Penske Automotive (PAG) PRE 14A16 Mar 23Preliminary proxyFinancial data

Company Profile

Document and Entity Information

Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2022
Cover [Abstract]
Document Type	PRE 14A
Amendment Flag	false
Entity Registrant Name	Penske Automotive Group, Inc.
Entity Central Index Key	0001019849

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($)	12 Months Ended
Pay vs Performance Disclosure - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Pay vs Performance Disclosure [Table]
Pay vs Performance [Table Text Block]	Pay Versus Performance. In 2022, the SEC adopted new disclosure requirements for issuers which require us to present the following disclosures of our “pay versus performance”. These disclosures are intended to show the relationship of the compensation we paid to certain of our executives compared to our financial performance over the past three years. Below you will find: (1) a new table with three years of information on compensation “actually paid” to the Principal Executive Officer, which is our CEO, and our other NEOs for the applicable years on average as a group, as well as Total Shareholder Return (“TSR”), net income and EBITDA, as described below; (2) new disclosures explaining the relationship between compensation “actually paid” and the performance measures disclosed in the Pay versus Performance Table; and (3) a tabular list of financial performance measures we use to link compensation “actually paid” to NEOs for the last fiscal year to our performance. Our Company has produced record earnings in the past two years which has resulted in a substantial increase in our stock price. The SEC’s definition of compensation “actually paid” includes the increase in value of unvested restricted stock held by our NEOs which vest over four years with 70% of any award vesting in the third and fourth years. As a result, compensation “actually paid” pursuant to the SEC’s definition of that term has increased significantly over that time as a result of appreciation in the value of unvested restricted stock. Our NEOs may or may not receive the full economic benefit of the compensation showed as “actually paid” depending on the stock price at the time of vest of the restricted stock despite the characterization of such compensation being “actually paid” pursuant to SEC rules. Pay Versus Performance Table Year Summary Compensation Table Total for PEO Compensation Actually Paid to PEO (1) Average Summary Compensation Table Total for Non-PEO NEOs(1) Average Compensation Actually Paid to Non-PEO NEOs (1) Value of Initial Fixed $100 Investment Based On: Net Income EBITDA (3) Total Shareholder Return (2) Peer Group Total Shareholder Return (2) (In millions) 2022 $7,300,613 $14,618,634 $2,009,163 $2,532,735 $241.76 $174.37 $1,386 $2,057 2021 6,981,685 26,778,167 1,982,924 3,479,767 221.35 200.63 1,193 1,798 2020 5,979,555 4,146,492 1,505,797 1,279,321 120.06 152.87 545 934 (1) By SEC rules, these amounts reflect the amount disclosed above in our Summary Compensation Table (a) minus the grant date fair value of equity compensation in the Summary Compensation Table, (b) plus year-end fair value of stock awards granted in the year that were outstanding and unvested as of the end of year, (c) plus the change as of year-end in fair value of prior year awards that were outstanding and unvested as of the end of year or, for awards vesting in that year, the change in fair value of those awards as of the vesting date. The other elements required to be disclosed pursuant to SEC rules in the definition of compensation “actually paid” are inapplicable to our NEO compensation. The calculations for (b) and (c) are as follows: Year Share Price at 12/31 Shares Granted Granted Shares Fair Value at 12/31 Other Shares Outstanding Change in Fair Value Shares Vested Vested Shares Change in Fair Value Total Stock Compensation Actually Paid PEO 2022 $ 114.93 86,498 $ 9,941,215 206,728 $1,593,873 86,896 $ 782,933 $12,318,021 2021 107.22 143,340 15,368,915 150,284 7,188,084 81,229 2,239,484 24,796,482 2020 59.39 44,456 2,640,242 187,057 1,715,313 83,529 (1,188,618) 3,166,937 Other NEOs (Fair values represent averages) 2022 114.93 9,291 1,067,843 23,563 181,673 9.287 86,552 1,336,068 2021 107.22 