PENSKE AUTOMOTIVE GROUP, INC. (Form: DEF 14A, Received: 03/18/2022 16:32:23)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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the Securities Exchange Act of 1934 (Amendment No. )

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2022 Proxy Statement

Annual Meeting of Stockholders

to be held on May 12, 2022 Penske Automotive Group, Inc.

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Dear Fellow Stockholder:

2021 was a record year for our business. Although we continued to face challenges from the COVID-19 pandemic, the diversification provided by our investments across the transportation sector, coupled with the innovation and adjustments made by our team drove outstanding results for our business.

Some highlights from the past year include:

•	All-time records for revenues, earnings before taxes, income from continuing operations, and earnings per share

•	Achieved a 127% increase in earnings before taxes of $1.6 billion

•	Achieved a 118% increase in net income from continuing operations to $1.2 billion

•	Generated $1.3 billion in cash flow from operating activities

•	Completed acquisitions/open points of $1.3 billion in estimated acquired revenue

•	Repurchased $3.3 million shares of outstanding common stock for an aggregate price of $293.5 million

•	Increased the dividend on our common stock by nearly 10% from $0.42 to $0.46 per share

•	Reduced non-vehicle, long-term debt by $216 million

•	Opened six new CarShop locations, growing that business to 23 locations

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

•	Published our inaugural ESG/Sustainability Report

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 shift in consumer buying patterns to online engagement.

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 25,000 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 appreciate your continued support, and we hope that you will stay safe and healthy.

			Sincerely,

			/s/ Roger S. Penske

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

Bloomfield Hills, Michigan

March 18, 2022

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Penske Automotive Group, Inc.

Notice of 2022 Annual Meeting of Stockholders

Date:			May 12, 2022

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

Virtual Meeting:			Virtual Annual Meeting – www.virtualshareholdermeeting.com/PAG2022 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/PAG2022, 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 8:15 a.m. Please refer to the “Attending the Meeting” section of the proxy statement for more details.

Record date:			March 16, 2022. 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 ratify the selection of Deloitte & Touche LLP as our independent auditor for 2022 • To approve, on a non-binding advisory basis, the compensation paid to our named executive officers

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 18, 2022, we expect to release the proxy materials to our stockholders and to send to these 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 2021 Annual Report, and how to vote through the Internet or by telephone.

Our proxy statement, proxy card and fiscal year 2021 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 18, 2022

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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 12, 2022

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

Record date:			March 16, 2022

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/PAG2022 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 34 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

•	Ratification of Deloitte & Touche LLP as our independent auditor for 2022

•	Advisory vote 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
Ratification of Deloitte & Touche LLP as our independent auditor for 2022	For	Page 13
Advisory vote on named executive officer compensation	For	Page 15

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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.

John Barr

2002

Retired Chairman

Papa Murphy’s Holdings

•

Lisa Davis

2017

Former Chief Executive Officer

Gas and Power and

Managing Board Member

Siemens AG

•

Wolfgang Dürheimer

2018

Retired Chairman and CEO

Bentley Motors Ltd.

•

Michael Eisenson

1993

Founding Partner and Co-Chairman Charlesbank Capital Partners

Robert Kurnick, Jr.

2006

President

Penske Automotive Group

Kimberly McWaters

2004

President and CEO,

Fresh Start Women’s Foundation

•

Kota Odagiri

2021

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

Penske Automotive Group

Greg Penske

2020

Chairman and Chief Executive Officer,

Penske Motor Group

Roger Penske

1999

Chair and Chief Executive Officer

Penske Automotive Group

Sandra Pierce

2012

Senior Executive Vice President and Chair,

Huntington Michigan

Greg Smith

2017

Principal,

Greg C. Smith LLC and

Former Vice Chairman, Ford Motor Company

•

Ronald Steinhart

2001

Retired Chairman and CEO

Commercial Banking Group, Bank One Corporation

•

H. Brian Thompson

2002

Chairman and Chief Executive Officer

Universal Telecommunications, Inc.

•

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

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 2022. Set forth below is summary information with respect to 2021 auditor fees paid to Deloitte & Touche LLP.

	Audit Fees			$3,866,136
	Audit Related Fees			144,359
	Tax Fees
	Tax Compliance			26,735
	Other Tax Fees			37,858
	All Other Fees			—
	Total Fees			$4,075,088

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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 strengthening 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 take pride in our culture of trust and collaboration, and 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 inaugural ESG Report in 2021 which highlights the Company's environmental, social, and governance (ESG) strategies, activities, progress, metrics, and performance for 2020, which is available on our website under the tab “ESG”. The report aligns with the Sustainability Accounting Standards Board (SASB) Multiline & Specialty Distributors sector standard. We are committed to regular, transparent communication of our progress and look forward to bringing our stakeholders along with us on this journey.

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 the Company for long and productive careers. In 2021, over 99% of the votes cast by our stockholders approved our 2020 executive compensation.

