DEF 14A of Autonation, Inc., Mar 14, 2024

DEF 14A of Autonation, Inc.

Filed Mar 14, 2024 · FY20230000350698-24-000060

Open on EDGAR

  1. Directors

    Directors The Board has nominated the eight persons listed below to stand for election for a term expiring at the 2025 Annual Meeting of Stockholders or until their successors are duly elected and qualified. See “Items To Be Voted On - Proposal 1: Election of Directors.” All of our director nominees were elected by our stockholders at our 2023 Annual Meeting of Stockholders. Our Board nominees consist of a diverse group of leaders. Two of our Board nominees are women, and one is from an underrepresented racial/ethnic group. Many of our Board nominees have experience serving as executive officers and/or on boards and board committees of major companies. Many of them also have extensive corporate finance and investment banking experience as well as a broad understanding of capital markets. We have set forth below information regarding each person nominated to stand for election, including the specific experience, qualifications, attributes, or skills that led the Board to conclude that such person should serve as a director. Our Corporate Governance and Nominating Committee and the Board believe that the experience, qualifications, attributes, and skills of our Board nominees provide the Company with the ability to address the evolving needs of the Company and represent the best interests of our stockholders. All of our directors are elected annually. Rick L. Burdick, age 72, has served as our Chairman of the Board since February 2021 and as one of our directors since May 1991. Mr. Burdick previously served as our Lead Independent Director from December 2018 until January 2021. Mr. Burdick also serves as Chairman of the Board of Directors of CBIZ, Inc., a provider of integrated business services and products. From 1988 through 2019, Mr. Burdick was a partner with Akin, Gump, Strauss, Hauer & Feld, L.L.P., a global full service law firm. Mr. Burdick’s experience as a senior partner at an international law firm advising large companies on a broad range of corporate transactions and on securities law and corporate governance matters led the Board to conclude that he should serve as one of our directors. David B. Edelson, age 64, has served as one of our directors since July 2008 and is Chair of the Board’s Audit Committee. Mr. Edelson has served as a Managing Director in the North American Private Equity business of Bain Capital, LP, one of the world’s leading private investment firms, since October 2022. Mr. Edelson previously served as the Chief Financial Officer of the Loews Corporation, a diversified company with businesses in the insurance, energy, hospitality, and packaging industries, from May 2014 until May 2022; and, thereafter, as a Senior Advisor from July 2022 until October 2022. Prior to joining Loews, Mr. Edelson was Executive Vice President & Corporate Treasurer of JPMorgan Chase & Co. He was named Corporate Treasurer in April 2001 and promoted to Executive Vice President in February 2003. Mr. Edelson spent the first 15 years of his career as an investment banker, first with Goldman Sachs & Co. and subsequently with JPMorgan Chase & Co. Mr. Edelson’s experience as a senior executive officer of a large holding company owning a wide range of businesses, as well as his experience as an investment banker and corporate treasurer, led the Board to conclude that he should serve as one of our directors. Robert R. Grusky, age 66, has served as one of our directors since June 2006. In 2000, Mr. Grusky founded Hope Capital Management, LLC, an investment management firm for which he serves as Managing Member. He co-founded New Mountain Capital, LLC, a private and public equity investment management firm, in 2000 and was a Principal, Managing Director and Member of New Mountain Capital from 2000 to 2005 and was a Senior Advisor through 2019, and a member of the Executive Leadership Council since then. From 1998 to 2000, Mr. Grusky served as President of RSL Investments Corporation, the primary investment vehicle for the Hon. Ronald S. Lauder. Prior thereto, Mr. Grusky served in a variety of capacities at Goldman Sachs & Co. in its Mergers & Acquisitions Department and Principal Investment Area. Mr. Grusky is a director of Strategic Education, Inc., an education services company. Mr. Grusky’s board experience and experience in investment management, private equity, and investment banking led the Board to conclude that he should serve as one of our directors. Norman K. Jenkins, age 61, has served as one of our directors since December 2020. Mr. Jenkins is President and Chief Executive Officer of Capstone Development, a privately held firm he founded in 2009. Capstone develops and acquires commercial and multi-family real estate, with significant expertise in public-private partnerships and developing hospitality real estate that is generally affiliated with international lodging brands. Prior to launching Capstone, Mr. Jenkins was a senior executive and corporate officer of Marriott International Inc. During his 16 year tenure with Marriott, he served in a variety of leadership roles including, Senior Vice President - North American Lodging Development, Vice President and Chief Financial Officer - Ramada International, Vice President - Owner & Franchise Services and Acquisition Executive. Prior to joining Marriott, Mr. Jenkins spent 5 years with McDonald’s Corporation where he held positions in finance and operations. Mr. Jenkins currently serves as Lead Trustee of Urban Edge Properties and as a director of RE/MAX Holdings, Inc. He previously served on the board of Duke Realty from 2017 until it was acquired by Prologis, Inc. in 2022 and on the board of New Senior Investment Group from 2020 until it was acquired by Ventas, Inc. in 2021. He is a member of the Washington DC Developer Roundtable and is a former member of the Suburban Hospital Board of Trustees and the Howard University Board of Trustees. Mr. Jenkins’s executive and real estate experience led the Board to conclude that he should serve as one of our directors. Lisa Lutoff-Perlo, age 66, has served as one of our directors since February 2020. Since May 2023, she has served as Vice Chair, External Affairs for the Royal Caribbean Group. Ms. Lutoff-Perlo previously served as President and Chief Executive Officer of Celebrity Cruises, a multi-billion dollar cruise line and wholly-owned subsidiary of Royal Caribbean Cruises Ltd., from December 2014 until May 2023. Previously, Ms. Lutoff-Perlo was the Executive Vice President, Operations of Royal Caribbean International from 2012 to 2014; Senior Vice President, Hotel Operations of Celebrity Cruises from 2007 to 2012; and the Vice President, Onboard Revenue of Celebrity Cruises from 2005 to 2007. Ms. Lutoff-Perlo held various senior positions with Royal Caribbean International from 1985 to 2005. Ms. Lutoff-Perlo’s business operations and senior executive management experience led the Board to conclude that she should serve as one of our directors.

  2. Directors

    Michael Manley, age 60, has served as our Chief Executive Officer and as a member of our Board since November 1, 2021. Prior to joining AutoNation, Mr. Manley served as Head of Americas and as a member of the Group Executive Council for Stellantis N.V., one of the largest automotive original equipment manufacturers in the world, from January 2021 until October 2021. From July 2018 until January 2021, he served as Chief Executive Officer of Fiat Chrysler Automobiles N.V. (“FCA”), a predecessor to Stellantis N.V. Mr. Manley joined DaimlerChrysler (a predecessor to FCA) in 2000 and, prior to becoming FCA’s Chief Executive Officer, served in a number of management-level roles with increasing responsibility overseeing various aspects of FCA’s operations, including as Executive Vice President - International Sales & Marketing, Business Development and Global Product Planning Operations, Chief Executive Officer of Jeep, Chief Executive Officer of Ram, Chief Operating Officer for the Asia Pacific region, and FCA Global Executive Council member. Mr. Manley currently serves on the Board of Directors of Dover Corporation, a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions and support services. Mr. Manley’s automotive experience, his broad knowledge of the automotive industry, and his position as our Chief Executive Officer led the Board to conclude that he should serve as one of our directors. G. Mike Mikan, age 52, has served as one of our directors since March 2013 and is Chair of the Board’s Compensation Committee. Since January 2019, Mr. Mikan has served as Vice Chairman and President of NeueHealth, Inc. (formerly known as Bright Health Group, Inc.), a consumer-focused health insurance and services business, and in April 2020, Mr. Mikan became its Chief Executive Officer. Mr. Mikan served as Chairman and Chief Executive Officer of Shot-Rock Capital, LLC, a private investment capital group, from January 2015 until December 2018. From January 2013 until December 2014, he served as President of ESL Investments, Inc. Mr. Mikan served as the Interim Chief Executive Officer of Best Buy Co., Inc. from April 2012 until September 2012. From November 1998 through February 2012, he served in various executive positions at UnitedHealth Group Incorporated, including as Executive Vice President and Chief Financial Officer and as Chief Executive Officer of UnitedHealth’s Optum subsidiary. Mr. Mikan previously served as a director of Princeton Everest Fund (formerly known as Princeton Private Investments Access Fund) from 2014 until February 2023 and as a Trustee of Ellington Income Opportunities Fund from 2018 until February 2023. Mr. Mikan’s operational and public company leadership experience and his broad understanding of capital investment and allocation led the Board to conclude that he should serve as one of our directors. Jacqueline A. Travisano, Ed.D., age 54, has served as one of our directors since April 2018 and is Chair of the Board’s Corporate Governance and Nominating Committee. Dr. Travisano has served as Executive Vice President and Chief Financial Officer of Wake Forest University since July 2023. She previously served as the Executive Vice President for Business and Finance and Chief Operating Officer of the University of Miami, a private research university, from June 2017 until June 2023. From 2011 to May 2017, Dr. Travisano served as Executive Vice President and Chief Operating Officer of Nova Southeastern University. She began her career in public accounting at Coopers & Lybrand and is a NACD Governance Fellow. Dr. Travisano’s senior executive and financial, accounting, and operational experience led the Board to conclude that she should serve as one of our directors.

