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Advisory Vote on Executive Compensation (Proposal 2)

EXECUTIVE COMPENSATION

We are asking our stockholdersshareholders to approve, on a non-binding advisory basis, the compensation of our named executive officers.officers (“NEOs”). We believe that our compensation policies and practices are effective in achieving our Company’s goals of rewarding significant financial and operating performance, leadership excellence and aligning the executives’ long-term interests with those of our stockholders.shareholders. Our compensation philosophy is to set the fixed compensation of our named executive officers competitively for their demonstrated skills and industry experience. Our variable compensation, both annual and long-term, reflects the results of performance against a combination of quantitative and subjective measures. At last year’s Annual Meeting of Stockholders, our stockholders approvedShareholders, the compensation of our named executive officers was approved with a substantial majority of our stockholders (96%shareholders (97% of votes cast) voting in favor.

COMPENSATION COMPONENTS

favor of our executive compensation program.

In evaluating this year’s “say-on-pay”“say-on-pay” proposal, we recommend that you review the section entitled “2018“2021 Compensation Discussion and Analysis” (“CD&A”) beginning on page 41,33, as well as the Summary Compensation Table and related compensation tables and narratives, which explainsexplain how and why the Compensation & Human Resources (“CHR”) Committee arrived at its executive compensation actions and decisions for 2018.2021, and provide detailed information on the compensation of our named executive officers.

2021 SUMMARY COMPENSATION

For more information, visit the section titled “Executive Compensation – 2021 Summary Compensation Table” on page 50.

Name and Principal Position		Salary ($)				Stock Awards ($)				Non-Equity Incentive Plan Compensation ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Earl J. Hesterberg President and Chief Executive Officer			1,240,000				3,799,959				2,480,000				849,078				208,220				8,577,257
Daryl A. Kenningham President, U.S. and Brazilian Operations			760,000				1,999,994				1,121,000				342,173				174,355				4,397,522
Daniel McHenry Senior Vice President and Chief Financial Officer			575,000				499,925				661,250				859				34,557				1,771,591
Frank Grese, Jr. Senior Vice President, Human Resources, Training and Operations Support			633,450				699,807				715,799				373,425				32,605				2,455,086
Peter C. DeLongchamps Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs			530,450				799,821				610,018				142,794				29,663				2,112,746

 

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2018 SUMMARY COMPENSATION

Set forth below is the 2018 compensation for each named executive officer:Proxy Statement 2022  |  7

Name and Principal Position		Salary ($)				Stock Awards(1) ($)				Non-Equity Incentive Plan Compensation(2) ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) ($)				All Other Compensation(4) ($)				Total ($)
Earl J. Hesterberg President and Chief Executive Officer			1,150,000				3,599,959				1,437,500				337,607				378,588				6,903,654
Daryl A. Kenningham President, U.S. Operations			624,000				987,935				780,000				181,560				26,745				2,600,240
John C. Rickel Senior Vice President and Chief Financial Officer			599,700				873,943				689,655				395,460				26,210				2,584,968
Frank Grese, Jr. Senior Vice President, Human Resources, Training and Operations Support			572,500				683,955				658,375				193,206				31,914				2,139,950
Peter C. DeLongchamps Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs			478,300				645,958				550,045				82,345				24,952				1,781,600

(1)	The amounts in the “Stock Awards” column reflect the required accounting expense for these awards and do not correspond to the actual value that may be recognized. These amounts represent the grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Assumptions made in the calculation of these amounts are included in Note 5 to the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Certain of these awards have no intrinsic value to the recipient until the performance or vesting schedule is met. Vesting schedules for equity awards can be found in the footnotes to the “Outstanding Equity Awards as of December 31, 2018” table.
(2)	Annual cash incentive awards based upon the achievement of financial and mission-based goals. This is discussed further under “2018 Compensation Discussion and Analysis — Annual Incentive Compensation Plan”.
(3)	Amounts reflect above-market earnings on the Deferred Compensation Plan. Amounts are reflective of earnings in excess of 120% of the applicable federal long-term rate, with compounding, of 3.12%. We do not offer a pension plan.
(4)	Includes 401(k) savings plan matching contribution, automobile allowance, use of demonstrator vehicle, airplane use and club membership and dues.

Our Board of Directors Recommends a Vote“FOR”Proxy Statement the Non-Binding Advisory Approval of our Executive Compensation.

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Ratification of Ernst & Young LLP as our Independent Registered Public Accounting Firm for 2019 (Proposal 3)

 

As a matter of good corporate governance, we are asking our stockholders to ratify the appointment of Ernst & Young LLP (“Ernst & Young”) as our independent registered public accounting firm for the year ending December 31, 2019. Set forth below is summary information with respect to Ernst & Young’s fees for services provided in 2017 and 2018.

Type of Fees		2018		2017
Audit Fees		$ 2,594,000		$ 2,526,000
Audit Related Fees		—		—
Tax Fees		79,000		162,000
All Other Fees		2,200		2,200
TOTAL		$ 2,675,200		$ 2,690,200

2022 ANNUAL MEETING DATE AND VIRTUAL LOCATION

Our Board of Directors Recommends a Vote “FOR” Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2019.

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OUR CORE CORPORATE SOCIAL RESPONSIBILITY VALUES

Our core values, integrity, transparency, professionalism and teamwork, underlie our commitment to conduct our business in ways that are principled and accountable to key stakeholders and the communities in which we do business. We are committed to responsible business practices and continuous improvement of our operations and our relationships with our employees and the communities we live and work in.

	Community		Environment and Safety
	We believe that positively involving our employees and giving back to the communities in which we do business is central to our culture. Our charitable and philanthropic efforts include the Group 1 Foundation, employee volunteer opportunities, and partnerships with local food banks, homeless shelters, hospitals, school districts, animal rescue organizations and various other charitable organizations.		We are committed to appropriately monitoring and managing our environmental impact across our businesses, and to protecting the health and safety of our employees, customers and those with whom we do business.
	Workplace		Investor Outreach
	We strive to create workplaces of mutual trust and respect, and to provide a work environment that fosters inclusion and diversity, enabling our employees to achieve their full potential. We aim to maintain a collaborative, supportive, and opportunity-rich culture that enhances innovation and employee engagement.		We regularly interact with the investment community and prospective and existing stockholders through investor calls, conferences, meetings and occasional onsite visits. This interaction ensures that management and the Board understand and consider the views of our stockholders, perception of the investment community, and industry and economic outlook from the Company’s Wall Street covering analysts.