Compensation and Corporate Governance Highlights

	✔ Independent Lead Director			✔ No officer severance agreements
	✔ Clawback provision for certain restatements			✔ Board attendance of 98% during 2021
	✔ 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 Corporate Governance Committee

iii

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Proxy statement table of contents

Proposal 1 – Election of Directors			1
Our Corporate Governance			7
Board Committees			7
Board Structure and Lead Director			8
Director Independence			8
ESG Oversight			9
Risk Management			9
Director Advisor Program			10
No Hedging or Short Selling			10
Stock Ownership Guidelines/Pledging			10
Controlled Company			10
Director Candidates			10
Location of Corporate Governance Documents			11
Stockholder Nominations and Proposals for 2022			11
Environmental, Social and Governance			11
Proposal 2 – Ratification of the Selection of our Independent Auditor			13
Proposal 3 – Advisory Vote on Executive Compensation			15
Executive Officers			15
Compensation Committee Report			17
Compensation Discussion and Analysis (“CD&A”)			17
Executive Compensation			23
Director Compensation			28
Security Ownership of Certain Beneficial Owners and Management			30
Related Party Transactions			32
Attending the Meeting			34
Questions about the Meeting			36

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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 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.

Penske Corporation recommended Greg Penske (Roger Penske’s son) to our Nominating and Corporate Governance Committee as a candidate for election to our Board of Directors at the 2022 annual meeting. Penske Corporation has informed us that it does not intend to recommend Greg Penske for re-election to our Board at the 2023 annual meeting. Beginning in 2023, in lieu of Greg Penske, Penske Corporation presently intends to recommend one of Mr. Penske’s other sons, Roger Penske, Jr., to the Nominating and Corporate Governance Committee for nomination as a candidate for election to our Board at the 2023, 2024 and 2025 annual meetings. It is expected that Roger Penske, Jr. will serve as an advisory committee member of Penske Transportation Solutions (PTS) for 2022 and it is expected that Greg Penske will step down from our Board at the 2023 annual meeting and will serve as an advisory committee member of PTS beginning in 2023.

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 benchmarks 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: 74

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: 58

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 Kosmos Energy Ltd., Air Products and Chemicals, Inc., Phillips 66, and C3.ai, Inc.

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: 63

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: 66

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 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 chairman.

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

Age: 60

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 of Fresh Start Women’s Foundation

Age: 57

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: 52

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 – Chairman and CEO of Penske Motor Group

Age: 59

Joined Board: 2020

Mr. Penske joined our Board in May 2020 and was previously our director from May 2014 to May 2017. He has been the Chairman and Chief Executive Officer of Penske Motor Group, LLC, an automotive group that includes the Toyota, Lexus and Mercedes 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 through Penske Corporation directorship and Penske Truck Leasing Advisory Board membership.

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

Age: 85

Joined Board: 1999

Since May 1999, Mr. Penske has served as our Chair and CEO. Mr. Penske has also been Chair of the Board and CEO of Penske Corporation since 1969 and Chair of the Board of Penske Truck Leasing Corporation since 1982. Mr. Penske also is a Director of the Downtown Detroit Partnership and a director of Business Leaders for Michigan. 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 Michigan

Age: 63

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.

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 and former Vice Chairman, Ford Motor Company

Age: 70

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 in a leadership role in automotive and finance; perspective gained from leadership role in automotive and financial industries; extensive public company audit committee experience.

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

Age: 81

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: 82

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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Our Corporate Governance

John Barr

Lisa Davis

Wolfgang Dürheimer

Michael Eisenson

Robert Kurnick, Jr.

Kimberly McWaters

Kota Odagiri

Greg Penske

Roger Penske

Sandra Pierce

Greg Smith

C,F

Ronald Steinhart

H. Brian Thompson

No. of Meetings in 2021

C 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 98% of our board and committee meetings in 2021, and each director attended at least 93% 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 2021.

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, our Board of Directors determined that no material relationship exists which would interfere with the exercise of independent judgment in carrying out the responsibilities of the independent directors.

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.

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; 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 our efforts to promote equity, diversity and inclusion and reduce employee turnover. Our Nominating and Corporate Governance Committee reviews our ESG disclosures and discusses with management at least annually our ESG initiatives, which include our environmental sustainability efforts and charitable contributions. Management is responsible for the implementation and execution of our ESG practices and reporting.

Risk 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.

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, 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 the Company’s succession planning

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

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As part of its review of operational risk, 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. The Board meets periodically with our Chief Information Officer and our Audit Committee reviews key risks, including these risks, at its regular meetings and reviews any significant cybersecurity incidents.

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 renewal 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 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 2021 or 2022.

No 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. No such approvals were granted in 2021, but we retain this flexibility in the event of a hardship need for a non-executive employee.

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 considers the candidate’s diversity important 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

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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 2021 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.

Stockholder Director Nominations and Proposals for 2023. 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 2023 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 19, 2022. 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, 2022, nor later than January 12, 2023.

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 take pride in our culture of trust and collaboration, and 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 inaugural ESG Report which highlights the Company's environmental, social, and governance (ESG) strategies, activities, progress, metrics, and performance for 2020, which is available on our website under the tab “ESG.” The report aligns with the Sustainability Accounting Standards Board (SASB) Multiline & Specialty Distributors sector standard. 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. Several examples of our commitment to giving back include:

•

Over the last six years, our dealerships have supported The Paralyzed Veterans of America to help serve the needs of veterans with a spinal cord injury, donating more than $7.0 million through contributions from customers, employees and matching contributions of our Company. During this time, contributions have been collected from our customers and employees and then matched by the Company.

