UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | ![]() | ![]() | ||
![]() | Preliminary Proxy Statement |
![]() | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
![]() | Definitive Proxy Statement |
![]() | Definitive Additional Materials |
![]() | Soliciting Material under |
GROUP 1 AUTOMOTIVE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
![]() | No fee required. |
![]() | ||
![]() | Fee paid previously with preliminary materials. |
![]() | Fee computed on table in exhibit required by Item 25(b) per Exchange Act | |
NOTICE of ANNUAL MEETING and 2021 PROXY STATEMENT Wednesday, May 12, 2021 10:00 a.m., Central Daylight Saving Time Online at www.virtualshareholdermeeting.com/GPI2021
Cover Photo courtesy of Audi North Miami
North Miami, Florida, USA
April 6, 2021
Dear Fellow Stockholder:Shareholder
We are pleased to invite you to attend Group 1 Automotive’s 20212022 Annual Meeting of StockholdersShareholders to be held virtually on Wednesday, May 12, 2021,18, 2022, at 10:00 a.m. Central Daylight Saving Time. In light of the COVID-19 pandemic, the Annual Meeting will be held completely online. Please see the Notice of Annual Meeting for more information on how to attend and participate in the Annual Meeting.
OVERVIEW
Through the unprecedentedFiscal year of 2020,2021 was another record year for Group 1 adapted, evolved,Automotive. Despite the ongoing pandemic and emerged stronger as a Company. Our team has worked tirelesslywell documented supply-chain disruptions, we were able to navigate the unique challengesachieve significant growth in most of the COVID-19 pandemic. After executing an aggressive cost reduction plan to preserve liquidity in our U.S., U.K. and Brazil regions, the Company adapted by reengineering its processes and achieved solid results in 2020, which includedfinancial metrics.
Key accomplishments included: (i) revenue of $10.9$13.8 billion, and an increase of 27%, (ii) adjusted earnings per share of $15.51,$35.02, an increase of 66.0% compared94%, (iii) adjusted net income of $642 million, an increase of 93%, and (iv) $755.5 million adjusted operating cash flow, an increase of 50%(1). These results were attributable to 2019. Our solid performance, through theexpanded margins in our new market realities of 2020, is theand used vehicle sales, continued growth in our aftersales and finance and insurance businesses, and strong cost control. As a result of our continued focus on2021 financial performance, the controllable elementsCompany generated strong cash flow which allowed us to grow the business by acquisitions as well as the repurchase of approximately 6% of our business model, including optimizing cost control, enhancingshares.
The Company completed major acquisitions in both our digital platform,U.S. and capitalizing onU.K. markets in 2021, resulting in an increase in our total dealership count as of December 31, 2021 to 218 from 184 at year-end 2020. The Company increased its footprint in the experience and expertisenortheast United States with the acquisition of 33 dealerships, further diversifying our geographic footprint in the United States. In the United Kingdom, the Company added additional scale with the acquisition of 7 dealerships. These transactions represented, in the aggregate, $2.5 billion of annualized revenues. The Company also announced the divesture of our team.Brazilian operations with an expected closing date in the second quarter of 2022.
INITIATIVES
Our digital retail platform, Acceleride®, has been instrumental in allowing our Company to adapt to consumers’ needs during the restricted social distancing environment. Acceleride® allows customers to complete vehicle transactions entirely online or start the process online and finish the transaction at one of our dealerships. During 2020, Acceleride® U.S. total retail unit sales were up more than 100% compared to 2019. Despite a significant reduction in our employee head count and operating capacity, we evolved by improving the productivity of our sales and service departments, which resulted in a 19.0% increase in technician productivity and a 22.0% increase in salesperson productivity as compared to 2019. In 2021, we will continuecontinued our work to focus on the controllable elementsprepare for increasing sales volumes of alternative fuel and electric vehicles (“EV”) by working with local utility companies and auto manufacturers to increase vehicle charging capacity. We also made additional investments in EV service equipment and training for our employees.
In furtherance of our business model while prioritizing acquisitions, improving sales penetrationHuman Capital initiatives, we appointed our first Chief Diversity Officer in Acceleride®, increasing partsMay 2021 to continue the development and service gross profit, and growing our used vehicle business.
HUMAN CAPITAL
As we continue to operate through these unprecedented times, we remain guided by our core values: Integrity, Transparency, Professionalism, Teamwork, and our most recently identified core value, Respect. We are committed to treating everyone, customers and colleagues alike, with dignity and respect.
In 2020, we took significant steps in supportexecution of our new core value. Approximately 7,600 U.S. employees participated in anti-bias training from a diversity, equity, and inclusion expert in a program specifically developed for(“DEI”) strategy throughout the Company. The expert also conducted a two-part interactive training session with over 150 members of management. We established the Diversity, Equity, and Inclusion (DEI) Council to ensure that the Company’s activities, policies, and communications supportorganization. This new role integrates our goal of a more diverse and inclusive organization. As a partDEI strategy into every aspect of the DEI Council, we also formed the Group 1 Women’s Initiative, which focuses on increasing female employee lifecycle from recruitment and retention, providing a diverse and inclusive
platform along with creating networking and mentorship opportunities. The Board regularly reviews our Respect-driven programs, initiatives, and processes to ensure continual improvement. We believe a diverse workforce and inclusive culture are key competitive advantages that will help us drive our team’s full potential.
BOARD REFRESHMENT
As our Company continues to evolve, so do the perspectives, skills, and experiences that the Board seeks in its director nominees. Since 2016, we have welcomed five new independent directors to the Board, each of whom brings extensive experience and fresh perspectives to enrich Board dialogue and enhance the Board’s ability to continue effectively overseeing the business.
retention.
We hope you are ablelook forward to participateyour participation in theour 2022 virtual Annual Meeting, but if you cannot participate, we look forward to hearing your voice viasolicit your participation in votingto vote on the business items set forth in the attached notice. Regardless of the number of shares you own, your vote matters. We encourage you to sign and return your proxy card or use telephone or internet voting features prior to the meeting to assure that your shares are represented and voted at the meeting.
On behalf of theour Board of Directors and all Group 1 Automotive team members, thank you for your continued dedication of timeinterest and interestsupport in Group 1.
1 Automotive, Inc.
Sincerely,
![]() | ||
![]() | ||
Stephen D. Quinn | ||
Chairman of the Board | Earl J. Hesterberg President & |
Adjusted earnings per common share, adjusted net income, and adjusted operating cash flow are non-GAAP financial measures. Information regarding these non-GAAP financial measures, including reconciliation to most directly comparable GAAP measures, is included in Appendix A. |
Wednesday, May 12, 2021
10:00 a.m. Central Daylight Saving Time
Online at www.virtualshareholdermeeting.com/GPI2021
Notice of Annual Meeting of Shareholders
Matters to be voted on:
MATTERS TO BE VOTED ON:
1. | To elect the nine director nominees named in the proxy statement, each for a term expiring at the |
2. | To approve, on a non-binding advisory basis, our executive compensation; |
3. | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for |
4. | To transact such other business as may be properly brought before the meeting. |
StockholdersShareholders of record at the close of business on March 16, 2021,21, 2022, will be entitled to notice of and to vote during the Annual Meeting and at any adjournments or postponements thereof.
We are pleased this year to conduct the Annual Meeting solely online via the Internet through a live webcast and online stockholdershareholder tools. We are conducting the Annual Meeting solely online due to the continuing impact of and uncertainty surrounding the coronavirus (“COVID-19”) pandemic and to support the health and well-being of our stockholders. We also believe a virtual format facilitates stockholdershareholder attendance and participation by leveraging technology to allow us to communicate more effectively and efficiently with our stockholders.shareholders. This format empowers stockholdersshareholders around the world to participate at no cost. We have designed the virtual format to enhance stockholdershareholder access and participation and protect stockholdershareholder rights, as described in more detail in the proxy statement.
The proxy materials, including this Notice of Annual Meeting, the proxy statement, a proxy card, and our Annual Report to Stockholders on Form 10-K for the fiscal year ended December 31, 20202021 are being distributed and made available beginning on April 6, 2021.
12, 2022.
Your vote is important. We urge you to review the accompanying materials carefully and to vote by telephone or internet as promptly as possible. Alternatively, you may complete, sign and return the proxy card, by mail.
Houston, Texas
April 6, 202112, 2022
By Order of the Board of Directors,
Beth Sibley
Corporate Secretary
Important Notice Regarding the Availability of Proxy Materials for the The Notice of Annual Meeting of for the Annual Meeting and our Annual Report year ended December 31, |
50 |
75 |
This page intentionally left blank
Proxy Statement 2022 | 1
![]() |
Business and Financial Highlights
Despite the unique challenges of the COVID-19coronavirus (“COVID-19”) pandemic, Group 1 Automotive, Inc. (“Group 1” or the “Company”) continued to deliver record settingrecord-setting financial results and increased operational effectiveness in 2020.2021. The Company achieved solid results by successfully expanding its omnichannel marketing, closing attractive acquisitions involving approximately $2.5 billion in acquired revenues, executing an aggressive cost reduction plan and reengineering its processes. Our 20202021 financial results compared to 20192020 included:
![]() | ||||
✓ All-time record GAAP EPS for ✓ Adjusted EPS for | ||||
![]() | ✓ All-time record GAAP net income for ✓ Adjusted net income for | |||
![]() | ✓Achieved all-time U.S. Finance and Insurance (“F&I”) performance record of | |||
![]() | ✓Increased same store used vehicle total gross profit by | |||
![]() ✓ Increased same store parts and service gross profit by 15.5%; | ✓Issued | |||
![]() | full year; ✓Repurchased | |||
![]() | ✓ GAAP operating cash flow of ✓ Generated record adjusted operating cash flow of | |||
![]() | ✓Reduced SG&A as a % of gross profit from ✓ Acquired approximately $2.5 billion in annual revenues, an all-time annual record for the Company. | |||
![]() | ||||
![]() | ||||
*Please see Appendix A for an explanation and reconciliation of these non-GAAP measures.
[THIS PAGE INTENTIONALLY LEFT BLANK]
![]() | ||
![]() | Proxy Statement 2022 | |
Proxy Statement 2022 | 3
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read this entire proxy statement carefully before voting.
This proxy statement is being distributed and made available beginning on April 6, 2021 in connection with the solicitation of proxies by the Board of Directors of Group 1 Automotive, Inc. for use at our 2021 Annual Meeting of Stockholders.
ANNUAL MEETING OF STOCKHOLDERS
![]() | ![]() | ![]() |
VOTING
StockholdersShareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and each proposal. All elections of directors shall be decided by a majority of votes cast by stockholdersshareholders entitled to vote. All other matters submitted to the stockholdersshareholders shall be decided by vote of a majority of the shares present online or represented by proxy.
COMPENSATION AND CORPORATE GOVERNANCE HIGHLIGHTS
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() | ||
![]() | ![]() |
ENVIRONMENTAL AND SOCIAL HIGHLIGHTS
While we have always focused on delivering strong financial results, we remain committed to doing so in a way that respects the communities and environments in which we operate. We believe that strongly considering environmental and social factors in making investment and operating decisions will help our business operations have a positive impact on the planet, the people whose lives we touch and our bottom line. In an effort to better inform our stockholders and the investment community of the numerous activities of our corporate office and dealerships, we have set up websites that provide pertinent data on our environmental and social commitments. Please visit our websites at www.group1corp.com/ESG and www.group1auto.com/group1cares, for more detailed information on our environmental and corporate social responsibility practices, including our charitable and philanthropic efforts. A summary of our 2020 environmental and social efforts follows:
![]() |
Our Sustainable Business Priorities
![]() | ![]() | ![]() | ![]() | ![]() |
Diversity, Equity, and Inclusion Council
Encouraged by our Board, we established the Diversity, Equity, and Inclusion (DEI) Council. The Council’s mission is to treat everyone with respect and foster a diverse and inclusive culture where we value and develop employees of all backgrounds. We will enhance employee engagement in the areas of diversity and inclusion by offering innovative training, recruitment, and career path development where a sense of belonging is apparent throughout the organization. Each of the four committees of the Council, depicted below, has an employee chairperson and executive sponsor.
More information about our Environmental and Corporate Social Responsibility initiatives may be found in the “Environmental and Corporate Social Responsibility” section on page 27.
VOTING MATTERS AND BOARD RECOMMENDATIONS
Management Proposals: | Board’s Recommendation | Page (for more detail) | ||
Election of Nine Director Nominees | FOR | 17 | ||
Approval, on a Non-Binding Advisory Basis, of our Executive Compensation | FOR | 25 | ||
Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm | FOR | 27 |
GOVERNANCE HIGHLIGHTS
Board Composition and Independence | Board and Committee Practices | Board Oversight of Risk Management | ||||||||||
✓ Separation of the Chair and CEO roles ✓ 7 of 9 director nominees are independent ✓ 100% independent Audit, Compensation and Governance Committees ✓ Mandatory retirement age ✓ Limits on Board member service on other public company boards | ✓ Annual Board and Committee evaluations ✓ Director orientation and continuing education ✓ Robust stock ownership guidelines ✓ Executive sessions provided for all quarterly Board and Committee meetings ✓ Philosophy of continuous Board refreshment to ensure a mix of skills, experience, tenure and diversity ✓ Board has significant interaction with senior management and access to other employees | ✓ Annual review of enterprise risk management program ✓ Quarterly review of Cybersecurity program ✓ Quarterly review of ESG and Health and Safety programs ✓ Quarterly review of DEI program ✓ Quarterly review of PAC and GPI foundation income (donations) and contributions |
SUSTAINABILITY HIGHLIGHTS
We strongly believe that our environmental, social and governance (“ESG”) actions will help our business operations positively impact the planet, the people whose lives we touch and our bottom line. In an effort to better inform our shareholders and the investment community of our current initiatives and the actions we’ve taken, we recently released our inaugural 2021 Sustainability Report which may be found at www.group1corp.com/ESG. The report reflects the ESG progress we’ve made through 2021 and the things we hope to achieve in the future. A summary of our current ESG priorities and our respective 2021 accomplishments follows:
Our ESG Priorities
![]() | FOSTER DIVERSITY, EQUITY AND INCLUSION Appointed our first Chief Diversity Officer for executive oversight of our DEI strategy and actions | |
![]() | SUPPORT OUR EMPLOYEES AND COMMUNITIES Continued to encourage our employees to volunteer and to use our dealerships for community gatherings | |
![]() | MAINTAIN STRONG GOVERNANCE PRINCIPLES Established the ESG Working Group that reports to the Governance & Corporate Responsibility Committee on a quarterly basis | |
![]() | REDUCE THE ENVIRONMENTAL IMPACT OF OUR FACILITIES Installed an additional 800 solar panels to bring our current total to more than 6,400 panels | |
![]() | CONDUCT BUSINESS IN A SUSTAINABLE MANNER Established a team responsible for improving our electric vehicle infrastructure |
![]() | ||
![]() | Proxy Statement 2022 | |
Election of Directors (Proposal 1)
Proxy Statement 2022 | 5
DIRECTOR NOMINEES
The following table provides summary information about our nominees for election to the Board of Directors.Directors (the “Board”).(1) Additional information for all of our directors may be found beginning on page 30.17.
