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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

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Notice of Annual Meeting
and
Proxy Statement

Annual Meeting of Stockholders
June 8, 2016

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13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032

April 29, 201428, 2016

Dear Fellow Stockholder:

        WeI would like to cordially invite you to attend KAR Auction Services'Services, Inc.'s ("KAR" or the "Company") annual meeting of stockholders. The meeting will be held on June 10, 2014,8, 2016, at 9:00 a.m., Eastern Daylight Time, at the RenaissanceConrad Indianapolis, North Hotel, 11925 North Meridian50 West Washington Street, in Carmel,Indianapolis, Indiana 46032.46204.

As a KAR Auction Services stockholder, your vote is important. AtThe matters to be acted upon are described in the notice of annual meeting of stockholders will vote on a number of important matters.and the proxy statement. Even if you are planning to attend the annual meeting in person, you are strongly encouraged to vote your shares through one of the methods described in the enclosed proxy statement. Please take the time

I am pleased to carefully read eachreport that 2015 was an excellent year for KAR. We met or exceeded our key financial targets and delivered solid year-over-year growth in total vehicles sold, revenues, adjusted EBITDA and adjusted net income. As an established market leader with an experienced management team, we believe that we are well-positioned to continue driving growth with solid operating performance and disciplined capital investments.

We have a comprehensive capital allocation plan for increasing stockholder value. We are focused on return of the proposals describedcapital to our stockholders and accretive investments in the attached proxy statement. The Boardbusiness, including the acquisition of Directors would appreciate your support on our recommendations forphysical auctions and new technology platforms, as well as enhancing current technologies. In 2015, we announced the following proposals:

•

Electionacquisition of both physical auctions and technology companies, including the ten nominated directors;



•

Advisory vote approving the compensationpurchase of our named executive officers;



•

Approval of the amendmentfirst European business. We are proud that through share buybacks and restatement of the KAR Auction Services, Inc. 2009 Omnibus Stockdividends, in 2015 we returned approximately $380 million to stockholders and Incentive Plan;invested approximately $253 million in our business through capital expenditures and



•

Ratification of the appointment of KPMG LLP as strategic acquisitions.

I would like to express our independent registered public accounting firm for 2014.

        This year we are pleased to take advantage of the Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe these rules allow us to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of our annual meeting. The proxy statement contains instructions on how you can request a paper copy of the proxy statement and annual report.

        Thank youappreciation for your continued support of KAR Auction Services.KAR.

		Sincerely,
		James P. Hallett Chief Executive Officer

James P. Hallett

Chairman of the Board and
Chief Executive Officer

This proxy statement is dated April 29, 201428, 2016 and is first being distributed to stockholders on or about April 29, 2014.28, 2016.

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13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

		On Behalf of the Board of Directors,
April 29, 201428, 2016 Carmel, Indiana		Rebecca C. Polak Executive Vice President, General Counsel and Secretary

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Notice of Internet Availability of Proxy Materials for the Annual Meeting

The proxy statement for the Annual Meetingannual meeting and the Annual Reportannual report to Stockholdersstockholders for the fiscal year ended December 31, 2013,2015, each of which is being provided to stockholders prior to or concurrently with this notice, are also available to you electronically via the Internet. We encourage you to review all of the important information contained in the proxy materials before voting. To view the proxy statement and Annual Reportannual report to Stockholdersstockholders on the Internet, visit the "Investor Relations" sectionpage of our website, under the "Proxy Statement"Material" link at www.karauctionservices.com.www.karauctionservices.com.

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PROXY STATEMENT SUMMARY

​	​
​                 Name1		Director Since		Independent
Ryan M. Birtwell		2013		Yes
Brian T. Clingen (Chairman of Board)		2007		No
Donna R. Ecton		2013		Yes
Peter R. Formanek		2009		Yes
James P. Hallett (Chief Executive Officer)		2007		No
Mark E. Hill		—		Yes
Lynn Jolliffe		—		Yes
Michael T. Kestner		2013		Yes
John P. Larson		—		Yes
Stephen E. Smith		2013		Yes

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Board Nominees (pages 8-17)

Name		Age		Director Since		Independent		Primary Occupation		Committee Membership***
Todd F. Bourell		46		2015		Yes		Managing Partner of WLJ Capital, LLC		NCGC
Donna R. Ecton		69		2013		Yes		Chairman and Chief Executive Officer of EEI Inc.		CC (Chair), AC
James P. Hallett*		63		2007		No		Chairman of the Board and Chief Executive Officer of KAR		—
Mark E. Hill		60		2014		Yes		Managing Partner of Collina Ventures, LLC		NCGC (Chair), RC
J. Mark Howell		51		2014		Yes		Chief Operating Officer of Angie's List, Inc.		RC (Chair), CC
Lynn Jolliffe		64		2014		Yes		Human Capital and Talent Management Consultant		AC, CC
Michael T. Kestner		62		2013		Yes		Building Products and Automotive Industry Consultant		AC (Chair), RC
John P. Larson**		53		2014		Yes		Chief Executive Officer of Bestop, Inc.		CC, RC
Stephen E. Smith		67		2013		Yes		Automotive Industry Consultant		AC, NCGC

*

Chief Executive Officer and Chairman of the Board

**

Lead Independent Director

***

AC=Audit Committee
CC=Compensation Committee
NCGC=Nominating and Corporate Governance Committee
RC=Risk Committee

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KAR AUCTION SERVICES 2015 HIGHLIGHTS

Business Highlights

        DespiteFor the impact of Superstorm Sandy on our salvage auction business,year ended December 31, 2015, KAR Auction Services, Inc. (the "Company," "KAR" or "KAR Auction Services") again delivered solid growth in volume of total vehicles sold, revenues, and Adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the GAAP measure, net income (loss), in our Annual Report on Form 10-K for the year ended December 31, 2013 in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—adjusted EBITDA and Adjusted EBITDA."

adjusted net income. Specific highlights for fiscal 20132015 included:

•·

Total vehicles sold for our ADESA, Inc. ("ADESA") and Insurance Auto Auctions, Inc. ("IAA") business segments rose approximately 12%13% to 3.74.4 million units.



•·

Net revenue was up 11%12% to more than $2.1approximately $2.6 billion.



·

Adjusted EBITDA* rose 9% to approximately $650 million.



*

Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the most comparable GAAP measure, net income (loss), in our Annual Report on Form 10-K for the year ended December 31, 2015 in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—EBITDA and Adjusted EBITDA."

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·

Net income increased 27% from $169.3 million ($1.19 per diluted share) to $214.6 million ($1.51 per diluted share).



·

Through share buybacks and dividends, in 2015 we returned approximately $380 million to stockholders and invested approximately $253 million in our business through capital expenditures and strategic acquisitions.



•·

Adjusted EBITDA rose 8% to $538.2 million.



•

We reduced our leverage, as measured by Net Debt / Adjusted EBITDA, to 3.07X.



•

We increased our annual dividend from $0.76 to $1.00 per share.



•

SharesThe closing stock price of KARKAR's common stock rose 46%approximately 7% from $34.65 at December 31, 2014 to $29.55.$37.03 at December 31, 2015. The closing price shown below for each year is the closing price of a share of the Company's common stock on December 31.

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Corporate Governance
(pages 18-23)

We are committed to high standards of ethical and business conduct and strong corporate governance practices. This commitment is highlighted by the practices described below as well as the information contained on our website atwww.karauctionservices.com on the "Investor Relations" page under the link "Corporate Governance":

•

Annual Elections:  Our directors are elected annually for one year terms.



Majority Voting:

•

  We maintain a majority voting standard for uncontested director elections with a policy for directors to tender their resignation should a majority of the votes cast not be in their favor.

Director Independence:  Eight of our tennine director nominees are independent, and all committees of our Board of Directors' committeesDirectors are comprised entirely of independent directors.





•

Board Leadership:    We separate the roles of Chairman of the Board and Chief Executive Officer. Our Chairman of the Board is a non-executive chairman.



•

Executive Sessions:  Our independent directors meet in executive session at regularly scheduled Board of Directors' meetings.



Board Leadership:

•

  We have a lead independent director who presides over executive sessions of independent directors and serves as the principal liaison between the independent directors and the Company's Chief Executive Officer and Chairman of the Board.

Board Diversity:  Twenty percent of our Board of Directors is comprised of women.

Robust Equity Ownership Requirements:  In 2015, we adopted stock ownership guidelines that are applicable to our non-employee directors. The stock ownership guideline for our non-employee directors is three times their annual base cash retainer.

Robust Equity Retention Requirement:  In 2015, we adopted an equity retention requirement that is applicable to non-employee directors. All shares of our common stock granted on and after January 1, 2014 must be held for four years after the grant while serving as a director, regardless of whether the stock ownership guideline has been met. All shares of our common stock granted on and after January 1, 2014 must be held for six months after service as a director has ended with the Company.

Board of Directors Risk Oversight:  OurIn July 2015, the Board of Directors established a Risk Committee of the Board of Directors to assist the Board of Directors in its oversight of:

·

the principal business, financial, technology and operational risks and other material risks and exposures of the Company; and

·

the actions, activities and initiatives of the Company to mitigate such risks and exposures.

The Risk Committee provides oversight with respect to risk practices implemented by management, except for the oversight of risks that have been specifically delegated to aanother committee of the Board of Directors (in which case the Board of DirectorsRisk Committee may maintain oversight over such risks through the receipt of reports from thesuch committees). The Audit Committee maintains initial oversight over risks related to the integrity of our financial statements; internal controls over financial reporting and disclosure controls and procedures (including the performance of our internal audit function); the performance of the independent auditor; and oversees our responses to ethics issues arising from our whistleblower hotline. The Compensation Committee maintains oversight over risks related to our compensation practices. The Nominating and Corporate Governance Committee monitors potential risks relating to the effectiveness of the Board of Directors, notably director succession, composition of the Board of Directors and the principal policies that guide our governance.



•

Cessation of Controlled Company Status:    At the time of our initial public offering, we qualified as a "controlled company" within the meaning of the NYSE corporate governance standards, as KAR Holdings II, LLC ("KAR LLC") controlled a majority of the voting power of our

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outstanding common stock. As of June 6, 2013, KAR LLC ceased

Executive Compensation (pages 33-67)

We maintain a compensation program structured to holdachieve a majority of our outstanding common stockclose connection between executive pay and Company performance. We believe that this strong pay-for-performance orientation has served us well in recent years, particularly as of the date of this proxy statement, does not hold any shares of our common stock. Accordingly, we are no longer a controlled company, and we continue to evaluate our corporate governance structure in light of such transition. We currently have a majority of independent directors under the NYSE standards and each of our committees is comprised entirely of independent directors. See "Board of Directors Structure and Corporate Governance."

Executive Compensation

        During the past five years, includingwe've moved forward following the sale by our former equity sponsors of all of their holdings of our common stock in 2013, we have maintained a compensation program structured to achieve close connection between executive pay and company performance.

•

Pay for Performance Alignment:    During the past 5 fiscal years, including 2013, we have demonstrated close alignment between our total stockholder return (TSR) performance and the compensation of our Chief Executive Officer, as shown in the chart below.

5-Year Pay Alignment Chart

•

Independent Compensation Committee:    All of the members of our compensation committee are independent under NYSE rules.



•

Independent Compensation Consultant:    In 2013, our compensation committee engaged ClearBridge Compensation Group as its independent compensation consultant.



•

Performance-Based Compensation Awards:    The equity awards granted to our named executive officers in late 2013 and in 2014 are heavily performance-based, consisting of restricted stock units that vest based on achievement of relative TSR and adjusted earnings per share goals and stock options.



•

Incentive Compensation Recoupment Policy:    In 2014, we adopted a policy providing for the recovery of incentive compensation in the event we are required to prepare an accounting restatement due to any executive officer's intentional misconduct.



•

Anti-Hedging and Pledging of Company Stock Policy:    In addition to our existing anti-pledging of Company stock policy, we adopted a formal anti-hedging of Company stock policy in 2014, which is applicable to our officers and directors.

2013. For more information regarding our named executive officer compensation, see "Compensation Discussion and Analysis" and the compensation tables that follow.follow such section.

WE DO:

✔	​	Pay for performance alignment:   Historically, we have demonstrated close alignment between our total stockholder return (TSR) performance and the compensation of our Chief Executive Officer, as shown in the chart on page 36.	​	✔	​	Pay for performance:   The equity awards granted to our named executive officers in 2015 and in 2016 are heavily performance-based, including restricted stock units that vest based on achievement of adjusted earnings per share and net income goals.
✔	​	Independent Compensation Committee:   All of the members of our Compensation Committee are independent under NYSE rules.	​	✔	​	Maximum payout caps for annual cash incentive compensation and performance restricted stock units (PRSUs).
✔	​	Moderate change-in-control benefits:   Change-in-control severance benefits are two times base salary and target bonus for the CEO and one times base salary and target bonus for the other executive officers.	​	✔	​	Independent compensation consultants:   In 2015, our Compensation Committee engaged Semler Brossy Consulting Group LLC as its independent compensation consultant.
✔	​	Clawback of certain compensation if restatement and intentional misconduct:   Our clawback policy provides for the recovery of incentive compensation in the event we are required to prepare an accounting restatement due to such executive officer's intentional misconduct.	​	✔	​	Robust equity retention requirement:   In 2015, we adopted an equity retention requirement that is applicable to senior executives, including our named executive officers. Our named executive officers are required to hold 100% of net shares of Company stock received under awards granted on or after January 1, 2015 for at least 12 months after vesting, regardless of whether the stock ownership guideline has been met.
✔	​	Robust equity ownership requirements:   In 2015, we adopted stock ownership guidelines that are applicable to senior executives, including our named executive officers. The stock ownership guideline for our CEO is five times his annual base salary.	​		​

WE DO NOT:

✘	​	Allow dividends or dividend equivalents to be paid on unvested PRSUs:   Dividend equivalents are accrued but not paid on PRSUs until (i) the performance conditions are satisfied; and (ii) the PRSUs vest after the performance measurement period.	​	✘	​	Allow hedging of KAR securities:   We prohibit the hedging of Company stock by our directors and officers.
✘	​	Allow pledging of KAR securities:   As part of our Insider Trading Policy, we prohibit the pledging of Company stock.	​	✘	​	Provide excessive executive perquisites:   We provide only a limited number of perquisites to attract talented executives and to retain our current executives.

