Robert Kurnick Jr
PENSKE AUTOMOTIVE GROUPAbout Robert Kurnick Jr
Robert H. Kurnick, Jr. (age 63) is President of Penske Automotive Group (PAG) since April 2008 and has served on PAG’s Board since 2006; he is also Vice Chair of Penske Corporation (since 2017) and a director there since 2003 . PAG’s recent performance context: 2024 revenue rose ~3% to over $30B, net income was $923M, EPS $13.74, and the company completed acquisitions with $2.1B in expected annualized revenue; quarterly dividends were increased 51% in 2024 (from $0.79 to $1.19) and debt-to-capitalization stayed below 30% . Over the last five years, total shareholder return (TSR) rose ~235% (value of a $100 investment to $335.24), outpacing the peer group’s ~192%; 2024 EBITDA was $1,485.7M . Education is not disclosed in the proxy.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Penske Corporation | Vice Chair | 2017–present | Governance/leadership across diversified transportation services; broad industry relationships |
| Penske Corporation | President | 2003–2017 | Senior executive leadership overseeing affiliate operations; deep knowledge of issues affecting PAG |
| Penske Corporation | Director | 2003–present | Board-level oversight; alignment with PAG strategy via shared ownership/control |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Penske Transportation Solutions (PTL/PTS) | Advisory Board member; PAG representative | Current | Minority governance rights and pro rata distributions for PAG; oversight of major JV with PC and Mitsui |
| Penske Transportation Solutions | Advisory Board affiliation noted in PAG director bios | Current | Institutional knowledge transfer and strategic alignment with trucking/logistics JV |
Fixed Compensation
Multi-year summary for Kurnick (NEO):
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 1,000,000 | — | 1,500,000 | 279,753 (incl. $37,700 auto allowance; $50,000 charitable match; $192,083 dividends on unvested RS) | 2,729,753 |
| 2023 | 900,000 | — | 1,000,000 | 241,405 | 2,141,405 |
| 2022 | 900,000 | — | 1,000,000 | 217,834 | 2,117,834 |
Notes:
- CEO and President do not receive discretionary cash bonuses; equity grants in lieu of cash bonuses .
Performance Compensation
Kurnick’s awards are paid in restricted stock based on annual performance plans; RS vest 15%/15%/20%/50% over four years with June 1 vesting schedule beginning the following year .
| Metric | Weighting | Target/Thresholds | Actual | Payout Contribution |
|---|---|---|---|---|
| EBITDA | 20% | $1,646M = 100%; <$1,235M = 0%; $1,721M = 200% (pro rata between thresholds) | $1,486M | 12.2% |
| Comparative EPS | 10% | $14.87 = 100%; $14.88–$15.61 = 200%; >$15.61 = 300%; <$11.15 = 0% (pro rata) | $13.74 | 7.0% |
| Stock price performance vs peers | 10% | Meets/exceeds 2/5 = 75%; 3/5 = 100%; 4/5 = 150%; 5/5 = 200% | 0 of 5 | 0.0% |
| U.S. customer satisfaction ≥ OEM requirements | 10% | Threshold as stated | Exceeds | 10.0% |
| No material weaknesses in ICFR | 10% | Threshold as stated | Achieved | 10.0% |
| ESG: Annual global turnover ≤ prior year +2% | 10% | Threshold as stated | Achieved | 10.0% |
| ESG: U.S. auto retail gender diversity ≥ NADA | 10% | Threshold as stated | Achieved | 10.0% |
| Committee discretion | 20% | Discretionary | Awarded | 20.0% |
| Supplemental ESG: U.S. auto retail NPS higher than peer NPS | 10% (supplemental) | Threshold as stated | Achieved | 10.0% |
| Total | 110% | — | — | 89.2% |
Award Outcomes:
- 2024 LTIP (paid Feb 2025): Award $1,338,000; Shares 8,590 (calculated using $155.76 2024 average closing price) .
- 2025 LTIP targets (to be settled in 2026): Minimum $750,000; Target $1,500,000; Max $2,475,000; revised metric weightings shown (EBITDA 25%, EPS 15%, multiple operational/ESG/discretion components; total 110%) .
