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 No.     )

		Filed by the Registrant		Filed by a Party other than the Registrant

Check the appropriate box:
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	Definitive Proxy Statement
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	Soliciting Material under §240.14a-12

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 Rules 14a-6(i)(1) and 0-11.

Our Core Values

		Integrity
		We conduct ourselves with the highest level of ethics both personally and professionally, when we sell to and perform services for our customers, and we never compromise our honesty.
		Respect
		We treat everyone, customers, colleagues and other stakeholders alike, with dignity and equality.
		Teamwork
		We put the interest of the group first before our individual interests, as we know that success only comes when we work together.
		Transparency
		We promote open and honest communication between each other and with our customers.
		Professionalism
		We set our standards high, so that we can exceed expectations and strive for perfection in everything we do.

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Notice of 2023 Annual
Meeting of Shareholders

AGENDA
1		Election of Nine Directors
2		Advisory Vote to Approve Executive Compensation
3		Advisory Vote to Approve the Frequency of Shareholder Votes on Named Executive Officer Compensation
4		Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm
5		Approve an Amendment to the Certificate of Incorporation to Eliminate Personal Liability of Officers for Monetary Damages for Breach of Fiduciary Duty as an Officer
6		Approve an Amendment to the Certificate of Incorporation regarding Director Removal

VOTING METHODS AVAILABLE TO YOU
		The Internet
		Visit the website shown on the proxy card (www.proxyvote.com) and follow the instructions at that website at any time prior to 11:59 p.m., Eastern Daylight Saving Time, on May 16, 2023;
		By Telephone
		Within the United States (U.S.) or Canada, call the toll-free number shown on the proxy card and follow the instructions at any time prior to 11:59 p.m., Eastern Daylight Saving Time, on May 16, 2023;
		By Mail
		If you receive a paper copy of the proxy materials, complete, sign and date the proxy card and return the proxy card in the prepaid envelope. Your proxy card must be received by the Company before the voting polls close during the Annual Meeting; or
		During the Meeting
		If you are a shareholder of record on the record date, you may vote in person, online during the Annual Meeting, or by proxy.

Table of Contents

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This section highlights selected information in this Proxy Statement. Please review the entire Proxy Statement and our 2022 Annual Report before voting your shares.

Annual Meeting Agenda

			Board recommendation		Page numbers
Proposal 1:	Election of Nine Directors		FOR each director nominee		10
Proposal 2:	Advisory Vote to Approve Executive Compensation		FOR		31
Proposal 3:	Advisory Vote to Approve the Frequency of Shareholder Votes on Named Executive Officer Compensation		FOR every ONE YEAR		32
Proposal 4:	Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm		FOR		74
Proposal 5:	Approve an Amendment to the Certificate of Incorporation to Eliminate Personal Liability of Officers for Monetary Damages for Breach of Fiduciary Duty as an Officer		FOR		76
Proposal 6:	Approve an Amendment to the Certificate of Incorporation regarding Director Removal		FOR		79

2022 Performance Highlights

Financial Performance

In 2022, Group 1 Automotive, Inc. (the “Company” or “Group 1”) delivered record net income, diluted earnings per common share from continuing operations, revenues and gross profit.

*     Please see Appendix B for an explanation and reconciliation of these non-GAAP measures.

Grow Our Business			Achieved Cost Synergies
	Acquired $940 million in annualized revenues in 2022; $2.5 billion in annualized revenues in 2021			Continued to maintain lower cost structure compared to pre-pandemic levels
	Increased same store aftersales revenue growth by 13.2%			Increased sales team productivity through the use of AcceleRide®
	Outperformed the market in used vehicle retail sales			Industry leader in online service scheduling utilization
				Continuous technology-based cost reduction in back-end processes

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Capital Returned to Investors

Our strong balance sheet and cash flows allowed us to return significant capital to shareholders in 2022.

We spent $521.2 million repurchasing 3,021,023 common shares over the course of the year, representing 17.5% of our float at January 1, 2022. We distributed $23.7 million in dividends ($1.50 per common share), a 13% increase from 2021.

Execution on Key Priorities

In 2022, we continued to execute on the key priorities that underpin our business strategy:

Driving Operational Excellence and Continuous Improvement

We achieved efficiencies across all our businesses, improving the way we interact with and service our customers, and creating value for our shareholders and other stakeholders.

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Making Strategic Investments in Technology and Innovation

We identified technology opportunities across our businesses to address customer needs and drive long-term growth.

Actively Managing our Business Portfolio

We strategically added quality assets and divested underperforming or non-core assets to ensure our portfolio is balanced with strong businesses and market leading franchises.

CEO Transition

In August 2022, we announced that Earl Hesterberg would retire as our Chief Executive Officer (“CEO”) at the end of 2022 and Daryl Kenningham would become our CEO effective January 1, 2023. Mr. Kenningham joined Group 1 in 2011 and has been an integral part of Group 1’s evolution and success. He embodies the integrity that is at the core of our culture, and we are confident in his ability to lead Group 1 forward with a clear vision and focused strategy. See the section entitled “Compensation Discussion and Analysis – 2022 Pay Decisions for other NEOs”.

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Governance and Board Overview

Board Nominees

The following table provides summary information about our nominees for election to the Board. Additional information for all of our directors may be found beginning on page 12.