Business and Financial Highlights

Group 1 operates in three regions – the U.S., the U.K. and Brazil. In 2018, Group 1 continued to deliver record setting financial results and increased operational effectiveness. Our 2018 results compared to 2017 included:

	Record consolidated revenues of $11.6 billion, an increase of $477.6 million;
	U.K. record revenues of $2.4 billion, an increase of 22.7%;
	Actual (GAAP) EPS for 2018 was $7.83, a 22.3% decrease; Adjusted EPS for 2018 was $8.91, a 15.3% increase;
	Actual (GAAP) net income for 2018 was $157.8M, a 26.1% decrease; Adjusted net income for 2018 was $179.6M, a 9.8% increase;
	Achieved all-time U.S. Finance and Insurance (“F&I”) performance record of $1,710 per retail unit;

	Increased U.S. same store used vehicle retail unit sales by 8.8%;
	2.8% same store parts and service revenue growth;
	Total record sales of 318,516 new and used retail vehicles;
	Repurchased over 2.8 million shares of common stock, or 14% of our outstanding shares;
	Issued annual dividends of $1.04 per share; and
	Acquired 17 franchises with estimated annual revenues of $615.0 million.

See “Non-GAAP Financial Measures” in our Annual Report on Form 10-K for the year ended December 31, 2018, filed February 19, 2019 with the SEC, for a reconciliation of the non-GAAP measures to the comparable GAAP measures.

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800 Gessner, Suite 500
Houston, TX 77024

Proxy Statement

This proxy statement is being furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Group 1 Automotive, Inc. (“Group 1” or the “Company”) for use at our 20192022 Annual Meeting of StockholdersShareholders (the “Annual Meeting”) and at any adjournment or postponement thereof. Proxy materials were first sent to stockholders beginning on April 11, 2019.

2019 ANNUAL MEETING DATE AND LOCATION

Our Annual Meeting will be held virtually at Sterling McCall Lexus, 10025 Southwest Freeway, Houston, TX 77074,www.virtualshareholdermeeting.com/GPI2022, on Thursday,Wednesday, May 16, 2019,18, 2022, at 10:00 a.m., Central Daylight SavingsSaving Time, or at such other time and place to which the meeting may be adjourned.

We have decided to conduct the Annual Meeting solely online via the Internet through a live webcast and online shareholder tools. We believe a virtual format facilitates shareholder attendance and participation by leveraging technology to allow us to communicate more effectively and efficiently with our shareholders. This format empowers shareholders around the world to participate at no cost. We have designed the virtual format to enhance shareholder access and participation and protect shareholder rights. Specifically,

We Encourage Questions. Shareholders have multiple opportunities to submit questions for the meeting. Shareholders may submit a question online in advance or live during the meeting, following the instructions below. During the meeting, we will answer as many appropriate shareholder-submitted questions as time permits. Following the Annual Meeting, we will publish an answer to each appropriate question we received on our Investor Relations website at www.group1corp.comas soon as practicable.

We Believe in Transparency. Although the live webcast is available only to shareholders at the time of the meeting, following completion of the Annual Meeting, a webcast replay, final report of the inspector of election, and answers to all appropriate questions asked by investors in connection with the Annual Meeting will be posted as soon as practicable to our Investor Relations website at www.group1corp.com.

We Proactively Take Steps to Facilitate Your Participation. During the Annual Meeting, we will offer live technical support for all shareholders attending the meeting.

ATTENDING THE ANNUAL MEETING

To attend, vote and submit questions during the Annual Meeting, shareholders of record must use their control number on their proxy card to log into www.virtualshareholdermeeting.com/GPI2022; beneficial shareholders who do not have a control number may gain access to the meeting by logging into their brokerage firm’s website and selecting the shareholder communications mailbox to link through to the Annual Meeting; instructions should also be provided on the voting instruction card provided by their broker, bank, or other nominee.

Online access to the meeting will begin at 9:30 a.m., Central Daylight Saving Time. If you encounter any difficulties accessing the virtual meeting during the check-in or course of the Annual Meeting, a phone number will be posted on the website to connect you to technical support.

Shareholders who wish to submit a question in advance may do so either by emailing Investor Relations at ir@group1auto.comby 5:00 p.m., Central Daylight Saving Time, Tuesday, May 17, 2022, or visiting our Annual Meeting website, www.virtualshareholdermeeting.com/GPI2022. Shareholders also may submit questions live during the meeting. We plan to reserve some time for shareholder questions to be read and answered by Company personnel during the meeting. In submitting questions, please note that we will only address questions that are germane to the matters being voted on at our Annual Meeting.

References in this proxy statement to the Annual Meeting also refer to any adjournments, postponements or changes in location of the meeting, to the extent applicable.

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Information about Our Board of

Directors and its Committees

Meetings of the Board of Directors and its Committees

MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES

In 2018,2021, the Board held fiveten meetings, and acted by unanimous written consent nine times. The committees of the Board held a combined total of 2324 meetings. Each incumbentWith the exception of three directors that were unable to attend one ad hoc Board meeting, each director attended 75% or more100% of the aggregate of all of the meetings of the Board and the committees on which he or she served during the periods in which he or she served during 2018. Two directors were unable to attend one Board meeting.2021. Under our Corporate Governance Guidelines, our directors are encouraged to attend the annual meeting of our stockholders.shareholders. All of our then-current directorsdirector nominees attended our 20182021 Annual Meeting of Stockholders. Ms. Taylor joined the Board in September 2018, and therefore was not present at the 2018 Annual Meeting. We currently expect all of our director nominees to be present at the 2019 Annual Meeting.Shareholders.

