Form 8-K GROUP 1 AUTOMOTIVE INC For: Aug 24
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| |
77024 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code:
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. |
On August 24, 2022, Group 1 Automotive, Inc. (the “Company”) announced that Mr. Earl J. Hesterberg, the Company’s President and Chief Executive Officer (“CEO”), as well as a member of the Company’s Board of Directors (the “Board”), would resign from the position of President immediately, and would retire from the position of CEO and as a member of the Board effective as of December 31, 2022. The Board has appointed Mr. Daryl Kenningham to succeed Mr. Hesterberg in the role of CEO, effective January 1, 2023.
Also on August 24, 2022, the Board announced that Mr. Kenningham was appointed to the position of President and Chief Operating Officer and as a member of the Board, effective immediately. Mr. Kenningham, age 58, was serving as the Company’s President of U.S. Operations immediately prior to this announcement, a position he had held with the Company since 2019. From 2016 to 2017, Mr. Kenningham served as the Company’s Regional Vice President–West Region, and from 2011 to 2016, he served as the Company’s Regional Vice President–East Region. Prior to joining the Company, Mr. Kenningham was Chief Operating Officer at Ascent Automotive, a dealer group headquartered in Houston, Texas. Prior to that he enjoyed a 13-year career at Gulf States Toyota, an independent Toyota Distributor for the south-central U.S. where his roles included Senior Vice President of Dealer Operations, President of Gulf States Financial Services, a nationwide finance and insurance firm servicing the automotive sector, and President of U.S. Auto Logistics, an automotive transportation provider servicing a variety of auto manufacturers. Kenningham received his BA from the University of Michigan and an MBA from the Hough Graduate School of Business at the University of Florida. There was no arrangement or understanding between Mr. Kenningham and any other person(s) pursuant to which he was selected to be President and Chief Operating Officer of the Company, or as CEO, and Mr. Kenningham does not have any family relationships with any of the Company’s executive officers or directors. Mr. Kenningham is not a party to any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended.
In connection with Mr. Hesterberg’s retirement, his employment agreement was amended to provide that December 31, 2022 would be the date on which his employment term would end and that such a termination was due to a voluntary retirement (the “Second Amendment to Employment Agreement”). No other changes are expected to be made to Mr. Hesterberg’s compensation arrangements or contracts with the Company.
In connection with Mr. Kenningham’s promotion, he entered into an amendment to his Incentive Compensation, Confidentiality, Non-Disclosure and Non-Compete Agreement (the “First Amendment to Incentive Agreement”) to provide that his new annual base salary would be set at $1,100,000 per year, beginning August 24, 2022.
The foregoing descriptions of the Second Amendment to Employment Agreement and the First Amendment to Incentive Agreement are only summaries and are qualified in their entirety by the terms of such agreements, copies of which will be filed with the Company’s next Quarterly Report on Form 10-Q.
| Item 7.01 | Regulation FD Disclosure. |
On August 24, 2022, the Company issued a press release announcing the change in titles of both Messrs. Hesterberg and Kenningham. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 7.01, including the exhibits, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
2
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press Release dated August 24, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
3
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Group 1 Automotive, Inc. | ||||||
| Date: August 24, 2022 | By: | /s/ Darryl M. Burman | ||||
| Name: | Darryl M. Burman | |||||
| Title: | Senior Vice President | |||||
4
Exhibit 99.1
FOR IMMEDIATE RELEASE
Group 1 Automotive Announces CEO Transition Plans
| • | Earl Hesterberg to retire at year end |
| • | Daryl Kenningham, current President of US Operations, appointed to Board of Directors and as President and Chief Operating Officer of Group 1 immediately; will assume CEO role on January 1, 2023. |
HOUSTON, TX, August 24, 2022—Group 1 Automotive, Inc. (NYSE: GPI) (“Group 1” or the “Company”), an international, Fortune 300 automotive retailer with 204 dealerships located in the U.S. and U.K., today announced that Earl J. Hesterberg, President and Chief Executive Officer will retire as CEO and from the Board of Directors, effective December 31, 2022. Long-tenured Group 1 executive Daryl Kenningham, currently President of U.S. Operations, has been appointed as President and Chief Operating Officer and a member of the Board of Directors, effective immediately, and will succeed Hesterberg as CEO effective January 1, 2023, upon Mr. Hesterberg’s retirement.
