DEF 14A of Penske Automotive Group, Inc.
Filed Mar 20, 2025 · FY20240001140361-25-009697
Lisa Davis – Former Chief Executive Officer Gas and Power and Managing Board Member, Siemens AG
Lisa Davis – Former Chief Executive Officer Gas and Power and Managing Board Member, Siemens AG
Lisa Davis – Former Chief Executive Officer Gas and Power and Managing Board Member, Siemens AG
| Age: 61 Joined Board: 2017 Committees: Compensation, Corporate Governance | From August 2014 through February 2020 when she resigned, Ms. Davis served as a member of the Managing Board for Siemens AG responsible as Chief Executive Officer for the company’s Gas and Power global operations present in 80 countries around the world. Also, from January 2017 through February 2020 she served as Chair and CEO of Siemens Corporation, USA, the largest market globally for Siemens AG. From 1986 to 2014, Ms. Davis served in various capacities with Exxon Corporation, Texaco USA and Royal Dutch Shell, most recently, Executive Vice President – Strategy, Portfolio and Alternative Energy and Vice President – Lubricants and Commercial Fuels Americas, and previously numerous leadership positions in Supply and Refining. Ms. Davis is also a director for Air Products and Chemicals, Inc., Phillips 66, and C3.ai, Inc. and was previously a director of Kosmos Energy Ltd. in the past five years. Beginning in February 2023, Ms. Davis has served as a member of the Advisory Board of our affiliate Penske Transportation Solutions (a private company). Individual experience: Extensive global energy industry experience from serving in various capacities along the entire value chain from upstream to manufacturing to sales and marketing; senior executive leadership experience with international industry-leading companies; diverse experience with public company board service in the U.S. and Europe. |
Lisa Davis – Former Chief Executive Officer Gas and Power and Managing Board Member, Siemens AG
Wolfgang Dürheimer – Retired Chairman and CEO, Bentley Motors Ltd.
Lisa Davis – Former Chief Executive Officer Gas and Power and Managing Board Member, Siemens AG
| Age: 66 Joined Board: 2018 Committees: Compensation | Mr. Dürheimer served as the Chairman and Chief Executive Officer of Bentley Motors Ltd., a subsidiary of Volkswagen AG, from April 2014 to January 2018, as well as the President of its sister companies, Bugatti Automobiles S.A.S. and Bugatti International S.A. Previously, Mr. Dürheimer held various positions with Volkswagen AG and its subsidiaries, most recently as the Chief Representative of Volkswagen Group Motorsport responsible for the Group Motorsport Strategy from February 2011 to January 2018 and he was a member of the Board of Management of Audi AG from September 2012 to March 2014. From 1999 until 2011, Mr. Dürheimer worked for Porsche AG, where he was a member of the Board of Management responsible for Research and Development. Prior to joining Porsche in 1999, Mr. Dürheimer worked 14 years with BMW, where he held various managerial roles. Individual experience: Extensive automotive industry experience with some of the Company’s largest represented brands including Audi, Bentley, BMW, and Porsche, culminating in leadership experience as Chief Executive Officer of Bentley Motors; relationships with our key automotive industry partners, breadth of knowledge concerning issues facing our Company. |
Michael R. Eisenson – Founding Partner, Charlesbank Capital Partners LLC
Michael R. Eisenson – Founding Partner, Charlesbank Capital Partners LLC
Michael R. Eisenson – Founding Partner, Charlesbank Capital Partners LLC
| Age: 69 Joined Board: 1993 Committees: Executive | Mr. Eisenson has served as the Founding Partner of Charlesbank Capital Partners LLC, a private investment firm and the successor to Harvard Private Capital Group, Inc. since July 1, 2017. Previously, he was CEO of Charlesbank Capital Partners LLC, which he founded in 1998. Mr. Eisenson also serves as a director of Penske Corporation and an Advisory Board member of Penske Transportation Solutions (PTS) and is a director of a number of other private companies. Individual experience: Familiarity with all of the Company’s key operations from serving as our director since 1993; experience managing Charlesbank and affiliates and their portfolio companies; experience in commercial finance, private equity and leveraged finance; demonstrated success formerly serving as our Audit Committee Chair. |
David Hoogendoorn – CPA–Senior Partner, Ernst and Young (retiring June 30, 2025)
David Hoogendoorn – CPA–Senior Partner, Ernst and Young (retiring June 30, 2025)
David Hoogendoorn – CPA–Senior Partner, Ernst and Young (retiring June 30, 2025)
| Age: 58 Joined Board: n/a | Mr. Hoogendoorn has been a partner at Ernst & Young (EY) since 2002. During his 23-year career at EY, Mr. Hoogendoorn has held several leadership roles in the firm including the regional automotive sector, geographic markets and as an office managing partner, each with strategy, operations, P&L and talent management responsibility while also serving as the lead audit partner on several multi-national publicly traded companies and family-owned businesses. Mr. Hoogendoorn has also served as EY’s Cybersecurity and ESG assurance leader for the U.S. Central Region since March 2021 and 2022, respectively. Mr. Hoogendoorn also serves as an independent advisor and/or director of numerous private enterprises and non-profit organizations. Mr. Hoogendoorn’s 37-year career in public accounting included 14 years at Arthur Andersen where he was a partner from 1999 to 2002. He will be retiring from EY June 30, 2025. Individual experience: Mr. Hoogendoorn is a first-time nominee to our Board of Directors and was recommended for nomination by Greg Smith, the Chair of our Audit Committee. Mr. Hoogendoorn has extensive financial reporting, internal control, risk management and governance experience, having served large multi-national public companies as a senior audit partner in a Big Four public accounting firm and has significant experience in cybersecurity and in ESG matters. |
Yosuke Kawakami – Managing Director, Transystem Logistics International
Yosuke Kawakami – Managing Director, Transystem Logistics International
Yosuke Kawakami – Managing Director, Transystem Logistics International
| Age: 54 Joined Board: n/a | Mr. Kawakami currently serves as Managing Director of Transystem Logistics International Ptv. Ltd, a transportation services and automotive logistics company, a position he has held since December 2020. Effective April 1, 2025, Mr. Kawakami will serve as Senior Vice President, Mitsui & Co. (USA), Inc. He held numerous positions with Mitsui and its affiliates starting in April 1993. Prior to his current role, Mr. Kawakami served as General Manager of Mitsui’s Transportation Platform Business Department from July 2018 to December 2020, and from August 2015 to July 2018 he served as President and Chief Executive Officer of Veloce Logistica SA, a Brazilian road freight logistics company. Individual Experience: Mr. Kawakami is a first-time nominee to our Board of Directors and was recommended for nomination by representatives of Mitsui. Mr. Kawakami has global automotive industry experience; breadth of knowledge concerning logistics services and international opportunities; and affiliation with Mitsui, which is the Company’s second largest stockholder. |
Robert H. Kurnick, Jr. – President, Penske Automotive Group
Robert H. Kurnick, Jr. – President, Penske Automotive Group
Robert H. Kurnick, Jr. – President, Penske Automotive Group
| Age: 63 Joined Board: 2006 Committees: Executive | Mr. Kurnick has served as our President since April 2008. Since September 2017, Mr. Kurnick has served as Vice Chair of Penske Corporation, and from 2003 until then served as President of Penske Corporation. He has also been a director of Penske Corporation since 2003. Penske Corporation is a privately owned diversified transportation services company that holds, through its subsidiaries, interests in a number of businesses. Individual experience: Familiarity with all of the Company’s key operations; breadth of knowledge concerning issues affecting our Company; extensive automotive industry experience; experience as Vice Chair and former President of Penske Corporation. |