Skills and Expertise(1)

Identity (Self-Identified in D&O Questionnaire)(2)

DIRECTORS

CARIN M. BARTH

2017

2

F

N

W

DARYL A. KENNINGHAM

2022

0

M

N

W

STEVEN C. MIZELL

2021

1

M

N

AA/B

LINCOLN PEREIRA FILHO

2013

1

M

N

L

STEPHEN D. QUINN

2002

1

M

N

W

STEVEN P. STANBROOK

2019

1

M

N

W

CHARLES L. SZEWS

2016

1

M

N

W

ANNE TAYLOR

2018

2

F

N

W

MARYANN WRIGHT

2014

3

F

N

W

(1)

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.

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Executive Compensation Overview

How We Align Pay for Performance

Our executive compensation program is structured to advance our fundamental objective: aligning our executives’ compensation with the long-term interests of our Company and its shareholders. The Compensation & Human Resources (“CHR”) Committee’s primary goal has been to design a program that rewards financial and operating performance, effective strategic leadership, and advances our commitment to corporate social responsibility – all key elements in building sustainable shareholder value.

We are asking our shareholders to approve, on a non-binding advisory basis, the compensation of our named executive 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 and aligning our executives’ long-term interests with those of our shareholders. Our compensation philosophy is to set the fixed compensation of our NEOs 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 Shareholders, the compensation of our NEOs was approved with a substantial majority of our shareholders (97% of votes cast) voting in favor of our executive compensation program.

In evaluating this year’s advisory vote on the compensation of our NEOs (the “Say-On-Pay Vote”), we recommend that you review the section entitled “Compensation Discussion and Analysis” (“CD&A”) beginning on page 33, as well as the Summary Compensation Table and related compensation tables and narratives, which explain how and why the CHR Committee arrived at its executive compensation actions and decisions for 2022, and provides detailed information on the compensation of our NEOs.

2022 Pay Decisions and Mix

Consistent with our guiding principles, the largest portion of compensation for our NEOs in 2022 was “at-risk” compensation in the form of annual cash and long-term incentive awards that are largely contingent on Company financial performance and stock price performance.

2022 Total Direct Compensation

Annually, the CHR Committee evaluates our three principal elements of executive compensation: base salary, annual cash incentive and long-term incentive awards, which we collectively refer to as “total direct compensation.” These elements are discussed in detail on pages 40-45.

Total direct compensation for our NEOs is determined based on the CHR Committee’s assessment of Company and individual performance for the year. The following chart shows the 2022 total direct compensation of our NEOs:

2022 Performance Metrics

The Committee believes that the metrics used for our annual and long-term incentive plans are essential indicators of the long-term health of our Company, and therefore, serve the fundamental objective of our executive compensation program.

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Metrics for Annual Incentives

Financial Goal

The CHR Committee selected adjusted net income* as our financial goal because it reflects income statement performance, consistent with the interests of our shareholders. For 2022, the CHR Committee set threshold, target and maximum goals for adjusted net income shown below, where threshold was considered achievable, target was considered challenging yet attainable, and maximum was considered possible with significant effort. However, no payments are made under this portion of the annual incentive award unless the threshold level of adjusted net income is achieved.

Mission-Based Goals

Mission-based goals typically include specific goals that are related to the individual’s functional area. These goals are established at the beginning of each year jointly by the named executive officer and our CEO and reviewed by the CHR Committee, or in the case of the CEO, by the CHR Committee and the Board. Mission-based goals are integral to achieve key business objectives that help improve our financial performance, contribute to the growth of our Company, and promote the achievement of our ESG initiatives, including enhancements to our human capital management and diversity, equity and inclusion efforts.

Metrics for Performance Shares

Performance Share Awards

Performance shares vest based on Company performance over two years, with 50% vesting based on the Company’s return on invested capital (“ROIC”), and 50% vesting based on the Company’s total shareholder return (“rTSR”) relative to a comparator group of five domestic automotive retailers. In addition, performance share awards are subject to a three-year, time-based vesting period. Following the end of the two-year performance period, the CHR Committee will assess performance. Any awards that have satisfied the performance-based criteria will then continue to be subject to the time-based vesting requirement, which lapses at year end.

Compensation Design for 2023

Throughout the course of 2022, the CHR Committee has continued to evaluate the design of the Company’s compensation plans and programs. After extensive review and analysis, and discussions with the compensation consultant, the CHR Committee determined to increase the maximum annual incentive potential for the NEOs. Accordingly, the maximum annual incentive potential for Mr. Kenningham was set at 260% of base salary and the maximum annual incentive potential for our other NEOs was set at 125% of base salary. Additionally, the CHR Committee approved the reduction of the vesting period for restricted stock awards from five years to three years with the restrictions relating to the awards lapsing 33% in each of the first and second years, and 34% for the third year.

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Focus on Environmental, Social, and Governance

Our mission is to create a culture where employees are engaged in efforts to enhance the communities in which they live and work. Employee engagement improves our business performance, customer service, community involvement and competitive advantage. We are in the people business and pride ourselves on building long-term, trusting relationships with our team members, customers and communities. By aligning our business strategy with our desire to support our people, environment, customers and communities, we can make a positive impact and create value for our Company and its stakeholders.

In 2022, we published our first annual Sustainability Report detailing our Environmental, Social and Governance (“ESG”) approach. We encourage you to read our Sustainability Report at: https://www.group1corp.com/ESG. We additionally plan to publish our second annual Sustainability Report later this year which will reaffirm our commitment to sustainability and highlight our ESG-related priorities and accomplishments in 2022. A summary of our ESG priorities are as follows:

Environmental

Our commitment to ESG includes reducing our impact on the environment and doing our share to contribute to a healthier planet. Environmental sustainability means creating long-term value for our customers and stakeholders by providing innovative critical infrastructure in the construction and operation of our new and remodeled dealership facilities. We look for opportunities in the construction and operation of facilities to improve our energy usage, reduce waste and prepare for the electrification of the auto industry.

