On Monday, Charlotte-based Sonic Automotive announced a new top executive that secures a second generation of leadership within its founding family.
The company named Scott Smith the new chief executive officer, taking over for his father, Bruton Smith, who will become Sonic’s executive chairman.
The elder Smith, now 88, steered the car dealership chain through its initial public offering in 1997. Earlier this year he also passed along the No. 1 spot at the other Charlotte corporation he founded, Speedway Motorsports, to his son Marcus.
According to a statement from Sonic, Bruton Smith will report to the board of directors in his new role and will work closely with the board, the CEO and another son, Vice Chairman David Smith.
Scott Smith, 47, Sonic’s co-founder, has served as Sonic’s president and chief strategic officer since 2007.
Given the size of the Fortune 500 company, which made $100 million in revenue in 2014, it’s somewhat unusual for family leadership to persist for so long, though analysts say Scott Smith’s promotion wasn’t surprising.
In a May interview with the Observer, the younger Smith said his position has evolved into a CEO role in recent years, and his father’s into a “more or less chairman role.” In the company’s earlier years, Scott Smith said his job was more “operational,” and included working on acquisitions and making sure dealerships were running smoothly.
Scott Smith was 29 years old when the company went public.
“I was the youngest president at the New York Stock Exchange. It was before it was cool to be in your 20s and running a big company,” Smith told the Observer.
Prior to assuming the company’s No. 2 spot, Scott Smith worked his way up the Sonic chain, from washing and selling cars to managing. He was a general manager of Town & Country Ford for five years before becoming Sonic’s president.
Sonic Automotive operates more than 100 dealerships in 14 states. The company has been rolling out its high-tech car-selling concept called One Sonic One Experience across its Charlotte dealerships and started opening a new chain of stand-alone used-car dealerships called EchoPark in Colorado last year.
Investment in the two concepts has cut into recent earnings, and the local corporation’s stock as lagged behind peers like CarMax. The short-term pain from the investment, Scott Smith said, is worth the long-term investment, and it’s possible because the Smith family owns about 75 percent of Sonic’s votes.
“I don’t see the company changing at all. Scott really has been in the leadership role here for the last several years,” said Rick Nelson, a managing director at Chicago-based Stephens Inc. who follows Sonic.
The elder Smith, a flamboyant businessman, is no stranger to the spotlight.
Besides growing his motorsports speedway to a coast-to-coast conglomerate, Bruton Smith also has gotten into public spats over the years, including a name-calling match in 2004 with city and county leaders after the speedway cut down more than 100 trees near the track.
In February of this year, Marcus Smith, Bruton’s son and Scott’s brother, replaced his father as the CEO of Speedway Motorsports Inc.
In a call with the Observer on Monday, Marcus Smith described his father as a hands-on, “relentlessly optimistic” leader who has had a “huge influence” on him and his brothers.
“My brother Scott certainly has done an amazing job building the culture at Sonic into a fantastic family culture, but also a performance-driven performance culture that is doing so well,” Marcus Smith said.
Along with his business commitments, Marcus Smith said, his father has been busy spending time with his six grandchildren, who all live in Charlotte.
On a generally down day for markets, Sonic’s shares were down 3.8 percent at the close of trading Monday.
Katherine Peralta: 704-358-5079, @katieperalta