BOARD PERFORMANCE PROCESS

Board Evaluation Process

As required by our Corporate Governance Guidelines, ourOur Board and each of its committees annually conduct a self-evaluation to assess and identify opportunities to improve their respective performance. The Nominating/Governance & Corporate Responsibility (“GCR”) Committee is tasked with the oversight of the annual performance evaluation and to assist in designing and implementing such evaluations. The Nominating/Governance Committee has the authority to retain advisors or consultants and to provide for compensation to such consultants by the Company, as it shall deem appropriate. The 2018 board evaluations process is summarized below.

In 2018, the Nominating/Governance Committee reviewed and discussed the Board and Committee evaluation format and process and also decided to include individual director performance evaluations. The Nominating/Governance Committee and the Board elected to conduct the 2018 performance assessments through the use of electronic, written questionnaires. AWe engage a third party was selected to prepareassist us by preparing the performance assessments for electronic delivery, compilecompiling the responses, and aggregateaggregating the results.

Among other topics addressed, the Board and committee questionnaires solicitedevaluations solicit director opinions related to Board and committee effectiveness, director preparedness, strategic oversight, risk management, scope and content of presentations, access to management, and CEO and Board succession planning for the Board.planning.

Following completion by the directorsAs part of the performance assessments,evaluation process, the results were reviewed and aggregated by an independent third party. The third party provided a memorandumBoard Chair meets individually with each committee chair to the Chair of the Nominating/Governance Committee summarizingdiscuss the results of the Board, committee and individual director evaluations.

In early 2019, the Chair of the Nominating/Governance Committee met individually with each director and discussed the results of the director evaluations.his or her committee’s evaluation. The results of the committee evaluations wereare then reviewed by each committee chair with his or her committee members. The Board Chair then meets with each committee. Thedirector individually to discuss the results of the Board evaluations were presented toevaluation. In addition, the Board. Results requiring additional consideration will be addressed at subsequentresults of the Board and committee meetingsevaluations are discussed at the full Board and reported back to the Board, where appropriate.committee meetings.

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Corporate GovernanceCORPORATE GOVERNANCE

We are committed to good corporate governance which includes the highest standards of professional and personal conduct. OurThe Board has adopted several governance documentsa standing Audit Committee, CHR Committee, GCR Committee and Finance/Risk Management (“FRM”) Committee. Each committee may form and delegate some or all of its authority to guidesubcommittees when it deems appropriate. Each committee also has the operationauthority to obtain advice and directionassistance from internal or external legal, accounting or other advisors, to approve the fees and expenses of such outside advisors, and to cause the Company to pay the fees and expenses of such outside advisors. The CHR Committee additionally has the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of the compensation of our Boardsenior corporate officers and its committees, which include our Corporate Governance Guidelines, Code of Ethics, Code of Conductalso has the sole authority to approve the consultant’s fees and charters for the Audit Committee, Compensation Committee, Nominating/Governance Committee and Finance/ Risk Management Committee. Each of these documents is available on our website atwww.group1auto.comand stockholders may obtain a printed copy, free of charge, by sending a written request to Group 1 Automotive, Inc., 800 Gessner, Suite 500, Houston, TX 77024, Attn: Corporate Secretary.other retention terms.

Board Leadership Structure

BOARD LEADERSHIP STRUCTURE

The Nominating/Governance Committee’s charter provides that the committee willGCR Committee annually assessassesses and approveapproves the leadership structure of the Board. In 2018,2021, the Nominating/GovernanceGCR Committee conducted that assessment, and determined that having an independent director serve as non-executive Chairman of the Board Chair continues to be in the best interest of our stockholdersshareholders at this time. Our Chief Executive Officer is responsible for setting our strategic direction and providing day-to-day leadership, while the Chairman of the Board Chair sets the agenda for Board meetings, presides over meetings of the full Board and provides guidance to our Chief Executive Officer. We believe this structure at this time,currently ensures a greater role for the independent directors in the oversight of our Company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our Board. We discuss our directors’ qualifications and characteristics under “Proposal 1 — Election of Directors.”

 

The independent directors meet in executive session at each regularly scheduled meeting of our Board. Mr. Quinn, our independent Chairman of the Board, presides over these meetings and is responsible for preparing an agenda for the meetings of the independent directors in executive session.Proxy Statement 2022  |  11

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Risk OversightCOMMITTEES OF OUR BOARD

Our Board, as a whole and through its committees, has broad responsibility for the oversight of risk management with a focus on the most significant risks facing the Company, including strategic, operational, cyber, financial, legal and compliance risk. In its risk management role, our Board seeks to satisfy itself that our risk management processes and systems that have been put in place to identify and manage risks are reasonable and functioning as designed. Our Board also has specific risk management oversight for governance, executive compensation and Chief Executive Officer succession planning.

Much of our Board’s oversight work is delegated to various committees, which meet regularly and report back to the full Board. All committees have significant roles in carrying out the risk oversight function. Each committee is comprised entirely of independent directors, except the Finance/Risk Management Committee, and is responsible for overseeing risks associated with its respective area of responsibility as further detailed below.

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In addition to reports from its committees, our Board receives regular reports directly from the officers responsible for oversight of particular risks within our Company. Specifically, our officers report to our Board regarding the Enterprise Risk Management Program that management has implemented to assess, manage and monitor areas of risk that are significant to our business, including market and automotive technology risk, safety and property damage risk, strategic planning and operational risk, financial and accounting risk, information technology and cybersecurity risk, and governance, regulatory and legislative risk. Risk profiles are updated annually to ensure that all risks continue to be identified. Our officers also report to our Board on which risks management has assessed as the most significant, together with management’s plans to mitigate those risks. Further, outside counsel reports in person to our Board periodically on an as-needed basis to keep our directors informed concerning legal risks and other legal matters involving our Company. Finally, we have robust internal audit systems in place to review adherence to policies and procedures, which are supported by a separate internal audit department.

Corporate Social Responsibility Oversight

At Group 1, we work to conduct our business in ways that are principled and accountable to key stakeholders and the communities in which we do business. Our Board and members of management recognize the importance of establishing an effective “tone at the top” with respect to giving back, and are actively involved in supporting various charitable organizations through their time and donations.

