Daniel J. McHenry
GROUP 1 AUTOMOTIVEAbout Daniel J. McHenry
Daniel J. McHenry (Age: 50) has served as Senior Vice President & Chief Financial Officer since August 2020, after leading Group 1’s U.K. finance organization since 2007. He holds a Bachelor of Economics (Queen’s University Belfast), a Master of Accounting & Management Science (University of Southampton), and is a member of the Association of Chartered Certified Accountants (UK) . Under his finance leadership in 2024, Group 1 reported record revenues of $19.9 billion, gross profit of $3.2 billion, and parts & service gross profit of $1.4 billion, with adjusted net income of $530.6 million (EPS $39.21) despite margin normalization; cumulative TSR (value of $100) rose to $436.47 by 2024 versus $313.79 in 2023 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Group 1 Automotive (UK) | U.K. Finance Director | 2007–2020 | Joined with Chandlers BMW acquisition; led U.K. finance through the company’s first UK venture, supporting scaling and integration . |
| KPMG (UK) | Audit/Advisory | ~5 years (pre-2007) | Professional accounting experience supporting finance discipline . |
External Roles
- No external directorships or committee roles disclosed for McHenry in the proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $620,000 | $700,000 | $780,000 (merit increase effective Jan 1, 2024) |
| Annual Incentive Paid ($) | $697,500 | $673,312 | $684,826 |
| Stock Awards Grant-Date Fair Value ($) | $749,858 | $849,798 | $1,149,776 |
| All Other Compensation ($) | $36,276 | $32,173 | $40,964 |
| Total Compensation ($) | $2,110,251 | $2,265,048 | $2,667,900 |
Perquisites detail (2024): 401(k) match $12,670; vehicle allowance $15,000; demonstrator vehicle personal-use incremental cost $12,083; gift card & group term life $1,211 .
Performance Compensation
Annual Incentive Plan (AIP) Structure and 2024 Payouts (McHenry)
| Metric | Weight | Threshold | Target | Max | Actual 2024 | Payout (% of Base) |
|---|---|---|---|---|---|---|
| Adjusted Net Income from Continuing Operations | 80% | $446M | $557M | $613M | $548M (adjusted for CDK incident) | 64.0% |
| Parts & Service Gross Profit | 20% | $1,157M | $1,285M | $1,478M | $1,368M | 23.8% |
| Total AIP Payout | — | — | — | — | — | 87.7% of base salary |
Annual incentive opportunity ranges (as % of base salary): Threshold 41.7%, Target 83.3%, Max 166.7% .
CDK Cyber Incident adjustment: CHR Committee increased adjusted net income for AIP purposes from $531M to $548M to neutralize outage impact .
Long-Term Incentive (LTI) Awards and Performance Shares
| Grant | Instrument | Threshold (#) | Target (#) | Max (#) | Grant-Date FV ($) | Performance Metrics & Vesting |
|---|---|---|---|---|---|---|
| 2/12/2024 | Performance Shares | 1,024 | 2,049 | 4,098 | $574,888 | ROIC (50%) and rTSR (50%); performance period 1/1/2024–12/31/2025; service vest 12/31/2026; rTSR capped at 100% if negative TSR; overall “Maximum Value Limit” 400% of grant value . |
| 2/12/2024 | Restricted Stock | — | 2,049 | — | $574,888 | Time-based vesting ratably over 3 years (33%, 33%, 34%) for awards granted 2023+ . |
| 2/14/2023 | Performance Shares (earned) | — | 1,845 (earned) | — | $777,631 (market value shown) | Performance period 1/1/2023–12/31/2024; service vest continues to 12/31/2025 . |
Tracking as of 12/31/2024: rTSR portion at 156.2% of target; EPS portion (for 2025 metric change reference) tracking at 94% (table reporting convention reflects maximum in “outstanding” table) . For 2025 awards, CHR replaced ROIC with adjusted EPS (50%) alongside rTSR (50%) for clearer line-of-sight and peer alignment .
Stock vested in 2024 (McHenry): 3,843 performance shares ($1,629,970) and 3,698 restricted shares ($1,047,889) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/19/2025) | 17,769 shares; <1% of outstanding (13,041,128) . |
| Restricted Shares Counted in Ownership | 5,498 restricted shares (voting, not dispositive) included in totals . |
| Unvested Equity at 12/31/2024 | See detailed outstanding awards table below. |
| Stock Ownership Guidelines | SVPs must hold at least 3× base salary; compliance expected within five years; all officers met or are expected to meet requirements . |
| Hedging/Pledging | Prohibited for officers/directors; short sales and derivative hedging also prohibited . |
| Options | Company does not currently grant stock options; none outstanding . |
Outstanding equity awards (12/31/2024):
| Grant Date | Unvested Restricted Stock (#) | Market Value ($) | Unearned Performance Shares (#) | Market Value ($) |
|---|---|---|---|---|
| 02/19/2020 | 510 | $214,955 | — | — |
| 08/18/2020 | 415 | $174,914 | — | — |
| 02/19/2021 | 1,020 | $429,910 | — | — |
| 02/15/2022 | 1,286 | $542,023 | — | — |
| 02/14/2023 | 1,237 | $521,371 | — | — |
| 02/14/2023 (earned PS) | 1,845 | $777,631 | — | — |
| 02/12/2024 | 2,049 | $863,613 | 2,049 | $863,613 |
Vesting schedules:
- Restricted stock granted before 2023: 5-year schedule (40% at 2-year anniversary; 20% at years 3–5) .