Social

We are committed to providing a safe, healthy and productive working environment for our employees, improving the quality of lives for all and fostering an organization that is sustainable for the long term. As a people-centric business, we take continuous learning and professional development very seriously.

We encourage our teams to support each other’s professional goals. We equip our management team with the tools to help employees succeed and advance in their careers. All employees are required to complete training courses covering the Code of Conduct, anti-corruption, anti-harassment, anti-discrimination, diversity and inclusion and other relevant topics. We strive to cultivate a high-performing, diverse workforce and foster a culture of collaboration and learning where all employees feel valued. We work to enable our colleagues to reach their full potential by fostering a culture of mutual respect and security, an inclusive and diverse work environment, professional development and growth opportunities, safe working conditions and fair hiring and labor standards. Our vision is to become a global role model for diversity, equity and inclusion (“DEI”). We are working toward this vision by setting a clear strategy across the organization, enhancing oversight of DEI, assigning mandatory training to promote awareness and using data to make informed decisions.

Governance

The Board is committed to overseeing our ESG policies and practices, implementing sound and effective corporate governance practices and continually reviewing best practices and considering the views of our shareholders on various issues. For more information on how our Board and management oversee ESG-related matters, please see the section entitled “ESG Board and Oversight” beginning on page 24. Members of our management regularly interface with prospective investors, existing shareholders and research analysts in a variety of event formats to discuss the Company’s publicly disclosed performance, business strategy and outlook, and corporate governance. These interactions help management and the Board understand and consider the views of our shareholders and the perception of the investment community while we dynamically operate in an evolving industry and economy with an objective of maximizing returns.

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PROPOSAL 1

What am I Voting On?

We seek shareholder support for the election of nine individuals nominated to serve on the Board until the 2024 Annual Meeting of Shareholders. Each of the nominees is currently a director. For more information on the director nominees, please see the section entitled “Governance and Board Overview — Board Nominees” on page 6.

Criteria for Board Membership

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. In considering candidates for our Board, the Governance & Corporate Responsibility Committee (“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; 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.

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.

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. Our Board’s composition additionally reflects a mix of tenure and expertise that provides the Board with a balance of fresh perspectives and significant institutional knowledge. 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 NEOs.

How Candidates Are Identified

The GCR Committee may consider candidates for our Board from any reasonable source, including from a search firm engaged by the GCR Committee or shareholder recommendations. The GCR Committee will evaluate candidates recommended by shareholders using the same criteria as for other candidates recommended by its members, other members of the Board, or other persons. Any invitation to join our Board must be extended by our Board as a whole, by the GCR Committee Chair and by the Board Chair.

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Shareholders or a group of shareholders may recommend potential candidates for consideration by the GCR Committee. For additional information on such requests and the applicable timing, please see “How do I Submit Proposals and Nominations for the 2024 Annual Meeting?” in the “Frequently Asked Questions About the Annual Meeting”.

Board and Committee Composition

Members of each committee are recommended by the GCR Committee. Committee members are elected by the Board at its first meeting following the Annual Meeting of Shareholders. All members of our committees are independent, except for Messrs. Kenningham and Pereira.

				Committee Memberships
DIRECTORS		Independent		Audit Committee		Compensation & Human Resources Committee		Finance/Risk Management Committee		Governance & Corporate Responsibility Committee
CARIN M. BARTH
DARYL A. KENNINGHAM
STEVEN C. MIZELL
LINCOLN PEREIRA FILHO
STEPHEN D. QUINN
STEVEN P. STANBROOK
CHARLES L. SZEWS
ANNE TAYLOR
MARYANN WRIGHT
NUMBER OF 2022 MEETINGS				8		7		4		4

CHAIR

MEMBER

Director Attendance

Board and Committee Meetings

In 2022, the Board held six meetings. The committees of the Board held a combined total of 23 meetings. Each director attended at least 85% of the meetings held by the Board and all committees on which he or she served.

Annual Shareholders Meeting

Under our Corporate Governance Guidelines, our directors are encouraged to attend the annual meeting of our shareholders. All director nominees attended our 2022 Annual Meeting of Shareholders.

Executive Session of the Independent Directors

The independent directors meet in executive session with the Chair presiding, separate from management, at least four times a year. The executive sessions of the independent directors are held in connection with each regularly scheduled meeting of the Board, and any other meeting as determined by the Chair.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD AS SET FORTH IN THIS PROPOSAL.

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NOMINEES

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Our Continuing Commitment to Sound Corporate Governance

Group 1 is committed to strong corporate governance practices that are designed to maintain high standards of oversight, accountability, integrity and ethics and that go beyond legal and regulatory requirements. The Board believes this commitment promotes long-term shareholder value.

Code of Conduct and Corporate Governance Guidelines

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 an employee or member of the Board (1) improperly engages in conduct which is not in the best interest of the Company; (2) puts his or her personal interests above those of the Company; (3) seeks to benefit improperly from his or her position with the Company; or (4) misuses Company time, resources, or relationships. Conflicts of interest may also arise based on the conduct or relationships of an employee’s immediate family member. Our restrictions on conflicts of interest under the Code of Conduct include related person transactions.

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 “Director Independence.”

