DEF 14A of ARKO Corp., Apr 19, 2024

DEF 14A of ARKO Corp.

Filed Apr 19, 2024 · FY20230000950170-24-046083

Open on EDGAR

  1. Director Nominees

    Director Nominees Andrew R. Heyer, one of our directors since the closing of the Business Combination and our lead independent director since June 2023, served as President and a director of Haymaker Acquisition Corp. II’s (“Haymaker”) from inception until the closing of the Business Combination. Mr. Heyer is a finance professional with over 40 years of experience investing in the consumer and consumer-related products and services industries, as well as a senior banker in leveraged finance during which time his clients included many large private equity firms. Mr. Heyer was an officer and director of Haymaker Acquisition Corp. I (“Haymaker I”) until it completed its business combination with OneSpaWorld Holdings (NASDAQ:OSW) in March 2019, and has remained on its board since such time. Currently, Mr. Heyer is the Chief Executive Officer and founder of Mistral Equity Partners, a private equity fund manager founded in 2007 that invests in the consumer industry, and Chief Executive Officer and Executive Chairman of Haymaker Acquisition Corp. 4, a special purpose acquisition company. Prior to founding Mistral in 2007, from 2000 to 2007, Mr. Heyer served as a Founding Managing Partner of Trimaran Capital Partners, a $1.3 billion private equity fund. Mr. Heyer was formerly a vice chairman of CIBC World Markets Corp. and a co-head of the CIBC Argosy Merchant Banking Funds from 1995 to 2001. Prior to joining CIBC World Markets Corp. in 1995, Mr. Heyer was a founder and Managing Director of The Argosy Group L.P. from 1990 to 1995. From 1984 to 1990, Mr. Heyer was a Managing Director at Drexel Burnham Lambert Inc. and, previous to that, he worked at Shearson/American Express. Mr. Heyer also serves on the board of The Lovesac Company (NASDAQ: LOVE), a branded omni-channel retailer of technology-forward furniture, from 2010 to the present and several private companies owned in whole or in part by Mistral, including PetWise, a pet accessories business from 2011 to the present. Previously, Mr. Heyer served on the board of following companies: Coliseum Acquisition Corporation (NASDAQ: MITA), a special purpose acquisition company; Tastemaker Acquisition Corporation (NASDAQ: TMKRU), a special purpose acquisition company; AF Acquisition Corporation (NASDAQ: AFAQ), a special purpose acquisition company; Hain Celestial Group, Inc. (NASDAQ: HAIN), a natural and organic food and products company; XpresSpa Group, Inc. (NASDAQ: XSPA), a health and wellness services company; Insomnia Cookies, a retailer of desserts open primarily in the evening and nighttime; Accel Foods, an incubator and investor in early stage food and beverage companies; Las Vegas Sands Corp., a casino company; El Pollo Loco Holdings, Inc., a casual Mexican restaurant; and Reddy Ice Holdings, Inc., a manufacturer of packaged ice products. Mr. Heyer received his B.Sc. and M.B.A. from the Wharton School of the University of Pennsylvania, graduating magna cum laude. Mr. Heyer is the brother of Mr. Steven Heyer, another of our directors. We believe that Mr. Heyer is qualified to serve as a director due to his extensive finance, investment and operations experience, particularly in the consumer and consumer-related products and services industries. Steven J. Heyer, one of our directors since the closing of the Business Combination and formerly Haymaker’s Chief Executive Officer and Executive Chairman from inception until the closing of the Business Combination, has over 40 years of experience in the consumer and consumer-related products and services industries, leading a range of companies and brands. Mr. Heyer is currently President and a director of Haymaker Acquisition Corp. 4, a special purpose acquisition company. Mr. Heyer has applied his experience and analytical skills in a variety of leadership positions across diverse industry groups, including broadcast media, consumer products, and hotel and leisure companies. Over the past nine years, he has been acting as an advisor and director to, and investor in, several private companies across the consumer subsectors of health and wellness, restaurants, technology, marketing services and technology and furniture. From its formation until it completed its business combination with OneSpaWorld Holdings (NASDAQ:OSW) in March 2019, he was an officer and director of Haymaker I, and since its business combination through May 2023, served on the board of OneSpaWorld Holdings. Mr. Heyer’s operating experiences include: leading the turnaround of Outback Steakhouse as an advisor (from 2010 to 2012); as Chief Executive Officer of Starwood Hotels & Resorts Worldwide (from 2004 until 2007); as President and Chief Operating Officer of The Coca-Cola Company (from 2001 to 2004); as a member of the boards of Coca-Cola FEMSA, and Coca-Cola Enterprises (all from 2001 to 2004); as President and Chief Operating Officer of Turner Broadcasting System, Inc., and a member of AOL Time Warner’s Operating Committee (from 1994 to 2001); as President and Chief Operating Officer of Young & Rubicam Advertising Worldwide (from 1992 to 1994); and before that spending 15 years at Booz Allen & Hamilton, ultimately becoming Senior Vice President and Managing Partner. Mr. Heyer currently served on the boards of the following companies: Lazard Ltd; Lazard Group; and Atkins Nutritionals, Inc. which was acquired by Conyers Park Acquisition Corp, a publicly traded special purpose acquisition company. Previously, Mr. Heyer served on the board of following companies: WPP Group, a publicly traded digital, internet, and traditional advertising company; Equifax, a publicly traded consumer credit reporting and insights company; Omnicare, Inc., a supplier of pharmaceutical care to the elderly; Vitrue, Inc., a provider of social marketing publishing technologies; and Internet Security Systems, Inc. a provider of internet security software, appliance, and services. In March 2011, Harry & David Holdings, Inc. (“Harry & David”), a company where Mr. Heyer had been Chief Executive Officer from 2010 until February 2011, filed a prearranged Chapter 11 plan under the U.S. Bankruptcy Code. Subsequently, Harry & David filed a reorganization plan in bankruptcy court in May 2011 and emerged from bankruptcy in September 2011. Mr. Heyer received his B.S. from Cornell University and an M.B.A. from New York University. Mr. Heyer is the brother of Mr. Andrew Heyer, another of our directors. We believe that Mr. Heyer is qualified to serve as a director due to his extensive operations, management and business background, particularly in the consumer and consumer-related products and services industries.

  2. Director Nominees

    Michael J. Gade, one of our directors since the closing of the Business Combination and our Lead Independent Director from July 2021 until June 2023, has served as a Senior Advisor to the Global Consumer Group of Boston Consulting Group since 2006. He has served on the board of directors of Upbound Group (NASDAQ: UPBD) formerly Rent-A-Center, Inc.for 15 years, retiring in June 2021, where he has advised in various areas including retailing, franchising, operational productivity, branding, merchandising, private label development and acquisition/post-merger integration in the convenience, fuel and grocery industries. Additionally, Mr. Gade was the Senior Partner and Chairman of Coopers & Lybrand’s Retail and Consumer Practice (now PwC) as well as a senior executive at 7-Eleven, having been responsible for merchandising, marketing and business development. Mr. Gade has also served on the board of the Crane Group, Inc, a large family office operating several diversified operating companies, since 2005, and currently serves as the Chair of the Audit Committee. Previously, Mr. Gade served on the board of the following companies: MACS, Inc, a private equity owned convenience chain and gasoline distributor in the Mid-Atlantic region; One Network, Inc, a leading software developer in the area of Demand Based Supply Chains as part of a Total Logistics solution; and Strive Group & Strive Logistics, a promotional group serving the consumer products industry. Mr. Gade received his B.S.B.A. and M.B.A. from the Ohio State University. We believe that Mr. Gade’s significant retail marketing experience provides our Board with an important resource with respect to our marketing and merchandising. In addition, Mr. Gade provides leadership and governance experience through his other directorships, including service on the audit and compensation committees of such companies. Laura Shapira Karet, one of our directors since June 7, 2023, has over 30 years of experience in the grocery and consumer products industries. From 2012 to 2023, Ms. Karet served as the Chief Executive Officer of Giant Eagle, one of the nation’s largest retailers with approximately 32,000 team members and $11 billion in annual sales. She also served as the chairman of Giant Eagle’s board of directors. From 2000 to 2012, Ms. Karet served as Vice President of Marketing and Chief Strategy Officer and President of New Formats of Giant Eagle, during which period she was honored as one of Progressive Grocer Magazine’s 2010 Top Women in Grocery. During her tenure at Giant Eagle, Ms. Karet was noted for a variety of innovations, including enhancing manufacturing and fresh food production capabilities that led to expanded product offerings. She also focused on applying next generation technologies such A.I., robotics, and automation to retail, e-commerce, customer behavior and supply chains to streamline operations in stores and online. Prior to joining Giant Eagle, Ms. Karet was a marketing executive at the Sara Lee Corporation from 1997 to 2000 and a brand manager at the Procter & Gamble Company from 1990 to 1997, where she oversaw such household names such as Secret antiperspirant, Folgers coffee, and Crisco. Ms. Karet is a Trustee for the Brookings Institution and the Committee for Economic Development. She is also a member of the Council on Foreign Relations. We believe that Ms. Karet’s significant retail experience provides our Board with an important resource with respect to our store operations, marketing and merchandising. Diversity and Inclusion. While we do not currently have a formal diversity policy with respect to Board composition, the Board believes it is important for the Board to have gender, racial and ethnicity diversity along with diversity of knowledge base, professional experience and skills. The Nominating and Corporate Governance Committee takes these qualities into account when considering director nominees for recommendation to the Board. We believe diversity enhances our effectiveness. Our Board currently has one female director and one member with racial diversity. The Board is committed to achieving a Board composition that represents a diversity of background and experience, inclusive of race, ethnicity, gender and sexual orientation. The following matrix provides additional information about our Board diversity as of December 31, 2023.

