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Performance RSUs granted to Sonic Automotive (NYSE: SAH) senior leaders

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Sonic Automotive, Inc. approved new performance-based restricted stock unit awards for three senior executives under its 2026 Equity Incentive Plan, effective May 6, 2026. Grants total 134,230 units, including 69,872 units for CEO David Bruton Smith, 38,175 for Jeff Dyke, and 26,183 for Heath R. Byrd.

The units lack dividend equivalents and voting rights and remain subject to forfeiture until February 11, 2029 based on continued employment and compliance with restrictive covenants and confidentiality obligations. Payout also depends on achieving defined adjusted earnings per share performance for calendar 2026.

Subject to meeting the performance condition, the awards vest in three tranches: 25% on March 31, 2027, 30% on February 11, 2028, and 45% on February 11, 2029. After vesting, they are settled in Sonic’s Class A common stock, cash, or a mix, at the Compensation Committee’s discretion.

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Total performance-based RSUs granted 134,230 units Executive awards under 2026 Equity Incentive Plan, effective May 6, 2026
RSUs for CEO David Bruton Smith 69,872 units Performance-based restricted stock unit grant
RSUs for Jeff Dyke 38,175 units Performance-based restricted stock unit grant
RSUs for Heath R. Byrd 26,183 units Performance-based restricted stock unit grant
Initial vesting tranche 25% Vests on March 31, 2027, subject to performance condition
Second vesting tranche 30% Vests on February 11, 2028, subject to performance condition
Final vesting tranche 45% Vests on February 11, 2029, subject to performance condition
Performance year for EPS test 2026 calendar year Defined adjusted earnings per share performance metric
performance-based restricted stock units financial
"approved grants of performance-based restricted stock units under the Sonic Automotive, Inc. 2026 Equity Incentive Plan"
Performance-based restricted stock units are a type of employee equity award that converts into company shares only if predefined financial or operational targets are met over a set period. Think of it like a bonus check that becomes stock only when specific goals are hit; it ties pay to results, aligning managers’ incentives with shareholders. Investors care because these awards affect future share count, executive incentives, and signal how management’s success will be measured and rewarded.
Equity Incentive Plan financial
"performance-based restricted stock units under the Sonic Automotive, Inc. 2026 Equity Incentive Plan"
An equity incentive plan is a program that gives employees, executives or directors the right to receive company stock or options to buy stock as part of their pay. Think of it as offering slices of future company profit to motivate people to boost long‑term performance; for investors it matters because it can align employee goals with shareholder value but also increases the number of shares outstanding, which can dilute existing ownership.
adjusted earnings per share financial
"based on achievement of specified measures of the Company’s defined adjusted earnings per share performance for the 2026 calendar year"
Adjusted Earnings Per Share shows how much profit a company makes for each share of stock, but it removes unusual or one-time items like big expenses or gains. This helps investors see the company's true ongoing performance, making it easier to compare how well different companies are doing over time.
restricted stock units financial
"These restricted stock unit awards will not be eligible for dividend equivalents or voting rights"
Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.
restrictive covenants financial
"based on continuation of employment and violation of any restrictive covenants or confidentiality provisions"
Restrictive covenants are contract terms that limit what a company, its executives, or shareholders can do—like rules that prohibit selling stock, starting a rival business, or taking on certain debts. Think of them as house rules that protect one party’s interests by keeping risky or competitive actions off the table. For investors they matter because these limits affect a company’s flexibility, governance, potential future value and the ease of exiting an investment.

FAQ

What executive equity awards did Sonic Automotive (SAH) approve on May 6, 2026?
Sonic Automotive approved performance-based restricted stock unit awards for three executives totaling 134,230 units. CEO David Bruton Smith received 69,872 units, Jeff Dyke 38,175 units, and Heath R. Byrd 26,183 units, all under the Sonic Automotive, Inc. 2026 Equity Incentive Plan.

How do the new Sonic Automotive (SAH) restricted stock units vest?
Subject to performance, the awards vest in three stages: 25% on March 31, 2027, 30% on February 11, 2028, and 45% on February 11, 2029. Vesting is contingent on both continued employment conditions and achievement of specified adjusted earnings per share performance for calendar 2026.

What performance metric governs Sonic Automotive (SAH) 2026 equity awards?
The restricted stock units are tied to Sonic Automotive’s defined adjusted earnings per share performance for the 2026 calendar year. Failure to meet specified EPS targets may cause some or all units to be forfeited, making the awards genuinely performance-based rather than purely time-based compensation.

Do Sonic Automotive (SAH) executives receive dividends or voting rights on these RSUs?
No. The performance-based restricted stock unit awards do not carry dividend equivalents or voting rights. Executives receive economic and voting benefits only after units vest and are settled in Sonic Automotive Class A common stock or cash, at the Compensation Committee’s discretion.

Under what conditions can Sonic Automotive (SAH) forfeit these executive RSUs?
The units generally remain subject to forfeiture until February 11, 2029 based on continued employment and compliance with restrictive covenants and confidentiality provisions. In addition, the awards may be forfeited, in whole or part, depending on Sonic Automotive’s adjusted earnings per share performance for 2026.

How will Sonic Automotive (SAH) settle vested restricted stock units?
After vesting, Sonic Automotive will convert the restricted stock units into either shares of its Class A common stock, an equivalent cash value, or a combination of both. The specific settlement form is at the sole discretion of the Compensation Committee for each executive award.

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Understanding 8-K Material Events →
0001043509FALSE00010435092026-05-062026-05-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ____________________________________
FORM 8-K
 ____________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 6, 2026
____________________________________
SONIC AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
 ____________________________________
Delaware
(State or other jurisdiction
of incorporation)
1-1339556-2010790
(Commission
File Number)
(IRS Employer
Identification No.)
4401 Colwick Road
Charlotte,North Carolina28211
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (704) 566-2400
Not Applicable
(Former name or former address, if changed since last report.)
 ____________________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareSAHNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Effective May 6, 2026, the Compensation Committee approved grants of performance-based restricted stock units under the Sonic Automotive, Inc. 2026 Equity Incentive Plan to the following Executive Officers in the following amounts: Mr. David Bruton Smith, 69,872 units; Mr. Jeff Dyke, 38,175 units; and Mr. Heath R. Byrd, 26,183 units. These restricted stock unit awards will not be eligible for dividend equivalents or voting rights. As provided by the Compensation Committee, these restricted stock units generally remain subject to forfeiture until February 11, 2029 based on continuation of employment and violation of any restrictive covenants or confidentiality provisions contained in any agreement between the Company and the respective officer. The awards of restricted stock units are also subject to forfeiture, in whole or in part, based on achievement of specified measures of the Company’s defined adjusted earnings per share performance for the 2026 calendar year. Subject to the performance condition, these awards vest in three annual installments, with 25% of the restricted stock units vesting on March 31, 2027, 30% of the restricted stock units vesting on February 11, 2028, and 45% of the restricted stock units vesting on February 11, 2029.  Following vesting, the restricted stock units will be converted to, and paid in the form of shares of the Company’s Class A common stock, an equivalent cash value or a combination of shares of the Company’s Class A common stock and cash, at the option and in the sole discretion of the Compensation Committee.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
SONIC AUTOMOTIVE, INC.
May 8, 2026By:/s/ STEPHEN K. COSS
Stephen K. Coss
Senior Vice President and General Counsel


Source: View Original Filing on SEC EDGAR

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