Our key governance documents including our Corporate Governance Guidelines, Code of Conduct, Code of Ethics and committee charters are available on our Investor Relations website at https://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.

Board Leadership Structure

The GCR Committee annually assesses and approves the leadership structure of the Board. In 2022, the GCR Committee determined that having an independent director serve as non-executive Board Chair continues to be in the best interest of our shareholders at this time. Our CEO is responsible for setting our strategic direction and providing day-to-day leadership, while the Board Chair sets the agenda for Board meetings, presides over meetings of the full Board and provides guidance to our CEO. We believe this structure currently ensures a greater role for the independent directors in the oversight of our Company and active participation of the independent directors in establishing priorities and procedures for our Board.

Director 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 non-employee directors have a material relationship with our Company. Mr. Kenningham was determined not to be independent because he is a current employee of Group 1, and Messrs. Hesterberg and Pereira were determined not to be independent because they were employees of Group 1 within the past three years.

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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”). Four of the six members of the Finance/Risk Management Committee (“FRM Committee”) are 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 2022.

Governance Best Practices
	Board Elections, Composition and Independence			Board and Committee Practices			Board Oversight of Risk Management
	Independent Chair and separation of the Chair and CEO roles			Annual Board, Committee and individual director evaluations			Annual review of Enterprise Risk Management program
	Seven of nine director nominees are independent			Director orientation and continuing education			Quarterly review of Cybersecurity program
	100% independent Audit, CHR and GCR			Board has significant interaction with senior management and access to other employees			Quarterly review of ESG and Health and Safety programs
	Mandatory retirement age			Robust stock ownership guidelines			Quarterly review of DEI program
	Limits on Board member service on other public company boards			Executive sessions provided for all quarterly Board and Committee meetings			Quarterly review of PAC and Group 1 foundation income (donations) and contributions
	All directors stand for election annually			Philosophy of continuous Board refreshment to ensure a mix of skills, experience, tenure and diversity
	Majority voting for directors in uncontested elections

Board Self-Evaluation

Our Board and each of its committees annually conduct a self-evaluation to assess and identify opportunities to improve their respective performance.

Overview of the Self-Evaluation Process

The GCR Committee is tasked with the oversight of the annual performance evaluation and to assist in designing and implementing such evaluations.

We engage a third party to assist us by preparing the performance assessments for electronic delivery, compiling the responses, and aggregating the results. Among other topics addressed, the Board and committee evaluations 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.

As part of the evaluation process, the Board Chair meets individually with each committee chair to discuss the results of his or her committee’s evaluation. The results of the committee evaluations

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are then reviewed by each committee chair with his or her committee members. The Board Chair then meets with each director individually to discuss the results of the Board evaluation. In addition, the results of the Board and committee evaluations are discussed at the full Board and committee meetings.

Board Committees

The Board has a standing Audit Committee, CHR Committee, GCR Committee and FRM Committee. Such committees are required to perform the key functions summarized below as well as other such functions set forth in their charters or assigned by our Board from time to time. Each committee may form and delegate some or all of its 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 senior corporate officers and also has the sole authority to approve the consultant’s fees and other retention terms.

Audit Committee

Our Audit Committee’s responsibilities are to:

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The Report of the Audit Committee is set forth on page 72 of this proxy statement.

Compensation & Human Resources Committee

Our CHR Committee’s responsibilities are to:

For additional information regarding the role of management in the CHR Committee process, please see “Compensation Discussion and Analysis — How We Make Pay Decisions and Assess Our Programs.”

The Report of the CHR Committee is set forth on page 55 of this proxy statement.

Governance & Corporate Responsibility Committee

Our GCR Committee’s responsibilities are to:

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Finance/Risk Management Committee

Our FRM Committee assists our Board in its oversight of corporate finance and risk management, including:

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The Board’s Role

Risk Management 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. Management updates the FRM 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.

		•  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 54 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 and corporate compliance. •  Reviews matters relating to the Company’s corporate responsibility, including ESG efforts and initiatives.

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Cybersecurity 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 Vice President and Chief Information Officer 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 2022, the FRM Committee and the Audit Committee received cybersecurity and information security risk reports at least quarterly.

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ESG and Board Oversight

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 our sustainability progress. For updates on our progress and to access our 2022 Sustainability Report, please visit https://www.group1corp.com/ESG.

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.

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Succession Planning Oversight

Stakeholder Engagement and Responsiveness

Group 1 is committed to engaging in constructive and meaningful conversations with our shareholders, employees, customers, vendors and the communities in which we operate in order to build long-term relationships. The Board values the input and insights of our stakeholders, and regularly monitors investor sentiment, shareholder voting results, and trends in governance, executive compensation, regulatory, environmental, social and other matters. 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 used vehicle sales, market trends, parts and service strategies, successful implementation of our AcceleRide^® and Val-u-Line^® vehicle sales programs, success with hiring technicians, 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.

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Pay Structure

The table below sets forth the 2022 compensation we paid to our non-employee directors.

Equity-Based Compensation

Our non-employee directors are paid an annual equity retainer consisting of either restricted stock or restricted stock units valued at approximately $200,000 on the grant date pursuant to the 2014 Long-Term Incentive Plan. In 2022, directors could elect whether to receive the equity retainer in restricted stock or restricted stock units with Messrs. Pereira, Quinn, Stanbrook and Szews electing to receive restricted stock and Mses. Barth, Taylor and Wright and Mr. Mizell electing to receive restricted stock units. The grant was effective January 3, 2022 with the value determined based on the average of the high and low market price of our common stock on that date. Accordingly, each non-employee director received 1,030 shares of restricted stock or restricted stock units. In July 2022, when the Company sold its operations in Brazil, Mr. Pereira ceased being a full-time employee, of the Company, and received a pro rata annual retainer of 577 shares of restricted stock as a non-employee director. Mr.  Kenningham was elected to the Board on August 24, 2022 but receives no compensation for his service as a director.