•

Beginning in 2020, we partnered with a technical education institute to establish a diesel-commercial vehicle technician career skills program for service members on a United States military base. This program will provide hands-on, industry-aligned technician training to service members designed to increase career opportunities for veterans transitioning from military service to civilian life. Graduates of this program will earn a Systems Certified credential and will be offered employment with our commercial truck dealership group.

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

We are committed to encouraging the sale and use of EVs and, as part of that commitment, are actively placing charging stations across our network to facilitate a reliable infrastructure for their use. As of December 31, 2021, our network of EV

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charging stations across the U.S. and the U.K. totaled 882, including a combination of Level 1 (standard), Level 2 (240V), and Level 3 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 2021 in the U.S. and U.K. combined were either electric or hybrid electric vehicles.

Reducing our Energy Use. Reducing our energy use and greenhouse gas (GHG) emissions is important to our customers, team members and company leadership. 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. At our facilities, we have deployed several strategies for reducing our energy use, such as installing LED lighting, occupancy sensors, energy-efficient glass, and high-efficiency heating, ventilation, and air conditioning (HVAC) systems. Moreover, we have completed LED lighting upgrades at approximately 60 percent of our U.S. dealerships and collision centers. In 2020, we avoided the equivalent of 13,755 metric tons of greenhouse gasses through Safety Kleen’s Environmental Programs by recycling used oil and other liquids. In partnership with Shell Energy, we’re piloting an energy savings program at one of our largest campuses to enhance energy efficiency while reducing operating costs. The program provides our campus with the ability to monitor and reduce our energy usage through a unique platform including metered usage and sensors integrated within the HVAC units. In the pilot phase, we have seen an 18% reduction in energy usage.

Reducing Waste. 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. In the U.K., all of our hazardous waste is collected and processed by a fully licensed ISO-accredited waste management company. Approximately 96 percent of our hazardous waste, including engine oil, oil filters, antifreeze, and lead acid batteries, are recycled. The other 4 percent is properly disposed of by the waste management company. In the U.S., we use a third party to manage, collect and process recycling for many of the materials that go through our service departments. These products include mercury bulbs, used oil, oil filters, brake, and parts waste, used antifreeze, parts solvent and drain waste.

Other strategies to reduce pollution and waste include:

•	We eliminate paper at dealerships and in internal communications by using digital tools. We estimate that these changes yield annual reductions of millions of pages of paper.

•	We utilize water reclamation systems at many of our dealership locations that typically recycle approximately 85 percent of the water used.

•	Our collision and repair centers use water-based paints and solvents that are better for the environment and healthier for our team members and customers than traditional paints, which contain toxins that linger in the atmosphere, impacting people and air quality.

•	Our Hardware E-Cycle Policy requires that electronic equipment be disposed of through a specific certified electronics recycler which maintains a zero landfill, zero export policy of unprocessed equipment to non-OECD Countries.

•	In 2020, we recycled 98 percent of the 70,000+ worn-out tires from our U.S. retail automotive operations.

Human Capital-Equity, Diversity, 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. Our focus on inclusion and diversity at our U.S. automotive dealerships has resulted in over 66% of our workforce being diverse either by race, ethnicity, or gender, with our gender diversity higher than the National Automobile Dealer Association (“NADA”) average. Additionally, our U.S. automotive dealerships have a management diversity rate of approximately 50% and our Board of Directors has a diversity rate of 31%.

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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Proposal 2 – 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 2022. 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 2022 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

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 2021 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 2021 annual report on Form 10- K as filed with the SEC on February 18, 2022.

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 2021 and 2020, 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

	2021	2020
Audit Fees	$3,866,136	$3,362,744
Audit Related Fees	144,359	219,125
Tax Fees
Tax Compliance	26,735	45,004
Other Tax Fees	37,858	148,131
All Other Fees	—	—
Total Fees	$4,075,088	$3,775,004

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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Proposal 3 – Advisory Vote on Executive Compensation

We annually seek a non-binding advisory vote on our executive compensation. Because your vote is advisory, it will not be binding upon the Compensation and Management Development 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 35.2 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.

Executive Officers

Our named executive officers, whose compensation we describe below, are Messrs. Penske, Kurnick, Denker and Spradlin and Ms. Hulgrave. Ms. Hulgrave was promoted to Chief Financial Officer upon Mr. Carlson’s voluntary resignation from such position. Each of our named executive officers were 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, 63, has served as our Executive Vice President – Human Resources since July 2015. Since September 2017, he also has served as President of Penske Corporation, and he serves as Executive Vice President, Marketing and Communications of Penske Corporation as well 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, 43, 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.

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Shane Spradlin, 52, 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.

