Proxy Statement - Notice of Shareholders Meeting (preliminary) (pre 14a)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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Filed by a Party other than the Registrant ☐

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☒	Preliminary Proxy Statement

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☐	Definitive Proxy Statement

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☐	Soliciting Material under §240.14a-12

	Penske Automotive Group, Inc.
	(Name of Registrant as Specified In Its Charter)
	(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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2023 Proxy Statement

Annual Meeting of Stockholders

to be held on May 11, 2023 Penske Automotive Group, Inc.

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Dear Fellow Stockholder:

We are a diversified international transportation services company and one of the world’s premier automotive and commercial truck retailers. 2022 was a record year for our business, driven in part by the diversification provided by our investments across the transportation sector.

Some highlights from the past year include:

•	Produced record revenues, earnings before taxes, income from continuing operations, and earnings per share

•	Achieved a 16% increase in earnings before taxes and net income to $1.9 billion and $1.4 billion, respectively

•	Generated $1.5 billion in cash flow from operating activities

•	Repurchased 8.2 million shares of outstanding common stock for an aggregate price of $886.5 million

•	Increased our common stock dividend by nearly 24% from $0.46 to $0.57 per share

•	Forty-six of our U.S. dealerships were named to the Best 100 Dealerships to Work For by Automotive News

•	Published our second annual ESG/Sustainability Report which is responsive to the Sustainability Accounting Standards Board (SASB) Multiline & Specialty Distributors sector standard and the Task Force on Climate-related Financial Disclosures

As we look toward the future, we will continue to focus on innovation and transformational opportunities and driving further sustainability initiatives across our business. We will enhance our employee diversity, continue supporting vehicle electrification, and adapt to the changes in consumer engagement patterns.

We will once again hold our annual meeting exclusively by remote means this year. We encourage you to participate in the meeting, following the instructions within this proxy statement. We ask that you cast your vote as soon as possible to assure your shares are represented at the meeting.

Our success is driven by our nearly 27,000 team members and their unwavering dedication and commitment. They focus relentlessly on driving repeat and referral business by exceeding the expectations of our customers through best-in-class customer service and the highest level of integrity.

We thank you and appreciate your continued support.

			Sincerely,

			/s/ Roger S. Penske

			Roger S. Penske Chair of the Board and Chief Executive Officer

Bloomfield Hills, Michigan

March , 2023

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Penske Automotive Group, Inc.

Notice of 2023 Annual Meeting of Stockholders

Date:			May 11, 2023

Time:			9:00 a.m. Eastern Daylight Time

Virtual Meeting:			Virtual Annual Meeting – www.virtualshareholdermeeting.com/PAG2023 This year’s Annual Meeting will be virtual and held online via a live webcast. We are not holding an in-person meeting. To attend the Annual Meeting, ask questions and examine our list of stockholders you will need to visit www.virtualshareholdermeeting.com/PAG2023, and you will be required to enter the control number on your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form. Log-in for the virtual Annual Meeting begins at 8:30 a.m. Please refer to the “Attending the Meeting” section of the proxy statement for more details.

Record date:			March 15, 2023. Only stockholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting.

Items of business:			• To elect thirteen directors to serve until the next annual meeting • To adopt an Amended and Restated Certificate of Incorporation to incorporate new Delaware law provisions regarding officer exculpation • To ratify the selection of Deloitte & Touche LLP as our independent auditor for 2023 • To approve, on a non-binding advisory basis, the compensation paid to our named executive officers • To approve, on a non-binding advisory basis, the frequency of future advisory votes on our named executive officer compensation

INTERNET AVAILABILITY OF PROXY MATERIALS

Your vote is very important. Whether or not you plan to attend the Annual Meeting virtually, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials, the proxy card or voting instruction form you received in the mail. You may revoke your proxy at any time before it is voted. Please refer to the “Questions about the Meeting” section of the proxy statement for additional information. On March , 2023, we expect to release the proxy materials to our stockholders and to send stockholders (other than those stockholders who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our fiscal year 2022 Annual Report, and how to vote through the Internet or by telephone.

Our proxy statement, proxy card and fiscal year 2022 Annual Report are available at: https://www.penskeautomotive.com/investors/financials/annual-reports/default.aspx

By order of the Board of Directors:

/s/ Shane Spradlin
Shane Spradlin
Executive Vice President, General Counsel and Secretary

2555 Telegraph Road

Bloomfield Hills, Michigan 48302

March , 2023

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Proxy summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting.

Annual Meeting of Stockholders

Date:			May 11, 2023

Time:			9:00 a.m. Eastern Daylight Time

Record date:			March 15, 2023

Voting:			Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the proposals to be voted on.

Virtual meeting:			Virtual Annual Meeting – www.virtualshareholdermeeting.com/PAG2023 You will need the control number included on your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form to participate in the virtual Annual Meeting. You may view the Annual Meeting without the control number. See “Attending the Meeting” on page 41 for details.

Access to Company appointed proxies:			If you are participating in the virtual Annual Meeting, you will have access to the Company appointed proxies.

Meeting agenda

•	Election of thirteen directors named in this proxy statement

•	Adoption of an Amended and Restated Certificate of Incorporation to incorporate new Delaware law provisions regarding officer exculpation

•	Ratification of Deloitte & Touche LLP as our independent auditor for 2023

•	Advisory vote on named executive officer compensation

•	Advisory vote on the frequency of future advisory votes on named executive officer compensation

Voting Matters and Vote Recommendation

Matter	Board Vote Recommendation	Page Reference
Election of directors	For each director nominee	Page 1
Adoption of Amended and Restated Certificate of Incorporation	For	Page 7
Ratification of Deloitte & Touche LLP as our independent auditor for 2023	For	Page 9
Advisory vote on named executive officer compensation	For	Page 10
Advisory vote on frequency of future advisory votes on named executive officer compensation	Annual	Page 11

These materials were first sent or made available to shareholders on March , 2023.

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Our Director Nominees

The following table provides summary information about each director nominee. Each director is elected annually by a majority of votes cast.

Name

Age

Director

since

Occupation

Diversity

Independence

John Barr

75

2002

Retired Chairman

Papa Murphy’s Holdings

•

Lisa Davis

59

2017

Former Chief Executive Officer

Gas and Power and

Managing Board Member

Siemens AG

D

•

Wolfgang Dürheimer

64

2018

Retired Chairman and CEO

Bentley Motors Ltd.

•

Michael Eisenson

67

1993

Founding Partner Charlesbank Capital Partners

Robert Kurnick, Jr.

61

2006

President

Penske Automotive Group

Kimberly McWaters

58

2004

President and CEO

Fresh Start Women’s Foundation

D

•

Kota Odagiri

53

2021

Senior Vice President

Mitsui & Co. (USA), Inc.

D

Greg Penske

60

2020

Vice Chair of the Board, Penske Automotive Group

Chairman and CEO, Penske Motor Group, LLC

Roger Penske

86

1999

Chair and Chief Executive Officer

Penske Automotive Group

Sandra Pierce

64

2012

Senior Executive Vice President and Chair,

Huntington Bank Michigan

D

Greg Smith

71

2017

Principal, Greg C. Smith LLC and

Former Vice Chairman, Ford Motor Company

•

Ronald Steinhart

82

2001

Retired Chairman and CEO

Commercial Banking Group, Bank One Corporation

•

H. Brian Thompson

83

2002

Chairman and Chief Executive Officer

Universal Telecommunications, Inc.

•

D=Gender/Ethnic Diversity (31% of our nominated board is gender or ethnically diverse)

Adoption of an Amended and Restated Certificate of Incorporation to Incorporate New Delaware Law Provisions regarding Officer Exculpation

The State of Delaware, which is our state of incorporation, recently enacted legislation that enables Delaware companies like us to limit the liability of certain of their officers in limited circumstances under Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”). In light of this legislation, we are proposing to amend our Restated Certificate of Incorporation (the “Certificate of Incorporation”) to provide for exculpation of certain of our officers from liability in specific circumstances, as permitted by Delaware law. The new Delaware legislation only permits, and our proposed amendment would only permit, exculpation for direct claims (as opposed to derivative claims made by stockholders on behalf of the Company) and would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. The rationale for so limiting the scope of liability is to strike a balance between stockholders’ interest in accountability and their interest in our being able to attract and retain quality officers to work on such stockholders’ behalf. Our Certificate of Incorporation currently provides for the exculpation of directors, but does not include a provision that allows for the exculpation of officers. Additional information about the proposed Amended and Restated Certificate of Incorporation, including the Board’s rationale for recommending that stockholders vote FOR the adoption thereof, is set forth on page 7.

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Auditors

As a matter of good corporate governance, we ask that our stockholders ratify the selection of Deloitte & Touche LLP as our independent auditor for 2023. Set forth below is summary information with respect to 2022 auditor fees paid to Deloitte & Touche LLP.

	Audit Fees			$3,920,383
	Audit Related Fees			83,984
	Tax Fees
	Tax Compliance			49,023
	Other Tax Fees			46,582
	All Other Fees			—
	Total Fees			$4,099,972

Environmental, Social and Governance (ESG)

As a leading international, diversified transportation services company, we recognize it’s our responsibility to ensure we contribute to a healthy environment, economic opportunity, and social equity in the communities where we operate around the world. We recognize we are accountable to key stakeholders and the communities in which we do business. We are committed to responsible business practices, continuous improvement of our operations and the strengthening of relationships with our stakeholders.

We focus our ESG efforts where we can have the most positive impact on our business and society, including issues related to:

•	Community Participation

•	Environmental Sustainability

•	Human Capital

•	Investor Outreach

This important work is driven by our core values and ensures that we enrich our communities, minimize our environmental impact, protect the health and safety of our team members and customers, and provide a diverse and inclusive workplace – all while creating value for our stakeholders. The most important investments we make are in our people. Everything we aspire to be as a company builds on our ability to come together as one team. We provide our team members a supportive work environment that empowers them to do meaningful work while fulfilling their passions and balancing work goals with life goals.

We are pleased to have published our 2022 ESG Report last Fall which highlights the Company's environmental, social, and governance (ESG) strategies, activities, progress, metrics, and performance for 2021, which is available on our website under the tab “ESG”. Our 2022 ESG Report is responsive to the Sustainability Accounting Standards Board (SASB) Multiline & Specialty Distributors sector standard and includes additional disclosures responsive to the framework established by the Task Force on Climate-related Financial Disclosures. We are committed to regular, transparent communication of our progress and look forward to bringing our stakeholders along with us on this journey.

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Executive Compensation

We ask that our stockholders annually approve on an advisory basis our named executive officer compensation. The Board of Directors recommends a FOR vote because it believes that our compensation policies and practices are effective in achieving the Company’s goals of rewarding sustained financial and operating performance and leadership excellence, aligning the executives’ long-term interest with those of our stockholders and motivating our executives to remain with us for long and productive careers. In 2022, over 98% of the votes cast by our stockholders approved our 2021 named executive officer compensation.