Committee Memberships | |||||||||||||||||||||||
Committee Memberships | |||||||||||||||||||||||
Directors | Director Since | Age | Other Public Directorships | Audit | Compensation and Human Resources Committee | Finance/Risk Management | Governance & Corporate Responsibility Committee | Director Since | Age | Other Public Directorships | Independent | Audit Committee | Compensation & Human Resources Committee | Finance/Risk Management Committee | Governance & Corporate Responsibility Committee | ||||||||
Carin M. Barth | 2017 | 58 | 2 | ![]() | ![]() | 2017 | 59 | 2 | ✓ | ![]() | ![]() | ![]() | |||||||||||
Earl J. Hesterberg* | 2005 | 67 | 0 | ![]() | |||||||||||||||||||
Steven C. Mizell(2) | 2021 | 61 | 1 | ||||||||||||||||||||
Lincoln Pereira* | 2013 | 61 | 0 | ![]() | |||||||||||||||||||
Earl J. Hesterberg | 2005 | 68 | 0 | ![]() | |||||||||||||||||||
Steven C. Mizell1 | 2021 | 62 | 1 | ✓ | ![]() | ![]() | |||||||||||||||||
Lincoln Pereira Filho | 2013 | 62 | 12 | ![]() | |||||||||||||||||||
Stephen D. Quinn | 2002 | 65 | 1 | ![]() | ![]() | ![]() | 2002 | 66 | 1 | ✓ | ![]() | ![]() | ![]() | ||||||||||
Steven P. Stanbrook(3) | 2019 | 63 | 2 | ![]() | |||||||||||||||||||
Steven P. Stanbrook | 2019 | 64 | 1 | ✓ | ![]() | ![]() | ![]() | ||||||||||||||||
Charles L. Szews | 2016 | 64 | 3 | ![]() | ![]() | 2016 | 65 | 2 | ✓ | ![]() | ![]() | ||||||||||||
Anne Taylor | 2018 | 65 | 2 | ![]() | ![]() | 2018 | 66 | 2 | ✓ | ![]() | ![]() | ||||||||||||
MaryAnn Wright(4) | 2014 | 59 | 2 | ![]() | |||||||||||||||||||
MaryAnn Wright | 2014 | 60 | 2 | ✓ | ![]() | ![]() | ![]() |
![]() | ![]() ![]() ![]() |
Mr. Mizell joined the Board in March | |
Mr. Pereira serves on the |
Our Board of Directors Recommends a Vote “FOR” the Election of each of the Nominees for Director.
![]() | ||
|
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 (95%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 “2020“2021 Compensation Discussion and Analysis” (“CD&A”) beginning on page 43,33, as well as the Summary Compensation Table and related compensation tables and narratives, which explainsexplain how and why the Compensation and& Human Resources (“CHR”) Committee arrived at its executive compensation actions and decisions for 2020.2021, 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 ($) | Non-Equity ($) | Change in ($) | All Other ($) | Total ($) | ||||||||||||||||||
Earl J. Hesterberg President and Chief Executive Officer | 1,240,000 | 3,799,959 | 2,480,000 | 849,078 | 208,220 | 8,577,257 | ||||||||||||||||||
Daryl A. Kenningham President, U.S. and Brazilian Operations | 760,000 | 1,999,994 | 1,121,000 | 342,173 | 174,355 | 4,397,522 | ||||||||||||||||||
Daniel McHenry Senior Vice President and Chief Financial Officer | 575,000 | 499,925 | 661,250 | 859 | 34,557 | 1,771,591 | ||||||||||||||||||
Frank Grese, Jr. Senior Vice President, Human Resources, Training and Operations Support | 633,450 | 699,807 | 715,799 | 373,425 | 32,605 | 2,455,086 | ||||||||||||||||||
Peter C. DeLongchamps Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs | 530,450 | 799,821 | 610,018 | 142,794 | 29,663 | 2,112,746 |
![]() | ||
![]() | Proxy Statement 2022 | |
2020 SUMMARY COMPENSATION
Set forth below is a summary of the compensation granted or earned for each named executive officer during 2020, but which is not intended to replace the 2020 Summary Compensation Table included in the Executive Compensation section of this proxy statement:Proxy Statement 2022 | 7
Name and Principal Position | Salary(1) ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) ($) | All Other Compensation(5) ($) | Total ($) | ||||||
Earl J. Hesterberg | 900,000 | 3,646,040 | 2,400,000 | 292,530 | 60,009 | 7,298,579 | ||||||
President and | ||||||||||||
Chief Executive Officer | ||||||||||||
Daryl A. Kenningham | 604,500 | 1,772,418 | 1,080,000 | 806,776 | 171,939 | 4,435,633 | ||||||
President, U.S. and | ||||||||||||
Brazilian Operations | ||||||||||||
Daniel J. McHenry(6) | 375,317 | 450,026 | 349,506 | — | 7,982 | 1,182,831 | ||||||
Senior Vice President and | ||||||||||||
Chief Financial Officer | ||||||||||||
John C. Rickel(7) | 563,333 | 2,796,733 | — | 255,210 | 26,360 | 3,641,636 | ||||||
Former Senior Vice President | ||||||||||||
and Chief Financial Officer | ||||||||||||
Frank Grese, Jr. | 558,625 | 708,927 | 707,250 | 157,112 | 34,764 | 2,166,678 | ||||||
Senior Vice President, Human | ||||||||||||
Resources, Training and | ||||||||||||
Operations Support | ||||||||||||
Peter C. DeLongchamps | 467,792 | 708,927 | 592,250 | 54,561 | 30,613 | 1,854,143 | ||||||
Senior Vice President, | ||||||||||||
Manufacturer Relations, | ||||||||||||
Financial Services and | ||||||||||||
Public Affairs |
Our Board of Directors Recommends a Vote “FORProxy Statement” the Non-Binding Advisory Approval of our Executive Compensation.
![]() |
Ratification of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for 2021 (Proposal 3)
As a matter of good corporate governance, we are asking our stockholders to ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the year ending December 31, 2021.
Ernst & Young LLP (“Ernst & Young”) served as our independent registered public accounting firm for the year ended December 31, 2019. In February 2020, our Board of Directors appointed Deloitte to serve as our independent registered public accounting firm for the year ended December 31, 2020.
Set forth below is summary information with respect to Deloitte’s fees for services provided in 2020.
Set forth below is summary information with respect to Ernst & Young’s fees for services provided in 2019.
More information about the audit fees for Deloitte and Ernst & Young may be found in the “Audit and Other Fees” section on page 39.
Our Board of Directors Recommends a Vote “FOR” Ratification of the Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2021.
![]() |
This page intentionally left blank
![]() |
800 Gessner, Suite 500Houston, TX 77024
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 2021 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment or postponement thereof. Proxy materials were first sent to stockholders beginning on April 6, 2021.
20212022 ANNUAL MEETING DATE AND VIRTUAL LOCATION
Our 2022 Annual Meeting of Shareholders (the “Annual Meeting”) will be held virtually at www.virtualshareholdermeeting.com/GPI2021GPI2022, on Wednesday, May 12, 2021,18, 2022, at 10:00 a.m., Central Daylight Saving Time, or at such other time and place to which the meeting may be adjourned.
As you are aware, the COVID-19 pandemic continues to affect travel and gatherings. For that reason, weWe have decided to conduct the Annual Meeting solely online via the Internet through a live webcast and online stockholdershareholder tools. While we are conducting the Annual Meeting solely online to support the health and well-being of our stockholders, we alsoWe believe a virtual format facilitates stockholdershareholder attendance and participation by leveraging technology to allow us to communicate more effectively and efficiently with our stockholders.shareholders. This format empowers stockholdersshareholders around the world to participate at no cost. We have designed the virtual format to enhance stockholdershareholder access and participation and protect stockholdershareholder rights. Specifically,
Attending Online.If you plan to attend the Annual Meeting, online, please be awarewe 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 what you will need to gain admission, as described below. If you do not comply with the procedures described here for attendingmeeting, following completion of the Annual Meeting, online, you will not be ablea webcast replay, final report of the inspector of election, and answers to participateall appropriate questions asked by investors in the Annual Meeting. Stockholders may participate inconnection with the Annual Meeting by visiting will be posted as soon as practicable to our Investor Relations website at www.virtualshareholdermeeting.com/GPI2021www.group1corp.com. To attend online and participate in
We Proactively Take Steps to Facilitate Your Participation. During the Annual Meeting, stockholderswe 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/GPI2021GPI2022; beneficial stockholdersshareholders who do not have a control number may gain access to the meeting by logging into their brokerage firm’s website and selecting the stockholdershareholder 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.
We encourage you toOnline access the meeting prior to the start time. Please allow ample time for online check-in, whichmeeting will begin at 9:30 a.m., Central Daylight Saving Time. We will have technicians ready to assist if you have difficulties accessing the virtual meeting during the check-in time or during the Annual Meeting. 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.
![]() |
Asking Questions Online.Stockholders have multiple opportunities to submit questions for the Annual Meeting. StockholdersShareholders who wish to submit a question in advance may do so either by emailing our head of Investor Relations Sheila Roth at ir@group1auto.com by 5:00p.m.00 p.m., Central Daylight Saving Time, Tuesday, May 11, 2021,17, 2022, or onvisiting our Annual Meeting website, www.virtualshareholdermeeting.com/GPI2021GPI2022. Stockholders Shareholders also may submit questions live during the meeting. We plan to reserve some time for stockholdershareholder 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.
Voting Online.Stockholders who attend the virtual Annual Meeting should follow the instructions at www.virtualshareholdermeeting.com/GPI2021to vote or submit questions during the meeting. Voting online during the meeting will replace any previous votes.
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.
DELIVERY OF PROXY MATERIALS
The proxy materials, including this proxy statement, the Notice of Annual Meeting, the form proxy card, and our Annual Report to Stockholders on Form 10-K for the fiscal year ended December 31, 2020 are being distributed and made available to stockholders of record beginning on April 6, 2021.
The proxy card provides instructions on how to inform us to send future proxy materials to you electronically by email. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy-voting site. Your election to receive proxy materials by email or printed form will remain in effect until you terminate it.
Choosing to receive future proxy materials by email will allow us to provide you with the information you need in a timelier manner, save us the cost of printing and mailing documents, to you, and conserve natural resources.
![]() | ||
![]() | Proxy Statement 2022 | |
Proxy Statement 2022 | 9
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 2020,2021, the Board held ten meetings, and acted by unanimous written consent eightnine times. The committees of the Board held a combined total of 2824 meetings. Each incumbentWith the exception of three directors that were unable to attend one ad hoc Board meeting, each director attended 93% 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 2020.2021. 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 20202021 Annual Meeting of Stockholders.Shareholders.
BOARD PERFORMANCE PROCESS
Board Performance 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 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 GCR 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.
In 2018, the GCR Committee reviewed and discussed the Board and committee evaluation format and process and decided to add individual director performance evaluations. The GCR Committee and the Board elected to conduct the 2018 performance assessments through the use of electronic, written questionnaires. The GCR Committee elected to conduct the performance assessments electronically again in 2019 and 2020. The 2020 Board and committee evaluations process follows.
AWe engage a third party preparedto assist us by preparing the performance assessments for electronic delivery, compiledcompiling the responses, and aggregatedaggregating 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, the results were reviewed and aggregated by an independent third party. The third party provided a memorandum to the Chair of the GCR Committee summarizing the results ofevaluation process, the Board committee and individual director evaluations and also discussed the results with the Chair of the GCR Committee.
In early 2021, the Chair of the GCR Committee metmeets individually with each committee chair to discuss the results of 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 GCR chair also discussedBoard Chair then meets with each individual director the comments pertainingindividually to his or her director evaluation. Thediscuss the results of the Board evaluation. In addition, the results of the Board and committee evaluations were presented toare discussed at the Board.full Board and committee meetings.
![]() |
Corporate GovernanceCORPORATE GOVERNANCE
We are committed to seeking excellence in corporate governance which includes the highest standards of professional and personal conduct. OurThe Board has adopted several governance documents to guide the operation and direction of our Board and its committees, which include our Corporate Governance Guidelines, Code of Ethics, Code of Conduct and charters for thea standing Audit Committee, Compensation and Human ResourcesCHR Committee, Governance & Corporate ResponsibilityGCR Committee and Finance/Risk Management (“FRM”) Committee. Each committee may form and delegate some or all of these documents is available onits authority to subcommittees when it deems appropriate. Each committee also has the authority to obtain advice and assistance 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 website at www.group1auto.com senior corporate officers and stockholders may obtain a printed copy, free of charge, by sending a written requestalso has the sole authority to Group 1 Automotive, Inc., 800 Gessner, Suite 500, Houston, TX 77024, Attn: Corporate Secretary.approve the consultant’s fees and other retention terms.
Board Leadership Structure
BOARD LEADERSHIP STRUCTURE
The Governance & Corporate Responsibility Committee’s charter provides that the committee willGCR Committee annually assessassesses and approveapproves the leadership structure of the Board. In 2020,2021, the GCR 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”.
Board DiversityDIRECTOR QUALIFICATIONS AND DIVERSITY CONSIDERATIONS
Our Governance & Corporate Responsibility Committee is responsible for identifying and recommending to our Board qualified individuals to be nominated to serve on our Board. Our Board’s objective is to select individuals that have a demonstrated record of integrity, sound business judgment, leadership, objectivity, independence of mind, and commitment. In selecting potential Board candidates, our Board seeks independent directors who represent a mix of backgrounds and experiences that will enhance the quality of our Board’s deliberations and decisions. Board membership should reflect diversity in its broadest sense, including persons diverse in perspectives, personal and professional experiences, geography, gender, and ethnicity. This process has resulted in a Board that is comprised of highly qualified directors that reflect diversity as we define it. The GCR Committee assesses the effectiveness of this approach as part of our Board’s annual self-evaluation process.
Independence of the Members of Our Board
The Board has analyzed the independence of each director. It has affirmatively determined that Mses. Barth, Taylor and Wright and Messrs. Mizell, Quinn, Stanbrook, Szews and Watson (all of our non-employee directors) are independent directors under the listing standards of the New York Stock Exchange (“NYSE”). As part of its analysis, the Board determined that none of these directors has a material relationship with our Company. Mr. Hesterberg was determined not to be independent because he is our President and Chief Executive Officer, and Mr. Pereira, who was appointed to the Board following our acquisition of UAB Motors Participações, S.A. (“UAB”) in 2013, was determined not to be independent because he is our Regional Vice President, Brazil and the Chairman of UAB. Prior to his retirement as of our 2020 Annual Meeting, Mr. John L. Adams was determined by our Board to be independent under the listing standards of the NYSE.
![]() |
Charitable Contributions
We have in the past, and may, in the future, make donations to various charitable organizations. From time to time, some of our directors, officers and employees have been, and in the future may be, affiliated with such charities. During the annual independence review, our GCR Committee determined that any such affiliations did not impact the independence of our directors. We did not make any charitable donations to any organizations affiliated with our directors or officers in 2020.
Director Resignation Policy
Under our director resignation policy, in an uncontested election of directors, any nominee who receives a greater number of votes “against” than votes “for” his or her election will, promptly following the certification of the stockholder vote, tender his or her written resignation to the Board for consideration by the GCR Committee. The GCR Committee will consider the resignation and will make a recommendation to the Board concerning whether to accept or reject such resignation.
In determining its recommendation to the Board, the GCR Committee will consider all factors it considers relevant, which may include:
Under our director resignation policy, the Board will take formal action on the recommendation no later than 90 days following the certification of the results of the stockholders’ meeting. In considering the recommendation, the Board will consider the information, factors and alternatives considered by the GCR Committee and any additional information that the Board considers relevant. The Company will promptly disclose to the public the Board’s decision whether to accept or reject the director’s tendered resignation. If applicable, the Board will also disclose the reason or reasons for rejecting the tendered resignation.
Executive Sessions of Our Board
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.
![]() |
Risk Oversight
We have a robust Enterprise Risk Management Program, concentrating primarily in five principal areas that are significant to our business: (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 and as needed when significant risks 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 review adherence to policies and procedures, which are supported by a separate internal audit department.
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.
![]() |
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. At each of its meetings, the Finance/Risk Management Committee receives presentations from our VP, Information Technology, on cybersecurity and information security risk, and on our cybersecurity initiatives. We also engage cybersecurity experts to review, evaluate and provide recommendations on our cybersecurity program. Additionally, to assure compliance with our policies and procedures members of our internal audit department regularly visit our dealerships to ensure that our customers’ personal information is protected and secured appropriately. The results of those dealership visits are reported to the Audit Committee. In March 2020, at the onset of the COVID-19 pandemic, all dealership visits were suspended. As of March 2021, our internal audit department resumed conducting dealership visits in accordance with CDC guidelines and local regulations. In 2020, our Board, the Finance/Risk Management Committee and the Audit Committee received cybersecurity and information security risk reports at least quarterly.
Committees of Our Board
Our Board has established four standing committees to assist it in discharging its responsibilities: the Audit Committee, the Compensation and Human Resources Committee, the Governance & Corporate Responsibility Committee and the Finance/Risk Management Committee.
Each of the committee charters is available on our website at www.group1auto.comand 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.
![]() |
AUDIT COMMITTEE
Pursuant to its charter, the purposes and responsibilities of our Audit Committee are to:
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.
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.