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KAR AUCTION SERVICES, INC.
13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032

PROXY STATEMENT

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING

Q:

Why am I receiving these materials?

A:

We are providing these proxy materials to you in connection with the solicitation, by the Board of Directors of KAR Auction Services, Inc. (the "Company" or "KAR Auction Services"), of proxies to be voted at the Company's 2014 annual meeting of stockholders and at any adjournments or postponements thereof. Stockholders are invited to attend the annual meeting to be held on June 10, 2014 beginning at 9:00 a.m., Eastern Daylight Time, at the Renaissance Indianapolis North Hotel, 11925 North Meridian Street, Carmel, Indiana 46032. Our proxy materials are first being distributed to stockholders on or about April 29, 2014.

Q:

What proposals will be voted on at the annual meeting?

A:

There are four proposals scheduled to be voted on at the annual meeting:

•

To elect ten directors to the Board of Directors;



•

To provide an advisory vote to approve the compensation of our named executive officers;



•

To approve the amendment and restatement of the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan (the "Omnibus Plan"); and



•

To ratify the appointment of KPMG LLP ("KPMG") as our independent registered public accounting firm for 2014.

Q:

What is the Board of Directors' voting recommendation?

A:

The Company's Board of Directors recommends that you vote your shares:

•

"FOR" each of the nominees to the Board of Directors;



•

"FOR" the approval, on an advisory basis, of the compensation of our named executive officers;



•

"FOR" the approval of the amendment and restatement of the Omnibus Plan; and



•

"FOR" the ratification of the appointment of KPMG as our independent registered public accounting firm for 2014.

Q:

Who is entitled to vote?

A:

All shares owned by you as of the record date, which is the close of business on April 16, 2014, may be voted by you. You may cast one vote per share of common stock that you held on the record date.

These shares include shares that are:

•

held directly in your name as the stockholder of record; and

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held for you as the beneficial owner through a stockbroker, bank or other nominee, including shares purchased under the KAR Auction Services, Inc. Employee Stock Purchase Plan (the "Employee Stock Purchase Plan").

On the record date, KAR Auction Services had approximately 139,772,786 shares of common stock issued and outstanding.

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:

Many of our stockholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. As summarized below, there are some differences between shares held of record and those owned beneficially.

Stockholder of Record.    If your shares are registered directly in your name with the Company's transfer agent, American Stock Transfer & Trust Company, LLC, you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being sent to you directly by KAR Auction Services. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the annual meeting. You may vote on the Internet, by telephone or by mail, as described below under the heading "How can I vote my shares without attending the annual meeting?"

Beneficial Owner.    If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name" and these proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker on how to vote your shares and are also invited to attend the annual meeting. To vote these shares in person at the annual meeting, you must obtain a signed proxy from the record holder giving you the right to vote the shares. You may also vote by Internet, by telephone or by mail, as described below under "How can I vote my shares without attending the annual meeting?"

Q:

How can I vote my shares in person at the annual meeting?

A:

Stockholder of Record.    Shares held directly in your name as the stockholder of record may be voted in person at the annual meeting. If you choose to vote your shares in person at the annual meeting, please bring proof of identification. Even if you plan to attend the annual meeting, the Company recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the annual meeting. See "How can I vote my shares without attending the annual meeting?"

Beneficial Owner.    Shares held in street name may be voted in person by you only if you obtain an account statement or letter from your bank, broker or other nominee indicating that you are the beneficial owner of the shares and a legal proxy from the record holder giving you the right to vote the shares. The account statement or letter must show that you were the beneficial owner of shares on April 16, 2014, the record date.

Q:

How can I vote my shares without attending the annual meeting?

A:

Whether you hold your shares directly as the stockholder of record or beneficially in street name, you may direct your votewithout attending the annual meeting by voting in one of the following manners:

•

Internet.    Go to www.proxyvote.com and follow the instructions. You will need the control number included on your proxy card or voting instruction form;



•

Telephone.    Dial 1-800-690-6903. You will need the control number included on your proxy card or voting instruction form; or

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Mail.    Complete, date and sign your proxy card or voting instruction card and mail it using the enclosed, pre-paid envelope.

If you vote on the Internet or by telephone, you do not need to return your proxy card or voting instruction card. Internet and telephone voting for stockholders will be available 24 hours a day, and will close at 11:59 p.m., Eastern Daylight Time, on June 9, 2014.

Q:

If I am an employee holding shares pursuant to the Employee Stock Purchase Plan, how will my shares be voted?

A:

Employees holding stock acquired through the Employee Stock Purchase Plan will receive a voting instruction card covering all shares held in their individual account from Computershare, the plan record keeper. The voting instruction cards have an earlier return date than proxy cards. The record keeper for the Employee Stock Purchase Plan will vote your shares (i) in accordance with the specific instructions on your returned voting instruction card; or (ii) in its discretion, if you return a signed voting instruction card with no specific voting instructions.

Q:

What is the quorum requirement for the annual meeting?

A:

A quorum is necessary to hold the annual meeting. A quorum at the annual meeting exists if the holders of a majority of the Company's capital stock issued and outstanding and entitled to vote at the annual meeting are present in person or represented by proxy. Abstentions and broker non-votes are counted as present for establishing a quorum. A broker non-vote occurs when a broker does not vote on some matter on the proxy card because the broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

Q:

What happens if I do not give specific voting instructions?

A:

Stockholder of Record.    If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board of Directors on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting.

Beneficial Owners.    If you are a beneficial owner of shares held in street name and do not provide the organization (e.g., broker or bank) that holds your shares in "street name" with specific voting instructions, the organization that holds your shares may generally vote on routine matters (Proposal No. 4 (ratification of auditor)) but cannot vote on non-routine matters (Proposal No. 1 (director elections), Proposal No. 2 (advisory vote on the compensation of our named executive officers) and Proposal No. 3 (approval of the amendment and restatement of the Omnibus Plan)). If the organization that holds your shares does not receive instructions from you on how to vote your shares on Proposals No. 1, 2 and 3, such organization will inform the inspector of election that it does not have the authority to vote on these matters with respect to your shares. This is generally referred to as a "broker non-vote." Therefore, we urge you to give voting instructions to your broker. Shares represented by such broker non-votes will be counted in determining whether there is a quorum. Because broker non-votes are not considered shares entitled to vote, they will have no effect on the outcome of any proposal other than reducing the number of shares present in person or by proxy and entitled to vote from which a majority is calculated.

Q:

Which proposals are considered "routine" or "non-routine?"

A:

The ratification of the appointment of KPMG as our independent registered public accounting firm for 2014 (Proposal No. 4) is considered a routine matter under applicable rules. A broker or

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other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal No. 4.

The election of directors (Proposal No. 1), the advisory vote on the compensation of our named executive officers (Proposal No. 2) and the approval of the amendment and restatement of the Omnibus Plan (Proposal No. 3) are considered non-routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposal Nos. 1, 2 and 3.

Q:

What is the voting requirement to approve each of the proposals?

A:

Ten director nominees have been nominated for election at the annual meeting. Directors will be elected by a plurality of the votes cast in the election of directors at the annual meeting, either in person or represented by a properly authorized proxy. This means that the ten nominees who receive the largest number of "FOR" votes cast will be elected as directors. Stockholders cannot cumulate votes in the election of directors. "WITHHOLD" votes and broker non-votes will not have any effect on the election of directors, except in the case of "WITHHOLD" votes to the extent they revoke earlier dated proxies.

The advisory approval of the compensation of our named executive officers, the approval of the amendment and restatement of the Omnibus Plan and the ratification of the appointment of our independent registered public accounting firm require the affirmative vote of a majority of the votes represented at the meeting and entitled to vote on the proposals. In accordance with Delaware law, only votes cast "FOR" a matter constitute affirmative votes. A properly executed proxy marked "abstain" with respect to the advisory approval of our executive compensation, the approval of the amendment and restatement of the Omnibus Plan and/or the ratification of the appointment of our independent registered public accounting firm will not be voted, although it will be counted for purposes of determining whether there is a quorum. Accordingly, with respect to Proposals Nos. 2, 3 and 4, abstentions will have the same effect as negative votes or votes "AGAINST" that matter. Broker non-votes will have no effect on Proposals Nos. 2 and 3.

Q:

What does it mean if I receive more than one proxy or voting instruction card?

A:

It means your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction cards you receive.

Q:

Who will count the vote?

A:

The votes will be counted by the inspector of election appointed for the annual meeting.

Q:

Can I revoke my proxy or change my vote?

A:

Yes. You may revoke your proxy or change your voting instructions at any time prior to the vote at the annual meeting by:

•

providing written notice of revocation to the Secretary of the Company at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032;



•

delivering a valid, later-dated proxy or a later-dated vote on the Internet or by telephone; or



•

attending the annual meeting and voting in person.

Please note that your attendance at the annual meeting in person will not cause your previously granted proxy to be revoked unless you vote in person at the annual meeting to revoke your proxy. If you wish to revoke your proxy, you must do so in sufficient time to permit the necessary

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examination and tabulation of the subsequent proxy or revocation before the vote is taken. Shares held in street name may be voted in person by you at the annual meeting only if you obtain a signed proxy from the record holder giving you the right to vote the shares.

Q:

Who will bear the cost of soliciting votes for the annual meeting?

A:

The Board of Directors of the Company is soliciting your proxy to vote your shares of common stock at the annual meeting. We have engaged MacKenzie Partners, Inc., to assist in the solicitation of proxies for the annual meeting for a fee of approximately $15,000 plus reimbursement of reasonable out-of-pocket expenses. KAR Auction Services will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition to the distribution of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic and facsimile transmission by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. The Company also may reimburse brokerage firms and other persons representing beneficial owners of shares of KAR Auction Services' common stock for their expenses in forwarding solicitation material to such beneficial owners.

Q:

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

A:

The Company has adopted a procedure called "householding" which the Securities and Exchange Commission (the "SEC") has approved. Under this procedure, the Company is delivering a single copy of this proxy statement and the Company's Annual Report to multiple stockholders who share the same address unless the Company has received contrary instructions from one or more of the stockholders. This procedure reduces the Company's costs. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, a separate copy of this proxy statement and the Company's Annual Report will be promptly delivered to any stockholder at a shared address to which the Company delivered a single copy of any of these documents. If you prefer to receive separate copies of the proxy statement or annual report, contact Broadridge Financial Solutions, Inc. by calling 1-800-542-1061 or in writing at 51 Mercedes Way, Edgewood, New York 11717, Attention: Householding Department.

In addition, if you currently are a stockholder who shares an address with another stockholder and would like to receive only one copy of future notices and proxy materials for your household, you may notify your broker if your shares are held in a brokerage account or you may notify us if you hold registered shares. Registered stockholders may notify us by contacting Broadridge Financial Solutions, Inc. at the above telephone number or address.

Q:

What is notice and access and why did KAR Auction Services elect to use it?

A:

This year, for the first time, we are making the proxy materials available to stockholders electronically via the Internet under the Notice and Access regulations of the SEC. Most of our stockholders will receive a Notice of Electronic Availability ("Notice") in lieu of receiving a full set proxy materials in the mail. The Notice includes information on how to access and review the proxy materials, and how to vote, via the Internet. We believe this method of delivery will decrease costs, expedite distribution of proxy materials to you, and reduce our impact on the environment. Stockholders who receive a Notice but would like to receive a printed copy of the proxy materials in the mail should follow the instructions in the Notice for requesting such materials.

Q:

How can I obtain a copy of KAR Auction Services' Annual Report on Form 10-K?

A:

Copies of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the SEC, are available to stockholders free of charge on KAR Auction Services' website at www.karauctionservices.com or by writing to KAR Auction Services, Inc., Investor Relations, 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032.

Q:

Where can I find the voting results of the annual meeting?

A:

KAR Auction Services will announce preliminary voting results at the annual meeting and publish preliminary, or final results if available, in a Current Report on Form 8-K within four business days of the annual meeting.

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ELECTION OF DIRECTORS

PROPOSAL NO. 1

Directors Elected Annually

Our Board of Directors has nominated the tennine individuals named below to stand for election to the Board of Directors at the annual meeting. Messrs. Ament, Finlayson, Goldberg, Moore, O'Brien and Ward,Mr. Formanek, who currently serveserves on our Board of Directors, areis not standing for re-election at the annual meeting. KAR Auction Services'In connection with Mr. Formanek's retirement from the Board of Directors, the Board of Directors has approved by resolution to decrease of the size of the Board of Directors from ten directors to nine directors effective at the annual meeting. The Company's directors are elected each year by the stockholders at the annual meeting. We do not have a staggered or classified board. Each director's term will last until the 20152017 annual meeting of stockholders and until such director's successor is duly elected and qualified, or such director's earlier death, resignation or removal. Directors are elected byEach director nominee must receive the affirmative vote of a pluralitymajority of the votes cast in the election of directors at the annual meeting.meeting to be elected (i.e., the number of shares voted "FOR" a director nominee must exceed the number of votes cast "AGAINST" such nominee).

Director Independence

The Board of Directors is responsible for determining the independence of our directors. Under the NYSE listing standards, a director qualifies as independent if the Board of Directors affirmatively determines that the director has no material relationship with us. While the focus of the inquiry is independence from management, the Board is required to broadly consider all relevant facts and circumstances in making an independence determination. Based upon its evaluation, our Board has affirmatively determined that the following directors and director nominees meet the standards of "independence" established by the NYSE: David J. Ament, Ryan M. Birtwell,Todd F. Bourell, Donna R. Ecton, Robert M. Finlayson, Peter R. Formanek, Michael B. Goldberg, Mark E. Hill, J. Mark Howell, Lynn Jolliffe, Michael T. Kestner, John P. Larson Church M. Moore,and Stephen E. SmithSmith. James P. Hallett, our Chief Executive Officer and Jonathan P. Ward. Brian T. Clingen, our Chairman of the Board, James P. Hallett, our CEO, and Thomas C. O'Brien, CEO of IAA, areis not an independent directors.

director.
Board Nominations and Director Nomination Process

The Board of Directors is responsible for nominating members for election to the Board of Directors and for filling vacancies on the Board of Directors that may occur between the annual meetings of stockholders. The Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the Board of Directors for board membership. When formulating its Board of Directors membership recommendations, the Nominating and Corporate Governance Committee may also consider advice and recommendations from others, including stockholders, as it deems appropriate.

