Peter Kelly
OPENLANEAbout Peter Kelly
Peter J. Kelly (age 56) is Chief Executive Officer of OPENLANE, Inc. (NYSE: KAR) and a director since April 2021. He holds an Engineering degree from University College Dublin and an MBA from Stanford University . Under Kelly, 2024 performance included revenue up 5% to $1.8B, operating profit of $182.2M, and cash from operations of $292.8M . Pay-versus-performance shows 2024 TSR value of an initial $100 investment at $92 versus $149 for the S&P SmallCap 600; 2024 Adjusted EBITDA was $293.4M and net income $109.9M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| OPENLANE, Inc. | CEO | 2021–present | Leads digital marketplace strategy and enterprise transformation . |
| OPENLANE, Inc. | President | 2019–2021 | Unified go-to-market and marketplace leadership . |
| OPENLANE, Inc. | President, Digital Services; CTO | 2013–2019 | Built digital auction platform, modernized tech stack . |
| OPENLANE US, Inc. | CEO | 2011–2013 | Scaled U.S. digital auctions . |
| OPENLANE US, Inc. | President & CFO | 2010–2011 | Financial leadership during growth phase . |
| OPENLANE US, Inc. | Co-founder and executive roles | 1999–2010 | Founded digital auction startup; product and market development . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Taylor Woodrow (U.K.) | Engineering, construction & procurement | 1989–1997 | Large-scale project management experience . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $767,692 | $773,000 | $773,000 |
| Non-Equity Incentive Plan Compensation ($) | $216,024 | $1,131,220 | $1,059,976 |
| CEO Pay Ratio | 107:1 (2024) | — | — |
2024 annual incentive opportunity: Base salary $773,000; threshold 62.5%, target 125%, max 250% of base; 80% Adjusted EBITDA and 20% NA Volume weights .
Performance Compensation
| Metric | Weighting | Target | Actual | Payout vs Target | Vesting/Notes |
|---|---|---|---|---|---|
| 2024 Adjusted EBITDA | 80% | $290M | Achieved weighting result 111.3% | 111.3% | Annual cash incentive; capped at 200% . |
| 2024 NA Volume (vehicles) | 20% | 774,580 | Achieved weighting result 62.4% | 62.4% | Annual cash incentive; capped at 200% . |
| Strategic Modifier | ±15% | N/A | +8% | +8% | Based on growth, CX, tech, efficiency, engagement . |
| 2024 Annual Incentive Total | — | Target $966,250 | Payout $1,059,976 | 109.7% | CEO target = 125% of base . |
| 2024 PRSUs (Grant 2/22/2024) | 75% Cumulative Adjusted EBITDA; 25% Relative TSR | 341,065 target units; $5,000,013 grant-date value | Earn-out over 2024–2026 | N/A | Vest at end of 3-year period through 12/31/2026 . |
| Performance Stock Options (2021 grants) | — | Price hurdles: +$5, +$10, +$15, +$20 above exercise price; 20-day VWAP; time-based 4-year schedule | First hurdle achieved (Dec 2024, portion vested) | N/A | Align long-term value creation; substantial unvested balance remains . |
Equity Ownership & Alignment
- Beneficial ownership: 905,906 common shares; less than 1% of outstanding .
- Options exercisable within 60 days: 413,280 (included in beneficial count) .
- Ownership guidelines: CEO must hold stock equal to 6x base salary; executives must hold 60% of vested shares until guideline met; all NEOs except a newly promoted exec comply (Kelly in compliance) .
- Anti-hedging/pledging: Directors and officers prohibited from hedging, pledging, margin accounts, and short sales .
Outstanding equity detail (12/31/2024):
| Instrument | Count | Price/Value | Expiration | Status |
|---|---|---|---|---|
| Time-based options (2021) | 88,933 exercisable; 29,645 unexercisable | $13.81 strike | 03/04/2031 | 4-yr ratable vesting . |
| Performance-based options (2021) | 118,577 exercisable; 355,732 unearned | $13.81 strike | 03/04/2031 | Price hurdles +$5/+10/+15/+20 over strike; 20 consecutive trading days . |
| Time-based options (2021) | 132,093 exercisable; 44,032 unexercisable | $18.23 strike | 06/04/2031 | 4-yr ratable vesting . |
| Performance-based options (2021) | 704,501 unearned | $18.23 strike | 06/04/2031 | Price hurdles +$5/+10/+15/+20 over strike . |
| Unvested PRSUs (2022) | 109,643 | $2,175,317 market value | — | Earn-out per plan . |
| Unvested RSUs/PRSUs (2022) | 49,026 | $972,676 market value | — | Per plan . |
| Unvested PRSUs (2023) | 300,566 | $5,963,229 market value | — | Earn-out per plan . |
| Unvested PRSUs (2024) | 341,065 | $6,766,730 market value | — | Earn-out per plan . |
| In-the-money value of time-based options (12/31/24) | — | $249,651 (intrinsic at $19.84) | — | Per termination table . |
Employment Terms
| Term | Detail |
|---|---|
| Role start date | CEO since April 2021 . |
| Contract type | At-will, with severance/change-in-control provisions . |
| Severance (without cause / good reason) | Cash severance equal to 2x salary + target bonus (CEO); continued benefits; pro rata and earned bonus . |
| Change-in-control (double trigger) | If terminated within 2 years of CIC: 2x salary + target bonus; continued benefits; pro rata/earned bonus . |
| Equity treatment on CIC | Assumed/replaced awards: double-trigger acceleration; non-assumed awards: immediate vesting per target/actual components as specified . |
| Non-compete & non-solicit | 1-year non-compete; 1-year non-solicit of employees and customers post-termination . |
| Clawback | Mandatory recovery of incentive compensation upon restatement; 3-year lookback; applies to current/former execs . |
| Tax gross-ups | No excise tax gross-ups on severance/CIC . |
Board Governance
- Director since April 2021; not independent (serving as CEO) .