Our Board has also determined that each of Ms. Barth and Messrs. Quinn and Szews is an “audit committee financial expert” following a determination that Ms. Barth and Messrs. Quinn 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, Stanbrook and Szews, please read “Proposal 1 — Election of Directors.” The Audit Committee held eight meetings during 2020, and acted by unanimous written consent three times.
The Report of the Audit Committee is set forth on page 40 of this proxy statement.
COMPENSATION AND HUMAN RESOURCES COMMITTEE
Pursuant to its charter, the purposes and responsibilities of our Compensation and Human Resources (“CHR”) Committee are to:
The CHR 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; however, members of management do not participate in decisions regarding their own compensation.
Under its charter, the CHR 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.
The CHR Committee has 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. 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 of highly qualified and high performing executives, 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 CHR 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 2021, the CHR Committee considered the independence of PM&P in light of SEC rules and listing standards of the NYSE. The CHR Committee requested and received a letter from PM&P addressing the consulting firm’s independence, including the factors set forth in the listing standards of the NYSE. The CHR 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 CHR Committee are independent as that term is defined in the NYSE’s listing standards, including the heightened standards applicable to compensation committee members. The CHR Committee held ten meetings during 2020 and acted by unanimous written consent four times.
The Report of the Compensation and Human Resources Committee is set forth on page 56 of this proxy statement.
GOVERNANCE & CORPORATE RESPONSIBILITY COMMITTEE
Pursuant to its charter, the purposes and responsibilities of our Governance & Corporate Responsibility (“GCR”) Committee are to:
All members of the GCR Committee are independent as defined under the NYSE’s listing standards. The GCR Committee held four meetings during 2020.
FINANCE/RISK MANAGEMENT COMMITTEE
Pursuant to its charter and other applicable policies, the purpose of our Finance/Risk Management Committee is to assist the Board in fulfilling its oversight responsibilities across the principal areas of corporate finance and risk management for the Company, including:
All members of the Finance/Risk Management Committee, except for Mr. Hesterberg, our President and Chief Executive Officer and Mr. Pereira, our Regional Vice President, Brazil, are independent as defined under the NYSE’s listing standards. The Finance/Risk Management Committee held six meetings during 2020 and acted by unanimous written consent once.
![]() |
Communications with Directors
Our Board welcomes communications from our stockholders and other interested parties. Stockholders and any other interested parties may send communications to our Board, to any committee of our Board, to the independent Chairman of the Board (who presides over the executive sessions of our independent and non-management directors), or to any director in particular, to:
c/o Group 1 Automotive, Inc.
800 Gessner, Suite 500Houston, Texas 77024Attn: Chairman of the Board
Any appropriate correspondence addressed to our Board, to any committee of our Board, to the independent Chairman of the Board, or to any one of the directors in care of our offices will be forwarded to the addressee or addressees.
![]() |
Environmental and Corporate Social Responsibility
Responsible business practices are central to our success, the continuous improvement of our operations, and our relationships with our employees and the communities we call home.Our core values, integrity, transparency, professionalism, teamwork and respect, 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 in which we live and work.
In an effort to better inform our stockholders and the investment community of the numerous activities of our corporate office and geographically dispersed dealerships, we maintain and update websites that provide pertinent data on our environmental and social efforts. Please visit our websites at www.group1corp.com/ESG and www.group1auto.com/group1cares.
![]() |
Community participation and charitable donations that enrich the communities we serve have always been a priority for Group 1, and are continuously encouraged and supported by our directors and senior management. We are proud of these efforts and our employees from our corporate office, business centers and dealerships in the U.S., U.K., and Brazil who generously give of their time and resources to benefit others.
![]() |
![]() |
We are committed to minimizing our environmental impact and continually look for more opportunities where good environmental stewardship improves our long-term financial results. We also have an obligation to spend our stockholders’ money wisely. When constructing our various facilities, while considering the nature of our operations, we carefully choose projects that are environmentally responsible, economically viable and good for the Company’s long-term financial success. In 2020, we continued to focus on energy-saving initiatives such as LED lighting and installing solar panels at several stores. We also supported our commitment to the environment through a robust recycling program and our water-based paint initiative.
Additionally, we have robust workplace safety policies at our dealerships and collision centers. The Company has engaged a third-party consultant, who regularly conducts training and performs quarterly visits, to assure our workplaces remain compliant with environmental and safety regulations.
![]() |
Each year, management interfaces with prospective investors, existing stockholders, and buy-side and sell-side investment research analysts in a variety of event formats, to discuss the Company’s publicly disclosed performance, business strategy and outlook, and corporate governance. These events include earnings teleconferences; investor calls, meetings, and conference events; non-deal road trips; and, occasionally site visits. Key topics include discussions regarding sales of new and used vehicles, market trends, parts and service strategies, successful implementation of our Acceleride® and Val-u-Line® vehicle sales programs, success with hiring technicians, the impact of the COVID-19 pandemic on our operations, the impact of Brexit in the U.K., our digital retail strategies, capital allocation, and profitability. We address these topics with slide data in our roadshows and talking points on our earnings calls, conferences, and investor meetings. 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, while enabling the Company to dynamically operate in an evolving industry and economy with respect to maximizing return for our stockholders.
![]() |
Our employees are the heart of our company. We know that actively supporting the success and well-being of our employees is one of the best investments our company can make in its own sustainability. We also recognize the importance of training in the workplace to develop skills, promote best practices and support the success and advancement of our employees.
![]() |
Governance
We are committed to responsible business practices and continuous improvement of our operations and our relationships with our employees and the communities in which we live and work. Our core values - integrity, transparency, professionalism, teamwork and respect - underlie our commitment to conduct our business in ways that are principled and accountable to key stakeholders and the business community. Our Governance & Corporate Responsibility Committee advises the Board on appropriate corporate governance guidelines and practices and assists our Board in implementing those guidelines and practices.
Group 1 Foundation
Group 1 Foundation, the 501(c)(3) charitable arm of our business, was formed in 2005 (in response to Hurricane Katrina) to provide guidance and financial assistance to Group 1 employees and their immediate families who suffer hardship due to natural disasters, emergencies, extended illness, injury, fire, flood or other special situations beyond their control. Funds are made available through fundraisers and contributions from employees, Board members and vendors, and are distributed to help employees and their families with temporary, critical expenses. In 2017 and 2018, affected employees were provided temporary living and related expenses after Hurricanes Harvey and Michael. In 2019, we assisted employees in southeast Texas who were affected by Tropical Storm Imelda. Since 2017, we have disbursed over $1.4 million to over 400 employees.
COVID-19 Response
The COVID-19 pandemic significantly affected our operations in all three of our markets in the U.S., U.K., and Brazil. At the onset of the pandemic, the Board and management met weekly to ensure the Company protected the health and safety of its employees, adjusted its cost structure to adapt to market conditions, and preserved its core values during this unprecedented time. In 2020, the Company spent over $1 million on personal protective equipment, established remote working arrangements where possible, and adhered to its aggressive cost reduction plan to preserve liquidity in all regions. In addition to the compensation adjustments described in the CD&A, we reduced advertising expenses by over 33%. As announced in April 2020, we furloughed or terminated approximately 8,000 employees, suspended our dividend, and cancelled our share repurchase program. As market conditions improved, the Company reversed many of these cost reductions and improved productivity.
![]() |
Our Certificate of Incorporation and Bylaws currently provide for annual elections of directors. Our Board of Directors has nominated nine directors for election at this Annual Meeting to hold office until the next annual meeting and the election of their successors. All of the nominees are currently directors. With the exception of Mr. Mizell who joined our Board in March 2021, all of the nominees were elected directors by a vote of the stockholders at the last annual meeting of stockholders which was held on May 13, 2020. Each nominee agreed to be named in this Proxy Statement and to serve if elected. All then-current directors attended the 2020 Annual Meeting.
The following table sets forth certain information, as of the date of this proxy statement, regarding our director nominees.
Director | Position and Offices with Group 1 | Director Since | Age | |||
Carin M. Barth | Director | 2017 | 58 | |||
Earl J. Hesterberg | Director, President and Chief Executive Officer | 2005 | 67 | |||
Steven C. Mizell | Director | 2021 | 61 | |||
Lincoln Pereira | Director, Regional Vice President, Brazil | 2013 | 61 | |||
Stephen D. Quinn | Director, Non-Executive Chairman of the Board | 2002 | 65 | |||
Steven P. Stanbrook | Director | 2019 | 63 | |||
Charles L. Szews | Director | 2016 | 64 | |||
Anne Taylor | Director | 2018 | 65 | |||
MaryAnn Wright | Director | 2014 | 59 |
We have no reason to believe that any of the nominees will be unable or unwilling for good cause to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors.
The number of directors on our Board is reviewed annually and fixed by our Board from time to time. We currently have ten directors serving on our Board. Effective as of the Annual Meeting, the Board size will be reduced to nine members as Mr. Watson has reached the Company’s mandatory retirement age for non-management directors. The Board will continue to evaluate the size of the Board and make adjustments as needed to meet the current and future needs of the Company.
Stockholders may not cumulate their votes in the election of our directors. Under Delaware law and our Bylaws, a majority of votes cast by stockholders entitled to vote in the election of directors is required for the election of directors. This means that director nominees who receive more “for” votes than “against” will be elected for that position. You may vote “for” or “against” with respect to the election of directors. Only votes “for” or “against” are counted in determining whether a majority has been cast in favor of a director. Abstentions are not counted for purposes of the election of directors.
We have adopted a majority vote director resignation policy, which is described in greater detail under “Director Resignation Policy.”
![]() |
Our Board of Directors
Our Board believes that each of our directors is highly qualified to serve as a member of our Board. Each of our directors has contributed to the mix of skills, core competencies and qualifications of our Board. Our directors are highly educated and have diverse backgrounds and talents and successful records of accomplishment in what we believe are highly relevant positions with well-regarded organizations. Our Board has also considered the fact that all of our directors have worked for, or served on the boards of directors of, a variety of companies in a wide range of industries. Many of our directors also have served as directors of Group 1 for many years and benefit from an intimate knowledge of our operations and corporate philosophy. Our Board believes that through their varying backgrounds, our directors bring a wealth of experiences and new ideas to our Board.
Described on the following pages are the principal occupations, positions and directorships for at least the past five years of our director nominees, as well as certain information regarding their individual experience, qualifications, attributes and skills that led our Board to conclude that they should serve on our Board. There are no family relationships among any of our directors or named executive officers.
Skills and Qualifications of Our Board of Directors
The following table includes the breadth and variety of business experience that each of our director nominees brings to our Board.
Board Member | ||||||||||
Barth | Hesterberg | Mizell | Pereira | Quinn | Stanbrook | Szews | Taylor | Wright | ||
Experience/Knowledge: | ||||||||||
![]() | # of Other Public Company Boards Currently Serving On | 2 | - | 1 | - | 1 | 2 | 3 | 2 | 2 |
![]() | Former President or CEO | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||
![]() | Public Company Executive Position | ![]() | ![]() | ![]() | ![]() | ![]() | ||||
![]() | Automotive | ![]() | ![]() | IB | ![]() | ![]() | ||||
![]() | Retail | ![]() | ![]() | ![]() | IB | ![]() | ![]() | |||
![]() | Engineering/Product Development | ![]() | ![]() | ![]() | ![]() | ![]() | ||||
Expertise: | ||||||||||
![]() | International | ![]() | ![]() | ![]() | IB | ![]() | ![]() | ![]() | ||
![]() | Finance | ![]() | ![]() | ![]() | ||||||
![]() | Human Resources/Cultural | ![]() | ![]() | ![]() | ![]() | |||||
![]() | Legal | ![]() | ||||||||
![]() | Mergers & Acquisitions | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |
![]() | Accounting | ![]() | IB | ![]() | ||||||
![]() | P&L/Income Statement Responsibility | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||
![]() | SOX Financial Expert | ![]() | ![]() | ![]() | ||||||
![]() | Technology | ![]() | ![]() | ![]() | ![]() | |||||
Attributes: | ||||||||||
![]() | Independent | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||
![]() | Diversity | ![]() | ![]() | ![]() | ![]() |
The lack of a for a particular item does not mean that the director does not possess that qualification, characteristic, skill or experience.
We look to each director to be knowledgeable in these areas; however, the indicates that the item is a specific qualification, characteristic, skill or experience that the director brings to the Board.
IB – covered industry as Investment Banker
![]() |
Director Qualification and Considerations.The GCR Committee actively seeks individuals qualified to become members of our Board, seeks 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.
In considering candidates for our Board, the GCR Committee, which identifies and recommends board candidates to the full Board, will consider the entirety of each candidate’s credentials. There is currently no set of specific minimum qualifications that must be met by a nominee recommended by the GCR Committee, as different factors may assume greater or lesser significance at particular times and the needs of our Board may vary in light of its composition and the GCR Committee’s perceptions about future issues and needs. However, while the GCR Committee does not maintain a formal list of qualifications, in making its evaluation and recommendation of candidates, the GCR Committee may consider, among other factors, diversity, age, skill, experience in the context of the needs of our Board, independence qualifications, moral character and whether prospective nominees have relevant business and financial experience or have industry or other specialized expertise.
The GCR Committee considers the diversity of the Board when identifying director nominees in accordance with its charter. We believe board membership should reflect diversity in its broadest sense, including persons diverse in perspectives, personal and professional experiences, geography, gender, race and ethnicity. This process has resulted in a Board that is comprised of highly qualified and diverse directors.
BOARD INDEPENDENCE
The Board determined that all non-employee directors are independent directors under the listing standards of the New York Stock Exchange (“NYSE”). As part of its analysis, the Board determined that none of the directors have a material relationship with our Company. Each of Messrs. Hesterberg and Pereira was determined not to be independent because they are employees of Group 1.
The Board has determined that each of the members of the Audit Committee, CHR Committee and GCR Committee are independent under applicable NYSE and Securities and Exchange Commission (“SEC”) rules for committee memberships, and that each member of the Audit Committee also meets the additional independence criteria set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All members of the Finance/Risk Management Committee, except for Messrs. Hesterberg and Pereira, are also independent as defined under the NYSE’s listing standards. The Board has also determined that each of Ms. Barth and Messrs. Quinn and Szews qualifies as an “audit committee financial expert” as that term is defined under SEC rules.
We have in the past, and may, in the future, make donations to various charitable organizations. From time to time, some of our directors, officers and employees have been, and in the future may be, affiliated with such charities. During the annual independence review, our GCR Committee determined that any such affiliations did not impact the independence of our directors. We did not make any charitable donations to any organizations affiliated with our directors or officers in 2021.
DIRECTOR RESIGNATION POLICY
Under our director resignation policy, in an uncontested election of directors, any nominee who receives a greater number of votes “against” than votes “for” his or her election will, promptly following the certification of the shareholder vote, tender his or her written resignation to the Board for consideration by the GCR Committee. The GCR Committee will consider the resignation, as well as all factors it considers relevant, and will make a recommendation to the Board concerning whether to accept or reject such resignation.
The Board will take formal action on the recommendation no later than 90 days following the certification of the results of the shareholders’ meeting. The Company will promptly disclose to the public the Board’s decision whether to accept or reject the director’s tendered resignation. If applicable, the Board will also disclose the reason or reasons for rejecting the tendered resignation.
![]() | Proxy Statement 2022 | 10 |
Proxy Statement 2022 | 11
COMMITTEES OF OUR BOARD
Our Board has established four standing committees to assist it in discharging its responsibilities: the Audit Committee, the CHR Committee, the GCR Committee and the Finance/Risk Management Committee. Each committee is required to perform the key 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 Group 1’s:
financial statements and other financial information provided by us to any governmental body or the public;
compliance with legal and regulatory requirements;
the qualifications, performance and independence of our independent registered public accounting firm; and
the effectiveness and performance of our internal audit function.
In addition, 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 held nine meetings during 2021 and acted by unanimous written consent one time.
The Report of the Audit Committee is set forth on page 29 of this proxy statement.
Compensation & Human Resources Committee
Our CHR Committee’s responsibilities are to:
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.
For additional information regarding the role of management in the CHR Committee process, please see “2021 Compensation Discussion and Analysis — Role of the Compensation & Human Resources Committee, its Consultant and Management.”
The CHR Committee held seven meetings during 2021 and acted by unanimous written consent one time.
The Report of the CHR Committee is set forth on page 49 of this proxy statement.
