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CHARLOTTE, NC – Sonic Automotive Inc . (NYSE:SAH), a prominent auto dealership and gasoline station chain with a market capitalization of $2.5 billion, has detailed its compensation plans for top executives in a recent SEC filing. The announcement comes as the company’s stock trades near its 52-week high of $76.49, having delivered an impressive 29% return over the past six months. On Tuesday, the company’s Compensation Committee outlined performance-based cash bonuses and stock awards for its executive officers for the 2025 fiscal year.
The executives covered under these new compensation arrangements include David Bruton Smith, Chairman and Chief Executive Officer; Jeff Dyke, President; and Heath R. Byrd, Executive Vice President and Chief Financial Officer. Performance metrics tied to these bonuses include adjusted earnings per share goals and customer satisfaction targets, specifically the proportion of dealerships achieving manufacturer-specified objectives. According to InvestingPro data, the company generated $587.6 million in EBITDA over the last twelve months, maintaining profitability despite challenging market conditions.
The filing, dated February 7, 2025, indicates that the actual bonus amounts will be determined after the year-end review, no later than March 15, 2026. In addition to cash bonuses, the Committee granted performance-based restricted stock units (RSUs) under the 2012 Stock Incentive Plan. The allocated RSUs amount to 53,035 units for Smith, 30,135 units for Dyke, and 23,487 units for Byrd. These RSUs are subject to forfeiture conditions including employment continuation and compliance with non-compete and confidentiality agreements. The vesting schedule spans three years, with specific vesting percentages set for March 31, 2026, February 5, 2027, and February 5, 2028, contingent upon meeting adjusted earnings per share performance for 2025.
Moreover, the Compensation Committee has approved an increase in base salaries for the executive officers, retroactive to January 1, 2025. Smith’s salary will rise from $1,336,366 to $1,737,276, Dyke’s from $1,193,230 to $1,491,538, and Byrd’s from $930,000 to $1,023,000.
This information is based on a press release statement and reflects the company’s commitment to aligning executive compensation with performance objectives and shareholder interests. Sonic Automotive’s approach to executive pay demonstrates its adherence to governance practices that incentivize leadership to drive corporate success and customer satisfaction.
The specifics of these compensation packages are critical for investors, as they shed light on how Sonic Automotive incentivizes its top management and the performance metrics it prioritizes. This move may also signal to the market the company’s confidence in its growth trajectory and operational goals for the coming year.
In other recent news, Sonic Automotive Inc. has broadened its reach with the acquisition of Audi New Orleans, marking its first franchise in Louisiana and increasing its national franchise dealership count to 108. The acquisition, which was facilitated by Kerrigan Advisors, is part of Sonic Automotive’s larger growth strategy, as the company continues to enhance its service offerings and dealership experiences across the United States.
In financial analysis, CFRA, a research firm, has raised its 12-month price target for Sonic Automotive from $55.00 to $65.00, maintaining a Hold rating on the stock. This adjustment is attributed to anticipated improved market conditions for auto dealers, including better affordability and potential easing of interest rates.
Meanwhile, Seaport Global Securities has upgraded Sonic Automotive’s stock from Neutral to Buy, setting a price target of $74.00. Seaport’s analysis suggests that the franchise auto retailer sector, including Sonic Automotive, is undervalued and justifies a higher valuation multiple due to improved net margins post-pandemic. These recent developments continue to shape Sonic Automotive’s financial landscape.
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