Earl Hesterberg: New CEO gets big payday for staying with Group 1 until next April.
According to a Group 1 proxy statement, Hesterberg, 51, will get the first-anniversary bonus in lieu of participation in the company's 2005 incentive compensation plan.
He also is entitled to a $1 million signing bonus, the statement says. Hesterberg's base salary is $1 million a year.
His employment agreement with Group 1 runs through April 20, 2010, according to the statement.
His bonus for the 12 months ending April 21, 2007, will be at least $510,000, of which $350,000 will be payable after the end of Group 1's 2006 fiscal year, the company says. The rest will be payable after the 2007 fiscal year.
John Adams, Group 1's board chairman, says Hesterberg ultimately "will be tied to the same incentive performance-related compensation as other members of our senior management."
Hesterberg succeeded Group 1 founder B.B. Hollingsworth Jr. in April. Hollingsworth, 63, earned
$1.2 million in total compensation in 2004, down from $2.0 million in 2003.
Hesterberg joined Group 1 from Ford Motor Co., where his last job was group vice president for North American marketing, sales and service.
He previously was CEO of Gulf States Toyota and held various positions with Nissan Motor Corp.
Group 1, of Houston, owns 96 U.S. dealerships. It ranks No. 5 on the Automotive News list of the top 100 U.S. dealership groups with retail sales of 117,971 new vehicles in 2004.
Group 1's net income fell to $27.8 million last year, from $76.1 million in 2003. Its group revenue increased to $5.44 billion in 2004, from $4.52 billion the year before.
You may e-mail Gail Kachadourian at [email protected]