Kimberly J. McWaters – President and CEO of Fresh Start Women’s Foundation
Kimberly J. McWaters – President and CEO of Fresh Start Women’s Foundation
Kimberly J. McWaters – President and CEO of Fresh Start Women’s Foundation
| Age: 60 Joined Board: 2004 Committees: Audit, Corporate Governance (Chair) | Ms. McWaters has served as President and Chief Executive Officer of Fresh Start Women’s Foundation since February 1, 2021, after a long tenure as a director of that organization. Ms. McWaters was previously President and CEO of Universal Technical Institute, Inc. (UTI), the nation’s leading provider of transportation industry technician training through October 31, 2019. She was named President of UTI in 2000, CEO in 2003 and she served as its Chairman from 2013 to 2017. Ms. McWaters joined UTI in 1984 and has held several leadership positions in the company, including Vice President of Marketing and Vice President of Sales & Marketing. Ms. McWaters previously served as a director of UTI and WillScot Mobile Mini Holdings Corp.in the past five years. Individual experience: Automotive industry experience with UTI; accomplishment within her field culminating with leadership experience as Chief Executive Officer of UTI; expertise relating to service and parts operations and particularly service technicians; community involvement with Fresh Start Women’s Foundation. |
Greg Penske – Vice Chair of the Board, Penske Automotive Group; Chair and CEO, Penske Motor Group, LLC
Greg Penske – Vice Chair of the Board, Penske Automotive Group; Chair and CEO, Penske Motor Group, LLC
Greg Penske – Vice Chair of the Board, Penske Automotive Group; Chair and CEO, Penske Motor Group, LLC
| Age: 62 Joined Board: 2020 | Mr. Penske joined our Board in May 2020, has served as our Vice Chair of the Board since January 2023 and was previously our director from May 2014 to May 2017. Mr. Penske has been the Chair and Chief Executive Officer of Penske Motor Group, LLC, an automotive group that includes the Toyota and Lexus brands. Mr. Penske has served on the Board of Directors of Penske Corporation since 1999, and also currently serves as a board member and Vice Chair of Penske Entertainment and board member of the Petersen Automotive Museum. Mr. Penske is the son of our Chief Executive Officer, Roger Penske. Individual Experience: Extensive automotive retail industry experience; relationships with key automotive partners; familiarity with all of the Company’s key operations; breadth of knowledge concerning issues affecting our Company. |
Roger S. Penske – Chair of the Board and CEO, Penske Automotive Group
Roger S. Penske – Chair of the Board and CEO, Penske Automotive Group
Roger S. Penske – Chair of the Board and CEO, Penske Automotive Group
| Age: 88 Joined Board: 1999 Committees: Executive | Since May 1999, Mr. Penske has served as our Chair and CEO. Mr. Penske has also been Chair of the Board and CEO of Penske Corporation since 1969 and Chair of the Board of Penske Truck Leasing Corporation since 1982. Mr. Penske previously served as a member of the Board of Directors of Universal Technical Institute in the past five years. Individual experience: Extensive automotive industry experience; relationships with our key automotive partners; familiarity with all of the Company’s key operations; experience as an executive and a director of some of the world’s leading companies; significant ownership position of our stock through Penske Corporation and other affiliates. |
Sandra E. Pierce – Corporate Board Executive, CEO Advisor and Community Strategist
Sandra E. Pierce – Corporate Board Executive, CEO Advisor and Community Strategist
Sandra E. Pierce – Corporate Board Executive, CEO Advisor and Community Strategist
| Age: 66 Joined Board: 2012 Committees: Compensation, Corporate Governance | Ms. Pierce currently serves as a Corporate Board Executive, CEO Advisor and Community Strategist. From 2016 to December 2023, Ms. Pierce served as Huntington Bank’s Senior Executive Vice President, Private Bank and Regional Banking Director and Chair of Michigan. Ms. Pierce led the Private Bank, Insurance Agency, Auto, Marine and RV businesses corporate-wide as well as all state activities in Michigan. From February 1, 2013, until their August 2016 merger with Huntington, Ms. Pierce served as Vice Chairman of FirstMerit Corporation, and Chairman and CEO of FirstMerit Michigan. From 2005 until June 2012, Ms. Pierce served as the Chief Executive Officer and President of RBS Citizens, Michigan where she had responsibilities for commercial banking and all state bank activities in Michigan, Illinois and Ohio. From 1978 through 2004, Ms. Pierce served as Regional Executive of Midwest Retail Operations for JPMorgan Chase, with responsibilities for Michigan and Indiana, and she held a number of management positions in the retail, commercial lending, and private banking businesses at JPMorgan Chase and its predecessor companies, Bank One, First Chicago NBD Corp. and NBD Bancorp. Ms. Pierce is a director of American Axle and Manufacturing Holdings, Inc. and Board Chair of ITC Holdings Corp., a subsidiary of Fortis Inc., and has performed leadership duties with numerous civic organizations. Ms. Pierce also serves on the Michigan State University’s Board of Trustees. Individual Experience: Extensive retail and commercial banking experience; accomplished within her field culminating in CEO experience; extensive experience on company boards and demonstrated commitment to civic works. |
Ray Scott – President, CEO and Director, Lear Corporation
Ray Scott – President, CEO and Director, Lear Corporation
Ray Scott – President, CEO and Director, Lear Corporation
| Age: 60 Joined Board: n/a | Mr. Scott has been the President and Chief Executive Officer of Lear Corporation since March 2018. Previously, Mr. Scott served as Interim President, E-Systems from January 28, 2019 to September 3, 2019. Prior to that, he served as Executive Vice President and President, Seating, a position he had held since November 2011, and prior to that, as Senior Vice President and President, E-Systems, a position he had held since February 2008. Previously, he served in other positions at Lear, including Senior Vice President and President, North American Seat Systems Group since August 2006, Senior Vice President and President, North American Customer Group since June 2005, President, European Customer Focused Division since June 2004 and President, General Motors Division since November 2000. Mr. Scott earned a Bachelor of Science in Economics from the University of Michigan. He also earned a Master of Business Administration from Michigan State University’s Advanced Management Program. Individual experience: Mr. Scott is a first-time nominee to our Board of Directors and was recommended for nomination by each of the following members of management: Roger S. Penske, Rob Kurnick and Bud Denker. Extensive experience as an executive and director of Lear Corporation, a leading automotive supplier; perspective gained from leadership role in the automotive industry; demonstrated success serving as Chief Executive Officer. |
Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company
Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company
Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company
| Age: 73 Joined Board: 2017 Committees: Audit (Chair) | Mr. Smith, retired Vice Chairman of Ford Motor Company, currently serves as Principal of Greg C. Smith, LLC, a private management consulting firm, a position he has held since 2007. Previously, Mr. Smith was employed by Ford Motor Company for over 30 years until 2006. Mr. Smith held various executive-level management positions at Ford Motor Company, most recently serving as Vice Chairman from 2005 until 2006. As Vice Chairman, Mr. Smith was responsible for Ford’s Corporate Strategy and Staff, including Human Resources and Labor Affairs, Information Technology, and Automotive Strategy. Currently, Mr. Smith serves as the Non-Executive Chairman of the Board of Directors of Lear Corporation. Individual experience: Extensive experience as an executive and a director; experience and perspective gained from leadership role in automotive and finance; extensive public company audit committee experience. |
Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company
H. Brian Thompson – Chairman and Chief Executive Officer, Universal Telecommunications, Inc.
Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company
| Age: 85 Joined Board: 2002 Committees: Compensation (Chair), Corporate Governance; Executive Lead Independent Director | Mr. Thompson has served as a director since March 2002 and is the Chairman and Chief Executive Officer of his private equity investment and advisory firm, Universal Telecommunications, Inc. Mr. Thompson was Executive Chairman of GTT Communications, Inc., a leading global cloud network provider to multinational clients, from October 2006 to January 2022. From December 2002 to June 2007, Mr. Thompson was Chairman of Comsat International and also served as Chairman and Chief Executive Officer of Global TeleSystems Group, Inc. from March 1999 through September of 2000. Mr. Thompson was Chairman and CEO of LCI International from 1991 until its merger with Qwest Communications International Inc. in June 1998. Mr. Thompson became Vice Chairman of the board for Qwest until his resignation in December 1998. Mr. Thompson previously served as Executive Vice President of MCI Communications Corporation from 1981 to 1990, and prior to MCI, was a management consultant with the Washington, DC offices of McKinsey & Company for nine years, where he specialized in the management of telecommunications. He currently serves as a member of the board of directors of Pendrell Corporation. Mr. Thompson received his MBA from Harvard’s Graduate School of Business and holds an undergraduate degree in chemical engineering from the University of Massachusetts. Individual experience: Extensive experience as an executive and director of numerous public companies; experience in a leadership role directing international corporations; perspective gained from leadership role in communications industry; demonstrated success serving as our lead independent director. |
Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company
Proposal 2 – Ratification of the Selection of our Independent Auditor Our Audit Committee has selected Deloitte & Touche LLP, the member firm of Deloitte Touche Tohmatsu Limited, and their respective affiliates (collectively referred to as “Deloitte”) as our principal independent auditing firm for 2025. We have determined to submit the selection of auditors to stockholder ratification, even though it is not required by our governing documents or Delaware law. If the selection of Deloitte as our independent auditor is not ratified by our stockholders, our Audit Committee will re-evaluate its selection, taking into consideration the stockholder vote on the ratification and the advisability of selecting new auditors prior to completion of the 2025 audit. Our Audit Committee is solely responsible for selecting, engaging and terminating our independent auditing firm, and may do so at any time at its discretion. It is anticipated that a representative of Deloitte will be present at the Annual Meeting with the opportunity to make a statement and to answer appropriate questions.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITOR
| • | In the last several years, neither our Chief Executive Officer nor President has received an annual cash bonus as both only have received restricted stock grants in lieu of a cash bonus |
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITOR
| • | The named executive officers receive restricted stock grants with vesting provisions weighted towards the third and fourth years and are subject to stock ownership requirements discussed below, which encourages long-term stock ownership |
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITOR
| • | We do not have any employment agreements with our named executive officers and have no agreements that provide for severance payments upon termination of employment |
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITOR
| • | administration of our equity incentive plans |
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITOR
| • | recommendations to the Board of Directors with respect to director compensation |
The Audit Committee of the Board of Directors
The Audit Committee has considered the nature of the above-listed services provided by Deloitte and determined that they are compatible with their provision of independent audit services under relevant guidance. The Audit Committee has discussed these services with Deloitte and management and determined that they are permitted under the Code of Professional Conduct of the American Institute of Certified Public Accountants, the auditor independence requirements of the Public Company Accounting Oversight Board, and the laws and regulations administered by the Securities and Exchange Commission. Pre-approval Policy. The Audit Committee has adopted a policy requiring pre-approval of all audit and non-audit services provided by Deloitte. The primary purpose of this policy is to ensure that we engage our public accountants with a view toward maintaining independence. The Audit Committee is required to pre-approve all services relating to work performed for us by Deloitte and related fees. The Audit Committee must also approve fees incurred for pre-approved services that are in excess of the approved amount. Pre-approval of audit and non-audit services and fees may be given at any time up to a year before commencement of the specified service. The Chair of the Audit Committee may independently approve fees and services as long as they are reviewed and ratified by the Audit Committee at its next regularly scheduled meeting. All of the services and related fees set forth above were approved by the Audit Committee in accordance with this policy. Executive Officers Our named executive officers, whose compensation we describe below, are Messrs. Denker, Kurnick, Penske and Spradlin and Ms. Hulgrave. Each of our named executive officers was elected by the Board of Directors and will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal from office. Biographies of Messrs. Kurnick and Penske are set forth above. Biographies of our other named executive officers are provided below: Bud Denker, 66, has served as our Executive Vice President – Human Resources since July 2015. He also serves as President of Penske Corporation which he joined in 2005 and as Executive Vice President of Penske Racing. Mr. Denker served as our Executive Vice President – Marketing from July 2005 to June 2015. Prior to joining us, Mr. Denker served as Vice President, Brand and Market Development for Eastman Kodak Company from 2001-2005. Shelley Hulgrave, 46, has served as our Executive Vice President and Chief Financial Officer since June 2021 and prior to that served as our Senior Vice President from February 2020 to June 2021. Previously, she was our Vice President and Corporate Controller from June 2015. She has also served as our Corporate Accounting Manager from October 2006 to June 2015 coordinating our accounting teams in the U.S. and internationally. Prior to joining us, Ms. Hulgrave held various positions for DaimlerChrysler Financial and Ernst & Young. Shane Spradlin, 55, has served as our Executive Vice President since February 2010, our General Counsel since December 2007, and our Corporate Secretary since March 2004. Mr. Spradlin joined our Company in March 2003. From 1999 to 2003, he served as Corporate Counsel to Nextel Communications in Reston, Virginia. From 1995 to 1999, Mr. Spradlin was an associate with the New York and Washington, D.C. offices of Latham & Watkins, specializing in corporate finance and mergers and acquisitions. Compensation Committee Report The Compensation and Management Development Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis set forth below with management. Based on this review and these discussions with management, the committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
The Compensation & Management Development Committee of the Board of Directors
Compensation Discussion and Analysis Compensation Philosophy. Other than with respect to Messrs. Kurnick and Penske, the majority of our executive and employee compensation is payable in cash in the short-term and is comprised principally of salary and cash bonuses. We use cash compensation as the majority of our compensation because we believe it provides the most flexibility for our employees and is less dilutive to existing stockholders than equity compensation. The Compensation Committee also recognizes that stock prices may reflect factors other than long-term performance, such as general economic conditions and varying attitudes among investors toward the stock market in general and toward automotive retail companies specifically. However, we also provide long-term compensation in the form of restricted stock awards for senior employees, including each of our named executive officers (“NEOs”). Our restricted stock program awards typically vest over four years, with 70% of any award vesting in the third and fourth years. We believe this long-term compensation helps to align management’s goals with those of our other stockholders and provides a long-term retention inducement for our key employees, as discussed below under the heading “Long-Term Incentive Plans.” Outside Advisors and Consultants. Our Compensation Committee has full access to any of our employees and has the authority to hire outside consultants and advisors at its discretion, though it did not do so in 2024. All NEO compensation determinations are made by the committee, using its independent judgment and analysis. Role of Executive Officers. The Compensation Committee relies on our senior management to assist in fulfilling many of its duties, in particular our Executive Vice President – Human Resources and Chief Executive Officer, each of whom attends part of most committee meetings. These executives make recommendations concerning our compensation policies generally, certain specific elements of compensation for senior management (such as equity awards and bonuses), and report to the committee as to Company personnel and developments. Our executives do not participate in determining their own compensation. Addressing Risk. Our Compensation Committee recognizes that any incentive-based compensation arrangement induces an inherent element of risk taking by senior management. We incentivize management through annual discretionary bonuses, restricted stock grants and, in some cases, performance-based bonuses. The committee assesses the risk related to our compensation policies for the named executive officers and for the employees generally and has determined that our compensation arrangements do not lend themselves to unnecessary or excessive risk taking. The committee believes that any inherent risk is mitigated by the following factors:
The Compensation & Management Development Committee of the Board of Directors
| • | 70% of the equity compensation we issue vests in the third and fourth years |
The Compensation & Management Development Committee of the Board of Directors
The responsibilities of the Compensation Committee and committee member independence are described under “Our Corporate Governance” beginning on page 9. Compensation Recovery (“Clawback”) Policy. We have a policy regarding the recovery of unfairly awarded compensation which requires certain of our officers, including the NEOs, to repay certain incentive compensation in the event of a restatement of our financial results as required by NYSE rules. Equity Award Approval Policy. We have an equity award approval policy which requires that all equity awards be approved by the committee and that the grant date of all awards, except those discussed below, shall be the date of the approval by the committee. As part of that policy, the Compensation Committee delegated to our Chief Executive Officer the authority to grant or accelerate the vesting of awards with respect to 50,000 shares of our common stock per year, other than awards to executive officers, provided the grant or vesting of the awards are reported to the committee at its next meeting. Our Chief Executive Officer approved the grant or vesting of awards with respect to 11,198 shares under that authority in 2024, which awards were ratified by the committee. Timing of Awards. The only form of equity compensation employed by the Company in recent years has been awards of restricted stock vesting over four years as discussed above. These grants are made at the first regular Board meeting of the year in February (which typically occurs after release of our annual earnings) with the restricted stock vesting beginning June 1 of the following year and continuing to vest June 1 for the subsequent three years. We believe that our practice of not issuing equity linked awards that depend on the value of our stock on the date of grant, such as stock options, along with the delayed vesting of awards over four years and our issuance of awards after the public announcement of our earnings, ameliorates the risks involved with issuing awards during a time when we potentially could have material nonpublic information. We also have not, and do not intend to, time the release of material nonpublic information to influence the value of equity awards or other elements of executive compensation. Stock Ownership Guidelines. Our stock ownership guidelines are designed to align our management and Board members’ interests with our stockholders. The guidelines require that officers and directors own the following levels of common stock, expressed as a multiple of base salary.