15,094 1,638,777 16,366 782,786 10,220 281,760 2,468,307 2020 59.39 5,557 300,045 21,441 196,616 9,005 (128,138) 398,524 The PEO whose compensation is represented in each year is Mr. Penske. Messrs. Denker, Kurnick and Spradlin are included in the NEO averages for each year. Also included in the NEO average in 2020 was J.D. Carlson, our former CFO, in 2021 both Mr. Carlson and Ms. Hulgrave, and, for 2022, Ms. Hulgrave. (2) Total shareholder return measures the change in value of our common stock, adjusted to include dividends received by our shareholders over the period. Our peer group for purposes of the peer group total shareholder return disclosure is the same as the one identified in Item 5 of our annual report on Form 10K and consists of the following companies, each of which principally conducts automotive retail operations: Asbury Automotive Group, Inc., AutoNation, Inc., Group 1 Automotive, Inc., Lithia Motors, Inc., and Sonic Automotive, Inc. (the “Peer Group”). (3) The following table reconciles this non-GAAP measure to the closest applicable GAAP measure, net income Non-GAAP Reconciliations Twelve Months Ended December 31, (Amounts in Millions) 2022 2021 2020 Net Income $1,386.2 $1,192.7 $545.3 Add: Depreciation 127.3 121.5 115.5 Other Interest Expense 70.4 68.6 111.0 Income Taxes 473.0 416.3 162.7 Income from Discontinued Operations, net of tax (0.0 ) (1.3) (0.4) EBITDA $2,056.9 $1,797.8 $934.1
Company Selected Measure Name	EBITDA
Named Executive Officers, Footnote [Text Block]	Messrs. Denker, Kurnick and Spradlin are included in the NEO averages for each year. Also included in the NEO average in 2020 was J.D. Carlson, our former CFO, in 2021 both Mr. Carlson and Ms. Hulgrave, and, for 2022, Ms. Hulgrave.
Peer Group Issuers, Footnote [Text Block]	(2) Total shareholder return measures the change in value of our common stock, adjusted to include dividends received by our shareholders over the period. Our peer group for purposes of the peer group total shareholder return disclosure is the same as the one identified in Item 5 of our annual report on Form 10K and consists of the following companies, each of which principally conducts automotive retail operations: Asbury Automotive Group, Inc., AutoNation, Inc., Group 1 Automotive, Inc., Lithia Motors, Inc., and Sonic Automotive, Inc. (the “Peer Group”).
PEO Total Compensation Amount	$ 7,300,613	$ 6,981,685	$ 5,979,555
PEO Actually Paid Compensation Amount	$ 14,618,634	26,778,167	4,146,492
Adjustment To PEO Compensation, Footnote [Text Block]	(1) By SEC rules, these amounts reflect the amount disclosed above in our Summary Compensation Table (a) minus the grant date fair value of equity compensation in the Summary Compensation Table, (b) plus year-end fair value of stock awards granted in the year that were outstanding and unvested as of the end of year, (c) plus the change as of year-end in fair value of prior year awards that were outstanding and unvested as of the end of year or, for awards vesting in that year, the change in fair value of those awards as of the vesting date. The other elements required to be disclosed pursuant to SEC rules in the definition of compensation “actually paid” are inapplicable to our NEO compensation. The calculations for (b) and (c) are as follows: Year Share Price at 12/31 Shares Granted Granted Shares Fair Value at 12/31 Other Shares Outstanding Change in Fair Value Shares Vested Vested Shares Change in Fair Value Total Stock Compensation Actually Paid PEO 2022 $ 114.93 86,498 $ 9,941,215 206,728 $1,593,873 86,896 $ 782,933 $12,318,021 2021 107.22 143,340 15,368,915 150,284 7,188,084 81,229 2,239,484 24,796,482 2020 59.39 44,456 2,640,242 187,057 1,715,313 83,529 (1,188,618) 3,166,937 Other NEOs (Fair values represent averages) 2022 114.93 9,291 1,067,843 23,563 181,673 9.287 86,552 1,336,068 2021 107.22 15,094 1,638,777 16,366 782,786 10,220 281,760 2,468,307 2020 59.39 5,557 300,045 21,441 196,616 9,005 (128,138) 398,524 The PEO whose compensation is represented in each year is Mr. Penske. Messrs. Denker, Kurnick and Spradlin are included in the NEO averages for each year. Also included in the NEO average in 2020 was J.D. Carlson, our former CFO, in 2021 both Mr. Carlson and Ms. Hulgrave, and, for 2022, Ms. Hulgrave.
