Liebert severance to dent AutoNation Q3 earnings

August 23, 2019 06:33 PM

TOM WOROBEC

AutoNation and "what it can be, what it already is, especially in this industry, is exciting," Carl Liebert told Automotive News in an exclusive interview. "I look at this brand and say it has all that potential bottled up to go do it and an incredible amount of talent throughout. I'm thankful that we're at this point."

AutoNation Inc. late Friday said its third-quarter after-tax earnings will be hurt by $10 million to $11 million for expenses related to a severance agreement with former CEO Carl Liebert.

The nation's largest new-vehicle retailer, in a regulatory filing, said it expects severance and other expenses paid to Liebert in the third quarter to "adversely impact" earnings per share from continuing operations by an estimated 11 cents to 12 cents.

AutoNation said in July Liebert would step down after just four months with the company and named CFO Cheryl Miller as its next CEO.

Liebert will receive $3.75 million paid over 18 months, according to a Wednesday agreement. He also will receive an undisclosed prorated annual bonus for 2019 based on AutoNation's performance during the year. The bonus will be paid when other executives' bonuses are awarded, the company said.

AutoNation also will reimburse Liebert for relocation, storing household items and temporary housing, plus other moving expenses of up to $45,644. It will also reimburse him more than $19,000 for the cost of health insurance, according to the agreement.

According to the filing, Liebert will be treated as "retirement" eligible for nearly 218,000 restricted stock units granted in March, and the stock units will vest over three years through March 2022.

AutoNation Inc., of Fort Lauderdale, Fla., ranks No. 1 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 310,839 new vehicles in 2018.