Board candidates also are selected based upon various criteria including experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board of Directors. Board members are expected to prepare for, attend and participate in all Board of Directors and applicable committee meetings and the Company's annual meetings of stockholders.

In accordance with its charter, the Board of Directors also considers candidates for election as a director of the Company recommended by any stockholder, provided that the recommending stockholder follows the procedures set forth in Section 5 of the Company's Second Amended and Restated By-Laws for nominations by stockholders of persons to serve as directors, including the requirements of timely notice and certain information to be included in such notice. The Board of Directors generally evaluates such candidates in the same manner by which it evaluates other director candidates considered by the Board of Directors.

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An employment agreement entered into on February 27, 2012, between the Company and James P. Hallett, the Company's CEO and Chairman of the Board, provides that Mr. Hallett shall be entitled to serve as a member of the Board of Directors for so long as the employment agreement is in effect.

Diversity

The Nominating and Corporate Governance Committee and the Board of Directors believe that diversity along multiple dimensions, including opinions, skills, perspectives, personal and professional experiences and other differentiating characteristics, is an important element of its nomination recommendations. The Nominating and Corporate Governance Committee has not identified any specific minimum qualifications which must be met for a person to be considered as a candidate for director. However, Board candidates are selected based upon various criteria including experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board of Directors. Although the Board of Directors does not have a formal diversity policy, the Nominating and Corporate Governance Committee and Board of Directors review these factors, including diversity, in considering candidates for board membership.

Information Regarding the Nominees for Election to the Board of Directors

The following information is furnished with respect to each nominee for election as a director. SevenAll of the nominees are currently directors. Each of the nominees has consented to being named in this proxy statement and to serve as a director if elected. If a nominee is unavailable to serve as a director, your proxies will have the authority and discretion to vote for another nominee proposed by the Board of Directors or the Board of Directors may reduce the number of directors to be elected at the annual meeting. The ages of the nominees are as of the date of the annual meeting, June 10, 2014.8, 2016.

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Todd F. Bourell

Skills and Qualifications

​Donna R. Ecton

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Donna R. Ecton

Table of ContentsSkills and Qualifications

​James P. Hallett	​	​                Mr. Hallett, 61, has been a member of the Board of Directors since April 2007 and has been our Chief Executive Officer since September 2009.10
		Mr. Hallett served as President and Chief Executive Officer of ADESA from April 2007 to September 2009. Mr. Hallett served as: Executive Vice President of ADESA, Inc. from May 2004 to May 2005; President of ADESA Corporation, LLC from March 2004 to May 2005; President of ADESA Corporation between August 1996 and October 2001 and again between January 2003 and March 2004; Chief Executive Officer of ADESA Corporation from August 1996 to July 2003; ADESA Corporation's Chairman from October 2001 to July 2003; Chairman, President and Chief Executive Officer of ALLETE Automotive Services, Inc. from January 2001 to January 2003 and Executive Vice President from August 1996 to May 2004. Mr. Hallett left ADESA in May 2005 and thereafter served as President of the Columbus Fair Auto Auction until April 2007.
		Mr. Hallett is qualified to serve on the Board of Directors due to his significant business leadership experience and extensive knowledge of the automotive auction industry.

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James P. Hallett

Skills and Qualifications

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Mark E. Hill

Skills and Qualifications

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J. Mark Howell

Skills and Qualifications

​Lynn Jolliffe

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​                Ms. Jolliffe, 62, is a nominee for director.13

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Lynn Jolliffe

Skills and Qualifications

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Michael T. Kestner

Michael T. Kestner		Independent Director Mr. Kestner, 59, has been a member of our Board of Directors since December 2013. Mr. Kestner serves on our 2013 Age: 62 Current Board Committees: Audit Committee.Committee (Chair) and Risk Committee
		Mr. Kestner has served asCareer Highlights • Consultant in the building products and automotive industry since December 2015. • Chief Financial Officer of Building Materials Holding Corporation, a building products company, sincefrom August 2013. He previously was a partner2013 to December 2015. • Partner in FocusCFO, LLC, a consulting firm providing part-time CFO services, from April 2012 to August 2013 and served as the 2013. • Executive Vice President, Chief Financial Officer and a director of Hilite International, Inc., an automotive supplier of powertrain parts, from October 1998 to July 2011, and 2011. • Chief Financial Officer of Sinter Metals, Inc., a supplier of metal power precision components, from 1995 to 1998. Prior to that, he served • Served in various capacities at Banc One Capital Partners, and Wolfensohn Ventures LP and as a senior audit manager at KPMG LLP.
		Mr. Kestner is qualified to serve on the Board of Directors and the Audit Committee as a result of his extensive experience in financial analysis and financial statement preparation, as well has his management experience in the automotive industry.
• Graduated from Southeast Missouri State University.

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​John P. Larson

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John P. Larson

Skills and Qualifications

​Stephen E. Smith

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Stephen E. Smith

Skills and Qualifications

KAR AUCTION SERVICES' BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE ELECTION OF THE FOREGOING TEN NOMINEES
TO THE BOARD OF DIRECTORS.

PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "FOR" THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED IN THIS
PROXY STATEMENT AND THE PROXY CARD UNLESS STOCKHOLDERS SPECIFY A
CONTRARY VOTE.

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BOARD OF DIRECTORS STRUCTURE AND CORPORATE GOVERNANCE

Role of the Board of Directors

The Board of Directors, among other things, establishes the Company's overall corporate policies, evaluatesoversees the Company's Chief Executive Officer and other senior management in the senior leadership teamcompetent and oversees senior management.ethical operation of the Company and assures that the long-term interests of the stockholders are being served. The BoardCompany's Corporate Governance Guidelines are available on our website atwww.karauctionservices.com on the "Investor Relations" page under the link "Corporate Governance." The information on our website is not part of Directors also overseesthis proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the Securities and Exchange Commission (the "SEC").

Neither the Company's business strategy and planning, as well as the performance of management in executing the Company's business strategy, assessing and managing risks and managing the Company's day-to-day operations.

Board Leadership

        Currently, KAR Auction Services separates the roles of Chairman of the Board of Directors and Chief Executive Officer. Separating these roles allows our Chief Executive Officer to focus on the day-to-day management of our business and our Chairman of the Board of Directors to lead the Board of Directors and focus on providing advice and general oversight of management. Given the time and effort that is required of each of these positions, the Company currently believes it is best to separate these roles. However, neither the Company'sSecond Amended and Restated By-Laws nor the Company's Corporate Governance Guidelines requires that the Company separate thesethe roles of Chairman of the Board and Chief Executive Officer, and the Board of Directors does not have a policy on whether the same person should serve as both the Chief Executive Officer and Chairman of the Board of Directors, or if the roles must remain separate. The Board of Directors believes that it should have the flexibility to make these determinations from time to time in the way that it believes best to provide appropriate leadership for the Company under then-existing circumstances.

At present, the Board of Directors Meetingshas chosen to combine the positions of Chief Executive Officer and Attendance
Chairman of the Board and to appoint a Lead Independent Director. Our Board of Directors believes that having the same person serve in the roles of Chairman of the Board and Chief Executive Officer is appropriate for the Company at this time, as it fosters clear accountability, effective decision making and alignment on corporate strategy. Meanwhile, the appointment of a Lead Independent Director ensures that the Company benefits from effective oversight by its independent directors.

In connection with the appointment of a Lead Independent Director, the Board of Directors adopted a Lead Independent Director Charter, which sets forth a clear mandate and significant authority and responsibilities, including:

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In 2013,2015, the Board of Directors maintained three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. In addition, the Board of Directors established a Risk Committee in July 2015. Each of our committees operates pursuant to a written charter. Copies of the committee charters, other than the Risk Committee Charter, are available on KAR Auction Services' website atwww.karauctionservices.com on the "Investor Relations" page under the link "Corporate Governance." The information on our website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC. The following table sets forth the current membership of each committee:

Name		Audit Committee		Nominating and Corporate Governance Committee		Compensation Committee		Risk Committee
Todd F. Bourell				X
Donna R. Ecton		X		​		Chair		​
Peter R. Formanek				X
James P. Hallett*
Mark E. Hill				Chair				X
J. Mark Howell		​		​		X		Chair
Lynn Jolliffe		X				X
Michael T. Kestner		Chair		​		​		X
John P. Larson**						X		X
Stephen E. Smith		X		X		​		​

*Chief Executive Officer and Chairman of the Board
**Lead Independent Director

A description of each Board committee is set forth below.

Audit Committee.Committee

Meetings Held in 2015: Five

Primary Responsibilities:    Our Audit Committee assists the Board of Directors in its oversight of the integrity of our financial statements, our independent registered public accounting firm's qualifications and independence and the performance of our independent registered public accounting firm. The Audit Committee reviews the audit plans and findings of our independent registered public accounting firm and our internal audit team and tracks management's corrective action plans where necessary; reviews our financial statements, including any significant financial items and changes in accounting policies or practices, with our senior management and independent registered public accounting firm; reviews our financial risk and control procedures, compliance programs and significant tax, legal and regulatory matters; and has the sole discretion to appoint annually our independent registered public accounting firm, evaluate its independence and performance and set clear hiring policies for employees or former employees of the independent registered public accounting firm. The Audit Committee held six meetings during 2013.

Independence:    Each of Messrs. Finlayson, Formanek, Kestner and Ward, who comprise the Audit Committee, areSmith and Mmes. Ecton and Jolliffe is "financially literate" under the rules of the New York Stock Exchange (the "NYSE").

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Mr. Finlayson serves as Chairman of the Audit CommitteeNYSE, and each of Messrs. Finlayson, FormanekMr. Kestner and Kestner haveMs. Ecton has been designated as an "audit committee financial expert" as that term is defined by the SEC. In addition, the Board of Directors has determined that each of the current members of the Audit Committee meets the standards of "independence"

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established by the NYSE and is "independent" under the independence standards for audit committee members adopted by the SEC. If all of our director nominees are elected at

Committee Composition Following the Annual Meeting:    Following the annual meeting, we expect to appoint Messrs. Kestner, Larson and Smith and Ms. Jolliffe as members ofthat the Audit Committee followingwill be comprised of Donna R. Ecton, J. Mark Howell, Michael T. Kestner and Stephen E. Smith, with Mr. Kestner serving as the annual meeting.Chairman. Mr. Howell has been designated as an "audit committee financial expert" as that term is defined by the SEC.

Compensation Committee.Committee

Meetings Held in 2015: Eight

Primary Responsibilities:    The Compensation Committee reviews and recommends policies relating to compensation and benefits of our officers and employees. The Compensation Committee establishes, reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and approves the compensation of these officers based on such evaluations. The Compensation Committee also administers the issuance of stock optionsequity and other awards under our equity plans. The Compensation Committee held 11 meetings during 2013. The Compensation Committee is currently comprised of Messrs. Formanek and Moore and Ms. Ecton. Mr. Moore serves as Chairman of the Compensation Committee. Mr. Clingen, Sanjeev Mehra and Gregory P. Spivy served on the Compensation Committee during a portion of 2013.

Independence:    All of the current and former members of the Compensation Committee are or were during their tenure on the committee, independent under the NYSE rules (including the new enhanced independence requirements for Compensation Committee members), except for Mr. Clingen. If all of our director nominees are elected at.

Committee Composition Following the Annual Meeting:    Following the annual meeting, we expect to appoint Messrs. Formanek and Larson, Ms. Ecton and Ms. Jolliffe as members ofthat the Compensation Committee followingwill be comprised of Todd F. Bourell, Donna R. Ecton, Lynn Jolliffe and John P. Larson, with Ms. Ecton serving as the annual meeting.Chairman.

        The Compensation Committee retained ClearBridge Compensation Group ("ClearBridge") as its independent compensation consultant in 2013. During 2013, ClearBridge provided advice to the Compensation Committee with respect to the assessment of the Company's executive compensation practices, evaluation of long-term incentive compensation practices, designing new long-term equity awards, and related compensation matters. The Compensation Committee has reviewed the independence of ClearBridge in light of SEC rules and NYSE listing standards regarding compensation consultants and has concluded that ClearBridge's work for the Compensation Committee does not raise any conflict of interest.

Nominating and Corporate Governance Committee.Committee

Meetings Held in 2015: Four

Primary Responsibilities:    The Nominating and Corporate Governance Committee is responsible for making recommendations to the Board of Directors regarding candidates for directorships and the size and composition of the Board of Directors. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our Corporate Governance Guidelines and reporting and making recommendations to the Board of Directors concerning governance matters. The Nominating and Corporate Governance Committee held four meetings during 2013. The Nominating and Corporate Governance Committee is comprised of Messrs. Birtwell, Goldberg, Moore and Ward. Mr. Birtwell serves as Chairman of the Nominating and Corporate Governance Committee. Kelly J. Barlow and Mr. Mehra served on the Nominating and Corporate Governance Committee during 2013.

Independence:    All of the current and former members of the Nominating and Corporate Governance Committee are, or were during their tenure on the committee, independent under the NYSE rules. If all of our director nominees are elected at

Committee Composition Following the Annual Meeting:    Following the annual meeting, we expect to appoint Messrs. Birtwell, Hill and Smith as members ofthat the Nominating and Corporate Governance Committee followingwill be comprised of Todd F. Bourell, Mark E. Hill, Lynn Jolliffe and Stephen E. Smith, with Mr. Hill serving as the Chairman.

Risk Committee

Meetings Held in 2015: One

Primary Responsibilities:    The Risk Committee was established in July 2015. The Risk Committee assists the Board of Directors in its oversight of (i) the principal business, financial, technology and operational risks, and other material risks and exposures of the Company and (ii) the actions, activities and initiatives of the Company to mitigate such risks and exposures. The Risk Committee also provides oversight for matters specifically relating to cyber security and other risks related to information technology systems and procedures.

Independence:    All of the current members of the Risk Committee are independent under the NYSE rules.

Committee Composition Following the Annual Meeting:    Following the annual meeting.meeting, we expect that the Risk Committee will continue to be comprised of Mark E. Hill, J. Mark Howell, John P. Larson and Michael T. Kestner, with Mr. Howell serving as the Chairman.

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        Each of our committees operates pursuant to a written charter. Copies of the committee charters are available on KAR Auction Services' website at www.karauctionservices.com on the "Investor Relations" page under the link "Corporate Governance." The information on our website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC.

