Proxy Statement (Form DEF 14A)
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under
§240.14a-12
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No fee required
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and 0-11
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Notice of 2025 Annual Meeting of Stockholders
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This year's Annual Meeting of Stockholders will be conducted exclusively as a virtual meeting via live audio webcast. You are invited to attend the Annual Meeting by visiting https://www.virtualshareholdermeeting.com/WCC2025, where you will be able to listen to the meeting live, submit questions and vote online. To join the meeting, you will need the 16-digitcontrol number received with your Notice Regarding the Availability of Proxy Materials. When accessing our Annual Meeting, please allow ample time for online check-in,which will begin at |
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Record Date: |
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Dear Fellow Stockholders:
I am pleased to invite you to attend our 2025 Annual Meeting of Stockholders. It will be held via live audio webcast on
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Elect ten Directors for a one-yearterm expiring in 2026. |
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Approve, on an advisory basis, the compensation of the Company's named executive officers. |
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Approve amendments to the Company's Restated Certificate of Incorporation to provide stockholders with the right to request a special meeting of stockholders. |
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Ratify the appointment of |
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Vote on shareholder proposal to give shareholders the ability to call for a special shareholder meeting. |
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Transact any other business properly brought before the Annual Meeting. |
Voting can be completed in one of four ways: |
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returning the proxy card by mail |
refer to the phone number on your voting card |
online at www.proxyvote.com |
online during the open poll section of the meeting |
We are sending a Notice Regarding the Availability of Proxy Materials to you on or about
Thank you for your ongoing support of
By order of the Board of Directors,
Chairman, President and Chief Executive Officer
Table of Contents |
Questions and Answers | 1 |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on
The 2025 Proxy Statement and 2024 Annual Report of
Questions and Answers
What is a proxy or proxy statement?
The Board is soliciting your proxy to vote at the Annual Meeting. A proxy is your legal designation of another person to vote the stock you own - that person is sometimes called "your proxy." A proxy statement is a document that the
Why did I receive a Notice Regarding the Availability of Proxy Materials? What is included in the proxy materials?
We are pleased to continue to utilize the
The proxy materials for the Annual Meeting include the Notice, this Proxy Statement, and our Annual Report on Form 10-K.If you receive a paper copy of these materials, the proxy materials also include a proxy card or voting instruction form. Proxy materials are first being made available to stockholders on
What does it mean if I receive more than one Notice?
If your shares are registered differently or held in multiple accounts (for example, some shares may be registered directly in your name and some may be held in the Company's 401(k) Retirement Savings Plan), you may receive more than one Notice from the Company or, if your shares are beneficially owned (also known as held in "street name"), from your broker, bank or other nominee. Please carefully follow the instructions on each Notice you receive and vote all proxies to ensure that all your shares are voted.
What is the record date?
The Board established
How do I attend the Annual Meeting?
Our Annual Meeting will be exclusively conducted via live audio webcast. We are excited to leverage technology to expand stockholder access and allow for stockholders to participate from any location around the world and save
You may attend the meeting webcast by visiting http://www.virtualshareholdermeeting.com/WCC2025. You will need the 16-digitcontrol number received with your Notice. If a bank, brokerage firm, or other nominee holds your shares, you should contact that organization for additional information. Rules of conduct for our Annual Meeting will be available once you access the meeting webcast.
Questions and Answers | 2 |
The meeting is scheduled to begin at
How can I ask questions during the Annual Meeting?
The virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meeting so they can ask questions of our Board of Directors or management. To submit a question, you must login to the meeting platform using your control number, locate the "Ask a Question" section of the page, select a topic from the "Question Topic" menu, type your question into the "Submit a Question" field, and click "Submit." During the Annual Meeting, we will answer questions submitted that are relevant to the business of the Annual Meeting as time permits and in accordance with our meeting rules and procedures. In the interest of addressing as many stockholder questions as possible in the time allotted, stockholders will generally be limited to one question per proposal and questions that are substantially similar may be grouped and answered once. Questions that are not relevant to the official business of the Annual Meeting or that include derogatory, offensive, or uncivil language or that are otherwise inappropriate or not suitable for the conduct of the Annual Meeting will not be addressed during the meeting. Responses to any questions appropriately submitted and relevant to the official business of the Annual Meeting that were not answered during the meeting due to time constraints will be posted to our Investor Relations website (https://investors.wesco.com) as soon as practicable after the Annual Meeting.
What are the proposals to be voted on at the Annual Meeting? How many votes are needed to approve each proposal? How do abstentions and broker non-votesaffect the voting results?
Proposals | Board's Recommendation |
Voting Requirements | ||||
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Elect ten Directors named in the Proxy Statement, each for a one-yearterm expiring at the 2026 Annual Meeting | FOR EACH DIRECTOR NOMINEE |
Abstentions and broker non-voteswill have no effect on the proposal. Election of a nominee requires a plurality of votes cast. | |||
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Approve, on an advisory basis, the compensation of the Company's named executive officers | FOR | Broker non-voteswill have no effect on the proposal; abstentions have the effect of a vote against the proposal. Approval requires a majority of shares represented at the meeting and entitled to vote and voting thereon. | |||
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Approve amendments to the Company's Restated Certificate of Incorporation to Provide Stockholders with the Right to Request a Special Meeting of Stockholders | FOR | Abstentions and broker non-voteswill have the effect of a vote against the proposal. Approval requires a majority of the outstanding shares of our Common Stock entitled to vote thereon. | |||
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Ratify the appointment of |
FOR | Abstentions will have the effect of a vote against the proposal; brokers may vote in their discretion on the proposal, so no broker non-votes are expected on the proposal. Approval requires a majority of shares represented at the meeting and entitled to vote and voting thereon. | |||
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Shareholder Proposal to Give Shareholders the Ability to Call for a Special Shareholder Meeting | AGAINST | Broker non-voteswill have no effect on the proposal; abstentions will have the effect of a vote against the proposal. Approval requires a majority of shares represented at the meeting and entitled to vote and voting on the matter. |
Action may be taken at the Annual Meeting with respect to any other business that properly comes before the meeting, and the proxy holders have the right to and will vote in accordance with their judgment on any additional business.
How do I cast my vote?
There are four different ways you may cast your vote. You may vote by:
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internet, follow the instructions provided on the Notice; |
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telephone, call the toll-free number listed on the Notice; |
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mail, follow the instructions on the Notice to request a paper proxy card and proxy materials and then mark, sign, date and retueach proxy card by mail in the postage-paid envelope provided; or |
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attending the virtual Annual Meeting and voting your shares online during the open poll section of the Annual Meeting at http://www.virtualshareholdermeeting.com/WCC2025. |
Questions and Answers | 3 |
The deadline for voting by internet, telephone, or mail is receipt by
How do I revoke or change my vote?
If you have returned a proxy via the internet, telephone or mail, you may revoke it at any time before it is voted at the Annual Meeting by:
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notifying the Corporate Secretary at the Company's headquarters office in writing that is received before |
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sending another validly executed proxy dated later than your prior proxy either by internet, telephone or mail that is received before |
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attending the virtual Annual Meeting and voting online during the open poll section of the meeting. |
What is the difference between holding shares as a registered stockholder and a beneficial holder?
If your shares are registered directly in your name with our transfer agent,
What if I don't indicate my voting choices?
If you are a registered stockholder and retuyour signed proxy card but do not mark the boxes showing how you wish to vote on any particular matter, your shares will be voted in the manner recommended by our Board on each matter presented in this Proxy Statement.
If you are a beneficial holder, then your broker, bank or other nominee will ask you how you want to vote your shares. If you give the broker, bank or nominee instructions, your shares will be voted as you direct. If you do not give instructions, your broker, bank or nominee may vote your shares only on proposals that are considered routine matters. The only routine matter being proposed for stockholder vote at the Annual Meeting is the proposal to ratify the appointment of
Who will count the votes?
Representatives of
How many votes must be present to hold the Annual Meeting? What is a quorum?
A quorum of stockholders is required to conduct business at the Annual Meeting. A quorum is met if the holders of a majority of the outstanding shares of the Company's Common Stock entitled to vote at the Annual Meeting are present either in person or by proxy at the Annual Meeting. Abstentions, broker non-votesand votes withheld from Director nominees count as shares present for purposes of determining a quorum.
How will
Questions and Answers | 4 |
May I elect to receive a paper copy of proxy materials in the future?
Stockholders can elect to receive future Wesco Proxy Statements and Annual Reports via paper copies in the mail.
If you are a registered stockholder, you can choose to receive future Annual Reports and Proxy Statements via paper copy at no charge by writing to
If you enroll to receive paper copies of
What is householding?
Stockholders who share the same last name and address will receive one package containing a separate Notice for each individual stockholder at that address. Stockholders who have elected to receive paper copies and who share the same last name and address will receive only one set of our Annual Report on Form 10-Kand Proxy Statement, unless such stockholders have notified us that they wish to continue receiving multiple copies. This method of delivery, known as "householding," will help ensure that stockholder households do not receive multiple copies of the same document and lowers the costs and the environmental impact of our Annual Meeting.
If you are a registered stockholder, you can opt out of the householding practice and receive prompt delivery of a separate copy of the materials by calling Broadridge at 1-866-540-7095.If you would like to opt out of this practice and you are a beneficial holder, please contact your bank or broker.
If you receive multiple copies of proxy materials at your household and would prefer to receive a single copy of these materials, please contact Broadridge at the above telephone number. If you are a beneficial holder, please contact your bank or broker.