  3. Director Nominees

    | Board Diversity Matrix | | | | | | Total Number of Directors: 7 | | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 1 | 6 | | | | Part II: Demographic Background | | | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 1 | 5 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | | |

  4. Executive Compensation Objectives and Philosophy

    Executive Compensation Objectives and Philosophy Our executive compensation strategy is guided by four core guiding principles: alignment to stakeholders; performance focused; competitive; and simple and transparent. Our primary executive compensation objectives are to: • Attract, retain and motivate executives who are capable of advancing the Company’s mission and strategy; and • Reward executives in a manner aligned with the Company’s financial performance. To achieve our objectives, we deliver executive compensation to the NEOs through a combination of the following components: • base salary; • cash bonus opportunities; • equity compensation, which is mainly performance-based; and • broad-based employee benefits. Our executive compensation program for 2021 was the first compensation program adopted following completion of the Business Combination on December 22, 2020 and was influenced by the unique circumstances of the Company including: (i) prior to 2021, no executive had received equity grants and (ii) the Company wished to reward long-term service and individual contribution with special recognition awards. In 2021, as part of our transition to a public company, all incentive compensation was granted solely in equity without a cash component. In 2022 and 2023, we began to transition to an incentive program that better reflects our peers’ compensation levels and public-company compensation structures while continuing to build our executives’ equity base, which we believe aligns their interests with those of our stockholders. Therefore, starting in 2022, a small portion of the long-term incentive (“LTI”) awards for certain named executive officers was granted in the form of cash (“Cash LTIs”) and subject to the same metrics as our performance-based restricted stock units (“PSUs”) . Our equity LTIs (which may be granted in the form of shares, stock options, time-based restricted stock units (“RSUs”), PSUs or a combination thereof) consists of equity awards linked to Company performance and long-term value creation in an effort to align the interests of the NEOs with our stockholders as described in below, and time-based equity awards intended to foster share ownership that aligns the NEO’s long-term interests with stockholders of the Company. We primarily grant LTI equity in the form of time-based RSUs and PSUs, which awards are designed to attract and retain individuals with the qualifications to manage and lead the Company by motivating such persons to develop professionally and contribute to the achievement of our financial and operational goals. We believe having a substantial amount of the compensation package at risk, with a complementary time-based component intended to foster share ownership to align recipients long-term interests with our stockholders, provides optimal alignment among increasing stockholder value, management’s execution of our long-term strategic plan and goals, and value actually realized by our executives. Under the ARKO Corp. 2020 Plan, we use EBITDA (as defined below) as the performance metric for LTIs, including the PSUs and Cash LTI issued to selected NEOs and the performance level is measured versus our Annual Budgeted EBITDA (as defined below). This performance metric is also used as the financial performance metric for certain corporate-level and field-level employee cash bonuses. We chose EBITDA as the performance metric for the PSUs because we believe that it is a key indicator of our operating performance and a strong equity valuation metric. “EBITDA” is defined as GPM’s net income plus interest, taxes, depreciation & amortization, (gain)/loss on disposal of fixed assets, impairment charges, acquisition costs, other noncash items, and unusual or nonrecurring items. We chose this definition because GPM is our primary operating entity. “Annual Budgeted EBITDA” is defined as budgeted EBITDA for a fiscal year as approved by the Board within the first sixty days of the beginning of that fiscal year, as may be adjusted by the Board, within its discretion, for mergers and acquisitions, store closures and similar extraordinary non-recurring items. We believe that actual EBITDA is the most relevant performance metric at this point of time for our executives, because (i) we believe EBITDA reflects the Company’s core performance and operational results, (ii) EBITDA is influenced, in part by the efforts of our executives to enhance sales, grow margin and reduce cost and expenses, and (iii) EBITDA is a metric reviewed by our investors when evaluating our Company. For 2020 through 2023, we did not use total shareholder return (“TSR”) as a metric for measuring our executive officers’ performance because we have been publicly-traded for only a limited period of time, the trading volume of our shares has been relatively low, we believe that the market has generally been poor for companies like us that combined with a SPAC, and we believe that we have only a limited number of publicly traded peers with similar characteristics and to which we could compare our TSR as a means of determining executive compensation.

  5. Compensation Determination Process; Role of Compensation Consultant and Management

    Compensation Determination Process; Role of Compensation Consultant and Management The Compensation Committee, on behalf of the Board, discharges the Board’s responsibilities relating to compensation of the Company’s directors and executive officers, oversees the Company’s overall compensation structure, policies and programs, and reviews the Company’s processes and procedures for the consideration and determination of director and executive compensation. The primary objective of the Compensation Committee is to develop and implement compensation policies and plans that ensure the attraction and retention of key management personnel, the motivation of management to achieve the Company’s corporate goals and strategies, and the alignment of the interests of management with the long-term interests of the Company’s stockholders. Each year, at the beginning of the year, the Company’s Board approves the Annual Budgeted EBITDA, which is then used as a metric for our equity LTI and Cash LTI awards. The Board periodically reviews the approved Annual Budgeted EBITDA to determine whether adjustments are appropriate as a result of mergers and acquisitions, store closures and similar extraordinary non-recurring items. Pursuant to its charter, the Compensation Committee is authorized to, and has direct responsibility for, the appointment, compensation and oversight of the work of any compensation consultant retained by the Compensation Committee. For the 2023 fiscal year, the Compensation Committee engaged Mercer (US) as its independent compensation consultant to assist with our 2023 compensation program. Mercer (US) has served as the Compensation Committee’s independent compensation consultant for the prior two fiscal years. The Compensation Committee assessed the independence of Mercer (US) pursuant to SEC rules prior to this latest engagement and did not identify any conflict of interest that would prevent it from independently advising the Compensation Committee. In 2023, the compensation consultant attended selected Compensation Committee meetings and advised the Compensation Committee on the following matters, among others: peer group development; market review of executive compensation levels and compensation mix; long-term incentive plan design and development of performance measures for the CEO bonus. The awards to Mr. Kotler for 2023 were based on the terms of his written employment agreement. At the beginning of each calendar year, the Compensation Committee determines the key performance measures for Mr. Kotler. In February 2023, the Compensation Committee determined that Mr. Kotler’s Target Bonus (as defined below) for 2023 was to be based on certain key performance measures that were focus areas for 2023 in the fields of financial management, strategic planning, acquisitions and deal performance, culture and team, people development, Board relations, and communications and social responsibility. With regard to Mr. Kotler’s LTI for 2023, the Compensation Committee approved the same awards as were approved for 2022. In March of 2022 and March of 2023, the Compensation Committee approved equity awards and cash bonuses for the NEOs (other than Mr. Kotler). The awards to the other NEOs were based on recommendations of the CEO, which were based in part on (i) the CEO’s assessment of these executives’ contribution to the Company and the need to retain these executives, (ii) prior year award amounts, and (iii) the fact that 2021 was the first year in which the executives received equity compensation from the Company. The Compensation Committee additionally considers other factors in making decisions on executive pay adjustments, including individual and company performance, experience, time in position and for roles other than the CEO, the recommendations of the CEO. Based on the CEO’s recommendations in 2023, the Compensation Committee approved a cash bonus component for the NEOs’ compensation, which was based on performance.