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Board of Directors' Oversight of Risk

BOARD OF DIRECTORS' RISK OVERSIGHT

Our management is responsible for the management and assessment of risk at the Company, including communication of the most material risks to the Board of Directors and its committees. TheOversight of risks to the Company is carried out by the Board of Directors as a whole and by each of its various committees. In July 2015, the Board of Directors formed a new Risk Committee which provides oversight with respect to risk practices implemented by management, except for the oversight of risks that have been specifically delegated to aanother committee of the Board of Directors. Even when the oversight of a specific area of risk has been delegated to aanother committee, the Board of DirectorsRisk Committee may maintain oversight over such risks through the receipt of reports from the committee chairpersons to the Risk Committee. The Board of Directors maintains oversight over such risks through the receipt of reports from the chairperson of the Risk Committee and from the other committees at each regularly scheduled Board of Directors meeting. The Board of DirectorsRisk Committee and other committee reviews occur principally through the receipt of regular reports from management to the Board of Directors on these areas of risk, and discussions with management regarding risk assessment and risk management.

At its regularly scheduled meetings, the Board of Directors generally receives a number of reports which include information relating to risks faced by the Company. The Company's Chief Financial Officer provides a report on the Company's results of operations, its liquidity position, including an analysis of prospective sources and uses of funds, and the implications to the Company's debt covenants and credit rating, if any. The Chief Executive Officer of each primary business unit provides an operational report, which includes information relating to strategic, operational and competitive risks. Finally, the Company's General Counsel provides a privileged report which provides information regarding the status of the Company's material litigation and related matters, if any, including environmental updates and the Company's continuing compliance with applicable laws and regulations. At each regularly scheduled Board of Directors meeting, the Board of Directors also receives reports from the Risk Committee chairperson as well as other committee chairpersons, which may include a discussion of risks initially overseen by the committees for discussion and input from the Board of Directors. As noted above, in addition to these regular reports, the Board of DirectorsRisk Committee receives reports on specific areas of risk from time to time, such as regulatory, cyclical or other risks that are not covered in the regularand reports given to the Board of Directors and described above.on these matters.

The Board of Directors' leadership structure, through its committees, also supports its role in risk oversight. The Audit Committee maintains initial oversight over risks related to the integrity of the Company's financial statements; internal controls over financial reporting and disclosure controls and procedures (including the performance of the Company's internal audit function); the performance of the independent auditor;registered public accounting firm; and oversees the Company's responses to ethics issues arising from the Company's whistleblower hotline. The Company's Compensation Committee maintains oversight over risks related to the Company's compensation practices. The Nominating and Corporate Governance Committee monitors potential risks relating to the effectiveness of the Board of Directors, notably director succession, composition of the Board of Directors and the principal policies that guide the Company's governance. The Risk Committee maintains oversight over risks generally and specifically with respect to cyber security and information technology systems and procedures.

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Corporate Governance Documents

CORPORATE GOVERNANCE DOCUMENTS

The Board of Directors has adopted the following corporate governance documents:

Document		Purpose/Application
Code of Business Conduct and Ethics		Applies to all of the Company's employees, officers and directors, including those officers responsible for financial reporting.
Code of Ethics for Principal Executive and Senior Financial Officers		Applies to the Company's principal executive officer, principal financial and accounting officer and such other persons who are designated by the Board of Directors.
Corporate Governance Guidelines		Contains general principles regarding the functions of the Board of Directors and its committees.
Committee Charters		Applies to the following Board committees, as applicable: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee and Risk Committee.
Lead Independent Director Charter		Sets forth a clear mandate and significant authority and responsibilities for the Lead Independent Director.

We expect that any amendments to the codes of ethics, or any waivers of their requirements for executive officers and directors, will be disclosed on the Company's website. The foregoing documents are available atwww.karauctionservices.com under on the "Investor Relations" link onpage under the "Corporate Governance" pagelink and in print to any stockholder who requests them. Requests should be made to KAR Auction Services, Inc., Investor Relations, 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032. The information on our website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC.

Cessation of "Controlled Company" Status

        At the time of our initial public offering, we qualified as a "controlled company" within the meaning of the NYSE corporate governance standards, as KAR LLC controlled a majority of the voting power of our outstanding common stock. As of June 6, 2013, KAR LLC ceased to hold a majority of our outstanding common stock and, as of the date of this proxy statement, does not hold any shares of our common stock. As a controlled company, we were exempt from compliance with certain NYSE corporate governance standards, including (i) the requirement that a majority of the Board of Directors consist of independent directors; (ii) the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors; and (iii) the requirement that we have a compensation committee that is composed entirely of independent directors.

        The NYSE listing rules provide that, to the extent a controlled company ceases to qualify as such, it is required to comply with the corporate governance requirements from which it was previously exempt as follows:

•

The company must satisfy the majority independent board requirement within one year of the date its status changed; and



•

The company must have at least one independent member on its nominating committee and at least one independent member on its compensation committee by the date its status changed, at

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least a majority of independent members on each committee within 90 days of the date its status changed and fully independent committees within one year of the date its status changed.

        As of the date of this proxy statement, ten of our 13 directors are independent under NYSE standards, and each of our committees is comprised entirely of independent directors. In addition, eight of our ten nominees are independent.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2013,2015, Messrs. Clingen, Formanek, Mehra, MooreHowell and SpivyLarson and Ms.Mmes. Ecton and Jolliffe served as members of the Compensation Committee. None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or our Compensation Committee. None of the individuals serving as members of the Compensation Committee during 2013 is2015 are now or waswere previously an officer or employee of the Company, other than Mr. ClingenHowell who isserved as the Vice President and Corporate Controller of ADESA, Inc. from August 1992 to July 1994. Our Board has affirmatively determined that Mr. Howell meets the standards of "independence" established by the NYSE.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Any interested parties desiring to communicate with the Chairman of the Board of Directors or any of the independent directors regarding the Company may directly contact such directors by delivering such correspondence to the Company's General Counsel at KAR Auction Services, Inc., 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032.

The Audit Committee of the Board of Directors has established procedures for employees, stockholders and others to submit confidential and anonymous reports regarding accounting, internal accounting controls, auditing or any other matters.

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EXECUTIVE SESSIONS

The independent directors of the Company meet in executive session at every regularly scheduled Board of Directors meetings. The Company's Corporate Governance Guidelines state that the Chairman of the Board of Directors, if an independent director, or the Lead Independent Director shall preside at such executive sessions, or in such director's absence, another independent director designated by the Chairman of the Board of Directors or the Lead Independent Director, as applicable, shall preside at such executive sessions. Currently, Mr. Larson, our Lead Independent Director, presides at the executive sessions of our independent directors.

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DIRECTOR COMPENSATION

We use a combination of cash and stock-based incentive compensation to attract and retain independent, qualified candidates to serve on the Board of Directors. The Board of Directors makes all director compensation determinations after considering the recommendations of the Nominating and Corporate Governance Committee. For 2015, the Nominating and Corporate Governance Committee retained Semler Brossy as its independent compensation consultant.

In setting director compensation, we consider market comparison studies and other data obtained from Semler Brossy, the responsibilities of directors generally including committee chairs, the significant amount of time that directors expend in fulfilling their duties, and the skill level we require of members of our Board of Directors. Directors who also serve as employees of the Company do not receive payment for services as directors.

CASH AND STOCK RETAINERS

Directors who served for the entirety of 2015 received:

Components of Director Compensation Program For 2015 Service		Value of Cash Payment/Award		Form of Payment
​	​	​	​	​
Annual Cash Retainer(1)		$75,000		Cash; May elect to receive annual cash retainer in common stock
Annual Stock Retainer(2)		$100,000		Restricted Stock
Lead Independent Director Retainer		$30,000		Cash
Audit and Compensation Committee Chair Fee(3)		$20,000		Cash
Nominating and Corporate Governance Committee Chair Fee		$10,000		Cash
Risk Committee Chair Fee(4)		—		Cash

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(1)

One-fourth of the annual cash retainer is paid at the end of each quarter, provided that the director served as a director in such fiscal quarter. The annual cash retainer has been increased to $85,000 for 2016.

(2)

Pursuant to our Policy on Granting Equity Awards, unless specifically provided otherwise by the Compensation Committee or the Board of Directors, annual grants for directors are effective on the date of the annual meeting at which the director was elected or re-elected. One-fourth of the annual restricted stock grant vests quarterly following the date of the grant. The number of shares of our common stock received is based on the value of the shares on the date of the restricted stock grant. The annual stock retainer has been increased to $115,000 for 2016.

(3)

The Chairman of the Compensation Committee's cash retainer was increased to $20,000 effective July 29, 2015.

(4)

For 2016, the Chairman of our Risk Committee will receive a cash retainer of $10,000.

All of our directors are reimbursed for reasonable expenses incurred in connection with attending Board of Directors meetings, committee meetings and Board education events.

For any director who started after the beginning of the year, became a Committee Chair after the beginning of the year or retired during the year, relevant compensation was prorated according to the number of months during which he or she served in that position during that year.

DIRECTORS DEFERRED COMPENSATION PLAN

Our Board of Directors adopted the KAR Auction Services, Inc. Directors Deferred Compensation Plan (the "Director Deferred Compensation Plan") in December 2009. Pursuant to the terms of the Director Deferred

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Compensation Plan, each non-employee director may elect to defer the receipt of his or her cash director fees into a pre-tax interest-bearing deferred compensation account, which account accrues interest as described in the Director Deferred Compensation Plan. Amounts under the Director Deferred Compensation Plan may also be invested in the same investment choices as are available under our 401(k) plan. Directors also may choose to receive all or a portion of their annual stock retainer in the form of a deferred share account. The plan provides that the amount of cash in a director's deferred cash account, plus a number of shares of common stock equal to the number of shares in the director's deferred share account, will be delivered to a director in installments over a specified period or within 60 days following the date of the director's departure from the Board of Directors, with cash being paid in lieu of any fractional shares.

DIRECTOR STOCK OWNERSHIP AND HOLDING GUIDELINES

The Company's non-employee directors are subject to the Company's Chief Executive Officer from April 2007director stock ownership and holding guidelines. The stock holding guideline requires each non-employee director to September 2009. See "Certain Related Party Relationships"hold any shares of the Company's common stock granted after January 1, 2014 for at least four years, subject to certain exceptions approved by the Nominating and Corporate Governance Committee. All shares granted on and after January 1, 2014 must be held for six months after service as a descriptiondirector has ended with the Company.

The stock ownership guidelines, which were adopted in 2015, require each non-employee director to own a minimum of certain relationships betweenthree times his or her annual cash retainer amount in shares of Company stock.

DIRECTOR COMPENSATION PAID IN 2015

The following table provides information regarding the Company and memberscompensation paid to our non-employee directors.

Name		Fees Earned or Paid in Cash(1)		Stock Awards(2)		Total
Ryan M. Birtwell(3)		$35,961		—		$35,961
Todd F. Bourell(4)		$43,269		$100,031		$143,300
Donna R. Ecton(5)		$89,926		$100,031		$189,957
Peter R. Formanek(6)		$78,062		$100,031		$178,093
Mark E. Hill(7)		$80,769		$100,031		$180,800
J. Mark Howell		$75,000		$143,884		$218,884
Lynn Jolliffe		$75,000		$100,031		$175,031
Michael T. Kestner		$95,000		$100,031		$195,031
John P. Larson(8)		$105,000		$100,031		$205,031
Stephen E. Smith		$75,000		$100,031		$175,031

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(1)

The amounts represent the $75,000 annual cash retainer paid to each non-employee director, plus an additional $20,000 paid to the Chairman of the Audit Committee, $15,000 paid to the Chairman of the Compensation Committee (effective July 29, 2015, the retainer was increased to $20,000) and $10,000 paid to the Chairman of the Nominating and Corporate Governance Committee. Amounts are prorated to reflect partial years of service on the Board of Directors. Pursuant to the Director Deferred Compensation Plan, Mr. Kestner and Ms. Jolliffe elected to defer 100% of their annual cash retainer in a deferred account.

(2)

The amounts represent the aggregate grant date fair value, computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("ASC 718"), of shares of restricted stock awarded to each non-employee director as an annual stock retainer. All non-employee directors received 2,620 shares of restricted stock as an annual stock retainer in June 2015. Pursuant to the Director Deferred Compensation Plan, Messrs. Bourell, Hill, Howell, Kestner, Larson and Smith and Mmes. Ecton and Jolliffe each elected to receive 100% of his or their affiliated companies.her annual stock retainer in a deferred share account. Mr. Howell deferred a grant of 1,270 shares ($43,853) on January 2, 2015 which he received as a pro-rata grant as he was appointed to the Board effective as of December 31, 2014.

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(3)

Mr. Birtwell was a director for the period June 12, 2013 to June 3, 2015 and he served as the Chairman of the Nominating and Corporate Governance Committee from December 13, 2013 to June 3, 2015.

(4)

Mr. Bourell was elected to the Board of Directors effective as of June 3, 2015.

(5)

Ms. Ecton became the Chairman of the Compensation Committee effective as of March 13, 2015.

(6)

Mr. Formanek is not standing for re-election at the annual meeting. Mr. Formanek elected to receive his annual cash retainer in shares of the Company's common stock. Mr. Formanek was the Chairman of the Compensation Committee from June 10, 2014 to March 12, 2015.

(7)

Mr. Hill became the Chairman of the Nominating and Corporate Governance Committee effective as of June 3, 2015.

(8)

Mr. Larson was elected Lead Independent Director effective as of January 1, 2015.

Mr. Hallett was not entitled to receive any fees or other compensation for serving as a member of our Board of Directors because he was employed by the Company.

OUTSTANDING DIRECTOR RESTRICTED STOCK AWARDS

The following table sets forth information regarding the number of unvested shares of our common stock held by each non-employee director as of December 31, 2015:

Name		Unvested Shares of Common Stock		Deferred Phantom Shares and Dividend Equivalents(1)
Todd F. Bourell		1,328		2,658
Donna R. Ecton		1,328		7,747
Peter R. Formanek		1,328		—
Mark E. Hill		1,328		5,978
J. Mark Howell		1,328		3,957
Lynn Jolliffe		1,328		5,978
Michael T. Kestner		1,328		6,041
John P. Larson		1,328		5,978
Stephen E. Smith		1,328		7,747

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(1)

This number represents phantom stock and dividend equivalents which are deferred in each director's account pursuant to the Director Deferred Compensation Plan. These shares will be settled for shares of KAR common stock on a one-for-one basis.

