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CDK Preps to Reduce Dealer Fees

CDK Global CEO Brian Krzanich is reducing his salary and cash bonuses to $1 for the remainder of 2020 as the dealership technology company prepares to waive or reduce fees paid by dealerships in April.

This story by Lindsay Vanhulle originally appeared in Automotive News.

CDK, which provides dealership management and customer relationship management systems, said this week Krzanich’s voluntary salary reduction will be effective from April 1 through the end of the calendar year. The company said Krzanich requested the move.

“We know that you and your employees are being impacted by the COVID-19 crisis,” Krzanich wrote in a letter to CDK customers Sunday. “I want to do this as an expression of solidarity and a commitment to this industry, as well as to the employees of our dealers and CDK. Together, we will get through this.”

Krzanich’s annual base salary is $1 million and he is eligible for an annual cash bonus worth 150 percent of the base salary, according to an employment agreement and documents filed with the Securities and Exchange Commission.

The company reported Krzanich earned a prorated base salary of $651,517 in fiscal 2019 based on an employment date of Nov. 7, 2018.

Krzanich also said in his letter that CDK in April will temporarily waive all dealership subscription fees for layered applications, such as its Elead CRM and service products, and cut fees for DMS and related products, such as document management and digital contracting, by 25 percent. Dealerships will see April bills automatically adjusted to reflect the changes, CDK said. Fees for third-party integrations and other services outside of CDK's direct control won’t be reduced, the company said.

“I want to make sure you know that we’re all in this together,” Krzanich said in the letter. “It looks like it may be difficult for a while. Your business and ours have to maintain balance and secure the future while managing through today's uncertainty. For the CDK team, our North Star is truly the sustained health and success of our automotive dealer network.”

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