Non-PEO NEO Average Total Compensation Amount	$ 2,009,163	1,982,924	1,505,797
Non-PEO NEO Average Compensation Actually Paid Amount	$ 2,532,735	3,479,767	1,279,321
Adjustment to Non-PEO NEO Compensation Footnote [Text Block]	(1) By SEC rules, these amounts reflect the amount disclosed above in our Summary Compensation Table (a) minus the grant date fair value of equity compensation in the Summary Compensation Table, (b) plus year-end fair value of stock awards granted in the year that were outstanding and unvested as of the end of year, (c) plus the change as of year-end in fair value of prior year awards that were outstanding and unvested as of the end of year or, for awards vesting in that year, the change in fair value of those awards as of the vesting date. The other elements required to be disclosed pursuant to SEC rules in the definition of compensation “actually paid” are inapplicable to our NEO compensation. The calculations for (b) and (c) are as follows: Year Share Price at 12/31 Shares Granted Granted Shares Fair Value at 12/31 Other Shares Outstanding Change in Fair Value Shares Vested Vested Shares Change in Fair Value Total Stock Compensation Actually Paid PEO 2022 $ 114.93 86,498 $ 9,941,215 206,728 $1,593,873 86,896 $ 782,933 $12,318,021 2021 107.22 143,340 15,368,915 150,284 7,188,084 81,229 2,239,484 24,796,482 2020 59.39 44,456 2,640,242 187,057 1,715,313 83,529 (1,188,618) 3,166,937 Other NEOs (Fair values represent averages) 2022 114.93 9,291 1,067,843 23,563 181,673 9.287 86,552 1,336,068 2021 107.22 15,094 1,638,777 16,366 782,786 10,220 281,760 2,468,307 2020 59.39 5,557 300,045 21,441 196,616 9,005 (128,138) 398,524 The PEO whose compensation is represented in each year is Mr. Penske. Messrs. Denker, Kurnick and Spradlin are included in the NEO averages for each year. Also included in the NEO average in 2020 was J.D. Carlson, our former CFO, in 2021 both Mr. Carlson and Ms. Hulgrave, and, for 2022, Ms. Hulgrave.
Compensation Actually Paid vs. Total Shareholder Return [Text Block]	The following tables show the relationship between (1) compensation “actually paid” to our CEO and the other NEOs to (2) each of total shareholder return, net income and EBITDA. We have produced record earnings for our Company in the past two years as net income and EBITDA have increased 154% and 120%, respectively. Compensation “actually paid” has increased over that time as well, most significantly due to the increase in value of the NEOs’ restricted stock holdings, which vest over four years with 70% of any award vesting in the third and fourth years. Our stock price has increased from $50.22 on December 31, 2019 to $114.93 on December 30, 2022, representing an increase in shareholder value based on our December 30, 2022 outstanding shares of over $4.5 billion. Excluding the increase in the value of unvested restricted stock, compensation “actually paid” for our CEO, and the other NEOs (consisting of salary, bonus, other compensation and the vesting of restricted stock) increased 211%, and 89%, respectively, over the three year period, as compared to an increase of total shareholder return of 242%. As noted in the table above, our total shareholder return over the last three years increased 242% as compared to a 174% increase by our Peer Group. We believe we trailed our peer group in our 2020 shareholder return given our large exposure to the U.K. economy, which experienced more prolonged dealerships closures than the U.S. in response to the COVID-19 pandemic. Over the last two years, however, our total shareholder return was among the highest in the Peer Group, we believe, due in part to our diversification strategy and record financial performance.