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Section 16(a) Beneficial Ownership Reporting Compliance
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BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of April 13, 2016 of: (1) each person or entity who owns of record or beneficially 5% or more of any class of the Company's voting securities of which 137,300,457 shares of common stock were outstanding as of April 13, 2016; (2) each of our directors, director nominees and named executive officers; and (3) all of our directors, director nominees and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge, each stockholder will have sole voting and investment power with respect to the shares indicated as beneficially owned, unless otherwise indicated in a footnote to the following table. The percentage calculations below are based on 137,300,457 shares of common stock outstanding as of April 13, 2016 rather than the percentages set forth in any stockholders' Schedule 13D and Schedule 13G filings. Unless otherwise indicated in a footnote, the business address of each person is our corporate address, c/o KAR Auction Services, Inc. 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032.

		Shares Beneficially Owned
Name of Beneficial Owner		Number of Shares(1)			Percent of Class(2)
5% BENEFICIAL OWNERS		​			​
Wells Fargo & Company(3)			8,986,848			6.5	%
The Vanguard Group(4)		​	9,307,797		​	6.8
NAMED EXECUTIVE OFFICERS, DIRECTORS AND DIRECTOR NOMINEES
Todd F. Bourell		​	2,871		​	*
Donna R. Ecton			8,039			*
Peter R. Formanek		​	38,984		​	*
Donald S. Gottwald(5)			166,039			*
James P. Hallett(5)		​	251,601		​	*
Mark E. Hill			19,743			*
J. Mark Howell		​	4,190		​	*
Lynn Jolliffe			6,242			*
Michael T. Kestner		​	11,378		​	*
John Kett(5)			102,695			*
John P. Larson		​	6,243		​	*
Eric M. Loughmiller(5)			63,457			*
Stephen E. Smith		​	8,038		​	*
Stéphane St-Hilaire(5)			152,286			*
Executive officers, directors and director nominees as a group 22 persons(6)		​	1,764,382		​	1.3	%

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*

Less than one percent

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(1)

The number of shares includes shares of common stock subject to vesting requirements and options exercisable within 60 days of April 13, 2016.

(2)

Shares subject to options exercisable within 60 days of April 13, 2016 are considered outstanding for the purpose of determining the percent of the class held by the holder of such option, but not for the purpose of computing the percentage held by others.

(3)

Based solely on information disclosed in a Schedule 13G filed by Wells Fargo & Company on January 29, 2016. According to this Schedule 13G, Wells Fargo & Company has the sole voting power and sole dispositive power with respect to 267,438 shares, shared voting power with respect to 8,168,434 shares and shared dispositive power with respect to 8,986,848 shares.

(4)

Based solely on information disclosed in a Schedule 13G/A filed by The Vanguard Group on February 10, 2016. According to this Schedule 13G/A, The Vanguard Group has sole voting power with respect to 100,461 shares, sole dispositive power with respect to 9,208,636 shares, shared voting power with respect to 7,300 shares and shared dispositive power with respect to 99,161 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(5)

Includes the following shares of common stock issuable pursuant to options that are exercisable within 60 days of April 13, 2016: Mr. Gottwald, 165,000; Mr. Hallett, 247,202; Mr. Kett, 85,246; Mr. Loughmiller, 48,602; Mr. St-Hilaire, 151,565.

(6)

Includes an aggregate of 1,524,582 shares of common stock issuable pursuant to options that are exercisable within 60 days of April 13, 2016.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires KAR Auction Services' directors and executive officers and persons who own more than 10% of the issued and outstanding shares of the Company's common stock to file reports of initial ownership of common stock and other equity securities and subsequent changes in that ownership with the SEC and the NYSE. Based solely on a review of such reports and written representations from the directors and executive officers, the Company believes that all such filing requirements were met during 2013.2015.

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DIRECTOR COMPENSATION

        We use a combination of cash and stock-based incentive compensation to attract and retain independent, qualified candidates to serve on the Board of Directors. In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties as well as the skill level we require of members of our Board of Directors. As discussed below, we have revised our director compensation program for 2014 in connection with the ongoing transition of our Board of Directors upon KAR LLC losing its director nomination rights pursuant to its divestiture of its holdings of our Company stock in 2013.

Cash and Stock Retainers

        Cash.    Members of the Board of Directors who are not our employees nor employed by Kelso Investment Associates VII, L.P., GS Capital Partners VI, L.P., ValueAct Capital Master Fund, L.P. or Parthenon Investors II, L.P. and their respective affiliates (collectively, the "Former Equity Sponsors"), which, prior to their divestiture of our common stock in 2013, collectively owned through KAR LLC a majority of the common stock of KAR Auction Services, were entitled to receive an annual cash retainer of $50,000 during 2013. Such directors may elect to receive their annual cash retainer in common stock. The Chairperson of the Audit Committee received an additional cash retainer of $10,000 during 2013. One-fourth of the annual cash retainer is paid at the end of each quarter, provided that the director served as a director in such fiscal quarter. All of our directors are reimbursed for reasonable expenses incurred in connection with attending Board of Directors meetings and committee meetings.

        The Company's non-employee director compensation program was revised effective January 1, 2014 to provide for (i) a $75,000 annual cash retainer (increased from $50,000); and (ii) additional

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annual cash retainer amounts of $20,000 for the chair of the Audit Committee; $15,000 for the chair of the Compensation Committee; and $10,000 for the chair of the Nominating and Corporate Governance Committee.

        Stock.    In addition to the annual cash compensation, directors who are not employed by us or the Former Equity Sponsors received an annual stock retainer of $75,000 of our common stock in the form of restricted stock during 2013. Pursuant to our Policy on Granting Equity Awards, unless specifically provided otherwise by the Compensation Committee or the Board of Directors, annual grants for directors are effective on the date of the annual meeting at which the director was elected or re-elected. One-fourth of the annual restricted stock grant vests quarterly following the date of the grant. The number of shares of our common stock received is based on the value of the shares on the date of the restricted stock grant.

        The Company's non-employee director compensation program was revised effective January 1, 2014 to provide for a $100,000 annual restricted stock retainer (increased from $75,000), which is normally granted on the date of the annual meeting of stockholders and vests quarterly over a one-year period. On January 2, 2014, Ms. Ecton and Messrs. Clingen, Kestner and Smith each received pro-rata restricted stock grants worth approximately $50,000 and Messrs. Finlayson, Formanek and Ward received a pro-rata grant worth approximately $12,500 to reflect the increased stock retainer amount for 2014.

Directors Deferred Compensation Plan

        Our Board of Directors adopted the KAR Auction Services, Inc. Directors Deferred Compensation Plan (the "Director Deferred Compensation Plan") in December 2009. Pursuant to the terms of the Director Deferred Compensation Plan, each director who is not employed by us or the Former Equity Sponsors may elect to defer the receipt of his cash director fees into a pre-tax interest-bearing deferred compensation account, which account accrues interest as described in the Director Deferred Compensation Plan. Directors also may choose to receive all or a portion of their annual stock retainer in the form of a deferred share account. The plan provides that the amount of cash in a director's deferred cash account, plus a number of shares of common stock equal to the number of shares in the director's deferred share account, will be delivered to a director within 60 days following the date of the director's departure from the Board of Directors, with cash being paid in lieu of any fractional shares.

Director Compensation Paid in 2013

        The following table provides information regarding the compensation paid to our directors.

Name(1)		Fees Earned or Paid in Cash(2)			Stock Awards(3)			Total
Donna R. Ecton(4)		$	2,174			—		$	2,174
Robert M. Finlayson		$	60,000		$	75,018		$	135,018
Peter R. Formanek		$	50,000	(5)	$	75,018		$	125,018
Michael T. Kestner(6)		$	2,174			—		$	2,174
Stephen E. Smith(7)		$	2,174			—		$	2,174
Jonathan P. Ward		$	50,000		$	75,018	(8)	$	125,018

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(1)

Mr. Clingen is not included in the table. He received compensation as an executive officer of the Company in 2013 but was not a named executive officer. Mr. Clingen did not receive any additional compensation for services provided as Chairman of the Board

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in 2013. Effective January 1, 2014, Mr. Clingen is no longer an executive officer of the Company and will instead be compensated as our non-executive Chairman.

(2)

The amounts represent the $50,000 annual cash retainer paid to each director who is not employed by the Company or one of our Former Equity Sponsors, plus an additional $10,000 paid to Mr. Finlayson for serving as the Chairman of the Audit Committee. Amounts reported for Ms. Ecton and Messrs. Kestner and Smith are prorated to reflect amounts earned during 2013.

(3)

The amounts represent the aggregate grant date fair value, computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("ASC 718"), of 3,358 shares of restricted stock awarded to each director who is not employed by the Company or one of our Former Equity Sponsors as an annual stock retainer for the period of June 2013 through June 2014. Ms. Ecton and Messrs. Kestner and Smith were not eligible to receive such awards because they were elected to the Board of Directors on December 16, 2013, however, these individuals received prorated restricted stock grants in January 2014 as described above in "Cash and Stock Retainers."

(4)

Ms. Ecton was elected to the Board of Directors effective as of December 16, 2013.

(5)

Mr. Formanek elected to receive his annual cash retainer in shares of the Company's common stock.

(6)

Mr. Kestner was elected to the Board of Directors effective as of December 16, 2013.

(7)

Mr. Smith was elected to the Board of Directors effective as of December 16, 2013.

(8)

Mr. Ward elected to receive his annual stock retainer in a deferred share account pursuant to the Director Deferred Compensation Plan.

        Directors that are employed by the Company are not (or, prior to the November 13, 2013 Exit Event (as defined below), those employed by the Former Equity Sponsors were not) entitled to receive any fees for serving as a member of our Board of Directors. Mr. Clingen serves as Chairman of the Board of Directors, which was also an executive officer position, during the last fiscal year and received a base salary and a cash bonus payment for that year solely resulting from holding such officer position. Mr. Clingen is not a named executive officer and did not receive any additional compensation for services provided as Chairman of the Board in 2013. Mr. Clingen's compensation in 2013 as an executive officer was approved by the Compensation Committee of the Board of Directors. Effective January 1, 2014, Mr. Clingen is no longer an executive officer of the Company and will no longer be eligible to receive a base salary and cash bonus and will instead be compensated as our non-executive Chairman solely through our director compensation program, as described above.

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Director Stock Ownership

        The following table sets forth information regarding the number of vested and unvested shares of our common stock held by each director who was not employed by the Company or one of our Former Equity Sponsors as of December 31, 2013:

Name		Shares of Common Stock
Robert M. Finlayson			19,595	(1)
Peter R. Formanek			27,399	(1)
Jonathan P. Ward			19,942	(1)(2)

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(1)

3,358 of these shares are shares of restricted stock that were granted pursuant to the Omnibus Plan and one-fourth of the grant vests every three months from the date of grant, June 12, 2013, and such grant is subject to forfeiture until vested.

(2)

12,370 of these shares are phantom stock and dividend equivalents which are deferred in Mr. Ward's account in the Director Deferred Compensation Plan and will be settled for shares of KAR common stock on a one-for-one basis.

AMENDMENT AND RESTATEMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION: PROPOSAL NO. 2

Director Stock Ownership and Holding Guidelines

        The Company's non-employee directors are subject to the Company's stock ownership and holding guidelines, which require each non-employee director to hold any shares of the Company's common stock granted after January 1, 2014 for at least four years, subject to certain exceptions approved by the Compensation Committee.

PROPOSAL

Communications with the Board of Directors

        Any interested parties desiring to communicate with the Chairman of the Board of Directors or any of the independent directors regarding the Company may directly contact such directors by delivering such correspondence to the Company's General Counsel at KAR Auction Services, Inc., 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032.

The Audit Committee of the Board of Directors has established procedures for employees,approved an amendment and restatement of our Amended and Restated Certificate of Incorporation to provide that the Company's stockholders may remove any director from office, with or without cause, and others to submit confidential and anonymous reports regarding accounting, internal accounting controls, auditing or any other matters.

Executive Sessions

ministerial changes. The independent directorsfull text of the Company meet in executive session at regularly scheduledproposed Second Amended and Restated Certificate of Incorporation is included asAnnex I hereto and has been marked to show changes from the current Amended and Restated Certificate of Incorporation.

Removal of Directors With or Without Cause

Article Fifth, Section (d) of the Company's Amended and Restated Certificate of Incorporation currently provides that the Company's stockholders may remove directors from office only for cause. The Delaware General Corporation Law, as applicable to corporations without a classified Board of Directors, meetings, if needed,requires that stockholders be afforded the right to remove directors from office with or without cause. The proposed amendment to the Company's Amended and Restated Certificate of Incorporation is intended to conform the membersCompany's Amended and Restated Certificate of Incorporation to the Audit Committee generally meet in executive session at each regularly scheduled, in person Audit Committee meeting. requirements of Delaware law.

Ministerial Changes

The Company's Corporate Governance Guidelines stateAmended and Restated Certificate of Incorporation contains a number of references to the Company's former private equity sponsors and a completed stock split that are no longer applicable to the ChairmanCompany. The Second Amended and Restated Certificate of Incorporation will delete these erroneous references and include the Boardre-numbering and lettering of Directors, if an independent director, or the lead independent director shall preside at such executive sessions, or in such director's absence, another independent director designated by the Chairman of the Board of Directors or the lead independent director, as applicable, shall preside at such executive sessions. Our Chairman of the Board is not an independent director and we currentlyremaining provisions. We do not have a designated lead director. Until such time asbelieve that any of these ministerial changes would materially affect the Boardrights or preferences of Directors appoints a lead independent director,our stockholders. We believe that these changes are advisable in order to simplify the Amended and Restated Certificate of Incorporation for all executive sessions of the non-employee or independentour stockholders, directors, the independent directors will rotate as the presiding director.officers, employees, agents and advisors.

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ADVISORY VOTE TO APPROVE THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS

PROPOSAL NO. 2

        Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, the Board of Directors is providing our stockholders the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC. As approved by its stockholders at the 2011 Annual Meeting and consistent with the Board of Directors' recommendation, the Company submits this proposal for a non-binding vote on executive compensation every three years. The next advisory vote to approve the compensation of our named executive officers is scheduled to occur at the 2017 Annual Meeting.