Compensation and Corporate Governance Highlights

	✔ Independent Lead Director			✔ No officer severance agreements
	✔ Clawback provision for certain restatements			✔ Board attendance of 97% during 2022
	✔ Director independence guidelines more stringent than NYSE guidelines			✔ Robust stock ownership guidelines for our Officers and Directors
	✔ No stockholder rights plan (poison pill)			✔ Annual election of our Board of Directors
	✔ Say on pay advisory vote conducted annually			✔ Company policy prohibits Directors and employees from hedging our Common Stock
	✔ ESG oversight by Nominating and Corporate Governance Committee

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Proxy statement table of contents

Proposal 1 – Election of Directors			1
Proposal 2 – Adoption of an Amended and Restated Certificate of Incorporation to Incorporate Delaware Law Changes Regarding Officer Exculpation			7
Proposal 3 – Ratification of the Selection of our Independent Auditor			9
Proposal 4 – Advisory Vote on Named Executive Officer Compensation			10
Proposal 5 – Advisory Vote on Frequency of Future Advisory Votes on Named Executive Officer Compensation			11
Our Corporate Governance			12
Environmental, Social and Governance			16
Audit Committee Report			18
Independent Auditing Firm Fees			19
Executive Officers			20
Compensation Committee Report			21
Compensation Discussion and Analysis (“CD&A”)			21
Executive Compensation			27
Director Compensation			35
Security Ownership of Certain Beneficial Owners and Management			37
Related Party Transactions			39
Attending the Meeting			41
Questions about the Meeting			43
Annex A – Proposed Amended and Restated Certificate of Incorporation			A-1

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Proposal 1 – Election of Directors

The first proposal to be voted on at the annual meeting will be the election of our thirteen director nominees. Our Nominating and Corporate Governance Committee and Board of Directors recommend approval of each of the nominees outlined below. If elected, each will serve until the next annual meeting of stockholders and until their successor has been elected and qualified or until their earlier resignation or removal. Pursuant to a stockholders agreement, certain of our stockholders affiliated with Roger Penske and Mitsui & Co., Ltd. have agreed to vote together to elect members of our Board of Directors. See “Related Party Transactions” for a description of this stockholders agreement.

We appointed Greg Penske as our Vice Chair effective January 1, 2023. We previously disclosed in last year’s proxy statement that Penske Corporation informed us that it intended to recommend one of Mr. Penske’s sons, Roger Penske, Jr., to the Nominating and Corporate Governance Committee for nomination as a candidate for election in 2023, 2024 and 2025. However, Penske Corporation subsequently determined to recommend Roger Penske, Jr. as Vice Chair of the Advisory Board of Penske Transportation Solutions (PTS) effective January 1, 2023 and continue to recommend Greg Penske as a director in this proxy statement.

Director Nominees. Our Nominating and Corporate Governance Committee has established minimum qualifications for director nominees, including integrity, judgment, and personal accomplishment within their field. Experience in at least one of the following is also desired: high level of leadership experience in business or administration, breadth of knowledge concerning issues affecting our Company, willingness to contribute special competence to board activities, accomplishments within the director’s respective field, and experience reading and understanding financial statements. The Nominating and Corporate Governance Committee and Board of Directors reviewed the qualities of the Board members as a group, including the diversity of the Board’s career experiences, viewpoints, company affiliations, expertise with respect to the various facets of our business operations, and business experiences. The Board did not employ any particular benchmark with respect to these qualities but was mindful of achieving an appropriate balance of these qualities with respect to the Board of Directors as a whole. Moreover, the Board of Directors and Nominating and Corporate Governance Committee considered each nominee’s overall service to our Company during the previous term, each nominee’s personal integrity and adherence to the standards noted above, as well as the individual experience of each director noted within their biographies below. On October 31, 2021, GTT Communications, Inc. filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York. Mr. Thompson was an executive officer of GTT Communications, Inc. until January 2022. The Board believes that the qualities and skills listed for each of the nominees, qualifies each such nominee for service as a director of our Company.

Our Board of Directors Recommends a Vote “FOR” Each of the Following Nominees:

John D. Barr – Retired Chairman, Papa Murphy’s Holdings, Inc.

Age: 75

Joined Board: 2002 Committees: Audit

Mr. Barr was the Chairman of Papa Murphy’s Holdings, Inc., a franchisor and operator of Take-N-Bake pizza from September 2009 to September 2016 and was its Chief Executive Officer from April 2004 to January 1, 2012. From 1999 until April 2004, Mr. Barr served as President and Chief Executive Officer of Automotive Performance Industries, a vehicle transportation service provider. Prior thereto, Mr. Barr was President and Chief Operating Officer, as well as a member of the Board of Directors, of Quaker State Corporation from June 1995 to 1999. Prior to joining Quaker State, Mr. Barr spent 25 years with the Valvoline Company, a subsidiary of Ashland Inc., where he was President and Chief Executive Officer from 1987 to 1995.

Individual experience: Extensive oil industry experience from serving ultimately as COO and director of Quaker State Corporation; breadth of knowledge concerning issues affecting our Company; experience with franchise business model as former CEO of Papa Murphy’s Holdings.

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Lisa Davis – Former Chief Executive Officer Gas and Power and Managing Board Member, Siemens AG

Age: 59

Joined Board: 2017

Committees:

Compensation,

Corporate

Governance

From August 2014 through February 2020 when she resigned, Ms. Davis served as a member of the Managing Board for Siemens AG responsible as Chief Executive Officer for the company’s Gas and Power global operations present in 80 countries around the world. Also, from January 2017 through February 2020 she served as Chair and CEO of Siemens Corporation, USA, the largest market globally for Siemens AG. From 1986 to 2014, Ms. Davis served in various capacities with Exxon Corporation, Texaco USA and Royal Dutch Shell, most recently, Executive Vice President – Strategy, Portfolio and Alternative Energy and Vice President – Lubricants and Commercial Fuels Americas, and previously numerous leadership positions in Supply and Refining. Ms. Davis is also a director for Air Products and Chemicals, Inc., Phillips 66, and C3.ai, Inc. and was previously a director of Kosmos Energy Ltd. in the past five years. In February 2023, Ms. Davis was appointed to the Advisory Board of our affiliate Penske Transportations Solutions (a private company).

Individual experience: Extensive global energy industry experience from serving in various capacities along the entire value chain from upstream to manufacturing to sales and marketing; senior executive leadership experience with international industry-leading companies; diverse experience with public company board service in the U.S. and Europe.

Wolfgang Dürheimer – Retired Chairman and CEO, Bentley Motors Ltd.

Age: 64

Joined Board: 2018

Committees:

Compensation

Mr. Dürheimer served as the Chairman and Chief Executive Officer of Bentley Motors Ltd., a subsidiary of Volkswagen AG, from April 2014 to January 2018, as well as the President of its sister companies, Bugatti Automobiles S.A.S. and Bugatti International S.A. Previously, Mr. Dürheimer held various positions with Volkswagen AG and its subsidiaries, most recently as the Chief Representative of Volkswagen Group Motorsport responsible for the Group Motorsport Strategy from February 2011 to January 2018 and he was a member of the Board of Management of Audi AG from September 2012 to March 2014. From 1999 until 2011, Mr. Dürheimer worked for Porsche AG, where he was a member of the Board of Management responsible for Research and Development. Prior to joining Porsche in 1999, Mr. Dürheimer worked 14 years with BMW, where he held various managerial roles.

Individual experience: Extensive automotive industry experience with some of the Company’s largest represented brands including Audi, Bentley, BMW, and Porsche, culminating in leadership experience as Chief Executive Officer of Bentley Motors; relationships with our key automotive industry partners, breadth of knowledge concerning issues facing our Company.

Michael R. Eisenson – Founding Partner, Charlesbank Capital Partners LLC

Age: 67

Joined Board: 1993

Mr. Eisenson has served as the Founding Partner of Charlesbank Capital Partners LLC, a private investment firm and the successor to Harvard Private Capital Group, Inc. since July 1, 2017. Previously, he was CEO of Charlesbank Capital Partners LLC, which he founded in 1998. Mr. Eisenson also serves as a director of Penske Corporation and is a director of a number of other private companies.

Individual experience: Familiarity with all of the Company’s key operations from serving as our director since 1993; experience managing Charlesbank and affiliates and their portfolio companies; experience in commercial finance, private equity and leveraged finance; demonstrated success formerly serving as our Audit Committee Chair.

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Robert H. Kurnick, Jr. – President, Penske Automotive Group

Age: 61

Joined Board: 2006

Mr. Kurnick has served as our President since April 2008. Since September 2017, Mr. Kurnick has served as Vice Chair of Penske Corporation, and from 2003 until then served as President of Penske Corporation. He has also been a director of Penske Corporation since 2003. Penske Corporation is a privately owned diversified transportation services company that holds, through its subsidiaries, interests in a number of businesses.

Individual experience: Familiarity with all of the Company’s key operations; breadth of knowledge concerning issues affecting our Company; extensive automotive industry experience; experience as Vice Chair and former President of Penske Corporation.

Kimberly J. McWaters – President and CEO, Fresh Start Women’s Foundation

Age: 58

Joined Board: 2004

Committees: Audit,

Corporate Governance (Chair)

Ms. McWaters has served as President and Chief Executive Officer of Fresh Start Women’s Foundation since February 1, 2021, after a long tenure as a director of that organization. Ms. McWaters was previously President and CEO of Universal Technical Institute, Inc. (UTI), the nation’s leading provider of transportation industry technician training through October 31, 2019. She was named President of UTI in 2000, CEO in 2003 and she served as its Chairman from 2013 to 2017. Ms. McWaters joined UTI in 1984 and has held several leadership positions in the company, including Vice President of Marketing and Vice President of Sales & Marketing. Ms. McWaters is also a director of WillScot Mobile Mini Holdings Corp. and previously served as a member of the Board of Directors of UTI in the past five years.

Individual experience: Automotive industry experience with UTI; accomplishment within her field culminating with leadership experience as Chief Executive Officer of UTI; expertise relating to service and parts operations and particularly service technicians; community involvement with Fresh Start Women’s Foundation.

Kota Odagiri – Senior Vice President, Mitsui & Co. (USA), Inc.

Age: 53

Joined Board: 2021

Mr. Odagiri has served as a director since December 2021 and currently serves as Senior Vice President, Mitsui & Co. (USA), Inc. He held numerous positions with Mitsui and its affiliates starting in April 1992. Mr. Odagiri was Chairman and Managing Director of Bussan Auto Finance India Pvt. Ltd. from April 2020 to December 2021. From March 2019 to March 2020, he served as Deputy Managing Director of India Yamaha Motor Pvt. Ltd. and from April 2017 to February 2019, he served as General Manager, Group Management Framework Department in Mitsui’s First Motor Vehicles Division. From January 2015 to March 2017, he served as General Manager, Yamaha Business Department in Mitsui’s Third Motor Vehicles Division.