  6. ARKO Corp. 2020 Incentive Compensation Plan

    ARKO Corp. 2020 Incentive Compensation Plan Our equity awards are granted under the 2020 Plan, which was approved at the special meeting of Haymaker stockholders held on December 8, 2020, and is administered by the Compensation Committee. Our grants of RSUs provides the award recipient the right to receive, upon the vesting date of such RSUs, one share of common stock for each vested RSU. Each RSU vests in accordance with the schedule determined at the time of grant, subject to the grantee’s continued employment or service through the vesting date. Our grants of PSUs provides the award recipient the right to receive, upon the vesting date of such PSUs, one share of common stock for each vested PSU. PSUs generally vest (or fail to vest) at the end of a three-year performance period, based on the performance metrics specified in the Form PSU Agreement, subject to the additional requirement that the grantee remain in continuous service through the vesting date. Our grants of stock options provides non-qualified stock options to purchase shares of common stock, subject to the vesting of such stock options, at an applicable exercise price per share. For additional information on the 2020 Plan, including the proposed Amendment to the 2020 Plan, see “Proposal No. 3 – Amendment to the ARKO Corp. 2020 Incentive Compensation Plan.”

  7. Bonuses

    Bonuses Target Bonus Pursuant to Mr. Kotler’s employment agreement, he is entitled to a target bonus opportunity with a target equal to 150% of his current base salary (the “Target Bonus”), based on satisfaction of performance criteria established by the Compensation Committee. For 2023, the Compensation Committee has determined that the threshold for payout would be 50% of the Target Bonus and the maximum would be 200% of the Target Bonus. The actual payout for 2023 as approved by the Compensation Committee was 50% of the Target Bonus. For 2022, Mr. Kotler received 100% of the Target Bonus. For 2021, Mr. Kotler was not entitled to the Target Bonus because the Compensation Committee did not establish the performance criteria in respect of that bonus. However, in March 2022, the Compensation Committee approved discretionary RSU awards to Mr. Kotler to recognize Mr. Kotler’s contribution to the Company’s strong 2021 financial results. Discretionary Bonus Pursuant to their respective employment agreements, Messrs. Bassell, Nuchamovitz and Bricks may be awarded discretionary bonuses from time to time. In 2023, a one-time cash bonus of $100,000 was approved by the Compensation Committee for each of Mr. Bricks and Mr. Nuchamovitz in anticipation of the Transit Energy Group, LLC acquisition that closed in March 2023. Fixed Quarterly Bonus Pursuant to their respective employment agreements, Messrs. Bassell and Bricks are each entitled to a fixed quarterly bonus. Please see “— Employment Agreements” below.

  8. Long Term Incentives (LTIs)

    Long Term Incentives (LTIs) Under Mr. Kotler’s employment agreement, his long-term incentive target (“LTI Target”) is 350% of his base salary. The LTI Target for our other NEOs, except for Mr. Bassell, for 2023 were 203% – 239%, without giving effect to a discretionary bonus of $100,000 earned by each Messrs. Bricks and Nuchamovitz in 2023. The LTI Target for Mr. Bassell for 2023 was 51%. Cash LTIs The Company believes that aligning annual cash bonus for its NEOs with the Company’s performance serves the primary objectives of the Company’s compensation philosophy. Accordingly, since 2022, the Company has granted a Cash LTI to the NEOs, other than Mr. Kotler who is instead entitled to an annual cash Target Bonus under his employment agreement, as described above. The Cash LTI is granted in conjunction with the grant of PSUs and is allocated to each of the three years in the PSU performance cycle, and each portion is earned and payable, if at all, consistent with the performance results and associated payout percentages for the PSUs for each individual year. The amount of Cash LTI, if any, earned each year is paid annually at or about the time the results for the preceding year are approved by the Compensation Committee. We believe that basing the Cash LTI on the same performance metrics as our PSUs with the same payout percentage further aligns our NEO’s interests with development within our existing operational and strategic metrics while providing a cash incentive to complement our equity LTIs. In 2023, due to Mr. Bassell’s planned retirement in 2024, in lieu of a Cash LTI, Mr. Bassell was granted a one year cash short-term incentive to be paid based on the performance of the Company in 2023. No short-term incentive plan was implemented for NEOs other than Mr. Kotler in accordance with his employment agreement and for Mr. Bassell in 2023 as described above. Equity LTIs In 2021, the Company granted the NEOs (other than Mr. Kotler) both RSUs and PSUs. Excluding the one-time special recognition awards, our NEOs (other than Mr. Kotler) received one-third (1/3) of their LTI in RSUs that are time-based (vesting ratably over a three year period) and two-thirds (2/3) in PSUs. These 2021 grants were more heavily weighted towards PSUs to enhance the performance orientation of the awards, particularly given the retention-oriented special recognition award granted in respect of the consummation of the Business Combination. The 2022 equity grants were driven primarily by a market survey data for similar-sized companies reviewed by the Compensation Committee’s independent consultant in November 2021 and the lack of historical equity grants to any NEOs before 2021. As a result, in 2022, we added an LTI cash component and therefore increased the performance metric components of our other NEO’s LTI to be 30% RSUs, 50% PSUs and 20% Cash LTI, as described above. The 2023 equity grants were made generally in the same form and weighting as in 2022, with a mix of performance-based and time-based awards, predominantly weighted towards performance conditions. In 2023, the other NEO’s LTI, except for Mr. Bassell, consisted of approximately 31% – 36% RSUs, 50% – 58% PSUs and 11% – 14% Cash LTIs. For Mr. Bassell, in 2023, due to his planned retirement, in lieu of LTIs, the Company granted awards consisting of 45% RSUs with one year vesting and 55% in a cash short-term incentive to be paid based on the performance of the Company in 2023 in lieu of a Cash LTI. The stock options granted to Mr. Kotler in 2021 through 2023 were designed to align his pay opportunity with stock price appreciation. The stock options granted in 2021 were granted at a $10 strike price based on the price of the stock used for the Business Combination. Upon review of the 2021 grant, the Compensation Committee determined that a computational error resulted in the issuance of fewer stock options than were supposed to have been granted in 2021. As a result, in March 2022, Mr. Kotler was granted “make-up” stock options, which options have a $10 strike price. The other stock options granted in March 2022 as compensation for 2022 were granted at $8.49 strike price based on our market price at the time of the grant. The stock options granted in March 2023 were granted at a $8.58 strike price based on our market price at the time of the grant. We believe these stock options align with investor focus on stock price. The PSUs have three-year cliff vesting and the RSUs and Stock Options vest ratably over three years. We believe these vesting periods are consistent with market practices and promote retention. We believe our 2023 awards provided market-aligned long term incentive opportunities. Performance-based Restricted Stock Units Each PSU includes three one-year performance periods. The payout of shares earned, if any, is at the end of the three-year cycle, provided the recipient continues to be employed by the Company as of the end of such performance period, and is the greater of (a) the sum of the PSUs earned for each of the three fiscal years during the performance period based on actual EBITDA compared to the Annual Budgeted EBITDA for each respective year or (b) the average of actual EBITDA compared to the Annual Budgeted EBITDA for the three fiscal years with a cap applied at 110% when averaging each year. The following table shows the threshold and target achievement levels of the Annual Budgeted EBITDA for 2023 and the corresponding payout levels to the NEOs. Payout levels between the stated levels of achievement increase in 5% increments for each additional percentage of the Annual Budgeted EBITDA achieved, up to the target level.