        As described in more detail under the heading "Executive Compensation—Compensation Discussion and Analysis," we believe that the compensation program for our named executive officers is designed to enhance stockholder value by (i) closely aligning compensation with our performance on both a short-term and long-term basis through the use of annual cash incentive awards and equity awards such as stock options and performance-based restricted stock unit awards; (ii) linking compensation to specific, measurable results; and (iii) attracting and retaining key executive talent in the vehicle remarketing and automotive finance industry. More specifically, we believe that each of the compensation programs that we have developed and implemented satisfies one or more of the following specific objectives:

•

motivate and focus our executive officers through incentive compensation programs directly tied to our financial results;



•

support a one-company culture and encourage synergies between all business units by aligning compensation with long-term overall Company performance and stockholder value;



•

provide a significant percentage of total compensation through variable pay based on pre-established goals and objectives;



•

enhance our ability to attract and retain skilled and experienced executive officers;



•

align the interests of our executive officers with the interests of our stockholders so that they manage from the perspective of owners with an equity stake in the Company; and



•

provide rewards commensurate with performance and with competitive market practices.

        For these reasons and the others described elsewhere in this proxy statement, the Board of Directors recommends approval of the following non-binding resolution:

RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis section, the compensation tables and any related material disclosed in this proxy statement, is hereby APPROVED.

        The vote is an advisory vote only and is not binding on the Company or the Board of Directors. However, the Compensation Committee will consider, in its discretion, the result of the vote in future compensation decisions for the named executive officers.

KAR AUCTION SERVICES' BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE NON-BINDING RESOLUTION
APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "FOR"
PROPOSAL NO. 2 UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

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APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE KAR AUCTION SERVICES, INC. 2009 OMNIBUS STOCK AND INCENTIVE PLAN

PROPOSAL NO. 3

        We are asking our stockholders to approve the amendment and restatement of the Omnibus Plan, under which we are seeking the approval of additional shares. Approval of this proposal requires the affirmative vote of the majority of shares present in person or represented by proxy at the annual meeting and entitled to vote.

        The following description of the Omnibus Plan is qualified in its entirety by the full text of the Omnibus Plan, which is attached as Appendix A to this proxy statement. Capitalized terms used herein but not otherwise defined shall have the meaning assigned to such terms in the Omnibus Plan, unless the context clearly dictates otherwise.

Purpose

        The purpose of the Omnibus Plan is to provide an additional incentive to participants whose contributions are essential to the growth and success of our business, in order to strengthen the commitment of such persons to the Company, motivate such persons to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated persons whose efforts will result in our long-term growth and profitability.

Description of the Amendments

        As described below, the Omnibus Plan would be amended to, among other things:

•

Add 6,000,000 shares of common stock to be available for issuance under the Omnibus Plan;



•

Extend the expiration date of the Omnibus Plan's term from December 10, 2019 to June 10, 2024;



•

Eliminate liberal share counting provisions for options and share appreciation rights ("SARs");



•

Clarify that the option and SAR repricing prohibitions also applies to the substitution of other awards for and cash buyouts of underwater options;



•

Grant the Committee the power to amend or terminate the Omnibus Plan;



•

Provide that all awards issued under the Omnibus Plan are subject to any compensation recoupment policy adopted by the Company; and



•

Clarify other provisions in the Omnibus Plan.

Eligible Participants

        The employees, directors and independent contractors and consultants of the Company and its affiliates who are chosen by the Committee are eligible to receive awards under the Omnibus Plan. As of March 31, 2014, there were approximately 12,282 employees, 13 directors and 450 independent contractors and consultants of the Company and its affiliates.

Available Shares and Award Limitations

        The aggregate awards granted during any calendar year to any single individual shall not exceed (i) 600,000 shares subject to options or SARs; (ii) 300,000 shares subject to restricted shares or other share-based awards; and (iii) $5,000,000 with respect to cash-based awards. Following the approval of this amendment and restatement of the Omnibus Plan, which seeks to add 6,000,000 shares, the number of shares of our common stock, in the aggregate, which may be issued pursuant to awards

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under the Omnibus Plan will be increased from 6,492,683 to 12,492,683. If the amendment and restatement of the Omnibus Plan is approved by stockholders, the 2,082,560 shares which remained available for issuance after February 28, 2014 would be increased to 8,082,560 shares that would be available for future issuance. Based on historic and projected usage patterns, we expect that, if this proposal is approved by stockholders, the shares under the Omnibus Plan will be exhausted for purposes of granting awards under the Omnibus Plan within the next three to four years. As of the close of the regular trading session on April 16, 2014, the Company's stock price was $30.18 per share.

        Our three year average adjusted equity plan burn rate for 2011 through 2013 was 0.64% under the model used by Institutional Shareholder Services (ISS), which treats each full value share awarded as equivalent to 2.5 option shares. In addition, our equity plan overhang (or potential dilution) as of February 28, 2014 (prior to our additional share request) was approximately 6.8% on a fully-diluted basis and with the additional requested shares, if approved, would be approximately 10.5%. We are defining and calculating equity plan overhang to be (i) the total of all shares subject to outstanding awards PLUS shares remaining available for future issuance, including any additional share requests, DIVIDED BY (ii) our total issued and outstanding shares PLUS the total of all shares subject to outstanding awards PLUS shares remaining available for future issuance, including any share requests.

Awards

        Under the Omnibus Plan, the Committee is authorized to grant stock options, SARs, restricted shares and other share-based awards or cash-based awards, each of which may be made subject to the achievement of specified Performance Goals established by the Committee.

        Stock Options.    Nonqualified stock options, which are not intended to qualify for special tax treatment under the Code, may be granted under the Omnibus Plan. The Committee is authorized to set the terms of an option, including exercise price and the time and method of exercise, but is prohibited from repricing options without stockholder approval. The exercise price applicable to option awards must be at least equal to the fair market value of a share of the Company's common stock on the applicable grant date, generally determined based on the closing sale price on the New York Stock Exchange on the grant date.

        SARs.    A SAR entitles the holder to receive an amount equal to the difference between the fair market value of a specified number of shares on the exercise date and the exercise price of the SAR set by the Committee as of the date of grant. The exercise price applicable to SAR awards must be at least equal to the fair market value of a share of the Company's common stock on the applicable grant date, generally determined based on the closing sale price on the New York Stock Exchange on the grant date. The Committee is authorized to set the terms of the SARs, including the time and method of exercise, but is prohibited from repricing SARs without stockholder approval.

        Restricted Shares.    Awards of restricted shares are subject to restrictions on transferability and such other restrictions, if any, as the Committee may impose on the date of grant or thereafter. Such restrictions may lapse under circumstances as the Committee may determine, such as completion of a specified period of continued employment or upon the achievement of performance criteria. Except as otherwise determined by the Committee, eligible participants, who are granted restricted shares will have all of the rights of a stockholder with respect to such restricted shares during any period of restriction.

        Other Share-Based Awards or Cash-Based Awards.    The Committee may also grant rights or other interests that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, our common stock, including, but not limited to, unrestricted shares, restricted stock units, dividend equivalents or performance units, each of which may be subject to the

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attainment of Performance Goals or a period of continued employment or other terms or conditions as permitted under the Omnibus Plan.

Performance Goals

        Awards under the Omnibus Plan to the chief executive officer and the three other most highly compensated officers other than the chief financial officer (the "Covered Employees") may be made subject to the attainment of Performance Goals relating to one or more of the following business criteria within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)"): (i) earnings, including one or more of operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) stock price appreciation (including total stockholder return, on an absolute basis or relative to a peer group or other index selected by the Committee); (x) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xi) implementation or completion of critical projects or processes; (xii) cumulative earnings per share growth; (xiii) operating margin or profit margin; (xiv) cost targets, reductions and savings, productivity and efficiencies; (xv) strategic business criteria, consisting of one or more objectively determinable objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xvi) objectively determinable personal professional objectives, including any of the foregoing Performance Goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and (xvii) any combination of, or a specified increase in, any of the foregoing.

        Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or affiliate thereof, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur). Each of the foregoing Performance Goals shall be subject to certification by the Committee. The Committee has the authority to specify reasonable definitions for any Performance Goals it uses and the definitions may provide for equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any affiliate thereof or the financial statements of the Company or any affiliate thereof, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles (in each case, to the extent not inconsistent with Section 162(m), if applicable).

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Change in Control

        Upon the consummation of a Change in Control, unless otherwise determined by the Administrator or as otherwise specified in an award agreement, all outstanding awards granted under the Omnibus Plan (other than Other Cash-Based Awards granted pursuant to the Company's annual incentive plan or program) will fully vest and become exercisable. With respect to Other Cash-Based Awards granted pursuant to the Company's annual incentive plan or program, such awards shall be paid upon the consummation of a Change in Control and calculated based on the actual performance of the applicable performance goals through the date of the Change in Control, as determined by the Administrator in its discretion, prorated based on the number of days of the annual performance period that have elapsed prior to and including the date of the Change in Control.

Capital Structure Changes

        If the Administrator determines that a share dividend, special dividend (including cash dividends), recapitalization, share split, reverse split, reorganization, merger, consolidation, spin-off, repurchase, share exchange, or other similar corporate transaction affects the shares such that an adjustment is appropriate in order to prevent the dilution of the rights of participants, the Administrator may make such equitable changes as it deems appropriate.

Amendment and Termination

        The Omnibus Plan may be amended, suspended or terminated by the board of directors or the Committee. However, any amendment or modification for which stockholder approval is required will not be effective until such stockholder approval has been obtained. Except as described above in "Capital Structure Changes," the Administrator will not modify any outstanding stock option or SAR in order to specify a lower exercise price or grant price (and will not cancel a stock option or SAR and substitute for it a stock option or SAR with a lower exercise price or grant price), without the approval of the Company's stockholders. In addition, except as described above in "Capital Structure Changes," the Administrator may not cancel an outstanding stock option or SAR whose exercise price or grant price is equal to or greater than the current fair market value of a share and substitute for it another award or cash payment without the prior approval of the Company's stockholders.

Effective Date and Term

        The Omnibus Plan originally became effective on December 10, 2009 and, if the amendment and restatement thereof is approved by our stockholders, will be effective as of June 10, 2014 and will terminate as to future awards on June 10, 2024.

Incentive Compensation Recoupment Policy

        The Omnibus Plan and all awards issued thereunder will be subject to any compensation recoupment policy adopted by the Company to comply with applicable laws, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

U.S. Federal Income Tax Considerations

        The following is a brief description of the federal income tax treatment that generally apply to Omnibus Plan awards. The description is based on current federal tax laws, rules and regulations, which are subject to change, and does not purport to be a complete description of the federal income tax aspects of the Omnibus Plan. A participant may also be subject to state and local taxes.

        Nonqualified Stock Options.    The grant of a nonqualified stock option will not result in taxable income to the participant. The participant will realize ordinary income at the time of exercise in an

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amount equal to the excess, if any, of the then fair market value of the stock acquired over the exercise price for those shares, and we will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains or losses, with the basis in such stock equal to the fair market value of the shares at the time of exercise.

        SARs.    The grant of a SAR will not result in taxable income to the participant at the time of the grant. The participant will realize ordinary income at the time of exercise in an amount equal to the amount of cash or the fair market value of the shares paid upon exercise, and we will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of any shares received will be treated as capital gains or losses, with the basis in such stock equal to the fair market value of the shares at the time of exercise.

        Restricted Stock.    A grant of restricted stock will not result in taxable income to the participant at the time of grant, and we will not be entitled to a corresponding deduction, assuming that the shares are subject to transferability restrictions and that certain restrictions on the shares constitute a "substantial risk of forfeiture" for federal income tax purposes. Upon vesting, the holder will realize ordinary income in an amount equal to the then fair market value of the vested shares, and we will be entitled to a corresponding deduction. Gains or losses realized by the participant upon subsequent disposition of such shares will be treated as capital gains or losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting. Dividends paid to the holder of restricted stock during the restricted period also will be compensation income to the participant, and we will be entitled to a corresponding deduction when the dividends no longer are subject to a substantial risk of forfeiture or become transferable. A participant may elect pursuant to Section 83(b) of the Code to have income recognized at the date a restricted stock award is granted and to have the applicable capital gain holding period commence as of that date. In such a case, we will be entitled to a corresponding deduction on the date of grant.

        Other Share-Based Awards—Restricted Stock Units and Performance Units.    A grant of restricted stock units or performance units will not result in taxable income to the participant at the time of grant, and we will not be entitled to a corresponding deduction. Upon vesting and issuance of the underlying shares, the holder will realize ordinary income in an amount equal to the then fair market value of the issued shares, and we will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains or losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting and issuance. Dividend equivalents paid to the holder of restricted stock units during the restricted period also will be compensation income to the participant, and we will be entitled to a corresponding deduction when the dividend equivalents are paid. No election pursuant to Section 83(b) of the Code may be made with respect to restricted stock units and performance units.

        Other Share-Based Awards.    With respect to grants of other share-based awards (other than restricted stock units or performance units), upon payment of cash or the vesting or issuance of the underlying shares, the participant will realize ordinary income in an amount equal to the cash received or the then fair market value of the issued shares, and we will be entitled to a corresponding deduction. Gains or losses realized by the participant upon subsequent disposition of such shares will be treated as capital gains or losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting and issuance.

        Other Cash-Based Awards.    A participant will have taxable compensation equal to the amount of the cash award on the date the award is vested and paid to the participant. The Company will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for U.S. federal income tax purposes.

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        Tax Withholding.    As a condition to the delivery of any shares to the recipient of an award, we may require the recipient to make arrangements for meeting certain tax withholding requirements in connection with the award.

        Section 162(m).    In general, Section 162(m) denies a publicly held corporation a deduction for U.S. federal income tax purposes for compensation in excess of $1,000,000 per year per Covered Employee, subject to certain exceptions. The Omnibus Plan is designed to permit certain awards to be granted as performance compensation awards intended to qualify under the "performance-based compensation" exception to Section 162(m). The Committee generally will attempt to structure awards to preserve federal income tax deductions, but the Committee retains the discretion to approve awards that do not meet the "performance-based compensation" exception to Section 162(m).