Governance & Corporate Responsibility Committee
Our GCR Committee’s responsibilities are to:
assist our Board by identifying individuals qualified to become members of our Board and recommend director nominees to our Board;
recommend to our Board the appropriate composition of our Board and its committees and Board committee membership and leadership;
advise our Board about and recommend to it appropriate corporate governance guidelines and practices and assist in implementing the same;
oversee the succession of our Chief Executive Officer;
review the Company’s policies governing political contributions and lobbying, and review Company and political action committee political contributions and expenditures;
review matters relating to the Company’s governance and corporate responsibility to confirm compliance with emerging best practices;
review ESG matters, including significant issues of corporate social and environmental responsibility and safety;
review the Company’s material community participation and charitable efforts, including matters relating to the Group 1 Foundation; and
establish, review and approve the compensation of our directors.
The GCR Committee held four meetings during 2021.
Finance/Risk Management Committee
Our Finance/Risk Management Committee assists our Board in its oversight of corporate finance and risk management, including:
review, oversee, advise and report to our Board regarding our financial status and capital structure, debt and equity financings, cash management and other banking activities, compliance with covenants of material debt instruments, investor/shareholder relations, relationships with various financial constituents and securities repurchase activities, and authorize transactions related thereto within limits prescribed by our Board;
review return on investment for our shareholders through dividend and stock repurchase programs;
review and assess risk exposure, including cybersecurity and insurance related to our operations, and authorize transactions within limits prescribed by our Board; and
review capital expenditures and other capital spending plans, including significant acquisitions and dispositions of businesses or assets, and authorize transactions within limits prescribed by our Board.
The Finance/Risk Management Committee held five meetings during 2021 and acted 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: (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 and as needed when significant risks 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.
![]() | Proxy Statement 2022 | 12 |
Proxy Statement 2022 | 13
Each Board committee has a significant role in assisting the Board in overseeing the risks that impact Group 1. Each committee is responsible for overseeing risks associated with its respective area of responsibility as further detailed below.
Committee | Responsibilities | |
Finance/Risk Management Committee | • Oversight of our operations risk, including quarterly reviews of cybersecurity and data protection, litigation management, and enterprise risk management strategies. • Monitors our finance-related activities and provides guidance to management and the Board concerning our capital structure, capital allocation and our long-range financial policies and objectives. • Oversees the formal process to identify risks company-wide, allocate them to the appropriate Board committee, and ensure that risk mitigation activities are being followed. | |
Audit Committee | • Oversight of risks relating to accounting matters, financial reporting and legal and regulatory compliance. • Meets with our management and independent registered public accounting firm regarding the adequacy of our financial controls and our compliance with legal, tax and regulatory matters, as well as our significant financial and accounting policies. • Meets with our vice president of internal audit and with other members of management, to review the identified risk areas and scope and results of the internal audits. • Audit Committee Chair routinely meets between formal Audit Committee meetings with our chief financial officer, general counsel, corporate controller, vice president of internal audit and our independent registered public accounting firm. | |
Compensation & Human Resources Committee | • Oversight of succession planning for our key corporate officers (except our Chief Executive Officer) and the associated risks. • Responsible for overseeing risks relating to employment policies, our compensation policies and programs, including the DEI Council, and our benefits systems. • Has retained its own compensation consultant and meets regularly with management to understand the financial, human resources and shareholder implications of compensation decisions being made. • A separate discussion regarding the risk considerations in our compensation programs, including the processes that are put in place by the CHR Committee and management to identify, manage and mitigate potential risks in compensation, can be found beginning on page 48 of this proxy statement. | |
Governance & Corporate Responsibility Committee | • Oversight of succession planning for our Chief Executive Officer and the associated risks. • Responsible for identifying diverse and qualified Board candidates and other matters related to Board succession planning. • Conducts a review of the performance of the Board and its committees and reviews and reassesses the adequacy of the corporate governance guidelines and recommends any proposed changes to the Board. • Reviews matters relating to the Company’s governance, corporate compliance, and corporate responsibility, including ESG. |
CYBERSECURITY AND INFORMATION SECURITY RISK OVERSIGHT
Our Board recognizes the importance of maintaining the trust and confidence of our customers, vendors, shareholders and employees, and devotes significant time and attention to oversight of cybersecurity and information security risk. At each of its meetings, the FRM Committee receives presentations from our VP, Information Technology, on cybersecurity and information security risk, and on our cybersecurity initiatives. We also engage cybersecurity experts to review, test, evaluate and provide recommendations on our cybersecurity program. Additionally, to assure compliance with our policies and procedures members of our internal audit department regularly visit our dealerships to ensure that our customers’ personal information is protected and secured appropriately. The results of those dealership visits are reported to the Audit Committee. In 2021, our Board, the Finance/Risk Management Committee and the Audit Committee received cybersecurity and information security risk reports at least quarterly.
![]() | Proxy Statement 2022 | 14 |
Proxy Statement 2022 | 15
TRANSPARENCY AND ENGAGEMENT
Governance Documents
Our key governance documents including our Corporate Governance Guidelines and committee charters are available on our Investor Relations website at www.group1corp.com and shareholders 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.
Communications With Directors
Our Board welcomes communications from our shareholders and other interested parties. Shareholders and any other interested parties may send communications to our Board, to any committee of our Board, to the independent Board Chair (who presides over the executive sessions of our independent and non-management directors), or to any director in particular, to:
c/o Group 1 Automotive, Inc.
800 Gessner, Suite 500
Houston, Texas 77024
Attn: Chair of the Board
Any appropriate correspondence addressed to our Board, to any committee of our Board, to the independent Board Chair, or to any one of the directors in care of our offices will be forwarded to the addressee or addressees.
Investor Outreach
Each year, management interfaces with prospective investors, existing shareholders, and buy-side and sell-side investment research analysts in a variety of event formats, to discuss the Company’s publicly disclosed performance, business strategy and outlook, and corporate governance. These events include earnings teleconferences; investor calls, meetings, and conference events; non-deal road trips; and occasionally site visits. Key topics include discussions regarding capital allocation, share repurchases, company growth through acquisitions, the impact of our inventory supply on new and use vehicle sales, market trends, parts and service strategies, successful implementation of our AcceleRide® and Val-u-Line® vehicle sales programs, success with hiring technicians, the impact of the COVID-19 pandemic on our operations, our digital retail strategies, capital allocation, and profitability. This interaction ensures that management and the Board understand and consider the views of our shareholders, perception of the investment community, and industry and economic outlook from the Company’s Wall Street covering analysts, while enabling the Company to dynamically operate in an evolving industry and economy with respect to maximizing return for our shareholders.
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 are committed to transparency in sharing out sustainability progress. For updates on our progress and to access our 2021 Sustainability Report, please visit www.group1corp.com/ESG.
SUSTAINABILITY GOVERNANCE
We are committed to responsible business practices and continuous improvement of the sustainability of our operations and our relationships with our employees and the communities in which we live and work. While our GCR Committee oversees our ESG policies and practices, other Board committees also play a role in our sustainability efforts, relating to cybersecurity, human capital management, health & safety and corporate risk management. In addition, our management team and other employee subject matter experts are responsible for the implementation of our ESG strategy, initiatives and communications.
![]() | Proxy Statement 2022 | 16 |
Proxy Statement 2022 | 17
Election of Directors
Our Board of Directors has nominated nine directors to be elected to serve on our Board until the next annual meeting and the election of their successors. Each nominee was elected to our Board at our last annual meeting on May 12, 2021. Each nominee agreed to be named in this Proxy Statement and to serve if elected.
For more information on the director nominees, please see the section entitled “Qualifications of Our Board of Directors” beginning on page 19.
If any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors.
The number of directors on our Board is reviewed annually and adjusted by our Board from time to time to meet the current needs of the Company.
A majority of votes cast by shareholders entitled to vote in the election of directors is required for the election of directors. This means that director nominees who receive more “for” votes than “against” will be elected for that position. You may vote “for” or “against” with respect to the election of directors. Only votes “for” or “against” are counted in determining whether a majority has been cast in favor of a director. Abstentions are not counted for purposes of the election of directors.
Please see “Director Resignation Policy” on page 10 for a description of our majority vote director resignation policy.
DIRECTOR SKILLS AND DEMOGRAPHICS
Our Board believes that each of our directors is highly qualified to serve as a member of our Board. Our directors are highly educated and have diverse backgrounds and talents and successful records of accomplishment in what we believe are highly relevant positions with well-regarded organizations. Our Board has also considered the experience our directors have from working for, or serving on the boards of, a variety of companies in a wide range of industries. Many of our directors also have served as directors of Group 1 for many years and benefit from an intimate knowledge of our operations and corporate philosophy. Our Board believes that through their varying backgrounds, our directors bring a wealth of experiences and new ideas to our Board.
Described on the following pages are the principal occupations, positions and directorships for at least the past five years of our director nominees, as well as certain information regarding their individual experience, qualifications, attributes and skills that led our Board to conclude that they should serve on our Board. There are no family relationships among any of our directors or named executive officers.
Skills and Demographic Matrix
The following table includes the breadth and variety of business experience that each of our director nominees brings to our Board. | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||
Experience / Knowledge | ||||||||||||||||||||
# of Other Public Company Boards Currently Serving On | 2 | - | 1 | 1* | 1 | 1 | 2 | 2 | 2 | |||||||||||
Former President or CEO | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ||||||||||||||
Public Company Executive Position | ⬛ | ⬛ | ⬛ | ⬛ | ||||||||||||||||
Automotive | ⬛ | ⬛ | IB | ⬛ | ⬛ | |||||||||||||||
Retail | ⬛ | ⬛ | ⬛ | IB | ⬛ | ⬛ | ||||||||||||||
Engineering/Product Development | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | |||||||||||||||
Expertise | ||||||||||||||||||||
International | ⬛ | ⬛ | ⬛ | IB | ⬛ | ⬛ | ⬛ | ⬛ | ||||||||||||
Finance | ⬛ | ⬛ | ⬛ | |||||||||||||||||
Human Resources/Cultural | ⬛ | ⬛ | ⬛ | ⬛ | ||||||||||||||||
Legal | ⬛ | |||||||||||||||||||
Mergers & Acquisitions | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | |||||||||||
Accounting | ⬛ | IB | ⬛ | |||||||||||||||||
P&L/Income Statement Responsibility | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ||||||||||||||
SOX Financial Expert | ⬛ | ⬛ | ⬛ | |||||||||||||||||
Technology | ⬛ | ⬛ | ⬛ | ⬛ | ||||||||||||||||
Attributes | ||||||||||||||||||||
Independent | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | ⬛ | |||||||||||||
Identity (self-identified in D&O Questionnaire) | ||||||||||||||||||||
Gender Identity (Male/Female) | F | M | M | M | M | M | M | F | F | |||||||||||
LGBTQ+ (Yes/No) | N | N | N | N | N | N | N | N | N | |||||||||||
Race/Ethnicity (White, African American/Black, Latino, Multiracial) | W | W | AA/B | W/L/M | W | W | W | W | W |
The lack of a ⬛ for a particular item does not mean that the director does not possess that qualification, characteristic, skill or experience. We look to each director to be knowledgeable in these areas; however, the ⬛ indicates that the item is a specific qualification, characteristic, skill or experience that the director brings to the Board.
IB – covered industry as Investment Banker
*Company is listed on the Brazilian Stock Exchange
![]() | Proxy Statement 2022 | 18 |
Proxy Statement 2022 | 19
DIRECTOR QUALIFICATION AND CONSIDERATIONS
The GCR Committee actively seeks individuals qualified to become members of our Board, seeks to implement the independence standards required by law, applicable listing standards, our Certificate of Incorporation, our Bylaws and Corporate Governance Guidelines. For more information, visit the section titled “Information about Our Board of Directors and its Committees – Director Qualifications and Diversity Considerations” on page 10.
The GCR Committee may consider candidates for our Board from any reasonable source, including from a search firm engaged by the GCR Committee or stockholder recommendations, provided that the procedures set forth below are followed.shareholder recommendations. The GCR Committee does not intend to alter the manner in which it evaluateswill evaluate candidates based on whether the candidate is recommended by a stockholdershareholders using the same criteria as for other candidates recommended by its members, other members of the Board, or not. However, in evaluating a candidate’s relevant business experience, the GCR Committee may consider previous experience as a member of our Board.other persons. Any invitation to join our Board must be extended by our Board as a whole, by the Chairman of the GCR Committee Chair and by the Chairman of the Board.Board Chair.
StockholdersShareholders or a group of stockholdersshareholders may recommend potential candidates for consideration by the GCR Committee. For additional information on such requests and the applicable timing, please see “Stockholder“Shareholder Proposals for 20222023 Annual Meeting.”
QUALIFICATIONS OF OUR BOARD OF DIRECTORS
![]() | CARIN M. BARTH Co-Founder and President of LB Capital, Inc., a private equity investment firm Audit Committee Chair Age Director | Independent Director Audit Committee Financial Expert | Other Current • Enterprise Products Holdings, LLC • Black Stone Minerals, L.P.
| Other Directorships Within • 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 | |||||
Career | ||||||||||
• Co-Founder and President of LB Capital, Inc. since 1988 • Currently serves on the • Former board member and current Emeritus board member of Ronald McDonald House of Houston | • Commissioner of the Texas Department of Public Safety from 2008 to 2014 • 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 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. |
![]() |
![]() | EARL J. HESTERBERG President and Chief Executive Officer of Group 1 Age Director | Other Current None
| Other Directorships Within • Stage Stores, Inc. | Degrees B.A. in Psychology, Davidson College; M.B.A, Xavier University | ||||
Career | ||||||||
• 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 |
![]() | STEVEN C. MIZELL Executive Vice President and Chief Human Resources Officer at Merck & Co., Inc., a multinational pharmaceutical company Age Director
| Independent Director Other Current • Allegion plc
| Other Directorships Within • Oshkosh Corporation |
Degrees B.S. in Industrial Management, Georgia Institute of Technology; M.S. in Management, Carnegie Mellon University | ||||
Career | ||||||||
• Responsible for all aspects of human resources at Merck & Co. since 2018, which has been recognized as one of the Top 10 Best Workplaces in Health Care and Biopharma by Fortune and Great Place to Work, Best Workplace for Innovators by Fast • Joined Monsanto, a global leader in sustainable agriculture, as Senior Vice President, Chief Human Resources Officer in 2004; served as Executive Vice President, Chief Human Resources Officer from 2007 to 2018 | • Previously served as Senior Vice President and Chief Corporate Resources Officer for AdvancePCS, a pharmaceutical company • Currently serves on the board of the United Way Charmaine Chapman Society of St. Louis • Recognized as one of St. Louis’s most influential Diverse Business Leaders • National Association of Corporate Directors (NACD) Directorship Certified
| |||||||
Mr. Mizell’s human resource management expertise from his position with an international, publicly traded company makes him well qualified to serve as a member of our Board. His extensive, global leadership experience and knowledge of human capital management provides our Board with valuable insights. Mr. Mizell was identified as a potential Board candidate by a current member of the Board. |
![]() |
![]() | Proxy Statement 2022 | 20 |
Proxy Statement 2022 | 21
![]() | LINCOLN PEREIRA FILHO Regional Vice President, Brazil of Group 1
Age 62 Director Since 2013 | Other Current • Boa Vista Serviços S.A.-SCPC • Tempo Telecomunicações • Associação Brasileira dos Concessionários BMW • Associação Brasileira dos Distribuidores Toyota | Other Directorships Within None |
Degrees LL.B, Faculdade de Direito do Largo de São Francisco; London Business School | ||||
Career | ||||||||
• Regional Vice President, Brazil of Group 1 since 2013 • 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 1999 to 2005 • Previously practiced law with Cunha Pereira Advogados, representing professional athletes and international racecar drivers, from 1995 through 2005 • Founded Atrium Telecomunicações Ltda, a provider of local exchange telecommunication services, in 1999. Atrium was sold to Telefónica of Spain in December 2004 | • Founded E-Vertical Tecnologia, a leading provider of high tech facilities management services to commercial properties • Serves as Vice President of the São Paulo Chamber of Commerce (ACSP) • Held numerous positions with various banks, both in Brazil and abroad, from 1978 through 1995 | |||||||
| ||||||||
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 |
![]() | STEPHEN D. QUINN Former General Partner and Managing Director of Goldman, Sachs & Co. Non-Executive Chair of the Board Age Director | Independent Director Audit Committee Financial Expert | Other Current • Zions Bancorporation
| Other Directorships Within
None | Degrees B.S. in Economics, Brigham Young University; M.B.A., Harvard University Graduate School of Business | |||||
Career | ||||||||||
• Joined Goldman, Sachs & Co., a full-service global investment banking and securities firm, in August 1981, where he specialized in corporate finance | • Served as a General Partner and Managing Director of Goldman, Sachs & Co. from 1990 until his retirement in 2001 | |||||||||
| ||||||||||
Mr. Quinn was selected to serve as a director on our Board due to his valuable financial expertise and extensive experience with capital markets transactions. His judgment in assessing business strategies and the accompanying risks is an invaluable resource for our business model. Mr. Quinn also has significant historical knowledge of our Company as a result of his role at Goldman Sachs, an underwriter for our initial public offering. The Board believes his experience and expertise in these matters make him well qualified to serve as a member and Chair of |
![]() |
![]() | STEVEN P. STANBROOK Former Chief Operating Officer, International Markets of S.C. Johnson, Inc. Age Director | Independent Director
| Other Current
• Primo Water Corporation
| Other Directorships Within • Chiquita Brands International, Inc. • Hewitt Associates, Inc.