Additional corporate officers include:

George Brochick, 72, has served as Executive Vice President of Strategic Development since July 2012. Prior to this, he served as Executive Vice President of our Western Region since December 2002. He joined PAG in 1996 upon the sale of the former Sun Automotive Group to Penske Automotive. In addition to his current executive functions, Mr. Brochick has held numerous dealership general manager positions throughout his automotive career. From 1977 to 1984, prior to entering the automobile business, Mr. Brochick served as Vice President, Operations, for Southwest Kenworth, Inc. Mr. Brochick also held the position of Director, Marketing Services, for Euclid, Inc., a division of Daimler-Benz, A.G., with worldwide responsibilities for market research and technical field studies. Mr. Brochick has previously served as a Board Member of the American International Automobile Dealers Association and is currently serving as a Board Member for Universal Technical Institute (UTI), Inc. and the Duke University Board of Visitors.

Tracy Cassady, 49, has served as our Executive Vice President, Marketing since August 2020. She previously served as our Senior Vice President, Corporate Marketing since February 2020, Vice President since 2015, and Director since 2011. Prior to joining us, Ms. Cassady held various global marketing and communication positions at Federal-Mogul Corporation.

Tony Facione, 40, has served as our Vice President and Corporate Controller since June 2021. He previously served as our Director — Financial Services and Controller from June 2020 to June 2021, our Controller — Central Region from January 2017 to June 2020 and our Manager — Financial Planning and Analysis from October 2012 to December 2016. Mr. Facione joined the Company in 2007 as a Financial Analyst. Prior to joining us, Mr. Facione was an auditor at Plante Moran.

Richard Hook, 47, has served as our Executive Vice President and Chief Information Officer since February 2019. Prior to that, he served as our Senior Vice President and Chief Information Officer since May 1, 2015, as well as Vice President, IT Infrastructure since July 2009. Before joining us in 2009, Mr. Hook held various positions at Arthur Andersen LLP, H&R Block Financial Advisors and Federal-Mogul Corporation.

Anthony Pordon, 57, has served as Executive Vice President since May 2011. Prior to that, Mr. Pordon served as Senior Vice President since January 2006 and Vice President since July 2001. Mr. Pordon’s primary responsibilities include Investor Relations, Corporate Communications, and Corporate Development, including the responsibility for establishing, directing and maintaining our communication strategies and representation on Wall Street with the buy-side and sell-side analyst community. Prior to joining us, Mr. Pordon served in various capacities at Detroit Diesel Corporation, a manufacturer of heavy-duty diesel engines. Prior to Detroit Diesel, Mr. Pordon was an auditor at Deloitte & Touche LLP.

Aaron Michael, 46, has served as our Executive Vice President, Financial Services and Global Risk Management since June 2021 and has been our Treasurer since 2006. Prior to June 2021, he previously served as our Senior Vice President, Financial Services from 2014 to June 2021. In his current role, he manages our risk management, capital structure and real estate portfolio. From 2001 through 2006, Mr. Michael was employed by Penske Corporation in various finance and treasury roles. Prior to working with Penske, Mr. Michael was a commercial lender for Comerica Bank in its Detroit, MI office.

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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. 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 2021. All named executive officer 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 incent 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 negative 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 field and 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 7.

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 30,000 shares under that authority in 2021, 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
	Executive Vice Presidents			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 named executive officers. 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 (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 named executive officers 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 named executive officers 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 named executive officers, 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 named executive officers. The items of corporate performance that are considered for our named executive officers 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 July 1, 2021, Messrs. Denker and Spradlin’s salaries were each increased $25,000 resulting from the Committee’s review of these factors. Beginning January 1, 2022, Messrs. Kurnick and Penske’s salaries were each increased by $100,000 and $200,000 respectively resulting from the Committee’s review of these factors. When Ms. Hulgrave was promoted to the position of Executive Vice President and Chief Financial Officer effective June 1, 2021, her salary was increased to $500,000 to provide an adjustment commensurate with her promotion.

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 named executive officers 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 named executive officers 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 named executive officers, 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, including the right to vote with our other stockholders and receive dividends.

In 2021 and 2022, each of our named executive officers (other than Ms. Hulgrave, who was newly appointed) received restricted stock awards resulting from achievement of the long-term incentive plan awards discussed below. In 2022, Ms. Hulgrave received a discretionary award of 7,464 shares of restricted stock. In total in 2021, the committee approved the grant of approximately 456,808 equity incentive awards under our equity plans (representing approximately 0.6% of our current outstanding equity), including all of the awards to our named executive officers. Awards granted were made under our 2020 Equity Incentive Plan which originally provided up to five million shares for equity awards.

Other Compensation. We may also provide our named executive officers, 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 named executive officers, 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 named executive officers 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. 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.

Our former Chief Financial Officer, J.D. Carlson, voluntarily resigned as our Executive Vice President and Chief Financial Officer effective June 1, 2021. In connection with Mr. Carlson’s resignation, and, in light of his 15 years of meritorious service, we vested his remaining 29,022 shares of restricted stock which would have otherwise vested in years 2022-2025. He did not receive any other benefits or compensation in connection with his departure.

Long Term Incentive Plans. In February 2021, our compensation committee established 2021 performance targets for a performance-based award for each of named executive officers other than Ms. Hulgrave (who was not an executive officer at the time). The payouts for these awards are set forth in the table below and were paid in shares of restricted stock in February 2022 as set forth below. Ms. Hulgrave received discretionary awards in 2021 and 2022 noted below under “Executive Compensation”. The amount of restricted stock noted below granted in February 2022 and vesting over a four-year period was calculated by dividing the total award achieved by our average closing stock price for each trading day in 2021 ($86.7077). Messrs. Kurnick and Penske did not receive an annual cash bonus because they each received this restricted stock grant.