        Code Section 409A.    The American Jobs Creation Act of 2004, enacted on October 22, 2004, revised the federal income tax law applicable to certain types of awards that may be granted under the Omnibus Plan. To the extent applicable, it is intended that the Omnibus Plan and any awards made under the Omnibus Plan either be exempt from, or, in the alternative, comply with the provisions of Code Section 409A, including the exceptions for stock rights and short-term deferrals. The Company intends to administer the Omnibus Plan and any awards made thereunder in a manner consistent with the requirements of Code Section 409A.

New Plan Benefits

        The Committee has established the 2014 Annual Incentive Program for the Company's executive officers as a cash-based award under the Omnibus Plan. No decisions have been made regarding the amount and type of other awards that are to be made under the Omnibus Plan to participants in the future. The following table sets forth certain information relating to the amount of the 2014 target bonus that would be payable under the cash-based award to the Company's named executive officers and executive officers and employees. No amounts have been included relating to other awards as the amounts of any such awards are not determinable at this time.

Name and Position		Target Dollar Value
James Hallett		$	900,000
CEO
Eric Loughmiller		$	331,901
CFO
Rebecca Polak		$	273,105
EVP, General Counsel and Secretary
Thomas O'Brien		$	522,037
CEO of IAA
Thomas Caruso		$	318,750
Chief Client Officer
Executive Officers as a Group		$	4,746,861
Non-Executive Directors as a Group			N/A
Non-Executive Officers as a Group		$	33,670,334

KAR AUCTION SERVICES' BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
THE AMENDMENT AND RESTATEMENT OF
THE KAR AUCTION SERVICES, INC. 2009 OMNIBUS STOCK AND INCENTIVE PLAN.

PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "FOR"
PROPOSAL NO. 3 UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

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Equity Compensation Plan Information

        The following table sets forth the aggregate information of our equity compensation plans in effect as of December 31, 2013.

Plan Category		Number of securities to be issued upon exercise of outstanding options, warrants and rights(1)			Weighted- average exercise price of outstanding options, warrants and rights(2)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)(3)
Equity compensation plans approved by security holder(s)			7,741,999		$	12.70			3,703,415
Equity compensation plans not approved by security holders			—			—			—
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Total			7,741,999		$	12.70			3,703,415

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(1)

Includes (a) service options, exit options and PRSUs issued under the Omnibus Plan; (b) service and exit options issued under the KAR Auction Services, Inc. Stock Incentive Plan; and (c) service and exit options carried over from the Axle Holdings, Inc. Stock Incentive Plan at the time of the merger on April 20, 2007. In December 2013, we granted a target amount of 223,120 PRSUs which vest in three years if and to the extent that the Company's total stockholder return relative to that of companies within the S&P 500 Index exceeds certain levels. As such, the target amount of 223,120 PRSUs has been included the table above.

(2)

Awards issued post-merger by the Company have exercise prices ranging from $10.00 to $27.59. Axle Holdings, Inc. options that were carried over at the merger date have exercise prices ranging from $6.41 to $8.52. The weighted-average price in the table above only reflects the weighted-average exercise price of outstanding options. The weighted-average exercise price does not include the PRSUs.

(3)

The number of securities available for future issuance includes (a) 2,935,862 shares of common stock that may be issued under the Omnibus Plan; and (b) 767,553 shares of common stock that may be issued under the KAR Auction Services, Inc. Employee Stock Purchase Plan.

Updated Equity Compensation Plan Information as of February 28, 2014

        As of February 28, 2014, there were 2,082,560 shares remaining available for future issuance under the Omnibus Plan and 8,061,653 shares subject to outstanding awards. Of the 8,061,653 shares subject to outstanding awards, 323,466 were full value awards and 7,738,187 were related to options, with a weighted average exercise price of $14.39 and a weighted average remaining term of 5.6 years.

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM: PROPOSAL NO. 3

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PROPOSAL

RATIFICATION OF INDEPENDENT AUDITORS

PROPOSAL NO. 4

Proposal

The Audit Committee has appointed KPMG LLP ("KPMG") to serve as KAR Auction Services'the Company's independent registered public accounting firm for its fiscal year ending December 31, 2014.2016. The Audit Committee and the Board of Directors seek to have the stockholders ratify the Audit Committee's appointment of KPMG, which has served as KAR Auction Services'the Company's independent registered public accounting firm since 2006. Although KAR Auction Servicesthe Company is not required to seek stockholder approval of this appointment, the Board of Directors believes it to be sound corporate governance to do so. If the appointment of KPMG is not ratified by the stockholders, the Audit Committee will consider the vote of the Company's stockholders and may appoint another independent registered public accounting firm or may decide to maintain its appointment of KPMG. Ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of the majority of shares present in person or represented by proxy at the annual meeting and entitled to vote.

Representatives of KPMG will be present at the annual meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.

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KAR AUCTION SERVICES' BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF KPMG AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2013.Table of Contents

PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "FOR"
PROPOSAL NO. 4 UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

REPORT OF THE AUDIT COMMITTEE

Report of the Audit Committee

The Audit Committee reviewsis composed of four independent directors, each of whom satisfies the Company'sindependence requirement of Rule 10A-3 under the Securities Exchange Act of 1934, as amended. The Audit Committee oversees our financial reporting process on behalf of the Board of Directors. The Audit Committee consists of directors who have been determined byDirectors and serves as the primary communication link between the Board of Directors to beas the representative of our stockholders, the independent of the Company as prescribed by the NYSEauditors, KPMG LLP and other regulators. The Company'sour internal auditors. Our management has the primary responsibility for the financial statements and for the reporting process, including the establishmentsystems of internal control and maintenance offor assessing the systemeffectiveness of internal control over financial reporting. The Company's independent registered public accounting firm is responsible for auditing the financial statements prepared by management, expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, and auditing the Company's internal control over financial reporting and expressing an opinion thereon. In this context, the Audit Committee has met and held discussions with management and KPMG, the Company's independent registered public accounting firm, regarding the fair and complete presentation of the Company's financial statements and the assessment of the Company's internal control over financial reporting.

        The Audit Committee has discussed with KPMG matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA,Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board (the "PCAOB") in Rule 3200T, and has reviewed and discussed KPMG's independence from the Company and its management. As part of that review, the Audit Committee has received the written disclosures and the letter required by applicable requirements of the PCAOB regarding KPMG's communications with the Audit Committee concerning independence, and the Audit Committee has discussed KPMG's independence from the Company. The Audit Committee also has considered whether KPMG's provision of non-audit services to the Company is compatible with the auditor's independence. The Audit Committee has concluded that KPMG is independent from the Company and its management.

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        The Audit Committee meets with the Company's Chief Financial Officer, the Company's Vice President of Internal Audit and representatives of KPMG, in regular and separate, executive sessions, to discuss the audited consolidated financial statements, the evaluations of the Company's internal controls and the overall quality of the Company's financial reporting and compliance programs.

In fulfilling its responsibilities during the fiscal year, the Audit Committee reviewed with management the consolidated financial statements and related financial statement disclosures included in our Quarterly Reports on Form 10-Q and the audited consolidated financial statements and related financial statement disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Also, the Audit Committee reviewed with the independent auditors their judgments as to both the quality and the acceptability of our accounting policies. The Audit Committee's review with the independent auditors included a discussion of other matters required under Auditing Standards promulgated by the Public Company Accounting Oversight Board ("PCAOB"), including PCAOB Auditing Standard No. 16,Communications with Audit Committees. The Audit Committee received the written disclosures from the independent auditors required by the PCAOB Rule Nos. 3524 and 3526 regarding communications with the Audit Committee concerning independence and has discussed those disclosures with the independent auditors. The Audit Committee has also reviewed non-audit services performed by KPMG and considered whether KPMG's provision of non-audit services was compatible with maintaining its independence from the Company.

The Audit Committee discussed with our internal auditors and independent auditors the overall scope and plans for their respective audits and reviewed our plans for compliance with management certification requirements pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee met with the internal auditors and independent auditors, with and without management present, to discuss the results of the auditors' examinations, their evaluations of our internal controls, including a review of the disclosure control process, and the overall quality of our financial reporting. Management represented to the Audit Committee that the Company's consolidated audited financial statements as of and for the fiscal year ended December 31, 2015 were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and the independent auditors. The Audit Committee, or the Chairman of the Audit Committee, also pre-approved all audit and non-audit services provided by the independent auditors during and relating to fiscal year 2015. In reliance on the reviews and discussions referred to above, the Audit Committee has recommended to the Board of Directors and the Board of Directors has approved, that the audited consolidated financial statements be included in the Company'sour Annual Report on Form 10-K for the fiscal year ended December 31, 2013, for filing2015.

The Audit Committee evaluates the performance of the independent auditors each year and determines whether to re-engage the current independent auditors or consider other audit firms. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the independent auditors, along with the SEC.independent auditor's capabilities, technical expertise, and knowledge of our operations and industry. In addition, the Audit Committee reviews with our Chief Financial Officer and our Vice President of Internal Audit, the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and the independent auditors of our internal control over financial reporting and the quality of our financial reporting and the ability of the independent auditors to remain independent. Based on these evaluations, the Audit Committee decided to engage KPMG LLP as our independent auditors for fiscal year 2016. Although the Audit Committee has the sole authority to appoint the independent auditors, the Audit

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Committee has continued its long-standing practice of recommending that the Board ask our stockholders to ratify the appointment of the independent auditors at our annual meeting of stockholders.

The Audit Committee

Robert M. Finlayson (Chairman)
Peter R. Formanek
Michael T. Kestner(Chairman)
Jonathan P. WardDonna R. Ecton
Lynn Jolliffe
Stephen E. Smith

Fees Paid to KPMG

FEES PAID TO KPMG LLP

The following table sets forth the aggregate fees charged to KAR Auction Services by KPMG for audit services rendered in connection with the audit of our consolidated financial statements and reports for 20132015 and 20122014 and for other services rendered during 20132015 and 20122014 to KAR Auction Services and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services:

Fee Category		2013			2012				2015			2014
Audit Fees(1)		$	2,160,000		$	2,089,500			​	$2,359,561		​	$2,148,000
Audit-Related Fees(2)			237,000			100,500				33,000			32,500
Tax Fees(3)			—			37,222			​	248,615		​	96,035
All Other Fees(4)			51,014			—				160,432			70,471
​	​		​	​		​	​	​	​	​	​	​	​	​
Total Fees		$	2,448,014		$	2,227,222			​	$2,801,608		​	$2,347,006
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(1)

Audit Fees: Consists of fees for professional services rendered for the audit of our consolidated financial statements, review of the interim condensed consolidated financial statements included in the Company's quarterly reports, the audit of our internal control over financial reporting and services that are normally provided by independent auditorsregistered public accounting firms in connection with statutory and regulatory filings or engagements, and attest services, except those not required by statute or regulation.

(2)

Audit-Related Fees: Consists principally of professional services rendered with respect to our registration statements filed on Form S-3 and Form S-8 and our secondary equity offerings. Also includes professional services rendered in connection with the audit of our 401(k) benefit planplan. Also includes professional services rendered with respect to our registration statement filed on Form S-8 and certain procedures in connection with due diligence.respect to AFC's consolidating report.

(3)

Tax Fees: Consists of fees for various tax planning projects.

(4)

All Other Fees: Consists principally of fees for professional services rendered with respect to a SOC 1 readiness assessmentassessments and forreporting. Also includes a license to use KPMG's accounting research software.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

KAR Auction Services' independent auditorregistered public accounting firm fee pre-approval policy provides for an annual process through which the Audit Committee evaluates the nature and scope of the audit prior to the commencement of the audit. The Audit Committee also evaluates audit-related, tax and other services

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that are proposed, along with the anticipated cost of such services. The Audit Committee reviews schedules of specific services to be provided. If other services are provided outside of this annual process, under the policy they may be (i) pre-approved by the Audit Committee at a regularly scheduled meeting; or (ii) pre-approved by the Chairman of the Audit Committee, acting between meetings and reporting back to the Audit Committee at the next scheduled meeting. All audit, audit-related, tax services and all other fees described above were approved by the Audit Committee or the Chairman of the Audit Committee before such services were rendered.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION DISCUSSION AND ANALYSIS

Overview

OVERVIEW

The following discussion and analysis of our compensation program for named executive officers should be read in conjunction with the tables and text elsewhere in this proxy statement that describe the compensation awarded to, earned by, and paid to the named executive officers.

Named Executive Officers.Officers

Our named executive officers for the last completed fiscal year were (i) our principalchief executive officer, or PEO;officer; (ii) our principalchief financial officer, or PFO;officer; and (iii) each of the three other most highly compensated executive officers (other than the PEO and the PFO) who were serving as executive officers at the end of the last completed fiscal year. The following persons were ourOur named executive officers for the period covered by this compensation discussion and analysis:are:

•

JamesJim Hallett, Chief Executive Officer (PEO)and Chairman of the Board of KAR Auction Services;



•

Eric Loughmiller, Executive Vice President and Chief Financial Officer (PFO) of KAR Auction Services;





•

Rebecca PolakDon Gottwald, Executive Vice President, General Counsel and SecretaryChief Operating Officer of KAR Auction Services;





•

Thomas O'BrienStéphane St-Hilaire, Chief Executive Officer of IAA; and



•

Thomas Caruso, Chief Client Officer of KAR Auction Services and former Chief Executive Officer and President of ADESA.ADESA; and

John Kett, Chief Executive Officer and President of IAA.

This CD&A is organized into the following six sections:

Executive Summary (page 34)

Compensation Philosophy and Objectives (page 38)

The Role of the Compensation Committee and the Executive Officers in Determining Executive Compensation (page 38)

Elements Used to Achieve Compensation Philosophy and Objectives (page 40)

Compensation Policies and Other Information (page 49)

Results of Say on Pay Votes at 2014 Annual Meeting (page 51)

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EXECUTIVE SUMMARY

Executive Summary
Business Highlights

        DespiteFor the impact of Superstorm Sandy on our salvage auction business,year ended December 31, 2015, KAR Auction Services again delivered solid growth in volume of total vehicles sold, revenues, adjusted EBITDA and adjusted net income. Specific highlights for fiscal 2015 included:

·

Total vehicles sold by our ADESA and IAA business segments rose approximately 13% to 4.4 million units.

·

Net revenue was up 12% to approximately $2.6 billion.

·

Adjusted EBITDA. EBITDA* rose 9% to approximately $650 million.

*

Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the most comparable GAAP measure, net income (loss), in our Annual Report on Form 10-K for the year ended December 31, 20132015 in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—EBITDA and Adjusted EBITDA."