- Committee roles: None; all committees comprised solely of independent directors .
- Board leadership: Independent Chair; expected transition to Howell as Chair post-2025 meeting; CEO is not Chair (limits dual-role risk) .
- Nomination rights: Employment agreement provides that Kelly is nominated to the Board during employment .
- Board meetings & attendance: 5 meetings in 2024; all incumbent directors ≥75% attendance; executive sessions each meeting with independent Chair presiding .
Director Compensation
- Employee directors (Kelly) receive no separate director fees; 2024 director compensation only for non-employee directors .
- Non-employee director program: Cash retainer $85,000, stock retainer $170,000; Chair fee $100,000; committee chair/member fees; 3-year holding on vested grants; ownership guideline 5x cash retainer .
Compensation Peer Group (Benchmarking)
- 2024 comparator group (April 2023–July 2024): ACV Auctions, CarGurus, CarMax, Cars.com, Carvana, Copart, CoStar, Equifax, Etsy, Fair Isaac, Gentex, IAA (RB Global), RB Global, TripAdvisor, Vroom, Yelp .
- Revised July 2024: Added ACI Worldwide and Frontdoor; removed IAA and Vroom .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~97%; 5-year average ~95% .
- Ongoing investor engagement on governance, compensation, ESG .
Performance & Track Record (Selected Metrics)
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| TSR value of $100 investment ($) | 73 | 61 | 69 | 92 |
| Peer group TSR (S&P SmallCap 600) ($) | 141 | 118 | 137 | 149 |
| Net Income ($M) | 66.5 | 241.2 | (154.1) | 109.9 |
| Adjusted EBITDA ($M) | 434.2 | 231.2 | 272.0 | 293.4 |
Risk Indicators & Red Flags
- Hedging/pledging prohibited; option repricing prohibited .
- No excise tax gross-ups; capped payouts; robust ownership/holding requirements .
- Compensation risk review concluded balanced pay design without excessive risk-taking .
- Double-trigger equity vesting; structured CIC equity treatment mitigates windfalls .
Equity Ownership & Alignment Detail (Vested vs Unvested)
| Category | Shares/Units |
|---|---|
| Beneficial ownership (incl. options within 60 days) | 905,906 shares |
| Options exercisable (selected 2021 grants) | 88,933; 118,577; 132,093 |
| Options unexercisable (selected 2021 grants) | 29,645; 44,032 |
| Performance options unearned (price hurdles) | 355,732; 704,501 |
| Unvested PRSUs (2022, 2023, 2024) | 109,643; 300,566; 341,065 |
| Unvested RSUs/PRSUs (2022) | 49,026 |
Governance/Committee Independence Implications
- CEO serves on the Board but is not independent; however, the Board has an independent Chair, all committees are fully independent, and executive sessions occur at each meeting—mitigating concerns about CEO-chair dual roles and enhancing oversight .
- Kelly’s nomination right while employed is disclosed, alerting investors to potential entrenchment risk balanced by independent majority and majority voting standards .
Investment Implications
- Alignment: High at-risk pay (approximately 91% of CEO target compensation at risk) and 90% performance-based equity in 2024 drive linkage to EBITDA and TSR; strict ownership/holding and anti-hedging/pledging policies reduce misalignment risk .
- Retention and selling pressure: Large unvested PRSU and performance-option overhang with strict price hurdles suggests continued retention incentive; first price hurdle achieved in Dec 2024 indicates potential incremental vesting and possible liquidity events, but 60% holding requirement mitigates near-term selling pressure .
- Change-in-control economics: Double-trigger cash (2x salary+target bonus) and equity acceleration terms are standard market protections—no tax gross-ups; governance-friendly features lower shareholder risk of windfall payouts .
- Performance risk: TSR has trailed peer benchmark since 2021 despite improving Adjusted EBITDA and 2024 net income recovery; equity awards keyed to multi-year EBITDA and relative TSR should incentivize closing the gap .