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2021 Long Term Incentive Award Amounts

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

Roger Penske Chief Executive Officer	5,000,000	7,500,000	7,500,000	86,498

Robert Kurnick, Jr. President	1,000,000	1,500,000	1,500,000	17,300

Bud Denker EVP – Human Resources	500,000	750,000	750,000	8,650

Shane Spradlin EVP, General Counsel & Secretary	500,000	750,000	750,000	8,650

J.D. Carlson Former EVP & Chief Financial Officer	500,000	750,000	750,000	—

2021 Long Term Incentive Award Objectives

The specific 2021 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 $1,000.6 million (100% attainment), EBITDA below $920 million results in no attainment, EBITDA of $920 million results in 50% attainment, and EBITDA of $1,046 million yields 200% attainment (1)	$1,798	20%	40%
•	Compliance with the covenants in our U.S. and U.K. credit facilities	Compliant	5%	5%
•	Comparative earnings per share of $6.95 to $7.27 (100% attainment), EPS of $6.65 to $6.94 (50% attainment) and EPS over $7.27 (200% attainment)	$14.88	10%	20%
•	Operating margin of 3.12% to 3.16% (100% attainment), operating margin of 3.04% to 3.06% (50% attainment), operating margin of 3.07% to 3.11% (75% attainment) and above 3.16% (200% attainment) (2)	5.31%	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 – Company to produce its inaugural sustainability report	Achieved	10%	10%
•	Component is discretionary in the determination of our Compensation and Management Development Committee	Awarded	20%	20%
Total			100%	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 are Asbury Automotive, AutoNation, CarMax, Lithia Automotive, Group 1 Automotive, Sonic Automotive, Ryder and Pendragon PLC (U.K.).

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2022 Long Term Incentive Award Amounts

In February 2022, the committee established similar performance-based awards for our named executive officers in the amounts specified below to be paid in shares of restricted stock to be granted in 2023 calculated by dividing the resulting total award achieved by the average PAG closing stock price for each trading day in 2022.

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

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

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

Shelley Hulgrave Executive Vice President & Chief Financial Officer	500,000	800,000

Bud Denker Executive Vice President – Human Resources	500,000	800,000

Shane Spradlin Executive Vice President & General Counsel	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 $1,650 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)	20%
•	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)	10%
•	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)	10%
•	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)	10%
•	Customer satisfaction scores exceed manufacturer objectives at 90% of our U.S. dealerships	10%
•	No material weaknesses in our internal controls	5%
•	ESG Metric – Increase the number of electric vehicle charging stations to 1,300	7.5%
•	ESG Metric – Complete values-based diversity and inclusion training to 1,800 associates	7.5%
•	Component is discretionary in the determination of our Compensation and Management Development Committee	20%
Total		100%
•	Supplemental ESG Metric – Representation by the company in Newsweek’s Top 500 Most Responsible Companies	10%
		110%

(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, Lithia Automotive, Group 1 Automotive, Sonic Automotive, Ryder and Pendragon PLC (U.K.)

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Executive Compensation

The following table contains information concerning 2021 annual and long-term compensation for our Chief Executive Officer, Chief Financial Officer and each of our three other most highly compensated named executive officers, collectively referred to as the “named executive officers.” For a discussion of our methodology in valuing the items set forth under “All Other Compensation,” see “CD&A – Other Compensation.”

2021 Summary Compensation Table

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

Roger Penske Chief Executive Officer	2021	1,400,000	—	5,000,000	581,685 (2)	6,981,685
	2020	700,000	—	5,000,000	279,555	5,979,555
	2019	1,400,000	—	5,000,000	493,752	6,893,752

Robert Kurnick, Jr. President	2021	800,000	—	1,000,000	194,036 (3)	1,994,036
	2020	400,000	—	1,000,000	133,581	1,533,581
	2019	800,000	—	1,000,000	176,315	1,976,315

Bud Denker EVP – Human Resources	2021	610,417	550,000	500,000	50,335 (4)	1,710,752
	2020	548,958	400,000	500,000	19,488	1,468,446
	2019	575,000	315,000	500,000	34,649	1,424,649

Shelley Hulgrave (5) EVP & Chief Financial Officer	2021	438,542	350,000	250,000	58,639 (6)	1,097,181
Shelley Hulgrave (5) EVP & Chief Financial Officer

Shane Spradlin EVP, General Counsel & Secretary	2021	610,417	550,000	500,000	107,057 (7)	1,767,474
	2020	548,958	400,000	500,000	64,394	1,513,352
	2019	575,000	315,000	500,000	89,597	1,479,597

J.D. Carlson (8) Former EVP & Chief Financial Officer	2021	275,000	—	500,000	2,570,175 (9)	3,345,175
	2020	548,958	400,000	500,000	58,850	1,507,808
	2019	575,000	315,000	500,000	77,659	1,467,659

(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, other than for Ms. Hulgrave, 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 14 to our audited financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 18, 2022. Other than for Ms. Hulgrave, these amounts represent the target amount for the awards. The 2022 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 2022 valued as set forth above. Note that Mr. Carlson forfeited the right to receive any portion of the incentive award when he resigned on June 1, 2021. For Ms. Hulgrave, the amount represents the value of the discretionary restricted stock award she received in February 2021.