Restricted stock or restricted stock units granted to our directors vest immediately upon issuance. All vested awards held by a director will settle upon the retirement, death or disability of the director. Since January 1, 2019, all restricted stock units are settled in cash; prior thereto restricted stock units were settled in shares of common stock upon the termination of the director’s membership on our Board.

Director Stock Ownership Guidelines

Our non-employee directors are required to attain Group 1 common stock ownership with a value of $450,000 within five years of joining the Board. Once achieved, directors may sell or otherwise dispose of any shares in excess of the $450,000 value. If a director’s stock ownership value falls below $450,000 due to a decline in stock price, the director may not sell or dispose of shares until the director has again attained the requisite ownership level. Shares of common stock owned by the director and his or her immediate family members

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who share the same household, whether held individually or jointly, and grants of restricted stock and restricted stock units also count for purposes of the director stock ownership guidelines. Each of our directors has met, or is expected to meet within the applicable timeframe, our current director stock ownership requirements.

Nonqualified Deferred Compensation

Non-employee directors currently cannot defer director compensation under the Company’s Deferred Compensation 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 Compensation” for a more fulsome description of the Company’s Deferred Compensation Plan and the material changes approved under the amended and restated plan.

Prior to January 1, 2021, the Company’s Deferred Compensation Plan permitted non-employee directors who elected to participate an opportunity to accumulate additional savings for retirement on a tax-deferred basis. These directors could defer in the plan any portion of their cash compensation received for services provided to our Board or its committees, while remaining 100% vested in deferred funds. We have complete discretion over how the deferred funds are utilized and they represent our unsecured obligation to the participants.

2022 Director Compensation

The following table sets forth a summary of the compensation we paid to our non-employee directors in 2022. Mr. Pereira ceased being a full-time employee on July 4, 2022, after which he received pro rata compensation for his service as a director. Compensation of Messrs. Hesterberg and Kenningham is shown in the Summary Compensation Table and related tables and Mr. Pereira’s employee compensation is discussed in the section titled “Transactions with Related Persons.”

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Compensation Changes for 2023

In November 2022, after a review of a competitive market analysis prepared by Pearl Meyer & Partners, LLC (“PM&P”) the GCR Committee recommended, and the Board approved, the following increases to the annual retainers:

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Beneficial Stock Ownership of Directors and Executive Officers

The following table shows the amount of our common stock beneficially owned (unless otherwise indicated) by our directors and nominees, our NEOs, our current directors and NEOs as a group, and any shareholders with over 5% of our common stock. Except as otherwise indicated, directors and NEOs possessed sole voting and investment power with respect to all shares of common stock in the table. In addition, except as otherwise indicated, all information is as of March 20, 2023.

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Certain Beneficial Owners

The following table provides information about beneficial owners, known by us as of March 20, 2023, of 5% or more of our outstanding common stock (the “5% Shareholders”). Unless otherwise noted in the footnotes to the table, the 5% Shareholders named in the table have sole voting power with respect to all shares shown.

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PROPOSAL 2

What am I Voting On?

Pursuant to Section 14A of the Exchange Act, each year we ask shareholders to approve, on an advisory basis, the compensation of our NEOs. Before voting, we encourage you to read and consider the CD&A on pages 33-54, along with the compensation tables beginning on page 56.

How is Shareholder Feedback Considered?

Annually, our shareholders have the opportunity to cast an advisory vote on the compensation of our NEOs Say-On-Pay Vote, as disclosed in this proxy statement. As an advisory vote, this Proposal 2 is not binding on Group 1, our Board or the CHR Committee. However, the CHR Committee will consider the outcome of the vote when making future compensation decisions regarding our NEOs.

Why Should I Vote for this Proposal?

Our Board recognizes that executive compensation is an important matter for our shareholders. 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, the decisions made by the CHR Committee in 2022, and the tabular disclosures regarding our NEOs’ compensation together with the accompanying 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 shareholders and the total compensation package provided to our NEOs (including potential payouts upon a termination or change of control) is materially consistent with market practice. We also believe our executive compensation is reasonable and competitive.

We believe that it is appropriate to seek the views of our shareholders on the design and effectiveness of our executive compensation program, and we value your opinion. At the 2022 Annual Meeting of Shareholders, 97% of the shares voted on the Say-On-Pay Vote were in favor of the compensation paid to our NEOs. 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 that Say-On-Pay Vote.

In light of these reasons, we are recommending that our shareholders vote “FOR” the following resolution:

“RESOLVED, that the compensation paid to our Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby Approved, on an advisory basis.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE NON-BINDING ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION.

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PROPOSAL 3

What am I Voting On?

Pursuant to Section 14A of the Exchange Act, every six years we ask shareholders to select, on an advisory basis, the frequency of future advisory shareholder votes, to approve the compensation of our NEOs – whether every year, every two years, or every three years.

How is Shareholder Feedback Considered?

