ARKO Corp. Definitive proxy statements

Definitive proxy statements

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($)

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Pay vs Performance Disclosure

Pay vs Performance Disclosure, Table

Pay Versus Performance

The following table shows the total compensation for our NEOs as set forth in the Summary Compensation Table, the Compensation Actually Paid (as defined below) to our CEO and, on an average basis, our other NEOs for the years ended December 31, 2023, 2022, 2021 and 2020. The table also provides our TSR performance, the selected peer group TSR, net income and EBITDA, which is our company selected financial measure, all measured over the same time period.


									Value of Initial Fixed $100 Investment Based on:
Year (1)	Summary Compensation Table Total for CEO ($)		Compensation Actually Paid to CEO ($) (2)		Average Summary Compensation Table for non-CEO NEOs ($)		Average Compensation Actually Paid to non-CEO NEOs ($) (2)		Total Shareholder Return ($) (3)		Peer Group Total Shareholder Return ($) (3)		Net Income ($ in thousands) (4)		EBITDA ($ in thousands) (5)
2023		6,048,569		4,331,734		1,457,580		1,210,103		84.61		127.46		34,566		297,123
2022		6,683,793		7,032,571		1,233,269		1,208,599		87.47		104.87		71,978		305,452
2021		6,375,923		6,409,489		2,083,296		2,048,069		87.70		153.59		59,427		262,864
2020		2,078,493		2,078,493		753,248		753,248		90.00		107.42		30,639		179,120

(1)

Mr. Kotler was the CEO for each of 2023, 2022, 2021 and 2020. For 2023 and 2022, the other NEOs were Messrs. Bassell, Bricks and Nuchamovitz. For 2021 and 2020, the other NEOs were Messrs. Bassell and Bricks.

(2)

To calculate “Compensation Actually Paid,” as computed in accordance with Item 402(v) of Regulation S-K, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Kotler and for the average of the other NEOs is set forth following the footnotes to this table.

(3)

TSR is determined based on the value of an initial fixed income of $100 on December 23, 2020 in our stock or December 31, 2020 in the peer group index. The peer group used for TSR comparisons is the S&P Retail Select Industry Index, an index in which our common stock is included.

(4)

Reflects “Net Income” in the Company’s consolidated statement of operations included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022, 2021 and 2020.

(5)

As noted in the CD&A, EBITDA was chosen as the performance metric as the Company values EBITDA as a metric that is a key indicator of our operating performance and a strong equity valuation metric. EBITDA for purposes of calculating the LTIs is calculated at the GPM (our operating company) level and therefore awards excludes public company expenses and certain items at the ARKO Corp. level. As a result, the actual EBITDA attained (and the required Annual Budgeted EBITDA needed to reach the threshold, target, and maximum LTI) is higher than reported EBITDA at the ARKO Corp. level. A reconciliation of ARKO Corp. net income to EBITDA is as follows:


	For the Year Ended December 31,
	2023			2022			2021			2020
	(in thousands)
ARKO net income	$	34,566		$	71,978		$	59,427		$	30,639
Interest and other financing expenses, net		71,243			59,405			71,207			49,905
Income tax expense (benefit)		12,166			35,557			11,634			(1,499	)
Depreciation and amortization		127,597			101,752			97,194			74,396
General and administrative expenses (excluding GPM expenses) (a)		6,695			6,526			6,289			3,017
Impact of Pride acquisition (b)		—			(1,592	)		—			—
Non-cash rent expense (c)		14,168			7,903			6,359			7,051
Acquisition costs (d)		9,079			8,162			5,366			6,031
Loss on disposal of assets and impairment charges (e)		6,203			5,731			1,384			6,060
Share-based compensation expense (f)		15,015			12,161			5,804			1,891
Loss (income) from equity investment (g)		39			74			(186	)		1,269
Adjustment to contingent consideration (h)		(604	)		(2,204	)		(1,740	)		(1,287	)
Internal entity realignment and streamlining (i)		—			475			—			—
Fuel taxes paid in arrears (j)		—			—			—			819
Other (k)		956			(476	)		126			828
EBITDA	$	297,123		$	305,452		$	262,864		$	179,120

Represents public company expenses and other general and administrative expenses not incurred in GPM (our operating company).