Grants of Plan-Based Awards (for prior year achievement settled in 2024):
- 2/13/2024 RS grant to settle 2023 LTIP: 6,344 shares; grant date fair value $953,820 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/20/2025) | 90,745 shares; <1% of outstanding |
| Restricted stock outstanding | 49,218 shares |
| Pledging | No pledging disclosed for Kurnick; policy excludes pledged shares from ownership guidelines |
| Stock ownership guidelines (President) | 4x base salary; 5 years to comply; RS count; pledged shares excluded |
| Hedging/short sales | Prohibited without GC approval; no approvals in 2024; no Rule 10b5-1 plans by officers/directors in 2024 or 2025 as of proxy date |
Vesting Schedule (Unvested RS as of 12/31/2024):
| Vest Date | Shares |
|---|---|
| June 1, 2025 | 20,137 |
| June 1, 2026 | 12,733 |
| June 1, 2027 | 7,163 |
| June 1, 2028 | 4,890 |
| June 1, 2029 | 4,295 |
Stock Vested During 2024:
| Shares Acquired on Vesting | Value Realized ($) |
|---|---|
| 14,161 | 2,153,888 |
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement | None for current executive officers (including Kurnick) |
| Pre-arranged severance | None; company retains flexibility for case-by-case arrangements |
| Change-in-control | RS grants vest upon change in control; no guaranteed CIC cash payments |
| Clawback | Compensation recovery policy for unfairly awarded incentive comp upon restatement; NYSE-compliant |
| Deferred compensation | No 2024 contributions or balances for Kurnick in DCP |
| Perquisites (2024) | Auto allowance $37,700; charitable match $50,000; dividends on unvested RS $192,083 |
Board Governance
| Attribute | Detail |
|---|---|
| Board service | Director since 2006 |
| Committee roles | Executive Committee member |
| Independence | Not independent (employee director); majority of board and all key committees are independent |
| Attendance | Directors collectively attended 98% of board/committee meetings in 2024; each director ≥88% |
| Lead Independent Director | H. Brian Thompson (also Compensation Chair; Executive Lead Independent Director) |
| Controlled company status | PAG is a “controlled company” (PC and Mitsui voting agreement); PAG nonetheless complies with non-controlled NYSE requirements |
| Director compensation (employee directors) | Employee directors (Kurnick, CEO) receive no additional director fees; eligible for charitable matching |
Governance dynamics:
- CEO is also Chair; independent Lead Director coordinates executive sessions each board meeting .
- Stockholders agreement with Mitsui and Penske companies (expires March 26, 2030) governs board representation and voting; additional Voting Agreement (Jan 23, 2024) to vote “excess” PC shares proportionally to unaffiliated votes mooted litigation claims regarding buybacks .
Compensation Committee Analysis
| Topic | Detail |
|---|---|
| Committee composition | Independent directors; Compensation & Management Development Committee |
| Consultants | Authority to hire; none used in 2024 |
| Benchmarking peer group | Asbury Automotive, AutoNation, Group 1 Automotive, Lithia Motors, Sonic Automotive |
| Target percentile | No specific quartile targeted |
| Pay program | Base salary; discretionary cash bonuses (not for CEO/President); restricted stock awards; benefits |
| Risk oversight | Committee reviews compensation risk; clawback policy; weighted vesting (70% in years 3–4) mitigates risk |
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval in prior year: over 98% of votes cast supported NEO compensation .
- PAG maintained overall compensation framework reflecting strong shareholder support .
Related Party Transactions (Context)
- Extensive affiliations with Penske Corporation and PTS (e.g., JV governance, distributions, consignment agreements; various intercompany services/leases) overseen under a formal related party transaction approval policy .
- Voting Agreement entered January 23, 2024 to address derivative litigation concerns; litigation dismissed as moot; PAG paid $995,000 in fees/expenses .
Compensation Structure Analysis (Management confidence signals)
- Shift in cash vs equity: Kurnick’s salary increased from $900,000 (2022–2023) to $1,000,000 in 2024, while stock awards rose from $1,000,000 (2022–2023) to $1,500,000 in 2024, reinforcing equity-linked pay emphasis for CEO/President roles .
- Options usage: PAG has not employed stock options in recent years; uses only restricted stock; grants made after annual earnings release; vesting over four years mitigates timing risk .