• Imperial Brands plc | Degrees HNC in Business Studies, Thames Valley University, U.K. | |||||
Career | ||||||||||
• Retired from S.C. Johnson, Inc., a global manufacturer and marketer of household products, in 2015, following a distinguished 19-year career serving in various roles, including most recently as Chief Operating Officer, International Markets • Previously held a variety of senior leadership positions with both Sara Lee Corporation, including Chief Executive Officer of Sara Lee Bakery, and CompuServe, the leading, global Internet Service Provider | • Over 30 years of experience operating across the global consumer package goods sector | |||||||||
| ||||||||||
Mr. Stanbrook was selected to serve on our Board due to his extensive international operational experience and his background in business development. His previous and current board positions on other publicly traded companies, combined with his global operational experience in a variety of senior management positions, have provided him with a wealth of knowledge in dealing with complex strategic, business matters. |
![]() | CHARLES L. SZEWS Former Chief Executive Officer of Oshkosh Corporation FRM Committee Chair Age Director | Independent Director Audit Committee Financial Expert | Other Current • Commercial Metals Company • Allegion plc
| Other Directorships Within • Rowan Companies plc • Valaris plc | Degrees B.B.A. in Comprehensive Public Accounting, University of Wisconsin – Eau Claire | |||||
Career | ||||||||||
• Joined Oshkosh Corporation, a leading global manufacturer of specialty vehicles and vehicle bodies serving access equipment, defense, fire and emergency, and commercial markets, as Vice President and CFO in 1996; appointed Executive Vice President in October 1997; appointed President and Chief Operating Officer in October 2007 | • Served as Chief Executive Officer at Oshkosh Corporation from January 2011 until his retirement in 2016 • Vice President and Controller at Fort Howard Corporation during its leveraged buyout • Began his career with Ernst & Young | |||||||||
| ||||||||||
Mr. Szews was selected to serve on our Board due to his extensive operational and financial experience and his background in public accounting, auditing and risk management. His previous and current board positions on other publicly traded companies have provided many years of audit committee experience, including as chair. Mr. Szews’ extensive financial and audit experience in a variety of senior management positions, combined with his global operational experience in vehicle manufacturing and distribution, including autonomous and electric vehicles, have provided him with a wealth of knowledge in dealing with complex strategic, financial and accounting matters. |
![]() |
![]() | Proxy Statement 2022 | 22 |
Proxy Statement 2022 | 23
![]() | ANNE TAYLOR Former Vice Chairman and Managing Partner CHR Committee Chair Age Director
| Independent Director Other Current • Southwestern Energy Company • Whiting Petroleum Corporation
| Other Directorships Within
None | Degrees B.S. in Engineering, University of Utah; M.S. in Engineering, University of Utah; Attended Princeton University, pursuing Ph.D studies in Transportation Engineering | ||||
Career | ||||||||
• Joined Deloitte, a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services in 1987, serving as Regional Managing Partner, Chief Strategy Officer and Global Leader for e-business; served as Vice Chairman and Managing Partner of the Houston office from 2013 until her retirement in 2018; chaired the strategic review of the proposed transaction to separate Deloitte Consulting while serving on Deloitte’s Board of Directors • Became the first woman to serve on Deloitte’s US executive committee and the management committee of Deloitte Global | • Currently serves on the board of Memorial Hermann Hospital System and Central Houston, Inc. and previously served on the boards of the Greater Houston Partnership and United Way of Greater Houston • President and sole owner of ATStrategies, LLC, a private consulting firm • Currently serves on the Board of Directors of Conway Mackenzie and as a consultant for Flynn Heath Leadership • Previously served as the strategic partner advisor to the World Economic Forum’s Technology Pioneer Program
| |||||||
Ms. Taylor is financially literate and has participated in audit committee meetings of many Deloitte clients. She was selected to serve on our Board due to her management and leadership experience, extensive background in global technology, development and execution of business strategy, and corporate governance experience. |
![]() | MARYANN WRIGHT Former Group Vice President of Johnson Controls International GCR Committee Chair Age Director
| Independent Director Other Current
• Micron Technology, Inc.
| • Brunswick Corporation Other Directorships Within • Delphi Technologies
• Maxim Integrated Products, Inc. | Degrees B.A. in Economics and International Business; M.S. in Engineering, University of Michigan; M.B.A., Wayne State University | ||||
Career | ||||||||
• Worked for Johnson Controls Power Solutions, the global leader in automotive lead-acid and advanced batteries, from 2007 through 2017, served as Group Vice President of Engineering & Product Development from 2013 through 2017, and Vice President of Technology and Innovation from 2009 to 2013. She served as Vice President and General Manager for Johnson Controls Hybrid Systems business and as CEO of Johnson Controls-Saft from 2007 through 2009. • Previously served as Executive Vice President Engineering, Product Development, Commercial and Program Management for Collins & Aikman Corporation | • Served as Director, Sustainable Mobility Technologies and Hybrid Vehicle Programs at Ford Motor Company from 1988 through 2005; Chief Engineer of the 2005 Ford Escape Hybrid, the industry’s first full hybrid SUV; led the launch of Ford’s first hydrogen-powered fuel cell fleet program • Owner of TechGoddess, LLC, a technical consulting firm • Board Chair of the Friends of Animals for Metro Detroit | |||||||
| ||||||||
Ms. Wright was selected to serve on our Board because of her extensive experience and her knowledge of the automotive industry, having been named one of the “Leading 100 Women in the Automotive Industry” by Automotive News. Her unique business, manufacturing, engineering and technology background and her extensive global automotive experience make her well qualified to serve as a member of |
Our Board of Directors Recommends a Vote “FOR”“FOR” the Election of each of the Nominees for Director.
![]() | ||
[THIS PAGE INTENTIONALLY LEFT BLANK]
![]() | Proxy Statement 2022 | |
Pursuant toProxy Statement 2022 | 25
Advisory Vote on Executive
Compensation
In accordance with the requirements of Section 14A of the Exchange Act, our stockholders are entitledshareholders have the opportunity to cast an annual advisory vote during the Annual Meeting to approve, on a non-binding advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement. As an advisory vote, this Proposal 2 is not binding on our Board or the Compensation and Human Resources (“CHR”) Committee, will not overrule any previous decisions made byGroup 1, our Board or the CHR Committee, or require our Board or the CHR Committee to take any future or remedial action. Although the vote is non-binding,Committee. However, the CHR Committee will take into account the outcome of the vote when considering future compensation decisions regarding our named executive compensation decisions.
officers.
Our Board recognizes that executive compensation is an important matter for our stockholders.shareholders. As described in detail inyou consider this Proposal 2, we urge you to read the CD&A section of this proxy statement for additional details on executive compensation, including the more detailed information about our compensation philosophy and objectives, the decisions made by the CHR Committee is taskedin 2021, and the tabular disclosures regarding our named executive officers’ compensation together with the implementationaccompanying narrative disclosures in the “Executive Compensation” section of this proxy statement.
As described in the CD&A, we believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our executiveshareholders and that the total compensation philosophy. The core of that philosophy has been and continuespackage provided to be to pay our named executive officers compensation that is competitive with amounts paid by our peer companies based on individual and Company performance. In particular, the CHR Committee strives to attract, retain and motivate talented executives, to reward past performance measured against established goals, to provide incentives for future performance, and to align executives’ long-term interests with the interests(including potential payouts upon a termination or change of our stockholders. To do so, the CHR Committee uses a combination of short- and long-term incentive compensation to reward near-term performance and to encourage our executives’ commitment to our long-range, strategic business goals. It is always the intention of the CHR Committee that our named executive officers be compensated competitively and in a manner thatcontrol) is consistent with market practice. We also believe our strategy, sound corporate governance principles,executive compensation is reasonable and stockholder interests and concerns. Our Board believes that our compensation policies and practices are effective in achieving our Company’s goals of rewarding sustained financial and operating performance, leadership excellence and aligning the executives’ long-term interests with those of our stockholders.
competitive.
We believe that it is appropriate to seek the views of our stockholdersshareholders on the design and effectiveness of our executive compensation program, and we value your opinion. Based on the stockholdershareholder vote on the frequency of an advisory vote on executive compensation that took place at our 2019 Annual Meeting of Stockholders,Shareholders, our Board determined to continue holding the vote on executive compensation annually until the next stockholdershareholder vote on the frequency of such advisory vote.
At our 20202021 Annual Meeting of Stockholders, 95%Shareholders, 97% of the shares voted on the say-on-pay vote (as defined below) were in favor of the compensation paid to our named executive officers. The CHR Committee believes this vote strongly endorses the compensation philosophy, policies and practices of the Company and, therefore, it did not make any significant changes in the structure of our executive compensation program as a result of this say-on-pay vote.
As described in the CD&A, we believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our stockholders and that the total compensation package provided to our named executive officers (including potential payouts upon a termination or change of control) is consistent with market practice. We also believe our executive compensation is reasonable and competitive.
As you consider this Proposal 2, we urge you to read the CD&A section of this proxy statement for additional details on executive compensation, including the more detailed information about our compensation philosophy and objectives and the past compensation of our named executive officers, and to review the tabular disclosures regarding our named executive officers’ compensation together with the accompanying narrative disclosures in the “Executive Compensation” section of this proxy statement.
say-on-pay vote.
In light of these reasons, we are recommending that our stockholdersshareholders vote “FOR”“FOR” the following resolution:
“RESOLVED, that the compensation paid to our Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby Approved.”
Our Board of Directors Recommends a Vote “FOR”“FOR” the Non-Binding Advisory Approval of our Executive Compensation.
[THIS PAGE INTENTIONALLY LEFT BLANK]
![]() | ||
![]() | Proxy Statement 2022 | |
Proxy Statement 2022 | 27
| Ratification of the Appointment of |
In early 2020, the Audit Committee performed its annual evaluation of the external auditor as part of its responsibilities. After careful consideration, the Audit Committee determined that a different perspective would be beneficial to the Company. The Audit Committee chose not to renew the engagement of Ernst & Young following the filing of the Company’s Annual Report on Form 10-K in February 2020.
Ernst & Young’s reports on the financial statements for fiscal year ended December 31, 2019 did not contain any adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. During the fiscal year ended December 31, 2019 and the subsequent period through February 14, 2020 (the date of Ernst & Young’s dismissal), (i) there were no “disagreements” (as defined in Item 304(a) (1)(iv) of Regulation S-K) with Ernst & Young on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to the satisfaction of Ernst & Young, would have caused Ernst & Young to make reference thereto in its reports on the consolidated financial statements for such fiscal years; and (ii) there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K).
Following extensive discussion, the Audit Committee appointed Deloitte & Touche LLP (“Deloitte”) as of February 14, 2020 as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2020. Our
Independent Registered Public Accounting Firm
The Audit Committee believes that the engagement ofhas reappointed Deloitte as the Company’s independent registered public accounting firm for 2021 is in the best interestand as auditors of the Company and its stockholders. We have been advised by Deloitte that the firm is independent and has no relationship with Group 1 or its subsidiaries other than that arising from the firm’s engagement as auditors, tax advisors and consultants.Company’s consolidated financials for 2022. The Audit Committee has also discussed Deloitte’s independence with Deloitte since its appointment. Duringreviews the fiscal year ended December 31, 2020, neither the Company nor anyone on its behalf consulted with Deloitte regarding anyperformance of the matters or events set forth in Item 304(a)(2)(i) or (ii)independent registered public accounting firm annually. In making the determination to re-appoint Deloitte for 2022, the Audit Committee considered, among other factors, the independence and performance of Regulation S-K.Deloitte, and the quality and candor of Deloitte’s communications with the Audit Committee and management. Deloitte has served as the Company’s independent registered public accounting firm since 2020. Representatives of Deloitte will be present during the Annual Meeting and will have the opportunity to make a statement and respond to appropriate questions from stockholders. Representatives of Ernst & Young will not be present at the Annual Meeting.shareholders.
The ratification of our Audit Committee’s appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2021 requires our receiving the affirmative vote of the holders of a majority of our common stock present in person or represented by proxy and entitled to vote on the proposal. Although ratification is not required, by our bylaws or otherwise, as a matter of good corporate governance, we are asking our stockholdersshareholders to approve the selection of Deloitte as our independent registered public accounting firm. The Board of Directors recommends that stockholders ratify the selection of Deloitte as the independent registered public accounting firm for the Company for 2021. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interest and the best interest of our stockholders.
shareholders.
Our Board of Directors recommends a vote “FOR”“FOR” Ratification of the Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2021.2022.
![]() |
Audit and Other FeesFEES PAID TO AUDITORS
Set forth below is a summary ofThe following table shows the fees paid for professional services provided byto Deloitte for services related to the fiscal yearyears ended December 31, 2020.2020 and 2021. In determining the independence of Deloitte, the Audit Committee considered whether the provision of non-audit services is compatible with maintaining Deloitte’s independence.
Type of Fees | 2020 | |||
Audit Fees(1) | $ | 2,125,000 | ||
Audit Related Fees(2) | 100,000 | |||
Tax Fees(3) | 308,000 | |||
All Other Fees(4) | — | |||
TOTAL | $ | 2,533,000 |
Type of Fees | 2021 | 2020 | ||||||
Audit Fees1 | $ | 2,740,000 | $ | 2,125,000 | ||||
Audit Related Fees2 | 125,000 | 100,000 | ||||||
Tax Fees3 | 140,000 | 308,000 | ||||||
All Other Fees4 | — | — | ||||||
TOTAL | $ | 3,005,000 | $ | 2,533,000 |
Audit fees consisted of amounts accrued for services performed in association with the integrated audit of the Company’s consolidated financial statements for 2020 and 2021, and attestation of the effectiveness of the Company’s internal controls over financial reporting (including required quarterly reviews). Other procedures included consultations on audit or accounting matters that arise during or as a result of the audit or quarterly reviews. Audit fees for 2021 also include fees related to acquisition and divestiture activity during the year. Also included in audit fees are amounts accrued for assurance and related services that are related to the performance of the audit or review of our financial statements or that are traditionally performed by the independent registered public accounting firm, consisting primarily of statutory audits. Audit fees exclude reimbursed expenses of $63,000 and $85,000 for 2020 and 2021, respectively, in conjunction with their services. |
Included in Audit Related Fees are amounts |
Tax fees consisted of amounts billed in 2020 and 2021 for tax planning and consultation and tax compliance services. |
There were no other fees in |
Set forth below is a summary of fees paid for professional services provided by Ernst & Young for services related to fiscal year ended December 31, 2019. In determining the independence of Ernst & Young, the Audit Committee considered whether the provision of non-audit services is compatible with maintaining Ernst & Young’s independence.
Type of Fees | 2019 | |||
Audit Fees(1) | $ | 2,519,800 | ||
Audit Related Fees(2) | — | |||
Tax Fees(3) | 81,400 | |||
All Other Fees(4) | — | |||
TOTAL | $ | 2,601,200 |
The Audit Committee considered whether the provision of these services was compatible with maintaining Ernst & Young’s independence and Deloitte’s independence and has determined such services for fiscal 20192020 and 20202021 were compatible. All of the services described above were pre-approved by the Audit Committee pursuant to paragraph (c)(7) of Rule 2-01 of Regulation S-X under the Exchange Act.