(2)	Consists of $531,685 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 $106,366 in dividends on unvested restricted stock awards.

(4)	Represents dividends on unvested restricted stock.

(5)	Ms. Hulgrave was promoted to Executive Vice President and Chief Financial Officer on June 1, 2021.

(6)	Represents an automobile allowance, matching funds under our U.S. 401(k) plan, Company-sponsored life insurance, Company-sponsored lunch program, dividends on unvested restricted stock awards, payments for a country club membership, use of sporting event tickets and a tax allowance of $4,467.

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(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 $51,133, and a tax allowance of $5,311.

(8)

Mr. Carlson voluntarily resigned as our Executive Vice President and Chief Financial Officer effective June 1, 2021. In connection with Mr. Carlson’s resignation, and, in light of his 15 years of meritorious service, we vested his remaining 29,022 shares of restricted stock which would have otherwise vested in years 2022-2025. The incremental value of this accelerated vesting is reflected in the “Other Compensation” column.

(9)

Represents $2,523,753 of compensation resulting from the vesting of restricted stock described in footnote (8), an automobile allowance, Company-sponsored life insurance, matching funds under our U.S. 401(k) plan, Company-sponsored lunch program, dividends on unvested restricted stock, and a tax allowance of $2,485.

2021 Long Term Incentive Award Amounts

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

Roger Penske Chief Executive Officer	5,000,000	7,500,000	7,500,000

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

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

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

J.D. Carlson Former EVP & Chief Financial Officer	500,000	750,000	—

Grants of Plan-Based Awards in 2021

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

Roger Penske Chief Executive Officer	2/16/2021	5,000,000	7,500,000		5,000,000
Roger Penske Chief Executive Officer	2/16/2021			143,340	9,427,472

Robert Kurnick, Jr. President	2/16/2021	1,000,000	1,500,000		1,000,000
Robert Kurnick, Jr. President	2/16/2021			28,668	1,885,494

Bud Denker EVP – Human Resources	2/16/2021	500,000	750,000		500,000
Bud Denker EVP – Human Resources	2/16/2021			14,334	942,747

Shelley Hulgrave EVP & Chief Financial Officer	2/16/2021			3,801	249,992
Shelley Hulgrave EVP & Chief Financial Officer

Shane Spradlin EVP, General Counsel & Sec.	2/16/2021	500,000	750,000		500,000
Shane Spradlin EVP, General Counsel & Sec.	2/16/2021			14,334	942,747

J.D. Carlson Former EVP & Chief Financial Officer	2/16/2021	500,000	750,000		500,000
J.D. Carlson Former EVP & Chief Financial Officer	2/16/2021			14,334	942,747

(1)

These columns show the target and maximum award values for the awards granted under our 2021 Long Term Incentive Plan described above under the heading “2021 Long Term Incentive Awards” which awards were paid out in shares of restricted stock in February 2022 other than for Mr. Carlson. There is no threshold award level.

(2)	Shows the number of shares that were issued in February 2021 to settle the 2020 Long Term Incentive Awards and, for Ms. Hulgrave, her discretionary award in 2021.

(3)	Computed in accordance with ASC 718.

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Outstanding Equity Awards at 2021 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	380,122 (2)	$40,756,681
Robert Kurnick, Jr. President	76,046 (3)	8,153,652
Bud Denker EVP – Human Resources	37,672 (4)	4,039,192
Shelley Hulgrave EVP & Chief Financial Officer	9,811 (5)	1,051,935
Shane Spradlin EVP, General Counsel & Secretary	37,672 (4)	4,039,192
J.D. Carlson Former EVP & Chief Financial Officer	0	—

(1)	Market value is based upon the closing price of our common stock on December 31, 2021 ($107.22).

(2)	These restricted shares vest as follows:

June 1, 2022 – 86,895			June 1, 2025 – 88,969
June 1, 2023 – 97,138			June 1, 2026 – 43,249
June 1, 2024 – 63,871

(3)	These restricted shares vest as follows:

June 1, 2022 – 17,382			June 1, 2025 – 17,804
June 1, 2023 – 19,433			June 1, 2026 – 8,650
June 1, 2024 – 12,777

(4)	These restricted shares vest as follows:

June 1, 2022 – 8,349			June 1, 2025 – 8,897
June 1, 2023 – 9,714			June 1, 2026 – 4,325
June 1, 2024 – 6,387

(5)	These restricted shares vest as follows:

June 1, 2022 – 3,168			June 1, 2024 – 2,019
June 1, 2023 – 2,724			June 1, 2025 – 1,900

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Option Exercises and Stock Vested During 2021

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)

Roger Penske Chief Executive Officer	81,229	7,063,674
Robert Kurnick, Jr. President	16,246	1,412,752
Bud Denker EVP – Human Resources	5,563	483,758
Shelley Hulgrave EVP & Chief Financial Officer	2,559	222,531
Shane Spradlin EVP, General Counsel & Secretary	6,480	563,501
J.D. Carlson (1) Former EVP & Chief Financial Officer	34,585	3,007,512

(1)	Mr. Carlson voluntarily resigned on June 1, 2021, and this amount includes the vesting of all of his then-restricted stock as noted above.