Board of Directors | 5 |
Proposal 1 - Election of Directors
The following Director Nominees have been nominated for election to our Board for a term expiring at the 2026 Annual Meeting of Stockholders:
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR"
EACH OF THE DIRECTOR NOMINEES.
Board of Directors
The Board is composed of ten directors as of the filing date of this Proxy Statement. The current Director Nominees are to be elected at the Annual Meeting for a one-yearterm expiring in 2026, subject to earlier retirement, resignation or removal.
The following is the complete list of individuals who comprise our Board of Directors and Board Committees as of
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Age | Director Since |
Audit | Compensation | Executive | Nominating and Governance |
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63 | 2008 | ||||||||||||||||||
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66 | 2023 | ||||||||||||||||||
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65 | 2021 | ||||||||||||||||||
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66 | 2016 | ||||||||||||||||||
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76 | 2014 | ||||||||||||||||||
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62 | 2022 | ||||||||||||||||||
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69 | 2006 | ||||||||||||||||||
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69 | 1998 | ||||||||||||||||||
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54 | 2018 | ||||||||||||||||||
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60 | 2019 |
(1) |
Lead Director |
Chair
Member
Board of Directors | 6 |
The following information is provided regarding our Directors as of
Our Board proactively seeks Director candidates to provide representation of relevant and varied backgrounds, perspectives, skills, and experiences in our business and in the boardroom. During the past seven years, the Board has added five new Directors as part of its on-goingrefreshment process.
The matrix below describes the self-identified gender and race or ethnicity attributes of our Directors:
Board Background Matrix | ||||||
Board Size: | ||||||
Total Number of Directors |
10 | |||||
Gender Identity: | Female | Male | ||||
3 | 7 | |||||
Demographic Background: | ||||||
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1 | 1 | ||||
Asian |
0 | 2 | ||||
White |
2 | 4 |
Board of Directors | 7 |
Director Skills, Experience, and Background
The Board regularly reviews the relevant skills, experiences, and backgrounds that it believes are desirable to be represented on the Board and, in conjunction with the Board's refreshment process described herein, has evaluated these skills and qualifications to align with the Company's strategic vision, business and operations. The following is a description of some of these skills, experiences and backgrounds, along with the percentage of our Directors that bring such skills and qualifications to the Board.
100% |
Strategic and Executive Management Leadership
Experience driving strategic direction and growth while serving in an executive leadership role of a major organization
90% |
Industry Background
Knowledge of or experience in one or more of the Company's specific industries
70% |
Risk Management
Experience or expertise in identifying, assessing, and mitigating potential business risks
90% |
Corporate Finance and M&A Experience
Experience in corporate lending or borrowing, capital markets transactions, significant mergers or acquisitions, private equity, or investment banking
50% |
CEO Leadership
Experience serving as the Chief Executive Officer of a major organization
70% |
Environmental, Climate and Sustainability Experience
Experience or expertise working within or overseeing the sustainability function of an organization, or having educational training on relevant environmental, social and governance-related topics
100% |
Operations Management Expertise
Experience or expertise in managing the operations and/or supply chain of a large business or major organization
100% |
Public Company Board Service
Experience as a board member of another publicly traded company
70% |
Financial Expertise or Experience
Expertise or experience in financial accounting and reporting or the financial management of a major organization
60% |
Technology and Cybersecurity Background or Expertise
Experience or expertise in information technology, information security or the use of digital tools/technologies/ applications to facilitate business management
100% |
International Experience
Experience doing business around the world
70% |
Human Capital and Talent Experience
Experience working within or overseeing the human resources function of an organization, addressing compensation, benefits, talent and culture topics
Board composition is assessed by the
Board of Directors | 8 |
Nominee Directors to Serve for a One-YearTerm Expiring in 2026
Chairman, President & Chief Executive Officer Qualifications: Among |
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Age: 63 Director since: 2008 Chairman of the Board Member of: Executive Committee |
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Former Chief Financial Officer, Qualifications: Among |
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Age: 66 Director since: 2023 Member of: Audit Committee |
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Board of Directors | 9 |
Former President, Qualifications:Among |
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Age: 65 Director since: 2021 Member of: Audit Committee and |
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Director, Advisor and Investor Qualifications:Among |
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Age: 66 Director since: 2016 Member of: |
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Board of Directors | 10 |
Former President, International Operations, Qualifications:Among |
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Age: 76 Director since: 2014 Member of: Compensation Committee, Executive Committee, and |
President and Chief Executive Officer of Qualifications:Among |
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Age: 62 Director since: 2022 Member of: |
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Board of Directors | 11 |
Former Chairman and Chief Executive Officer, Qualifications:Among |
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Age: 69 Director since: 2006 Member of: Compensation Committee and |
Chairman, Qualifications:Among |
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Age: 69 Director since: 1998 Lead Director Member of: Compensation Committee, Executive Committee (Chair), and |
Board of Directors | 12 |
Operating Executive, Qualifications:Among |
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Age: 54 Director since: 2018 Member of: Audit |
Former Executive Vice President and Chief Financial Officer, Qualifications:Among |
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Age: 60 Director since: 2019 Member of: Audit |
Corporate Governance | 13 |
Corporate Governance
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines in conformity with the
We have adopted a Wesco Code of Business Conduct and a Global Antibribery and Anticorruption Policy which apply to our Board of Directors and all of our employees and cover all areas of professional conduct, including customer relations, conflicts of interest, insider trading, financial disclosure, and compliance with applicable laws and regulations.
We also have adopted a Code of Principles for Senior Financial Executives, referred to as the Senior Financial Executive Code, which applies to our Chief Executive Officer, Chief Financial Officer and Corporate Controller. We disclose future amendments to, or waivers from, the Senior Financial Executive Code on the corporate governance section of our website within four business days of any amendment or waiver.
You may access our Corporate Governance Guidelines,
Director Independence
Our Board has adopted independence standards that meet or exceed the independence standards of the NYSE, including the enhanced independence requirements for audit and compensation committee members. In addition, as part of our independence standards, our Board has adopted categorical standards to assist it in evaluating the independence of each of its Directors. The categorical standards are intended to assist our Board in determining whether or not certain direct or indirect relationships between its Directors and our Company or its subsidiaries are "material relationships" for purposes of the NYSE independence standards. The categorical standards establish thresholds at which any relationship is deemed to be material.
Annually, the independence of each Director is reviewed, applying applicable independence standards. The review considers relationships and transactions between each Director and his or her immediate family and affiliates and our management and our independent registered public accounting firm. Based on this review, our Board has affirmatively determined that the following Directors are independent: Messrs. Espe, Griffin, Nagarajan, Raymund, Singleton and Sundaram and Messes. Bryan, Cooney and Thompson.
Director Qualifications
Our
Corporate Governance | 14 |
Board Refreshment and Tenure
The Board is committed to ongoing Board refreshment. The Board considers a balanced Board in terms of overall average Director tenure, comprising newer Directors as well as those who have longer experience with the Company, to benefit the Company and its stockholders by providing fresh perspectives, experience and stability. As part of its Board refreshment process, the Board has recruited a new Director in five of the past seven years. Currently, 33% of our independent Directors have a tenure of five years or less, and the average tenure of our independent Directors as of
Board, Committee and Director Evaluations
The Board has established a robust self-evaluation process for the Board, its Committees and individual Directors. Each year, our Board and Committees conduct evaluations to assess their effectiveness and adherence to the Corporate Governance Guidelines and Committee charters, and to identify opportunities to improve Board and Committee performance. As part of that process, we also conduct individual Director evaluations, including peer assessments. As described below, the Board engages an independent corporate governance professional to conduct interviews with each Director as part of this process.
Under the leadership of our Lead Director,
Corporate Governance | 15 |
Topics considered during the 2024 Board, Committee and Director Evaluation Process included: Director Performance • Individual Director performance • Chairman (in that role) • Lead Director (in that role) • Each Committee Chair (in that role) Board and Committee Operations • Board and Committee membership, including Director skills, background and expertise • Committee structure, including whether the Committee structure enhances Board and Committee performance • Access to management • Conduct of meetings, including time allocated for, and encouragement of, candid dialogue • Key areas of focus for the Board • Strategy oversight • Capital allocation • Consideration of stockholder value • Consideration of reputation • Identification of relevant and timely topics for attention and discussion Board Performance Committee Performance • Performance of Committee duties under Committee charters • Consideration of reputation • Effectiveness of outside advisors |
Director Continuing Education
As part of our efforts designed to ensure a continuing high-performance Board, Directors participate in continuing education on current topics and developments. We bring outside experts into the Board room to review current topics and developments in their areas of expertise, and Directors regularly attend outside education sessions on relevant topics. Education topics include corporate governance, compensation,
Compensation Committee Interlocks
None of our executive officers serves as an executive officer of, or as a member of, the compensation committee of any public company that has an executive officer, director or other designee serving as a member of our Board. No member of our Compensation Committee has been an executive officer of the Company.
Executive Sessions and Lead Director Responsibility
During 2024, the non-managementmembers of our Board met in executive session at each regularly scheduled Board of Directors' meeting. Our Directors generally hold executive sessions at both the beginning and end of each Board meeting. As Lead Director,
Corporate Governance | 16 |
Board Leadership Structure
Since 2011,
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Presides at all meetings of the Board at which the Chairman is not present, including meetings of independent Directors held in executive session; |
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Has the authority to call meetings of the independent Directors; |
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Leads the Board evaluation program; |
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Evaluates, along with the members of the Compensation Committee and the full Board, the CEO's performance, and meets with the CEO to discuss the Board's evaluation; |
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Serves as a liaison between the Chairman/CEO and the independent Directors; |
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Consults with the Chairman/CEO on and approves agendas and schedules for Board meetings to ensure there is sufficient time for discussion of agenda items; |
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Advises the Chairman/CEO on the Board's informational requirements and approves information sent to the Board, as appropriate; |
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Consults with the Chair of the |
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Facilitates communication between the Board and senior management. |
The Lead Director assures that appropriate independence is brought to bear on important Board and governance matters. In addition, there is strong leadership vested in and exercised by the independent Committee chairs, and each Director may request inclusion of specific items on the agendas for Board and Committee meetings.