  9. Long Term Incentives (LTIs)

    | Performance Metric and PSU payout level: | Threshold | Target | Maximum | | Annual Budgeted EBITDA | 90% | 100% | 110% or over | | Payout Level | 50% | 100% | 150% |

  10. Long Term Incentives (LTIs)

    Given our strong performance in 2022, in which we achieved in approximately 108% of Annual Budgeted EBITDA, the Compensation Committee adjusted the performance criteria between 100% and 110% of the Annual Budgeted EBITDA for 2022 and in 2023 approved that the percentage of PSUs out of the target amount for 2022 will be 125% multiplied by one-third. This applied to (i) all PSUs granted as part of the 2021 LTI and all PSUs granted as part of the 2022 LTI, and (ii) the NEOs Cash LTIs granted in March 2022 with respect to the portion earned and payable for 2022. In 2023, we achieved slightly above 90% of Annual Budgeted EBITDA, and in 2024, the Compensation Committee approved that the percentage of PSUs out of the target amount for 2023 will be 50% multiplied by one-third. This applied to (i) all PSUs granted as part of the 2021 LTI, the 2022 LTI, and the 2023 LTI, and (ii) the NEOs Cash LTIs granted in March 2022 and March 2023 with respect to the portion earned and payable for 2023. We believe that the above payout amounts are in-line with the market practices, are tied to Board approved annual budgets, and calibrate the threshold and maximum to investor expectations.

  11. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation We offer a select group of management and key employees, including the NEOs, who contribute materially to the Company’s continued growth, development and future business success an opportunity to defer a portion of their compensation (in the form of salary and bonuses) under our Non-Qualified Plan, or NQP. We made matching contributions of approximately $0.2 million to the NQP during the year ended December 31, 2023 related to all participants.

  12. Pension Benefits

    Pension Benefits We do not maintain any pension benefit or retirement plans other than the 401(k) plan.

  13. Employment, Severance or Change in Control Agreements

    Employment, Severance or Change in Control Agreements We consider maintenance of a strong management team essential to our success. To that end, we recognize that the uncertainty that may exist among management with respect to their “at-will” employment with us could result in the departure or distraction of management personnel to the Company’s detriment. Accordingly, we determined that severance arrangements are appropriate to encourage the continued attention and dedication of certain members of its management team and to allow them to focus on the value to equity holders of strategic alternatives without concern for the impact on their continued employment. See “Potential Payments upon Termination or Change in Control” for a discussion of certain rights of the NEOs upon termination of their employment or upon the occurrence of certain events.

  14. Employment Agreements

    Employment Agreements Kotler Employment Agreement On September 8, 2020, we entered into an employment agreement with Mr. Kotler pursuant to which Mr. Kotler serves as our Chief Executive Officer for a three-year term from December 22, 2020, following which the agreement will be automatically extended for additional one-year terms, unless either we or Mr. Kotler give at least 120 days’ prior notice of non-extension. Under the terms of the employment agreement, Mr. Kotler is entitled to the following: • An annual base salary of $1,080,000, to be increased by at least 3% on an annual basis (subject to an annual review by the Compensation Committee for increase (but not decrease)); • A target bonus opportunity equal to 150% of the executive’s current base salary, based on satisfaction of performance criteria to be established by the Compensation Committee; • An annual long term-incentive award having a fair market value (as reasonably determined by the Board or the Compensation Committee) equal to 350% of the executive’s then base salary in effect as of the date of the grant with the type of the long-term incentive award, and the terms and conditions thereof, determined by the Compensation Committee of the Board, in its discretion; • An expense reimbursement for all reasonable business expenses actually paid or incurred by the executive during the term of employment, including first class air travel, hotel and other travel-related expenses, including for any and all related travel between our principal place of business in Richmond, Virginia and employee’s principal residence in Miami-Dade, Florida; and • Participation in all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, and all other plans as are offered by us to our executive personnel, including savings, pension, profit-sharing and deferred compensation plans, subject to the general eligibility and participation provisions set forth in such plan. Bassell Employment Agreement On August 4, 2020, GPM and Mr. Bassell entered into an amended and restated employment agreement for a five-year term, following which the agreement contemplated automatic extension for additional one-year terms, unless either GPM or Mr. Bassell gives at least 90 days’ prior notice of non-extension. Under the terms of the amended and restated employment agreement, Mr. Bassell was entitled to the following: • An annual base salary of $370,302 (subject to discretionary review by the CEO for increase (but not decrease)); • A signing bonus of $50,000; • A monthly car allowance of $600; • A quarterly bonus of $35,000 (to be eligible, Mr. Bassell must have been employed by GPM on the last day of the prior calendar quarter); • Participation in the 2020 Incentive Plan; • Discretionary bonus (as determined by the CEO or Board); and In January 2023, Mr. Bassell announced his planned retirement, effective upon the appointment of his successor. Mr. Bassell’s tenure as the Company’s Chief Financial Officer (principal financial and accounting officer) concluded upon the effectiveness of Mr. Giammatteo’s appointment as Executive Vice President and Chief Financial Officer (principal financial and accounting officer) on January 2, 2024. Mr. Bassell will remain with the Company until the beginning of May 2024 to assist with the transition process. Bricks Employment Agreement Pursuant to the terms of the employment agreement dated January 3, 2020, between GPM and Mr. Bricks, Mr. Bricks continued to serve as GPM’s General Counsel for a five-year term, following which the agreement will be automatically extended for additional successive one-year terms, unless either GPM or Mr. Bricks gives at least 90 days’ prior notice of non-extension. Under the terms of the employment agreement, Mr. Bricks is entitled to the following: • An annual base salary of $395,000 (subject to discretionary review by the CEO for increase (but not decrease)); • A signing bonus of $50,000; • A monthly car allowance of $600; • A quarterly bonus of $10,000 (to be eligible, Mr. Bricks must be employed by GPM on the last date of the prior calendar quarter); • Participation in the 2020 Incentive Plan; • Discretionary bonus (as determined by the CEO or Board); and • Participation in customary employee benefit plans and in the NQP. Nuchamovitz Employment Agreement Pursuant to the terms of the employment agreement dated January 1, 2020, between GPM and Mr. Nuchamovitz, Mr. Nuchamovitz continued to serve as Executive Vice President of GPM for a five-year term, following which the agreement will be automatically extended for additional successive one-year terms, unless either GPM or Mr. Nuchamovitz gives at least 90 days’ prior notice of non-extension. Under the terms of the employment agreement, Mr. Nuchamovitz is entitled to the following: • An annual base salary of $555,000 (subject to discretionary review by the CEO for increase (but not decrease)); • A signing bonus of $100,000; • A monthly car allowance of $600; • Participation in the 2020 Incentive Plan; • Discretionary bonus (as determined by the CEO or Board); and • Participation in customary employee benefit plans and in the NQP. Giammatteo Employment Agreement Pursuant to the terms of the employment agreement dated December 19, 2023, by and among the Company, GPM and Mr. Giammatteo, the Company appointed Mr. Robb Giammatteo as Executive Vice President and Chief Financial Officer (principal financial and accounting officer), effective January 2, 2024. Mr. Giammatteo’s employment agreement provides for an initial term of three years, which term will automatically extend for successive one-year terms unless the Company or Mr. Giammatteo gives at least 90 days’ prior notice of non-extension. Under the terms of the employment agreement, Mr. Giammatteo is entitled to the following: • An annual base salary of $725,000 (which amount is subject to periodic review by the Compensation Committee for increase (but not decrease)); • Annual short-term cash incentive bonus of up to 50% of the current base salary; • Annual long term incentive compensation which includes (i) time-based awards equal to $250,000 and (ii) performance-based awards equal to $1,062,125. The type of long term awards, and the terms and conditions, and the grant date, shall be determined by the Compensation Committee, in its discretion. In addition to the foregoing, and to partially account for foregone severance from Mr. Giammatteo’s immediately prior employer, when Mr. Giammatteo’s initial grants were first issued in 2024 under the Company’s normal grant cycle, a one-time special award consisting of performance-based restricted stock units equal to $730,000; A monthly car allowance of $600; and Participation in customary employee benefit plans and in the NQP.