Cybersecurity and Information Security Risk Oversight

Our Board recognizes the importance of maintaining the trust and confidence of our customers, vendors, stockholders and employees, and devotes significant time and attention to oversight of cybersecurity and information security risk. The Board and Finance/ Risk Management Committee regularly receive presentations from our VP, Information Technology, on cybersecurity and information security risk, and on our cybersecurity initiatives. We also engage cybersecurity experts to audit and provide recommendations on our cybersecurity program. Additionally, members of our internal audit department conduct unscheduled visits to our dealerships to ensure that our customer’s personal information is protected and secured appropriately. The results of those dealership audits are reported to the Audit Committee. In 2018, our Board, the Finance/ Risk Management Committee and the Audit Committee received cybersecurity and information security risk reports at least quarterly.

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Committees of Our Board

Our Board has established four standing committees to assist it in discharging its responsibilities: the Audit Committee, the CompensationCHR Committee, the Nominating/GovernanceGCR Committee and the Finance/Risk Management Committee. The following chart reflectsEach committee is required to perform the current membershipkey functions summarized below as well as other such functions set forth in its charter or assigned by our Board from time to time.

Audit Committee

Our Audit Committee assists the Board in oversight of each committee:Group 1’s:

 

Name	Board	Audit Committee	Compensation Committee	Finance/Risk Management Committee	Nominating/ Governance Committee
John L. Adams(1)
Carin M. Barth(2)
Earl J. Hesterberg
Lincoln Pereira
Stephen D. Quinn
J. Terry Strange(3)
Charles L. Szews
Anne Taylor(4)
Max P. Watson, Jr.
MaryAnn Wright(5)
MEETINGS HELD IN 2018	5	9	5	5	4

financial statements and other financial information provided by us to any governmental body or the public;

 

	Member
	Chairman
(1)	Mr. Adams rolled off the Audit Committee following the 2018 Annual Meeting.
(2)	Ms. Barth was appointed Chairman of the Audit Committee in mid-May following the 2018 Annual Meeting.
(3)	Mr. Strange served as the Chairman of the Audit Committee until mid-May 2018. Effective as of the 2019 Annual Meeting, the Board size will be reduced to nine members as Mr. Strange has reached the Company’s mandatory retirement age for non-management directors.
(4)	Ms. Taylor joined the Audit Committee and the Compensation Committee in November 2018.
(5)	Ms. Wright rolled off the Audit Committee following the 2018 Annual Meeting.

compliance with legal and regulatory requirements;

 

Each of the committee charters is available on our website atwww.group1auto.comqualifications, performance and stockholders may obtain printed copies, free of charge, by sending a written request to Group 1 Automotive, Inc., 800 Gessner, Suite 500, Houston, TX 77024, Attn: Corporate Secretary.

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AUDIT COMMITTEE

Pursuant to its charter, the purposes and responsibilitiesindependence of our Audit Committee are to:independent registered public accounting firm; and

 

•	oversee the quality, integrity and reliability of the financial statements and other financial information we provide to any governmental body or the public;
•	oversee our compliance with legal and regulatory requirements;
•	oversee the qualifications, performance and independence of our independent registered public accounting firm;
•	oversee the performance of our internal audit function;
•	produce the Audit Committee Report for inclusion in the proxy statement, in accordance with applicable rules and regulations;
•	oversee our systems of internal controls regarding finance, accounting, legal compliance and ethics that our management and our Board have established;
•	provide an open avenue of communication among our independent registered public accounting firm, financial and senior management, the internal audit department, and our Board, always emphasizing that the independent registered public accounting firm is accountable to the Audit Committee;
•	review complaints dealing with financial reporting or potential violations of applicable laws, rules and regulations, or violations of the Company’s codes, policies and procedures, that are reported on the Company’s hotline; and
•	perform such other functions as our Board may assign to the Audit Committee from time to time.

the effectiveness and performance of our internal audit function.

In addition, to, and in connection with, the purposes and responsibilities described above, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. The Audit Committee also reviews our annual and quarterly financial statements and confirms the independence and quality systems of our independent registered public accounting firm.

All members of the Audit Committee are independent as that term is defined in the NYSE’s listing standards and by Rule 10A-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”). Our Board has determined that each member of the Audit Committee is financially literate and that Ms. Barth has the necessary accounting and financial expertise to serve as Chairman. Mr. Strange also serves on the Audit Committees of New Jersey Resources Corporation, Newfield Exploration Company and BBVA Compass. Our Board has determined that Mr. Strange’s simultaneous service on these other Audit Committees and our Audit Committee has not impaired his ability to serve effectively on our Audit Committee.

Our Board has also determined that each of Ms. Barth and Messrs. Quinn, Strange and Szews is an “audit committee financial expert” following a determination that Ms. Barth and Messrs. Quinn, Strange and Szews met the criteria for such designation under SEC rules and regulations. For information regarding the business experience for Mses. Barth and Taylor and Messrs. Quinn, Strange and Szews, please read “Proposal 1 — Election of Directors.” The Audit Committee held nine meetings during 2018,2021 and acted by unanimous written consent twice. All individuals who were members of the Audit Committee at such time attended each meeting of the Audit Committee.

Mr. Strange served as the Chairman of the Audit Committee until mid-May 2018. Following the 2018 Annual Meeting, Ms. Barth was appointed to serve as the Chairman of the Audit Committee.

one time.

The Report of the Audit Committee is set forth on page 3829 of this proxy statement.