Compensation Actually Paid vs. Net Income [Text Block]	The following tables show the relationship between (1) compensation “actually paid” to our CEO and the other NEOs to (2) each of total shareholder return, net income and EBITDA. We have produced record earnings for our Company in the past two years as net income and EBITDA have increased 154% and 120%, respectively. Compensation “actually paid” has increased over that time as well, most significantly due to the increase in value of the NEOs’ restricted stock holdings, which vest over four years with 70% of any award vesting in the third and fourth years. Our stock price has increased from $50.22 on December 31, 2019 to $114.93 on December 30, 2022, representing an increase in shareholder value based on our December 30, 2022 outstanding shares of over $4.5 billion. Excluding the increase in the value of unvested restricted stock, compensation “actually paid” for our CEO, and the other NEOs (consisting of salary, bonus, other compensation and the vesting of restricted stock) increased 211%, and 89%, respectively, over the three year period, as compared to an increase of total shareholder return of 242%.
Compensation Actually Paid vs. Company Selected Measure [Text Block]	The following tables show the relationship between (1) compensation “actually paid” to our CEO and the other NEOs to (2) each of total shareholder return, net income and EBITDA. We have produced record earnings for our Company in the past two years as net income and EBITDA have increased 154% and 120%, respectively. Compensation “actually paid” has increased over that time as well, most significantly due to the increase in value of the NEOs’ restricted stock holdings, which vest over four years with 70% of any award vesting in the third and fourth years. Our stock price has increased from $50.22 on December 31, 2019 to $114.93 on December 30, 2022, representing an increase in shareholder value based on our December 30, 2022 outstanding shares of over $4.5 billion. Excluding the increase in the value of unvested restricted stock, compensation “actually paid” for our CEO, and the other NEOs (consisting of salary, bonus, other compensation and the vesting of restricted stock) increased 211%, and 89%, respectively, over the three year period, as compared to an increase of total shareholder return of 242%.
Total Shareholder Return Vs Peer Group [Text Block]	The following tables show the relationship between (1) compensation “actually paid” to our CEO and the other NEOs to (2) each of total shareholder return, net income and EBITDA. We have produced record earnings for our Company in the past two years as net income and EBITDA have increased 154% and 120%, respectively. Compensation “actually paid” has increased over that time as well, most significantly due to the increase in value of the NEOs’ restricted stock holdings, which vest over four years with 70% of any award vesting in the third and fourth years. Our stock price has increased from $50.22 on December 31, 2019 to $114.93 on December 30, 2022, representing an increase in shareholder value based on our December 30, 2022 outstanding shares of over $4.5 billion. Excluding the increase in the value of unvested restricted stock, compensation “actually paid” for our CEO, and the other NEOs (consisting of salary, bonus, other compensation and the vesting of restricted stock) increased 211%, and 89%, respectively, over the three year period, as compared to an increase of total shareholder return of 242%. As noted in the table above, our total shareholder return over the last three years increased 242% as compared to a 174% increase by our Peer Group. We believe we trailed our peer group in our 2020 shareholder return given our large exposure to the U.K. economy, which experienced more prolonged dealerships closures than the U.S. in response to the COVID-19 pandemic. Over the last two years, however, our total shareholder return was among the highest in the Peer Group, we believe, due in part to our diversification strategy and record financial performance.
Tabular List [Table Text Block]	We are required under SEC rules to also disclose the most important financial performance measures that link compensation “actually paid” to our NEOs (which amounts are shown in the table above using the SEC’s methodology) to Company performance. We believe those metrics are as follows: Financial Performance Measures Net Income EBITDA Earnings Per Share Operating Margin Stock Price Performance We selected these measures because we believe our compensation “actually paid” is most influenced by two factors: (1) the amount of restricted stock granted to our NEOs under the annual performance plans over the relevant period and (2) the change in our stock price over time (see footnote 1 to the Pay Verses Performance Table above). The largest components of our performance plans are EBITDA, EPS, operating margin and stock price performance, which collectively represent up to two-thirds of the total amount available under the plans. We believe the change in our stock price over time is correlated most closely to the financial performance measures EBITDA, EPS and net income.