Individual Experience: Global automotive industry experience; breadth of knowledge concerning international opportunities; affiliation with Mitsui, which is the Company’s second largest stockholder.

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Greg Penske – Vice Chair of the Board, Penske Automotive Group; Chairman and CEO, Penske Motor Group, LLC

Age: 60

Joined Board: 2020

Mr. Penske joined our Board in May 2020, has served as our Vice Chair of the Board since January 2023 and was previously our director from May 2014 to May 2017. Mr. Penske has been the Chairman and Chief Executive Officer of Penske Motor Group, LLC, an automotive group that includes the Toyota and Lexus brands. Mr. Penske has served on the Board of Directors of Penske Corporation since 1999, and also currently serves as a board member and Vice Chairman of Penske Entertainment and board member of Petersen Automotive Museum. Mr. Penske is the son of our Chief Executive Officer, Roger Penske.

Individual Experience: Extensive automotive retail industry experience; relationships with key automotive partners; familiarity with all of the Company’s key operations; breadth of knowledge concerning issues affecting our Company.

Roger S. Penske – Chair of the Board and CEO, Penske Automotive Group

Age: 86

Joined Board: 1999

Since May 1999, Mr. Penske has served as our Chair and CEO. Mr. Penske has also been Chairman of the Board and CEO of Penske Corporation since 1969 and Chair of the Board of Penske Truck Leasing Corporation since 1982. Mr. Penske previously served as a member of the Board of Directors of Universal Technical Institute in the past five years..

Individual experience: Extensive automotive industry experience; relationships with our key automotive partners; familiarity with all of the Company’s key operations; experience as an executive and a director of some of the world’s leading companies; significant ownership position of our stock through Penske Corporation and other affiliates.

Sandra E. Pierce – Senior Executive Vice President and Chair, Huntington Bank Michigan

Age: 64

Joined Board: 2012

Since August 2016, Ms. Pierce has been Huntington Bank’s Senior Executive Vice President, Private Bank and Regional Banking Director and Chair of Michigan. Ms. Pierce has led the Private Bank, Insurance Agency, Auto, Marine and RV businesses as well as state activities in Michigan. From February 1, 2013, until their August 2016 merger with Huntington, Ms. Pierce served as Vice Chairman of FirstMerit Corporation, and Chairman and CEO of FirstMerit Michigan. From 2005 until June 2012, Ms. Pierce served as the Chief Executive Officer and President at Charter One Bank Michigan, a division of RBS Citizens, N.A. where she had responsibilities for commercial banking and all state bank activities in Michigan as well as oversight of all state activities in Illinois and Ohio. From 1978 through 2004, Ms. Pierce served as Regional Executive of Midwest Retail Operations for JPMorgan Chase, with responsibilities for Michigan and Indiana, and she held a number of management positions in the retail, commercial lending, and private banking businesses at JPMorgan Chase and its predecessor companies, Bank One, First Chicago NBD Corp. and NBD Bancorp. Ms. Pierce is a director of American Axle and Manufacturing Holdings, Inc., and has performed leadership duties with numerous civic organizations. Ms. Pierce is also Board Chair of ITC Holdings, which was previously a public company in the past five years. In December 2022, Ms. Pierce was appointed to Michigan State University’s Board of Trustees by Michigan Governor Whitmer.

Individual Experience: Extensive retail and commercial banking experience; accomplished within her field culminating in CEO experience; extensive experience on company boards and demonstrated commitment to civic works.

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Greg C. Smith – Principal, Greg C. Smith LLC; Former Vice Chairman, Ford Motor Company

Age: 71

Joined Board: 2017 Committees:

Audit (Chair)

Mr. Smith, retired Vice Chairman of Ford Motor Company, currently serves as Principal of Greg C. Smith, LLC, a private management consulting firm, a position he has held since 2007. Previously, Mr. Smith was employed by Ford Motor Company for over 30 years until 2006. Mr. Smith held various executive-level management positions at Ford Motor Company, most recently serving as Vice Chairman from 2005 until 2006. As Vice Chairman, Mr. Smith was responsible for Ford’s Corporate Strategy and Staff, including Human Resources and Labor Affairs, Information Technology, and Automotive Strategy. Currently, Mr. Smith serves as the Non-Executive Chairman of the Board of Directors of Lear Corporation and formerly served as a director of Penske Corporation, the Federal National Mortgage Association (Fannie Mae) and Solutia, Inc. Mr. Smith serves on the Risk Oversight Advisory Council of the National Association of Corporate Directors.

Individual experience: Extensive experience as an executive and a director; experience and perspective gained from leadership role in automotive and finance; extensive public company audit committee experience.

Ronald G. Steinhart – Retired Chairman and CEO, Commercial Banking Group, Bank One Corporation

Age: 82

Joined Board: 2001 Committees: Audit

Mr. Steinhart served as Chairman and CEO, Commercial Banking Group, of Bank One Corporation from December 1996 until his retirement in January 2000. From January 1995 to December 1996, Mr. Steinhart was Chairman and CEO of Bank One, Texas, N.A. Mr. Steinhart joined Bank One in connection with its merger with Team Bank, which he founded in 1988. Mr. Steinhart is a certified public accountant (retired status) and previously served as a Director of eight other public companies and a trustee of the MFS/Compass Group of mutual funds.

Individual experience: Extensive experience in banking and commercial lending industries; experience with respect to automotive retail finance and insurance operations; extensive public company audit committee experience.

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H. Brian Thompson – Chairman and Chief Executive Officer, Universal Telecommunications, Inc.

Age: 83

Joined Board: 2002 Committees: Compensation (Chair), Corporate Governance; Lead Independent Director

Mr. Thompson has served as a director since March 2002 and is the Chairman and Chief Executive Officer of his private equity investment and advisory firm, Universal Telecommunications, Inc. Mr. Thompson was Executive Chairman of GTT Communications, Inc., a leading global cloud network provider to multinational clients, from October 2006 to January 2022. From December 2002 to June 2007, Mr. Thompson was Chairman of Comsat International and also served as Chairman and Chief Executive Officer of Global TeleSystems Group, Inc. from March 1999 through September of 2000. Mr. Thompson was Chairman and CEO of LCI International from 1991 until its merger with Qwest Communications International Inc. in June 1998. Mr. Thompson became Vice Chairman of the board for Qwest until his resignation in December 1998. Mr. Thompson previously served as Executive Vice President of MCI Communications Corporation from 1981 to 1990, and prior to MCI, was a management consultant with the Washington, DC offices of McKinsey & Company for nine years, where he specialized in the management of telecommunications. He currently serves as a member of the board of directors of Pendrell Corporation. Mr. Thompson received his MBA from Harvard’s Graduate School of Business and holds an undergraduate degree in chemical engineering from the University of Massachusetts.

Individual experience: Extensive experience as an executive and director of numerous public companies; experience in a leadership role directing international corporations; perspective gained from leadership role in communications industry; demonstrated success serving as our lead independent director.

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Proposal 2 – Adoption of an Amended and Restated Certificate of Incorporation to Incorporate New Delaware Law Provisions Regarding Officer Exculpation

The State of Delaware, which is our state of incorporation, recently enacted legislation that enables Delaware companies like us to limit the liability of certain of their officers in limited circumstances under Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”). In light of this legislation, we are proposing to amend Article X of our Restated Certificate of Incorporation (the “Certificate of Incorporation”) to provide for exculpation of certain of our officers from liability in specific circumstances, as permitted by Delaware law. The new Delaware legislation only permits, and our proposed amendment would only permit, exculpation for direct claims (as opposed to derivative claims made by stockholders on behalf of the Company) and would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. The rationale for so limiting the scope of liability is to strike a balance between stockholders’ interest in accountability and their interest in our being able to attract and retain quality officers to work on such stockholders’ behalf. Our Certificate of Incorporation currently provides for the exculpation of directors, but does not include a provision that allows for the exculpation of officers.

The Board of Directors believes it is appropriate for us as a public company to have exculpation clauses in our Certificate of Incorporation. The nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower both directors and officers to best exercise their business judgment in furtherance of stockholder interests. The Company expects a number of industry participants to adopt exculpation clauses that limit the personal liability of officers in their charters and failing to adopt the amendment could impact our recruitment and retention of exceptional officer candidates that conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company.

For the reasons stated above, we believe it is in the best interests of the Company and its stockholders that the Amended and Restated Certificate of Incorporation be approved. A complete copy of the proposed Amended and Restated Certificate of Incorporation is set forth on Annex A. The proposed amendment would better position us to attract top officer candidates and retain our current officers and enable the officers to exercise their business judgment in furtherance of the interests of our stockholders without the potential for distraction posed by the risk of personal liability. Additionally, it will align the protections for our officers with those protections afforded to our directors. Accordingly, we ask our stockholders to vote on the following resolution:

“RESOLVED, that our stockholders approve an Amended and Restated Certificate of Incorporation, including to amend and restate our Article X, which shall read in its entirety as follows:

ARTICLE X

ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS AND OFFICERS

To the fullest extent permitted by the DGCL, as the same presently exists or may hereafter be amended, no director or officer shall be personally liable to the Corporation or to any stockholder for monetary damages for breach of fiduciary duty as a director or officer, except for any matter in respect of which (a) such director shall be liable under Section 174 of the DGCL or any amendment thereto or successor provision thereto, (b) such officer shall be liable in any action by or in the right of the Corporation, or (c) such director or officer shall be liable by reason that, in addition to any and all other requirements for liability, that person (A) shall have breached their duty of loyalty to the Corporation or its stockholders, (B) shall not have acted in good faith or, in failing to act, shall not have acted in good faith, (C) shall have acted in a manner involving intentional misconduct or a knowing violation of law or, in failing to act, shall have acted in a manner involving intentional misconduct or a knowing violation of law or (D) shall have derived an improper personal benefit.

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Any repeal or modification of this Article X shall not adversely affect any right or protection of a director or officer with respect to any act or omission occurring prior to such repeal or modification. If the DGCL is amended after the date of incorporation to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO AMEND AND RESTATE OUR CERTIFICATE OF INCORPORATION TO INCORPORATE NEW DELAWARE LAW PROVISIONS REGARDING OFFICER EXCULPATION.

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Proposal 3 – Ratification of the Selection of our

Independent Auditor

Our Audit Committee has selected Deloitte & Touche LLP, the member firm of Deloitte Touche Tohmatsu Limited, and their respective affiliates (collectively referred to as “Deloitte”) as our principal independent auditing firm for 2023. We have determined to submit the selection of auditors to stockholder ratification, even though it is not required by our governing documents or Delaware law. If the selection of Deloitte as our independent auditor is not ratified by our stockholders, our Audit Committee will re-evaluate its selection, taking into consideration the stockholder vote on the ratification and the advisability of selecting new auditors prior to completion of the 2023 audit.