Compensation & Human Resources Committee

COMPENSATION COMMITTEE

Pursuant to its charter, the purposes andOur CHR Committee’s responsibilities of our Compensation Committee are to:

 

•	review, evaluate, and approve our agreements, plans, policies, and programs to compensate our senior corporate officers;
•	review and discuss with our management the Compensation Discussion and Analysis (the “CD&A”) to be included in our proxy statement for the Annual Meeting of Stockholders and to determine whether to recommend to our Board that the CD&A be included in the proxy statement, in accordance with applicable rules and regulations;
•	produce the Compensation Committee Report for inclusion in the proxy statement, in accordance with applicable rules and regulations;
•	oversee risks relating to employment policies, our compensation policies and programs, and our benefit systems;
•	review, evaluate, and approve senior corporate officers’ compensation; identify, manage and mitigate any potential risks in the Company’s executive compensation plans; oversee all matters relating to the succession of the key corporate officers of the Company other than our Chief Executive Officer; review and discuss with our management the CD&A to be included in our proxy statement for the Annual Meeting of Shareholders and to determine whether to recommend to our Board that the CD&A be included in the proxy statement, in accordance with applicable rules and regulations; produce the Compensation & Human Resources Committee Report for inclusion in the proxy statement; oversee the Company’s human capital resources management strategy, including the recruitment, development and retention of personnel, talent management, and diversity, equity and inclusion; and otherwise discharge our Board’s responsibility relating to compensation of our senior corporate officers; and
•	perform such other functions as our Board may assign to the Compensation Committee from time to time.

In connection with these purposes, our Board has entrusted the Compensation Committee with the overall responsibility for establishing, implementing and monitoring the compensation for our senior corporate officers (our named executive officers and officers that report directly to our Chief Executive Officer). The Compensation Committee reviews and approves the compensation of our senior corporate officersofficers.

For additional information regarding the role of management in the CHR Committee process, please see “2021 Compensation Discussion and makes appropriate adjustments based on Company performance, achievement of predetermined goals and changes in an officer’s duties and responsibilities. The Compensation Committee also approves all employment agreements related to the senior corporate officers and approves recommendations regarding equity awards for all employees. Together with management, and any counsel or other advisors deemed appropriate by the Compensation Committee, the Compensation Committee typically reviews and discusses the particular executive compensation matter presented and makes a final determination, with the exception of compensation matters relating to our Chief Executive Officer. In the case of our Chief Executive Officer, the Compensation

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Committee reviews and discusses the particular compensation matter (together with our management and any counsel or other advisors deemed appropriate) and formulates a recommendation. The Compensation Committee’s Chairman then reports the Compensation Committee’s recommendation for approval by the full Board or, in certain cases, by the independent directors.

In general, executive compensation matters are presented to the Compensation Committee or raised with the Compensation Committee in one of the following ways: (1) at the requestAnalysis — Role of the Compensation Committee Chairman or another Compensation Committee member or member of our Board, (2) in accordance with the Compensation Committee’s agenda, which is reviewed by the Compensation Committee members and other directors on at least an annual basis, (3) by our Chief Executive Officer or Senior Vice President,& Human Resources TrainingCommittee, its Consultant and Operations Support, or (4) by the Compensation Committee’s outside compensation consultant.

Management.”

The Compensation Committee works with the management team, our Chief Executive Officer and our Senior Vice President, Human Resources, Training and Operations Support, to implement and promote our executive compensation strategy. The most significant aspects of management’s involvement in this process are:

Our Chief Executive Officer is instrumental to this process. Specifically, the Chief Executive Officer assists the Compensation Committee by:

In addition, our Senior Vice President, Human Resources, Training and Operations Support is involved in the executive compensation process by:

Under its charter, the Compensation Committee has the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of the compensation of our senior corporate officers and also has the sole authority to approve the consultant’s fees and other retention terms. To the extent permitted by applicable law, the Compensation Committee may delegate some or all of its authority to subcommittees, as it deems appropriate.

During 2018, the Compensation Committee engaged Pearl Meyer & Partners, LLC (“PM&P”) to conduct a compensation analysis which involved the comparison of long-term, short-term and total compensation of our named executive officers with a selected group of peer companies. We generally compare compensation data at the 25^th, 50^thand 75^thpercentiles of the market and the Compensation Committee engaged PM&P to review the analysis. While we do not think it is appropriate to establish compensation based solely on market analysis, we believe that this practice is useful for two reasons.

First, our compensation practices must be competitive in order to attract and retain executives with the ability and experience necessary to provide leadership and to deliver strong performance to our stockholders. Second, reviewing market analysis allows us to assess the reasonableness of our compensation practices. This process allows us to achieve one of our primary objectives of maintaining competitive compensation to ensure retention when justified and rewarding the achievement of Company objectives so as to align with stockholder interests. PM&P is an independent compensation consulting firm and does not provide any other services to us outside of matters pertaining to executive officer and director compensation. PM&P reports directly to the Compensation Committee, which is the sole party responsible for determining the scope of services performed by PM&P and the directions given to PM&P regarding the performance of such services.

In February 2019, the Compensation Committee considered the independence of PM&P in light of SEC rules and listing standards of the NYSE. The Compensation Committee requested and received a letter from PM&P addressing the consulting firm’s independence, including the following factors: (1) other services provided to us by the consultant; (2) fees paid by us as a percentage of the consulting firm’s total revenue; (3) policies or procedures maintained by the consulting firm that are designed to prevent a conflict of interest; (4) any business or personal relationships between the individual consultants involved in the engagement and a member of the Compensation Committee; (5) any company stock owned by the individual consultants involved in the engagement; and (6) any business or personal relationships between our named executive officers and the consulting firm or the individual consultants involved in the engagement. The letter highlighted three additional factors that supported their independence: (1) PM&P has regular discussions with only the Compensation Committee (or select members of the Compensation Committee) present and where PM&P interacts with management, it is at the Compensation Committee Chair’s request and/or with the Chair’s knowledge and approval; (2) PM&P has not provided any gifts, benefits or donations to our Company or received any gifts, benefits, or donations from our Company; and (3) PM&P is bound by strict confidentiality and information sharing protocols. The Compensation Committee discussed these considerations, among other things, and concluded that the work of PM&P did not raise any conflict of interest.

All members of the Compensation Committee are independent as that term is defined in the NYSE’s listing standards, including the heightened standards applicable to compensation committee members. The CompensationCHR Committee held fiveseven meetings during 20182021 and acted by unanimous written consent once. All individuals who were members of the Compensation Committee at such time attended each meeting of the Compensation Committee.

one time.