  3. Board Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Rick L. Burdick | 250,000 | 249,930 | 499,930 | | David B. Edelson | 75,000 | 249,930 | 324,930 | | Robert R. Grusky | 50,000 | 249,930 | 299,930 | | Norman K. Jenkins | 50,000 | 249,930 | 299,930 | | Lisa Lutoff-Perlo | 50,000 | 249,930 | 299,930 | | G. Mike Mikan | 65,000 | 249,930 | 314,930 | | Jacqueline A. Travisano | 65,000 | 249,930 | 314,930 |

  4. Compensation Philosophy and Objectives

    Compensation Philosophy and Objectives Our executive compensation programs are administered by the Committee. The Committee’s fundamental philosophy is to closely link executive compensation with the achievement of performance goals tied to key metrics and to create an owner-oriented culture through our executive compensation programs. The objectives of our executive compensation program are to ensure that we are able to attract and retain highly skilled executives and to provide a compensation program that incentivizes management to optimize business performance, deploy capital productively, and increase long-term stockholder value. The Committee believes that total compensation for each of our executive officers should be fair for the services rendered and competitive with market practice. In addition, the Committee designs our executive compensation program to be transparent and easily understood and administered, which is why the key components of executive compensation are limited to a base salary, an annual cash incentive award based on the achievement of a predetermined performance goal, and long-term incentive awards in the form of time-based and performance-based equity awards. The Committee strives to ensure executive compensation aligns management with the Company’s annual and long-term plans, business strategy, and stockholder interests.

  5. 2023 Executive Compensation Elements

    2023 Executive Compensation Elements The key elements of our executive compensation program for the year ended December 31, 2023 were: •base salary; •an annual performance-based cash incentive award; and •long-term incentive compensation in the form of time-based and performance-based restricted stock units (“RSUs”). Executive officers are also entitled to limited perquisites and other benefits as outlined below under “Perquisites and Other Benefits.” The following is a summary of the considerations underlying each element of compensation paid to our named executive officers for 2023.

  6. Annual Incentive Awards

    Annual Incentive Awards A core component of our executive compensation program is the annual performance-based cash incentive program in which our named executive officers participate. The program is designed to incentivize our senior management team to continually improve our operating performance and to use capital to maximize returns. In February 2023, the Committee established a performance goal for the 2023 annual incentive program under the AutoNation, Inc. 2017 Employee Equity and Incentive Plan (the “2017 Plan”) based upon a specified level of adjusted operating income per basic share, taking into consideration our 2022 financial results, anticipated industry dynamics for 2023, planned capital investments, our macroeconomic outlook, payout opportunities, and pay-for-performance alignment. Each of our named executive officers participated in the annual incentive program for 2023. For 2023, the adjusted operating income per basic share target was set approximately 19% higher than the target for 2022. The 2023 target was set lower than our achievement in 2022 due to anticipated reductions in new vehicle margins as a result of increasing supply and availability of new vehicle inventory, as well as anticipated increases in borrowing costs due to higher interest rates and higher inventory levels. The following table sets forth the 2023 threshold, target, and maximum payout levels established under the annual incentive program for each of our named executive officers based on the adjusted operating income per basic share performance metric:

  7. Annual Incentive Awards

    | Performance | | Payout | | Threshold | $25.84 | 50% | | Target | $32.31 | 100% | | Maximum | $51.69 | 200% |

  8. Annual Incentive Awards

    In calculating the level of our performance under our annual performance-based cash incentive program, certain adjustments are made to operating income per basic share to ensure that operating performance is fairly measured to incentivize management appropriately. For example, floorplan interest expense is charged against operating income to ensure management manages this expense. On a GAAP basis, floorplan interest expense is not included in operating income. Operating income per basic share is also adjusted for acquisitions and to reflect a capital charge for the repurchase of shares of our common stock. The capital charge is designed to encourage more productive uses of capital and to discourage less productive uses of capital. The Committee also has the authority to make, and from time to time makes, appropriate equitable adjustments to reflect the impact of unusual or infrequently occurring items. One hundred percent of the target incentive award for each participant is based upon achievement of the predetermined performance goal. The annual incentive awards are payable on a sliding scale based on the Company’s actual achievement relative to the predetermined goal, with the possibility that awards earned may exceed or be less than the targeted payout level. The Committee has absolute “negative discretion” to eliminate or reduce the amount of any award under the program. The following table sets forth the 2023 threshold, target, and maximum annual incentive awards, expressed as a percentage of salary, established by the Committee for each of our named executive officers in 2023. Target bonus opportunities were set based on the Committee’s objective of aligning a significant portion of executive compensation with the achievement of objective annual performance goals and a consideration of peer group and market data. The threshold, target, and maximum annual incentive award for each named executive officer that was eligible for an annual incentive award in 2022 remained the same for 2023 as compared to 2022.

  9. Annual Incentive Awards

    | Participant | Threshold | Target | Maximum | | Michael Manley | 100% | 200% | 400% | | Thomas A. Szlosek(1) | 50% | 100% | 200% | | Gianluca Camplone | 45% | 90% | 180% | | C. Coleman Edmunds | 38% | 75% | 150% | | Dave Koehler | 38% | 75% | 150% | | Marc Cannon | 40% | 80% | 160% | | Joseph T. Lower(2) | 45% | 90% | 180% |

  10. Annual Incentive Awards

    (1) Mr. Szlosek’s award was prorated based on his date of hire. (2) Mr. Lower’s annual incentive award was prorated based on his base salary for the portion of 2023 prior to his transition date and his base salary for the portion of 2023 following his transition date. Our actual results for 2023 were above the performance target set by the Committee. Our outperformance relative to target was driven principally by a significant increase in same store parts and service gross profit, resulting from double-digit year-over-year increases in gross profit from customer-pay service, the preparation of vehicles for sale, and warranty service. Based on our financial performance against the performance target, incentive awards under the 2017 Plan were paid at 149% of the targeted levels. The following table sets forth our performance under the 2017 Plan for 2023:

  11. Annual Incentive Awards

    | 2023 Performance Metric | Target | Attainment | Payout Relative to Individual Target | | Adjusted Operating Income Per Basic Share | $32.31 | $35.44 | 149% |

  12. Annual Incentive Awards

    Actual payouts to our named executive officers are shown in our “Summary Compensation Table” under “Compensation Tables” below.

  13. Long-Term Incentive Awards

    Long-Term Incentive Awards The Committee grants stock-based awards to our named executive officers in order to provide long-term incentives, which align the long-term interests of management with the long-term interests of our stockholders. The Committee believes that stock-based awards motivate our named executive officers to focus on optimizing our long-term business performance and stockholder value and creating an owner-oriented culture. Stock-based awards are approved on an annual basis in amounts determined by the Committee, while carefully considering the cost to us and our stockholders, including common stock dilution. The sum of all stock-based awards granted to AutoNation employees in 2023 represented potential share issuances equal to approximately 0.8% of our outstanding common stock, based on the number of shares outstanding at the beginning of 2023. Annual Awards In February 2023, the Committee, advised by Meridian and based on a review of peer group and market data, approved the 2023 long-term incentive plan under the 2017 Plan, which included RSU awards (the “2023 RSU Awards”) for each of our named executive officers. The Committee generally sets the target award levels for long-term incentive awards that may be earned by each executive, taking into account the executive’s position, experience, and job duties. While the Committee considers peer group data, the Committee does not target a specific percentile within the peer group. The Committee also considers an executive’s individual skills, experience, both in general and in the role, and future potential in establishing the target value of each executive’s award. The following table sets forth the target grant date value for the 2023 RSU Awards that the Committee approved in 2023 for each of our named executive officers that was eligible for an award in 2023. Mr. Szlosek was not eligible for a 2023 RSU Award based on his date of hire. See “Other Awards” below for a description of certain awards Mr. Szlosek received in August 2023 in connection with his appointment as our Executive Vice President and Chief Financial Officer. The target grant date values for each named executive officer who was eligible for a long-term incentive award in 2022 remained the same for 2023 as compared to 2022.