- Restricted stock granted 2023+: 3-year schedule (33%, 33%, 34%) .
- Performance shares (2024 grant): performance period through 12/31/2025; service vest 12/31/2026; conversion and continued vesting rules for planned retirement; accelerated vesting upon death/disability per LTIP terms .
Employment Terms
| Provision | Key Terms |
|---|---|
| Retention/Non-Compete (McHenry) | Two-year non-compete and non-solicit post-termination; forfeiture of cash/equity awards realized in prior 12 months if covenant breached . |
| Severance (Qualifying Termination) | Cash payment equal to average annual base salary received over prior 24 months (subject to restrictive covenants and a general release) . |
| Change-in-Control (Corporate Change) | Equity acceleration value upon corporate change per termination/award assumptions; McHenry corporate change equity comp modeled at $3,524,416 (as of 12/31/2024 at $421.48 stock price); total for death/disability $4,264,416 . |
| Triggers/Definitions | Cause, Corporate Change, Constructive Termination, Disability defined with specific conditions (notice/cure rights included) . |
| Clawback | NYSE-compliant recoupment of incentive-based compensation in the event of required accounting restatement; covers EPS and other financial-reporting measures . |
| Tax Gross-Ups | None provided to NEOs . |
Termination and change-in-control quantified (as of 12/31/2024):
| Scenario | Salary & Bonus ($) | Equity ($) | Total ($) |
|---|---|---|---|
| Involuntary Termination (McHenry) | $740,000 | — | $740,000 |
| Corporate Change (McHenry) | — | $3,524,416 | $3,524,416 |
| Death/Disability (McHenry) | $740,000 | $3,524,416 | $4,264,416 |
Deferred Compensation (balance and earnings, 2024):
| Item | Amount |
|---|---|
| Executive Contributions (2024) | $146,483 |
| Aggregate Earnings (2024) | $37,299 (includes $12,334 above-market) |
| Aggregate Balance at FYE | $507,922 |
| Guaranteed Crediting Rate | 8.5% (plan declared rate for 2024) |
Performance & Track Record
- 2024 financial performance: Revenues $19.9B; gross profit $3.2B; parts & service GP $1.4B; adjusted net income $530.6M; adjusted free cash flow $504.1M .
- Capital allocation: ~$3.9B acquired revenues; $161.6M share repurchases (~3.8% of starting shares); $229.7M disposition proceeds; quarterly dividends totaling $1.88/share .
- TSR progression (value of $100 investment): 2020 $131.93; 2021 $197.96; 2022 $184.39; 2023 $313.79; 2024 $436.47 .
| Year | Company TSR ($100 basis) | Peer Group TSR ($100 basis) |
|---|---|---|
| 2020 | $131.93 | $146.68 |
| 2021 | $197.96 | $205.74 |
| 2022 | $184.39 | $189.75 |
| 2023 | $313.79 | $268.90 |
| 2024 | $436.47 | $285.86 |
Risk and execution notes:
- AIP adjusted for CDK outage to avoid penalizing operational execution amid external system failure .
- Section 16(a) late Form 4s noted for McHenry (two forms, three transactions); monitor filing timeliness .
Compensation Committee Analysis
- CHR Committee (independent) members: Anne Taylor (Chair), Steven C. Mizell, Stephen D. Quinn, Steven P. Stanbrook, Charles L. Szews, MaryAnn Wright .
- Independent consultant: Pearl Meyer re-engaged in 2024 (no conflicts) .
- Compensation Peer Group (unchanged in 2024): Asbury, AutoNation, CarMax, Lithia, Penske, Sonic; Advance Auto Parts, AutoZone, Genuine Parts, LKQ, O’Reilly; Rush Enterprises .
- Governance: Prohibitions on hedging/pledging; robust ownership requirements; clawback policy; no single-trigger equity vesting; no tax gross-ups .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval ~98%; CHR made no significant structural changes in response to strong support .
Equity Ownership & Vesting Pressure Map (McHenry)
| Upcoming Vesting Milestones | Detail |
|---|---|
| 2023 RS grants | 33%/33%/34% annual tranches; remaining tranches in 2025–2026 . |
| 2023 PS earned (1,845 sh) | Service vest continues until 12/31/2025 . |
| 2024 RS grant (2,049 sh) | Tranches in 2025–2027 . |
| 2024 PS grant (2,049 target sh) | Performance ends 12/31/2025; service vest 12/31/2026; rTSR tracking >100% suggests potential elevated payout subject to limits . |
Investment Implications
- Pay-for-performance alignment: McHenry’s AIP tied 80% to adjusted net income and 20% to parts & service GP; 2024 payout at 87.7% of base reflects balanced execution amid margin normalization, with strong parts & service performance . LTI weighting to PSUs/RS supports shareholder alignment; 2025 move to adjusted EPS increases clarity and reduces capital allocation noise .
- Retention risk: Two-year non-compete, severance equal to 24‑month average base salary on qualifying termination, and multi-year vesting reduce near-term departure risk; no tax gross-ups and robust clawback/ownership policies indicate disciplined governance .
- Trading signals: Multiple vesting events (2025–2027) and rTSR tracking at 156.2% (as of 12/31/2024) could create selling pressure around vest dates; prohibitions on pledging/hedging limit riskier behavior; monitor Form 4 activity given prior filing timeliness issues .
- Performance backdrop: Record 2024 revenue and cash generation with active capital allocation (acquisitions, buybacks) and strong TSR trending support finance execution under McHenry; watch 2025 AIP inclusion of U.K. goal given Inchcape Retail integration .