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        Specific highlights for fiscal 2013 included:

•·

Total vehicles sold forNet income increased 27% from $169.3 million ($1.19 per diluted share) to $214.6 million ($1.51 per diluted share).



·

Through share buybacks and dividends, in 2015 we returned approximately $380 million to stockholders and invested approximately $253 million in our ADESAbusiness through capital expenditures and IAA business segments rose approximately 12% to 3.7 million units.strategic acquisitions.



•·

Net revenue was up 11% to more than $2.1 billion.



•

Adjusted EBITDA rose 8% to $538.2 million.



•

We reduced our leverage, as measured by Net Debt / Adjusted EBITDA, to 3.07X.



•

We increased our annual dividend from $0.76 to $1.00 per share.



•

SharesThe closing stock price of KARKAR's common stock rose 46%approximately 7% from $34.65 at December 31, 2014 to $29.55.$37.03 at December 31, 2015. The closing price shown below for each year is the closing price of a share of the Company's common stock on December 31.

        During the past five

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We maintain a compensation program structured to achieve a close connection between executive pay and company performance. We believe that this strong pay-for-performance orientation has served us well in recent years, andparticularly as we movewe've moved forward following the sale by our former equity sponsors of all of their holdings of our common stock in 2013, we have maintained a compensation program structured to achieve a close connection between executive pay and company performance.late 2013.

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Pay for Performance Alignment:performance alignment:  During the past 5 fiscal years, including in 2013,Historically, we have demonstrated close alignment between our total stockholder return (TSR) performance and the compensation of our Chief Executive Officers,Officer, as shown in the chart below.

5-Year 5-year Pay Alignment Chart

​	​	​	​	​	​	​	​	​	​	​	​	​
Fiscal Year		2010 YE		2011		2012		2013		2014		2015
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CEO Pay ($000)		​		$1,475		$1,414		$5,994		$4,808		$4,824
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Indexed TSR		100		97.83		148.15		223.66		270.86		297.96
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Independent Compensation Committee:  All of the members of our compensation committeeCompensation Committee are independent under NYSE rules.



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Independent Compensation Consultant:compensation consultant:  In 2013,2015, our compensation committeeCompensation Committee engaged ClearBridgeSemler Brossy as its independent compensation consultant.



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PerformancePay for performance:-Based Compensation Awards:  The equity awards granted to our named executive officers in late 20132015 and in 20142016 are heavily performance-based, consisting ofincluding restricted stock units that vest based on achievement of relative TSR and adjusted earnings per share goals and stock options.net income goals.



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Incentive Compensation Recoupment Policy:Maximum payout caps for annual cash incentive compensation and PRSUs.



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Clawback of certain compensation if restatement and intentional misconduct:  In 2014, we adopted aOur clawback policy providingprovides for the recovery of incentive compensation in the event we are required to prepare an accounting restatement due to anysuch executive officer's intentional misconduct.



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Anti-HedgingModerate change-in-control benefits:  Change-in-control severance benefits are two times base salary and Pledgingtarget bonus for the CEO and one times base salary and target bonus for the other executive officers.

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Table of Company Stock Policy:Contents

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Robust equity ownership requirements:  In addition2015, we adopted stock ownership guidelines that are applicable to senior executives, including our existing anti-pledgingnamed executive officers. The stock ownership guideline for our CEO is five times his annual base salary.

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Robust equity retention requirement:  In 2015, we adopted an equity retention requirement that is applicable to senior executives, including our named executive officers. Our named executive officers are required to hold 100% of net shares of Company stock policy, we adopted a formal anti-hedgingreceived under awards granted on or after January 1, 2015 for at least 12 months after vesting, regardless of whether the stock ownership guideline has been met.

WE DO NOT:

✘

Allow dividends or dividend equivalents to be paid on unvested PRSUs:  Dividend equivalents are accrued but not paid on PRSUs until (i) the performance conditions are satisfied; and (ii) the PRSUs vest after the performance measurement period.

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Allow hedging of KAR securities:  We prohibit the hedging of Company stock policy in 2014, which appliesby our directors and officers.

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Allow pledging of KAR securities:  As part of our Insider Trading Policy, we prohibit the pledging of Company stock.

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Provide excessive executive perquisites.  We provide only a limited number of perquisites to attract talented executives and to retain our current executives.

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COMPENSATION PHILOSOPHY AND OBJECTIVES

We design and administer our executive officers and directors.

Compensation Philosophy and Objectives

        We believe thatpay programs to help ensure the compensation of our named executive officers should beis (i) closely aligned with our performance on both a short-term and long-term basis; (ii) linked to specific, measurable results intended to create value for stockholders; and (iii) competitive in attracting and retaining key executive talent ininto the vehicle remarketing and auto finance industry. Each of the compensation programs that we have developed and implemented is intended to satisfy one or more of the following specific objectives:

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align the interests of our executive officers with the interests of our stockholders so that our executive officers manage from the perspective of owners with an equity stake in the Company;



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motivate and focus our executive officers through incentive compensation programs directly tied to our financial results;






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support a one-company culture and encourage synergies among all business units by aligning rewards with long-term, overall Company performance and stockholder value;



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provide a significant percentage of total compensation through variable pay based on pre-established, measurable goals and objectives;



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provide competitive upside opportunity without encouraging excessive risk-taking;



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enhance our ability to attract and retain skilled and experienced executive officers; and



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align the interests of our executive officers with the interests of our stockholders so that they manage from the perspective of owners with an equity stake in the Company; and



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provide rewards commensurate with performance and with competitive market practices.

The Role of the Compensation Committee and the Executive Officers in Determining Executive Compensation

THE ROLE OF THE COMPENSATION COMMITTEE AND THE EXECUTIVE OFFICERS IN DETERMINING EXECUTIVE COMPENSATION

Composition of the Compensation Committee.    The Compensation Committee of our Board of Directors is comprised of Church M. MooreMmes. Ecton (Chairman), Donna R. Ecton and Peter R. Formanek. Mr. Moore was originally appointed by KAR LLC pursuant to a director designation agreement between KAR Auction ServicesJolliffe and KAR LLC.Messrs. Howell and Larson.

Role of the Compensation Committee.    The Compensation Committee has primary responsibility for all compensation decisions relating to our named executive officers. The Compensation Committee reviews the aggregate level of our executive compensation, as well as the mix of elements used to compensate our named executive officers on an annual basis.

Compensation Committee's Use of Market and Survey Data.    In light of the unique mix of businesses that comprise KAR Auction Services and the lack of directly comparable public companies, the Compensation Committee has traditionally not identifiedadopted a specific peer group of companies for comparative purposes and does notthe purpose of formally engage in benchmarking of compensation. During 2013,The Compensation Committee understands that most companies consider pay levels at comparably-sized, peer companies when setting named executive officer compensation levels. Knowing this practice, the Compensation Committee engaged ClearBridge ashas attempted to develop a meaningful peer group for the Company, with help from its independent compensation consultantconsultant; however, the Committee has historically stopped short of a formal peer group, in part due to provide advicethe unique combination of our three separate business segments.

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In order to confirm competitiveness of compensation, the Compensation Committee reviews survey data and proxy compensation data of other comparably-sized companies. Prior to 2015, the Compensation Committee had not set compensation levels by reference to competitive market data using any specific target percentiles within such data. Beginning in late 2015, the Compensation Committee began using a combination of (i) survey data (cuts from the 2015 Aon Hewitt and Mercer general industry and service industry surveys); and (ii) proxy compensation data of a "proxy comparator group" more formally in setting and adjusting base salary levels for 2016. In light of the lack of comparable companies for KAR's business, as discussednoted above, companies in the proxy comparator group were selected based on (i) a focus on service-oriented industries; (ii) comparable revenue and market capitalization levels (KAR represents the 41^st and 53^rd percentiles, respectively, within the selected proxy comparator group on these measures); (iii) comparable growth, profitability and/or market valuation profiles; and (iv) the avoidance of over-representing any one industry. Where possible, the Compensation Committee included companies that are in related or similar industries to the Company. The proxy comparator group used in late 2015 consisted of the following paragraph.30 companies:

Allison Transmission Holdings, Inc.		Kansas City Southern		Steelcase, Inc.
AOL, Inc.		Kirby Corp.		Stericycle, Inc.
Cintas Corp.		Landstar System, Inc.		Teradata Corp.
Comerica, Inc.		LKQ Corp.		Tetra Tech, Inc.
Copart, Inc.		MSC Industrial Direct Co., Inc.		Total System Services, Inc.
Equifax, Inc.		Old Dominion Freight Line, Inc.		Trimble Navigation Ltd.
GATX Corp.		Plexus Corp.		Vantiv, Inc.
Heartland Payment Systems, Inc.		Ritchie Bros. Auctioneers, Inc.		Waste Connections, Inc.
HNI Corp.		Solera Holdings, Inc.		Werner Enterprises, Inc.
Itron, Inc.		Springleaf Holdings, Inc.		Westinghouse Air Brake Technologies Corp.

The Compensation Committee viewed the proxy comparator group and market data as an important guide, but not as the sole determinant in making its decisions regarding 2016 base salary levels. The Compensation Committee also considered experience and tenure, sustained performance and specific requirements of roles relative to market.

Role of the Independent Compensation Consultant.    In 2013, theThe Compensation Committee engaged ClearBridge to provideused Semler Brossy as its independent compensation consultant in 2015. During 2015, Semler Brossy provided (i) advice to the Compensation Committee with respect to evaluatingthe assessment of the Company's executive compensation practices; (ii) advice regarding the evaluation of long-term incentive compensation practicespractices; (iii) advice and designingguidance regarding the design of new long-term equity awards andawards; (iv) advice regarding related compensation matters. matters; (v) advice to the Compensation Committee with respect to annual and long-term incentive plan design; and (vi) guidance on the competitiveness of the executive officers' elements of compensation.

The Compensation Committee has reviewed the independence of ClearBridgeSemler Brossy in light of SEC rules and NYSE listing standards regarding compensation consultants and has concluded that ClearBridge'sthe work of Semler Brossy for the Compensation Committee does not raise any conflict of interest. All work performed by ClearBridgeSemler Brossy is subject to review and approval of the Compensation Committee.

Role of the Executive Officers.    Mr. Hallett regularly participates in meetings of the Compensation Committee at which compensation actions involving our named executive officers are discussed. Mr. Hallett assists the Compensation Committee by making recommendations regarding compensation actions relating to the executive officers other than himself. Mr. Hallett recuses himself and does not participate in any portion of any meeting of the Compensation Committee at which his compensation is discussed.

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Elements Used to Achieve Compensation Philosophy and Objectives

        Components of Executive Compensation for 2013.    The Compensation Committee has established a total compensation and benefits program for our named executive officers that consist of the following:

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base salary;

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annual incentive opportunity;



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long-term incentive opportunity;



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retirement, health and welfare benefits; and



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limited perquisites and personal benefits.

ELEMENTS USED TO ACHIEVE COMPENSATION PHILOSOPHY AND OBJECTIVES

Elements of 2015 Executive Compensation Program Design

The following table lists the elements of compensation for our 2015 executive compensation program. The program uses a mix of fixed and variable compensation elements and provides alignment with both short- and long-term business goals through annual and long-term incentives. Our incentives are designed to drive overall corporate performance and business unit strategies that correlate to stockholder value and align with our strategic vision. In order to confirm competitiveness of compensation, the Compensation Committee reviews survey data and proxy compensation data of other companies.

		Element		Key Characteristics		Why We Pay This Element		How We Determine Amount		2015 Decisions
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Fixed		Base salary		Fixed compensation component payable in cash. Reviewed annually and adjusted when appropriate.		Reward the NEOs for their past performance and facilitate the attraction and retention of a skilled and experienced executive management team.		Individual performance, experience, job scope, tenure and review of competitive pay practices.		One named executive officer received a salary increase in 2015. See page 42.
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Variable		Annual cash incentive awards		Variable compensation component payable in cash based on performance against annually established targets.		Motivate and reward the successful achievement of pre-determined financial objectives at the Company.		Individual performance, experience, job scope and review of competitive pay practices. Based on achievement of 2015 Adjusted EBITDA.		Strong performance resulted in 114% of target for the CEO and an average of 115% of target for the other named executive officers. See page 45.
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		Performance restricted stock units (PRSUs)		PRSUs vest at the end of a three-year performance period. See pages 46 for the retention requirements for PRSUs.		Motivate and reward executives for performance on key long-term measures. Align the interests of executives with long-term stockholder value and serve to retain executive talent.		Target awards based on individual's ability to impact future results, job scope, individual performance and review of competitive pay practices. Earned awards based on Cumulative Adjusted Net Income Per Share performance through December 31, 2017. PRSU awards made up 75% of the value of the aggregate long-term incentives granted to the named executive officers in 2015.		The Compensation Committee granted PRSUs to all of the named executive officers in 2015. See pages 46 to 47.
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		Restricted stock units (RSUs)		RSUs vest ratably on each of the first three anniversaries of the grant date subject to the named executive officer's continued employment with the Company, provided that the Company achieves $100 million in adjusted net income in its 2015 fiscal year, as reported by the Company (which condition was satisfied).		Align the interests of executives with long-term stockholder value and serve to retain executive talent.		Awards based on individual's ability to impact future results, job scope, individual performance and review of competitive pay practices. RSU awards made up 25% of the value of the aggregate long-term incentives granted to the named executive officers in 2015.		The Compensation Committee granted RSUs to all of the named executive officers in 2015. See page 46.
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Compensation Structure and Goal Setting

Our executive compensation program is designed to deliver compensation in accordance with corporate and business unit performance with a large percentage of compensation at risk through long-term equity awards and annual cash incentive awards. These awards are linked to actual performance, consistent with our belief that a significant amount of executive compensation should be in the form of equity and that a greater percentage of compensation should be tied to performance for executives who bear higher levels of responsibility for our performance. The mix of target direct compensation for 2015 for our CEO and the average of our other named executives is shown in the charts below. Approximately 80% of our CEO's total compensation, and approximately 70% of the average total compensation of our other named executive officers, is at-risk, consisting of stock options and other performance-based incentives. As we move away from historical incentive programs developed in large part by our former equity sponsors, the Compensation Committee continues to refine the elements, mix of awards and performance goals in our incentive compensation program, while ensuring that a large portion of our named executive officers' compensation is performance-based.

CEO

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Other NEO Average Compensation