  15. Compensation-Related Risk Assessment

    Compensation-Related Risk Assessment Our Compensation Committee assesses and monitors whether any of our compensation policies and programs is reasonably likely to have a material adverse effect on our Company. The Compensation Committee and management do not believe that the Company presently maintains compensation policies or practices that are reasonably likely to have a material adverse effect on the Company’s risk management or create incentives that could lead to excessive or inappropriate risk taking by employees. In reaching this conclusion, the Compensation Committee considered all components of our compensation program and assessed any associated risks. The Compensation Committee also considered the various strategies and measures employed by the company that mitigate such risk, including: (i) the overall balance achieved through our use of a mix of cash and equity, annual and long-term incentives and time and performance-based compensation; (ii) our use of multi-year vesting periods for equity grants; and (ii) the oversight exercised by the Compensation Committee over the performance metrics and results under the 2020 Plan.

  16. Summary Compensation Table

    Summary Compensation Table The following table sets forth the compensation earned or received by the NEOs for services rendered during the fiscal years ended December 31, 2023, 2022 and 2021.

  17. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | | Arie Kotler, | 2023 | 1,146,731 | — | 2,673,511 | 1,336,754 | 885,128 | 6,445 | 6,048,569 | | Chairman, President, Chief Executive Officer and Director | 2022 | 1,113,319 | — | 2,595,597 | 1,299,832 | 1,668,600 | 6,445 | 6,683,793 | | | 2021 | 1,080,000 | — | 4,039,200(6) | 1,250,278(5) | —(6) | 6,445 | 6,375,923 | | Don Bassell, | 2023 | 409,108 | 140,000 | 125,002 | — | 101,667 | 11,010 | 786,787 | | Chief Financial Officer | 2022 | 393,066 | 140,000 | 640,002 | — | 66,667 | 9,180 | 1,248,915 | | | 2021 | 378,420 | 140,000 | 1,680,000 | — | — | 9,180 | 2,207,600 | | Maury Bricks, | 2023 | 430,594 | 140,000 | 950,004 | — | 50,000 | 26,636 | 1,597,234 | | General Counsel and Secretary | 2022 | 416,846 | 40,000 | 600,005 | — | 62,500 | 21,350 | 1,140,701 | | | 2021 | 403,657 | 40,000 | 1,488,000 | — | — | 27,335 | 1,958,992 | | Eyal Nuchamovitz, (7) | 2023 | 656,273 | 100,000 | 1,150,004 | — | 50,000 | 32,443 | 1,988,720 | | Executive Vice President | 2022 | 637,103 | — | 600,005 | — | 62,500 | 10,582 | 1,310,190 |

  18. Summary Compensation Table

    (1) The amounts shown in this column represent the discretionary bonuses earned by Messrs. Bricks and Nuchamovitz in 2023 and quarterly bonuses earned by Messrs. Bassell and Bricks in 2023, 2022 and 2021. See “Bonuses” for a discussion of such bonuses. (2) The amounts in this column reflect the aggregate grant date fair value of stock or option awards, as applicable, granted and computed in accordance with ASC 718, Compensation-Stock Compensation. For a discussion of the assumptions relating to these valuations, see Note 18 – Share-Based Compensation to our audited financial statements included in Item 8 of our Annual Report on Form 10-K filed with the SEC on February 27, 2024 (the “2023 Annual Report on Form 10-K”). The amounts for the performance-based restricted stock units included in the stock awards column reflect the grant date fair value computed in accordance with FASB ASC Topic 718 based upon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement as of the grant date, the aggregate grant date fair value of the performance-based restricted stock granted in 2023 would have been: Mr. Kotler—$4,010,266; Mr. Bricks—$825,006; and Mr. Nuchamovitz—$1,125,005. (3) The amounts shown in this column represent the Target Bonus earned by Mr. Kotler in 2023 and 2022 and Cash LTI earned by Messrs. Bassell, Bricks and Nuchamovitz in 2023 and 2022. See “Bonuses” for a discussion of such bonuses. (4) The amounts shown in this column include the amount the Company paid for the employee-paid portion of group medical coverage for Mr. Kotler in 2023, 2022 and 2021, 401(k) matching contributions for Mr. Bricks in 2023, 2022, and 2021 and Mr. Nuchamovitz in 2023 and 2022, matching contributions made under the NQP for Mr. Bricks in 2023, 2022 and 2021 and for Mr. Nuchamovitz in 2023, imputed income for group term life insurance for Mr. Kotler for 2023, 2022 and 2021, and imputed income for group term life insurance and car allowances for Messrs. Bassell and Bricks for 2023, 2022 and 2021 and for Mr. Nuchamovitz for 2023 and 2022. NEOs were also provided with group life insurance and group medical coverage that are not included with the exception of Mr. Kotler’s group medical coverage insurance (reflected above), because they are provided under broad-based, non-discriminatory benefit plans. (5) Includes stock options granted in March 2022 as part of a “make up” grant with respect to a grant of stock options in 2021. Upon review of the 2021 grant, the Compensation Committee determined that a computational error resulted in the issuance of fewer stock options than were supposed to have been granted in 2021, resulting in the “make up” effected in 2022. The 2022 grant was effected at the applicable fair value at the time of actual grant in 2022. (6) For 2021, Mr. Kotler was not entitled to a Target Bonus under his Employment Agreement because the Compensation Committee did not establish the performance criteria in respect of that bonus. However, in March 2022, the Compensation Committee approved a discretionary RSU award to Mr. Kotler to recognize the strong 2021 financial results and Mr. Kotler’s contribution to those results. Mr. Nuchamovitz was not a named executive officer in 2021.

  19. Grants of Plan-Based Awards

    Grants of Plan-Based Awards This table provides supplemental information relating to grants of plan-based awards made to NEOs relative to 2023.

  20. Grants of Plan-Based Awards

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | | | | | | Name/Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards; Number of Shares of Stock or Units (#) | All Other Option Awards; Number of Securities Underlying Options (#) | Exercise Price of Option Awards ($/share) | Grant Date Fair Value of Stock and Option Awards ($) | | Arie Kotler | | | | | | | | | | | | | Target Bonus | | 885,128 | 1,770,256 | 3,540,512 | | | | | | | | | Stock Options | 3/2/2023 | | | | | | | | 409,290(4) | 8.58 | 1,336,754 | | Performance-Based Restricted Stock Units | 3/2/2023 | | | | 155,799 | 311,598 | 467,397 | | | | 2,673,511(5) | | Don Bassell | | | | | | | | | | | | | Cash LTI | 3/2/2023 | 75,000 | 150,000 | 225,000 | | | | | | | | | Restricted Stock Units | 3/2/2023 | | | | | | | 14,569(3) | | | 125,002 | | Maury Bricks | | | | | | | | | | | | | Cash LTI | 3/2/2023 | 75,000 | 150,000 | 225,000 | | | | | | | | | Restricted Stock Units | 3/2/2023 | | | | | | | 46,620(4) | | | 400,000 | | Performance-Based Restricted Stock Units | 3/2/2023 | | | | 32,052 | 64,103 | 96,155 | | | | 550,004(5) | | Eyal Nuchamovitz | | | | | | | | | | | | | Cash LTI | 3/2/2023 | 75,000 | 150,000 | 225,000 | | | | | | | | | Restricted Stock Units | 3/2/2023 | | | | | | | 46,620(4) | | | 400,000 | | Performance-Based Restricted Stock Units | 3/2/2023 | | | | 43,707 | 87,413 | 131,120 | | | | 750,004(5) |

  21. Grants of Plan-Based Awards

    (1) The amounts reflect the potential range of payments under the Target Bonus and Cash LTI plans. The actual payments earned for 2023 are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. See “Bonuses” for a discussion of such bonuses. The Cash LTI is granted in conjunction with the grant of PSUs and is allocated to each of the three years in the PSU performance cycle, and each portion is earned and payable, if at all, consistent with the performance results and associated payout percentages for the PSUs for each individual year. In 2023, due to Mr. Bassell’s planned retirement in 2024, the Cash LTI granted to Mr. Bassell was for one year only to be paid based on the performance of the Company in 2023. (2) The amounts reflect a range of PSUs that vest, if at all, based on achievement of performance targets with a three-year performance period with any shares earned vesting on December 31, 2025. The amounts under Threshold reflect the threshold award under the PSUs, which is 50% of the target amount. The amounts under Maximum reflect the greatest potential award under the PSUs, which is 150% of the target amount. The Compensation Committee will determine the performance against pre-established targets to determine payout of the PSUs, if any, at the end of the performance period. See “Compensation Discussion and Analysis—Compensation Elements—Long Term Incentives (LTIs)—Performance-based Restricted Stock Units” above for additional information on terms of PSUs granted during 2023. (3) The grant provided for full vesting on March 1, 2024. (4) The grants provided for vesting in three equal annual installments beginning on March 1, 2024. Represents the aggregate grant date fair value of the target amount calculated in accordance with FASB ASC Topic 718.