The Audit Committee has established a policy requiring pre-approval by the Audit Committee of all services (audit and non-audit) to be provided to us by our independent registered public accounting firm. In accordance with this policy, the Audit Committee had given its annual approval for the provision of audit services by Ernst & Young for 2019 and by Deloitte for 2020 and 2021 and had also given its approval for up to a year in advance for the provision of particular categories or types of audit-related, tax and permitted non-audit services, in each case subject to a specific budget.
Any proposed services to be provided by the independent registered public accounting firm not covered by one of these approvals, including proposed services exceeding pre-approved budget levels, requires special pre-approval by the Audit Committee. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent registered public accounting firm to management. All of the services listed above were pre-approved pursuant to this policy.
![]() | ||
![]() | Proxy Statement 2022 | |
Proxy Statement 2022 | 29
The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities relating to our accounting policies, reporting policies, internal controls, compliance with legal and regulatory requirements, selection of the independent registered public accounting firm and the integrity of Group 1’s financial reports. The Board of Directors, upon the recommendation of its Governance & Corporate Responsibility Committee, has determined that each member of the Audit Committee has the requisite independence and other qualifications for audit committee membership under New York Stock Exchange corporate governance listing standards, the Sarbanes-Oxley Act of 2002, the Audit Committee Charter and the Group 1 Automotive, Inc. Corporate Governance Guidelines.
Each year, the Audit Committee reviews the work and status of its independent accounting firm with the Company. In 2019, after careful consideration, the Audit Committee determined that a different perspective with in-depth auto retail experience would be beneficial to the Company. The Audit Committee reviewedhas the qualifications of the remaining public accounting firms with experienceduties and powers described in our industry and decided to interview Deloitte & Touche LLP. After several discussions between the Audit Committee, members of our senior management team and members of Deloitte who would service our account, the Audit Committee decided to retain the accounting services of Deloitte for the fiscal year beginning in 2020. Deloitte also provides non-audit services, including among others, tax planning and consultation and tax compliance.
The Audit Committee acts under aits written charter adopted and approved by the Board of Directors. The Audit Committee reviews and reassesses the adequacyA copy of the charter on an annual basis. Based on the recommendation of the Audit Committee, the Board approved updates to the Audit Committee charter at a regularly scheduled meeting in February 2021. The Audit Committee charter is posted on our Investor Relations website, www.group1auto.comwww.group1corp.com, and you may obtain a printed copy of the Audit Committee charter by sending a written request to Group 1 Automotive, Inc., 800 Gessner, Suite 500, Houston, TX 77024, Attn: Corporate Secretary.
The Audit Committee assists the Board’s oversight and monitoring of the Company’s system of internal controls, including the internal audit function. The Audit Committee discussed with our internal auditors the overall scope and plans for the 20202021 audit. At each Audit Committee meeting, the Audit Committee is provided the opportunity to meet with the internal auditor with, and without, management present. During 2020,2021, management made updates to its internal control documentation for changes in internal control and completed its testing and evaluation of the Company’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. The Audit Committee has kept apprised of the progress of the evaluation and provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received updates provided by management and the independent auditor at each regularly scheduled Audit Committee meeting and met in executive session separately with the internal and the independent auditor to discuss the results of their examinations, observations and recommendations regarding internal control over financial reporting.
The independent registered public accounting firm is accountable to the Audit Committee, and the Audit Committee has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent registered public accounting firm. The Audit Committee engages in an annual evaluation of the independent public accounting firm’s qualifications, assessing the firm’s quality of service, the firm’s sufficiency of resources, the quality of the communication and interaction with the firm, and the firm’s independence. The Audit Committee makes its selection based on the best interests of the Company and its stockholders.shareholders. The Audit Committee participates in the selection and annual evaluation of the leadLead Audit Partner (the “Lead Partner”) of the independent registered public accounting firm through its review of the Lead Partner’s professional qualifications, experience, and prior performance on the Company’s audit (if any), through in-person meetings with the Lead Partner, and through discussion between the Audit Committee and management regarding the selection of the Lead Partner.
The Audit Committee has reviewed and discussed with management and Deloitte, our audited financial statements as of and for the year ended December 31, 2020.2021. The Audit Committee also discussed with Deloitte the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Commission.
Deloitte submitted to the Audit Committee the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the firm’s communications with the Audit Committee concerning its independence. The Audit Committee discussed with Deloitte such firm’s independence. The Audit Committee also considered whether the provision of non-audit services to our Company by Deloitte was compatible with maintaining their independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements referred to above be included in our Annual Report on Form 10-K for the year ended December 31, 2020,2021, for filing with the SEC.
Respectfully submitted by the Audit Committee of the Board of Directors of Group 1,
Carin M. Barth (Chair)
Carin Barth (Chairman)
Stephen D. Quinn
Steven P. Stanbrook
Charles L. Szews
Anne Taylor
![]() | ||
![]() | Proxy Statement 2022 | |
Proxy Statement 2022 | 31
Except as described under the heading “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table”, our named executive officers serve at the discretion of our Board. The following table setsbiographies set forth certain information as of the date of this proxy statement regarding our named executive officers:officers other than Mr. Hesterberg whose biography can be found on page 20:
DARYL A. | KENNINGHAM President, U.S. and Brazilian Operations | |||
Mr. Hesterberg’s biographical information may be found on page 33 of this proxy statement.
![]() Age 57 Appointed in 2019 |
| Previous Group 1 Positions • President, U.S. Operations from 2017 to 2019 • Regional Vice President – West Region from 2016 to 2017 •Regional Vice President – East Region from 2011 to 2016 | Degrees B.A. in Psychology, University of Michigan; M.B.A, University of Florida | |||
Experience:
Experience • | Prior to joining Group 1, he most recently served as Chief Operating Officer of Ascent Automotive |
• | Held a variety of executive positions from 1998 to 2011, including Senior Vice President of Gulf States Toyota, President of Gulf States Financial Services, and President of USA Logistics (previously known as Gulf States Transportation) |
• | Began his career at Nissan Motor Corporation in 1988 |
Degrees: B.A. in Psychology, University of Michigan; M.B.A, University of Florida
![]() | ||||
DANIEL Senior Vice President and Chief
Age 47 Appointed | Previous Group 1 Positions •U.K. Finance Director from 2007 to 2020 | |||
Degrees
Experience:
Degrees: BSc in Economics, Queens University Belfast; MSc in Accounting & Management, Southampton University
![]() |
Experience • Member of the Association of Chartered and Certified Accountants in the U.K. • Joined Chandlers BMW in 2004 before its acquisition by Group 1 in 2007 • Prior to entering the auto retail business, he spent five years with KPMG | ||||
![]() FRANK GRESE, JR. Senior Vice President, Training, Operations Support and Employee Communications Age 70 Appointed in 2022 |
| Previous Group 1 Positions • | ||
Experience:
Degrees: B.S.B.A. in Finance and M.B.A, The Ohio State University
![]() |
|
• Regional Vice President – West Region from 2006 to 2016 • Platform President of Group 1 Atlanta from 2004 to 2005
| Degrees B.A. in Journalism, University of Georgia | |||
Experience:
Experience
• | Immediately prior to joining Group 1 in 2004, he served as Director of Dealership Operations for a large, private dealer group |
• | Previously held various executive positions, including Chief Operating Officer and District President, with large public and private dealer groups |
• | Joined Nissan in 1982, where he ultimately served as National Dealer Advertising Manager until 1986 |
• | Began his automotive career in the Ford Management Training Program in 1974 |
Degree: B.A. in Journalism, University of Georgia
![]() | ||||||
PETER C. DELONGCHAMPS Senior Vice President, Manufacturer
Age 61 Appointed | Previous Group 1 Positions • Vice President, Manufacturer Relations, Financial Services and Public Affairs from 2012 to 2017 • Vice President, Manufacturer Relations and Public Affairs from 2006 to 2011 • Vice President, Manufacturer Relations from 2004 to 2005 | Degrees B.B.A. in Marketing, Baylor University | ||||
Experience:
Experience
• | Prior to joining Group 1, he was President of Advantage BMW, a Houston-based automotive retailer, from 1997 to 2004 | ||
• | Began his automotive retailing career in 1980, having held several positions, including District Manager for General Motors Corporation and Regional Operations Manager for BMW of North America | ||
• | Serves on the Board of Directors of Junior Achievement of Southeast Texas, Houston Christian High School and the Texas Bowl | ||
Degree: B.B.A. in Marketing, Baylor University
![]() | ||
![]() | Proxy Statement 2022 | |
2020 Compensation Discussion and Analysis
ThroughProxy Statement 2022 | 33
and Analysis
Following the unprecedented yearevents of 2020, Group 1 adapted, evolved, and emerged stronger as a Company.Company in 2021. Our team worked tirelessly to navigate the unique challenges of the COVID-19 pandemic, executing an aggressiveespecially supply chain disruptions, by maintaining strong cost reduction plan to preservecontrol and preserving liquidity, in our U.S., U.K. and Brazil regions andwhile making significant investments to keepincrease the size and improve the strength of our employees and customers safe.Company. As a result of reengineering its processes,these efforts, the Company achieved solid results in 2020, which included revenue of $10.9 billionrecord sales and an earnings per share of $15.51, an increase of 66.0% as compared to 2019.profits. Our solidstrong performance was the result of an experienced, focused management team and dedicated employees that responded to the continued focus by executive management and the operating team on the controllable elements of our business model.
challenges we faced.
This Compensation Discussion and AnalysisCD&A provides a detailed description of our executive compensation philosophy, and programs, the compensation decisions the Compensation and Human Resources Committee (the “CHR Committee”) has made under those programs and the factors considered in making those decisions.compensation determinations of the CHR Committee. As discussed in greater detail below, our compensation plans are designed to reward our named executive officers for the achievement of these results for our Company and our stockholders.results. The Compensation Discussion and AnalysisCD&A focuses on the compensation of our named executive officers as of December 31, 2020,2021, who were:
Earl J. Hesterberg President and Chief Executive Officer; Daryl A. Kenningham President, U.S. and Brazilian Operations; Daniel McHenry Senior Vice President and Chief Financial Officer; Frank Grese, Jr. Senior Vice President, Human Resources, Training and Operations Support; and Peter C. DeLongchamps Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs. COMPENSATION AND CORPORATE GOVERNANCE Our executive compensation and governance programs are designed to link pay with operational performance and increases in long-term shareholder value while minimizing incentives that could lead to excessive risk-taking. We have adopted the following policies and practices over time to accomplish such objectives:
ROLE OF THE COMPENSATION & HUMAN RESOURCES COMMITTEE, ITS CONSULTANT AND MANAGEMENT The CHR Committee
The CHR Committee has engaged Pearl Meyer & Partners, LLC (“PM&P”), an executive compensation firm, to serve as its independent compensation consultant
In February 2022, the CHR Committee considered the independence of PM&P CALIBRATING OUR EXECUTIVE COMPENSATION Compensation
Philosophy The CHR Committee believes that the most effective executive compensation program is Our strategic business focus during the fiscal year ended December 31,
increase total same store gross profit through focused efforts in the new vehicle, used vehicle, finance and insurance, parts, service and collision departments;
maintain a cost level that aligns with the anticipated level of business activity; implement additional health and safety measures to protect our employees and customers in response to the COVID-19 pandemic;
Proxy Statement 2022 | 35 seek strategic acquisition and divestiture opportunities within the automotive retail market so that we can continue to optimize our business operations in the U.S. and the U.K.; and maintain a balanced capital allocation strategy including share repurchases, dividends and effective capital spending. Our named executive officers’ individual or functional goals for the fiscal year ended December 31,
sustain sales momentum;
control costs and expenses as sales levels fluctuate; dispose of underperforming dealerships and deploy the proceeds into other capital opportunities with drive the
identify and successfully close acquisition targets.
Companies. While we do not think it is appropriate to establish compensation based solely on market analysis, we believe that the practice of comparing our compensation program to the programs of our peers can be 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 Our Peer Companies include all of the publicly traded automotive consolidators and specialty retailers associated with automotive sales, and automotive parts and service against whom we most directly
When evaluating the compensation data and making compensation decisions, the CHR Committee has taken into consideration the variance in revenue size among the entities comprising our Peer Companies. Additionally, when calculating a market value, the CHR Committee has considered other differences between our Peer Companies and us, such as corporate structure, tenure of officers, variance in scope of duties for each officer and other factors. However, any application of market analysis data is tempered by our basic staffing philosophy, which is to remain as lean as practical. This guiding principle results in certain of our named executive officers having a broad range of job responsibilities, which, at certain of our Peer Companies, may be divided among multiple executive officers. The CHR Committee’s use of market analysis data for specific compensation components is described in more detail below. Comprehensive Compensation Reviews
In addition to such consideration given to the results of the say-on-pay vote, at various times throughout the year the CHR Committee considers input from shareholders and other stakeholders as well as more general developments in executive compensation principles. The CHR Committee uses this information to develop and implement the Company’s executive compensation
Proxy Statement 2022 | 37 Compensation Program Structure Our executive compensation program
Base Salary Design We provide our named executive officers with
Following the comprehensive compensation review, and considering certain economic conditions impacting the Company at that time, the CHR Committee approved a 3% increase to the base salaries for our named executive officers, except for Mr. Hesterberg whose increase was approved by the independent directors of the Board. The increases became effective January 1, 2021. In November
Annual Incentive Compensation Plan Annual cash incentive awards are intended to align our annual performance and results with the compensation paid to persons who are most responsible for such performance, and to motivate and reward achievement of Company and individual or functional performance objectives. Meaningful, performance-related goals are established so that attaining or exceeding the performance targets is not assured, requires significant effort by each of our named executive officers, and if accomplished, contributes to the ongoing overall improvement and success of the Company. For
Proxy Statement 2022 | 39 The following is a description of the
Financial Goal The CHR Committee meets in November to determine appropriate financial metrics for the upcoming year, and has a general compensation philosophy of setting challenging, yet attainable, performance goals. PM&P provides the CHR Committee with market data and other information about the Company’s peers, which the CHR Committee reviews in the context of the Company’s short-term and long-term strategy, along with the metrics used in previous years. The CHR Committee evaluates information and analyses provided by management and PM&P to assess which metrics are expected to properly motivate management to produce short-term and long-term value for its shareholders.
Under the
Mission-based Goals Mission-based goals typically include specific goals that are related to the individual’s functional area and are established at the beginning of each fiscal year jointly by the named executive officer and our Chief Executive Officer and reviewed by the CHR Committee, or in the case of the Chief Executive Officer, by the CHR Committee and the Board. These goals are integral toward achieving key business objectives, such as those listed on
The CHR Committee determined that for
Proxy Statement 2022 | 41
Results For In connection with its review of the performance of our Chief Executive Officer, the CHR Committee determined that Mr. Hesterberg had achieved 100% of his Based on the CHR Committee’s evaluation of the performance of each of our named executive officers, it determined the degree to which each named executive officer had achieved his goals and the following amounts of incentive compensation were paid with respect to the
Annual Incentive Compensation Plan Changes for Fiscal 2022 In
Long Term Equity Incentive Compensation Design To align the compensation of our named executive officers with the attainment of our business goals and an increase in We believe that restricted stock, subject to time-based vesting requirements, appropriately aligns management’s interests with those of our Company and our When determining the size of the awards, we typically consider amounts that would provide our named executive officers with long-term incentive opportunities that, when performance is above target, results in pay above the median of our Restricted Stock Awards Vesting of equity-based awards are intended to facilitate retention, and the restricted stock shares vest over a five-year period with the restrictions relating to the awards lapsing 40% after two years and 20% in each year thereafter. Since 2008, our vesting provisions have been based on the passage of time. Under the terms of the current restricted stock award agreements, in the event of death or disability of any employee with unvested awards, all granted but unvested restricted stock awards will automatically vest.