Our shareholders have the opportunity to cast an advisory vote on the frequency with which shareholders should vote to approve the compensation of our NEOs, as disclosed in this proxy statement. As an advisory vote, this Proposal 3 is not binding on Group 1, our Board or the CHR Committee. However, the CHR Committee will consider the outcome of the vote when making future compensation decisions regarding our NEOs.

Why Should I Vote for this Proposal?

At our 2017 Annual Meeting of Shareholders, our shareholders cast the highest number of votes in favor of holding annual Say-On-Pay Votes. As a result, and based on other factors considered by our Board, we have since held the Say-On-Pay Vote on an annual basis. The Board believes that conducting Say-On-Pay Votes every year is the most appropriate alternative for our Company. An annual Say-on-Pay Vote enables our shareholders to provide frequent, direct input to the Company regarding compensation policies and practices. Shareholders will have the opportunity to consider our most recent compensation decisions and focus on increasing long-term shareholder value, and to give immediate and direct feedback on our executive compensation programs. The Board also believes an annual advisory shareholder vote promotes corporate transparency and accountability for the CHR Committee. Although the vote is nonbinding, the Board and the CHR Committee value the opinions of our shareholders and will consider the outcome of the vote when setting the frequency of future advisory votes on our NEOs’ compensation.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR HOLDING AN ADVISORY VOTE TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION EVERY YEAR.

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In 2022, Group 1 focused on driving operational excellence and continuous improvement, making strategic investments in technology and innovation, actively managing our business portfolio, promoting corporate and social responsibility, and beginning the process of successfully transitioning to a new CEO. As a result of these efforts, we achieved record sales and profits and returned to investors $544.9 million in dividends and share repurchases. Our results are the product of an experienced, dedicated workforce and a commitment to drive long-term growth and shareholder value creation.

This CD&A provides a detailed description of our executive compensation philosophy and programs, and the compensation determinations of the CHR Committee. As discussed below, our compensation plans are designed to reward our executive officers for the achievement of the Company’s business and financial goals. The CD&A focuses on the compensation of our NEOs as of December 31, 2022, identified below:

2022 NAMED EXECUTIVE OFFICERS (NEOs)⁽¹⁾

EARL J. HESTERBERG		DARYL A. KENNINGHAM		DANIEL MCHENRY		PETER C. DELONGCHAMPS		DARRYL M. BURMAN
Chief Executive Officer (CEO)		President and Chief Operating Officer		Senior Vice President and Chief Financial Officer		Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs		Senior Vice President, General Counsel

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Executive Summary

2022 Performance Overview

Group 1 delivered record-setting financial results and improved operational effectiveness in 2022. We achieved record earnings per share by closing attractive acquisitions with approximately $1 billion in revenues, integrating operations of our large acquisitions in 2021, maintaining an aggressive cost reduction plan and continuing to return capital to shareholders through share repurchases and distribution of dividends. Our 2022 financial results compared to 2021 included:

In addition to the metrics above, Group 1 achieved the following notable performance in 2022:

Financial Performance

	Increased same store parts and service gross profit by 10.2%			Reduced SG&A as a percentage of gross profit from 60.5% in 2021 to a record low of 60.1% in 2022
	Increased same store new vehicle total gross profit by 12.3%			Achieved all-time U.S. Finance and Insurance performance record of $2,428 per retail unit

Capital Allocation

Acquired approximately $1 billion in annual revenues

Issued quarterly dividends totaling $1.50 per share for the full year

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How We Align Pay and Performance

The CHR Committee believes that the most effective executive compensation program is designed to be reasonable and competitive, and should balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our Company and our shareholders. The CHR Committee annually evaluates our executive compensation program to ensure it is consistent with our short-term and long-term goals. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual corporate goals. We provide long-term incentive compensation opportunities in the form of equity awards. By maintaining competitive compensation and rewarding performance, the CHR Committee strives to support our overall business objectives.

Our Guiding Principles

Our strategic business focus during 2022 consisted of the following objectives:

Our NEOs’ individual or functional goals for the year, which provide support for our business objectives, generally consisted of one or more of the following:

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Compensation Governance Best Practices

Our executive compensation and governance programs are designed to link pay with operational performance and increases in long-term shareholder value while avoiding incentives that could lead to excessive risk-taking. We have adopted the following policies and practices over time to accomplish such objectives:

	We Do			We Do Not
	Retain an independent compensation consultant			Pay tax gross-ups
	Conduct a say-on-pay advisory vote annually			Use single-trigger equity vesting
	Maintain robust stock ownership guidelines for our officers and directors			Design compensation plans that encourage excessive risk-taking
	Maintain an incentive recoupment (i.e., clawback) policy			Permit short sales, pledging or hedging of Group 1 common stock by directors or employees
	Rely on both financial and mission-based goals for incentive compensation			Adjust terms of previous awards
	Conduct competitive benchmarking to ensure executive officer compensation is aligned to market
	Pay for performance, including performance-based shares over multi-year performance periods
	Target total compensation at median of our Peers

Overview of 2022 Pay Decisions

2022 Pay Mix

Consistent with our guiding principles, the largest portion of compensation for our NEOs in 2022 was “at-risk” compensation in the form of annual cash and long-term incentive awards that are contingent on Company performance and stock price performance.

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2022 Total Direct Compensation

In making annual pay decisions, the CHR Committee typically evaluates our three principal elements of executive compensation: base salary, annual cash incentive and long-term incentive awards, which we collectively refer to as “total direct compensation.” These elements are set forth below.

