Business Context and Reporting Period
This Form 8-K Current Report was filed by Asbury Automotive Group, Inc. on June 22, 2011, regarding events occurring on June 21, 2011. The filing discloses the appointment of a new Senior Vice President and Chief Financial Officer.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity metrics. The document focuses exclusively on executive compensation arrangements.
Material Changes
The primary material change is the appointment of Scott J. Krenz as Senior Vice President and Chief Financial Officer, effective June 27, 2011. Mr. Krenz replaces the previous CFO and brings prior experience from Heidrick & Struggles International, Inc., Navigant Consulting, Inc., and Sapient Corporation.
Guidance, Outlook, and Compensation Details
The filing details the compensatory arrangements for Mr. Krenz under a letter agreement dated June 21, 2011:
- Base Salary: $425,000 per year.
- Annual Bonus: Target of $234,000 (55% of base salary), prorated for 2011 based on months employed.
- Equity Grant: Initial grant valued at $400,000, split 50/50 between unvested restricted stock (vesting ratably over three years) and performance share units (converting in Q1 2012 based on 2011 performance, then vesting over three years).
- Signing Bonus: $150,000 paid over 12 months in lieu of relocation assistance; subject to repayment if employment terminates before the second anniversary.
- Benefits: $800 monthly automobile allowance and standard executive benefits.
- Severance: One year of base salary if terminated without cause or for good reason within the first three years (subject to a general release). Change in control benefits are to be negotiated later but include at least six months of base salary.
Investor Verification Checklist
- Verify the effective start date of Mr. Krenz's employment (June 27, 2011).
- Review the specific performance objectives for the 2011 performance share units, which are established by the Compensation Committee.
- Confirm the terms of the future negotiation regarding change in control severance benefits.
- Examine the attached Exhibit 10.1 (Letter Agreement) for the full legal terms of the employment arrangement.