The Compensation & Management Development Committee of the Board of Directors
Non-employee board members are required to own common stock equal to ten times our annual retainer (currently, $60,000 x 10 = $600,000). Directors and officers have five years from appointment to reach the minimum ownership level, though our policy allows extensions at the discretion of the Chair and Lead Director. These guidelines exclude any shares that are pledged by any of our directors and officers, and also include any shares of restricted stock held by the officer or director. Determination of Compensation Amounts. The Compensation Committee determines all aspects of compensation for our NEOs. In making decisions regarding non-CEO compensation, the committee receives input from our Chief Executive Officer. The committee believes that solely using annual quantitative performance measurements does not create the appropriate balance of incentives to build long-term value. Thus, the committee evaluates a broad range of qualitative factors, including reliability, a track record of integrity, good judgment, foresight and the ability to lead others. The committee reviews salary adjustments to maintain external compensation competitiveness. We annually benchmark competitiveness of our total compensation against a group of publicly traded automotive retailers which in 2024 consisted of Asbury Automotive Group, AutoNation, Group 1 Automotive, Lithia Motors and Sonic Automotive. While we benchmark our compensation, we do not target a specific quartile of pay for our NEOs as compared to our peers. In addition to the above-mentioned factors, the level of compensation that we pay to Messrs. Denker and Kurnick reflect that each devotes a percentage of his time to affiliated companies for which they receive additional compensation from Penske Corporation. Specifically, Mr. Kurnick serves as Penske Corporation’s Vice Chair and Mr. Denker serves as the President of Penske Corporation. Our committee does not track the exact percentage of time spent on Penske Automotive versus affiliated matters, recognizing that the amount varies from year to year, but it is generally expected that each will spend approximately 75% of his time on Penske Automotive matters. We were reimbursed approximately three percent of Mr. Spradlin’s base salary by Penske Corporation to reflect his efforts on behalf of Penske Corporation. The full amount of Mr. Spradlin’s base salary is shown in the table below. Our Compensation Program. Our compensation program primarily consists of four elements:
The Compensation & Management Development Committee of the Board of Directors
| • | Annual discretionary cash bonus payments |
The Compensation & Management Development Committee of the Board of Directors
| • | Restricted stock awards |
The Compensation & Management Development Committee of the Board of Directors
| • | Evaluation of the annual performance of an individual’s business unit in the prior year |
The Compensation & Management Development Committee of the Board of Directors
The items of Company-wide performance that are considered for our NEOs are the same as those detailed below under “Long-Term Incentive Plans.” Our Compensation Committee uses these factors to evaluate Company performance, keeping in mind the impact of the overall performance of the business sectors in which we compete. The evaluation of the individual’s performance and the performance of the individual’s business unit is based on the committee’s perception of that performance, based in part on input from our Chief Executive Officer and the factors noted above under “Determination of Compensation Amounts.” Restricted Stock Awards. Each member of senior management, including each of the NEOs, is eligible to receive a restricted stock award each year based on achievement of performance goals in the prior year because we believe these awards effectively align management’s goals with those of our other stockholders. Restricted stock grants for management typically vest over four years at a rate of 15%, 15%, 20% and 50% per year, and are subject to forfeiture in the event the employee departs from the Company before vesting. We believe these awards provide a longer-term incentive for management because the majority of the award vests in the third and fourth year. We employ this form of compensation in part because many of our initiatives may take several years to yield benefits. We also believe that weighted vesting of these awards provides an additional incentive to retain our valuable employees due to the unvested value that may be created over time. Our restricted stock awards mirror our other outstanding stock, providing dividend and voting rights prior to vesting. In 2024, each of our NEOs received restricted stock awards resulting from achievement of 2023 long-term incentive plan awards. In total in 2024, the committee approved the grant of 177,060 equity incentive awards under our equity plans (representing approximately 0.3% of our current outstanding equity), including all of the awards to our NEOs. Awards were granted under our 2020 Equity Incentive Plan which originally provided up to five million shares for equity awards, of which 3,595,159 remain available for issuance as of March 14, 2025. As discussed in more detail below, in 2024 we also established the performance goals for the 2024 long-term incentive plan and, in February 2025, each of our NEOs received restricted stock awards resulting from achievement of the 2024 long-term incentive plan awards. Other Compensation. We may also provide our NEOs, and certain other employees, with selected other benefits or perquisites in order to attract and retain them. With respect to health and welfare benefits, the committee believes that our employees should receive a meaningful benefit package commensurate with those of other automotive retailers, recognizing the increasing cost of those benefits in recent years. We also provide our U.S. employees with matching under our 401(k) plan. Our NEOs, as well as other eligible employees, may defer up to 50% of their base salary and up to 95% of their bonus compensation pursuant to the Penske Automotive Group, Inc. Amended and Restated Deferred Compensation Plan (the “DCP”). The DCP is an unfunded, non-qualified deferred compensation plan which provides the opportunity to accumulate additional savings for retirement on a tax deferred basis. The Company does not match funds deferred through this plan. Additional details regarding our DCP can be found below in the “Nonqualified Deferred Compensation” table. Our NEOs and directors are also provided with an automobile allowance or the use of a Company vehicle. From time to time, we may provide other benefits to certain members of our senior management. We have valued these benefits in the “All Other Compensation” column of the “Summary Compensation” table below based on our cost. We review these benefits on a case-by-case basis and believe, if limited in scope, such benefits can incent long-term performance and help retain our valuable employees. No Employment Agreements or Pre-arranged Severance Compensation. None of our current executive officers have been provided an employment agreement, nor are they entitled to any pre-arranged severance compensation from our Company. We believe our mix of short-term and long-term compensation provides a retention incentive that makes an employment contract unnecessary, while providing us flexibility with respect to managing the departure of an executive officer. Our lack of pre-arranged severance compensation is consistent with our performance-based compensation philosophy and provides us the flexibility to enter into post-employment arrangements based on circumstances existing upon departure. We have historically entered into varying types of severance arrangements with departing members of our senior management, which have included vesting of restricted stock and consulting agreements, as we believe it may be important to have continuing access to these individuals’ knowledge base and guidance. With respect to a change in control, none of our current executive officers have been guaranteed any change of control payments, however, our restricted stock grants vest in the event of a change of control. Long-Term Incentive Plans. In February 2024, our Compensation Committee established 2024 performance targets for a performance-based award for each of the NEOs. The earned payouts for these awards are set forth in the table below and were paid in shares of restricted stock in February 2025 as set forth below. For each of the NEOs, the amount of restricted stock noted below granted in February 2025 and vesting over a four-year period was calculated by dividing the total award achieved by our average closing stock price for each trading day in 2024 ($155.76). Messrs. Kurnick and Penske do not receive cash bonuses. Their performance bonuses are paid only in shares of restricted stock as a result of the long-term incentive plans.
