Arie Kotler
About Arie Kotler
Arie Kotler is Chairman, President and Chief Executive Officer of ARKO, serving as CEO and Chairman since the December 22, 2020 Business Combination, and President since January 15, 2021; he has led GPM as CEO since 2011 and President since 2015 . He is 50 years old . Under his tenure, ARKO launched a multi‑year Transformation Plan in 2024 (including converting 153 retail stores to dealer sites) to enhance profitability and capital allocation focus . Performance snapshot: 2024 revenues were $8.73B, Adjusted EBITDA $248.9M; 2023 revenues $9.41B, Adjusted EBITDA $276.3M; 2022 revenues $9.14B, Adjusted EBITDA $293.2M .
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($mm) | 9,142.8 | 9,412.7 | 8,732.0 |
| Adjusted EBITDA ($mm) | 293.2 | 276.3 | 248.9 |
| Fuel gallons sold (mm) | 1,971.0 | 2,241.8 | 2,189.2 |
- Cumulative total return: $100 invested at listing (12/23/2020) was $68.89 at 12/31/2024, versus S&P 500 at $172.80 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ARKO (public company; post-Business Combination) | Chairman & CEO; President since 1/15/2021 | Since 12/22/2020 | Set strategic direction; led Transformation Plan and capital allocation |
| GPM Investments, LLC | CEO (since 9/2011); President (since 4/2015) | 2011–present | Scaled platform via acquisitions and multi-segment model |
| Arko Holdings, Ltd. (TASE, pre-combination) | Chairman & CEO | 2005–12/2020 | Controlling owner of GPM until Business Combination |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Ligad Investments & Building Ltd. | Chairman | Since 2011 | Company 50% owned by ARKO; taken private in 2013 |
| Malrag 2011 Engineering & Construction Ltd. (TASE) | Director (2011–2014); Chairman (2012–2014) | 2011–2014 | Public company board/Chair experience |
Fixed Compensation
| Component | 2022 | 2023 | 2024 | Notes |
|---|---|---|---|---|
| Base Salary ($) | 1,113,319 | 1,146,731 | 1,181,139 | 3% increase approved Dec 2024 |
| Target Annual Bonus (% of salary) | 150% | 150% | 150% | Per employment agreement |
| Actual Annual Bonus Paid ($) | 1,668,600 (Target Bonus) | 885,128 (Target Bonus) | 795,497 earned but declined by CEO |
- Employment agreement: base salary initial $1,080,000 with at least 3% annual increases; Target Bonus 150% of salary; LTI target 350% of salary; first-class travel reimbursement between Richmond and Miami; standard benefits .
Performance Compensation
- Metrics and design: Company uses EBITDA vs Board-approved Annual Budgeted EBITDA for PSUs and cash incentives; threshold at 90% (50% payout), target 100% (100%), max 110% (150%); 2024 EBITDA performance was below 90%, so no 2024-year portion of PSU/Cash LTI vested . In 2024, CEO also received stock-price PSUs tied to achieving share price targets by 12/31/2026 .
- Clawback: SEC/Nasdaq-compliant mandatory 3-year recovery for excess incentive-based compensation after a restatement (adopted Nov 2023) .
- No dividends on unvested awards .
| 2024 Incentive Structure (CEO) | Metric | Weighting/Target | Threshold | Target | Max | Payout/Status | Vesting |
|---|---|---|---|---|---|---|---|
| Target Bonus | Merchandise contribution, margin improvement, EBITDA | 150% of salary | 50% | 100% | 200% | Earned $795,497 but voluntarily declined | Cash; annual |
| PSUs (EBITDA) | Annual Budgeted EBITDA | 3-year cycle | 90% = 50% | 100% = 100% | 110% = 150% | 2024 portion below threshold (no vest) | Cliff vest at 12/31/2026 |
| PSUs (Stock-Price) | Share price targets | n/a | — | — | — | In performance window to 12/31/2026 | Cliff vest at 12/31/2026 |
| RSUs | Time-based | — | — | — | — | In progress | 1/3 annually starting 3/1/2025 |
2024 CEO Grants (grant-date fair value per ASC 718):
- RSUs: 2/29/2024 158,138 units ($1,032,641); 4/16/2024 50,604 units ($237,839); both vest in three equal annual installments beginning 3/1/2025 .
- PSUs (EBITDA): 4/16/2024 target 208,742 (range 104,371–313,113), $981,087 grant-date value; vest based on 2024–2026 EBITDA vs budget, cliff at 12/31/2026 .
- PSUs (Stock-Price): 4/16/2024 target 298,784 (range 149,392–448,176), $552,750 grant-date value; vest upon achieving stock-price targets by 12/31/2026 .