  22. Outstanding Equity Awards at 2023 Fiscal Year End

    Outstanding Equity Awards at 2023 Fiscal Year End

  23. Outstanding Equity Awards at 2023 Fiscal Year End

    | Name | Award Type | Unexercised/Not Vested Securities Outstanding (#) | Exercisable Securities Outstanding (#) | Option Exercise Price ($/share) | Option Expiration Date | Market Value ($) (1) | Vesting Schedule of Unexercised/Not Vested Securities Outstanding | | Arie Kotler | Options | — | 126,000 | 10.00 | 3/6/2031 | — | Fully vested | | | Options | 301,935 | 150,968 | 8.49 | 3/2/2032 | — | 50% on March 1, 2024 and March 1, 2025 | | | Options | 159,244 | 159,245 | 10.00 | 3/2/2032 | — | 100% on March 1, 2024 | | | Options | 409,290 | — | 8.58 | 3/2/2033 | — | 1/3 on March 1, 2024, 2025 and 2026 | | | RSUs | 127,208 | | | | 1,049,466 | 50% on March 1, 2024 and March 1, 2025 | | | PSUs | 252,000 | | | | 2,079,000 | The performance period ended on December 31, 2023; the full target amount (100%) vested on February 23, 2024 | | | PSUs | 290,438 | | | | 2,396,114 | The performance period ending on December 31, 2024 (2) | | | PSUs | 259,665 | | | | 2,142,236 | The performance period ending on December 31, 2025 (2) | | Don Bassell | RSUs | 41,667 | | | | 343,753 | 100% on January 1, 2024 | | | RSUs | 18,846 | | | | 155,480 | 50% on March 1, 2024 and March 1, 2025 | | | RSUs | 14,569 | | | | 120,194 | 100% on March 1, 2024 | | | PSUs | 50,000 | | | | 412,500 | The performance period ended on December 31, 2023; the full target amount (100%) vested on February 23, 2024 | | | PSUs | 44,758 | | | | 369,254 | The performance period ending on December 31, 2024 (2) | | Maury Bricks | RSUs | 39,445 | | | | 325,421 | 100% on January 1, 2024 | | | RSUs | 17,668 | | | | 145,761 | 50% on March 1, 2024 and March 1, 2025 | | | RSUs | 46,620 | | | | 384,615 | 1/3 on March 1, 2024, 2025 and 2026 | | | PSUs | 36,667 | | | | 302,503 | The performance period ended on December 31, 2023; the full target amount (100%) vested on February 23, 2024 | | | PSUs | 41,962 | | | | 346,187 | The performance period ending on December 31, 2024 (2) | | | PSUs | 53,419 | | | | 440,707 | The performance period ending on December 31, 2025 (2) | | Eyal Nuchamovitz | RSUs | 43,334 | | | | 357,506 | 100% on January 1, 2024 | | | RSUs | 17,668 | | | | 145,761 | 50% on March 1, 2024 and March 1, 2025 | | | RSUs | 46,620 | | | | 384,615 | 1/3 on March 1, 2024, 2025 and 2026 | | | PSUs | 50,000 | | | | 412,500 | The performance period ended on December 31, 2023; the full target amount (100%) vested on February 23, 2024 | | | PSUs | 41,962 | | | | 346,187 | The performance period ending on December 31, 2024 (2) | | | PSUs | 72,844 | | | | 600,963 | The performance period ending on December 31, 2025 (2) |

  24. Outstanding Equity Awards at 2023 Fiscal Year End

    Based on ARKO’s closing stock price of $8.25 on December 31, 2023. (2) The grants are performance-based grants that, subject to meeting the applicable three-year performance targets set forth in the grant agreement, will vest in a single vesting upon the Compensation Committee determining that the performance criteria has been met; amounts are based on the probable outcome of such performance-based vesting conditions as of the record date.

  25. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023 This table provides information concerning the exercises of stock options and the vesting of RSUs and PSUs in 2023 on an aggregated basis for each of our NEOs.

  26. Option Exercises and Stock Vested in 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Arie Kotler | — | — | 63,605 | 526,013 | | Don Bassell | — | — | 51,090 | 438,764 | | Maury Bricks | — | — | 48,278 | 414,642 | | Eyal Nuchamovitz | — | — | 52,167 | 448,321 |

  27. Pension Benefits Table

    Pension Benefits Table None of the NEOs participated in any defined benefit pension plans in 2023.

  28. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation We offer a select group of management and key employees, including our NEOs, who contribute materially to the Company’s continued growth, development and future business success an opportunity to defer a portion of their compensation under our NQP. The NQP allows these employees to defer up to 90% of their annual base salary and cash bonuses. Distributions under the NQP begin on a date that is within 30 days of the participant’s separation from service, except in the case of specified employees where no distributions will be made until six months after separation from service or, if earlier, the date of the specified employee’s death. Participants may elect to receive deferred amounts in a lump sum or in at least two, but not more than ten, consecutive annual installments. Participants can elect from investment alternatives made available as investment options for their deferred compensation and gains and losses on these investments are credited to their respective accounts. For each plan year, we make a discretionary match, which for 2023 was equal to 50% of the first 6% of contributions made by the participants for such plan year; however, that amount is reduced, dollar for dollar, by the amount of employer matching contributions that we contribute to the participant’s 401(k) plan for such plan year. In addition, we may also make additional matching contributions and discretionary contributions, in the Company’s sole discretion, on a participant by participant basis. Tax rules limit the amount that executives may contribute under the 401(k) plan and therefore also limit the company match under the 401(k) plan for executives. The NQP matching contribution is intended to reflect the amount of the matching contribution which is limited by the tax laws. The following table sets forth non-qualified deferred compensation for the NEOs.

  29. Non-Qualified Deferred Compensation

    | Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) (1) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year-End ($) | | Arie Kotler | — | — | — | — | | Don Bassell | — | — | — | — | | Maury Bricks | 130,764 | 16,612 | 72,574 | 431,954 | | Eyal Nuchamovitz | 44,594 | 19,720 | 27,551 | 215,548 |

  30. Non-Qualified Deferred Compensation

    (1) The amount in this column is included in the “All Other Compensation” column for 2023 in the Summary Compensation Table and represents employer contributions credited to the NEO’s account in 2024 for 2023.

  31. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control The employment agreements of our NEOs provide for certain payments and benefits in the event of certain terminations of employment. The material terms of such arrangements as of December 31, 2023 are described below.

  32. Pay Versus Performance

    Pay Versus Performance The following table shows the total compensation for our NEOs as set forth in the Summary Compensation Table, the Compensation Actually Paid (as defined below) to our CEO and, on an average basis, our other NEOs for the years ended December 31, 2023, 2022, 2021 and 2020. The table also provides our TSR performance, the selected peer group TSR, net income and EBITDA, which is our company selected financial measure, all measured over the same time period.