  14. Long-Term Incentive Awards

    | Participant | 2023 RSU Award Target Value | | Michael Manley | $7,200,000 | | Gianluca Camplone | $2,000,000 | | C. Coleman Edmunds | $1,400,000 | | Dave Koehler | $1,000,000 | | Marc Cannon | $1,800,000 | | Joseph T. Lower | $2,000,000 |

  15. Long-Term Incentive Awards

    The 2023 RSU Awards for each of our named executive officers listed in the table above were made on March 1, 2023 in the form of three different grants of RSUs. The first grant was a time-based award, representing approximately 40% of the total number of RSUs they received in March 2023, and was made subject to a three-year installment vesting schedule, pursuant to which one-third of the grant will vest on the first three anniversaries of the grant date. The second and third grants (collectively, the “2023-2025 PBRSUs”), each representing approximately 30% of the total number of RSUs granted to each of our executive officers in March 2023, were made subject to a three-year performance period (fiscal years 2023-2025) based on (a) our total shareholder return relative to a peer group approved by the Committee (“Relative TSR”) for the second grant and (b) a measure of return on invested capital (“ROIC”) for the third grant. The 2023-2025 PBRSUs will cliff vest following the three-year performance period, with zero to 200% of the target number of shares vesting depending on the Company’s performance relative to the applicable performance metric (threshold performance would result in a payout equal to 40% of the target number of shares). Target Relative TSR and ROIC levels were established by the Committee in February 2023 after consultation with Meridian and a review of the strategic plan for fiscal years 2023-2025. The target levels for the 2023-2025 PBRSUs were set at levels viewed as challenging but attainable, while the maximum goals were considered to be much more demanding. The Committee chose Relative TSR as a performance measure because the Committee believes it is an objective and meaningful metric to evaluate our performance against the performance of comparable companies and aligns the interests of our named executive officers with the interests of our stockholders in creating long-term value. The ROIC measure is intended to hold our executive officers accountable for maximizing income returns relative to capital invested. The Committee believes that these performance measures appropriately incentivize our executives to strive for continuously improving performance and provide variable compensation based on performance achieved against pre-established goals. Settlement of 2021-2023 PBRSUs. In the first quarter of 2024, the Committee certified the Company’s performance relative to the performance goals established for the 2021-2023 PBRSUs awarded to Messrs. Edmunds, Cannon, and Lower in 2021. None of our other named executive officers received an award of 2021-2023 PBRSUs. The following table sets forth our performance relative to each performance goal established for the 2021-2023 PBRSUs.

  16. Long-Term Incentive Awards

    | 2021-2023 RSUs | Threshold(1) | Target | Maximum(2) | Actual | Payout(3) | | Adjusted EBITDA Metric (3-year cumulative)(4) | $2,548 | $3,397 | $3,737 | $6,092 | 150% | | ROIC Metric (3-year average)(5) | 8.25% | 10.25% | 12.25% | 25.63% | 150% | | CSI Metric (3-year average)(6) | 60% | 70% - 75% | 85% | 76.40% | 107% |

  17. Long-Term Incentive Awards

    (1) 50% payout. (2) 150% payout. (3) A linear interpolation is applied for performance above threshold and below maximum. (4) The Adjusted EBITDA metric was defined as gross profit, less selling, general, and administrative expenses, less floorplan interest expense, subject to certain adjustments approved by the Committee to reflect the impact of unusual or infrequently occurring items in accordance with the terms of the 2017 Plan. Amounts presented in millions. (5) The ROIC metric was defined as (x) gross profit, less selling, general, and administrative expenses, less floorplan interest expense, less depreciation and amortization, and less income taxes divided by (y) our Adjusted Average Invested Capital, subject to certain adjustments approved by the Committee to reflect the impact of unusual or infrequently occurring items in accordance with the terms of the 2017 Plan. Adjusted Average Invested Capital is defined as the average balance for each quarter-end during the three-year performance period of non-vehicle long-term debt, plus current maturities of non-vehicle long-term debt, plus commercial paper, plus total shareholders’ equity, less cash and cash equivalents. (6) The CSI metric was calculated based on customer satisfaction indices established by certain vehicle manufacturers. The Adjusted EBITDA, ROIC, and CSI grants represented 40%, 40%, and 20%, respectively, of the total number of 2021-2023 PBRSUs awarded to Messrs. Lower, Cannon, and Edmunds in 2021. Accordingly, the payout for the 2021-2023 PBRSUs was 141%, on a weighted-average basis, of the target number of shares awarded.

  18. Other Awards

    Other Awards In connection with his appointment as our Executive Vice President and Chief Financial Officer, on August 7, 2023, Mr. Szlosek received a one-time sign-on grant of time-based restricted stock units with a grant date value of approximately $1.5 million and a one-time sign-on grant of performance-based restricted stock units with a grant date value of approximately $1.0 million. The one-time sign-on grant of time-based restricted stock units will vest in one-third annual increments over three years, and the one-time sign-on grant of performance-based restricted stock units will be subject to a three-year performance period based on the same performance goals the Committee approved for the 2023-2025 PBRSUs discussed above. In addition, we agreed to pay Mr. Szlosek a one-time sign-on cash payment in the amount of $1.0 million in two installments. The first installment was paid on his date of hire, August 7, 2023, and the second installment will be paid as soon as administratively feasible following the first anniversary of such date. If Mr. Szlosek resigns from the Company or is terminated for cause before the second anniversary of his first day of employment with the Company, he will be required to pay back the amount he received from the Company, prorated based on the number of months employed with the Company. These awards were intended to replace certain compensation that Mr. Szlosek forfeited from prior employment in connection with his recruitment to the Company.

  19. Employment Agreement with CEO

    Employment Agreement with CEO We enter into employment agreements with persons serving as our Chief Executive Officer. The Committee believes that an employment agreement is appropriate to provide certainty regarding terms and conditions of employment and to aid in recruitment and retention. In connection with his appointment as our Chief Executive Officer, we entered into an employment agreement with Mr. Manley on September 9, 2021. The Committee believes that entering into the employment agreement with Mr. Manley furthered our efforts to attract and recruit him to the Company. See the narrative following the “Summary Compensation Table” below for more information regarding his employment agreement.