Our Audit Committee is solely responsible for selecting, engaging and terminating our independent auditing firm, and may do so at any time at its discretion. It is anticipated that a representative of Deloitte will be present at the annual meeting with the opportunity to make a statement and to answer appropriate questions.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITOR

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Proposal 4 – Advisory Vote on Named Executive Officer Compensation

We annually seek a non-binding advisory vote on our named executive officer compensation. Because your vote is advisory, it will not be binding upon the Compensation and Management Development Committee (which we also refer to as our compensation committee), however, the committee will take the outcome of the vote into account when making future executive compensation decisions. Last year, our stockholders approved the compensation of our named executive officers as described under “Compensation Discussion and Analysis” and “Executive Compensation” with over 99% of the votes cast by our stockholders voting in favor. As we evaluated our compensation programs and practices, we were mindful of this strong shareholder support in deciding to maintain the overall framework of our compensation program and the majority of our compensation practices unchanged from last year.

Our compensation program is designed to motivate our executive officers to enhance long-term stockholder value and to attract and retain the highest quality executive and key employee talent available. We believe our executive compensation is aligned with increasing the value of our common stock and promoting our key strategies, values and long-term financial and operational objectives. In this regard, we note that:

•	Mr. Penske beneficially owns approximately 35.1 million shares of our common stock, which significantly aligns his interests with the stockholders’ interests

•	In the last several years, neither our Chief Executive Officer nor President has received an annual cash bonus as both only have received restricted stock grants in lieu of a cash bonus

•	The named executive officers receive restricted stock grants with vesting provisions weighted towards the third and fourth years and are subject to stock ownership requirements discussed below, which encourages long-term stock ownership

•	We do not have any employment agreements with our named executive officers and have no agreements that provide for severance payments upon termination of employment

•	Our executive officers earn no additional retirement income under any supplemental executive retirement plan

•

Executive officers are subject to a compensation recovery or “clawback” policy, which provides that we may recoup some or all of the executive officer’s incentive compensation as a result of certain detrimental conduct to encourage compliance with policies and appropriate behavior, and we prohibit our directors, officers and employees from engaging in hedging with respect to our equity securities (as discussed above under “Our Corporate Governance”)

•	We structure our compensation practices to be consistent with and support sound risk management. Our compensation committee reviews risk associated with our compensation policies and has determined such risk is not excessive

THE BOARD OF DIRECTORS BELIEVES THAT THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS IS APPROPRIATE AND RECOMMENDS A VOTE FOR THE FOLLOWING ADVISORY RESOLUTION:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S- K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.

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Proposal 5 – Advisory Vote on Frequency of Future Advisory Votes on Named Executive Officer Compensation

As described in Proposal 4 above, our stockholders are being provided the opportunity to cast an advisory vote on our named executive officer compensation program. The advisory vote on executive compensation described in Proposal 4 above is referred to as a “Say-on-Pay” vote. As required under Section 14A of the Securities Exchange Act, this Proposal 5 affords you the opportunity to cast a non-binding advisory vote on how often we should include a Say-on-Pay vote in our proxy materials in the future. Under this Proposal 5, stockholders may vote to have the Say-on-Pay vote every year, every two years, every three years or may abstain from voting. The next advisory vote regarding this matter will occur at the 2029 annual meeting of stockholders.

We believe that Say-on-Pay votes should be conducted every year so that stockholders may annually express their views on our executive compensation program. Our Compensation and Management Development Committee, which administers our executive compensation program, values the opinions expressed by stockholders in these votes, and even though they are non-binding, will continue to consider the outcome of these votes in making its decisions on executive compensation.

THE BOARD OF DIRECTORS BELIEVES AN ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION SHOULD OCCUR ANNUALLY AND RECOMMENDS A VOTE FOR THE FOLLOWING RESOLUTION:

“RESOLVED, that future stockholder advisory votes regarding the compensation paid to the Company's named executive officers be conducted annually is APPROVED.”

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Our Corporate Governance

CURRENT DIRECTORS

BOD

Audit Committee

Compensation &

Management

Development

Committee

Nominating &

Corporate

Governance

Committee

Executive

Committee

John Barr

M

F

Lisa Davis

M

Wolfgang Dürheimer

M

Michael Eisenson

M

Robert Kurnick, Jr.

M

Kimberly McWaters

M

F

C

Kota Odagiri

M

Greg Penske

VC

Roger Penske

C

Sandra Pierce

M

Greg Smith

M

C, F

Ronald Steinhart

M

F

H. Brian Thompson

M

C

M

No. of Meetings in 2022

5

7

5

2

0

C = Chair VC = Vice Chair M = Member F = Financial Expert

Board Committees

Our Board of Directors has four standing committees: the Audit Committee, the Compensation and Management Development Committee, the Nominating and Corporate Governance Committee and the Executive Committee. Charters for the Audit, Compensation and Management Development, and Nominating and Corporate Governance committees are available on our website, www.penskeautomotive.com, under the sub-heading “Governance” within the “Investors” section. The principal responsibilities of each committee are described below. Collectively, our directors attended 97% of our board and committee meetings in 2022, and each director attended at least 92% of their respective meetings. All of our directors are encouraged to attend the annual meeting of stockholders and all directors serving at that time attended the annual meeting in 2022.

Committee Member Qualifications. Each of the members of our Audit, Compensation and Management Development, and Nominating and Corporate Governance Committees are independent under New York Stock Exchange guidelines and our guidelines for director independence. The Board of Directors has determined that all members of the Audit Committee are “independent” and “financially literate” under New York Stock Exchange rules and applicable law, and each of the four are “audit committee financial experts,” as that term is defined in Securities and Exchange Commission rules.

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibility relating to the:

•	financial statements, financial reporting and financial controls

•	internal audit function

•	engagement and evaluation of the independent auditing firm

•	key credit risks, liquidity risks, market risks, cybersecurity risks and any significant cybersecurity incidents and the steps taken to assess, monitor and mitigate these risks or exposures

The Compensation and Management Development Committee assists the Board of Directors in discharging its responsibility relating to:

•	executive officers’ compensation

•	compensation and benefits of other employees

•	administration of our equity incentive plans

•	recommendations to the Board of Directors with respect to director compensation

•	management progression and succession plans

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The Nominating and Corporate Governance Committee:

•	identifies prospective candidates for our Board of Directors

•	recommends director nominees for each annual meeting of stockholders and any interim vacancies the Board of Directors determines to fill

•	recommends to the Board of Directors corporate governance principles and policies

•	oversees the Board self-evaluation

•	oversees our compliance with legal and regulatory requirements

•	oversees our Environmental, Social and Governance (ESG) practices and reporting

Executive Committee. Our Executive Committee’s primary function is to act upon matters when the Board of Directors is not in session. The Executive Committee has the full power and authority of the Board of Directors, except to the extent limited by law or our certificate of incorporation or bylaws or other governance documents.

Board Structure and Lead Director. Roger Penske is the Chair of our Board of Directors and our Chief Executive Officer. We believe the combination of these two offices represents the most appropriate approach for our Company due to Mr. Penske’s significant ownership position through Penske Corporation, his extensive industry experience, his relationships with our key suppliers and other partners and his experience as an executive and a director of some of the world’s leading companies. In light of the combination of these positions, one of our governance principles is to have an independent “Lead Director.” Our Lead Director is responsible for:

•	coordinating and leading the activities of the outside directors

•	establishing the agenda for executive sessions of the outside directors

•	presiding at the executive sessions of the outside directors which generally occur as part of each Board meeting

•	facilitating communication between the outside directors as a group and our management team

Our Lead Director is H. Brian Thompson. You may communicate with the Lead Director by writing to us, c/o Corporate Secretary and General Counsel, 2555 Telegraph Road, Bloomfield Hills, MI 48302. All correspondence will be reviewed by our Corporate Secretary’s office, and all (other than frivolous correspondence) will be forwarded to the Lead Director. Any written communications to the independent directors as a group or the entire Board of Directors may be sent care of the Corporate Secretary as well. These communications (other than frivolous correspondence) will also be forwarded to the Lead Director.

Director Independence. A majority of our Board of Directors is independent and each of the members of our Audit, Compensation and Management Development, and Nominating and Corporate Governance committees is independent. The Board of Directors has determined that Mss. Davis and McWaters and Messrs. Barr, Dürheimer, Smith, Steinhart and Thompson are each independent in accordance with the listing requirements of the New York Stock Exchange and our guidelines for independent directors which can be found in our corporate governance guidelines on our website www.penskeautomotive.com under the sub-heading “Governance” within the “Investors” section, and as set forth below. As required by New York Stock Exchange rules, in making independence determinations with respect to directors, our Board of Directors has affirmatively determined that the independent directors have no material relationship with the Company which would interfere with the exercise of independent judgment in carrying out the responsibilities of such directors or otherwise fail to meet the individual independence tests specified by the NYSE Listed Company Manual Section 303A.02.

For a director to be considered independent under our corporate governance guidelines, the Board of Directors must determine that the director does not have any direct or indirect material relationship with us. In addition to applying these guidelines, the Board of Directors considers relevant facts and circumstances in making the determination of independence, and not merely from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation. The Board considers the transactions, relationships and arrangements between the Company, and its affiliates such as Penske Corporation, Penske Racing, Penske Entertainment and Penske Transportation Solutions and affiliates of the director, including those described under “Related Party Transactions” and elsewhere in the proxy statement, in its independence determination. The Board also considers ownership of our or our affiliates’ securities by the directors and their affiliates, ownership by our management team of any securities of affiliates of directors, and sponsorships of Penske Racing or other Penske affiliated racing entities by any of our or our directors’ affiliates.

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Under our guidelines, which are more stringent than the New York Stock Exchange guidelines, a director will not be independent if:

1.	The director is employed by us, or an immediate family member is one of our executive officers.*

2.	The director receives more than $60,000 of direct compensation from us, other than director fees and deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).*

3.	The director is affiliated with or employed by our independent auditing firm, or an immediate family member is affiliated with or employed in a professional capacity by our independent auditing firm.

4.	An executive officer of ours serves on the compensation committee of the board of directors of a company that employs the director or an immediate family member as an executive officer.

5.

The director is an executive officer or employee, or if an immediate family member is an executive officer, of another company that does business with us and the sales by that company to us or purchases by that company from us, in any single fiscal year during the evaluation period, are more than the greater of two percent of the annual revenues of that company or $1 million.

6.	The director serves as an officer, director or trustee of a charitable organization, and our charitable contributions to the organization are more than the greater of $250,000 or one percent of that organization’s total annual charitable receipts during its last completed fiscal year.

*	Subject to the rules of the New York Stock Exchange, employment as an Interim Chair, Interim CEO or other executive officer on an interim basis, and related compensation, shall not disqualify a director from being considered independent immediately following that employment.