- Performance metrics: EBITDA, EPS, stock performance vs peer group plus operational/ESG metrics with committee discretion; 2024 plan achieved 89.2% of the 110% plan opportunity .
- Ownership alignment: President guideline at 4x salary; RS count toward compliance; pledged shares excluded .
Performance & Track Record (Selected indicators)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Income ($M) | 545.3 | 1,192.7 | 1,386.2 | 1,058.6 | 923.4 |
| EBITDA ($M) | 934.1 | 1,797.8 | 2,056.9 | 1,653.1 (Adj. 1,693.8) | 1,485.7 |
| 5-yr TSR (Value of $100) | — | — | — | 344.02 | 335.24 |
Additional 2024 highlights: revenue increased ~3% to over $30B; acquisitions added $2.1B expected annualized revenue; dividends raised 51% QoQ; debt-to-capitalization <30% .
Equity Ownership & Alignment (Detail)
| Item | Value |
|---|---|
| Beneficial ownership (incl. unvested RS) | 90,745 shares; <1% ownership |
| Unvested RS vesting cadence | Heavily weighted to later years (50% vesting in year 4) supporting retention and alignment |
| Dividends on unvested RS (2024) | $192,083 (included in “All Other Compensation”) |
| RS vesting 2024 | 14,161 shares; $2,153,888 value realized |
Employment & Contracts (Retention/transition)
| Category | Disclosure |
|---|---|
| Contract term/renewal | No fixed-term employment agreement disclosed |
| Severance multiples | None pre-arranged; case-by-case historically |
| CIC terms | RS accelerate upon change-in-control |
| Non-compete/solicit/garden leave | Not disclosed |
| Post-termination consulting | Case-by-case historically (company notes flexibility) |
Board Service History and Dual-Role Implications
- Director since 2006; sits on the Executive Committee; not on Audit/Comp/Governance committees .
- Independence: employee director; PAG mitigates combined CEO/Chair structure via an independent Lead Director who leads executive sessions at each board meeting; majority of board and all key committees are independent .
- Controlled company context (PC and Mitsui voting arrangements) may influence governance dynamics, but PAG reports compliance with non-controlled NYSE standards and formal related party oversight .
Director Compensation (as applicable to Kurnick)
- Employee directors receive no additional director cash/equity compensation; eligible for charitable matching (Kurnick’s 2024 “All Other” includes $50,000 charitable match) .
Compensation Peer Group
| Peer Group Companies | Usage |
|---|---|
| Asbury Automotive Group; AutoNation; Group 1 Automotive; Lithia Motors; Sonic Automotive | Benchmarking for NEO compensation competitiveness; no specific quartile targeted |
Risk Indicators & Red Flags
- Hedging/pledging: Hedging and short selling prohibited; stock ownership guidelines exclude pledged shares; no pledging disclosed for Kurnick .
- Options repricing: None; PAG uses restricted stock only; awards timed post-earnings .
- Related party transactions: Extensive with PC/PTS; formal approval policy and disclosures (including Voting Agreement mooting litigation) reduce governance risk, but affiliations remain material .
- Say-on-Pay: Strong support (>98%), reducing compensation-related shareholder risk .
Investment Implications
- Pay-for-performance alignment appears robust: President compensation is equity-centric with vesting back-weighted (70% in years 3–4) and multi-factor performance metrics; 2024 plan paid at 89.2% of the expanded 110% opportunity, consistent with earnings/EPS outcomes and operational/ESG achievements .
- Retention risk is mitigated by sizable unvested RS and explicit ownership guidelines (4x salary), with scheduled vestings through 2029 that can create periodic supply overhangs but no Rule 10b5-1 plans were in place in 2024/2025 as of the proxy date .
- Governance considerations include employee-director status and controlled-company dynamics; mitigants are a majority-independent board, independent key committees, a Lead Independent Director, and a Voting Agreement designed to address controller influence concerns raised in litigation .
- Related party breadth underscores potential conflicts but is systematically overseen; operational performance (5-year TSR +235%, EBITDA $1.49B, continued acquisitions/dividend growth) supports alignment and execution credibility during Kurnick’s tenure as President .