  20. Severance and Change in Control Policy and Agreements for Post-Termination Payments

    Severance and Change in Control Policy and Agreements for Post-Termination Payments We have a policy governing severance and change in control agreements with the Company’s named executive officers, which is set forth in our Corporate Governance Guidelines. Generally, the policy provides that we will not enter into any severance agreements with senior executives that provide specified benefits in an amount exceeding 299% of the sum of such executive’s base salary plus bonus unless such severance agreement has been submitted to a stockholder vote. Further, unless such severance agreement has been submitted to a stockholder vote, we will not enter into a severance agreement that provides for the payment of specified benefits to an executive triggered by (i) a change in control of our Company that is approved by stockholders but not completed, or (ii) a completed change in control of the Company in which the named executive officer remains employed in a substantially similar capacity by the successor entity. We have not entered into any change in control agreements with any of our named executive officers. Our employment agreement with Mr. Manley and our letter agreement with Mr. Camplone each provides for payments or benefits at, following, or in connection with, termination under certain circumstances. See the narrative following the “Summary Compensation Table” below for more information regarding the letter agreement entered into with Mr. Camplone. We do not have employment agreements with our other named executive officers. Under the 2017 Plan, if an outstanding award is continued, assumed, or substituted in connection with a “change in control” (as defined in the 2017 Plan and related agreements), then, in the case of awards subject to performance goals, the performance goals will be deemed to be achieved at the target level of performance, and the awards will vest in full at the end of the applicable performance period, subject to the participant’s continued employment. Also, if awards remain outstanding in connection with a change in control, the 2017 Plan only provides for “double trigger” vesting. Specifically, if within 24 months following such change in control, a participant’s employment or service is terminated without cause or the participant resigns with good reason (as defined in the 2017 Plan and related agreements), all restrictions on such participant’s RSUs will immediately lapse and such awards will be settled as soon as reasonably practicable. These provisions are designed to promote stability and continuity of senior management. In April 2018, the Board adopted the Severance Plan to help retain key employees and maintain a stable work environment by providing severance benefits to covered employees in the event of certain terminations of employment. Under the Severance Plan, in the event a covered employee is terminated without cause, or a covered employee terminates his or her employment for good reason, as long as such person (a) is not in material breach of any restrictive covenant agreement with the Company, (b) does not breach any such restrictive covenant agreement as if it had been in effect through the 18-month period following the applicable termination date, and (c) signs a waiver and release of claims, then such person will be entitled to receive: •in equal installments over 18 months, 1.5 times the sum of such person’s annual base salary and target annual bonus, •at the same time bonuses are paid to active employees generally, an amount equal to such person’s annual bonus as determined by the Committee based on actual performance, prorated for the number of days the person was employed during the calendar year, and •a payment equal to the cost of health insurance coverage under COBRA, grossed up for taxes, based on such person’s then-current elections for an 18-month period. Each named executive officer, other than Messrs. Manley, Camplone, and Lower, was covered by the Severance Plan as of December 31, 2023. Mr. Cannon’s retirement, effective as of December 31, 2023, did not constitute a qualifying event under the Severance Plan, and he did not receive any benefits thereunder.

  21. Policy Regarding Recoupment of Certain Incentive Compensation

    Policy Regarding Recoupment of Certain Incentive Compensation In October 2023, the Board adopted the AutoNation, Inc. Amended and Restated Policy Regarding Recoupment of Certain Incentive Compensation (the “Recoupment Policy”) in accordance with SEC rules and NYSE listing standards, which mandate the recovery of certain erroneously paid performance-based incentive compensation that may be received by our current and former Section 16 officers on or after October 2, 2023, if AutoNation has a qualifying financial restatement during the three completed fiscal years immediately prior to the fiscal year in which a financial restatement determination is made, subject to limited exceptions. In addition, the Recoupment Policy retains our pre-existing recoupment policy which first became effective in February 2015, and which covers cash bonuses based on achievement of financial performance metrics and any equity-based compensation (e.g., restricted stock, RSUs, PBRSUs, or options). Each of our named executive officers is subject to the Recoupment Policy.

  22. Summary Compensation Table

    Summary Compensation Table The following table provides information regarding compensation earned by each of our named executive officers for 2023, 2022, and 2021, except in the case of Mr. Camplone who was not a named executive officer in 2021 and Messrs. Szlosek and Koehler who were not named executive officers in 2022 or 2021. This table should be read in conjunction with the narrative descriptions and analysis under “Compensation Discussion and Analysis.”

  23. Summary Compensation Table

    | SUMMARY COMPENSATION TABLE | | | | | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(2) | Total ($) | | Michael Manley | 2023 | 1,300,000 | — | 8,315,079 | 3,861,000 | 112,738(3) | 13,588,817 | | Chief Executive Officer and Director | 2022 | 1,300,000 | — | 7,199,903 | 4,446,000 | 553,290 | 13,499,193 | | | 2021 | 216,667 | 1,500,000 | 6,699,904 | — | 97,092 | 8,513,663 | | Thomas A. Szlosek | 2023 | 331,250 | 500,000 | 2,758,044 | 493,358 | 66,445(4) | 4,149,097 | | Executive Vice President and Chief Financial Officer | | | | | | | | | Gianluca Camplone | 2023 | 785,000 | — | 2,309,727 | 1,049,153 | 35,857(5) | 4,179,737 | | Chief Operating Officer, Precision Parts Business, and Executive Vice President, Head of Mobility, Business Strategy, and Development | 2022 | 654,167 | 600,000 | 2,199,979 | 1,012,884 | 222,481 | 4,689,511 | | C. Coleman Edmunds | 2023 | 688,418 | — | 1,616,816 | 766,726 | 32,339(6) | 3,104,299 | | Executive Vice President, General Counsel and Corporate Secretary | 2022 | 685,912 | — | 1,399,914 | 882,896 | 32,002 | 3,000,724 | | | 2021 | 658,634 | — | 2,495,949 | 1,002,550 | 26,053 | 4,183,186 | | Dave Koehler | 2023 | 680,000 | — | 1,154,761 | 757,350 | 20,714(7) | 2,612,825 | | Chief Operating Officer, Non-Franchised Business | | | | | | | | | Marc Cannon | 2023 | 795,675 | — | 2,078,665 | 945,262 | 41,030(8) | 3,860,632 | | Former Executive Vice President and Chief Customer Experience Officer | 2022 | 792,778 | — | 1,799,891 | 1,088,484 | 38,491 | 3,719,644 | | | 2021 | 761,250 | — | 3,209,188 | 1,236,000 | 30,684 | 5,237,122 | | Joseph T. Lower | 2023 | 525,598 | — | 5,579,330(9) | 701,335 | 14,336(10) | 6,820,599 | | Former Executive Vice President and Chief Financial Officer | 2022 | 806,297 | — | 1,999,992 | 1,248,322 | 25,564 | 4,080,175 | | | 2021 | 761,250 | — | 3,387,425 | 1,390,500 | 25,558 | 5,564,733 |

  24. Summary Compensation Table

    (1) The amounts reported reflect the aggregate grant date fair value of each award computed in accordance with FASB ASC Topic 718 for each year shown in the table. For additional information regarding the calculation of these amounts, see Note 15 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Assuming the highest level of performance is achieved under the applicable performance conditions, the maximum value of the 2023-2025 ROIC-based PBRSUs granted to Messrs. Manley, Szlosek, Camplone, Edmunds, Koehler, Cannon, and Lower in 2023 as of the grant date would be as follows:

  25. Summary Compensation Table

    | Mr. Manley | Mr. Szlosek | Mr. Camplone | Mr. Edmunds | Mr. Koehler | Mr. Cannon | Mr. Lower | | $4,320,041 | $1,000,163 | $1,200,027 | $839,909 | $600,013 | $1,080,079 | $1,200,027 |

