officer and the percentage of total

Company revenue and/or expense that each individual officer is responsible for, where applicable. The Chief Executive

Officer then makes specific recommendations to the Compensation Committee for adjustments of base salary and incentive

plan targets as part of the compensation package for each executive officer (other than himself) for the next fiscal year.

The Compensation Committee reviews the performance of the Chief Executive Officer and determines the

compensation for all executive officers for the next fiscal year, considering the recommendations from the Chief Executive

Officer, as well as the market data and peer group information described above and any other information available to it

that it considers relevant. The Compensation Committee discusses the recommendations of the Chief Executive Officer in

executive session without any members of management present and may modify the Chief Executive Officer’s

recommendations when approving final compensation packages.

Tally Sheets. When reviewing executive compensation, the Compensation Committee has historically reviewed

management-provided materials which highlight the base salary, target cash incentive award, and actual cash incentive

award to each of our executive officers for prior fiscal years. The Compensation Committee uses this information to review

compensation trends, to compare increases or decreases year over year, and to ensure that compensation decisions are made

with a view to the total compensation package awarded to each executive officer over time. No specific weight is assigned

by the Compensation Committee to the tally sheets or any specific items which may appear on such tally sheets.

Risk Management Considerations. The Compensation Committee structures our short-term and long-term

incentive compensation programs, as highlighted below, to promote the creation of long-term value and discourage

behavior that may lead to excessive risk:

•The Company’s short-term incentive compensation program (as more fully described under “Elements

of Compensation – Short-Term Incentive Compensation Program” below) is based in part on Company

financial performance, designed to align executive compensation to year-over-year improvements in

corporate performance and increases in shareholder value. This portion of the cash incentive award is

structured such that, year-over-year improvements that are favorable for our shareholders, are also made

favorable for our executives whose compensation is based on the achievement of those improvements. In

addition, an executive’s actual award is capped on an annual basis at 200% of the applicable target, no

matter how much financial performance exceeds the range established for the award, thereby limiting the

incentive for excessive risk-taking. Any award in excess of the 200% target may be carried forward into

the following year, subject to the risk of forfeiture depending upon the following year’s performance. In

addition, since these awards are based on overall corporate performance, rather than individual

performance, the ability of an individual executive to increase his own compensation through excessive

risk taking is constrained.

•The portion of the target cash incentive award that is based on Company financial performance

represents 70% of an executive’s total target cash incentive award in any year. Management

performance, or MBO bonuses (as more fully described under “Elements of Compensation – Short-Term

Incentive Compensation Program” below), which are based upon the achievement of management goals

and objectives, and thus are more susceptible to individual risk taking, represent only 30% of an

executive’s total target cash incentive award, thus reducing the incentive for any executive to take

excessive risks.

•The measures used to determine whether performance share awards vest are based on at least three years

of financial performance. The Compensation Committee believes that the longer performance period

encourages executives to attain sustained performance over several years, rather than performance in a

single annual period.

•Restricted stock awards generally vest at the end of a three year or longer period and an executive must

hold any vested restricted stock (except long-term retention awards) for an additional two-year period

following vesting pursuant to the terms of our Stock Ownership Guidelines, thereby encouraging

executives to look to long-term appreciation in equity values.