Excludes the actual results from the December 2022 acquisition of all of the issued and outstanding membership interests in Pride Convenience Holdings, LLC, since this acquisition was not included in the Annual Budgeted EBITDA for 2022.

Eliminates the non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. The GAAP rent expense adjustment varies depending on the terms of our lease portfolio, which has been impacted by our recent acquisitions. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.

Eliminates costs incurred that are directly attributable to business acquisitions and salaries of employees whose primary job function is to execute our acquisition strategy and facilitate integration of acquired operations.

Eliminates the non-cash loss from the sale of property and equipment, the loss recognized upon the sale of related leased assets and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites.

Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate our employees, certain non-employees, and members of our Board.

Eliminates our share of loss (income) attributable to our unconsolidated equity investment.

Eliminates fair value adjustments to the contingent consideration owed to the seller for the 2020 Empire acquisition.

Eliminates non-recurring charges related to our internal entity realignment and streamlining.

Eliminates the payment of historical fuel tax liabilities owed for multiple prior periods.

Eliminates other unusual or non-recurring items that we do not consider to be meaningful in assessing operating performance.

Reconciliation of Compensation Actually Paid Adjustments


Year	Summary Compensation Table Total ($) (1)		Minus: Grant Date Fair Value of Stock Awards Granted During Fiscal Year ($) (2)			Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year ($) (3)		Plus/(Minus): Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($) (4)			(Minus): Change in Fair Value as of Vesting Date for Stock Awards Granted in Prior Fiscal Years but Vested During Fiscal Year ($) (5)			Compensation Actually Paid ($)
	Arie Kotler
2023		6,048,569		(4,010,265	)		3,353,164		(934,957	)		(124,777	)		4,331,734
2022		6,683,793		(3,895,429	)		4,121,730		122,477			—			7,032,571
2021		6,375,923		(5,289,478	)		5,323,044		—			—			6,409,489
2020		2,078,493		—			—		—			—			2,078,493
	Other Named Executive Officers (Average) (6)
2023		1,457,580		(741,670	)		643,698		(145,983	)		(3,522	)		1,210,103
2022		1,233,269		(613,337	)		603,960		(15,293	)		—			1,208,599
2021		2,083,296		(1,584,000	)		1,548,773		—			—			2,048,069
2020		753,248		—			—		—			—			753,248

(1)

Represents Total Compensation as reported in the Summary Compensation Table for the indicated year. With respect to the other NEOs, amounts shown represent averages.

(2)

Represents the grant date fair value of the stock awards granted during the indicated year as reported in the Summary Compensation Table, computed in accordance with the methodology used for financial reporting purposes.

(3)

Represents the fair value as of the indicated year-end of the outstanding and unvested stock awards granted during such year, computed in accordance with the methodology used for financial reporting purposes and for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the year.

(4)

Represents the change in fair value during the indicated year of each stock award that was granted in a prior year that remained outstanding and unvested as of the last day of the indicated year, computed in accordance with the methodology used for financial reporting purposes, and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the year.

(5)

Represents the change as of the vesting date (from the end of the prior fiscal year) in fair value of any awards granted in any prior fiscal years for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year.

(6)

For 2023 and 2022, the other NEOs were Messrs. Bassell, Bricks and Nuchamovitz. For 2021 and 2020, the other NEOs were Messrs. Bassell and Bricks.