  26. Summary Compensation Table

    (2) The amounts reported for personal use by Mr. Manley of corporate aircraft are calculated based on the aggregate incremental cost to the Company. Such incremental cost to the Company is calculated based on the direct operating costs to the Company, including fuel costs, crew fees and travel expenses, trip-related repairs and maintenance, landing fees, and other direct operating costs. The amounts reported for personal usage of cars are based on imputed income attributable to each named executive officer calculated in accordance with Treasury regulations, which amounts we believe are equal to or greater than our incremental costs of providing such usage. The Company car programs are part of a competitive compensation package used to attract and retain executive talent in our industry and to familiarize our executive officers with the products that we sell. In addition to the perquisites and other benefits identified in the footnotes below, our named executive officers also are eligible to use our on-site fitness facility, and from time to time, use our tickets for sporting and entertainment events for personal purposes, and receive occasional secretarial support with respect to personal matters. These items do not represent incremental costs to the Company. (3) Includes $43,557 for a vehicle allowance, $19,609 for personal usage of corporate aircraft, $12,574 for relocation reimbursement, $20,000 in reimbursement for financial and tax planning services, $8,158 for tax reimbursement related to his relocation benefits, $6,450 for group term life insurance premiums, and $2,390 for demonstrator vehicle usage. (4) Includes $31,500 for relocation reimbursement, $20,437 for tax reimbursement related to his relocation benefits, $6,712 for a demonstrator vehicle, $4,000 for COBRA reimbursement, $2,046 for group term life insurance premiums, and $1,750 in matching contributions under our 401(k) Plan. (5) Includes $12,693 for demonstrator vehicle usage, $8,250 in matching contributions under our DCP Plan, $7,280 for vehicle allowance, $2,028 for group term life insurance premiums, and the cost of an executive health exam. (6) Includes $15,600 for vehicle allowance, $8,489 for group term life insurance premiums, and $8,250 in matching contributions under our DCP Plan. (7) Includes $13,712 for demonstrator vehicle usage and $7,002 for group term life insurance premiums. (8) Includes $14,950 for a vehicle allowance, $15,714 for group term life insurance premiums, $8,250 in matching contributions under our DCP Plan, and the cost of an executive health examination. (9) Includes approximately $2.3 million related to his 2023 long-term incentive awards, and approximately $3.3 million related to the incremental fair value computed in accordance with FASB ASC Topic 718 with respect to Mr. Lower’s unvested awards that were considered modified as of August 7, 2023. See “Grants of Plan-Based Awards” table below for additional information. (10) Includes $9,336 for a vehicle allowance and the cost of an executive health exam. Employment Agreement with Mr. Manley. In connection with his appointment as our Chief Executive Officer, we entered into an employment agreement with Mr. Manley on September 9, 2021. Pursuant to the terms of his employment agreement, Mr. Manley commenced employment with the Company on November 1, 2021. Mr. Manley’s employment agreement provides that he will serve as our Chief Executive Officer for an initial term of three years, which term will be automatically renewed on the third anniversary of his commencement date and annually thereafter, unless earlier terminated. In addition, his employment agreement provides that his annual base salary will be $1.3 million and that, commencing in 2022, his target annual performance-based cash incentive award will be no less than 200% of his annual base salary and his annual target long-term incentive opportunity under our long-term incentive program will be $7.2 million. As of September 1, 2023, Mr. Manley’s employment agreement authorizes his personal use of corporate aircraft for up to 70 hours per year, the value of which will be included in his annual taxable income. Letter Agreement with Mr. Camplone. In connection with his appointment as our Chief Operating Officer, Precision Parts, Executive Vice President, Head of Mobility, Business Strategy and Development, we entered into a letter agreement with Mr. Camplone, pursuant to which he commenced employment with us on March 1, 2022. The letter agreement provides that Mr. Camplone’s annual base salary will be $785,000 and that his target annual incentive award opportunity will be commensurate with his position. For 2023, Mr. Camplone’s target annual incentive opportunity was set at 90% and his annual target long-term incentive opportunity was set at $2,000,000, in each case representing no change from 2022. See “Potential Payments Upon Termination or Change in Control” for a description of certain provisions in Mr. Manley’s employment agreement and Mr. Camplone’s letter agreement that provide for payments or benefits to the executive at, following, or in connection with, termination under certain circumstances.

  27. Grants of Plan-Based Awards in Fiscal Year 2023

    Grants of Plan-Based Awards in Fiscal Year 2023 The following table sets forth certain information with respect to the non-equity incentive plan awards and the stock-based awards granted to our named executive officers in 2023 under the 2017 Plan. The material terms of these awards are described above in the sections titled “Annual Incentive Awards” and “Long-Term Incentive Awards” under “Compensation Discussion and Analysis.”

  28. Grants of Plan-Based Awards in Fiscal Year 2023

    | Name | Award Type | Grant Date | Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(2) | | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Michael Manley | RSU | 3/1/2023 | 2/15/2023 | | | | | | | 20,985 | 2,879,981 | | | PBRSU-ROIC | 3/1/2023 | 2/15/2023 | | | | 6,295 | 15,739 | 31,478 | | 2,160,020 | | | PBRSU-Relative TSR | 3/1/2023 | 2/15/2023 | | | | 6,295 | 15,738 | 31,476 | | 3,275,078 | | | Annual Cash Incentive | | | 1,300,000 | 2,600,000 | 5,200,000 | | | | | | | Thomas A. Szlosek | RSU | 8/7/2023 | 7/19/2023 | | | | | | | 9,583 | 1,499,931 | | | PBRSU-ROIC | 8/7/2023 | 7/19/2023 | | | | 1,278 | 3,195 | 6,390 | | 500,081 | | | PBRSU-Relative TSR | 8/7/2023 | 7/19/2023 | | | | 1,277 | 3,194 | 6,388 | | 758,032 | | | Annual Cash Incentive(3) | | | 166,114 | 332,228 | 664,456 | | | | | | | Gianluca Camplone | RSU | 3/1/2023 | 2/15/2023 | | | | | | | 5,830 | 800,109 | | | PBRSU-ROIC | 3/1/2023 | 2/15/2023 | | | | 1,748 | 4,372 | 8,744 | | 600,013 | | | PBRSU-Relative TSR | 3/1/2023 | 2/15/2023 | | | | 1,748 | 4,371 | 8,742 | | 909,605 | | | Annual Cash Incentive | | | 353,250 | 706,500 | 1,413,000 | | | | | | | C. Coleman Edmunds | RSU | 3/1/2023 | 2/15/2023 | | | | | | | 4,081 | 560,076 | | | PBRSU-ROIC | 3/1/2023 | 2/15/2023 | | | | 1,224 | 3,060 | 6,120 | | 419,954 | | | PBRSU-Relative TSR | 3/1/2023 | 2/15/2023 | | | | 1,224 | 3,060 | 6,120 | | 636,786 | | | Annual Cash Incentive | | | 258,157 | 516,314 | 1,032,628 | | | | | | | Dave Koehler | RSU | 3/1/2023 | 2/15/2023 | | | | | | | 2,915 | 400,055 | | | PBRSU-ROIC | 3/1/2023 | 2/15/2023 | | | | 874 | 2,186 | 4,372 | | 300,007 | | | PBRSU-TSR | 3/1/2023 | 2/15/2023 | | | | 874 | 2,185 | 4,370 | | 454,699 | | | Annual Cash Incentive | | | 255,000 | 510,000 | 1,020,000 | | | | | | | Marc Cannon | RSU | 3/1/2023 | 2/15/2023 | | | | | | | 5,246 | 719,961 | | | PBRSU-ROIC | 3/1/2023 | 2/15/2023 | | | | 1,574 | 3,935 | 7,870 | | 540,039 | | | PBRSU-Relative TSR | 3/1/2023 | 2/15/2023 | | | | 1,573 | 3,934 | 7,868 | | 818,665 | | | Annual Cash Incentive | | | 318,270 | 636,540 | 1,273,080 | | | | | | | Joseph T. Lower | RSU | 3/1/2023 | 2/15/2023 | | | | | | | 5,830 | 800,109 | | | PBRSU-ROIC | 3/1/2023 | 2/15/2023 | | | | 1,748 | 4,372 | 8,744 | | 600,013 | | | PBRSU-Relative TSR | 3/1/2023 | 2/15/2023 | | | | 1,748 | 4,371 | 8,742 | | 909,605 | | | Annual Cash Incentive(4) | | | 236,140 | 472,280 | 944,560 | | | | | |

  29. Grants of Plan-Based Awards in Fiscal Year 2023

    (1) Columns represent the threshold, target, and maximum annual incentive award payout for the January 1, 2023-December 31, 2023 performance period. The actual payout is reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table.” (2) Amounts reported in this column are based on the grant date fair value of awards computed in accordance with FASB ASC Topic 718. (3) Mr. Szlosek’s annual incentive award was prorated based on his date of hire. (4) Mr. Lower’s annual incentive award was prorated based on his base salary for the portion of 2023 prior to his transition date and his base salary for the portion of 2023 following his transition date. Effective as of August 7, 2023, Mr. Lower transitioned to a non-executive role with the Company. As a result of such transition, Mr. Lower’s unvested equity awards were considered modified under FASB ASC Topic 718. The following table sets forth certain information with respect to the modification of those awards required to be included in our “Grants of Plan-Based Awards” table.