The Compensation & Management Development Committee of the Board of Directors
| Objective | | Result | % of Award | Achievement | | • | EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,646 million yields 100% attainment, EBITDA below $1,235 million results in no attainment, and EBITDA of $1,721 million yields 200% attainment (1) | $1,486 mil | 20% | 12.2% | | • | Comparative earnings per share of $14.87 (100% attainment), EPS of $14.88 to $15.61 (200% attainment), and EPS over $15.61 (300% attainment), EPS below $11.15 (No attainment) (1) | $13.74 | 10% | 7.0% | | • | Common stock price performance meets or exceeds performance of 2 of 5 peer group companies (75% attainment), 3 of 5 selected peer group companies (100% attainment), 4 of 5 peer group companies (150% attainment) and 5 of 5 yields (200% attainment) (2) | 0 of 5 | 10% | 0.0% | | • | U.S. customer satisfaction scores of 90% of our dealerships meet or exceed any applicable manufacturer’s requirements | Exceeds | 10% | 10.0% | | • | No material weaknesses in our internal controls | Achieved | 10% | 10.0% | | • | ESG Metric – Annual global turnover no more than 2% greater than prior year annual turnover | Achieved | 10% | 10.0% | | • | ESG Metric – U.S. auto retail gender diversity equal or above auto retail gender diversity (per NADA) | Achieved | 10% | 10.0% | | • | Awarded on sole discretion of the Compensation and Management Development Committee | Awarded | 20% | 20.0% | | Total | | | 100% | 79.2% | | • | Supplemental ESG Metric – U.S. auto retail NPS for employee opinion survey higher than peer NPS | 10% | 10% | 10.0% | | | | | 110% | 89.2% |
The Compensation & Management Development Committee of the Board of Directors
| (2) The peer group companies for this purpose are Asbury Automotive, AutoNation, Group 1 Automotive, Lithia Automotive, and Sonic Automotive . |
2025 Long-Term Incentive Award Amounts
2025 Long-Term Incentive Award Amounts In February 2025, the committee established similar performance-based awards for our NEOs in the amounts specified below to be paid in shares of restricted stock to be granted in 2026 calculated by dividing the resulting total award achieved by the average PAG closing stock price for each trading day in 2025.
2025 Long-Term Incentive Award Amounts
| Name and Principal Position | Minimum ($) | Target ($) | Maximum ($) | | Roger Penske, Chief Executive Officer | 3,000,000 | 6,000,000 | 9,900,000 | | Robert Kurnick, Jr., President | 750,000 | 1,500,000 | 2,475,000 | | Shelley Hulgrave, EVP & CFO | 375,000 | 750,000 | 1,237,500 | | Bud Denker, EVP – Human Resources | 375,000 | 750,000 | 1,237,500 | | Shane Spradlin, EVP & General Counsel | 375,000 | 750,000 | 1,237,500 |
2025 Long-Term Incentive Award Amounts
The performance objectives for these awards are as follows:
2025 Long-Term Incentive Award Amounts
| Objective | | % of Award | | • | EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,548 million yields 100% attainment, EBITDA below $1,162 million results in no attainment, and EBITDA of $1,618 million yields 200% attainment (1) | 25% | | • | Comparative earnings per share of $13.87 (100% attainment), EPS over $14.56 (300% attainment), and EPS below $10.42 (No attainment) (1) | 15% | | • | U.S. customer satisfaction scores of 90% of our dealerships meet or exceed any applicable manufacturer’s requirements | 10% | | • | No material weaknesses in our internal controls | 10% | | • | Annual global turnover no more than 2% greater than prior year annual turnover | 10% | | • | U.S. auto retail net promoter score for employee opinion survey higher than peer NPS | 10% | | • | Annual healthcare costs incurred at or below budgeted levels | 10% | | • | Awarded on sole discretion of the Compensation and Management Development Committee | 20% | | | | 110% |
2025 Long-Term Incentive Award Amounts
| (1) Performance between these amounts yields pro rata attainment. These metrics may be adjusted for certain one-time or extraordinary items |
2025 Long-Term Incentive Award Amounts
| (2) The peer group companies for this purpose are Asbury Automotive, AutoNation, Lithia Automotive, Group 1 Automotive and Sonic Automotive |
2025 Long-Term Incentive Award Amounts
Executive Compensation The following table contains information concerning 2024 annual and long-term compensation for our Chief Executive Officer, Chief Financial Officer and each of our three other most highly compensated executive officers, collectively referred to as the “named executive officers” or “NEOs”.” For a discussion of our methodology in valuing the items set forth under “All Other Compensation,” see “Compensation Discussion & Analysis – Other Compensation.”
2024 Summary Compensation Table
2024 Summary Compensation Table
2024 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | Roger Penske Chief Executive Officer | 2024 | 1,750,000 | — | 6,000,000 | 1,027,453 (2) | 8,777,453 | | | 2023 | 1,600,000 | — | 5,000,000 | 828,439 | 7,428,439 | | | 2022 | 1,600,000 | — | 5,000,000 | 700,613 | 7,300,613 | | Robert Kurnick, Jr. President | 2024 | 1,000,000 | — | 1,500,000 | 279,753 (3) | 2,729,753 | | | 2023 | 900,000 | — | 1,000,000 | 241,405 | 2,141,405 | | | 2022 | 900,000 | — | 1,000,000 | 217,834 | 2,117,834 | | Shelley Hulgrave EVP & Chief Financial Officer | 2024 | 720,000 | 525,000 | 750,000 | 136,346 (5) | 2,131,346 | | | 2023 | 600,000 | 340,000 | 500,000 | 104,060 | 1,544,060 | | | 2022 | 504,167 | 450,000 | 1,249,983 (4) | 83,297 | 2,287,447 | | Bud Denker EVP – Human Resources | 2024 | 720,000 | 525,000 | 750,000 | 104,656 (6) | 2,099,656 | | | 2023 | 650,000 | 450,000 | 500,000 | 81,842 | 1,681,842 | | | 2022 | 625,000 | 600,000 | 500,000 | 64,732 | 1,789,732 | | Shane Spradlin EVP, General Counsel & Secretary | 2024 | 720,000 | 525,000 | 750,000 | 160,788 (7) | 2,155,788 | | | 2023 | 650,000 | 450,000 | 500,000 | 137,346 | 1,737,346 | | | 2022 | 625,000 | 600,000 | 500,000 | 116,637 | 1,841,637 |
2024 Summary Compensation Table
| (1) These amounts represent the grant date fair value of the long-term incentive awards which were settled by issuing shares of restricted stock in February of the subsequent year computed in accordance with FASB ASC Topic 718. Additional assumptions used in the calculation of the amounts in this column are included in footnote 13 to our audited financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2025. These amounts represent the target amount for the awards. The 2025 payouts for these performance-based awards are each set forth in the table below which was ultimately paid in shares of restricted stock in February 2025 valued as set forth above. For Ms. Hulgrave, the 2022 amount includes, in addition to the target amount of the 2022 long-term incentive award, the value of the discretionary award she received in 2022. |
2024 Summary Compensation Table