Nonqualified Deferred Compensation

The Penske Automotive Group, Inc. Amended and Restated Deferred Compensation Plan (“DCP”) allows qualifying individuals, including our named executive officers, to defer on a pre-tax basis up to 50% of their base salary and/or up to 95% of their annual bonus for a specified period of time, and/or until their retirement or separation from the Company. The deferred assets are held in a rabbi trust and are invested notionally on behalf of the participants. In the event of termination of employment, all balances would be paid in either a lump sum or up to ten annual installments, according to the participant’s prior election. We do not provide any matching contributions and we do not guarantee a minimum return on these amounts. We believe the DCP is an important tool for recruiting key employees and assists in employee retention. The table below reflects the contributions, earnings, withdrawals, distributions during 2021, and account balances as of December 31, 2021 for each named executive officer.

Roger Penske

Chief Executive Officer

–

Robert Kurnick, Jr.

President

–

Bud Denker

EVP – Human Resources

$171,146

–

$23,119

–

$375,090

Shelley Hulgrave

EVP – Chief Financial Officer

$97,079

–

$19,113

–

$236,443

Shane Spradlin

EVP, General Counsel & Secretary

$347,155

–

$89,663

–

$1,039,753

J.D. Carlson (4)

Former EVP – Chief Financial Officer

$130,750

–

$148,098

–

$2,462,246

(1)	These amounts are reported in the “Salary” and “Bonus” columns of the Summary Compensation Table.

(2)	The amounts in this column were not reported as compensation in the Summary Compensation Table.

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(3)

The following amounts, which represent the total Executive Contributions to the DCP since its effective date, have previously been reported in the Summary Compensation Table for prior fiscal years in the “Salary” and “Bonus” columns:Bud Denker – $240,429; Shelley Hulgrave – $97,079; Shane Spradlin – $747,130; J.D. Carlson – $1,357,669.

(4)	Mr. Carlson voluntarily resigned on June 1, 2021. He had previously elected a ten-year payment schedule for his deferred compensation which amount began to be distributed in February 2022.

Pension Benefits. Our executive officers are not eligible to participate in any defined benefit compensation plans.

“Golden Parachutes” or Termination/Change in Control Payments. None of our current named executive officers have been provided an employment agreement, nor are they entitled to any pre-arranged severance compensation. With respect to a change in control, none of our current named executive officers have been guaranteed any change of control payments, however, our restricted stock grants vest in the event of a change of control. Based on a closing stock price of $95.59 on March 1, 2022, the following number of shares having the values indicated would vest assuming a change of control occurred on that date: Roger Penske 380,122 shares ($36,335,862), Robert Kurnick 76,046 shares ($7,269,237), Shane Spradlin 37,672 shares ($3,601,066), Bud Denker 37,672 shares ($3,601,066), and Shelley Hulgrave 17,275 shares ($1,651,317).

CEO Pay Ratio. For 2021, the estimated median of the annual total compensation of our employees other than Mr. Penske, our Chief Executive Officer, was $52,712 and the annual total compensation of Mr. Penske described elsewhere in this proxy statement was $6,981,685. Based on this information, the ratio of the annual total compensation of Mr. Penske to the median of the annual total compensation of all employees was estimated to be 132 to 1. To identify the median of the annual total compensation of our worldwide employee population, as well as to calculate the annual total compensation of the “median employee” from this population, our methodology necessarily involved certain material assumptions, adjustments, and estimates as permitted by SEC rules and interpretations.

Pursuant to SEC rules, we are permitted to calculate our CEO pay ratio for the year ended December 31, 2021 using the same median employee that we identified in 2020 because we do not believe that there have been any changes to our employee population or employee compensation arrangements during 2021 that would have a significant impact on our pay ratio disclosure.

We identified our median employee in 2020 as of December 31, 2020, when our worldwide employee population consisted of approximately 24,192 individuals. In identifying the median employee, we excluded from our employee population all of the employees in the following jurisdictions as permitted by SEC rules and interpretations based on the small number of employees located in each: Canada (220), New Zealand (144) and Italy (445). To identify our 2020 median employee from our employee population, we then compared the amount of U.S. gross taxable wages or equivalent foreign metric of our employees as reflected in our payroll records.

Once we identified our median employee, we combined all of the elements of such employee’s compensation for 2021 in accordance with the SEC’s requirements, resulting in annual total compensation of $52,712. With respect to the annual total compensation of Mr. Penske, we used the total amount reported in the above Summary Compensation Table for 2021.

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Director Compensation

The Board of Directors receives a mix of cash and equity compensation with the option to receive certain compensation in the form of equity and to defer certain compensation until separation from service. The Board of Directors approves changes to director compensation only upon the recommendation of the Compensation and Management Development Committee, which is composed solely of independent directors. Although all of our directors are eligible for our charitable donation matching program discussed below, only those directors who are not our employees are eligible for director compensation.