Considering all of the above, the Board believes that a combined Chairman and Chief Executive Officer, together with the Lead Director, is an appropriate Board leadership structure and is in the best interests of the Company and its stockholders at this time.
Communications with Directors
Our Board has established a process by which stockholders and other interested parties may communicate with the Board, our Board Committees, and/or individual Directors by confidential e-mail.Such communications should be sent in writing to the e-mailaddress noted in the corporate governance section of our website at https://www.wesco.com/us/en/our-company/leadership.html#contact.
Our Chief Compliance Officer will review all of these communications on a timely basis and will forward appropriate communications (i.e., other than solicitations, invitations, advertisements, or similar communications) to the relevant Board members on a timely basis.
Stockholders who wish to communicate with our Board in writing via regular mail should send correspondence to:
Our Board members routinely attend our Annual Meeting of Stockholders. This provides you with additional opportunities to communicate with our Board. All of our Board members were present at our Annual Meeting of Stockholders.
Corporate Governance | 17 |
Director Nominating Procedures
Our
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The name and address of the proposed candidate; |
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The proposed candidate's resume or a listing of his or her qualifications to be a Director on our Board; |
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A description of why the proposed candidate would be a valuable addition to our Board; |
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A description of any relationship that could affect the proposed candidate's ability to qualify as an independent Director, including identifying all other public or private company board and committee memberships; |
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A confirmation of the proposed candidate's willingness to serve as a Director if selected by our |
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Any information about the proposed candidate that, under the federal proxy rules, would be required to be included in our Proxy Statement if the proposed candidate were a nominee or otherwise is required to be provided pursuant to our Amended and Restated By-Laws(our "By-Laws");and |
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The name of the stockholder submitting the proposed candidate, together with information as to the number of shares owned and the length of time of ownership. |
To allow for timely consideration, recommendations must be received not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. In addition, the Company may request additional information regarding any proposed candidates. A stockholder who wishes to nominate a person for election as a Director must provide written notice to the Corporate Secretary of the Company at the address below in accordance with the procedures specified in Section 2.15 of our By-Laws.In general, to be timely, the written notice must be received by our Corporate Secretary not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. The notice must provide certain information required by the By-Laws,including (a) biographical and share ownership information of the stockholder (and certain affiliates), (b) descriptions of any material interests of the stockholder (and certain affiliates) in the nomination and any arrangements between the stockholder (and certain affiliates) and another person or entity with respect to the nomination, (c) certain biographical, employment and specific qualifications information of each nominee, and (d) a brief description of any arrangement or understanding between each individual proposed as a nominee and any other person pursuant to which the individual was selected as a nominee. Any notice of director nomination submitted must comply with the additional requirements of, and include the additional information required by, Rule 14a-19(b)under the Securities Exchange Act of 1934, as amended.
Notices of Director recommendations or Director nominations, including the information described above, should be sent to:
Director Resignation Policy
The Board has adopted a resignation policy under which any Director who does not receive a majority of votes cast for his or her re-electionis expected to offer his or her resignation for the Board's consideration.
Stockholder Engagement
We seek to engage with current and prospective investors throughout the year in order to review our financial performance, business model and strategic initiatives, so that management and the Board can better understand stockholder perspectives. We also utilize these discussions to assess emerging issues that may help shape our practices and enhance our corporate disclosures, including in the areas of environmental, social and governance issues, executive compensation and capital deployment strategies. We strive for a collaborative approach with our stockholders and value the variety of perspectives that we hear in our discussions with them.
Corporate Governance | 18 |
Board's Role in Oversight of Risk Management
Management is responsible for risk management, and the Board's role is to oversee management's efforts in this area. As part of their regular meetings and deliberations, the Board and its Committees review and discuss matters of significance regarding operational, financial and other risks that are relevant to the Company's business. Strategic risks and operating risks are monitored by the Board through discussions regarding the Company's strategic and operating plans and regular reviews of the Company's operating performance. Certain topics, including succession planning and mergers and acquisitions, are of such importance that they are reviewed for the full Board and not delegated to a specific committee. In addition, management assesses the Company's enterprise risk and reviews with the entire Board significant risks and associated mitigating factors on an annual basis.
Our Board has tasked designated standing committees with oversight of certain categories of risk management. The risk oversight focus areas of the committees are:
The Audit Committee, which is composed 100% of independent members, discusses and reviews guidelines and policies with respect to risk assessment and risk management and discusses with management the Company's major financial risk exposures
Corporate Governance | 19 |
and the steps management takes to monitor and control such exposures. The Audit Committee is also responsible for oversight of cybersecurity risk. The Compensation Committee, which is composed 100% of independent members, reviews the potential for risk related to the Company's compensation arrangements, including compensation arrangements and policies for executives, and determines whether any such arrangements are likely to encourage excessive or inappropriate risk taking.
To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer ("CISO") whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes. The CISO reports to our Executive Vice President, Chief Information and Digital Officer ("CIDO"), who reports directly to our Chief Executive Officer. The CISO and CIDO regularly review cybersecurity matters with our Chief Executive Officer and other members of our senior management, including cybersecurity risks and threats and the status of our cybersecurity incident response plan and related processes relating to the prevention, detection, mitigation and remediation of cybersecurity incidents. As part of its oversight responsibility of cybersecurity risk and the overall enterprise risk management process, the Audit Committee meets at least quarterly with the Company's CISO, the CIDO, and other senior management to receive updates on cybersecurity risks and threats (and should they arise, any material incidents), the status of initiatives to strengthen the Company's information security systems, management's assessments of the Company's security program and compliance with disclosure requirements. The Audit Committee and senior management report any findings and recommendations, as appropriate to the full Board of Directors for consideration. The Company has developed and conducts mandatory information security training programs for all employees and maintains cyber liability insurance policies.
Environmental, Social and Governance Matters
The Board oversees the Company's efforts to conduct its business in a principled, transparent, and accountable manner. The Board believes that its effective oversight of environmental, social and governance matters is central to its risk oversight function.
Our management teams work with senior leaders to set strategy and develop goals to embed sustainability objectives across our organization. Management of our sustainability programs is led by the Executive Vice President, Supply Chain and Operations who reports at least annually to the Board and as appropriate to the Board Committees on the status of these programs.
Sustainability Initiatives
We promote ethics, safety, and environmental sustainability in conducting our business. We act responsibly and strive to reduce our environmental impact by how we service customers and the communities in which we operate. To guide Company initiatives toward measurable change, we established the following 2030 sustainability goals:
Corporate Governance | 20 |
2030 Sustainability Goals |
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Reduce absolute Scope 1 and 2 GHG emissions by 30 percent from a 2021 baseline by 2030. |
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Reduce by 2030 landfilled waste intensity by 15 percent across our |
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Achieve a 15 percent reduction in the Total Recordable Incident Rate by 2030 from a 2020 baseline. |
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Committed to providing 425,000 hours of safety training and development to our employees by 2030. |
Achieving these goals depends on the collective action of our business and functional units, as well as alignment across our Company management. The foundation of our environmental, health and safety management is our Global Environmental, Health, Safety and Sustainability Policy, which aligns with key provisions of the ISO 14001:2015 environmental management standards. The policy includes management accountability for environmental sustainability, direct program responsibilities, key performance indicators, and other metrics to track progress. To enhance our sustainability strategy, practices, and communications, we also engage with employees, customers, suppliers, stockholders, community members and other stakeholders.
As a business-to-businessdistribution, logistics services, and supply chain solutions services company, our approach to sustainability includes positive actions across our organization to reduce the environmental impacts of our own operations and assisting our customers and suppliers with attaining their sustainability goals through our products, services, and supply chain solutions. For example, we assist our customers in areas such as lighting efficiency, energy management, renewable energy, and green sustainable sourcing. We also support utilities as they work to meet their renewable portfolio standards initiatives (solar and wind generation projects). Our lighting renovation and retrofit business is focused on improving energy efficiency in offices, schools, high rise buildings and manufacturing plants and our automation solutions are focused on reducing waste for customers.
Overall, we continue to invest in new and emerging technologies and expand our capabilities in order to meet growing demands in these areas:
ENERGY EFFICIENCY | ENERGY MANAGEMENT | |||||||
We provide some of the most efficient products on the market, including LED lighting and energy-efficient power systems. |
We offer a suite of smart building solutions that help manage a facility's environmental impact, including advanced building automation equipment and HVAC controls. | |||||||
RENEWABLE ENERGY | SUSTAINABLE MAINTENANCE, REPAIR & OPERATIONS |
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We provide turnkey renewable energy solutions ranging from large-scale photovoltaic projects to customized solar, wind, and energy solutions. |
We help businesses meet green procurement goals by offering a broad range of sustainable tools, safety equipment, and miscellaneous consumables. |
Safety
Our Sustainability Goals include a focus on employee safety, training and development, as these are core values of
Corporate Governance | 21 |
Inclusive and Respectful Workplace Culture
We believe that our people and our high-performance culture are our greatest assets. We foster a culture that values and rewards employees based on merit. We also believe that making the most of the wealth of ideas, talents, skills, backgrounds, and perspectives from our people helps us do more and be more - together. We take pride in our talented and diverse workforce and aspire to become the employer of choice in our industry. Our Compensation Committee and Board are updated routinely by management on relevant programs and engage in regular discussions on matters such as workplace culture, talent development, and employee engagement.