The Report of the CompensationCHR Committee is set forth on page 5149 of this proxy statement.

2019 PROXY STATEMENT  ●
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NOMINATING/GOVERNANCE COMMITTEE

Pursuant to its charter, the purposes andGovernance & Corporate Responsibility Committee

Our GCR Committee’s responsibilities of our Nominating/Governance Committee are to:

In connection with these purposes, the Nominating/Governance Committee actively seeks individuals qualified to become members of our Board seeksand recommend director nominees to implement the independence standards required by law, applicable listing standards, our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”), our Third Amended and Restated Bylaws (“Bylaws”) and our Corporate Governance Guidelines, and identifies the qualities and characteristics necessary for an effective Chief Executive Officer.Board;

The Nominating/Governance Committee’s primary objectives in establishing and implementing director compensation are to:

All members of the Nominating/Governance Committee are independent as defined under the NYSE’s listing standards. The Nominating/GovernanceGCR Committee held four meetings during 2018, and acted by unanimous written consent once. All individuals who were members of the Nominating/Governance2021.

Finance/Risk Management Committee at such time attended each meeting of the Nominating/Governance Committee.

FINANCE/RISK MANAGEMENT COMMITTEE

Pursuant to its charter and other applicable policies, the purposes of ourOur Finance/Risk Management Committee are to:assists our Board in its oversight of corporate finance and risk management, including:

2019 PROXY STATEMENT  ●

24

In connection with these purposes, the Finance/Risk Management Committee reviews periodically our financial status and capital structure and can authorize finance-related activities within limits prescribed by our Board. The Finance/Risk Management Committee reviews with management the status of current litigation matters and regularly reports to our Board on litigation and contingent liabilities. The Finance/Risk Management Committee also consults with management on matters that could have a significant financial impact on our Company and reviews our financial policies and procedures, our compliance with material debt instruments and our significant banking relationships. In addition, the Finance/ Risk Management Committee reviews and assesses periodically the risk exposure of our operations, including cybersecurity, and plans and strategies for insurance programs, and authorizes risk management-related activities within limits prescribed by our Board. The Finance/Risk Management Committee also provides direction for the assessment of future capital spending and acquisition opportunities and reviews capital expenditure plans, including significant acquisitions and dispositions of businesses andor assets, and other specific capital projects.authorize transactions within limits prescribed by our Board.

At the request of theThe Finance/Risk Management Committee management developedheld five meetings during 2021 and presented to the Boardacted by unanimous written consent one time.

RISK OVERSIGHT

We have a robust Enterprise Risk Management Program, designed to identify, assess, monitor, manage, and mitigate our significant business risks by concentrating primarily in five principal areas that are significant to our business:areas: (1) safety and property damage risk; (2) strategic planning and operational risk; (3) financial and accounting risk; (4) information technology and cybersecurity risk; and (5) governance, regulatory and legislative risk. Risk profiles are formally updated annually to ensure that alland as needed when significant risks continue to be identified.emerge like COVID-19 pandemic risks in 2020. Management updates the Finance/Risk Management Committee as new risks are identified, and on the steps taken to mitigate such risks. On an annual basis, management reviews results from tests of key risks with the full Board and the steps taken to mitigate new risks which have been identified.

Further, outside counsel advises our Board periodically on an as-needed basis to keep our directors informed concerning legal risks and other legal matters involving our Company. Finally, we have robust internal audit systems in place to help identify and mitigate risk and improve our internal controls, including reviewing our adherence to policies and procedures.

All

		Proxy Statement 2022  |  12

Corporate Social ResponsibilitySustainability

At Group 1, we work

Our core values of integrity, transparency, professionalism, teamwork and respect underlie our commitment to conduct our business in ways that are principled and accountable to key stakeholders, the environment and the communities in which we do business.We focus our efforts where we can have the most positive impactare committed to transparency in sharing out sustainability progress. For updates on our businessprogress and society, including issues related to community participation, environmental sustainability, culture and human capital.access our 2021 Sustainability Report, please visit www.group1corp.com/ESG.

Group 1 Foundation

Group 1 Foundation, Inc. (the “Foundation”) was formed in 2005 as a charitable 501(c)(3) entity with the purpose of providing guidance, emotional support and financial assistance, including though collected contributions and fundraising, to current Group 1 employees and their immediate families who suffer hardship due to a natural disaster, emergency hardship, extended illness, injury, fire, flood or special situation that is beyond their control. As an example of the Foundation’s efforts, through contributions made to the Foundation, employees in need were provided temporary living and related expenses after Hurricane Harvey and Hurricane Michael.

Community Outreach

Since its inception, Group 1 and its employees have supported the communities they serve. We believe community participation and charitable donations enrich our dealerships’ local neighborhoods. We are proud of these efforts and we encourage participation by all of our dealerships and employees.

SUSTAINABILITY GOVERNANCE

We are proudcommitted to responsible business practices and continuous improvement of the sustainability of our dealershipsoperations and our relationships with our employees for their efforts to improveand the communities in which theywe live and work. For more information onWhile our charitableGCR Committee oversees our ESG policies and philanthropicpractices, other Board committees also play a role in our sustainability efforts, seerelating to cybersecurity, human capital management, health & safety and corporate risk management. In addition, our website at www.group1auto.com/group1cares.management team and other employee subject matter experts are responsible for the implementation of our ESG strategy, initiatives and communications.

Safety and Environmental Impact

2019 PROXY STATEMENT  ●

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Employee Wellness and Wellbeing

At Group 1, we believe that supporting the wellness and wellbeing of our employees helps create a healthier company and ultimately more sustainable value to our stakeholders. In 2016, the Company began the Group 1 Wellness program, which is focused on providing employees with healthy living challenges and access to individual health coaching. In 2018, Group 1 was recognized by the American Heart Association as an organization that is promoting the heart health of our employees.

We also believe that supporting our employees’ workplace satisfaction ultimately enhances the value of our business.