Total direct compensation for the NEOs is determined based on the CHR Committee’s assessment of Company and individual performance for the year. The following shows the 2022 total direct compensation of our NEOs:

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Shareholder Feedback on Compensation

Our shareholders have the right to approve annually, on an advisory non-binding basis, the compensation of our NEOs. At our 2022 Annual Meeting of Shareholders, 97% of the votes cast were in favor of our executive compensation program. Because of this substantial support, the CHR Committee did not make any significant changes to our compensation program or our general compensation philosophy following the vote. The CHR Committee will continue to consider the vote results for annual Say-on-Pay proposals when making compensation decisions for our NEOs and setting our compensation goals and philosophy.

In addition, at various times throughout the year the CHR Committee considers feedback from shareholders as well as more general developments in executive compensation principles. The CHR Committee uses this input to develop and implement the Company’s executive compensation philosophy, policies and programs. For additional information on the Say-on-Pay Vote with respect to the compensation paid to our NEOs in 2022, see Proposal 2 above.

How We Make Pay Decisions and Assess Our Programs

Roles and Responsibilities

Compensation & Human Resources Committee

Oversees our compensation programs

CEO

Provides input to the CHR committee

Independent Consultant

Provides an independent perspective and assessment

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Management

Provides additional insight and assistance

Shareholders

Provide feedback on our programs

2022 Independent Consultant Engagement

Since 2005, the CHR Committee has engaged PM&P to serve as its independent compensation consultant on executive compensation matters. PM&P 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 alone determines the scope of services performed by PM&P and the directions given to PM&P regarding the performance of such services. However, in carrying out assignments PM&P may interact with management when necessary and appropriate.

In February 2022, the CHR Committee considered the independence of PM&P in light of SEC rules and NYSE listing standards. The CHR Committee requested and received a letter from PM&P addressing the consulting firm’s independence, including the factors set forth in the NYSE listing standards. The CHR Committee discussed these considerations, among other things, and concluded that the work of PM&P did not raise any conflict of interest.

Compensation Peer Group and Use of Market Data

How We Use Peer Group Data

PM&P’s market analysis process involves the comparison of the total compensation elements (base, annual incentive and long-term incentive) with the Peer 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 shareholders. Second, comparative analysis allows us to assess the reasonableness of our compensation practices. Conducting a market analysis allows us to achieve our objective of maintaining competitive compensation, while aligning compensation with shareholder interests.

How Our Peer Group is Constructed

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 compete. The list of our Peer Companies is periodically reviewed and updated by the CHR Committee. The CHR Committee discussed the Company’s peer group with PM&P in 2022. Based on that discussion, the list of Peer Companies for 2022, shown below, was unchanged from 2021.

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When evaluating the compensation data and making compensation decisions, the CHR Committee has taken into consideration the variance in revenue size among 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 organizational philosophy, which is to remain as lean as practical. This guiding principle means that certain of our NEOs have a broad range of job responsibilities that, 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.

Timeline for Compensation Decisions

The CHR Committee followed the process shown below in making 2022 annual pay decisions for each component of compensation included in 2022 total direct compensation.

2022 Compensation Program

Base Salary

We provide our NEOs with a competitive annual base salary to compensate them for services rendered during the year. The CHR Committee annually reviews base salaries of our NEOs and adjusts based on market competitiveness, with the Board (excluding the CEO) approving increases for our CEO. We have generally set base salaries near the 50^th percentile of our Peer Companies compensation. Following a review of the data supplied by PM&P, we made increases to base salaries between the 2021 and 2022 years, which reflect our intent to provide base salaries near that 50^th percentile.

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The base salaries for our NEOs are noted in the table below.

Annual Incentive Compensation

Annual cash incentive awards are intended to motivate and reward achievement of Company and individual or functional performance objectives. The CHR Committee establishes meaningful, performance-related goals for these awards so that attaining or exceeding the performance targets is not assured. Instead, attaining the performance goals requires significant effort by each of our NEOs, and if accomplished, contributes to the ongoing overall improvement and success of the Company.

For 2022, the annual incentive compensation plan was based upon financial and individual mission-based goals approved by the CHR Committee. Targets are expressed as a percentage of base salary and are generally multiplied by the NEO salary for the plan year to calculate the dollar value of the target. Below are the 2022 target percentages for each NEO.

In 2022, 70% of the total annual incentive opportunity was based on the adjusted net income as the financial metric and 30% of the total annual incentive opportunity was based on the achievement of certain individual mission-based goals. With respect to the 2021 calendar year, the annual incentive program was based 50% on financial goals, and 50% on individual goals. The CHR Committee believes this change in the focus of the program better aligned managements’ interests with those of Group 1’s shareholders while continuing to reward strategic mission-based activities. The following is a description of the 2022 performance metric under the annual incentive compensation plan.

Financial Goal

The CHR Committee selected adjusted net income* as our financial goal because it reflects income statement performance, consistent with the interests of our shareholders. For 2022, the CHR Committee set threshold, target and maximum goals for adjusted net income shown below, where threshold was considered achievable, target was considered challenging yet attainable and maximum was considered possible with significant effort. However, no payments are made under this portion of the annual incentive award unless the threshold level of adjusted net income is achieved.

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The achievement of the threshold, target and maximum levels of performance for the adjusted net income metric would result in payouts as a percentage of base salary as follows:

The CHR Committee may, in its sole discretion, adjust the Company’s adjusted net income when determining achievement of this metric for extraordinary or unusual items that would be included in our annual operating results, but not typically considered at the time the targets were set, such as certain asset impairments or extraordinary events that materially affect adjusted net income.