  30. Grants of Plan-Based Awards in Fiscal Year 2023

    | Name | Award Type | Grant Date(1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(2) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Joseph T. Lower | PBRSU | 8/7/2023 | | | | | 6,814 | | | 766,507 | | | PBRSU | 8/7/2023 | | | | | 8,308 | | | 667,049 | | | PBRSU-EBITDA | 8/7/2023 | | | | 1,661 | 3,323 | 4,984 | | 266,804 | | | PBRSU-ROIC | 8/7/2023 | | | | 1,661 | 3,323 | 4,984 | | 266,804 | | | PBRSU-CSI | 8/7/2023 | | | | 831 | 1,662 | 2,493 | | 133,442 | | | RSU | 8/7/2023 | | | | | 6,028 | | | 199,768 | | | PBRSU | 8/7/2023 | | | | | 8,861 | | | 386,871 | | | PBRSU-EBITDA | 8/7/2023 | | | | 1,181 | 2,363 | 3,544 | | 103,169 | | | PBRSU-ROIC | 8/7/2023 | | | | 1,181 | 2,363 | 3,544 | | 103,169 | | | PBRSU-CSI | 8/7/2023 | | | | 590 | 1,181 | 1,771 | | 51,562 | | | RSU | 8/7/2023 | | | | | 5,830 | | | 112,402 | | | PBRSU-ROIC | 8/7/2023 | | | | 1,748 | 4,372 | 8,744 | | 84,292 | | | PBRSU-Relative TSR | 8/7/2023 | | | | 1,748 | 4,371 | 8,742 | | 127,764 |

  31. Grants of Plan-Based Awards in Fiscal Year 2023

    (1) Grant dates in this column represent the modification date with respect to each award in accordance with FASB ASC Topic 718. (2) Amounts reported in this column are based on the incremental fair value of the awards as of the modification date computed in accordance with FASB ASC Topic 718.

  32. Outstanding Equity Awards at End of Fiscal Year 2023

    Outstanding Equity Awards at End of Fiscal Year 2023 The following table provides information concerning unvested restricted stock units held by our named executive officers as of December 31, 2023.

  33. Outstanding Equity Awards at End of Fiscal Year 2023

    | Name | Grant Date | Stock Awards | | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Michael Manley | 11/1/2021 | 18,101(2) | 2,718,408 | | | | | 3/1/2022 | 14,176(3) | 2,128,952 | | | | | 3/1/2022 | | | 25,518(4) | 3,832,293 | | | 3/1/2022 | | | 25,518(4) | 3,832,293 | | | 3/1/2022 | | | 12,759(4) | 1,916,147 | | | 3/1/2023 | 20,985(3) | 3,151,527 | | | | | 3/1/2023 | | | 6,295(5) | 945,383 | | | 3/1/2023 | | | 6,295(5) | 945,383 | | Thomas A. Szlosek | 8/7/2023 | 9,583(6) | 1,439,175 | | | | | 8/7/2023 | | | 1,278(5) | 191,930 | | | 8/7/2023 | | | 1,277(5) | 191,780 | | Gianluca Camplone | 3/1/2022 | 3,938(3) | 591,409 | | | | | 3/1/2022 | | | 7,089(4) | 1,064,626 | | | 3/1/2022 | | | 7,089(4) | 1,064,626 | | | 3/1/2022 | | | 3,543(4) | 532,088 | | | 3/1/2023 | 5,830(3) | 875,549 | | | | | 3/1/2023 | | | 1,748(5) | 262,515 | | | 3/1/2023 | | | 1,748(5) | 262,515 | | C. Coleman Edmunds | 3/2/2020 | | | 4,921(7) | 739,036 | | | 3/1/2021 | | | 6,122(7) | 919,402 | | | 3/1/2021 | | | 3,674(8) | 551,761 | | | 3/1/2021 | | | 3,674(8) | 551,761 | | | 3/1/2021 | | | 1,836(9) | 275,730 | | | 3/1/2022 | | | 6,202(8) | 931,416 | | | 3/1/2022 | | | 2,481(4) | 372,597 | | | 3/1/2022 | | | 2,481(4) | 372,597 | | | 3/1/2022 | | | 1,241(4) | 186,373 | | | 3/1/2023 | 4,081(3) | 612,885 | | | | | 3/1/2023 | | | 1,224(5) | 183,820 | | | 3/1/2023 | | | 1,224(5) | 183,820 | | Dave Koehler | 3/2/2020 | 1,777(7) | 266,870 | | | | | 3/1/2021 | 2,565(7) | 385,212 | | | | | 3/8/2022 | 1,894(3) | 284,441 | | | | | 3/8/2022 | | | 3,545(4) | 532,388 | | | 3/8/2022 | | | 3,545(4) | 532,388 | | | 3/8/2022 | | | 1,772(4) | 266,119 | | | 3/1/2023 | 2,806(3) | 421,405 | | | | | 3/1/2023 | | | 874(5) | 131,257 | | | 3/1/2023 | | | 874(5) | 131,257 | | Marc Cannon | 3/2/2020 | | | 4,921(7) | 739,036 | | | 7/20/2020 | | | 1,039(7) | 156,037 | | | 3/1/2021 | | | 7,871(7) | 1,182,067 |

  34. Outstanding Equity Awards at End of Fiscal Year 2023

    | Name | Grant Date | Stock Awards | | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Marc Cannon (continued) | 3/1/2021 | | | 4,722(8) | 709,150 | | | 3/1/2021 | | | 4,722(8) | 709,150 | | | 3/1/2021 | | | 2,363(9) | 354,875 | | | 3/1/2022 | | | 7,974(7) | 1,197,535 | | | 3/1/2022 | | | 3,189(4) | 478,924 | | | 3/1/2022 | | | 3,189(4) | 478,924 | | | 3/1/2022 | | | 1,596(4) | 239,687 | | | 3/1/2023 | 5,246(3) | 787,844 | | | | | 3/1/2023 | | | 1,574(5) | 236,383 | | | 3/1/2023 | | | 1,573(5) | 236,233 | | Joseph T. Lower | 3/2/2020 | | | 6,814(7) | 1,023,327 | | | 3/1/2021 | | | 8,308(7) | 1,247,695 | | | 3/1/2021 | | | 4,984(8) | 748,497 | | | 3/1/2021 | | | 4,984(8) | 748,497 | | | 3/1/2021 | | | 2,493(9) | 374,399 | | | 3/1/2022 | | | 8,861(7) | 1,330,745 | | | 3/1/2022 | | | 3,544(4) | 532,238 | | | 3/1/2022 | | | 3,544(4) | 532,238 | | | 3/1/2022 | | | 1,771(4) | 265,969 | | | 3/1/2023 | 5,830(3) | 875,549 | | | | | 3/1/2023 | | | 1,748(5) | 262,515 | | | 3/1/2023 | | | 1,748(5) | 262,515 |

  35. Outstanding Equity Awards at End of Fiscal Year 2023

    (1) Based on the closing price per share of our common stock on December 29, 2023 ($150.18). (2) These RSUs vest in one-third annual increments on each of November 1, 2022, October 31, 2023, and October 31, 2024. (3) These RSUs vest in one-third annual increments on each of the first three anniversaries of March 1 of the year in which they were granted. (4) These RSUs are shown at the maximum amount (150% of the target number of shares awarded). These awards are scheduled to cliff vest on the date that the achievement of the applicable performance goal is certified following the applicable three-year performance period. (5) These RSUs are shown at the threshold amount (40% of the target number of shares awarded). These awards are scheduled to cliff vest on the date that the achievement of the applicable performance goal is certified following the applicable three-year performance period. Each of the Relative TSR and ROIC performance goals are discussed under “Compensation Discussion and Analysis - Long-Term Incentive Awards” above. (6) These RSUs vest in one-third annual increments on each of the first three anniversaries of the grant date. (7) These RSUs vest in 25% annual increments on each of the first four anniversaries of March 1 of the year in which they were granted (except that the first tranche of the March 2020 RSU Awards vested on March 2, 2021 and the first tranche of the July 2020 RSU Awards vested on the first anniversary of the applicable grant date). (8) These RSUs are shown at the maximum amount (150% of the target number of shares awarded). In February 2024, the Committee certified the Company’s performance relative to the performance goal established for this award and approved a payout equal to 150% of the target number of shares awarded. (9) These RSUs are shown at the maximum amount (150% of the target number of shares awarded). In February 2024, the Committee certified the Company’s performance relative to the performance goal established for this award and approved a payout equal to 107% of the target number of shares awarded.

  36. Option Exercises and Stock Vested in Fiscal Year 2023

    Option Exercises and Stock Vested in Fiscal Year 2023 The following table provides information concerning exercises of stock options and vesting of restricted stock and restricted stock units held by our named executive officers during 2023.