“On behalf of the Board of Directors and the Group 1 employees, we are deeply grateful for Earl’s many years of exceptional leadership and strategic vision,” said Steve Quinn, Chairman of Group 1’s Board of Directors. “As a highly respected international automotive executive, Earl utilized his relationships to expand the Company’s U.S. operations and build a significant U.K. business, increasing aggregate Company revenues threefold. His passion for our core values – integrity, transparency, professionalism, teamwork and respect – promotes an invigorating workplace for our associates and drives our commitment to excellent customer service.”
“The Board and I are delighted to announce Daryl as Group 1’s next CEO,” added Quinn. “Over the course of his career, Daryl has developed strong relationships with the automotive manufacturers. He is a proven, strategic operating executive with extensive automotive experience and a deep knowledge of Group 1. His business acumen and experience in the implementation of applied technology are what we need in this fast changing, dynamic marketplace. He has placed great emphasis on all aspects of ESG, and in particular has become a champion in the area of diversity, equity and inclusion.”
Hesterberg added “Now is the perfect time to transition to a new generation of leadership at our Company. Daryl’s performance throughout his career has been exemplary, and he has driven our U.S. business to record levels. Although I will sorely miss the wonderful people at Group 1, this transition will be seamless and our Company could not be in better hands.”
Hesterberg joined Group 1 in April 2005 after a 30-year career with several automotive manufacturers including Ford and Nissan. Kenningham joined Group 1 in 2011 as a Regional Vice President and continually expanded his areas of responsibility since that time to include all of Group 1’s U.S. operations as well as many key Company support functions such as marketing, facilities and information technology.
Regarding his appointment as CEO, Kenningham commented, “I am honored and excited to embark on this new role. I thank Earl for his outstanding leadership and the Board for their confidence, guidance and support. We have an outstanding team at Group 1, and I am energized to work alongside them to chart our path forward for the benefit of our employees, customers, communities and stakeholders during this exciting and dynamic time in our industry.”
ABOUT DARYL KENNINGHAM
Mr. Kenningham joined Group 1 in 2011 as Regional Vice President. He has over 30 years of automotive industry experience. He previously served as Chief Operating Officer at Ascent Automotive. From 1998 to 2011, he served in senior executive roles at Gulf States Toyota, including Senior Vice President of Gulf States Toyota, President of Gulf States Financial Services, and as President at USA Logistics (previously known as Gulf States Transportation). He began his career at Nissan Motor Corporation in 1988.
ABOUT EARL HESTERBERG
Mr. Hesterberg has served as Chief Executive Officer and President of Group 1 since 2005. He previously served as Group Vice President for Marketing, Sales, and Service for Ford North America and prior to that held the same position for Ford of Europe, in Cologne, Germany. He also served as President and CEO of Gulf States Toyota and held various senior sales, marketing, general management, and parts and service positions with Nissan Motor Corporation in the U.S. and Nissan Europe, both of which are wholly owned by Nissan Motor Co., Ltd. Hesterberg is a board member of the Greater Houston Partnership.
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 204 automotive dealerships, 273 franchises, and 47 collision centers in the United States and the United Kingdom that offer 35 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Group 1 discloses additional information about the Company, its business, and its results of operations at www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, www.facebook.com/group1auto, and www.twitter.com/group1auto.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events, including statements regarding the planned CEO transition, and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, results of operations and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” “foresee,” “may” or “will” and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
SOURCE: Group 1 Automotive, Inc.
Investor contacts:
Jason Babbitt
Vice President, Treasurer
Group 1 Automotive, Inc.
Media contacts:
Pete DeLongchamps
Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223
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