Equity Ownership & Alignment
- Beneficial ownership: 22,658,874 shares (19.6% of outstanding) including 9,452,636 via KMG Realty LLC and 1,170,252 issuable upon options exercisable within 60 days; outstanding shares at record date 114,680,085 . No shares pledged by directors or executive officers as of 12/31/2024; pledging requires pre-notification under policy .
- Hedging prohibited under Insider Trading Policy .
- Section 16 compliance: one late Form 4 filed by Arie Kotler on March 6, 2024 (RSU grant) .
| Beneficial Ownership (as of 4/11/2025) | Shares | % Outstanding |
|---|---|---|
| Arie Kotler | 22,658,874 (incl. KMG Realty LLC and 1,170,252 options) | 19.6% |
Outstanding awards and near-term vesting (12/31/2024 snapshot):
- Options: $10.00 exp. 3/6/2031 (fully vested); $8.49 exp. 3/2/2032 (150,967 vested; 301,936 unexercised to vest 3/1/2025); $10.00 exp. 3/2/2032 (fully vested); $8.58 exp. 3/2/2033 (272,860 vested; 136,430 vest 3/1/2025 & 3/1/2026) .
- RSUs: 63,604 vest 3/1/2025; 208,742 vest 1/3 on 3/1/2025, 3/1/2026, 3/1/2027 .
- PSUs: 2022-cycle paid 75% of target on 2/28/2025; 2023-cycle in performance to 12/31/2025; 2024-cycle in performance to 12/31/2026; stock-price PSUs in performance to 12/31/2026 .
| CEO Equity and Vesting (selected) | Quantity | Key Dates/Terms |
|---|---|---|
| Options @ $10.00 exp. 3/6/2031 | 126,000 (vested) | Fully vested |
| Options @ $8.49 exp. 3/2/2032 | 150,967 vested; 301,936 unexercised | 100% vest 3/1/2025 |
| Options @ $8.58 exp. 3/2/2033 | 272,860 vested; 136,430 unexercised | 50% vest 3/1/2025; 50% 3/1/2026 |
| RSUs (two tranches) | 63,604; 208,742 | 63,604 vests 3/1/2025; 208,742 vests 1/3 on 3/1/2025–2027 |
| PSUs (2022 grant) | 229,293 (probable outcome) | 75% of target vested 2/28/2025 |
| PSUs (2023 grant) | 186,959 (probable) | Performance period ends 12/31/2025 |
| PSUs (2024 grant) | 156,557 (probable) | Performance period ends 12/31/2026 |
| PSUs (Stock-Price 2024) | 298,784 (probable) | Vest upon stock-price targets by 12/31/2026 |
Implications:
- Alignment: Very high insider ownership (19.6%) and multi-year PSU mix strengthen pay-performance alignment .
- Selling pressure: 2025–2027 RSU/option vesting could create incremental supply, but there is no pledging; hedging is prohibited .
Employment Terms
| Term | Key Provisions |
|---|---|
| Agreement & Term | CEO agreement dated 9/8/2020; 3-year term from 12/22/2020, auto-renews annually |
| Cash & LTI | Salary with ≥3% annual increase; Target Bonus 150% of salary; LTI target 350% of salary |
| Perquisites | First-class air travel/hotel for Richmond–Miami commute; company pays employee portion of group medical |
| Severance (No CIC) | If terminated without cause or resigns for good reason: 2x (salary + Target Bonus) paid over 2 years; immediate vesting of unvested LTIs |
| CIC Double Trigger | If terminated without cause or for good reason within 2 years post-CIC: lump-sum 3x (salary + Target Bonus) |
| Death/Disability | Pro-rata Target Bonus, pro-rata vesting of LTIs, continuation of health benefits |
| Restrictive Covenants | Non-compete and non-solicit for 2 years post-termination (with severance payment condition) |
| “Cause” / “Good Reason” | Detailed definitions including pay/role diminution, relocation, change in control (notice and cure required for Good Reason) |
Performance & Track Record
- Strategic execution: In 2024, led the launch of a Transformation Plan, converting 153 retail stores to dealer sites to elevate profitability and focus investments; plan targets additional conversions in 2025 and foodservice upgrades .
- M&A program: Continued consolidation, including SpeedyQ acquisition (21 stores) in 2024; 26 acquisitions since 2013 .
- Operating trends (2024 vs. 2023): Revenues down 7.2% (lower fuel prices/volumes and VA skill gaming elimination), merchandise margin expanded to 32.8%; Adjusted EBITDA $248.9M (down from $276.3M) .