ESG Oversight. Our Board of Directors has delegated oversight of our ESG practices and reporting to our Nominating and Corporate Governance Committee responsible for (i) recommending to the Board our overall strategy with respect to ESG matters, (ii) overseeing our policies, practices, and performance with respect to ESG matters, and (iii) overseeing our reporting formats and standards with respect to ESG matters; provided that certain aspects of our ESG practices are managed by other committees of the Board. For example, our Compensation and Management Development Committee is responsible for oversight of social risks and social initiatives such as our efforts to promote diversity, promote equity and inclusion, reduce employee turnover and incentivize certain performance consistent with our ESG practices and goals. Our Nominating and Corporate Governance Committee reviews our ESG disclosures and discusses with management at least annually our ESG initiatives, which include our environmental risks, environmental sustainability efforts and charitable contributions. Management is responsible for the implementation and execution of our ESG practices and reporting.

Risk Oversight and Management. We have designed and implemented processes to manage risk in our operations. The role of the Board of Directors in risk management is primarily one of oversight. Management is responsible for the implementation and execution of our risk management initiatives. Our Board of Directors executes its oversight role directly and also through its various committees as set forth below.

At least quarterly, our senior leadership team prepares a comprehensive summary of certain key risks facing the Company (the “Risk Report”). The Risk Report includes feedback from multiple constituencies within the Company. Identified risks are each assigned to members of senior management or designated management committees who are tasked with monitoring such risks and, where appropriate, implementing risk mitigation efforts. The Risk Report also clarifies Board oversight of each risk and is shared and discussed at least quarterly with the Audit Committee and periodically with the full Board, with certain specified risks and mitigation efforts reported to the Board or designated standing committees on a more frequent basis, as appropriate.

Full Board of Directors

•	reviews strategic and operational risk in the context of reports from corporate management, regional executives and other officers

•	receives reports on all significant committee activities at each regular meeting

•	reviews the risks inherent in any significant Company transactions

Cybersecurity. As part of its review of the Company’s operational risks, the Board of Directors reviews cybersecurity risks facing our Company, including the potential for breach of our key information technology systems and the potential for a breach of our systems and processes relating to the protection of customer and employee confidential information. Our Chief Information Officer meets periodically with our Board and typically quarterly with our Audit Committee to review key cybersecurity and other information technology risks as well as any significant cybersecurity incidents.

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Audit Committee

•	together with the full Board of Directors, reviews management’s assessment of the key risks facing our Company, including the key controls we rely on to mitigate those risks

•	monitors certain key risks at its regularly scheduled meetings, such as credit risks, liquidity risks, market risks, regulatory risks, litigation risks, related party transaction risk and cybersecurity risks

Nominating and Corporate Governance Committee

•	oversees compliance with legal and regulatory requirements

•	reviews risks relating to our governance structure

Compensation and Management Development Committee

•	reviews risk inherent in our compensation policies

•	reviews social risks

•	reviews the Company’s succession planning

Director Advisor Program. The Board has adopted a policy in its Corporate Governance Guidelines for the designation of certain former directors as “Director Advisors” which allows us to retain the benefits of continuing guidance from our long-tenured directors. This program is designed to encourage director refreshment while retaining access to former long-tenured directors’ valuable experience and institutional knowledge. Director Advisors are expected typically to be invited to attend two Board meetings per year and be available for continuing consultation. A Director Advisor is not entitled to attend any Board meeting, may not vote on any business coming before the Board nor is he or she counted as a member of the Board for the purpose of determining a quorum or for any other purpose. A Director Advisor is not a member of the Board or a “director” as that term is used in our bylaws, this proxy statement, our filings with Securities and Exchange Commission or otherwise.

Director Advisors are entitled to cash compensation of $60,000 per year payable in cash or Company stock at the director’s election, a charitable match opportunity and use of a Company vehicle or a $20,000 stipend, as well as reimbursement of Company expenses and travel to our meetings. We have not designated any Director Advisors for 2022 or 2023.

Securities Trading Policy Prohibition of Hedging or Short Selling. Our securities trading policy applies to all of our directors, officers and employees and restricts trading in our securities while in possession of material nonpublic information. The policy prohibits our directors, officers, employees and their designees from engaging in hedging, short sales and other trading techniques that offset any decrease in market value of our equity securities without the approval of our General Counsel and no such approvals were granted in 2022. Our policy also provides for an approval procedure for corporate management and senior field management prior to any trading activity, requires advance approval of any securities trading plan under SEC Rule 10b5-1, or otherwise, and limits trading during designated “blackout” periods. These management personnel must request pre-approval and affirm they are not in possession of any material non-public information at that time. Approval for any individual trade will only be granted in an open trading window period and once approved, the recipient has three business days to effect a trade or must reinitiate the pre-approval procedure. Approval of any securities trading plan is also subject to these limits, as well as approval of our General Counsel who will confirm all legal requirements of such plan, including any applicable waiting periods, before implementation of such plan. No officers or directors implemented Rule 10b5-1 trading plans in 2022 or 2023 year-to-date.

Stock Ownership Guidelines/Pledging. Our stock ownership guidelines, discussed in the CD&A below, require threshold levels of our stock to be held by executive officers, other senior officers and directors. These guidelines exclude any shares that are pledged by our directors and officers.

Controlled Company. Under the New York Stock Exchange rules, if a company is “controlled” it need not have a majority of independent directors or solely independent compensation or nominating committees. We are a “controlled company” because more than 50% of the voting power for the election of directors is held by Penske Corporation through its voting agreement with Mitsui & Co. and their affiliates. These entities are considered a group due to the provisions of the stockholders agreement between these parties described under “Related Party Transactions.” Even though we are a “controlled company,” we are fully compliant with the New York Stock Exchange rules for non-controlled companies.

Director Candidates. When considering new candidates for our Board of Directors, the Nominating and Corporate Governance Committee uses the network of contacts of the Board of Directors to compile potential candidates, but may also engage, if it deems appropriate, a professional search firm. The committee considers whether the nominee would be independent and

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considers the candidate’s diversity in relation to the then existing Board, potentially including age, gender, ethnicity, geography, business experience or expertise or other factors. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders pursuant to procedures outlined below. Stockholder proposals for nominees should be addressed to our Corporate Secretary, Penske Automotive Group, 2555 Telegraph Road, Bloomfield Hills, MI 48302. The committee’s evaluation of stockholder-proposed candidates will be the same as for any other candidates.

Director candidate submissions are to include:

•	sufficient biographical information concerning the recommended individual, including age, employment history with employer names and description of the employer’s business

•	whether such individual can read and understand financial statements

•	a list of current and previous board memberships and other affiliations of the nominee

•	a description of the specific experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director, in light of our business and structure

•	a written consent of the individual to stand for election and serve if elected by the stockholders

•	a statement of any relationships between the person recommended and the person submitting the recommendation

•	a statement of any relationships between the candidate and any automotive or truck retailer, manufacturer or supplier, as well as any other transportation business or any business that could be deemed to compete with the Company

•	proof of ownership by the person submitting the recommendation of at least 500 shares of our common stock for at least one year

Location of Corporate Governance Documents. Our corporate governance guidelines and the other documents referenced in this section are posted on our website, www.penskeautomotive.com, under the sub-heading “Governance” within the “Investors” section. Our 2022 ESG Report is posted on our website under the “ESG” tab. We have also adopted a Code of Business Conduct and Ethics that applies to all of our employees and directors. We intend to disclose waivers, if any, for our executive officers or directors from the code, and changes to the code, on our website.

Compensation Committee Interlocks and Insider Participation. During the last fiscal year, there were no compensation committee interlocks between us and other entities involving our executive officers and directors who serve as executive officers or directors of such other entities. During the last completed fiscal year, no member of the Compensation and Management Development Committee was a current or former officer or employee.

Stockholder Director Nominations and Proposals for 2024. We must receive any proposals submitted pursuant to Rule 14(a)- 8 of the SEC proxy rules intended to be presented to stockholders at our 2024 annual meeting of stockholders at our principal executive offices at 2555 Telegraph Road, Bloomfield Hills, Michigan 48302 for inclusion in the proxy statement by November 17, 2023. These proposals must also meet other requirements of the rules of the SEC relating to stockholder proposals. Any stockholder who wishes to make a director nomination or introduce an item of business, other than as described above, must comply with the procedures set forth in our bylaws, including delivering proper notice to us not less than 120 days nor more than 150 days prior to the first anniversary of the preceding year’s Annual Meeting, which means not earlier than December 13, 2023, nor later than January 12, 2024. In addition to satisfying the foregoing requirements and other procedures set forth under our bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934 no later than January 12, 2024.

Environmental, Social and Governance (ESG)

As a leading international, diversified transportation services company, we recognize it is our responsibility to ensure that we contribute to a healthy environment, economic opportunity, and social equity in the communities where we operate around the world. We recognize we are accountable to key stakeholders and the communities in which we do business. We are committed to responsible business practices, continuous improvement of our operations and strengthening relationships with our stakeholders. We focus our ESG efforts where we can have the most positive impact on our business and society and are driven by our core values that ensures we enrich our communities, minimize our environmental impact, protect the health and safety of our team members and customers, and provide a diverse and inclusive workplace – all while creating value for our stakeholders. The most important investments we make are in our people. Everything we aspire to be as a company builds on our ability to come together as one team. We provide our team members a supportive work environment that empowers them to do meaningful work while fulfilling their passions and balancing work goals with life goals.

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We are pleased to have published our 2022 ESG Report which highlights the Company's environmental, social, and governance (ESG) strategies, activities, progress, metrics, and performance for 2021, which is available on our website under the tab “ESG.” The report is responsive to the Sustainability Accounting Standards Board (SASB) Multiline & Specialty Distributors sector standard and includes additional disclosures responsive to the framework established by the Task Force on Climate-related Financial Disclosures. We are committed to regular, transparent communication of our progress and look forward to bringing our stakeholders along with us on this journey. We encourage you to review our ESG report, which includes additional detail in regard to certain our key efforts highlighted below.

Community Participation. We believe community participation and charitable giving enrich the neighborhoods where we work, live and play. We are proud of these efforts and we encourage participation by all dealerships and employees, including through our commitment to the Paralyzed Veterans of America (“PVA”). Since 2015, our dealerships have supported the PVA, an organization working to ensure paralyzed and disabled veterans receive the care, benefits, and job opportunities they deserve. Each year, we match certain donations from our customers and team members to the PVA and have contributed more than $8.5 million to the group. As a company with a presence spanning four continents, we are able to make positive impacts well beyond the borders of the communities where our dealerships are located. After the outbreak of the war in Ukraine, we and our affiliate Penske Transportation Solutions made a $1 million contribution to World Central Kitchen, an organization working to supply meals to those in need at the frontlines of humanitarian, climate, and community crises. We encouraged team members to also donate to this cause, raising over $150,000 from employees.

Environmental Sustainability-Electric Vehicles. Our dealerships sell and service vehicles that are engineered and manufactured by over 35 of the world’s automotive OEMs. Our new car dealerships sell the full suite of vehicles offered by our manufacturer partners, including hybrid, plug-in hybrid and pure electric vehicles (“EVs”). EVs can reduce the emissions that contribute to climate change and smog, improving public health and reducing ecological damage.