•	In 2008, we initiated the Manager Trainee Program, an entry-level rotational program designed for college graduates to learn our business from the ground up. Trainees will gain knowledge and experience within our Company over a 24-month period while working in one of our dealerships. The first year of the program is spent in Aftersales and the second year takes place in Variable Operations. After completing the program, trainees decide what area of the business suits them the most and where they would like to begin their career. This program helps prepare our employees for leadership roles within Group 1. We have had 69 employees graduate from the program. Examples of positions they currently hold are General Manager, New Vehicle Manager, Estimator, F&I Manager, Associate Manager Procurement, Manager Fixed Operations and Accounting Manager.
•	In 2016, we launched the Pinnacle Program, an employee training and recognition program aimed at providing employees with meaningful opportunities to grow and develop, and to achieve greater employee retention and productivity in our business. Our dealerships are consistently recognized in the Automotive News Best Dealerships to Work for competition.
•	In 2018, the Company worked with a third party vendor to conduct a confidential employee engagement survey for all U.S. dealership employees, with a focus on individual managers and an overall view of each General Manager. As a result of the survey, each dealership GM prepared an action plan focusing on becoming a better leader. A summary of the results of the survey was shared with our Board.
•	In 2018, the Company elected to use the financial benefit it realized as a result of U.S. tax reform to recognize our U.S. employees who serve as the face of our company every day. Accordingly, a $500 bonus was paid to U.S. non-management dealership employees and operational staff.Proxy Statement 2022  |  16

Age 74Proxy Statement 2022  |  19

Director Since: 1999DIRECTOR QUALIFICATION AND CONSIDERATIONS

Independent Director

John L. Adams has served as oneThe GCR Committee actively seeks individuals qualified to become members of our directors since November 1999,Board, seeks to implement the independence standards required by law, applicable listing standards, our Certificate of Incorporation, our Bylaws and served as non-executive Chairman of the Board from April 2005 through May 2017. Mr. Adams served as Executive Vice President of Trinity Industries, Inc., one of North America’s largest manufacturers of transportation, construction and industrial products, from January 1999 through June 2005, and as Vice Chairman from July 2005 through March 2007. Before joining Trinity Industries, Mr. Adams spent 25 years in various positions with Texas Commerce Bank N.A. and its successor, Chase Bank of Texas, National Association. From 1997 to 1998, Mr. Adams was Chairman, President and Chief Executive Officer of Chase Bank of Texas. Mr. Adams serves on the Board of Directors, the Corporate Governance and Directors Nominating Committee and is Chairman ofGuidelines. For more information, visit the Finance and Risk Management Committee of Trinity Industries, Inc. Mr. Adams is Chairman of the University of Texas, Austin, President’s Development Board and serves on the Chancellor’s Council Executive Committee. He also serves on the McCombs School of Business Advisory Council. Mr. Adams recently retired from thesection titled “Information about Our Board of Directors and Audit Committee of Dr Pepper Snapple Group, Inc., a refreshment beverage business. Mr. Adams received his B.B.A.its Committees – Director Qualifications and J.D. from the University of Texas.

Diversity Considerations” on page 10.

The Board believes Mr. Adam’s extensive financial, strategic planning, capital allocation and executive management experience makes him well qualified to serve on our Board. His service on other public company boards has also provided exposure to various approaches to risk management, corporate governance and other key issues. Through his years of service onGCR Committee may consider candidates for our Board he has developed in-depth knowledgefrom any reasonable source, including from a search firm engaged by the GCR Committee or shareholder recommendations. The GCR Committee will evaluate candidates recommended by shareholders using the same criteria as for other candidates recommended by its members, other members of the retail automotive industry generally andBoard, or other persons. Any invitation to join our Company in particular. The Board believes his experience and expertise in these matters makes him well qualified to servemust be extended by our Board as a member ofwhole, by the Board.

CARIN M. BARTH

Age 56

Director Since: 2017

Independent Director

Carin M. Barth has served as one of our directors since February 2017. She is co-founderGCR Committee Chair and President of LB Capital, Inc., a private equity investment firm established in 1988. Since 2015, Ms. Barth has served onby the Board Chair.

Shareholders or a group of Directors of Enterprise Holdings, LLC,shareholders may recommend potential candidates for consideration by the General Partner of Enterprise Product Partners, L.P., one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, and Black Stone Minerals, L.P., one of the largest oil and gas mineral and royalty companies in the United States, where she serves as Chair of the AuditGCR Committee. Ms. Barth also serves as a Trustee of the Welch Foundation, and as a Board member of the Ronald McDonald House in Houston, Texas. From 2012 through 2018, Ms. Barth served as Chair of the Investment Advisory Committee for Texas Tech University. From 2008 to 2014, she served as a Commissioner for the Texas Department of Public Safety. Ms. Barth previously servedFor additional information on the Board of Directors of Bill Barrett Corporation where she served on the Compensation Committee and on the Nominating and Corporate Governance Committee from 2012 through 2016. From 2010 through 2017, she served on the board of directors of Strategic Growth Bancorp Incorporated, a privately held bank holding company located in El Paso, Texas, where she served as Chair of the Audit Committee, and Capital Bank, SSB, an affiliate of Strategic Growth Bancorp. Additional past board service includes Western Refining, Inc. from 2006 through 2016, where she served as Audit Committee Chair, Methodist Hospital Research Institute from 2007 through 2012, Encore Bancshares, Inc. from 2009 through 2012, Amegy Bancorporation, Inc. from 2006 through 2009, Texas Public Finance Authority from 2006 through 2008,such requests and the Texas Tech University System Board of Regents from 1999 through 2005. Ms. Barth was also appointed by President George W. Bush to serve as Chief Financial Officer of the U.S. Department of Housing and Urban Development from 2004 to 2005. Ms. Barth received a B.S. from the University of Alabama and an M.B.A. from Vanderbilt University’s Owen Graduate School of Management.applicable timing, please see “Shareholder Proposals for 2023 Annual Meeting.”