Company Selected Measure Name

EBITDA

Named Executive Officers, Footnote

(1)

PEO Total Compensation Amount

$ 6,048,569

$ 6,683,793

$ 6,375,923

$ 2,078,493

PEO Actually Paid Compensation Amount

$ 4,331,734

7,032,571

6,409,489

2,078,493

Adjustment To PEO Compensation, Footnote

(2)

Reconciliation of Compensation Actually Paid Adjustments


Year	Summary Compensation Table Total ($) (1)		Minus: Grant Date Fair Value of Stock Awards Granted During Fiscal Year ($) (2)			Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year ($) (3)		Plus/(Minus): Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($) (4)			(Minus): Change in Fair Value as of Vesting Date for Stock Awards Granted in Prior Fiscal Years but Vested During Fiscal Year ($) (5)			Compensation Actually Paid ($)
	Arie Kotler
2023		6,048,569		(4,010,265	)		3,353,164		(934,957	)		(124,777	)		4,331,734
2022		6,683,793		(3,895,429	)		4,121,730		122,477			—			7,032,571
2021		6,375,923		(5,289,478	)		5,323,044		—			—			6,409,489
2020		2,078,493		—			—		—			—			2,078,493
	Other Named Executive Officers (Average) (6)
2023		1,457,580		(741,670	)		643,698		(145,983	)		(3,522	)		1,210,103
2022		1,233,269		(613,337	)		603,960		(15,293	)		—			1,208,599
2021		2,083,296		(1,584,000	)		1,548,773		—			—			2,048,069
2020		753,248		—			—		—			—			753,248

(1)

Represents Total Compensation as reported in the Summary Compensation Table for the indicated year. With respect to the other NEOs, amounts shown represent averages.

(2)

(3)

(4)

(5)

(6)

For 2023 and 2022, the other NEOs were Messrs. Bassell, Bricks and Nuchamovitz. For 2021 and 2020, the other NEOs were Messrs. Bassell and Bricks.

Non-PEO NEO Average Total Compensation Amount

$ 1,457,580

1,233,269

2,083,296

753,248

Non-PEO NEO Average Compensation Actually Paid Amount

$ 1,210,103

1,208,599

2,048,069

753,248

Compensation Actually Paid vs. Total Shareholder Return

Compensation Actually Paid vs. Net Income

Compensation Actually Paid vs. Company Selected Measure

Total Shareholder Return Vs Peer Group

Tabular List, Table

2023 Performance Measures

The following table sets forth the financial performance measure that we view as the “most important” measure used to determine our CEO’s and other NEOs’ Compensation Actually Paid for 2023. For additional information, please see the CD&A beginning on page 22.

      Performance Measure

     

      EBITDA

     

Total Shareholder Return Amount

$ 84.61

87.47

87.7

Peer Group Total Shareholder Return Amount

127.46

104.87

153.59

107.42

Net Income (Loss)

$ 34,566,000

$ 71,978,000

$ 59,427,000

$ 30,639,000

Company Selected Measure Amount

297,123,000

305,452,000

262,864,000

179,120,000

PEO Name

Mr. Kotler

Measure:: 1

Pay vs Performance Disclosure

Name

EBITDA

Non-GAAP Measure Description

(5)


	For the Year Ended December 31,
	2023			2022			2021			2020
	(in thousands)
ARKO net income	$	34,566		$	71,978		$	59,427		$	30,639
Interest and other financing expenses, net		71,243			59,405			71,207			49,905
Income tax expense (benefit)		12,166			35,557			11,634			(1,499	)
Depreciation and amortization		127,597			101,752			97,194			74,396
General and administrative expenses (excluding GPM expenses) (a)		6,695			6,526			6,289			3,017
Impact of Pride acquisition (b)		—			(1,592	)		—			—
Non-cash rent expense (c)		14,168			7,903			6,359			7,051
Acquisition costs (d)		9,079			8,162			5,366			6,031
Loss on disposal of assets and impairment charges (e)		6,203			5,731			1,384			6,060
Share-based compensation expense (f)		15,015			12,161			5,804			1,891
Loss (income) from equity investment (g)		39			74			(186	)		1,269
Adjustment to contingent consideration (h)		(604	)		(2,204	)		(1,740	)		(1,287	)
Internal entity realignment and streamlining (i)		—			475			—			—
Fuel taxes paid in arrears (j)		—			—			—			819
Other (k)		956			(476	)		126			828
EBITDA	$	297,123		$	305,452		$	262,864		$	179,120