For more information on the potential vesting (or forfeiture) of Control — GROUP 1 AUTOMOTIVE 2014 LONG TERM INCENTIVE PLAN.” Performance Share Awards We designed 50% of the performance shares or 12.5% (50% x 25%) of the total 2021 annual equity-based grant, to be based on
Proxy Statement 2022 | 43 These performance criteria are to be measured over a two-year performance period 2023. The For details regarding the potential vesting (or forfeiture of) the Performance Share Awards, please see the section entitled “Executive Compensation – Potential Payments upon Termination or Change in Control – GROUP 1 AUTOMOTIVE 2014 LONG TERM INCENTIVE PLAN.” The performance share agreements under the LTIP for our named executive officers provide that upon a named executive officer’s termination due to death or disability, the performance shares will pay out following the performance period based on actual performance. If a named executive officer’s employment is terminated due to a planned retirement (generally defined as a mutually agreed upon retirement by the officer and the Company), the performance shares will convert to time-based restricted stock awards that will continue to vest, subject to the officer’s compliance with applicable restrictive covenants, until the second anniversary of the named executive officer’s termination of employment. Such a conversion will occur based on the actual performance achieved during the performance period. All other terminations of employment will result in a forfeiture of the performance shares without payment.
2021 Awards In February
For more information on the Changes for Fiscal 2022 In November 2021, after reviewing a competitive analysis prepared by PM&P and following discussions with PM&P , the CHR Committee increased the mix of performance based long term incentive from 25% to 50%. The financial metrics remained the same, with 25% (50% x 50%) of the total annual equity-based grant, to be based on Group 1’s ROIC, and 50% of the performance shares of the equity award or 25% of the total annual equity-based grant to be based on the Company’s TSR relative to a group of five domestic automotive retailers. The other fifty percent of the long term incentive, restricted stock awards, remains time vesting over five years. 401(K) Plan We maintain the Group 1 Automotive, Inc. 401(k) Savings Plan (the “401(k) Savings Plan”) to assist eligible employees in providing for their retirement. Matching contributions may be in the form of cash or shares of our common stock or a combination of both, as determined by the CHR Committee. All of our matches have been in cash for all employees. Amounts that we contributed to each named executive officer’s 401(k) Savings Plan account are disclosed within the Summary Compensation Table.
Employee Stock Purchase Plan Generally, under the Group 1 Automotive, Inc. Employee Stock Purchase Plan, all employees, including our named executive officers, are offered the opportunity to purchase up to $25,000 annually of our common stock at a 15% discount to market, provided that the maximum number of shares that may be purchased by an employee shall not exceed 3,000 shares of common stock per quarter. This is an additional equity incentive we offer to all of our employees to further promote their interest in enhancing
Proxy Statement 2022 | 45 Deferred Compensation Plan The Group 1 Automotive, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) is designed as a retention tool for our corporate and regional officers, dealership general managers, and other key employees. It allows participants the opportunity to accumulate additional savings for retirement on a tax-deferred basis. Other Benefits
Health and Welfare Benefits Our named executive officers are eligible to participate in our standard medical, dental, vision, disability insurance and life insurance plans to meet their health and welfare needs. These benefits are provided so as to assure that we are able to maintain a competitive position in terms of attracting and retaining executive officers and other employees. This is a fixed component of compensation and the benefits are provided on a non-discriminatory basis to all of our full-time employees. Vehicle Allowance Under his employment agreement, our Chief Executive Officer is provided with two vehicles for his use. Our President, U.S. and Brazilian Operations also receives the use of two vehicles. Our Senior Vice President and Chief Financial Officer, our Senior Vice President, Other Limited Perquisites and Personal Benefits We provide certain named executive officers with perquisites and other personal benefits that the CHR Committee believes are reasonable and consistent with our overall compensation programs and philosophy. These benefits are provided in order to enable us to attract and retain these executives. For example, we pay for club membership privileges that are used primarily for business but also for occasional personal purposes by our Chief Executive Officer, Mr. Hesterberg. In addition, we own a fractional interest in an aircraft which is primarily used for business purposes. However, we make a portion of our time available to Messrs. Hesterberg and Kenningham for personal use during the year. In
EMPLOYMENT AGREEMENTS, SEVERANCE BENEFITS AND CHANGE IN CONTROL PROVISIONS We maintain employment and other compensatory agreements with certain named executive officers to ensure they will perform their roles for an extended period of time. Certain provisions contained in these agreements, such as non-competition and non-solicitation provisions, as well as change in control severance payments, are essential to retaining our talent and protecting our
Please read “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Employment, Incentive Compensation and Non-Compete Agreements.” These agreements provide for severance compensation to be paid if the officer’s employment is terminated under certain conditions, such as following a corporate change, involuntary termination, termination by us for “cause,” death or disability, each as defined in the applicable executive’s agreement. The employment and other compensatory agreements between our Company and our named executive officers and the related severance provisions are designed to meet the following objectives:
Corporate Change In certain limited scenarios, the potential for merger or being acquired may be in the best interests of our
Termination Without Cause If we terminate the employment of certain named executive officers “without cause” as defined in the applicable agreement, we are obligated to pay the officer certain compensation and other benefits as described in greater detail in “Executive Compensation - Potential Payments Upon Termination or Change in Control.” We believe these payments are appropriate because the terminated officer is bound by confidentiality, non-solicitation and non-compete provisions ranging from one to two years after termination. Parties with existing agreements have mutually agreed to a severance package that would be in place prior to any termination event. This provides us with more flexibility to make a change in senior management if such a change is in the best interests of our Company and its
HEDGING AND PLEDGING PROHIBITIONS Our
POLICY ON PAYMENT OR RECOUPMENT OF PERFORMANCE-BASED AWARDS The CHR Committee has adopted a policy on payment or recoupment (or “clawback”) of performance-based cash bonuses and performance-based stock bonuses in the event of certain financial restatements, excluding those required by a change in generally accepted accounting principles, which provides that we will require the payment or reimbursement (to the extent permitted by governing law) of all or a portion of any performance-based cash or performance-based stock bonus where: (a) the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a material restatement and (b) a higher or lower payment would have been made to the employee based upon the restated financial results. In each of these instances, we will, to the extent practicable: (a) either make a payment of, or seek to recover, the cash amount by which the individual employee’s annual performance-based bonus was recalculated based on the restated financial results; provided that we will not pay or seek to recover bonuses paid more than three years prior to the date the applicable restatement is disclosed; (b) cause the award or cancellation of any performance-based stock awards; and (c) seek reimbursement of any unearned gains realized on the vesting of performance-based stock attributable to such awards.
Proxy Statement 2022 | 47 Our Stock Ownership Guidelines
The dollar value of stock ownership is based on base salary times a multiple divided by the previous 36-month average stock price as calculated on December 31st of each year. Unvested restricted stock awards or restricted stock units are counted towards each named executive officer’s ownership requirement. Unvested performance shares are not considered in this calculation. Stock ownership levels should be achieved by each officer within five years of the adoption of these guidelines, or within five years of the individual’s appointment as an officer. Each of our named executive officers was in compliance with current guidelines on December 31,
TAX DEDUCTIONS FOR COMPENSATION In conducting our executive compensation programs, prior to 2018 the CHR Committee considered the effects of Section 162(m) of the Internal Revenue Code (the “Code”), which denied publicly held companies a tax deduction for annual compensation in excess of $1 million paid to certain covered
We annually review our compensation policies and practices for all employees, including our named executive officers, and have determined that our compensation programs are not reasonably likely to cause behaviors that would have a material adverse effect on our Company. Moreover, we believe that several design features of our compensation programs and policies reduce the likelihood of excessive risk-taking:
We believe that, for all employees, our compensation programs do not encourage excessive risk and instead encourage behaviors that support sustainable value
Proxy Statement 2022 | 49 Report of the Compensation Resources Committee
During the last fiscal year, and this year in preparation for the filing of this proxy statement with the SEC, the Compensation
reviewed and discussed the disclosure set forth under the heading “2021 Compensation Discussion and Analysis” with management; and
based on the reviews and discussions referred to above, recommended to the Board of Directors that the disclosure set forth under the heading “2021 Compensation Discussion and Analysis” be included in this proxy statement and incorporated by reference into Group 1 Automotive, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Respectfully submitted by the Compensation Anne Taylor Steven C. Mizell Stephen D. Quinn Steven P. Stanbrook
MaryAnn Wright
2021 SUMMARY COMPENSATION TABLE The following table summarizes, with respect to our named executive officers, information relating to the compensation granted or earned for services rendered in all capacities during 2021, 2020
Proxy Statement 2022 | 51
GRANTS OF PLAN-BASED AWARDS IN 2021 The following table provides information concerning each grant of an award made to our named executive officers under our annual incentive compensation plan and 2014 Long Term Incentive Plan during
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE The following is a discussion of material factors we believe are necessary to an understanding of the information disclosed in the Summary Compensation Table and the Grants of Plan-Based Awards Table for
Employment, Incentive Compensation and Non-Compete Agreements Earl J. Hesterberg
termination. Daryl A. Kenningham Effective June 6, 2011, we entered into an incentive compensation, confidentiality, non-disclosure and non-compete agreement with Mr. Kenningham (the “Incentive Agreement”). The Incentive Agreement initially granted Mr. Kenningham 7,000 shares of restricted stock (which vested in full in 2016) in exchange for his agreement to certain non-competition restrictions and other customary restrictive covenants such as a confidentiality provision. The non-competition restriction within the Incentive Agreement is in effect during Mr. Kenningham’s employment and will continue in effect for a period of two years following his termination of employment for any reason.
Daniel On June 1, 2020, we entered into an offer letter with Mr. McHenry (the “Offer Letter”), effective as of his appointment date. The Offer Letter provides that Mr. McHenry will receive an annual salary of $575,000 and will be eligible for an annual bonus opportunity equal to a maximum of 115% of his base salary. In connection with his promotion, and as an inducement to move to the U.S., on August 20, 2020, we entered into a “Retention, Confidentiality and Non-Compete Agreement with Mr. McHenry (the “Retention Agreement”). Pursuant to the Retention Agreement, Mr. McHenry was granted an initial restricted stock award of 2,067 shares, which was determined by dividing $200,000 by the closing price of our common stock on the date of grant. This initial restricted stock award will vest 40% on the second anniversary of the date of grant, with an additional 20% vesting on each subsequent annual anniversary date thereafter. The Retention Agreement provides that Mr. McHenry will also be eligible to receive future annual restricted stock awards, which will be based on his performance and subject to approval by the CHR Committee and which are expected to be granted at the same time and with similar vesting provisions as applicable for our other executive officers.
Additional Information
We have not entered into an employment or non-compete agreement with Mr. Grese or Mr. DeLongchamps. However, the equity-based compensation awards granted to our named executive officers could receive accelerated vesting in connection with certain qualifying terminations or change in control events.
Proxy Statement 2022 | 53
2021 The following table provides information concerning restricted stock awards and performance share awards for our named executive officers. As of December 31,
The following table provides information relating to the vesting of restricted stock during
NONQUALIFIED DEFERRED COMPENSATION The following table sets forth our named executive officers’ information regarding the Deferred Compensation Plan, including, with respect to each officer: (1) the aggregate contributions made by the officer, (2) the
Proxy Statement 2022 | 55
Pursuant to the Deferred Compensation Plan, certain corporate officers, including named executive officers, may defer up to 50% of their base salary and up to 100% of their incentive compensation. Deferral elections are to be made no later than the last day of the calendar year immediately preceding the calendar year in which such compensation is
2021 calendar years. Benefits under the Deferred Compensation Plan will be paid no earlier than upon the executive’s termination of service, or, for deferrals made prior to January 1, 2021, upon a certain date elected by the officer. Benefits will be paid, at the participant’s election, in a lump sum or in annual installments, although all distributions will be paid in cash. Payments upon an executive’s termination of service may be delayed for six months to the extent necessary to comply with the requirements of Section 409A of the annual contribution limit of $300,000 was implemented for all employee deferrals with an employee lifetime maximum contribution amount of $3.5 million. Deferred amounts will be deemed to be notionally invested in Deferred Compensation Plan Changes for Fiscal 2022 In November 2021, the CHR Committee
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL We believe providing certain senior corporate officers with severance payments and accelerated vesting of equity awards in certain circumstances are important retention tools. In addition, we believe that providing for
Employment And Severance Agreements Mr.Hesterberg’s Employment Agreement.Mr. Hesterberg’s agreement (the “Employment Agreement”) provides that in the event the executive is terminated due to an Involuntary Termination or the executive terminates his employment following a Constructive Termination Event, the executive will be entitled to the following: a lump sum payment equal to the executive’s base salary divided by 12 and multiplied by a severance multiplier. The “severance multiplier” in the case of Mr. Hesterberg, is 12 months or the remaining months in the term of the employment agreement. The payment will be made on the first day of the seventh month following the termination of employment;
immediate vesting of all unvested restricted stock awards or stock options, which will be exercisable as if the executive had continued to be employed by the Company for the full term of his employment agreement; and the use of a demonstrator vehicle for a period of six months. In the event that the executive terminates employment following an involuntary reduction of his salary or incentive compensation targets within six months after a Corporate Change, the executive will be entitled to the same payments and benefits as described in the first three bullets above, except the severance multiplier will be 30 months. Each agreement further provides that if the executive’s employment is terminated due to Death or Disability, then the executive is entitled to:
his pro rata salary through the date of such termination and a pro rata bonus (based on his termination date), calculated in accordance with our Annual Incentive Compensation Plan, paid in a single lump sum payment at
Proxy Statement 2022 | 57
immediate vesting of all unvested restricted stock awards or stock options, which will be exercisable as if the executive had continued to be employed by us for the full term of his employment agreement; and in the case of Disability, the use of a demonstrator vehicle for a period of six months, or in the event of the executive’s Death, the use of the vehicle would go to the surviving spouse, if any, for a period of twelve months. Mr. Hesterberg’s agreement also provides that if he resigns at any time after May 18, 2018, all unvested equity awards held by Mr. Hesterberg will vest upon satisfaction of certain post-termination employment obligations set forth in his non-compete agreement (discussed below); provided, however, that beginning with the awards granted in 2018, any restricted stock awarded to the executive must have been granted at least six months prior to the date the executive provides notification of his intent to terminate his employment due to qualified retirement, and at least six months prior to his effective retirement date to be eligible for vesting as provided above. In addition, if Mr. Hesterberg’s employment is terminated for any reason, other than cause, after May 18, 2018, he will receive his pro rata bonus through the date of his termination, calculated in accordance with the annual incentive compensation plan and paid in a single lump sum payment. In the event of a termination by the Company for Cause or a Voluntary Termination by the executive, all compensation and benefits will cease as of the respective date of termination. In these circumstances, the executive would only receive base salary earned but not yet paid. The employment agreements contain a covenant that the executives will not sue or lodge any claim against Mr. Hesterberg has agreed not to disclose, during or at any time after their employment with us, any of our confidential information or trade secrets. The executive will return all proprietary materials, and all copies thereof, to Mr.Kenningham’s Incentive Compensation, Confidentiality, Non-Disclosure and Non-Compete Agreement. Mr.McHenry’s Retention and Severance Agreement.
Mr. McHenry received over the 24-month period immediately preceding the date of the applicable termination, subject to Mr. McHenry’s compliance with certain restrictive covenants within the Retention Agreement and upon Mr. McHenry’s execution of a general release in the Company’s favor. As used in the above-described agreements for Messrs. Hesterberg, Kenningham and McHenry, as applicable, the following terms shall generally have the meaning provided below, which could impact the amount of compensation that the executive receives at or following his separation from service from us:
“Corporate Change” shall mean the first to occur of any of the following events: (1) any person acquires 50% or more of our common stock or voting securities, other than (a) any acquisition directly from or resulting from an acquisition of our shares by the Company, (b) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (c) any acquisition by any entity pursuant to a transaction which complies with clauses (a) or (b); (2) the occurrence of a merger, reorganization, consolidation or disposition of all or substantially all of our assets, unless our shareholders prior to such transaction hold more than 50% of the equity and voting power of the resulting entity or entity holding such assets, no person (other than benefit plans of such entity) holds 50% or more of the equity or voting power of such entity and at least a majority of the board of directors of such entity were members of the Incumbent Board; (3) our shareholders approve our complete liquidation or dissolution; or (4) under the Incentive Agreement, within any period of 24 consecutive months and subject to certain exceptions, a change in the composition of the board of directors of the Company such that the incumbent board ceases for any reason to constitute a least a majority of the Board. “Constructive Termination Event” shall occur upon: (1) the failure by us to pay the executive’s compensation as provided in the applicable agreement; (2) relocation without his consent of his primary employment location of more than 50 miles; (3) our request that the executive perform any illegal activity or sign-offon “Disability” under the Employment Agreement “Disability” under the Incentive Agreement means any
Proxy Statement 2022 | 59
“Voluntary Termination” shall mean a termination by the executive other than for a Constructive Termination Event. Group 1 Automotive 2014 Long Term Incentive Plan Upon the occurrence of a Corporate Change, the CHR Committee may fully vest any restricted stock awards then outstanding and, upon such vesting, all restrictions applicable to the restricted stock will terminate. Further, the Committee may determine that the performance conditions are satisfied for the performance share awards upon a Corporate Change if the participant is also terminated without cause or for good reason in connection with the Corporate Change, or the participant’s award is not assumed or converted by the controlling entity following the Corporate Change.