Mission-Based Goals

Mission-based goals typically include specific goals that are related to the individual’s functional area. These goals are established at the beginning of each year jointly by the named executive officer and our CEO and reviewed and modified by the CHR Committee, or in the case of the CEO, by the CHR Committee and the Board. Mission-based goals are integral to achieve key business objectives that help improve our financial performance, contribute to the growth of our Company and promote the achievement of our ESG initiatives, including enhancements to our human capital management and diversity, equity and inclusion efforts. As described in greater detail in “Corporate Governance — The Board’s Role — ESG and Board Oversight,” these efforts include a focus on enhancing talent acquisition, leadership development and talent assessment capabilities and processes; enhancing our employee retention strategy with particular emphasis on career development for diverse and female employees; and establishing a multi-year strategy to support the transformation of our team.

Results

For 2022, adjusted net income was $731 million, exceeding the maximum target performance level of $650 million.

In connection with its review of the performance of our CEO and following extensive discussion with our CEO regarding his evaluation of the performance of our NEOs, the CHR Committee determined that each of our NEOs had achieved 100% of their respective mission-based goals, resulting in a 100% payment of the mission-based payout. Please read “2022 CEO Pay Decisions” and “2022 Pay Decisions for other NEOs” for additional discussion of the 2022 individual mission-based goals.

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Accordingly, the following amounts of incentive compensation were paid with respect to the 2022 year:

Long-Term Incentive Compensation

Design

As part of our annual compensation program, the CHR committee granted the long-term incentive compensation awards as a combination of restricted stock awards and performance share awards. When determining the size of the long-term equity awards, we typically consider amounts that would provide our NEOs with incentive opportunities that would result in pay above the median of our Peer Companies for performance above target. We then take into account individual performance, the position and value of the NEO to our Company, experience and length of service, our desire to incentivize the officer to remain with our Company, and the amount of equity previously awarded to the officer. Once the total annual grant amount for an NEO was determined, the CHR Committee granted 50% of that value in performance share awards and 50% in restricted share awards. This allocation provided each NEO with a higher percentage of performance-based equity awards than in previous years.

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Restricted Stock Awards

Restricted stock awards vest over several years to encourage recipients to remain with the Company. Prior to 2023, restricted stock awards vested over a five-year period, with 40% vesting after two years and an additional 20% vesting in each year thereafter.

For more information on the potential vesting (or forfeiture) of outstanding Restricted Stock Awards, please see the section entitled “Executive Compensation — Potential Payments upon Termination or Change in Control — Group  1 Automotive 2014 Long Term Incentive Plan.”

Performance Share Awards

Performance shares will vest based on Company performance over two years, with 50% vesting based on the Company’s return on invested capital (“ROIC”), and 50% vesting based on the Company’s total shareholder return relative to a comparator group of five domestic automotive retailers (“rTSR”). In addition, performance share awards are subject to an additional three-year, time-based vesting period. As a result, following the end of the two-year performance period, the CHR Committee will assess performance. Any awards that have satisfied the performance-based criteria will then continue to be subject to the time-based vesting requirement.

Return on Invested Capital

We believe ROIC is a metric that aligns with our efforts to build long-term value for shareholders by focusing on the effective allocation of capital. The ROIC performance target for the 2022-2023 performance period was designed to be sufficiently challenging and aligned with the Company’s strategic plan and growth objectives. Potential payout levels as a percentage of target based on actual performance are summarized below:

Relative Total Shareholder Return

The 2022 performance shares that vest based on rTSR are subject to a two-year performance period that ends on December 31, 2023. The comparator group consists of Asbury, Autonation, Lithia Motors, Penske Automotive, and Sonic Automotive (collectively, the “2022 rTSR Comparator Group”). The actual number of performance shares that could be earned range from 0%-200% of the target amount, with adjustments upward or downward from the target 100% payout by 2.0% for each percentage point Group 1’s rTSR is above or below that of the median company’s rTSR.

In addition, the portion of the awards subject to rTSR performance are also subject to a cap on the maximum fair market value of the awards that become earned. As a result, the maximum fair market value (determined as of the last day of the applicable performance period) of the shares (or restricted stock, as further described below) may not exceed four times the fair market value of the target number of shares subject to rTSR performance originally granted to the NEO (the “Maximum Value”).

The following table illustrates the percentage of target performance shares that could be earned based on Group 1’s rTSR performance to the 2022 rTSR Comparator Group:

Attainment within performance parameters is subject to interpolation on a linear basis.

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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 NEOs provide that upon an NEO’s termination due to death or disability, the performance shares will pay out following the performance period based on actual performance. If an NEO’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 NEO’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.

2022 Awards

In February 2022, the CHR Committee reviewed the competitive analysis prepared by PM&P and the Company’s comprehensive compensation review to determine how each NEO’s base salary and total compensation compared to their peers. The CHR Committee also assessed all elements of each executive’s pay relative to total compensation. When making the decision as to the size of the equity award for each NEO the CHR Committee also considered each executive’s current equity position for purposes of reward and retention and considered other factors, such as size of previous awards, contribution to corporate results, the nature of the executive’s leadership role and Company performance during the year. Based on this analysis and review, on February 15, 2022, the CHR Committee granted the following restricted stock and performance share awards to the NEOs:

For more information on the 2022 equity awards, please see the section entitled “Executive Compensation —Grants of Plan-Based Awards in 2022.”

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2022 CEO Pay Decisions

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2022 Pay Decisions for other NEOs

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