We require that personnel actions are administered without any form of discrimination, and in compliance with applicable law.
We aim to support an inclusive and respectful workplace culture that:
• |
leverages the unique experiences and perspectives of our talented workforce to support |
• |
furthers employee engagement and builds a respectful culture; |
• |
attracts and cultivates talent that bring new perspectives and thought processes to |
• |
supports the communities in which we operate. |
Human Rights - At
• |
Inclusion and Non-Discrimination |
• |
Harassment Prohibition |
• |
Child or Forced Labor Prohibition |
• |
Working Hours, Wages, and Benefits |
• |
Safety and Workplace Conditions |
• |
Disabled Employee Accommodations |
We also expect vendors to comply with our Supplier Code of Conduct, which incorporates these human rights protections.
United Nations Global Compact
GOOD HEALTH AND WELL-BEING |
AFFORDABLE AND CLEAN ENERGY |
INDUSTRY INNOVATION & INFRASTRUCTURE |
REDUCED INEQUALITIES |
RESPONSIBLE CONSUMPTION AND PRODUCTION |
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Corporate Governance | 22 |
Transparency
Sustainability Reporting Standards |
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GRI |
The |
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SASB |
The |
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CDP |
Formerly the |
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TCFD |
More information about
Prohibition on Hedging and Pledging
The Company's Insider Trading Policy prohibits Section 16 Directors and Officers from engaging in any hedging transactions that involve
Stockholder Proposals for 2026 Annual Meeting
If you wish to have a stockholder proposal included in the Company's proxy soliciting materials for the 2026 Annual Meeting of Stockholders, you must submit the proposal to the Company at its principal executive offices by our deadline, which is 120 days prior to the first anniversary of the mailing of this Proxy Statement, or
Board and Committee Meetings | 23 |
Board and Committee Meetings
Our Board has four standing committees: an Audit Committee, a Compensation Committee, an Executive Committee, and a
The full Board held four meetings in 2024. Each Director attended 75% or more of the aggregate number of meetings of the full Board held in 2024 and the total number of meetings held by all Committees of the Board on which he or she served.
Audit Committee | 8 Meetings Held in 2024 | |
Members | Key Responsibilities: | |
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• Appointing the independent registered public accounting firm to perform an integrated audit of our financial statements and to perform services related to the audit • Reviewing the scope and results of the audit with the independent registered public accounting firm • Reviewing with management our quarterly and year-endoperating results • Considering the adequacy of our internal accounting and control procedures • Reviewing the Annual Report on Form 10-Kand Quarterly Reports on Form 10-Q • Providing oversight for cybersecurity risks • Reviewing any non-auditservices to be performed by the independent registered public accounting firm and the potential effect on the registered public accounting firm's independence |
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Independence and Financial Expert Qualifications: | ||
• All of the members of our Audit Committee are required to be, and were determined by our Board to be, independent Directors according to the independence standards of the |
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• Our Board has determined that Messes. Bryan and Thompson and |
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Compensation Committee | 5 Meetings Held in 2024 | |
Members | Key Responsibilities: | |
• Reviewing, recommending and approval of compensation arrangements for executive officers |
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• Administration of certain benefit and compensation plans and arrangements of the Company |
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Independence Qualifications: | ||
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• All Compensation Committee members are required to be, and were at all times, Independent Directors according the independence standards of the |
Board and Committee Meetings | 24 |
Executive Committee | No Meetings Held in 2024 | |
Members | Key Responsibilities: | |
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• May exercise all the powers and authority of the Directors in the management of the business and affairs of our Company • Has delegated authority to exercise the powers of our Board between Board meetings |
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Independence Qualifications: | ||
• Except for |
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Nominating and Governance Committee 3 Meetings Held in 2024 | ||
Members | Key Responsibilities: | |
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• Responsible for identifying and nominating candidates for election or appointment to our Board and determining compensation for Directors |
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• Review and make recommendations to our Board with respect to our corporate governance policies and practices and to develop and recommend to our Board a set of corporate governance principles |
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• Responsible for oversight of material environmental, social and governance matters |
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Independence Qualifications: | ||
• All of the members of our |
Director Compensation | 25 |
Director Compensation
Compensation
Independent members of the Board of Directors receive compensation in the form of an annual cash retainer paid quarterly and an annual equity award. Directors have the ability to defer 25% to 100% of the cash and equity retainers. Deferred annual cash retainer amounts were converted into stock units and credited to an account in the Director's name using the fair market value of our Common Stock on the dates the annual retainer would have been paid in the absence of a deferral election. The table below sets forth 2024 annual retainers our non-employeeDirectors, as determined based on analysis provided by the independent compensation consultant, as described below.
Role |
2024 Annual Cash Retainer |
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All Independent Directors |
$ 125,000 | |||
Lead Independent Director |
$ 50,000 | |||
Committee Chairs: |
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Audit |
$ 30,000 | |||
Compensation |
$ 30,000 | |||
Nominating and Governance |
$ 30,000 |
In addition to the retainer, non-employeeDirectors are reimbursed for travel and other reasonable out-of-pocketexpenses related to attendance at Board and Committee meetings. Directors receive no additional compensation for Board or Committee meeting attendance. Members of our Board who are also our employees do not receive compensation for their services as Directors.
For 2024, non-employeeDirectors received equity grants in the form of Restricted Stock Units ("RSUs") in the amount of
Distribution of deferred stock units will be made in a lump sum or in installments, in the form of shares of our Common Stock, in accordance with the distribution schedule selected by the Director at the time the deferral election is made.
As set forth on an exhibit to the Company's Form 10-Kfiled on
Robust Stock Ownership Guidelines
Our Board has adopted robust stock ownership guidelines for Directors, which are five times their annual cash retainer. Directors are expected to hold these ownership positions during their service as Directors. All Directors have acquired or are acquiring stock in accordance with the stock ownership guidelines.
Director Compensation | 26 |
Director Compensation for 2024
|
Fees Earned or Paid in Cash(1) |
Stock Awards(2)(3) |
All Other Compensation |
Total | ||||||||||
Bryan |
$ | 125,000 | $ | 185,000 | - | $ | 310,000 | |||||||
Cooney |
$ | 125,000 | $ | 185,000 | - | $ | 310,000 | |||||||
Espe |
$ | 155,000 | $ | 185,000 | - | $ | 340,000 | |||||||
Griffin |
$ | 155,000 | $ | 185,000 | - | $ | 340,000 | |||||||
Nagarajan |
$ | 125,000 | $ | 185,000 | - | $ | 310,000 | |||||||
Raymund |
$ | 125,000 | $ | 185,000 | - | $ | 310,000 | |||||||
Singleton |
$ | 175,000 | $ | 185,000 | - | $ | 360,000 | |||||||
Sundaram |
$ | 125,000 | $ | 185,000 | - | $ | 310,000 | |||||||
Thompson |
$ | 155,000 | $ | 185,000 | - | $ | 340,000 |
(1) |
The amounts shown represents the cash portion of the annual retainer paid to the Directors. |
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Deferred Compensation |
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Bryan |
$ | 125,000 | ||
Griffin |
$ | 77,500 | ||
Nagarajan |
$ | 125,000 | ||
Sundaram |
$ | 125,000 |
(2) |
Amounts represent the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718, of RSUs. On |
(3) |
All the RSU awards were granted under the |
Director Outstanding Equity Awards at Year-End(1)
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Number of Securities Underlying Unexercised Equity Awards Exercisable |
Number of Shares of Stock That Have Not Vested |
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Bryan |
280 | 1,228 | ||||||
Cooney |
1,767 | 1,228 | ||||||
Espe |
7,573 | 1,228 | ||||||
Griffin |
16,591 | 1,228 | ||||||
Nagarajan |
1,775 | 1,228 | ||||||
Raymund |
7,715 | 1,228 | ||||||
Singleton |
1,037 | 1,228 | ||||||
Sundaram |
2,498 | 1,228 | ||||||
Thompson |
1,037 | 1,228 |
(1) |
All Equity Award values have been adjusted by dividend equivalents issued quarterly during 2024. |
Security Ownership | 27 |
Security Ownership
Security Ownership of Management
The following table sets forth the number of shares
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Shares Beneficially Owned |
Percent Owned Beneficially(1) |
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843,453 | (2) | 1.7% | |||||||
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2,395 | (3) | * | |||||||
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4,384 | (3) | * | |||||||
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19,583 | (3) | * | |||||||
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29,786 | (3) | * | |||||||
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4,805 | (3) | * | |||||||
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27,111 | (3) | * | |||||||
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39,251 | (3) | * | |||||||
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11,953 | (3) | * | |||||||
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9,287 | (3) | * | |||||||
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181,449 | (2) | * | |||||||
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44,700 | (2) | * | |||||||
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35,748 | (2) | * | |||||||
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123,860 | (2) | * | |||||||
All 18 Directors and executive officers as a group(4) |
1,625,290 | (2) | 3.3% |
* Indicates ownership of less than 1% of the Common Stock.