| (2) Consists of $977,452 of dividends on unvested restricted stock awards and $50,000 in charitable donations pursuant to our director charitable matching program. |
2024 Summary Compensation Table
| (3) Consists of $37,700 for an automobile allowance, $50,000 in charitable donations pursuant to our director charitable matching program and $192,083 in dividends on unvested restricted stock awards. |
2024 Summary Compensation Table
| (4) As discussed in footnote (1) above, represents two years of stock awards for Ms. Hulgrave: the discretionary award issued in February 2022 ($749,983), and the long-term incentive award for 2022 ($500,000). |
2024 Summary Compensation Table
| (5) Consists of $27,600 for an automobile allowance, matching funds under our U.S. 401(k) plan, Company-sponsored life insurance, Company-sponsored lunch program, $73,778 in dividends on unvested restricted stock awards, payments for a country club membership, use of sporting event tickets and a tax allowance of $5,340. |
2024 Summary Compensation Table
| (6) Represents dividends on unvested restricted stock. |
2024 Summary Compensation Table
| (7) Represents an automobile allowance, Company-sponsored life insurance, matching funds under our U.S. 401(k) plan, Company-sponsored lunch program, payments for a country club membership, use of sporting event tickets, dividends on unvested restricted stock of $104,656, and a tax allowance of $5,581. |
2024 Summary Compensation Table
| Name and Principal Position | Minimum ($) | Target ($) | Maximum ($) | Award ($) | | Roger Penske Chief Executive Officer | 3,000,000 | 6,000,000 | 9,600,000 | 5,352,000 | | Robert Kurnick, Jr. President | 750,000 | 1,500,000 | 2,400,000 | 1,338,000 | | Shelley Hulgrave EVP and Chief Financial Officer | 375,000 | 750,000 | 1,200,000 | 669,000 | | Bud Denker EVP – Human Resources | 375,000 | 750,000 | 1,200,000 | 669,000 | | Shane Spradlin EVP, General Counsel & Secretary | 375,000 | 750,000 | 1,200,000 | 669,000 |
Grants of Plan-Based Awards in 2024
Grants of Plan-Based Awards in 2024
Grants of Plan-Based Awards in 2024
| | | Estimated Future Payouts under Equity Incentive Plan Awards(1) | | | All other Awards: Number of Shares of Stock(2) | Grant Date Fair Value of Stock Awards ($)(3) | | Name and Principal Position | Grant Date | Minimum ($) | Target ($) | Maximum ($) | | | | Roger Penske Chief Executive Officer | 2/13/2024 | 3,000,000 | 6,000,000 | 9,600,000 | | 6,000,000 | | | 2/13/2024 | | | | 31,722 | 4,769,403 | | Robert Kurnick, Jr. President | 2/13/2024 | 750,000 | 1,500,000 | 2,400,000 | | 1,200,000 | | | 2/13/2024 | | | | 6,344 | 953,820 | | Shelley Hulgrave EVP and Chief Financial Officer | 2/13/2024 | 375,000 | 750,000 | 1,200,000 | | 750,000 | | | 2/13/2024 | | | | 3,172 | 476,910 | | Bud Denker EVP – Human Resources | 2/13/2024 | 375,000 | 750,000 | 1,200,000 | | 750,000 | | | 2/13/2024 | | | | 3,172 | 476,910 | | Shane Spradlin EVP, General Counsel & Sec. | 2/13/2024 | 375,000 | 750,000 | 1,200,000 | | 750,000 | | | 2/13/2024 | | | | 3,172 | 476,910 |
Grants of Plan-Based Awards in 2024
| (1) These columns show the minimum, target and maximum award values for the awards granted under our 2024 Long-Term Incentive Plan described above under the heading “2024 Long-Term Incentive Award Amounts” which awards were paid out in shares of restricted stock in February 2025. |
Grants of Plan-Based Awards in 2024
| (2) Reflects the shares that were issued in February 2024 to settle the 2023 Long-Term Incentive Awards. |
Grants of Plan-Based Awards in 2024
| (3) Computed in accordance with ASC 718. |
Outstanding Equity Awards at 2024 Year-End
Outstanding Equity Awards at 2024 Year-End
Outstanding Equity Awards at 2024 Year-End
| | Stock Awards | | | Name | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested (1) | | Roger Penske (2) Chief Executive Officer | 241,369 | $36,794,290 | | Robert Kurnick, Jr. (3) President | 49,218 | 7,502,792 | | Shelley Hulgrave (4) EVP & Chief Financial Officer | 20,466 | 3,119,837 | | Bud Denker (5) EVP – Human Resources | 26,562 | 4,049,111 | | Shane Spradlin (5) EVP, General Counsel & Secretary | 26,562 | 4,049,111 |
Outstanding Equity Awards at 2024 Year-End
| (1) Market value is based upon the closing price of our common stock on the last trading day of 2024, December 31, 2024 ($152.44). |
Outstanding Equity Awards at 2024 Year-End
| (2) These restricted shares vest as follows: |
Outstanding Equity Awards at 2024 Year-End
| June 1, 2025 – 101,328 | June 1, 2028 – 22,734 | | June 1, 2026 – 63,295 | June 1, 2029 – 17,180 | | June 1, 2027 – 38,832 | |
Outstanding Equity Awards at 2024 Year-End
| (3) These restricted shares vest as follows: |
Outstanding Equity Awards at 2024 Year-End
| June 1, 2025 – 20,137 | June 1, 2028 – 4,890 | | June 1, 2026 – 12,733 | June 1, 2029 – 4,295 | | June 1, 2027 – 7,163 | |
Outstanding Equity Awards at 2024 Year-End
| (4) These restricted shares vest as follows: |
Outstanding Equity Awards at 2024 Year-End
| June 1, 2025 – 4,907 | June 1, 2028 – 2,445 | | June 1, 2026 – 6,233 | June 1, 2029 – 2,148 | | June 1, 2027 – 4,733 | |
Outstanding Equity Awards at 2024 Year-End
| (5) These restricted shares vest as follows: |
Outstanding Equity Awards at 2024 Year-End
| June 1, 2025 – 10,410 | June 1, 2028 – 2,445 | | June 1, 2026 – 6,826 | June 1, 2029 – 2,148 | | June 1, 2027 – 4,733 | |
Stock Vested During 2024
Stock Vested During 2024
Stock Vested During 2024
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Roger Penske Chief Executive Officer | 71,470 | $10,870,587 | | Robert Kurnick, Jr. President | 14,161 | 2,153,888 | | Shelley Hulgrave EVP & Chief Financial Officer | 4,174 | 634,865 | | Bud Denker EVP – Human Resources | 7,423 | 1,129,038 | | Shane Spradlin EVP, General Counsel & Secretary | 7,423 | 1,129,038 |
Nonqualified Deferred Compensation for 2024
Nonqualified Deferred Compensation for 2024 The Penske Automotive Group, Inc. Amended and Restated Deferred Compensation Plan (“DCP”) allows qualifying individuals, including our NEOs, to defer on a pre-tax basis up to 50% of their base salary and/or up to 95% of their annual bonus for a specified period of time, and/or until their retirement or separation from the Company. The deferred assets are held in a rabbi trust and are invested notionally on behalf of the participants. In the event of termination of employment, all balances would be paid in either a lump sum or up to ten annual installments, according to the participant’s prior election. We do not provide any matching contributions and we do not guarantee a minimum return on these amounts. We believe the DCP is an important tool for recruiting key employees and assists in employee retention. The table below reflects the contributions, earnings, withdrawals, distributions during 2024, and account balances as of December 31, 2024 for each NEO.