We encourage the sale and use of EVs and are actively placing charging stations across our network to facilitate a reliable infrastructure for their use. As of December 31, 2022, our network of EV charging stations across the U.S. and the U.K. totaled over 1,600, including a combination of Level 1 (standard), Level 2 (240V), and Level 3 (fast charging) capabilities. We expect to install additional charging stations to support EVs as our manufacturer partners introduce more of these products to the marketplace. We estimate that approximately 23% of our new vehicles sold in 2022 in the U.S. and U.K. combined were either electric or hybrid electric vehicles.

Managing our Energy Use and Reducing Waste. We are committed to monitoring and managing our energy use and the environmental impacts of our business. We recognize our responsibility to advocate for a cleaner environment through self-awareness, leveraging our global partnerships, promoting cleaner driving vehicles through our dealerships and reducing pollution and waste. We have deployed several strategies for reducing or optimizing our energy use, such as installing LED lighting, occupancy sensors, energy-efficient glass, and high-efficiency heating, ventilation and air conditioning (HVAC) systems.

We are committed to reducing the environmental impact of waste produced at our facilities. We deploy several strategies to ensure the efficient use of resources and responsible disposal of waste, including hazardous waste, and use third parties to manage, collect and process recycling for many of the materials that go through our service departments. Other strategies to reduce pollution and waste include recycling worn-out tires collected from participating U.S. retail dealerships and eliminating the use of paper for internal communications and customer documentation.

Human Capital, Diversity, Equity and Inclusion. We believe that our employees are our greatest asset. We understand that exceptional customer service can only be consistently delivered by attracting, motivating, training, and retaining the very best team members. With this in mind, we put our employees at the heart of everything that we do by developing their talent and enabling them to build long-term careers.

We are committed to building a diverse and skilled workforce while providing a work environment that promotes equity and is free from any form of discrimination on the basis of race, color, creed, religion, sex (including breast feeding and related medical conditions), pregnancy, sexual orientation, gender identity and expression, marital status, national origin, ancestry, citizenship status, uniform service member and veteran status, age, genetic information, protected medical condition, disability, or any other protected status in accordance with all applicable federal, state, and local laws.

Investor Outreach. We have an investor outreach program that aims to engage prospective and current shareholders throughout the year. Engagement activities includes participation in industry conferences and events, sell-side research conferences, one-on-one meetings with current and potential investors, quarterly financial results conference calls, and visits to our locations.

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AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of our accounting functions and internal controls as more fully discussed above under “Our Corporate Governance.” The Audit Committee has the sole authority to retain and terminate our independent auditing firm, and is responsible for recommending to the Board of Directors that our financial statements be included in our annual report on Form 10-K.

The Audit Committee took a number of steps in making this recommendation for our 2022 annual report. The Audit Committee discussed with our independent auditing firm those matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC, including information regarding their independence and the scope and results of their audit. These communications and discussions were intended to assist the Audit Committee in overseeing the financial reporting and disclosure process. The Audit Committee also discussed the independent auditing firm’s independence and received the letters and written disclosures from the independent auditing firm required by the PCAOB. Finally, the Audit Committee reviewed and discussed the annual audited financial statements with our management and the independent auditing firm in advance of the public release of operating results, and before the filing of our annual and quarterly reports with the SEC.

Based on the foregoing, and other matters deemed relevant and appropriate by the Audit Committee, the Audit Committee recommended to the Board of Directors that our audited financial statements be included in our 2022 annual report on Form 10- K as filed with the SEC on February 21, 2023.

The Audit Committee of the Board of Directors

	Greg Smith (Chair)			Kimberly McWaters
	John Barr			Ronald Steinhart

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INDEPENDENT AUDITING FIRM FEES

Deloitte & Touche LLP is our principal independent registered public accounting firm. We paid Deloitte & Touche LLP the fees described below in 2022 and 2021, all of which services were approved by our Audit Committee:

Audit Services:

•	audits of our consolidated financial statements

•	audits of management’s assessment of internal control over financial reporting

•	reviews of quarterly financial statements

•	other services normally provided in connection with statutory or regulatory engagements

Audit Related Services:

•	services in connection with registration statements filed with the Securities and Exchange Commission

•	acquisition due diligence

•	audits of benefit plans

•	consents and comfort letters

•	accounting research and consultation

Tax Fees:

•	services rendered by the independent auditing firms in connection with tax compliance, planning and advice, including in connection with acquisitions

	2022	2021
Audit Fees	$3,920,383	$3,866,136
Audit Related Fees	83,984	144,359
Tax Fees
Tax Compliance	49,023	26,735
Other Tax Fees	46,582	37,858
All Other Fees	—	—
Total Fees	$4,099,972	$4,075,088

The Audit Committee has considered the nature of the above-listed services provided by Deloitte and determined that they are compatible with their provision of independent audit services under relevant guidance. The Audit Committee has discussed these services with Deloitte and management and determined that they are permitted under the Code of Professional Conduct of the American Institute of Certified Public Accountants, the auditor independence requirements of the Public Company Accounting Oversight Board, and the laws and regulations administered by the Securities and Exchange Commission.

Pre-approval Policy. The Audit Committee has adopted a policy requiring pre-approval of all audit and non-audit services provided by Deloitte. The primary purpose of this policy is to ensure that we engage our public accountants with a view toward maintaining independence. The Audit Committee is required to pre-approve all services relating to work performed for us by Deloitte and related fees. The Audit Committee must also approve fees incurred for pre-approved services that are in excess of the approved amount. Pre-approval of audit and non-audit services and fees may be given at any time up to a year before commencement of the specified service. The Chair of the Audit Committee may independently approve fees and services as long as they are reviewed and ratified by the Audit Committee at its next regularly scheduled meeting. All of the services and related fees set forth above were approved by the Audit Committee in accordance with this policy.

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Executive Officers

Our named executive officers, whose compensation we describe below, are Messrs. Denker, Kurnick, Penske and Spradlin and Ms. Hulgrave. Each of our named executive officers was elected by the Board of Directors and will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal from office. Biographies of Messrs. Kurnick and Penske are set forth above. Biographies of our other named executive officers are provided below:

Bud Denker, 64, has served as our Executive Vice President – Human Resources since July 2015. He also serves as President of Penske Corporation, and as Executive Vice President of Penske Racing. Mr. Denker served as our Executive Vice President – Marketing from July 2005 to June 2015. Prior to joining us, Mr. Denker served as Vice President, Brand and Market Development for Eastman Kodak Company from 2001-2005.

Shelley Hulgrave, 44, has served as our Executive Vice President and Chief Financial Officer since June 2021 and prior to that served as our Senior Vice President since February 2020 and our Vice President and Corporate Controller since June 2015. She has also served as our Corporate Accounting Manager since October 2006. Prior to joining us, Ms. Hulgrave held various positions for DaimlerChrysler Financial and Ernst & Young.

Shane Spradlin, 53, has served as our Executive Vice President since February 2010, our General Counsel since December 2007, and our Corporate Secretary since March 2004. Mr. Spradlin joined our Company in March 2003. From 1999 to 2003, he served as Corporate Counsel to Nextel Communications in Reston, Virginia. From 1995 through 1999, Mr. Spradlin was an associate with the New York and Washington, D.C. offices of Latham & Watkins, specializing in corporate finance and mergers and acquisitions.

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Compensation Committee Report

The Compensation and Management Development Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis set forth below with management. Based on this review and these discussions with management, the committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

The Compensation & Management Development Committee of the Board of Directors

H. Brian Thompson

(Chair)

Wolfgang Dürheimer

Lisa Davis

Compensation Discussion and Analysis

Compensation Philosophy. Other than with respect to Messrs. Kurnick and Penske, the majority of our executive and employee compensation is payable in cash in the short-term and is comprised principally of salary and cash bonuses. We use cash compensation as the majority of our compensation because we believe it provides the most flexibility for our employees and is less dilutive to existing stockholders than equity compensation. The compensation committee also recognizes that stock prices may reflect factors other than long-term performance, such as general economic conditions and varying attitudes among investors toward the stock market in general and toward automotive retail companies specifically. However, we also provide long-term compensation in the form of restricted stock awards for senior employees, including each of our named executive officers (“NEOs”). Our restricted stock program awards typically vest over four years, with 70% of any award vesting in the third and fourth years. We believe this long-term compensation helps to align management’s goals with those of our other stockholders and provides a long-term retention inducement for our key employees, as discussed below under the heading “Long-Term Incentive Plans.”

Outside Advisors and Consultants. Our compensation committee has full access to any of our employees and has the authority to hire outside consultants and advisors at its discretion, though it did not do so in 2022. All NEO compensation determinations are made by the committee, using its independent judgment and analysis.

Role of Executive Officers. The compensation committee relies on our senior management to assist in fulfilling many of its duties, in particular our Executive Vice President – Human Resources and Chief Executive Officer, each of whom attends part of most committee meetings. These executives make recommendations concerning our compensation policies generally, certain specific elements of compensation for senior management (such as equity awards and bonuses), and report to the committee as to Company personnel and developments. Our executives do not participate in determining their own compensation.

Addressing Risk. Our compensation committee recognizes that any incentive-based compensation arrangement induces an inherent element of risk taking by senior management. We incentivize management through annual discretionary bonuses, restricted stock grants and, in some cases, performance-based bonuses. The committee assesses the risk related to our compensation policies for the named executive officers and for the employees generally and has determined that our compensation arrangements do not lend themselves to unnecessary or excessive risk taking. The committee believes that any inherent risk is mitigated by the following factors:

•	Our compensation recovery policy noted below

•	Our committee’s discretion to reduce any performance-based award

•	Approximately 70% of the equity compensation we issue vests in the third and fourth years

•	Rigorous internal and external audits of our consolidated results

•	Our commitment to full compliance with our code of conduct

•	Thorough investigation of all fraud and financial-related complaints, including those received on our anonymous hotline

The responsibilities of the compensation committee and committee member independence are described under “Our Corporate Governance” beginning on page 12.

Compensation Recovery (“Clawback”) Policy. We have a policy regarding the recovery of unfairly earned compensation. Under the policy, if our Board determines that a member of management earned performance based compensation or incentive compensation within the last three years due to fraud, negligence or intentional misconduct, and such conduct was

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a significant contributing factor to our restating our financial statements or the reporting of material inaccuracies relating to financial reporting or other performance metrics used in those awards, our Board has the discretion to cause that employee to repay and/or forfeit all compensation that was expressly conditioned upon the achievement of the misreported financial results.

Equity Award Approval Policy. We have an equity award approval policy which requires that all equity awards be approved by the committee and that the grant date of all awards except those discussed below shall be the date of the approval by the committee. As part of that policy, the compensation committee delegated to our Chief Executive Officer the authority to grant or accelerate the vesting of awards with respect to 50,000 shares of our common stock per year, other than awards to executive officers, provided the grant or vesting of the awards are reported to the committee at its next meeting. Our Chief Executive Officer approved the grant or vesting of awards with respect to 25,082 shares under that authority in 2022, which awards were ratified by the committee.