(1) |
Based on the number of shares outstanding on the Record Date. |
(2) |
Includes the following shares of Common Stock not currently owned, but subject to SARs and/or Options which were outstanding on |
(3) |
Includes shares of Common Stock payable to any such Director following the Director's termination of Board service with respect to portions of annual fees deferred under the Company's Deferred Compensation Plan for Non-EmployeeDirectors, and restricted stock units subject to an election to defer even though such shares are not deemed currently to be beneficially owned by the Directors pursuant to Rule 13d-3,as follows: |
(4) |
As of |
Delinquent Section 16(a) Reports
Under the federal securities laws of
Security Ownership | 28 |
Security Ownership of Principal Stockholders
The following table sets forth the beneficial ownership of the Company's Common Stock as of
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Shares Beneficially Owned |
Percent Owned Beneficially |
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4,819,559 | (1) | 9.9% | |||||
50 Hudson Yards |
3,993,934 | (2) | 8.2% | |||||
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2,474,092 | (3) | 6.1% |
(1) |
This information is based solely upon a Schedule 13G filed by |
(2) |
This information is based solely upon a Schedule 13G filed by |
(3) |
This information is based solely upon a Schedule 13G filed by |
Transactions with Related Persons | 29 |
Transactions With Related Persons
Our Company has a written policy and has implemented processes and controls in order to obtain information from our Directors and executive officers with respect to related person transactions and for then determining whether our Company or a related person has a direct or indirect material interest in the transaction based on the facts and circumstances. Our
Executive Officers | 30 |
Executive Officers
Our executive officers and their respective ages and positions as of
Age | Position | |||||
63 | Chairman, President and Chief Executive Officer | |||||
59 | Executive Vice President and Chief Financial Officer | |||||
59 | Executive Vice President and General Manager, Utility & |
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54 | Executive Vice President and General Manager, Communications & Security Solutions | |||||
51 | Executive Vice President and Chief Information and Digital Officer | |||||
58 | Executive Vice President and General Counsel | |||||
51 | Executive Vice President, Supply Chain and Operations | |||||
Nelson J. Squires III | 63 | Executive Vice President and General Manager, Electrical & Electronics Solutions | ||||
64 | Executive Vice President and Chief Human Resources Officer |
Executive Officers | 31 |
Nelson J. Squires IIIhas served as our Executive Vice President and General Manager of the Electrical & Electronic Solutions (EES) strategic business unit since
Proposal 2 - Approve, on an Advisory Basis, the Compensation of the Company's Named Executive Officers |
32 |
Proposal 2 - Approve, on an Advisory Basis, the Compensation of the Company's Named Executive Officers
This year, the Company is seeking that the stockholders approve the compensation of the Company's named executive officers (commonly referred to as "say-on-pay")as described in the "Compensation Discussion and Analysis" section, the tabular disclosure regarding named executive officer compensation and the narrative description accompanying such disclosure. As approved by our stockholders at the Annual Meeting of Stockholders in 2024 regarding the frequency of the advisory vote, and consistent with the Board's recommendation, we are submitting this proposal on an annual basis. This vote is advisory only, meaning it is non-bindingon the Company; however, the
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THE COMPENSATION OF THE COMPANY'S
NAMED EXECUTIVE OFFICERS.
The Board endorses the Company's executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of the Company's named executive officers as disclosed pursuant to Item 402 of SEC Regulation S-K,including as described under the "Compensation Discussion and Analysis" section, as well as the accompanying compensation tables and the related narrative disclosure, in the Company's 2025 Proxy Statement.
Compensation Discussion and Analysis | 33 |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis section discusses the Company's compensation philosophy, policies and arrangements for the 2024 year that are applicable to our Named Executive Officers ("NEOs"), who are listed below:
NEO | ||
Chairman, President, and Chief Executive Officer | ||
Executive Vice President and Chief Financial Officer | ||
Executive Vice President and General Manager, Communications & Security Solutions (CSS) | ||
Executive Vice President and General Manager, Electrical & Electronic Solutions (EES) | ||
Executive Vice President and Chief Information and Digital Officer |
Executive Summary
Key elements of our executive compensation program include the following:
Element |
Description | |||
Stockholder Support |
We received the support of approximately 97% of stockholder votes in favor of our say-on-payproposal in 2024. The overall structure of our compensation program, which was based on significant stockholder engagement, has remained consistent. | |||
Straightforward Program |
Our program is straightforward and comprises three elements: (1) Base Salary; (2) Short-Term Incentive Program ("STIP"); and (3) Long-Term Incentive Program ("LTIP"). |
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Pay for Performance |
Our performance metrics are linked to our strategy and demonstrate our pay for performance philosophy that aligns compensation earned with performance outcomes. | |||
Balanced Mix of Incentives |
We have a balanced mix of short- and long-term incentives, using a blend of performance metrics. | |||
Challenging Incentive Award Goals |
We set challenging short- and long-term incentive award goals. | |||
Reasonable Compensation Levels |
Total compensation is reviewed annually against a range of market data from a custom peer group of companies with similar business characteristics to |
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Limited Perquisites |
We have limited use of perquisites. | |||
No Tax Gross-Upson Executive-Only Perquisites |
We do not provide tax gross-upson executive-only perquisites. | |||
Independent Committee and Consultant |
Our Compensation Committee is 100% independent and utilizes an independent compensation consultant. | |||
Stock Ownership Guidelines |
We have robust stock ownership guidelines for our executive officers. | |||
No Hedging or Pledging |
Our executive officers are prohibited from hedging or pledging our stock. | |||
Clawback Policies |
We have clawback policies that apply to financial restatements and events of misconduct, including a mandatory policy that complies with |
Compensation Discussion and Analysis | 34 |
Pay for Performance
Our compensation program uses the following performance metrics:
Performance Metrics | Why It's Included | How It's Used | ||||
Short-Term Incentive Program (STIP) |
Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA") |
Encompasses sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability, all of which are central to the Company's strategy and the creation of long-term stockholder value. |
Based on the annual operating plan reviewed and approved by the Board each December, these metrics are used for STIP targets in the following year. | |||
Free Cash Flow |
Relates directly to the Company's operating performance, including the effective management of working capital, which is especially relevant for a supply chain services company. Strong free cash flow is important to our business and to our investors. |
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Long-Term Incentive Program (LTIP) |
Net Income Growth |
Linked to strategy to drive profitable revenue and earnings growth; encompasses sales growth, margin improvement and cost control. |
These metrics are measured over a three-year period and represent an appropriate mix of a growth metric and a retumetric, both of which are relevant to our business and strategy. We believe that the combination of earnings growth and effective asset management drives value for a supply chain services company. | |||
Retuon Net Assets (RONA) Growth |
Important operating metric for a supply chain services company like us, since it focuses on improving profitability and the efficient use of operating assets (working capital, property, buildings and equipment) to create value for our stockholders. |
2024 Highlights
Highlights for 2024 include:
• |
Record free cash flow generation of more than |
• |
Portfolio strengthened through |
• |
Executed a total of |
• |
Made substantial progress on our business transformation digital initiatives |
Compensation Discussion and Analysis | 35 |
Say-on-Pay
In addition to considering the needs of the business, the corporate governance landscape, the competitive marketplace and other trends, the Compensation Committee considers the results of the Say-on-Pay advisory vote in making compensation decisions for the following year. In 2024, the Company's advisory vote on executive compensation received the approval of approximately 97% of the shares voted. We believe that this substantial majority of votes cast affirms shareholders' recognition of our strong alignment of pay with performance.
Compensation Philosophy, Approach and Pay Elements
We have a straightforward and transparent compensation program that is linked to our strategy and the drivers of long-term stockholder value. It is based on our pay-for-performancemethodology, and we use operating performance metrics that are important to our business. To be successful, we need to attract and retain executives and employees who are talented and motivated to grow long-term stockholder value.
There are three central elements to our executive total compensation:
(1) |
base salary - cash-based; |
(2) |
short-term incentives - cash-based, and based on the annual operating plan approved by the Board; and |
(3) |
long-term incentives - stock-based, whose value depends on the increase in the Company's stock price over the long term, thus further aligning the executive's interests with stockholders' interests. Vesting occurs over three years, which fosters retention, and in the case of performance shares, is linked to the achievement of growth and retumetrics. |
Structuring a balanced, fair and properly-crafted compensation program for our executive leaders is essential to promote our high-performance culture and contribute to our success. Our compensation philosophy begins with the recognition that our success depends on the talent of our people. To encourage high level performance of our leaders, we have constructed a compensation plan that rewards the behavior of our executives in pursuit of the following three broad philosophical tenets and goals:
• |
Attract and retain an excellent management team.A high performing team is critical to our success as a company. Developing and strengthening our corporate relationships with our customers and suppliers over the long-term enables our business to grow profitably. Also important is the consistency of leadership in support of our corporate mission, executing our strategy, and sustaining our high-performance culture. |
• |
Enable |
• |
Reward our executives fairly and provide proper and balanced incentives for long-term value creation.We want to provide a level of annual base compensation that is fair. When our executives perform at a level of high achievement, we reward them with attractive but capped annual cash bonus awards. In years when performance measures are not met, they may receive little or no bonus. In terms of long-term incentives, we believe that the opportunity to participate in the growth in value of our share price links pay to performance. We provide equity incentives to align management's interests with those of stockholders, and we maintain robust stock ownership guidelines to instill that mindset. |
In setting compensation levels, we annually review a range of market data to ensure that our pay is appropriately positioned as compared to other similarly situated executives. The actual positioning of target compensation relative to the market varies based on each executive's experience, skill set, performance and potential.