  37. Option Exercises and Stock Vested in Fiscal Year 2023

    | Name | Stock Awards | | | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Michael Manley | 25,190 | 3,327,472 | | Thomas A. Szlosek | — | — | | Gianluca Camplone | 3,741 | 513,415 | | C. Coleman Edmunds | 33,681 | 4,648,613 | | Dave Koehler | 5,159 | 712,887 | | Marc Cannon | 40,392 | 5,573,738 | | Joseph T. Lower | 52,678 | 7,266,377 |

  38. Non-Qualified Deferred Compensation in Fiscal Year 2023

    Non-Qualified Deferred Compensation in Fiscal Year 2023 The AutoNation, Inc. Deferred Compensation Plan (“DCP”) affords our named executive officers and certain other employees the opportunity to defer up to 75% of base salary and 90% of bonuses and/or commissions on a pre-tax basis. For 2023, we provided eligible participants under the DCP a matching contribution of 100% on the first $8,250 deferred. The 2023 matching contributions were credited by the Company as of January 1, 2024. One-third of the 2023 matching contributions vested as of January 1, 2024, and an additional one-third will vest in January 2025 and 2026, provided that a participant’s matching contribution will immediately vest in the event of death, disability, or the attainment of age sixty with at least six years of service by such participant. Earnings on deferrals are based on “deemed” investments in funds selected for inclusion in the DCP by us. Participants specify the investment allocation of their accounts among the funds provided and are permitted to change the investment allocations on any business day. In 2023, annual returns on the investment options available for the DCP generally ranged from 3.6% to 38.48%. Additionally, the DCP provides for payment of vested deferrals and earnings upon separation from service, death, and disability as well as upon specified payment dates selected by the participants. Participants may elect to receive payments upon specified in-service dates (in the form of a lump sum payment or up to five annual installments) or upon separation from service (in the form of a lump sum payment or up to 15 annual installments). The DCP is intended to meet the requirements of Section 409A of the Internal Revenue Code and other relevant provisions thereunder and related Treasury regulations. The following table sets forth the non-qualified deferred compensation activity for each named executive officer during 2023.

  39. Non-Qualified Deferred Compensation in Fiscal Year 2023

    | Name | Executive Contributions in Last Fiscal Year ($)(2) | AutoNation Contributions in Last Fiscal Year ($) | Aggregate Earnings (Loss) in Last Fiscal Year ($)(1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | | Michael Manley | — | — | — | — | — | | Thomas A. Szlosek | — | — | — | — | — | | Gianluca Camplone | — | 8,250(3) | — | — | 8,250 | | C. Coleman Edmunds | 41,305 | 8,250 | 98,474 | — | 759,822(4) | | Dave Koehler | 21,791 | — | 17,720 | — | 139,905 | | Marc Cannon | 480,000 | 8,250 | 474,636 | — | 2,910,639(5) | | Joseph T. Lower | — | — | — | — | — |

  40. Non-Qualified Deferred Compensation in Fiscal Year 2023

    (1) These amounts are not included in the “Summary Compensation Table.” (2) Amounts are included in the “Salary” column for 2023 in the “Summary Compensation Table,” except for $400,000 for Mr. Cannon, which is included in the “Non-Equity Incentive Plan Compensation” column for 2022 in the “Summary Compensation Table,” and $21,791 for Mr. Koehler, which he earned in 2022, prior to becoming a named executive officer. (3) Mr. Camplone deferred a portion of his 2023 annual incentive bonus (which he contributed to the DCP in 2024) and earned a matching contribution in 2023. (4) $257,439 of this amount has been previously reported as compensation in the “Summary Compensation Table” for previous years. (5) $1,055,600 of this amount has been previously reported as compensation in the “Summary Compensation Table” for previous years.

  41. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The tables below reflect the amount of compensation that would have been payable to our current named executive officers serving on December 31, 2023, under any contract, agreement, plan, or arrangement with us that provides for any payment to such officer in the event of termination of such officer’s employment or a change in control of the Company, in each case assuming the termination or change in control occurred effective as of December 31, 2023, the last business day of our last completed fiscal year. See “Named Executive Officer Departures” below for information regarding Mr. Cannon’s retirement from the Company on December 31, 2023. Mr. Cannon’s separation from the Company did not entitle him to benefits under our Severance Plan described below. The amount of compensation payable to each named executive officer serving on December 31, 2023, upon “termination for cause,” “voluntary termination” (or “voluntary termination for good reason” and “voluntary termination without good reason”), “death or disability,” “retirement,” “involuntary termination without cause,” and “change in control,” as applicable, is shown below. We have prepared the tables based on the assumptions set forth below under “General Assumptions,” and the tables should be considered in conjunction with those assumptions and the disclosures below the tables. In April 2018, the Board adopted the Severance Plan to help retain key employees and maintain a stable work environment by providing severance benefits to covered employees in the event of certain terminations of employment. Under the Severance Plan, in the event a covered employee is terminated without cause, or a covered employee terminates his or her employment for good reason, as long as such person (a) is not in material breach of any restrictive covenant agreement with the Company, (b) does not breach any such restrictive covenant agreement as if it had been in effect through the 18-month period following the applicable termination date, and (c) signs a waiver and release of claims, then such person will be entitled to receive: •in equal installments over 18 months, 1.5 times the sum of such person’s annual base salary and target annual bonus, •at the same time bonuses are paid to active employees generally, an amount equal to such person’s annual bonus as determined by the Committee based on actual performance, prorated for the number of days the person was employed during the calendar year, and •a payment equal to the cost of health insurance coverage under COBRA, grossed up for taxes, based on such person’s then-current elections for an 18-month period. Each named executive officer, other than Messrs. Manley, Camplone, and Lower, was covered by the Severance Plan as of December 31, 2023.

  42. PAY RATIO

    PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Compensation Committee determined that the total annual compensation paid to our Chief Executive Officer, Mr. Manley, in respect of 2023 was approximately 224 times the median of the total annual compensation of all of our employees (other than Mr. Manley) in respect of 2023. We believe that the pay ratio disclosed above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions, and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. We identified the median employee by examining 2023 total compensation for all individuals who were employed by us on December 31, 2023, excluding the compensation received by Mr. Manley in 2023. We included all individuals employed by us on December 31, 2023, whether employed on a full-time or part-time basis, and excluded independent contractors. We calculated annual total compensation for all employees using the same methodology we use for our named executive officers as set forth in the “Summary Compensation Table” above and annualized the compensation of employees who were not employed for the entire year. As reported in the “Summary Compensation Table,” the annual total compensation of Mr. Manley for 2023 was $13,588,817. The annual total compensation of our median employee was $60,648.

  43. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE Pay Versus Performance Table As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid to our named executive officers and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, please refer to “Executive Compensation – Compensation Discussion and Analysis” above.

  44. PAY VERSUS PERFORMANCE

    | Pay Versus Performance | | | | | | | | | | | | | | | | | | | | | | | Value of initial fixed $100 investment based on: | | | | | Year | Summary Compensation Table Total for Mr. Manley(1) | Summary Compensation Table Total for Mr. Jackson(1) | Summary Compensation Table Total for Ms. Miller(1) | Compensation Actually Paid to Mr. Manley(2) | Compensation Actually Paid to Mr. Jackson(2) | Compensation Actually Paid to Ms. Miller(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income (millions)(7) | Adjusted Operating Income Per Basic Share(8) | | (a) | (b) | (b) | (b) | (c) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $13,588,817 | — | — | $20,284,705 | — | — | $4,121,198 | $5,596,060 | $309 | $172 | $1,021 | $35.44 | | 2022 | $13,499,193 | — | — | $12,706,450 | — | — | $3,753,082 | $2,390,745 | $221 | $123 | $1,377 | $35.63 | | 2021 | $8,513,663 | $18,288,250 | — | $8,159,065 | $42,209,539 | — | $5,761,104 | $10,159,292 | $240 | $170 | $1,373 | $25.26 | | 2020 | — | $14,198,071 | $12,362,521 | — | $28,786,698 | $4,112,952 | $3,538,126 | $5,295,383 | $144 | $126 | $382 | $11.95 |

  45. PAY VERSUS PERFORMANCE

    (1) The dollar amounts reflected in the columns labeled “(b)” are the amounts of total compensation reported for Messrs. Manley and Jackson and Ms. Miller for each corresponding year in the “Total” column of the applicable “Summary Compensation Table.” (2) The dollar amounts reported in the columns labeled “(c)” represent the amount of “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K and referred to as “CAP”) to Messrs. Manley and Jackson and Ms. Miller. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Messrs. Manley and Jackson or Ms. Miller during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Messrs. Manley’s and Jackson’s and Ms. Miller’s total compensation for each year to determine their respective CAP:

  46. PAY VERSUS PERFORMANCE

    | Year | Principal Executive Officer | Grant Date Fair Value of Equity Awards Granted During the Year | Fair Value at Year-End of Equity Awards Granted During the Year | Change in Fair Value of Awards Granted in Prior Years that Remain Unvested as of Year-End | Change in Fair Value as of Vesting Date of Awards Granted in Prior Years and Vested During the Year | Fair Value as of the End of Prior Year of Awards Cancelled During the Year | Total Adjustment to Equity Value Reflected in Compensation Paid | | 2023 | Michael Manley | $(8,315,079) | $9,070,897 | $5,315,485 | $624,585 | — | $6,695,888 | | 2022 | Michael Manley | $(7,199,903) | $6,845,204 | $(345,729) | $(92,315) | — | $(792,743) | | 2021 | Michael Manley | $(6,699,904) | $6,345,306 | — | — | — | $(354,598) | | | Michael Jackson | $(9,099,956) | $13,948,969 | $18,220,232 | $1,939,393 | (1,087,349) | $23,921,289 | | 2020 | Michael Jackson | $(7,946,117) | $12,646,506 | $10,939,424 | $(1,051,186) | — | $14,588,627 | | | Cheryl Miller | $(8,852,752) | $4,131,708 | — | $(167,686) | $(3,360,839) | $(8,249,569) |

  47. PAY VERSUS PERFORMANCE

    (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (“NEOs”) as a group (excluding any person who served as our principal executive officer, or “PEO”) in the “Total” column of the applicable “Summary Compensation Table.” The names of each of the non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Thomas A. Szlosek, Gianluca Camplone, C. Coleman Edmunds, Dave Koehler, Marc Cannon, and Joseph T. Lower; (ii) for 2022, Joseph T. Lower, Gianluca Camplone, Marc Cannon, C. Coleman Edmunds, and James R. Bender; (iii) for 2021, Joseph T. Lower, Marc Cannon, C. Coleman Edmunds, and James R. Bender; and (iv) for 2020, Joseph T. Lower, Marc Cannon, C. Coleman Edmunds, James R. Bender, and Christopher R. Cade. (4) The dollar amounts reported in column (e) represent the average CAP for the non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the non-PEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for the non-PEO NEOs as a group for each year to determine the average CAP for such group:

  48. PAY VERSUS PERFORMANCE

    | Year | | Grant Date Fair Value of Equity Awards Granted During the Year | Fair Value at Year-End of Equity Awards Granted During the Year | Fair Value at Vesting Date of Equity Awards Granted and Vested During the Year | Change in Fair Value of Awards Granted in Prior Years that Remain Unvested as of Year-End | Change in Fair Value as of Vesting Date of Awards Granted in Prior Years and Vested During the Year | Fair Value as of the End of Prior Year of Awards Cancelled During the Year | Total Adjustment to Equity Value Reflected in Compensation Paid | | 2023 | Average Non-PEO NEOs | $(2,582,891) | $2,159,120 | $2,475(a) | $1,236,451 | $691,414 | $(31,707) | $1,474,862 | | 2022 | Average Non-PEO NEOs | $(2,036,536) | $1,769,634 | — | $(226,814) | $(148,343) | $(720,280) | $(1,362,339) | | 2021 | Average Non-PEO NEOs | $(3,556,044) | $4,437,291 | — | $3,342,317 | $174,624 | — | $4,398,188 | | 2020 | Average Non-PEO NEOs | $(1,804,891) | $2,834,605 | — | $778,518 | $(50,975) | — | $1,757,257 |

  49. PAY VERSUS PERFORMANCE

    (a) Reflects shares withheld to satisfy FICA tax-related obligations in the year of grant for a non-PEO NEO who became retirement eligible in 2023. (5) Cumulative Total Shareholder Return (“TSR”) is calculated in accordance with the requirements of Item 402(v) of Regulation S-K. (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. Our peer group consists of other public companies in the automotive retail market, referred to as the “Public Auto Retail Peer Group.” The Public Auto Retail Peer Group consists of Asbury Automotive Group, Inc., CarMax, Inc., Group 1 Automotive, Inc., Lithia Motors, Inc., Penske Automotive Group, Inc., and Sonic Automotive, Inc. (7) The dollar amounts reported represent the amount of net income reflected in the Company’s audited consolidated financial statements for the applicable year. (8) Adjusted operating income per basic share is calculated by dividing a measure of operating income (referred to as “Adjusted Operating Income”) by the weighted average actual basic shares outstanding during the applicable year. Adjusted Operating Income includes net income (loss) from discontinued operations and floorplan interest expense and excludes, if applicable in a given year, restructuring expenses, goodwill, franchise rights, and other asset impairment charges, certain bonus accruals, charges or credits recorded in SG&A expenses related to our deferred compensation plan, and other significant reserves, losses, or write-downs. Adjusted Operating Income is also adjusted for acquisitions, to the extent such acquisition was not already included in calculating the performance goal, and to reflect a capital charge for the repurchase of shares of our common stock. The Committee also has the authority to make, and from time to time makes, appropriate equitable adjustments to reflect the impact of unusual or infrequently occurring items. Analysis of the Information Presented in the Pay Versus Performance Table As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” the Committee’s fundamental philosophy is to closely link executive compensation with the achievement of performance goals tied to key metrics and to create an owner-oriented culture through our executive compensation programs. The objectives of our executive compensation program are to ensure that we are able to attract and retain highly skilled executives and to provide a compensation program that incentivizes management to optimize business performance, deploy capital productively, and increase long-term stockholder value. While the Committee utilizes several performance measures to align executive compensation with Company performance, all of those measures are not presented in the Pay Versus Performance table. Moreover, the Committee generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with CAP for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. CAP and Cumulative TSR The following graph describes the relationship between (a) the CAP for our principal executive officers and the average CAP for our named executive officers other than our principal executive officers included in the applicable Summary Compensation Table and (b) our cumulative total shareholder return across our last three completed fiscal years. CAP and Net Income The following graph describes the relationship between (a) the CAP for our principal executive officers and the average CAP for our named executive officers other than our principal executive officers included in the applicable Summary Compensation Table and (b) our net income across our last three completed fiscal years. CAP and Adjusted Operating Income per Basic Share The following graph describes the relationship between (a) the CAP for our principal executive officers and the average CAP for our named executive officers other than our principal executive officers included in the applicable Summary Compensation Table and (b) our adjusted operating income per basic share across our last three completed fiscal years. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The following graph describes the relationship between (a) our cumulative total shareholder return across our last three completed fiscal years and (b) the cumulative total shareholder return for our peer group across the same period. Tabular List of Financial Performance Measures As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” the Committee’s fundamental philosophy is to closely link executive compensation with the achievement of performance goals tied to key metrics and to create an owner-oriented culture through our executive compensation programs. The objectives of our executive compensation program are to ensure that we are able to attract and retain highly skilled executives and to provide a compensation program that incentivizes management to optimize business performance, deploy capital productively, and increase long-term stockholder value. The most important financial performance measures used by the Committee for the most recently completed fiscal year to link compensation actually paid to our named executive officers to the Company’s performance are as follows:

  50. PAY VERSUS PERFORMANCE

    | Most Important Financial Performance Measures | | Adjusted Operating Income Per Basic Share | | Relative TSR | | Return on Invested Capital |

  51. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS Our Board has nominated each of the following eight persons to stand for election for a term expiring at the 2025 Annual Meeting of Stockholders or until their successors are duly elected and qualified: Rick L. Burdick, David B. Edelson, Robert R. Grusky, Norman K. Jenkins, Lisa Lutoff-Perlo, Michael Manley, G. Mike Mikan, and Jacqueline A. Travisano. Each of the nominees is willing and able to serve as a director of AutoNation. See “Board of Directors and Corporate Governance - Directors” for information regarding each of the director nominees. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.