Stock Ownership Guidelines. Our stock ownership guidelines are designed to align our management and Board members’ interests with our stockholders. The guidelines require that officers and directors own the following levels of common stock, expressed as a multiple of base salary.

	Executive Officer Level			Multiple of Base Salary
	CEO			8x
	President			4x
	Other Senior Executives			2x

Non-employee board members are required to own common stock equal to ten times our annual retainer (currently, $60,000 x 10 = $600,000). Directors and officers have five years from appointment to reach the minimum ownership level, though our policy allows extensions at the discretion of the Chair and Lead Director. These guidelines exclude any shares that are pledged by any of our directors and officers, and also include any shares of restricted stock held by the officer or director.

Determination of Compensation Amounts. The compensation committee determines all aspects of compensation for our NEOs. In making decisions regarding non-CEO compensation, the committee receives input from our Chief Executive Officer. The committee believes that solely using annual quantitative performance measurements does not create the appropriate balance of incentives to build long-term value. Thus, the committee evaluates a broad range of qualitative factors, including reliability, a track record of integrity, good judgment, foresight and the ability to lead others.

The committee reviews salary adjustments with a view to maintaining external compensation competitiveness. We annually benchmark competitiveness of our total compensation against a group of publicly traded automotive retailers which in 2022 consisted of Asbury Automotive Group, AutoNation, CarMax, Group 1 Automotive, Lithia Motors and Sonic Automotive. While we benchmark our compensation, we do not target a specific quartile of pay for our NEOs as compared to our peers.

In addition to the above-mentioned factors, the level of compensation that we pay to Messrs. Denker and Kurnick reflect that each devotes a percentage of his time to affiliated companies for which they receive additional compensation from Penske Corporation. Specifically, Mr. Kurnick serves as Penske Corporation’s Vice Chair and Mr. Denker serves as the President of Penske Corporation. Our committee does not track the exact percentage of time spent on Penske Automotive versus affiliated matters, recognizing that the amount varies from year to year, but it is generally expected that each will spend approximately 75% of his time on Penske Automotive matters. We were reimbursed approximately four percent of Mr. Spradlin’s base salary by Penske Corporation to reflect his efforts on behalf of Penske Corporation. The full amount of Mr. Spradlin’s base salary is shown in the table below.

Our Compensation Program. Our compensation program primarily consists of four elements:

•	Base salary

•	Annual discretionary cash bonus payments

•	Restricted stock awards

•	Employee health and welfare plan participation and other benefits, such as a vehicle allowance

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Base Salary. The salaries of our NEOs are determined by scope of job responsibility, experience, individual performance, historical salary levels and the benchmarking information discussed above. The evaluation of the individual’s performance is based upon the committee’s perception of that individual’s performance, based in large part on input from our Chief Executive Officer with respect to each of the other NEOs, and the factors noted above under “Determination of Compensation Amounts.”

The committee also considers our Company-wide performance in the prior year and general economic factors when setting base salary levels for each of the NEOs. The items of corporate performance that are considered for our NEOs are the same as those with respect to the award detailed below under “Long-Term Incentive Plans.” Our compensation committee uses these factors in a subjective evaluation to gauge Company performance, keeping in mind the impact of the general performance of the automotive retail industry. Beginning January 1, 2022, we increased the annual base salaries of Messrs. Kurnick and Penske by $100,000 and $200,000, respectively, based on the committee’s review of these factors. Beginning December 1, 2022, Ms. Hulgrave’s annual base salary was increased by $100,000, and beginning January 1, 2023, Messrs. Denker and Spradlin’s annual base salaries were each increased by $25,000, in each case based on the Committee’s review of these factors.

Annual Bonus Payments. Our senior management is eligible to receive annual discretionary cash bonus payments. Our Chief Executive Officer and President have not received any discretionary bonus payments, and instead receive only the restricted stock grants resulting from their achievement of performance goals, as described below under “Long-Term Incentive Plans.” We pay annual cash bonuses to our other NEOs to provide an incentive for future performance and as a reward for performance during the prior year. These discretionary bonus payments are determined in varying degrees based on three criteria:

•	Company-wide performance in the prior year

•	Evaluation of an individual’s performance in the prior year

•	Evaluation of the annual performance of an individual’s business unit in the prior year

The items of Company-wide performance that are considered for our NEOs are the same as those detailed below under “Long-Term Incentive Plans.” Our compensation committee uses these factors to evaluate Company performance, keeping in mind the impact of the overall performance of the business sectors in which we compete. The evaluation of the individual’s performance and the performance of the individual’s business unit is based on the committee’s perception of that performance, based in part on input from our Chief Executive Officer and the factors noted above under “Determination of Compensation Amounts.”

Restricted Stock Awards. Each member of senior management, including each of the NEOs, is eligible to receive a restricted stock award because we believe these awards effectively align management’s goals with those of our other stockholders. Restricted stock grants for management typically vest over four years at a rate of 15%, 15%, 20% and 50% per year, and are subject to forfeiture in the event the employee departs from the Company before vesting. We believe these awards provide a longer-term incentive for management because the majority of the award vests in the third and fourth year. We employ this form of compensation in part because many of our initiatives may take several years to yield benefits. We also believe that weighted vesting of these awards provides an additional incentive to retain our valuable employees due to the unvested value that may be created over time. Our restricted stock awards mirror our other outstanding stock, providing dividend and voting rights prior to vesting.

In 2022, each of our NEOs other than Ms. Hulgrave received restricted stock awards resulting from achievement of the long-term incentive plan awards discussed below as well. Ms. Hulgrave received a discretionary award in 2022 as she was named Chief Financial Officer in 2021 after the long-term incentive awards for the other officers had been implemented. In total in 2022, the committee approved the grant of 304,626 equity incentive awards under our equity plans (representing approximately 0.4% of our current outstanding equity), including all of the awards to our NEOs. Awards were granted under our 2020 Equity Incentive Plan which originally provided up to five million shares for equity awards. In February 2023, each of our NEOs received restricted stock awards resulting from achievement of the long-term incentive plan awards discussed below.

Other Compensation. We may also provide our NEOs, and certain other employees, with selected other benefits or perquisites in order to attract and retain them. With respect to health and welfare benefits, the committee believes that our employees should receive a meaningful benefit package commensurate with those of other automotive retailers, recognizing the increasing cost of those benefits in recent years. We also provide our U.S. employees with matching under our 401(k) plan.

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Our NEOs, as well as other eligible employees, may defer up to 50% of their base salary and up to 95% of their bonus compensation pursuant to the Penske Automotive Group, Inc. Amended and Restated Deferred Compensation Plan (the “DCP”). The DCP is an unfunded, non-qualified deferred compensation plan which provides the opportunity to accumulate additional savings for retirement on a tax deferred basis. The Company does not match funds deferred through this plan. Additional details regarding our DCP can be found below in the “Nonqualified Deferred Compensation” table.

Our NEOs and directors are also provided with an automobile allowance or the use of a Company vehicle. From time to time, we may provide other benefits to certain members of our senior management. We have valued these benefits in the “All Other Compensation” column of the “Summary Compensation” table below based on our cost. We review these benefits on a case-by-case basis and believe, if limited in scope, such benefits can provide an incentive to long-term performance and help retain our valuable employees.

No Employment Agreements or Pre-arranged Severance Compensation. None of our current executive officers have been provided an employment agreement, nor are they entitled to any pre-arranged severance compensation from our Company. We believe our mix of short-term and long-term compensation provides a retention incentive that makes an employment contract unnecessary, while providing us flexibility with respect to managing the departure of an executive officer. Our lack of pre-arranged severance compensation is consistent with our performance-based compensation philosophy and provides us the flexibility to enter into post-employment arrangements based on circumstances existing upon departure. We have historically entered into varying types of severance arrangements with departing members of our senior management, which have included vesting of restricted stock and consulting agreements, as we believe it may be important to have continuing access to these individuals’ knowledge base and guidance. With respect to a change in control, none of our current executive officers have been guaranteed any change of control payments, however, our restricted stock grants vest in the event of a change of control.

Long-Term Incentive Plans. In February 2022, our compensation committee established 2022 performance targets for a performance-based award for each of the NEOs. The earned payouts for these awards are set forth in the table below and, for Messrs. Denker and Spradlin, and Ms. Hulgrave, were paid in shares of restricted stock in February 2023 as set forth below. Messrs. Kurnick and Penske, however, waived the acceptance of approximately 33% and 27%, respectively, of the resulting awards. While each earned $7.5 million and $1.5 million, respectively, Mr. Kurnick waived the acceptance of $500,000 of that award and Mr. Penske waived acceptance of $2.0 million of that award in light of the increase in value of previously earned awards and to provide additional opportunity for awards to others in management without additional shareholder dilution. The amount noted in the table below reflects the award amounts that were achieved and accepted.

For each of the NEOs, the amount of restricted stock noted below granted in February 2023 and vesting over a four-year period was calculated by dividing the total award achieved and accepted by our average closing stock price for each trading day in 2022 ($108.55). Messrs. Kurnick and Penske do not receive cash bonuses. Their performance bonuses are paid only in shares of restricted stock as a result of the long-term incentive plans.

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2022 Long-Term Incentive Award Amounts

Name and Principal Position	Target ($)	Maximum ($)	Payment($)	Payment(Shares)

Roger Penske, Chief Executive Officer (1)	5,000,000	8,000,000	5,500,000	50,668

Robert Kurnick, Jr., President (1)	1,000,000	1,600,000	1,000,000	9,212

Shelley Hulgrave, EVP & Chief Financial Officer	500,000	800,000	750,000	6,909

Bud Denker, EVP – Human Resources	500,000	800,000	750,000	6,909

Shane Spradlin, EVP and General Counsel	500,000	800,000	750,000	6,909

(1)	Reflects a reduced amount as Messrs. Kurnick and Penske waived the acceptance of $500,000 and $2.0 million of their awards, respectively, as discussed above.

The specific 2022 performance objectives for these officers listed above and results were as follows:

Objective		Result	% of Award	Achievement
•	EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,650 million (100% attainment), EBITDA below $1,518 million results in no attainment, EBITDA of $1,518 million results in 50% attainment, and EBITDA of $1,726 million yields 200% attainment (1)	$2,057	20%	40%
•	Comparative earnings per share of $13.01 to $13.61 (100% attainment), EPS of $12.46 to $13.00 (50% attainment) and EPS over $13.61 (200% attainment)	$18.55	10%	20%
•	Operating margin of 4.34% to 4.41% (100% attainment), operating margin of 4.20% to 4.26% (50% attainment), operating margin of 4.27% to 4.33% (75% attainment) and above 4.41% (200% attainment) (2)	5.35%	10%	20%
•	Common stock price performance exceeds performance of 5 of 8 selected peer group companies (100% attainment). Outperformance of 4 of 8 yields 50% attainment, 6 of 8 yields 125% attainment, 7 of 8 yields 150% attainment and 8 of 8 yields 200% attainment (3)	8 of 8	10%	20%
•	Customer satisfaction scores exceed manufacturer objectives at 90% of our U.S. dealerships	Exceeds	10%	10%
•	No material weaknesses in our internal controls	None	5%	5%
•	ESG Metric – Increase the number of electric vehicle charging stations to 1,300	Achieved	7.5%	7.5%
•	ESG Metric – Complete values-based diversity and inclusion training to 1,800 associates	(4)	7.5%	7.5%(4)
•	Component is discretionary in the determination of our Compensation and Management Development Committee	Awarded	20%	20%
Total			100%	150%
•	Supplemental ESG Metric – Representation by the company in Newsweek’s Top 500 Most Responsible Companies	Not Achieved	10%	0%
			110%	150%

(1)	Performance between these amounts yields pro rata attainment

(2)	Operating margin is the ratio of operating income to total revenue

(3)	The peer group companies for this purpose are Asbury Automotive, AutoNation, CarMax, Group 1 Automotive, Lithia Automotive, Sonic Automotive, Ryder and Pendragon PLC (U.K.)