  33. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (1) | Summary Compensation Table Total for CEO ($) | Compensation Actually Paid to CEO ($) (2) | Average Summary Compensation Table for non-CEO NEOs ($) | Average Compensation Actually Paid to non-CEO NEOs ($) (2) | Total Shareholder Return ($) (3) | Peer Group Total Shareholder Return ($) (3) | Net Income ($ in thousands) (4) | EBITDA ($ in thousands) (5) | | 2023 | 6,048,569 | 4,331,734 | 1,457,580 | 1,210,103 | 84.61 | 127.46 | 34,566 | 297,123 | | 2022 | 6,683,793 | 7,032,571 | 1,233,269 | 1,208,599 | 87.47 | 104.87 | 71,978 | 305,452 | | 2021 | 6,375,923 | 6,409,489 | 2,083,296 | 2,048,069 | 87.70 | 153.59 | 59,427 | 262,864 | | 2020 | 2,078,493 | 2,078,493 | 753,248 | 753,248 | 90.00 | 107.42 | 30,639 | 179,120 |

  34. Pay Versus Performance

    (1) Mr. Kotler was the CEO for each of 2023, 2022, 2021 and 2020. For 2023 and 2022, the other NEOs were Messrs. Bassell, Bricks and Nuchamovitz. For 2021 and 2020, the other NEOs were Messrs. Bassell and Bricks. (2) To calculate “Compensation Actually Paid,” as computed in accordance with Item 402(v) of Regulation S-K, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Kotler and for the average of the other NEOs is set forth following the footnotes to this table. (3) TSR is determined based on the value of an initial fixed income of $100 on December 23, 2020 in our stock or December 31, 2020 in the peer group index. The peer group used for TSR comparisons is the S&P Retail Select Industry Index, an index in which our common stock is included. Reflects “Net Income” in the Company’s consolidated statement of operations included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022, 2021 and 2020. As noted in the CD&A, EBITDA was chosen as the performance metric as the Company values EBITDA as a metric that is a key indicator of our operating performance and a strong equity valuation metric. EBITDA for purposes of calculating the LTIs is calculated at the GPM (our operating company) level and therefore awards excludes public company expenses and certain items at the ARKO Corp. level. As a result, the actual EBITDA attained (and the required Annual Budgeted EBITDA needed to reach the threshold, target, and maximum LTI) is higher than reported EBITDA at the ARKO Corp. level. A reconciliation of ARKO Corp. net income to EBITDA is as follows:

  35. Pay Versus Performance

    | | For the Year Ended December 31, | | | | | | 2023 | 2022 | 2021 | 2020 | | | (in thousands) | | | | | ARKO net income | $34,566 | $71,978 | $59,427 | $30,639 | | Interest and other financing expenses, net | 71,243 | 59,405 | 71,207 | 49,905 | | Income tax expense (benefit) | 12,166 | 35,557 | 11,634 | (1,499) | | Depreciation and amortization | 127,597 | 101,752 | 97,194 | 74,396 | | General and administrative expenses (excluding GPM expenses) (a) | 6,695 | 6,526 | 6,289 | 3,017 | | Impact of Pride acquisition (b) | — | (1,592) | — | — | | Non-cash rent expense (c) | 14,168 | 7,903 | 6,359 | 7,051 | | Acquisition costs (d) | 9,079 | 8,162 | 5,366 | 6,031 | | Loss on disposal of assets and impairment charges (e) | 6,203 | 5,731 | 1,384 | 6,060 | | Share-based compensation expense (f) | 15,015 | 12,161 | 5,804 | 1,891 | | Loss (income) from equity investment (g) | 39 | 74 | (186) | 1,269 | | Adjustment to contingent consideration (h) | (604) | (2,204) | (1,740) | (1,287) | | Internal entity realignment and streamlining (i) | — | 475 | — | — | | Fuel taxes paid in arrears (j) | — | — | — | 819 | | Other (k) | 956 | (476) | 126 | 828 | | EBITDA | $297,123 | $305,452 | $262,864 | $179,120 |

  36. Pay Versus Performance

    a) Represents public company expenses and other general and administrative expenses not incurred in GPM (our operating company). b) Excludes the actual results from the December 2022 acquisition of all of the issued and outstanding membership interests in Pride Convenience Holdings, LLC, since this acquisition was not included in the Annual Budgeted EBITDA for 2022. c) Eliminates the non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. The GAAP rent expense adjustment varies depending on the terms of our lease portfolio, which has been impacted by our recent acquisitions. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments. d) Eliminates costs incurred that are directly attributable to business acquisitions and salaries of employees whose primary job function is to execute our acquisition strategy and facilitate integration of acquired operations. e) Eliminates the non-cash loss from the sale of property and equipment, the loss recognized upon the sale of related leased assets and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites. f) Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate our employees, certain non-employees, and members of our Board. g) Eliminates our share of loss (income) attributable to our unconsolidated equity investment. h) Eliminates fair value adjustments to the contingent consideration owed to the seller for the 2020 Empire acquisition. i) Eliminates non-recurring charges related to our internal entity realignment and streamlining. j) Eliminates the payment of historical fuel tax liabilities owed for multiple prior periods. k) Eliminates other unusual or non-recurring items that we do not consider to be meaningful in assessing operating performance. Reconciliation of Compensation Actually Paid Adjustments

  37. Pay Versus Performance

    | Year | Summary Compensation Table Total ($) (1) | Minus: Grant Date Fair Value of Stock Awards Granted During Fiscal Year ($) (2) | Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year ($) (3) | Plus/(Minus): Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($) (4) | (Minus): Change in Fair Value as of Vesting Date for Stock Awards Granted in Prior Fiscal Years but Vested During Fiscal Year ($) (5) | Compensation Actually Paid ($) | | | Arie Kotler | | | | | | | 2023 | 6,048,569 | (4,010,265) | 3,353,164 | (934,957) | (124,777) | 4,331,734 | | 2022 | 6,683,793 | (3,895,429) | 4,121,730 | 122,477 | — | 7,032,571 | | 2021 | 6,375,923 | (5,289,478) | 5,323,044 | — | — | 6,409,489 | | 2020 | 2,078,493 | — | — | — | — | 2,078,493 | | | Other Named Executive Officers (Average) (6) | | | | | | | 2023 | 1,457,580 | (741,670) | 643,698 | (145,983) | (3,522) | 1,210,103 | | 2022 | 1,233,269 | (613,337) | 603,960 | (15,293) | — | 1,208,599 | | 2021 | 2,083,296 | (1,584,000) | 1,548,773 | — | — | 2,048,069 | | 2020 | 753,248 | — | — | — | — | 753,248 |

  38. Pay Versus Performance

    Represents Total Compensation as reported in the Summary Compensation Table for the indicated year. With respect to the other NEOs, amounts shown represent averages. (2) Represents the grant date fair value of the stock awards granted during the indicated year as reported in the Summary Compensation Table, computed in accordance with the methodology used for financial reporting purposes. (3) Represents the fair value as of the indicated year-end of the outstanding and unvested stock awards granted during such year, computed in accordance with the methodology used for financial reporting purposes and for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the year. (4) Represents the change in fair value during the indicated year of each stock award that was granted in a prior year that remained outstanding and unvested as of the last day of the indicated year, computed in accordance with the methodology used for financial reporting purposes, and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the year. (5) Represents the change as of the vesting date (from the end of the prior fiscal year) in fair value of any awards granted in any prior fiscal years for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. (6) For 2023 and 2022, the other NEOs were Messrs. Bassell, Bricks and Nuchamovitz. For 2021 and 2020, the other NEOs were Messrs. Bassell and Bricks.