Ms. Barth has extensive experience in a variety of financial matters, including as chief financial officer for several entities. She also has a history of corporate and civic governance which provides additional depth and financial expertise to our Board. Her experience with mergers and acquisitions, in operating a private equity company, her previous and currently held board positions on other publicly traded companies and her audit committee experience are key attributes, among others, that make her well qualified to serve on our Board. Ms. Barth qualifies as an “audit committee financial expert.”QUALIFICATIONS OF OUR BOARD OF DIRECTORS

2019 PROXY STATEMENT
CARIN M. BARTH ●Co-Founder	and President of LB Capital, Inc., a private equity investment firm Audit Committee Chair Age 59 Director Since 2017		Independent Director Audit Committee Financial Expert Other Current Directorships 30• Enterprise Products Holdings, LLC • Black Stone Minerals, L.P. Other Directorships Within the Last Five Years • BBVA USA Bancshares, Inc. • Halcón Resources Corporation • Strategic Growth Bancorp Inc.		Degrees B.S. in Economics, University of Alabama; M.B.A, Vanderbilt University’s Owen Graduate School of Management

Age 65

Director Since: 2005

Earl J. Hesterberg has served as our President and Chief Executive Officer and as a director since April 2005. Prior to joining us, Mr. Hesterberg served as Group Vice President, North America Marketing, Sales and Service for Ford Motor Company, a global manufacturer and distributor of cars, trucks and automotive parts, since October 2004. From July 1999 to September 2004, he served as Vice President, Marketing, Sales and Service for Ford of Europe, and from 1999 until 2005, he served on the supervisory board of Ford Werke AG. Mr. Hesterberg has also served as President and Chief Executive Officer of Gulf States Toyota, an independent regional distributor of new Toyota vehicles, parts and accessories. He has also held various senior sales, marketing, general management, and parts and service positions with Nissan Motor Corporation in U.S.A. and Nissan Europe, both of which are wholly-owned by Nissan Motor Co., Ltd., a global provider of automotive products and services. Mr. Hesterberg serves on the Board of Directors of Stage Stores, Inc., a national retail clothing chain with over 800 stores located in 42 states where he is a member of the Corporate Governance and Nominating Committee and Chairman of the Compensation Committee. He is a past member of the Board of Trustees of Davidson College. Mr. Hesterberg also serves on the Board of Directors of the Greater Houston Partnership, where he serves on the Executive Committee and is Chairman of the Business Issues Committee. Mr. Hesterberg received his B.A. in Psychology at Davidson College and his M.B.A. from Xavier University in 1978.

As our President and Chief Executive Officer, Mr. Hesterberg sets the strategic direction of our Company under the guidance of our Board. He has extensive senior executive management experience in the automotive industry. His successful leadership of our Company, and extensive knowledge of the automotive industry provides our Board with a unique perspective on the opportunities and challenges we face, and makes him well-qualified to serve on the Board.

LINCOLN PEREIRA

Age 59

Director Since: 2013

Lincoln Pereira has served as one of our directors since February 2013. Mr. Pereira has served as our Regional Vice President, Brazil since March 2013 and has served as chairman of our subsidiary, UAB (which we acquired in February 2013), since 2007. From 1999 to 2005, Mr. Pereira served as a legal representative of United Auto do Brasil Ltda, a public auto group operating in São Paulo and controlled by United Auto Group. From 1995 through 2005, Mr. Pereira practiced law with Cunha Pereira Advogados, representing professional athletes and international race car drivers. He was also co-founder and a major stockholder in Cunha Pereira Negócios Imobiliários, a local Brazilian real estate company, and in 1999, he founded Atrium Telecomunicações Ltda, a provider of local exchange telecommunication services. Atrium was sold to Telefonica of Spain in December 2004, and Mr. Pereira founded E-Vertical Tecnologia, a leading provider of high tech facilities management services to commercial properties. From 1978 through 1995, Mr. Pereira held numerous positions with various banks, both in Brazil and abroad. Mr. Pereira serves on the Board of Boa Vista Servicos S.A.-SCPC, the second largest credit bureau in Brazil, is Vice Chairman of the Board of the São Paulo Chamber of Commerce (ACSP), serves as a member of the Board of the Associação Brasileira dos Concessionários Mercedes-Benz, and serves as a Director of the Associação Brasileira dos Concessionários BMW and Associação Brasileira do Distribuidores Toyota. He is also a Chapter Sponsorship Officer of YPO-WPO São Paulo, a not-for-profit, global network of young chief executives connected around the shared mission of becoming Better Leaders Through Education and Idea Exchange.™ Mr. Pereira received his LL.B. from Faculdade de Direito do Largo de São Francisco.

Mr. Pereira has extensive automotive retailing and manufacturer relations experience, as well as legal, finance, business and management expertise. He also has a deep understanding of the Brazilian finance, trade and legal sectors. Mr. Pereira’s experience and expertise in the automotive industry make him well qualified to serve as a member of the Board.

2019 PROXY STATEMENT  ●
EARL J. HESTERBERG President and Chief Executive Officer of Group 1 Age 68 Director Since 2005		Other Current Directorships None Other Directorships Within the Last Five Years 31• Stage Stores, Inc.		Degrees B.A. in Psychology, Davidson College; M.B.A, Xavier University
		Career Highlights
		•  CEO and President of Group 1 since 2005 •  Served as Group Vice President, North America Marketing, Sales and Service for Ford Motor Company since October 2004. From July 1999 to September 2004, he served as Vice President, Marketing, Sales and Service for Ford of Europe, and from 1999 until 2005, he served on the supervisory board of Ford Werke AG •  Previously served as President and Chief Executive Officer of Gulf States Toyota, an independent regional distributor of new Toyota vehicles, parts and accessories		•  Held various senior sales, marketing, general management, and parts and service positions with Nissan Motor Corporation in U.S.A. and Nissan Europe, both of which are wholly owned by Nissan Motor Co., Ltd. •  Currently serves on the board of the Greater Houston Partnership •  Past member of the Board of Trustees of Davidson College
		As our President and Chief Executive Officer, Mr. Hesterberg sets the strategic direction of our Company under the guidance of our Board. He has extensive senior executive management experience in the automotive industry. His successful leadership of our Company and extensive knowledge of the automotive industry provides our Board with a unique perspective on the opportunities and challenges we face and makes him well qualified to serve on our Board.

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