Total Shareholder Return Amount	$ 241.76	221.35	120.06
Peer Group Total Shareholder Return Amount	174.37	200.63	152.87
Net Income (Loss)	1,386,200,000	1,192,700,000	545,300,000
Depreciation	127,300,000	121,500,000	115,500,000
Other Interest Expense	70,400,000	68,600,000	111,000,000
Income Taxes	473,000,000	416,300,000	162,700,000
Income from Discontinued Operations, net of tax	$ 0	$ (1,300,000)	$ (400,000)
Company Selected Measure Amount	2,056,900,000	1,797,800,000	934,100,000
PEO Name	Mr. Penske
Measure [Axis]: 1
Pay vs Performance Disclosure [Table]
Measure Name	Net Income
Measure [Axis]: 2
Pay vs Performance Disclosure [Table]
Measure Name	EBITDA
Non-GAAP Measure Description [Text Block]	(3) The following table reconciles this non-GAAP measure to the closest applicable GAAP measure, net income Non-GAAP Reconciliations Twelve Months Ended December 31, (Amounts in Millions) 2022 2021 2020 Net Income $1,386.2 $1,192.7 $545.3 Add: Depreciation 127.3 121.5 115.5 Other Interest Expense 70.4 68.6 111.0 Income Taxes 473.0 416.3 162.7 Income from Discontinued Operations, net of tax (0.0 ) (1.3) (0.4) EBITDA $2,056.9 $1,797.8 $934.1
Measure [Axis]: 3
Pay vs Performance Disclosure [Table]
Measure Name	Earnings Per Share
Measure [Axis]: 4
Pay vs Performance Disclosure [Table]
Measure Name	Operating Margin
Measure [Axis]: 5
Pay vs Performance Disclosure [Table]
Measure Name	Stock Price Performance
PEO [Member]
Pay vs Performance Disclosure [Table]
Share Price	$ 114.93	$ 107.22	$ 59.39
Shares Granted	86,498	143,340	44,456
Other Shares Outstanding	206,728	150,284	187,057
Shares Vested	86,896	81,229	83,529
PEO [Member] \| Adjustment for Total Stock Compensation Actually Paid [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	$ 12,318,021	$ 24,796,482	$ 3,166,937
PEO [Member] \| Adjustment for Granted Shares Fair Value at 12/31 [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	9,941,215	15,368,915	2,640,242
PEO [Member] \| Adjustment for Other Shared Outstanding Change in Fair Value [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	1,593,873	7,188,084	1,715,313
PEO [Member] \| Adjustment for Vested Shares Change in Fair Value [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	$ 782,933	$ 2,239,484	$ (1,188,618)
Non-PEO NEO [Member]
Pay vs Performance Disclosure [Table]
Share Price	$ 114.93	$ 107.22	$ 59.39
Shares Granted	9,291	15,094	5,557
Other Shares Outstanding	23,563	16,366	21,441
Shares Vested	9.287	10,220	9,005
Non-PEO NEO [Member] \| Adjustment for Total Stock Compensation Actually Paid [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	$ 1,336,068	$ 2,468,307	$ 398,524
Non-PEO NEO [Member] \| Adjustment for Granted Shares Fair Value at 12/31 [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	1,067,843	1,638,777	300,045
Non-PEO NEO [Member] \| Adjustment for Other Shared Outstanding Change in Fair Value [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	181,673	782,786	196,616
Non-PEO NEO [Member] \| Adjustment for Vested Shares Change in Fair Value [Member]
Pay vs Performance Disclosure [Table]
Adjustment to Compensation Amount	$ 86,552	$ 281,760	$ (128,138)