(4)	This objective was not met. However, the compensation committee believes that the underperformance on this objective was due to the inability to conduct in-person training which was not subject to the influence of our management and therefore determined to pay out this objective at the full 7.5%.

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2023 Long-Term Incentive Award Amounts

In February 2023, the committee established similar performance-based awards for our NEOs in the amounts specified below to be paid in shares of restricted stock to be granted in 2024 calculated by dividing the resulting total award achieved by the average PAG closing stock price for each trading day in 2023.

Name and Principal Position	Minimum ($)	Target ($)	Maximum ($)

Roger Penske, Chief Executive Officer	2,500,000	5,000,000	8,000,000

Robert Kurnick, Jr., President	500,000	1,000,000	1,600,000

Shelley Hulgrave, EVP & CFO	250,000	500,000	800,000

Bud Denker, EVP – Human Resources	250,000	500,000	800,000

Shane Spradlin, EVP & General Counsel	250,000	500,000	800,000

The performance objectives for these awards are as follows:

Objective		% of Award
•	EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,888 million (100% attainment), EBITDA below $1,737 million results in no attainment, EBITDA of $1,737 million results in 50% attainment, and EBITDA of $1,974 million yields 200% attainment (1)	20%
•	Comparative earnings per share of $16.34 to $17.10 (100% attainment), EPS of $15.66 to $16.33 (50% attainment), EPS of $17.11 to $17.96 (200% attainment), and EPS over $17.97 (300% attainment)	10%
•	Common stock price performance exceeds performance of 3 of 5 selected peer group companies (100% attainment). Outperformance of 4 of 5 yields 150% attainment and 5 of 5 yields 200% attainment (2)	10%
•	Customer satisfaction scores exceed manufacturer objectives at 90% of our U.S. dealerships	10%
•	No material weaknesses in our internal controls	10%
•	ESG Metric – Annual global turnover no more than 1% greater than prior year annual turnover	10%
•	ESG Metric – U.S. franchised automotive gender diversity equal or above NADA average	10%
•	Component is discretionary in the determination of our Compensation and Management Development Committee	20%
Total		100%
•	Supplemental ESG Metric – U.S. net promotor score (NPS) for employee opinion survey higher than peer NPS	10%
		110%

(1)	Performance between these amounts yields pro rata attainment

(2)	The peer group companies for this purpose are Asbury Automotive, AutoNation, Lithia Automotive, Group 1 Automotive and Sonic Automotive

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Executive Compensation

The following table contains information concerning 2022 annual and long-term compensation for our Chief Executive Officer, Chief Financial Officer and each of our three other most highly compensated executive officers, collectively referred to as the “named executive officers” or “NEOs”.” For a discussion of our methodology in valuing the items set forth under “All Other Compensation,” see “Compensation Discussion & Analysis – Other Compensation.”

2022 Summary Compensation Table

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)(1)	All Other Compensation ($)	Total ($)

Roger Penske Chief Executive Officer	2022	1,600,000		5,000,000	700,613 (2)	7,300,613
	2021	1,400,000	—	5,000,000	581,685	6,981,685
	2020	700,000	—	5,000,000	279,555	5,979,555

Robert Kurnick, Jr. President	2022	900,000		1,000,000	217,834 (3)	2,117,834
	2021	800,000	—	1,000,000	194,036	1,994,036
	2020	400,000	—	1,000,000	133,581	1,533,581

Shelley Hulgrave EVP & Chief Financial Officer	2022	504,167	450,000	1,249,983 (4)	83,297 (5)	2,287,447
	2021	438,542	350,000	250,000	58,639	1,097,181


Bud Denker EVP – Human Resources	2022	625,000	600,000	500,000	64,732 (6)	1,789,732
	2021	610,417	550,000	500,000	50,335	1,710,752
	2020	548,958	400,000	500,000	19,488	1,468,446

Shane Spradlin EVP, General Counsel & Secretary	2022	625,000	600,000	500,000	116,637 (7)	1,841,637
	2021	610,417	550,000	500,000	107,057	1,767,474
	2020	548,958	400,000	500,000	64,394	1,513,352

(1)

These amounts represent the grant date fair value of the long-term incentive awards which were settled by issuing shares of restricted stock in February of the subsequent year all computed in accordance with FASB ASC Topic 718. Additional assumptions used in the calculation of the amounts in this column are included in footnote 13 to our audited financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2023. These amounts represent the target amount for the awards. The 2023 payouts for these performance-based awards are each set forth in the table below which was ultimately paid in shares of restricted stock in February 2023 valued as set forth above. For Ms. Hulgrave, the 2021 award represents the value of the discretionary restricted stock award she received in February 2021, and for 2022, the amount also includes, in addition to the target amount of the 2022 long-term incentive award, the value of the discretionary award she received in 2022.

(2)	Consists of $650,613 of dividends on unvested restricted stock awards and $50,000 in charitable donations pursuant to our director charitable matching program.

(3)	Consists of $37,670 for an automobile allowance, $50,000 in charitable donations pursuant to our director charitable matching program and $130,164 in dividends on unvested restricted stock awards.

(4)	As discussed in footnote (1) above, represents two years of stock awards for Ms. Hulgrave: the discretionary award issued in February 2022 ($749,983), and the long-term incentive award for 2022 ($500,000).

(5)

Consists of $27,600 for an automobile allowance, matching funds under our U.S. 401(k) plan, Company-sponsored life insurance, Company-sponsored lunch program, $28,767 in dividends on unvested restricted stock awards, payments for a country club membership, use of sporting event tickets and a tax allowance of $4,329.

(6)	Represents dividends on unvested restricted stock.

(7)	Represents an automobile allowance, Company-sponsored life insurance, matching funds under our U.S. 401(k) plan, Company-sponsored lunch program, payments for a country club membership, use of sporting event tickets, dividends on unvested restricted stock of $64,732, and a tax allowance of $5,173.

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2022 Long-Term Incentive Award Amounts

Name and Principal Position	Target ($)	Maximum ($)	Award ($)

Roger Penske Chief Executive Officer	5,000,000	8,000,000	5,500,000 (1)

Robert Kurnick, Jr. President	1,000,000	1,600,000	1,000,000 (1)

Shelley Hulgrave EVP and Chief Financial Officer	500,000	800,000	750,000

Bud Denker EVP, Human Resources	500,000	800,000	750,000

Shane Spradlin EVP, General Counsel & Secretary	500,000	800,000	750,000

(1)	Reflects a reduced amount as Messrs. Kurnick and Penske waived the acceptance of $500,000 and $2.0 million of their awards, respectively, as discussed above under “Compensation Discussion & Analysis-Long-Term Incentive Plans”.

Grants of Plan-Based Awards in 2022

		Estimated Future Payouts under Equity Incentive Plan Awards(1)		All other Awards: Number of Shares of Stock(2)	Grant Date Fair Value of Stock Awards ($)(3)
Name and Principal Position	Grant Date	Target ($)	Maximum ($)	All other Awards: Number of Shares of Stock(2)	Grant Date Fair Value of Stock Awards ($)(3)

Roger Penske Chief Executive Officer	2/15/2022	5,000,000	8,000,000		5,000,000
Roger Penske Chief Executive Officer	2/15/2022			86,498	8,691,319

Robert Kurnick, Jr. President	2/15/2022	1,000,000	1,600,000		1,000,000
Robert Kurnick, Jr. President	2/15/2022			17,300	1,738,304

Shelley Hulgrave EVP and Chief Financial Officer	2/15/2022	500,000	800,000		500,000
Shelley Hulgrave EVP and Chief Financial Officer	2/15/2022			7,464	749,983

Bud Denker EVP, Human Resources	2/15/2022	500,000	800,000		500,000
Bud Denker EVP, Human Resources	2/15/2022			8,650	869,152

Shane Spradlin EVP, General Counsel & Sec.	2/15/2022	500,000	800,000		500,000
Shane Spradlin EVP, General Counsel & Sec.	2/15/2022			8,650	869,152

(1)	These columns show the target and maximum award values for the awards granted under our 2022 Long-Term Incentive Plan described above under the heading “2022 Long-Term Incentive Awards” which awards were paid out in shares of restricted stock in February 2023.

(2)	For Ms. Hulgrave, reflects her discretionary award in February 2022 and for the others, reflects the shares that were issued in February 2022 to settle the 2021 Long-Term Incentive Awards.

(3)	Computed in accordance with ASC 718.

28

TABLE OF CONTENTS

Outstanding Equity Awards at 2022 Year-End

	Stock Awards
Name	Number of Shares of Stock That Have Not Vested (#)	Market Value of Shares of Stock That Have Not Vested (1)

Roger Penske Chief Executive Officer	343,914 (2)	$39,526,036
Robert Kurnick, Jr. President	67,876 (3)	7,800,989
Shelley Hulgrave EVP & Chief Financial Officer	21,017 (4)	2,415,484
Bud Denker EVP, Human Resources	36,232 (5)	4,164,144
Shane Spradlin EVP, General Counsel & Secretary	36,232 (5)	4,164,144

(1)	Market value is based upon the closing price of our common stock on December 31, 2022 ($114.93).

(2)	These restricted shares vest as follows:

June 1, 2023 – 97,137			June 1, 2026 – 53,386
June 1, 2024 – 71,474			June 1, 2027 – 25,344
June 1, 2025 – 96,573

(3)	These restricted shares vest as follows:

June 1, 2023 – 19,433			June 1, 2026 – 10,493
June 1, 2024 – 14,158			June 1, 2027 –4,606
June 1, 2025 – 19,186

(4)	These restricted shares vest as follows:

June 1, 2023 – 3,845			June 1, 2026 –5,113
June 1, 2024 – 4,174			June 1, 2027 – 3,455
June 1, 2025 – 4,430

(5)	These restricted shares vest as follows:

June 1, 2023 – 9,713			June 1, 2026 – 5,706
June 1, 2024 – 7,424			June 1, 2027 – 3,455
June 1, 2025 – 9,934

Stock Vested During 2022

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