Our named executive officers do not currently, and at December 31, The award agreements for restricted stock The performance share agreements
Non-Competition Agreements Along with their respective employment agreements, Mr. Hesterberg has entered into a Non-Compete Agreement and Messrs. Kenningham If Mr. Hesterberg violates this agreement, he will also forfeit his rights to any restricted stock and stock options granted pursuant to his employment agreement, and we will have the right to refrain from making any further payments under that agreement, as well as to receive back from Mr. Hesterberg the full value of any payments which were made to him in the previous twelve months as well as the value of any restricted stock or stock options that may have vested during the past twelve months from the date of Mr. Hesterberg’s termination. If Mr. Messrs. Hesterberg and Grese are eligible for a “qualified retirement”, as previously described under
TERMINATION AND CHANGE IN CONTROL TABLES FOR 2021 The following tables These estimated amounts have been calculated as if the individual’s employment had been terminated, or a Corporate Change had occurred,
Proxy Statement 2022 | 61
2021 DIRECTOR COMPENSATION TABLE The following table sets forth a summary of the compensation we paid to our non-employee directors in
Proxy Statement 2022 | 63 RETAINERS AND FEES The table below sets forth the compensation components we paid to our non-employee directors which governed the
EQUITY-BASED COMPENSATION The equity portion of our non-employee directors’ retainers is paid annually in restricted stock or restricted stock units valued at approximately $200,000 at the time of the grant pursuant to the 2014 Long Term Incentive Plan. In Mr. Mizell was elected to the Board on March 1, 2021. Upon his election, he received a pro rata annual retainer of 1,069 shares of restricted stock units. Restricted stock or restricted stock units granted to our directors vest immediately upon issuance. All vested STOCK OWNERSHIP GUIDELINES Our Board has adopted Stock Ownership Guidelines that apply to our non-employee directors. market
NONQUALIFIED DEFERRED COMPENSATION In November 2020, the CHR Committee approved an amendment and restatement to the Deferred Compensation Plan, effective January 1, 2021. Under the amended and restated plan, non-employee directors can no longer defer director compensation under the plan. However, previously deferred amounts remain deferred under the plan until the originally scheduled payment date. Please see the section entitled “Executive Compensation — Nonqualified Deferred
Prior to amending the Deferred Compensation Plan effective January 1, 2021, the plan provided those directors who elected to participate an opportunity to accumulate additional savings for retirement on a tax-deferred basis. The non-employee directors could defer any portion of the cash compensation (annual retainer or meeting fees) that he or she received with respect to the services provided to our Board, including any committee services, and the director would be 100% vested in his account at all times. We have complete discretion over how the deferred funds are utilized and they represent our unsecured obligation to the participants. COMPENSATION CHANGES FOR FISCAL 2022
Proxy Statement 2022 | 65
SEC regulations require that we provide a comparison of the annual total compensation of Mr. Hesterberg’s annual total compensation was $8,577,257 Our median employee’s total compensation was $54,880 The ratio of SEC rules allow us to use the employee identified in 2020 for three years. However, this individual was on leave for a substantial part of 2021. Therefore, for 2021 we selected an employee with substantially similar compensation to the 2020 identified median employee. We identified our 2020 median compensated employee based on our
We believe the pay ratio information set forth above constitutes a reasonable estimate, calculated in a manner consistent with applicable SEC regulations. Because other companies may use different methodologies to identify their median employees, the pay ratio set forth above may not be comparable to the pay ratios used by other companies.
Certain Relationships and Related Transactions
During fiscal year Information below pertains to certain related party transactions related to the operations of our subsidiary UAB, which we acquired in February 2013. All of the operations of UAB are in Brazil. The conversion of amounts expressed in Brazilian Reais to U.S. Dollars was calculated by using the average currency exchange rate for
During Mr. Pereira’s brother, Ricardo Ribeiro da Cunha Pereira, serves as Mr. Pereira’s brother, Andre Ribeiro, UAB leases office and retail space at market rates from Santorini Negócios Imobiliários Ltda. (“Santorini”), a real estate company which was co-founded by Mr. Pereira. The lease provides for monthly payments of R$ UAB also leases office space at market rates from Irene Maria Flecha de Lima, Mr. Pereira’s mother-in-law, and managed by Anna Luiza Flecha de Lima da Cunha Pereira (Mr. Pereira’s wife) and Andrea Maria Flecha da Lima (Mr. Pereira’s sister-in-law). The lease provides for monthly payments of R$ Mr. Pereira’s cousin, Joao Candido Cunha Pereira, represents UAB in legal court cases solely relating to the State of Paraná. These legal services are governed by a contractual relationship signed in January 2012 for an undetermined term and can be terminated at any time with 90 days’ notice. All legal rates are at or below the current market rate for such legal services.
Proxy Statement 2022 | 67 We review all relationships and transactions in which we and our directors and named executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Our General Counsel’s office is primarily responsible for the development and implementation of written procedures and controls to obtain information from the directors and named executive officers with respect to related person transactions and for subsequently determining, based on the facts and circumstances disclosed to them, whether we or a related person has a direct or indirect material interest in the transaction. SEC. Our Code of Conduct discourages all conflicts of interest, requires disclosure and provides guidance on handling conflicts of interest. Under the Code of Conduct, conflicts of interest occur when private or family interests interfere in any way, or even appear to interfere, with the interests of our Company. Our restrictions on conflicts of interest under the Code of Conduct include related person transactions. We have multiple processes for reporting conflicts of interests, and related person transactions. Under the Code of Conduct, all employees are required to report any actual or apparent conflict of interest, or potential conflict of interest, to their supervisors and all related person transactions involving our regional or market executives must be communicated in writing as part of their quarterly representation letter. This information is then reviewed by our Internal Audit Department, General Counsel, Audit Committee, our Board or our independent registered public accounting firm, as deemed necessary, and discussed with management. As part of this review, the following factors are generally considered:
the nature of the related person’s interest in the transaction;
the material terms of the transaction, including, without limitation, the amount and type of transaction; the importance of the transaction to the related person; the importance of the transaction to a third party; the importance of the transaction to us; whether the transaction would impair the judgment of a director, named executive officer or employee to act in the best interest of our Company; whether the transaction might affect the status of a director as independent under the independence standards of the NYSE; and any other matters deemed appropriate with respect to the particular transaction. Ultimately, all such transactions must be approved or ratified by our Board. Any member of our Board who is a related person with respect to a transaction is recused from the review of the transaction. In addition, our legal staff annually distributes a questionnaire to our named executive officers and members of our Board requesting certain information regarding, among other things, their immediate family members, employment and beneficial ownership interests. This information is then reviewed for any conflicts of interest under the Code of Conduct. At the completion of the annual audit, our Audit Committee and the independent registered public accounting firm review with management, insider and related person transactions and potential conflicts of interest. In addition, our internal audit function has processes in place, under its written procedure policies, to identify related person transactions and potential conflicts of interest and report them to senior management and the Audit Committee. We also have other policies and procedures to prevent conflicts of interest. For example, our Corporate Governance Guidelines require that our Board assess the independence of the non-management directors at least annually, including a requirement that it determine whether or not any such directors have a material relationship with us, either directly or indirectly, as defined therein and as further described under “Information about our Board and its Committees —
Security Ownership Information
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table shows the amount of our common stock beneficially owned (unless otherwise indicated) by our directors and nominees, our named executive officers, our current directors and named executive officers as a group, and any
Proxy Statement 2022 | 69
Questions and Answers about the Annual Meeting
WHO IS ENTITLED TO VOTE AT THE MEETING? Only our A list of
WHAT IS THE DIFFERENCE BETWEEN A SHAREHOLDER OF RECORD AND A BENEFICIAL OWNER OR STREET NAME HOLDER? If your shares are registered directly in your name with our registrar and transfer agent, American Stock Transfer & Trust Company, LLC, you are considered a If your shares are held in a brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of those shares, and your shares are held in street name. If you hold common stock in BOTH street name and as a
VOTE MY SHARES? If you are a
If you vote by internet or telephone, do not return your proxy card. The telephone and internet voting procedures are designed to authenticate Submitting your proxy by internet or telephone will not affect your right to vote in person online should you decide to attend the Annual Meeting. If you want to vote in person online during the meeting, you must have a control number and access our Annual Meeting at www.virtualshareholdermeeting.com/ If you hold your shares in street name, you will receive instructions from your broker, bank or other nominee describing how to vote your shares. Beneficial owners voting by telephone or internet are subject to the same deadlines as described above for holders of record. If you want to vote in person, you must obtain a legal proxy from your broker, bank or other nominee and use the information provided on the legal proxy to access the Annual Meeting.
Proxy Statement 2022 | 71 CAN I CHANGE MY VOTE OR REVOKE MY PROXY? If you are a
delivering an executed, later-dated proxy that is received by the Corporate Secretary of the Company before the voting polls close during the Annual Meeting;
resubmitting your proxy by internet or telephone at any time prior to 11:59 p.m., Eastern Daylight Saving Time, on May 17, 2022; delivering a written notice of revocation of the proxy to Beth Sibley, Corporate Secretary, Group 1 Automotive, Inc., 800 Gessner, Suite 500, Houston, Texas 77024 no later than May 17, 2022; or voting in person online during the Annual Meeting. Only your latest dated proxy that we receive prior to the Annual Meeting will be counted. Further, your attendance during the Annual Meeting will not automatically revoke your proxy. If you are a street name
WHAT IS THE EFFECT OF BROKER NON-VOTES AND ABSTENTIONS AND WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL? If you hold your shares in street name, you will receive instructions from your broker, bank or other nominee describing how to vote your shares. If you do not instruct your broker, bank or other nominee how to vote your shares, they may vote your shares as they decide as to each routine matter under the rules of the NYSE. Only Proposal No. 3 is considered a “routine” matter. If you do not provide specific voting instructions to your broker on non-routine matters, your broker may not cast a vote on the proposal, resulting in a broker non-vote. Although any broker non-vote would be counted as present at the meeting for purposes of determining a quorum, it would be treated as not entitled to vote with respect to
The table below describes the vote required for approval of each matter to be brought before the meeting, as well as the treatment of abstentions and broker non-votes as to each matter.
We have adopted a majority vote director resignation policy, which is described in greater detail under “Director Resignation Policy.” Our Board has appointed Earl J. Hesterberg, our President and Chief Executive Officer, and Daniel instructions on the proxy card you submit by mail, or the instructions provided for any proxy submitted by telephone or internet, as applicable. For
WHAT IS A QUORUM? There must be a quorum for the Annual Meeting to be held. A quorum will be present if the holders of a majority of the shares of common stock entitled to vote are present in person online or represented by proxy during the Annual Meeting. Our independent inspector of election, Broadridge Financial Solutions, will determine whether or not a quorum is present. There must be a quorum for the Annual Meeting to be held. Proxies received but marked as abstentions or broker non-votes will be included in the calculation of votes considered to be present during the Annual Meeting. If less than a quorum is represented at the meeting, the In the event a quorum is present during the Annual Meeting but sufficient votes to approve any of the items proposed by our Board have not been received, the persons named as proxies may propose one or more adjournments of the meeting to permit further solicitation of proxies. A
WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING? We have engaged Alliance Advisors to assist with the solicitation of proxies for a fee not to exceed $6,000, plus reimbursement for reasonable out-of-pocket expenses. We will bear all expenses of soliciting proxies. We may reimburse brokerage firms, custodians, nominees, fiduciaries and other persons representing beneficial owners of our common stock for their reasonable expenses in forwarding solicitation material to such beneficial owners. Directors, officers and employees of Group 1 may also solicit proxies in person or by other means of communication. Such directors, officers and employees will not be additionally compensated but may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation.
WHO WILL COUNT THE VOTES? We have engaged Broadridge Financial Solutions to tabulate the votes and to serve as inspector of election during the Annual Meeting for a fee of approximately $3,500. Broadridge will separately tabulate “For,” “Against” and “Withhold” votes, abstentions and broker non-votes. Broadridge will also certify the election results and perform any other acts required by the Delaware General Corporation Law.
Shareholder Proposals for
Pursuant to the various rules promulgated by the SEC, As more specifically provided for in our Bylaws, in order for a nomination of persons for election to our Board or a proposal of business (other than through Rule 14a-8) to be properly brought before our Annual Meeting of If we increase the number of directors to be elected at an Annual Meeting and do not make a public announcement naming all of the nominees for director and specifying the size of the increased Board at least 80 days prior to the first anniversary of the preceding year’s Annual Meeting, a For each individual that a A copy of our Annual Report on Form 10-K for the fiscal year ended December 31,
We may send a single set of proxy materials, as applicable, and other If you wish to opt out of householding, and would like to have separate copies of the proxy materials mailed to each However, please note that if you want to receive a paper proxy card or other proxy materials for purposes of this year’s meeting, you should follow the instructions included in the information that was sent to you. As of the date of filing this proxy statement, our Board is not aware of any other business or nominee to be presented or voted upon during the Annual Meeting. If any other business or nominee is properly presented, the proxies solicited by our Board will provide the proxy holders with the authority to vote on those matters and nominees in accordance with such persons’ discretion. Where a By Order of the Board of Directors, Beth Sibley Corporate Secretary
Proxy Statement 2022 | 75 Appendix A Measures
In addition to reporting our financial information in our Annual Report on Form 10-K using U.S. Generally Accepted Accounting Principles (“GAAP”), certain non-GAAP financial measures are used with respect to our annual incentive compensation and to evaluate the Company’s financial performance. Such non-GAAP financial measures include (i) adjusted operating cash flow, (ii) adjusted EPS, and (iii) adjusted net income, each of which are described further below. The Company does not intend for the information to be considered in isolation or as a substitute for the related GAAP financial measures. Other companies may define and calculate the measures differently than we do, limiting the usefulness of the measures for comparison with other companies. In addition to evaluating the financial condition and results of our operations in accordance with U.S. GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, profitability improvement initiatives, and other events outside of normal, or “core,” business and operations, by considering alternative financial measures not prepared in accordance with U.S. GAAP. In our evaluation of results from time to time, we exclude items that do not arise directly from core operations, such as non-cash asset impairment charges, out-of-period adjustments, legal matters, gains and losses on dealership franchise or real estate transactions, and catastrophic events, such as hailstorms, hurricanes, and snow storms. Because these non-core charges and gains materially affect the Company’s financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items. This includes evaluating measures such as adjusted selling, general and administrative expenses, adjusted net income, adjusted diluted earnings per share, and constant currency. These adjusted measures are not measures of financial performance under U.S. GAAP, but are instead considered non-GAAP financial performance measures. Non-GAAP measures do not have definitions under U.S. GAAP and may be defined differently by, and not be comparable to similarly titled measures used by, other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with U.S. GAAP. We caution investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures. In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Our management also uses these adjusted measures in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors, and industry analysts concerning financial performance. We disclose these non-GAAP measures, and the related reconciliations, because we believe investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance. The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. In addition, we evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than U.S. dollars using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. The Same Store amounts presented include the results of dealerships for the identical months in each period presented in comparison, commencing with the first full month in which the dealership was owned by us and, in the case of dispositions, ending with the last full month it was owned by us. Same Store results also include the activities of our corporate headquarters. Certain amounts in the financial statements may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented. RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES — CONSOLIDATED
(In millions, except per share data)
Proxy Statement 2022 | 77
RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES — CONSOLIDATED (Unaudited)
The following table reconciles cash flows on a GAAP basis to the corresponding adjusted amounts (in millions):
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|