Nonqualified Deferred Compensation for 2024
| Name | Executive Contributions In Last FY(1) | Registrant Contributions In Last FY | Aggregate Earnings In Last FY (2) | Aggregate Withdrawals / Distributions | Aggregate Balance at Last FYE (3) | | Roger Penske Chief Executive Officer | — | — | — | — | — | | Robert Kurnick, Jr. President | — | — | — | — | — | | Shelley Hulgrave EVP & Chief Financial Officer | $152,112 | — | $92,446 | — | $746,375 | | Bud Denker EVP – Human Resources | $245,708 | — | $161,131 | — | $1,159,904 | | Shane Spradlin EVP, General Counsel & Secretary | $546,283 | — | $295,921 | — | $2,758,034 |
Nonqualified Deferred Compensation for 2024
| (1) These amounts are reported in the “Salary” and “Bonus” columns of the Summary Compensation Table. |
Nonqualified Deferred Compensation for 2024
| (2) The amounts in this column were not reported as compensation in the Summary Compensation Table. |
Nonqualified Deferred Compensation for 2024
| (3) The following amounts represent the amounts reported in this column which were reported as compensation to the named executive officer in the Summary Compensation Table for previous years (excluding FY2024): Shelley Hulgrave – $331,003; Bud Denker – $672,242; Shane Spradlin – $1,738,670. |
Nonqualified Deferred Compensation for 2024
Pension Benefits. Our executive officers are not eligible to participate in any defined benefit compensation plans. “Golden Parachutes” or Termination/Change in Control Payments. None of our current NEOs have been provided an employment agreement, nor are they entitled to any pre-arranged severance compensation. With respect to a change in control, none of our current NEOs have been guaranteed any change of control payments, however, our restricted stock grants vest in the event of a change of control. See the table above captioned “Outstanding Equity Awards at 2024 Year-End“ for the number of shares and values that would vest assuming a change of control occurred on December 31, 2024. Pay Versus Performance. The SEC requires us to present the following disclosures of our “pay versus performance”. These disclosures are intended to show the relationship of the compensation we paid to certain of our executives compared to our financial performance over the past five years. Below you will find: (1) a table with five years of information on compensation “actually paid” to the Principal Executive Officer (“PEO”), which is our CEO, and our other NEOs for the applicable years on average as a group, as well as Total Shareholder Return (“TSR”), net income and EBITDA as adjusted if applicable, as described below; (2) disclosures explaining the relationship between compensation “actually paid” and the performance measures disclosed in the Pay versus Performance Table; and (3) a tabular list of financial performance measures we use to link compensation “actually paid” to NEOs for the last fiscal year to our performance. Our Company produced earnings in the past five years which resulted in a substantial increase in our stock price. The SEC’s definition of compensation “actually paid” includes the increase in value of unvested restricted stock held by our NEOs which vest over four years with 70% of any award vesting in the third and fourth years. As a result, compensation “actually paid” pursuant to the SEC’s definition of that term has increased significantly over that time in part as a result of appreciation in the value of unvested restricted stock. Our NEOs may or may not receive the full economic benefit of the compensation showed as “actually paid” depending on the stock price at the time of vest of the restricted stock despite the characterization of such compensation being “actually paid” pursuant to SEC rules.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs (1) | Value of Initial Fixed $100 Investment Based On: | | Net Income | Adjusted EBITDA (3) | | | | | | | Total Shareholder Return (2) | Peer Group Total Shareholder Return (2) | (In millions) | | | 2024 | $8,777,453 | $5,597,534 | $2,279,136 | $1,716,355 | $335.24 | $292.01 | $923 | $1,486 | | 2023 | 7,428,439 | 21,781,594 | 1,776,163 | 3,614,328 | 344.02 | 253.43 | 1,059 | 1,694 | | 2022 | 7,300,613 | 14,618,634 | 2,009,163 | 2,532,735 | 241.76 | 174.37 | 1,386 | 2,057 | | 2021 | 6,981,685 | 26,778,167 | 1,982,924 | 3,479,767 | 221.35 | 200.63 | 1,193 | 1,798 | | 2020 | 5,979,555 | 4,146,492 | 1,505,797 | 1,279,321 | 120.06 | 152.87 | 545 | 934 |
Pay Versus Performance Table
| (1) By SEC rules, these amounts reflect the amount disclosed in our Summary Compensation Table (SCT) for the applicable year (a) minus the grant date fair value of equity compensation in the SCT, (b) plus year-end fair value of stock awards granted in the year that were outstanding and unvested as of the end of year, (c) plus the change as of year-end in fair value of prior year awards that were outstanding and unvested as of the end of year or, for awards vesting in that year, the change in fair value of those awards as of the vesting date. The other elements required to be disclosed pursuant to SEC rules in the definition of compensation “actually paid” are inapplicable to our NEO compensation. The calculations for (b) and (c) are as follows: |
Pay Versus Performance Table
| | Year | Share Price at 12/31 | Shares Granted | Granted Shares Fair Value at 12/31 | Other Shares Outstanding | Change in Fair Value | Shares Vested | Vested Shares Change in Fair Value | Total Stock Compensation Actually Paid | | PEO | 2024 | $152.44 | 31,722 | $4,835,702 | 175,286 | ($1,414,558) | 71,470 | ($601,063) | $2,820,081 | | | 2023 | 160.51 | 50,668 | 8,132,721 | 196,088 | 8,937,691 | 97,138 | 2,282,743 | 19,353,155 | | | 2022 | 114.93 | 86,498 | 9,941,215 | 206,728 | 1,593,873 | 86,896 | 782,933 | 12,318,021 | | | 2021 | 107.22 | 143,340 | 15,368,915 | 150,284 | 7,188,084 | 81,229 | 2,239,484 | 24,796,482 | | | 2020 | 59.39 | 44,456 | 2,640,242 | 187,057 | 1,715,313 | 83,529 | (1,188,618) | 3,166,937 | | Other NEOs (Fair values represent averages) | 2024 | $152.44 | 3,965 | 604,425 | 21,368 | ($172,442) | 8,295 | ($69,763) | $362,220 | | | 2023 | 160.51 | 7,485 | 1,201,377 | 22,179 | 1,010,907 | 10,676 | 250,880 | 2,463,165 | | | 2022 | 114.93 | 9,291 | 1,067,843 | 23,563 | 181,673 | 9.287 | 86,552 | 1,336,068 | | | 2021 | 107.22 | 15,094 | 1,638,777 | 16,366 | 782,786 | 10,220 | 281,760 | 2,468,307 | | | 2020 | 59.39 | 5,557 | 300,045 | 21,441 | 196,616 | 9,005 | (128,138) | 398,524 |
Pay Versus Performance Table
The PEO whose compensation is represented in each year is Mr. Penske. Messrs. Denker, Kurnick and Spradlin are included in the NEO averages for each year. Also included in the NEO average in 2020 was J.D. Carlson, our former CFO, in 2021 both Mr. Carlson and Ms. Hulgrave were included and Ms. Hulgrave for 2022, 2023 and 2024.