Annual Fees and Stock Award. For 2021, each non-employee director received an annual fee of $60,000, except for Audit Committee members, who receive $65,000. We increased these base fees by $20,000 from 2020. The Lead Director receives an additional $25,000 and committee chairs receive an additional $10,000. These fees are payable, at the option of each non-employee director, in cash or common stock valued on the date of receipt. For 2021, our non-employee directors also received an annual grant of $250,000 of shares of stock or deferred stock (at their prior election) in December valued on the date of grant. We previously paid our directors a fixed number of shares (4,000). We changed our director compensation in light of the significant increase in the price of our common stock in 2021.

Option to Defer Receipt until Termination of Board Service. Our Non-Employee Director Compensation Plan allows our outside directors to defer their director compensation until termination of their service. Any amount deferred will be paid, at the director’s election, in either a lump sum or five annual installments upon their termination from the Board. Directors may defer their annual stock award into deferred stock units and may defer their cash compensation into a notional cash account or deferred stock units. Each deferred stock unit represents the right to receive payment of the value of one share of common stock, and ultimately will be paid in stock or cash after a director separates from service. These stock units do not have voting rights but do receive dividends in the form of additional stock units which are credited to the director’s account on the date dividends are paid. All cash fees deferred into the notional cash account are credited with a rate of return based 50% on a S&P 500 index fund and 50% on a bond fund.

Charitable Donation Matching Program. All directors are eligible to participate in a charitable matching gift program. Under this program, we match up to $50,000 per year in contributions by each director to institutions qualified as tax-exempt organizations under 501(c)(3) of the Internal Revenue Code and other institutions approved at the discretion of management. We may decline to match any contribution to an institution with goals that are incompatible with ours, or due to conflicts with our director independence policy. This program is not available for matching of political contributions. While the contributions are directed by our directors, we retain the tax deduction for matching contributions paid by us.

Other Amounts. As part of our director continuing education program, each director is eligible to be reimbursed by us for the cost and expenses relating to one education seminar per year. These amounts are excluded from the table below. Each non-employee director is also entitled to the use of a Company vehicle, including the cost of routine maintenance and repairs and Company-sponsored automobile insurance relating to that vehicle. For any director who declines the use of a Company-sponsored vehicle, we provide a $20,000 cash payment in lieu of the Company-sponsored vehicle, which the director may elect to receive in equity or may elect to defer it until separation from service, consistent with our policy for annual director fees described above. All directors are also entitled to reimbursement for their reasonable out-of-pocket expenses in connection with their travel to, and attendance at, meetings of the Board of Directors or its committees. Because we expect attendance at all meetings, and a substantial portion of the Board of Directors’ work is done outside of formal meetings, we do not pay meeting fees.

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2021 Director Compensation Table

Our directors serving in 2021 who were also our employees (Messrs. Kurnick, and Penske, and former director Mr. Yamanaka) as well as Kota Odagiri received no additional compensation for serving as directors, though they are eligible for the charitable matching program noted above.

Name	Fees Earned or Paid in Cash (1)	Stock Awards (2)	All Other Compensation (3)	Total
John Barr	$81,667(4)	$250,000	$42,333	$374,000
Lisa Davis	60,000	250,000	72,885	382,885
Wolfgang Dürheimer	60,000	250,000	55,822	365,822
Michael Eisenson	80,000(4)	250,000	50,000	380,000
Kimberly McWaters	75,000	250,000	77,949	402,949
Greg Penske	80,000(4)	250,000	50,000	380,000
Sandra Pierce	60,000	250,000	79,643	389,643
Greg Smith	95,000(4)	250,000	50,000	395,000
Ronald Steinhart	65,000	250,000	70,448	385,448
H. Brian Thompson	95,000	250,000	55,601	400,601

(1)	Ms. Davis and Mr. Greg Penske elected to receive equity in lieu of a cash retainer for 2021. Mr. Thompson elected to receive 50% of his retainer in equity in 2021.

(2)	These amounts represent the grant date fair value of awards computed in accordance with FASB ASC Topic 718 in connection with stock awards granted under our 2020 Equity Incentive Plan and excludes the amount of any equity compensation received in lieu of cash noted in footnote one.

(3)	See the following table for a description of these amounts and other information.

(4)	Includes $20,000 in lieu of a Company sponsored vehicle, except for Mr. Barr which includes $16,667 reflecting a partial year of payments in lieu of a Company vehicle.

Director Other Compensation

Name	Company Vehicle(1)	Charitable Match	Total	Deferred Stock Units at 12/31/21

John Barr	$17,333	$25,000	$42,333	35,116
Lisa Davis	22,885	50,000	72,885	22,883
Wolfgang Dürheimer	55,822	–	55,822	15,014
Michael Eisenson	–(2)	50,000	50,000	–
Kimberly McWaters	34,449	43,500	77,949	48,421
Greg Penske	–(2)	50,000	50,000	–
Sandra Pierce	29,643	50,000	79,643	8,773
Greg Smith	–(2)	50,000	50,000	19,446
Ronald Steinhart	20,448	50,000