We assess the effectiveness of our compensation programs regularly and use the services of an independent compensation consultant, Meridian, which provides us with research information and data. Meridian serves as a resource to our Compensation Committee, providing information on new developments, best practices and trends in compensation. The Committee considers
Compensation Discussion and Analysis | 36 |
information provided by Meridian, and then exercises its independent judgment to make plan design and compensation decisions. All of our Committee members are independent, as defined by applicable regulations.
Compensation Setting Process
Our Board has delegated to the Compensation Committee the responsibility of administering executive compensation and benefit programs, policies and practices. The Committee is composed entirely of individuals who are independent Directors under the independence standards of the NYSE and
Our compensation setting process for NEOs consists of the following steps:
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Supported by the independent compensation consultant, review competitive data and assess compensation program design; |
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Review external market data and confirm the reasonableness of total compensation levels as well as the reasonableness of each component of compensation when compared to peer companies; |
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Review the metrics and goals of the annual incentive plan as well as the performance share plan ensuring alignment with the Board-approved annual operating plan; |
Compensation Discussion and Analysis | 37 |
• |
Assess the Company's performance in relation to the Board-approved annual operating plan, competition and industry circumstances; |
• |
Assess individual performance, changes in duties and responsibilities, and strategic and operational accomplishments; |
• |
Make annual cash incentive award payments based on an evaluation of pre-establishedoperating and financial performance factors; |
• |
Evaluate and determine annual and long-term incentive award opportunities for each NEO and make awards under our LTIP that reflect recent performance and an assessment of each NEO's future impact on the long-term success of the Company; |
• |
Adjust base salaries, as appropriate, based on job performance, leadership, tenure, experience, and other factors, including market data relative to our peer companies; and |
• |
Consider stockholder feedback on say-on-payand compensation topics. |
In addition, the Committee has sought the recommendation of the Chief Executive Officer regarding the other NEOs relative to compensation adjustments and individual performance objectives he believes would be appropriate to achieve the Company's strategic and operational goals. The Committee reviews, discusses, modifies and approves, as appropriate, these compensation recommendations.
Role of
To assist in the compensation setting process, the Committee engages Meridian, an independent executive compensation consultancy firm, to provide information and advice regarding compensation and benefit levels and incentive plan designs. Meridian is engaged by and reports directly to the Committee, which has the sole authority to hire or fire Meridian and to approve fee arrangements for work performed. The Committee has authorized Meridian to interact with management on behalf of the Committee as needed in connection with advising the Committee. The Committee has assessed the independence of Meridian pursuant to
In particular, the Committee retains Meridian to prepare compensation plan reviews, identify general trends and practices in executive compensation programs, provide information on new developments, including regulatory and legislative updates, related to compensation, assist in selecting the appropriate peer group, prepare a market analysis of target total compensation for the NEOs based on comparable and similarly-sized(by revenue) companies, and furnish its input regarding the compensation and incentives of the Chief Executive Officer and other executives.
The Committee's Chairman meets with management and Meridian regularly throughout the course of the year. The Committee reports to the entire Board of Directors at every Board meeting on its activities, the research commissioned from our compensation consultant and on the Committee's specific compensation deliberations and decisions that directly affect our executive leadership team.
Compensation
As part of our compensation review process, the Committee annually assesses the competitiveness of the target pay opportunities for each of our NEOs against similarly situated executives from a custom peer group of companies. The peer group, reviewed and approved annually by the Committee, generally reflects:
• |
distribution companies similar in size, but also companies from general industry (excluding companies that are demonstrably variant to |
• |
companies with similar business and financial characteristics, including revenue size, margins, market capitalization and capital intensity |
We chose a large number of similarly sized companies to ensure a proper sample size for comparison purposes and because we believe that they are representative of the companies against whom we compete to recruit and retain talent. This approach has proven successful, as many of the executive officers that we recently hired came from large corporations that were not direct competitors of ours and not in the distribution industry. Furthermore, it is not feasible or appropriate to construct a peer group of only distributor competitors, as many of our competitors are smaller and/or privately-held companies, in the case of local competitors, or larger non-
Compensation Discussion and Analysis | 38 |
Company and the companies in the peer group and to get comparable data for its analysis, Meridian uses regression analysis to adjust market values for differences in company size, based on annual revenues.
Our compensation peer group in 2024 comprises the following 26 companies:
2024 COMPENSATION PEER GROUP |
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The Committee reviews with Meridian the composition of our peer group annually to ensure that companies are relevant for comparative purposes. For 2024, based on a qualitative review of our peer group, the Committee added
Elements of Compensation
Base Salaries
Base salaries are intended to provide our NEOs with a level of competitive cash compensation that is critical for retention and appropriate given their positions, responsibilities and accomplishments with the Company. Salaries for NEOs are reviewed annually. The Committee reviews detailed individual salary history for the NEOs and compares their base salaries to salaries for comparable positions at companies within our peer group.
In 2024, the Committee performed its annual assessment of base salaries in February. The Committee reviewed compensation market data, based on analysis prepared by Meridian, using our compensation peer group.
NEO |
Annual Base Salary Beginning of 2024 |
Annual Base Salary Effective 2024 |
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$ 755,000 | $ 780,000 | ||
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$ 650,000 | $ 670,000 | ||
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$ 670,000 | $ 670,000 | ||
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$ 575,000 | $ 600,000 |
In determining adjustments to base salaries, the Committee considers individual performance assessments based on a robust leadership and organizational review process, Company performance, changes in duties and responsibilities, comparable salary practices of companies within our peer group, prevailing economic conditions, the recommendation of
Short-Term Incentives
Our practice is to award cash incentive bonuses for achievement of performance measures linked to our strategy. Short-term incentives are designed to provide pay-for-performancecompensation opportunities and are reviewed on an annual basis.
Each December, the Board reviews the Company's annual operating plan, including performance measures. Targets for the coming year's short-term incentives are consistent with the Board-approved annual operating plan, based on specified achievement levels. Additionally, the annual operating plan forms the basis of expectations that are provided to stockholders, in the form of sales and profitability expectations, as well as Free Cash Flow generation. Thus, management's STIP is aligned with stockholder interests and expectations communicated to stockholders.
Compensation Discussion and Analysis | 39 |
Annually, the Company's performance criteria and financial and operational targets are reviewed and approved by the Committee for the upcoming year. For purposes of the 2024 annual incentive programs, the performance measures for our NEOs consist of the achievement of a combination of the following metrics: Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA") and Free Cash Flow. For NEOs leading a Strategic Business Unit ("SBU"), including Messrs. Geary and Squires, the EBITDA component comprises both the EBITDA for the relevant SBU and for the Company on a consolidated basis. We believe that EBITDA is an appropriate performance measure because it relates directly to the Company's or SBU's sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability. We believe that Free Cash Flow is an appropriate performance measure because it relates directly to the Company's operating performance, including the management of working capital. We believe that the combination of earnings growth and effective asset management drives value for a distribution and supply chain solutions business. Under the Company's annual incentive plan, the Committee may apply a performance modifier, based on the achievement of strategic initiatives, which may increase or decrease the calculated incentive amount under the plan by +/- 25%.
For 2024, the target incentive opportunity, and relative weight assigned to each performance measure for each of the NEOs, were as follows:
Performance Measure - Leaders with Corporate-Wide Responsibilities (Engel, Schulz, and Khurana) |
Weighting | Percent Achievement |
Payout Percent of Target Opportunity(1) |
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EBITDA | 75% | <>70% | 0% | |||||
70% to 100% | 25% up to 100% | |||||||
>100% to 120% | Over 100% to 200% | |||||||
Free Cash Flow | 25% | <>70% | 0% | |||||
70% to 100% | 25% up to 100% | |||||||
>100% to 120% | Over 100% to 200% | |||||||
Total (as a percent of Target Opportunity) | 100% | 0% to 200% |
(1) |
Amounts interpolated, as appropriate. |
Performance Measure - SBU Leaders (Geary and Squires) | Weighting | Percent Achievement |
Payout Percent of Target Opportunity(1) |
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EBITDA for SBU | 65% | <>70% | 0% | |||||
70% to 100% | 25% up to 100% | |||||||
>100% to 120% | Over 100% to 200% | |||||||
EBITDA | 10% | <>70% | 0% | |||||
70% to 100% | 25% up to 100% | |||||||
>100% to 120% | Over 100% to 200% | |||||||
Free Cash Flow | 25% | <>70% | 0% | |||||
70% to 100% | 25% up to 100% | |||||||
>100% to 120% | Over 100% to 200% | |||||||
Total (as a percent of Target Opportunity) | 100% | 0% to 200% |
(1) |
Amounts interpolated, as appropriate. |
Compensation Discussion and Analysis | 40 |
For 2024, the performance goals (at threshold, target and maximum levels) and the actual achievement of each of the financial components are included in the chart below:
Performance Measure (Engel, Schulz, and Khurana) | Threshold | Target | Maximum | Actual Results | ||||||||||||
EBITDA | $ | 1,206,800 | $ | 1,724,000 | $ | 2,068,700 | $ | 1,466,100 | (1) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 62.5 | % | ||||||||
Free Cash Flow | $ | 490,000 | $ | 700,000 | $ | 840,000 | $ | 1,045,200 | (2) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200.0 | % | ||||||||
Performance Measure (Geary) | Threshold | Target | Maximum | Actual Results | ||||||||||||
EBITDA for SBU | $ | 559,400 | $ | 799,200 | $ | 959,000 | $ | 614,500 | (1) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 42.5 | % | ||||||||
EBITDA | $ | 1,206,800 | $ | 1,724,000 | $ | 2,068,700 | $ | 1,466,100 | (1) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 62.5 | % | ||||||||
Free Cash Flow | $ | 490,000 | $ | 700,000 | $ | 840,000 | $ | 1,045,200 | (2) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200.0 | % | ||||||||
Performance Measure (Squires) | Threshold | Target | Maximum | Actual Results | ||||||||||||
EBITDA for SBU | $ | 552,800 | $ | 789,700 | $ | 947,600 | $ | 713,100 | (1) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 75.0 | % | ||||||||
EBITDA | $ | 1,206,800 | $ | 1,724,000 | $ | 2,068,700 | $ | 1,466,100 | (1) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 62.5 | % | ||||||||
Free Cash Flow | $ | 490,000 | $ | 700,000 | $ | 840,000 | $ | 1,045,200 | (2) | |||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200.0 | % |
(1) |
EBITDA is adjusted earnings before income taxes, interest, preferred stock dividends and depreciation and amortization, as shown on page 30 of the Company's Form 10-Kfiled with the |
(2) |
Free Cash Flow is cash flow provided by operations, less capital expenditures, plus digital transformation and restructuring costs. |
With respect to the NEOs other than himself, the Chief Executive Officer makes recommendations to the Committee for the Committee's consideration. The Committee's review of the Chief Executive Officer's bonus is conducted with only independent Directors present, with the assistance of Meridian.