- Stock performance: $68.89 total return on $100 since 12/23/2020 through 12/31/2024; stock and volume volatility highlighted in risk factors .
Board Governance
- Roles: Kotler serves as Chairman and CEO (combined role permitted by bylaws) with Lead Independent Director (Andrew R. Heyer) providing independent oversight (exec sessions, agenda setting, investor liaison) .
- Independence and structure: Board determined all non-employee directors are independent under Nasdaq rules; committees (Audit, Compensation, Nominating & Corporate Governance) are fully independent .
- Attendance: Board held 13 meetings in 2024; each director attended at least 75% of Board/committee meetings .
- Cybersecurity oversight: Cybersecurity Special Committee (formed 11/2023) transitioned to Audit Committee subcommittee (1/2025) with structured incident reporting .
Committee memberships (2024):
| Director | Audit | Compensation | Nominating & Governance |
|---|---|---|---|
| Michael J. Gade | Chair | Member | Member |
| Andrew R. Heyer | Member | — | — |
| Steven J. Heyer | — | Chair | Member |
| Sherman K. Edmiston III | — | Member | Chair |
| Avram Friedman | Member | Member | — |
| Laura Shapira Karet | Member | — | Member |
Dual-role implications: CEO/Chairman concentration is balanced by a Lead Independent Director role, independent committee structure, regular executive sessions, and formal governance guidelines .
Compensation Structure Analysis
- Mix and evolution: CEO moved from stock options (2021–2023) to adding stock-price PSUs in 2024, maintaining a high share of at-risk pay and reinforcing stock-performance alignment; RSUs vest over three years; PSUs use multi-year EBITDA targets .
- Pay-for-performance: 2024 EBITDA below threshold led to no PSU/Cash LTI vesting for the year; CEO declined his earned 2024 cash Target Bonus to align with broader management outcomes .
- Governance features: Robust clawback policy (SEC/Nasdaq), no dividends on unvested stock, no tax gross-ups, independent consultant (Mercer) advising the Compensation Committee .
Related Party Transactions (Governance considerations)
- Voting agreements: Seven-year agreements under which certain large holders and the SPAC sponsor committed to vote in favor of Kotler’s Board nomination, increasing leadership continuity but concentrating influence .
- Registration and sponsor support rights from Business Combination remain in place .
Say‑on‑Pay & Shareholder Feedback
- 2024 say-on-pay support exceeded 80%; Compensation Committee retained design without material changes in response .
Expertise & Qualifications
- Deep convenience retail and M&A track record across GPM/ARKO and public-company leadership roles (Chair/CEO/Director across multiple entities) .
- Age 50; biography emphasizes strategic execution and industry experience; specific education for Kotler not disclosed in proxy .
Work History & Career Trajectory
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| ARKO | Chairman, President & CEO | Since 2020 | Post‑SPAC combination leadership |
| GPM Investments | CEO/President | Since 2011/2015 | Scaled via acquisitions |
| Arko Holdings (TASE) | Chairman & CEO | 2005–2020 | Prior controlling owner of GPM |
| Malrag (TASE) | Director/Chair | 2011–2014 | Public board/Chair |
| Ligad Investments | Chairman | Since 2011 | 50% owned by ARKO |
Compensation Committee Analysis
- Members: Steven J. Heyer (Chair), Sherman K. Edmiston III, Avram Friedman, Michael J. Gade; all independent and non‑employee .
- Consultant: Mercer (US) — independent; advised on peer review, market levels/mix, and performance measures; no conflicts identified .
- Shareholder responsiveness: Maintained program following >80% Say‑on‑Pay support .
Investment Implications
- Alignment: Significant insider ownership (19.6%) and multi‑year PSUs (EBITDA and stock‑price) support long‑term value alignment; no pledging and anti‑hedging reduce misalignment risks .
- Near‑term supply: 2025–2027 vesting (RSUs/options) could add technical selling pressure; watch Form 4s around March 1 each year and 2026 PSU determinations .
- Retention/continuity: Robust severance (2x) and CIC (3x) economics and voting agreements enhance leadership stability through transformation; however, CEO/Chair dual role and historical voting agreements concentrate governance power — mitigated by Lead Independent Director and fully independent committees .
- Performance risk: 2024 under‑threshold EBITDA outcome and revenue declines underscore execution risk in retail traffic and fuel volumes; success of dealer conversions, foodservice initiatives, and margin management are key to PSU outcomes and share‑price PSUs by 2026 .
- Shareholder sentiment: >80% Say‑on‑Pay support indicates current design is broadly acceptable; any future underperformance could challenge support if payouts become uncoupled from results .