Pay Versus Performance Table
| (2) Total shareholder return measures the change in value of our common stock, adjusted to include dividends received by our shareholders over the period. Our peer group for purposes of the peer group total shareholder return disclosure is the same as the one identified in Item 5 of our annual report on Form 10-K and consists of the following companies, each of which principally conducts automotive retail operations: Asbury Automotive Group, Inc., AutoNation, Inc., Group 1 Automotive, Inc., Lithia Motors, Inc., and Sonic Automotive, Inc. (the “Peer Group“). |
Pay Versus Performance Table
| (3) The following table reconciles the non-GAAP measures EBITDA and Adjusted EBITDA to the closest applicable GAAP measure, net income |
Pay Versus Performance Table
| Non-GAAP Reconciliations | | | | | | | | Twelve Months Ended December 31, | | | | | | (Amounts in Millions) | 2024 | 2023 | 2022 | 2021 | 2020 | | Net Income | $923.4 | $1,058.6 | $1,386.2 | $1,192.7 | $545.3 | | Add: Depreciation | 158.0 | 141.0 | 127.3 | 121.5 | 115.5 | | Other Interest Expense | 87.8 | 92.6 | 70.4 | 68.6 | 111.0 | | Income Taxes | 316.5 | 360.9 | 473.0 | 416.3 | 162.7 | | Income from Discontinued Operations, net of tax | (0.0) | (0.0) | (0.0) | (1.3) | (0.4) | | EBITDA | 1,485.7 | $1,653.1 | $2,056.9 | $1,797.8 | $934.1 | | Add: Goodwill Impairment | (0.0) | 40.7 | (0.0) | (0.0) | (0.0) | | Adjusted EBITDA | 1,485.7 | $1,693.8 | $2,056.9 | $1,797.8 | $934.1 |
Pay Versus Performance Table
The following tables show the relationship between (1) compensation “actually paid” to our CEO and the other NEOs to (2) each of total shareholder return, net income and EBITDA as adjusted if applicable. Our net income and EBITDA have increased 112% and 80%, respectively over the five year period. Compensation “actually paid” has increased over that time as well, most significantly due to the increase in value of the NEOs’ restricted stock holdings, which vest over four years with 70% of any award vesting in the third and fourth years. Our stock price has increased from $50.22 on December 31, 2019 to $152.44 on December 31, 2024, representing an increase in shareholder value based on our December 31, 2024 outstanding shares of approximately $6.8 billion. Excluding the increase in the value of unvested restricted stock, compensation “actually paid” for our CEO, and the other NEOs (consisting of salary, bonus, other compensation and the vesting of restricted stock) increased 170%, and 99%, respectively, over the five year period, as compared to an increase of total shareholder return of 235%. As noted in the table above, our total shareholder return over the five years increased 235% as compared to a 192% increase by our Peer Group. We are required under SEC rules to also disclose the most important financial performance measures that link compensation “actually paid” to our NEOs (which amounts are shown in the table above using the SEC’s methodology) to Company performance. We believe those metrics are as follows:
Pay Versus Performance Table
| Financial Performance Measures | | Net Income | | Adjusted EBITDA | | Earnings Per Share | | Stock Price Performance |
Pay Versus Performance Table
We selected these measures because we believe our compensation “actually paid” is most influenced by two factors: (1) the amount of restricted stock granted to our NEOs under the annual performance plans over the relevant period and (2) the change in our stock price over time (see footnote 1 to the Pay Verses Performance Table above). Our 2024 performance plans include metrics for EBITDA, EPS, and stock price performance, which collectively could represent more than 50% of the total amount available under the plans. We believe the change in our stock price over time is correlated most closely to the financial performance measures EBITDA (as adjusted if applicable), EPS (as adjusted if applicable) and net income. CEO Pay Ratio. For 2024, the estimated median of the annual total compensation of our employees other than Mr. Penske, our Chief Executive Officer, was $54,232 and the annual total compensation of Mr. Penske described elsewhere in this proxy statement was $8,777,453. Based on this information, the ratio of the annual total compensation of Mr. Penske to the median of the annual total compensation of all employees was estimated to be 162 to 1. To identify the median of the annual total compensation of our worldwide employee population, as well as to calculate the annual total compensation of the “median employee” from this population, our methodology necessarily involved certain material assumptions, adjustments, and estimates as permitted by SEC rules and interpretations. Pursuant to SEC rules, we are permitted to calculate our CEO pay ratio for the year ended December 31, 2024 using the same median employee that we identified in 2023 because we do not believe that there have been any changes to our employee population or employee compensation arrangements during 2024 that would have a significant impact on our pay ratio disclosure. We identified our median employee in 2023 as of December 31, 2023, when our worldwide employee population consisted of approximately 28,279 individuals. In identifying the median employee, we excluded from our employee population all of the employees in the following jurisdictions as permitted by SEC rules and interpretations based on the small number of employees located in each: New Zealand (125), Japan (364) and Italy (731). To identify the median employee from our employee population, we compared the amount of U.S. gross taxable wages or equivalent foreign metric of our employees as reflected in our payroll records. Once we identified our median employee, we combined all the elements of such employee’s compensation for 2024 in accordance with the SEC’s requirements, resulting in the annual total compensation noted above. With respect to the annual total compensation of Mr. Penske, we used the total amount reported in the above Summary Compensation Table for 2024. Director Compensation The Board of Directors receives a mix of cash and equity compensation with the option to receive certain compensation in the form of equity and to defer certain compensation until separation from service. The Board of Directors approves changes to director compensation only upon the recommendation of the Compensation and Management Development Committee, which is composed solely of independent directors. Annual Fees and Stock Award. For 2024, each non-employee director received an annual fee of $60,000, except for Audit Committee members, who receive $65,000. The Lead Director received an additional $30,000, the Chairs of our Compensation and Management Development Committee and Nominating and Corporate Governance Committee each received an additional $15,000 and our Audit Committee Chair received $20,000. Greg Penske, our Vice Chair of the Board, receives an additional $50,000 in fees. These fees are payable, at the option of each non-employee director, in cash or common stock valued on the date of receipt. Our non-employee directors also received an annual grant of $250,000 of shares of stock or deferred stock (at their prior election) in December valued on the date of grant. Option to Defer Receipt until Termination of Board Service. Our Non-Employee Director Compensation Plan allows our outside directors to defer their director compensation until termination of their service. Any amount deferred will be paid, at the director’s election, in either a lump sum or five annual installments upon their termination from the Board. Directors may defer their annual stock award into deferred stock units and may defer their cash compensation into a notional cash account or deferred stock units. Each deferred stock unit represents the right to receive payment of the value of one share of common stock, and ultimately will be paid in stock or cash after a director separates from service. These stock units do not have voting rights but do receive dividends in the form of additional stock units which are credited to the director’s account on the date dividends are paid. All cash fees deferred into the notional cash account are credited with a rate of return based 50% on a S&P 500 index fund and 50% on a bond fund. Charitable Donation Matching Program. All directors are eligible to participate in a charitable matching gift program. Under this program, we match up to $50,000 per year in contributions by each director to institutions qualified as tax-exempt organizations under 501(c)(3) of the Internal Revenue Code and other institutions approved at the discretion of management. We may decline to match any contribution to an institution with goals that are incompatible with ours, or due to conflicts with our director independence policy. This program is not available for matching of political contributions. While the contributions are directed by our directors, we retain the tax deduction for matching contributions paid by us. Other Amounts. As part of our director continuing education program, each director is eligible to be reimbursed by us for the cost and expenses relating to one education seminar per year. These amounts are excluded from the table below. Each non-employee director is also entitled to the use of a Company vehicle, including the cost of routine maintenance and repairs and Company-sponsored automobile insurance relating to that vehicle. For any director who declines the use of a Company-sponsored vehicle, we provide a $20,000 cash payment in lieu of the Company-sponsored vehicle, which the director may elect to receive in equity or may elect to defer it until separation from service, consistent with our policy for annual director fees described above. All directors are also entitled to reimbursement for their reasonable out-of-pocket expenses in connection with their travel to, and attendance at, meetings of the Board of Directors or its committees. Because we expect attendance at all meetings, and a substantial portion of the Board of Directors’ work is done outside of formal meetings, we do not pay meeting fees.
2024 Director Compensation Table
2024 Director Compensation Table Our directors serving in 2024 who were also our employees (Messrs. Kurnick and Penske) as well as Kota Odagiri received no additional compensation for serving as directors, though they are eligible for the charitable matching program noted above.
2024 Director Compensation Table
| Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | All Other Compensation (3) | Total | | John Barr(4) | $85,000 | $250,000 | $50,000 | $385,000 | | Lisa Davis | 60,000 | 250,000 | $42,907 | $352,907 | | Wolfgang Dürheimer(4) | 80,000 | 250,000 | – | $330,000 | | Michael Eisenson(4) | 80,000 | 250,000 | $50,000 | $380,000 | | Kimberly McWaters | 80,000 | 250,000 | $90,303 | $420,303 | | Greg Penske(4) | 130,000 | 250,000 | $50,000 | $430,000 | | Sandra Pierce | 60,000 | 250,000 | $85,586 | $395,586 | | Greg Smith(4) | 105,000 | 250,000 | $50,000 | $405,000 | | Ronald Steinhart | 65,000 | 250,000 | $62,076 | $377,076 | | H. Brian Thompson | 105,000 | 250,000 | $52,545 | $407,545 |
2024 Director Compensation Table
| (1) Greg Penske elected to receive equity in lieu of a cash retainer for 2024. Mr. Thompson elected to receive 50% of his cash compensation in equity in 2024. |
2024 Director Compensation Table
| (2) These amounts represent the grant date fair value of awards computed in accordance with FASB ASC Topic 718 in connection with stock awards granted under our 2020 Equity Incentive Plan and excludes the amount of any equity compensation received in lieu of cash noted in footnote one. |
2024 Director Compensation Table
| (3) See the following table for a description of these amounts and other information. |
2024 Director Compensation Table
| (4) Includes $20,000 in lieu of a Company sponsored vehicle. |