For 2024, the CEO recommended applying a 25% reduction to the overall annual cash-incentive payouts for all of the executive officers, including himself, to better align with the payouts received by the broader management population based on results of other key performance measures, and the Committee agreed to reduce the executive officers' overall payouts by 25%.
2025 Proxy Statement |
Compensation Discussion and Analysis |
41
|
NEO
|
2024
Salary |
Target
Incentive % |
Target
Incentive $ |
Component
|
Component
Weighting |
Results
|
Payout
|
|||||||||||||||||
Engel
|
$ | 1,364,700 | 150% | $ | 2,047,050 |
EBITDA
|
75% | Below target EBITDA (62.5%) | $ | 959,555 | ||||||||||||||
Free Cash Flow
|
25% | Above target Free Cash Flow (200%) | $ | 1,023,525 | ||||||||||||||||||||
Sub-Total
|
$ | 1,983,080 | ||||||||||||||||||||||
Payout after Reduction
(1)
|
$ | 1,487,310 | ||||||||||||||||||||||
Schulz
|
$ | 773,750 | 100% | $ | 773,750 |
EBITDA
|
75% | Below target EBITDA (62.5%) | $ | 362,695 | ||||||||||||||
Free Cash Flow
|
25% | Above target Free Cash Flow (200%) | $ | 386,875 | ||||||||||||||||||||
Sub-Total
|
$ | 749,570 | ||||||||||||||||||||||
Payout after Reduction
(1)
|
$ | 562,178 | ||||||||||||||||||||||
Geary
|
$ | 665,000 | 90% | $ | 598,500 |
EBITDA for SBU
|
65% | Below target EBITDA for SBU (42.5%) | $ | 165,336 | ||||||||||||||
EBITDA
|
10% | Below target EBITDA (62.5%) | $ | 37,406 | ||||||||||||||||||||
Free Cash Flow
|
25% | Above target Free Cash Flow (200%) | $ | 299,250 | ||||||||||||||||||||
Sub-Total
|
$ | 501,992 | ||||||||||||||||||||||
Payout after Reduction
(1)
|
$ | 376,494 | ||||||||||||||||||||||
Squires
|
$ | 670,000 | 90% | $ | 603,000 |
EBITDA for SBU
|
65% | Below target EBITDA for SBU (75%) | $ | 293,963 | ||||||||||||||
EBITDA
|
10% | Below target EBITDA (62.5%) | $ | 37,687 | ||||||||||||||||||||
Free Cash Flow
|
25% | Above target Free Cash Flow (200%) | $ | 301,500 | ||||||||||||||||||||
Sub-Total
|
$ | 633,150 | ||||||||||||||||||||||
Payout after Reduction
(1)
|
$ | 474,863 | ||||||||||||||||||||||
Khurana
|
$ | 593,750 | 85% | $ | 504,688 |
EBITDA
|
75% | Below target EBITDA (62.5%) | $ | 236,572 | ||||||||||||||
Free Cash Flow
|
25% | Above target Free Cash Flow (200%) | $ | 252,344 | ||||||||||||||||||||
Sub-Total
|
$ | 488,916 | ||||||||||||||||||||||
Payout after Reduction
(1)
|
$ | 366,687 |
(1) |
As described above, reflects a 25% reduction applied to the overall STIP payouts for all of the executive officers, including the CEO, in accordance with the CEO's recommendations to the Committee.
|
Long-Term Incentives
|
Weighting
|
|
Performance Shares
|
50% | |
Stock Options
|
25% | |
Restricted Stock Units
|
25% |
2025 Proxy Statement |
Compensation Discussion and Analysis |
42
|
by a week or more. The intention of this timing was to choose a consistent date that would be at least a week removed from the announcement of annual results and filing of the
In addition to the annual grants, equity awards may be granted at other times during the year to new hires, employees receiving promotions, and in other special circumstances. The Committee does not take material nonpublic information into account when determining the timing and terms of equity awards, and we do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
day, the exercise price is the closing price of our common stock on the NYSE on the last trading day preceding the date of grant.
under the Securities Exchange Act of 1934, we are providing the following information about the stock options granted to our NEOs on
on
|
Grant
Date |
Number of
Securities Underlying the Award |
Exercise Price of
the Award ($/Sh) |
Grant Date Fair
Value of the Award ($) |
Percentage Change in the Closing
Market Price of the Securities Underlying the Award Between the Trading Day Ending Immediately Prior to the Disclosure of Material Nonpublic Information and the Trading Day Beginning Immediately Following the Disclosure of Material Nonpublic Information |
||||||||||||||||||||
Engel
|
29,146 | 2.7 | % | ||||||||||||||||||||||
Schulz
|
7,564 | $ 544,986 | 2.7 | % | |||||||||||||||||||||
Geary
|
5,205 | $ 375,020 | 2.7 | % | |||||||||||||||||||||
Squires
|
5,205 | $ 375,020 | 2.7 | % | |||||||||||||||||||||
Khurana
|
4,164 | $ 300,016 | 2.7 | % |
the target amount of performance shares (at the threshold performance level) up to two times the target amount of performance shares (at the maximum performance level). In the event of a change in control, the performance shares vest at the target level.
Compensation Discussion and Analysis | 43 |
The threshold, target and maximum performance goals for the performance shares awarded in 2022 for the three-year performance period ended
Performance Measure |
Threshold | Target | Maximum | Actual Payout |
||||
Net Income Growth (3-yearaverage growth rate) |
0% | 5% | 10%+ | 13.2% | ||||
Payment as % of Target |
0.5 x | 1.0 x | 2.0 x | 2.0 x | ||||
RONA Growth (3-yearcumulative RONA versus the base year, in basis points (bps)) |
0 bps | 50 bps | 100+ bps | -175 bps | ||||
Payment as % of Target |
0.5 x | 1.0 x | 2.0 x | 0.0 x |
Based on the actual results and performance goals above, the shares earned by the NEOs are calculated as follows:
NEO |
2022 Performance Shares at Target(1) |
Component | Component Weighting |
Results | Payout | |||||||||||
Engel |
29,217 | Net Income Growth | 50 | % | Above target (200%) | 29,217 | ||||||||||
RONA Growth | 50 | % | Below threshold (0%) | - | ||||||||||||
Total | 29,217 | |||||||||||||||
Schulz |
7,721 | Net Income Growth | 50 | % | Above target (200%) | 7,721 | ||||||||||
RONA Growth | 50 | % | Below threshold (0%) | - | ||||||||||||
Total | 7,721 | |||||||||||||||
Geary |
5,217 | Net Income Growth | 50 | % | Above target (200%) | 5,217 | ||||||||||
RONA Growth | 50 | % | Below threshold (0%) | - | ||||||||||||
Total | 5,217 | |||||||||||||||
Squires |
5,217 | Net Income Growth | 50 | % | Above target (200%) | 5,217 | ||||||||||
RONA Growth | 50 | % | Below threshold (0%) | - | ||||||||||||
Total | 5,217 | |||||||||||||||
Khurana |
4,173 | Net Income Growth | 50 | % | Above target (200%) | 4,173 | ||||||||||
RONA Growth | 50 | % | Below threshold (0%) | - | ||||||||||||
Total | 4,173 |
(1) |
Includes dividend equivalents accrued on performance shares. |
In accordance with the Company's pay-for-performancephilosophy, the realized pay was based on the achievement of the performance metrics, which were above the maximum level for Net Income Growth and below the threshold for RONA Growth. Each year the Committee reviews the performance targets and metrics for the upcoming grant.
Stock Options and Stock Appreciation Rights
We use Stock Options (and prior to 2022, used Stock Appreciation Rights (SARs)) to both motivate and align management's incentives with long-term stockholder value. We believe that management should have a substantial stake in the success of the Company and that enduring stock price growth reflects the effectiveness of management in executing a long-term strategic plan, not just the passage of time. Our Stock Options and SARs settle in Company Common Stock upon exercise, and they vest ratably over three years. In 2022, we started to grant stock-settled Options instead of SARs because substantively the instruments function in similar ways (i.e., a gain is settled in shares of stock) and the usage of Stock Options is more prevalent in the marketplace and participants are more familiar with them.