  39. Relationship Between “Compensation Actually Paid” and Performance Measures

    Relationship Between “Compensation Actually Paid” and Performance Measures The charts below compare the Compensation Actually Paid to our CEO and the Average Compensation Actually Paid to our other NEOs with (i) our TSR and our Peer Group TSR, (ii) our net income, and (iii) EBITDA, which is our company selected measure, for the years ended December 31, 2023, 2022, 2021 and 2020. We believe the Compensation Actually Paid in each of the years reported above reflects the Compensation Committee’s belief that actual EBITDA in comparison with the pre-established performance goal of Annual Budgeted EBITDA is the most relevant performance metric at this point of time for our executives, while our stock performance has not yet been a relevant performance measure based on the short time our Company has been a publicly-traded company, the generally negative stock market sentiment towards companies that listed following a merger with a SPAC, and the limited number of publicly traded peers with similar characteristics. Additionally, we believe net income is not a relevant performance metric at this point in time for our executives due to significant non-cash amounts and fair value adjustments impacting net income. For additional information of how we link pay and performance, please see the CD&A beginning on page 22. Compensation actually Paid vs. Company Total Shareholder Return

  40. Director Compensation

    Director Compensation The Board designed the Company’s non-employee director compensation program to reward directors for their contributions to the Company’s success, align the director compensation program with stockholder interests, and provide competitive compensation necessary to attract and retain high quality non-employee directors. Compensation to our non-employee directors includes cash payments that can be paid in RSUs at the director’s election and equity compensation. As we recognize the importance of our committees and recognize the additional responsibilities and duties required to fulfill leadership roles, our compensation includes supplemental retains for membership in committees and leadership roles. We believe that all our directors should be stockholders and therefore set a goal of 5x our cash retainer, to be achieved within five years from election as Board member. The Compensation Committee reviews director’s compensation periodically to ensure that director’s compensation remains competitive such that the Company can recruit and retain qualified directors. In 2023, the Compensation Committee conducted a director compensation review based on an analysis by the Company’s compensation consultant that compared the Company’s compensation levels and compensation program components against a peer group. Following such review, in June 2023, the Compensation Committee approved the following changes to the Director’s compensation: (i) increasing the annual cash retainer from $50,000 to $75,000 effective as of July 1, 2023; (ii) increasing the Board member equity retainer from $100,000 to $125,000, and (iii) changing the timing of the annual equity grants to Directors to coincide with election/re-election at the time of the Annual Meeting, and that as a transition adjustment, the Directors will receive 50% of their $100,000 annual equity award in January 2024, and then the proposed equity grant (increased to $125,000) will begin at the June 2024 Annual Meeting.

  41. Director Compensation

    | Compensation Element | Amount | | Annual Board Member Compensation | • $75,000 in cash or RSUs annually at the director’s election paid in quarterly installments • $125,000 in equity delivered in the form of RSUs | | Committee Member Retainers | Cash or RSUs at the director’s election, paid in quarterly installments: • Audit Committee: $15,000 • Compensation Committee: $10,000 • Nominating and Corporate Governance Committee: $10,000 | | Leadership Supplemental Retainer | Cash or RSUs at the director’s election, paid in quarterly installments: • Audit Committee Chair: $25,000 • Compensation Committee Chair: $20,000 • Nominating and Corporate Governance Committee Chair: $15,000 • Lead Independent Director: $25,000 | | Stock Ownership Policy | 5x cash retainer, to be achieved within five years | | Meeting Fees | Meeting fees will be paid for extraordinary Board/Committee meetings only and for special committees |

  42. Director Compensation

    As detailed above, a non-employee director may receive RSUs in lieu of up to 100% of his or her cash fees. All RSUs are immediately vested upon grant and are settled in common stock upon the director’s departure from the Board or an earlier change in control. There were 303,850 RSUs issued to non-employee directors outstanding at December 31, 2023. The following table summarizes the compensation paid to the Company’s non-employee directors during 2023:

  43. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | | Sherman K. Edmiston III | 90,003 | 99,997 | 190,000 | | Avram Friedman | 11 | 149,989 | 150,000 | | Michael J. Gade | 67,520 | 167,480 | 235,000 | | Andrew R. Heyer | 17 | 189,983 | 190,000 | | Steven J. Heyer | 16 | 202,484 | 202,500 | | Laura Shapira Karet | 50,003 | 99,997 | 150,000 | | Starlette B. Johnson | 50,003 | 99,997 | 150,000 | | Morris Willner | 16 | 162,484 | 162,500 |

  44. Director Compensation

    (1) Because the Company does not issue fractional shares or RSUs for fractional shares, when RSUs are issued, directors receive cash compensation in lieu of RSUs for fractional shares. (2) The amounts in this column reflect the aggregate grant date fair value of RSUs granted during the year computed in accordance with ASC 718, Compensation-Stock Compensation. The RSUs granted in January 2023, April 2023, June 2023, July 2023 and October 2023 had grant date fair values per share of $8.66, $8.49, $7.93, $7.95 and $7.15, respectively. For a discussion of the assumptions relating to these valuations, see Note 18 – Share-Based Compensation to our audited financial statements included in Item 8 of our 2023 Annual Report on Form 10-K. The table below sets forth the aggregate number of vested restricted stock units of each non-employee director outstanding as of December 31, 2023:

  45. Director Compensation

    | Name | Stock Awards | | Sherman K. Edmiston III | 40,973 | | Avram Friedman | 19,250 | | Michael J. Gade | 65,624 | | Andrew R. Heyer | 55,369 | | Steven J. Heyer | 59,274 | | Laura Shapira Karet | 12,610 | | Morris Willner | 50,300 |

  46. Director Compensation

    Compensation paid to Mr. Kotler, who also serves on the Board, is fully reflected in the Summary Compensation Table above. Mr. Kotler is not entitled to any additional compensation for his services as director. The Company’s policy is to reimburse directors for reasonable and necessary out-of-pocket expenses incurred in attending Board and committee meetings or performing other services in their capacities as directors. Director Tenure & Refreshment. Directors may be re-elected at the end of their respective terms. Given that we became a public company in December 2020, the Board has not established term limits, as we believe that directors who develop insight into the Company and our operations over time provide an increasing contribution to the Board as a whole. To ensure the Board continues to generate new ideas and operate effectively, the Nominating and Corporate Governance Committee evaluates individual Board member performance and plans to take steps as necessary regarding continuing director tenure.

  47. Pay Ratio

    Pay Ratio Pursuant to Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we provide the following “pay ratio” information for the 2023 fiscal year. The pay ratio included in this information represents a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For 2023, the annual total compensation of our President and Chief Executive Officer, Mr. Kotler, as provided in the Summary Compensation Table, was $6,048,569. The annual total compensation of our median employee, a sales associate team leader located in rural Illinois, was $31,270 for 2023, which was calculated using the same methodology as required by the Summary Compensation Table. Therefore, the ratio of the annual total compensation of our CEO to that of our median employee for the 2023 fiscal year was approximately 193:1. To determine the median employee (excluding Mr. Kotler), we used December 31, 2021 as the determination date, and we ranked each employee (other than Mr. Kotler) based on their total cash compensation for 2021. Compensation for permanent employees who did not work the entire measurement period was annualized; however, no other exemptions, assumptions, adjustments or estimates were used. We excluded five individuals that were located in Israel under the de minimis exception because these non-U.S. associates account for less than 1% of our total associates. Given that there has been no material change to our employee population or employee compensation programs that we reasonably believe would result in a significant change to our pay ratio disclosure, we have continued to identify the same employee reported for 2021 as our median employee for 2023. Because the SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.

  48. PROPOSAL NO. 1 – ELECTION OF DIRECTORS

    PROPOSAL NO. 1 – ELECTION OF DIRECTORS The Nominating and Corporate Governance Committee recommended for nomination, and the Board of Directors nominated the following persons for election as members of our Board of Directors at the Annual Meeting.

  49. PROPOSAL NO. 1 – ELECTION OF DIRECTORS

    | Name | Term Expiring | | Michael J. Gade | 2025 Annual Meeting of stockholders | | Andrew R. Heyer | 2025 Annual Meeting of stockholders | | Steven J. Heyer | 2025 Annual Meeting of stockholders | | Laura Shapira Karet | 2025 Annual Meeting of stockholders | | Arie Kotler | 2025 Annual Meeting of stockholders |

  50. PROPOSAL NO. 1 – ELECTION OF DIRECTORS

    The section titled “Directors & Named Executive Officers” beginning on page 7 of this Proxy Statement contains information about the leadership skills and other experience that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that these nominees should serve as directors of the Company. We believe that each of these directors possesses the experience, skills, and qualities to fully perform his or her duties as a director and contribute to our success. Our directors have been nominated because they possess the highest standards of personal integrity, interpersonal and communication skills, are highly accomplished in their fields, understand the interests and issues that are important to our stockholders, and are able to dedicate sufficient time to fulfilling their obligations as directors. Our directors as a group complement each other with their respective experiences, skills, and qualities. While our directors make up a diverse group in terms of age, gender and professional experience, together they comprise a cohesive body in terms of Board process and collaboration. Vote Required. If a quorum is present, the directors will be elected by a plurality of the votes of shares present and entitled to vote at the Annual Meeting. Accordingly, the nominees who receive the largest number of votes cast will be elected. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES.