Michael Welch
ASBURY AUTOMOTIVE GROUPAbout Michael Welch
Michael Welch (age 50) is Senior Vice President & Chief Financial Officer of Asbury Automotive Group (ABG), a role he has held since August 2021. He previously served as Vice President and Corporate Controller at Group 1 Automotive and began his career at Price Waterhouse; he holds a BBA from Oklahoma Baptist University and is a CPA (Texas) . In 2024, ABG reported Adjusted EBITDA of $980 million (down 13.5% YoY), adjusted diluted EPS of $27.24 (down 16.5% YoY), and an adjusted operating margin of 5.8% (highest among automotive retail peers), with a 2024 TSR of 13.5% used as a modifier in PSU payouts .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Group 1 Automotive (GPI) | Vice President & Corporate Controller | 2019–2021 (June 2019–Aug 2021) | Senior finance leadership (controller) supporting reporting/controllership functions |
| Group 1 Automotive (GPI) | Various roles of increasing responsibility (treasury, financial reporting, FP&A, internal audit) | 2000–2019 | Built comprehensive dealership finance capabilities across core functions |
| Price Waterhouse | Began career (audit/accounting) | Not disclosed | Early-career public accounting foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No public company directorships or external roles disclosed in the executive biography |
Fixed Compensation (CFO – 2024)
| Item | Value |
|---|---|
| Base salary (annualized) | $725,000 |
| Salary earned (SCT) | $718,269 |
| Target annual cash bonus (% of salary) | 85% |
| Threshold/Maximum bonus (% of salary) | 42.5% / 170% |
| Actual 2024 annual cash bonus paid | $585,438 |
| Perquisites (2024) | Demonstrator vehicle incremental cost $12,716; auto allowance $923; 401(k) match (included in “All Other”) |
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Weight | Target framework | 2024 actual | Payout (% of target) |
|---|---|---|---|---|
| EBITDA (adjusted for extraordinary items) aligned to USAAS (Wards) | 80% | Threshold 85% of target; Target 100%; Max 115%; payout interpolated by actual USAAS and EBITDA | Adjusted EBITDA $985.0m vs USAAS-derived threshold/target of ~$923.9m/$1,087.0m at 15.8m USAAS → 69% achievement → 55% payout for this component | 55% |
| Strategic objectives: acquisition integration, ESG progress, operating margin vs peers | 20% | Committee discretion; 0%–40% range | Highest operating margin among peers (5.8%); progress on Koons/Larry H. Miller/TCA integration and ESG initiatives | 30% |
| Committee discretion (other strategic initiatives) | + up to 10% | Discretionary | Recognized execution on integration/ESG/margin | +10% |
| Final payout | — | — | — | 95% of target |
Notes: Plan design and formulas, including USAAS matrix and interpolation, are as described in the proxy .
Long-Term Incentive – 2024 PSUs (performance year 2024; time-vest thereafter)
| Metric | Weight | Target framework | 2024 actual | Payout contribution |
|---|---|---|---|---|
| Adjusted EPS (absolute; USAAS matrix) | 70% | Threshold/Target/Max per USAAS matrix | Adjusted EPS $27.08 → 36% payout (of target) under absolute EPS metric | 36% |
| Adjusted EPS growth vs Automotive Peer Group (relative) | 30% | Committee discretion based on relative rank | Ranked third on 2024 adjusted EPS growth → 34% payout (of target) | 34% |
| TSR modifier | ±10% | +10% if TSR > +10%; –10% if TSR < –10%; cap at 150% total; if TSR < –20% cap 100% | TSR +13.5% → +10% modifier | +10% |
| Final PSU payout factor | — | — | — | 80% of target; earned shares vest ratably over 3 years (subject to service) |
Vesting mechanics: Annual PSUs earn based on 2024 results, then vest 1/3 on the later of first anniversary and Committee determination date, with remaining 1/3 on each of the second and third anniversaries, subject to continued service .
Equity Awards (2024 Grants to Michael Welch)
| Award type | Grant date | Shares/Units | Grant-date fair value | Vesting |
|---|---|---|---|---|
| RSUs | 2/20/2024 | 1,844 | $399,945 | Ratable over 3 years beginning first anniversary |
| PSUs (2024 performance) | 2/20/2024 | Threshold 1,384; Target 2,767; Maximum 4,151 | $600,135 | Earn based on 2024 metrics; earned PSUs vest ratably over 3 years |
Payments under 2024 PSU program (earned based on 80% factor): 2,214 shares awarded to Welch (subject to time-based vesting thereafter) .
Multi‑Year Compensation Mix (Welch)
| Year | Salary | Stock Awards (grant-date fair value) | Non‑Equity Incentive (annual cash) | All Other Compensation | Total |
|---|---|---|---|---|---|
| 2024 | $718,269 | $1,000,080 | $585,438 | $23,990 | $2,327,777 |
| 2023 | $669,231 | $800,067 | $590,963 | $20,150 | $2,080,411 |
| 2022 | $619,231 | $749,819 | $1,062,500 | $8,673 | $2,440,223 |
Observations: 2024 cash incentive fell YoY alongside earnings; equity grants increased to maintain at‑risk mix; perquisites are modest (primarily vehicle allowance/demonstrator and 401(k) match) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Welch) | 6,840 shares; denoted “*” = less than 1% of outstanding (as of 3/26/2025) |
| Shares outstanding (record date) | 19,657,706 |
| Unvested RSUs at 12/31/2024 | 1,760 (2/16/2022 grant); 2,229 (2/14/2023 grant); 1,844 (2/20/2024 grant) |
| Unearned PSUs at 12/31/2024 | 4,151 shown as “unearned” at maximum payout potential for 2024 grant (actual earned shares for 2024 = 2,214; see below) |
| 2024 PSU shares awarded (earned) | 2,214 (subject to 3‑year ratable time vesting) |
| Shares vested in 2024 | 3,735 shares; value realized $826,007 (delivery on vesting; does not imply sale) |
| Ownership guidelines | CFO expected to own ≥3× base salary; directors/NEOs have either met requirements or have time remaining |
| Hedging/pledging | Prohibited for directors and officers; no hedging or pledging permitted |
| Insider trading policy | Formal policy governs transactions; attached as Exhibit 19.1 to 2024 10‑K |
Note: “Unearned PSUs” in the Outstanding Equity table reflect maximum potential under plan disclosure conventions and not actual earned amounts; actual 2024 earned PSUs are disclosed separately .
Employment Terms
| Provision | Summary (CFO – Welch) |
|---|---|
| Severance agreement (without cause / for “good reason”) | One year base salary; one year benefits continuation; pro‑rated bonus equal to what would have been received for the year (must sign release); non‑compete and non‑solicit provisions apply |
| “Good reason” (for NEO severance agreements) | Generally includes mandatory relocation >50 miles, material base salary reduction, or material diminution in authority/duties (with notice/opportunity to cure) |
| Change‑in‑control (CIC) equity treatment | Under the 2019 Plan: double trigger – acceleration if awards are not assumed/replaced, or if assumed and executive is involuntarily terminated within 2 years post‑CIC; otherwise continue per terms |
| Clawback | NYSE/SEC‑compliant recoupment for excess incentive comp upon restatement; additional recoupment for misconduct or error; applies regardless of fault (with limited impracticability exceptions) |
| No hedging/pledging | Officers prohibited from hedging/pledging ABG stock |
Note: CEO terms are different (higher multiples and CIC protections); the CFO is covered by the standard severance agreement, not the CEO employment agreement .
Compensation Structure Notes (Alignment, Risk, Governance)
- Equity-heavy, at‑risk pay design: majority of NEO compensation variable; 2024 PSU framework: 70% absolute adjusted EPS (USAAS matrix) and 30% relative adjusted EPS growth, with a TSR ±10% modifier and a cap. Earned PSUs then time‑vest over three years, reinforcing retention and long‑term alignment .
- Annual bonus featured 80% EBITDA tied to industry SAAR proxy (USAAS) and 20% strategic objectives; committee discretion added +10% for strategic execution; final 2024 payout 95% of target amid softer EBITDA .
- Governance guardrails: double‑trigger CIC equity vesting; prohibition on hedging/pledging; robust clawback; no option repricing; share ownership guidelines; strong say‑on‑pay (99% approval in 2024) .
Investment Implications
- Pay-for-performance: 2024 outcomes (95% annual bonus; 80% PSU) reflect balanced use of absolute, relative, and strategic measures; TSR modifier rewarded 2024 shareholder returns (+13.5%), but EBITDA/EPS declines constrained payouts, indicating sensitivity to fundamentals .
- Retention and selling pressure: Significant unvested RSUs and multi‑year PSU vesting support retention; 3,735 shares vested for Welch in 2024 with $826,007 value realization, signaling periodic supply from vesting but not necessarily open‑market selling; hedging/pledging bans mitigate alignment risk .
- Alignment and risk controls: CFO ownership expectations (≥3× salary) and company‑wide no‑pledge policy reduce incentive misalignment; double‑trigger CIC and moderate severance (1× salary + pro‑rated bonus) limit windfalls while facilitating continuity during transitions .
- Execution focus: With 2024 Adjusted EBITDA and EPS down, ABG still led peers in operating margin; Welch’s tenure since 2021 spans major integrations (Koons/Larry H. Miller/TCA) woven into incentive goals—continued integration and margin discipline remain key drivers for future compensation outcomes and stock performance .