We have historically scheduled the grant of annual options during the week in February when our Compensation Committee and the full Board of Directors meet and after our announcement of our annual results. Beginning in 2024, annual option awards are granted on
Compensation Discussion and Analysis | 44 |
Restricted Stock Units
Fundamentally, Restricted Stock Units ("RSUs") are meant to balance the need for long-term retention of key executive talent while aligning realizable value with changes in stockholder wealth. RSUs are common in the marketplace and therefore are an important component of a competitive compensation opportunity. It is, however, intentionally only a modest portion of our NEOs' total long-term incentive compensation. Our RSUs vest ratably over a three-year period.
The performance shares, Stock Options and RSU grants to our NEOs in 2024 were as follows:
NEO |
Performance Share Opportunity (reflects number of shares that could be earned at target)(1) |
Stock Option Awards(2) |
RSU Awards(3) |
|||||||||||||||||
Engel |
27,619 | 29,146 | 13,809 | |||||||||||||||||
Schulz |
7,168 | 7,564 | 3,584 | |||||||||||||||||
Geary |
4,932 | 5,205 | 2,466 | |||||||||||||||||
Squires |
4,932 | 5,205 | 2,466 | |||||||||||||||||
Khurana |
3,946 | 4,164 | 18,048 |
(1) |
Performance shares are subject to a three-year performance period from |
(2) |
The Stock Option awards vest ratably over three years and have an expiration date of |
(3) |
The RSU awards vest in 1/3 increments on |
With respect to the NEOs other than himself, the Chief Executive Officer makes grant recommendations based on each individual executive's expected long-term contributions to the value creation of the Company and consideration of market data. The Chief Executive Officer's recommendations and Meridian's analysis are considered in making grant determinations. With respect to the Chief Executive Officer, the Committee determines (without the input of the Chief Executive Officer) the amount of his grant.
2025 Proxy Statement |
Compensation Discussion and Analysis |
45
|
equal to 100% of a participant's eligible elective deferrals up to 3% of the participant's eligible compensation and 50% of the next 4% of eligible compensation.
included the payment of certain travel costs for spouses to accompany the NEOs to
business-related meetings for which it was appropriate for a spouse to attend. The Company does not provide tax
on executive-only perquisites. See the "All Other Compensation" table on page 51 for more information regarding the perquisites given to our NEOs.
Compensation Discussion and Analysis | 46 |
Robust Stock Ownership Guidelines and Holding Periods for Executive Officers
Our Board has adopted robust stock ownership guidelines for certain executive officers. For the NEOs, the ownership guidelines are as follows:
NEO |
Ownership Requirement as a Multiple of Base Salary |
|
Engel |
5x | |
Schulz |
3x | |
Geary |
2x | |
Squires |
2x | |
Khurana |
2x |
These officers are expected to acquire their initial ownership positions within five years of their appointment and to hold those ownership positions during their service as executives of the Company. Until the stock ownership guidelines are met, an officer must hold a minimum of 50% of the pre-taxvalue realized at the exercise or vesting of equity awards. For purposes of these guidelines, ownership includes: stock owned directly; indirect beneficial ownership of stock; vested Options and SARs to the extent they are in the money; and unvested RSUs. It does not include Performance Shares unless and until they vest and are converted to stock. The Board reviews compliance with these guidelines annually, and all of our NEOs have acquired equity in accordance with the guidelines. Our CEO's ownership level is approximately 96x base salary, well in excess of his 5x requirement.
In addition, the Company has stock ownership guidelines for other officers and members of management who are not NEOs. In total, approximately 126 individuals were subject to stock ownership guidelines as of
Compensation Discussion and Analysis | 47 |
Chief Executive Officer Compensation
Employment, Severance, Change in Control or Other Arrangements
As disclosed previously,
On
The letter agreement with
The letter agreements with each of Messrs. Geary, Squires and Khurana provide for base salaries, target annual bonus opportunities as a percentage of base salaries with variable payout opportunities, and annual equity award opportunities that are subject to approval by the Compensation Committee. Currently, Messrs. Geary and Squires have a target bonus opportunity of 90% of base salary with a payout opportunity of 0-180%of base salary, and
The letter agreements with Messrs. Schulz, Geary, Squires and Khurana also include a severance provision entitling the applicable officer to receive the following severance benefits upon the termination of the officer's employment by the Company
Compensation Discussion and Analysis | 48 |
without cause or by the officer for good reason, subject to the officer's execution and non-revocationof a general release of claims against the Company: (i) cash severance equal to 12 months of base salary; (ii) a prorated target bonus for the year of termination; and (iii) continued medical, dental and vision benefits for one year following termination of employment subject to continued payment of the applicable premiums at active employee rates.
Pursuant to each letter agreement, the applicable officer is subject to noncompetition and employee and customer non-solicitationrestrictions applicable during employment and for one year thereafter and perpetual confidentiality and non-disparagementcovenants.
Change in Control Severance Plan
Effective as of
Under the CIC Plan, if a participant's employment is terminated by Company other than for cause or by the participant for good reason, in each case on or within two years following a change in control of the Company, the Company will pay or provide to the participant a cash severance payment equal to the sum of: (i) a prorated target bonus for the year of termination; (ii) an amount equal to a multiple (2x for each participant selected to participate on or after
As a condition to receipt of the severance benefits, the CIC Plan requires that each participant execute and not revoke a general release of claims against the Company and agree to comply with one-yearpost-termination noncompetition and employee and customer non-solicitationcovenants and perpetual confidentiality and non-disparagementcovenants.
If any payments or benefits would cause a participant to become subject to the excise tax imposed under section 4999 of the Internal Revenue Code, then the severance payment under the CIC Plan will be reduced to the extent required so that the participant would not be subject to the excise tax if such a reduction would put the participant in a more favorable after-taxposition than if the participant were to pay the excise tax.
The Company's stockholders approved a 2021 Omnibus Incentive Plan in
The Company has entered into indemnification agreements with the NEOs, in the form as set forth on an exhibit to the Company's Annual Report on Form 10-Kfiled on
Compensation Practices and Risk
On an annual basis, the Committee reviews the potential for risk regarding our compensation program design, including incentive compensation. The Committee has reviewed the Company's compensation programs for employees generally and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the Company. The Committee believes that the design of the Company's annual cash and long-term equity incentives provides an effective and appropriate mix of incentives to help ensure the Company's performance is focused on long-term stockholder value creation and does not encourage the taking of short-term risks at the expense of long-term results. Short-term incentive award payouts to the NEOs are subject to review and approval of the Committee, and the Committee also reviews with the independent members of the Board the CEO's incentive award. In addition, incentive award payouts are capped at 2x target. The Committee has the
Compensation Discussion and Analysis | 49 |
discretionary authority to reduce or eliminate any incentive payouts. As previously noted above, the Company also maintains stock ownership guidelines and has clawback policies that apply to incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results and also to provide for clawback of incentive compensation in the event of misconduct by an executive officer or former executive officer. This includes a mandatory clawback policy that complies with
CEO and Senior Management Succession Planning
Management succession planning and talent development are reviewed by the Board annually as part of its leadership and organizational review process. The Board reviews and discusses with management succession plans for the NEOs and other senior management positions across the Company, and the Board also evaluates succession plans in the context of overall Company strategy. Senior management is visible to Board members through formal presentations and informal events to allow Directors to personally assess candidates. The Board also establishes steps to address emergency CEO succession planning in extraordinary circumstances. The emergency CEO succession planning is intended to help the Company respond in the event of an unexpected emergency and reduce potential disruption or loss of continuity to the Company's business and operations.
Deductibility of Executive Compensation
We consider the anticipated accounting and tax treatment to the Company and our executive officers when reviewing executive compensation and our compensation programs, but the Company reserves the right to pay compensation that is not tax deductible and a portion of the executive officers' compensation paid in 2024 was not tax deductible. Code Section 162(m) generally imposes a
Compensation Committee Report
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and based on that review and those discussions, it recommended to the Board of Directors that the foregoing Compensation Discussion and Analysis be included in this Proxy Statement, and in the Annual Report on Form 10-Kof the Company for the year ended
Respectfully Submitted:
THE COMPENSATION COMMITTEE
Compensation Tables | 50 |
Compensation Tables
Summary Compensation Table
|
Salary ($) |
Stock Awards ($)(1) |
Option Awards ($)(2) |
Non-Equity Incentive Plan Compensation ($)(3) |
All Other Compensation ($)(4) |
Total ($) |
||||||||||||||||||
Chairman, President and CEO |
2024 | $ | 1,338,200 | $ | 6,299,956 | $ | 2,099,969 | $ 1,487,310 | $ 232,828 | $ | 11,458,263 | |||||||||||||
2023 | $ | 1,313,600 | $ | 5,850,079 | $ | 1,950,003 | $ 997,515 | $ 220,465 | $ | 10,331,662 | ||||||||||||||
2022 | $ | 1,255,000 | $ | 5,249,992 | $ | 1,749,980 | $ 2,823,750 | $ 83,557 | $ | 11,162,279 | ||||||||||||||
EVP and CFO |
2024 | $ | 758,750 | $ | 1,635,057 | $ | 544,986 | $ 562,178 | $ 92,429 | $ | 3,593,400 | |||||||||||||
2023 | $ | 747,500 | $ | 1,500,007 | $ | 499,987 | $ 378,422 | $ 84,337 | $ | 3,210,253 | ||||||||||||||
2022 | $ | 715,500 | $ | 1,387,431 | $ | 462,489 | $ 1,073,250 | $ 68,431 | $ | 3,707,101 | ||||||||||||||
EVP and |
2024 | $ | 664,615 | $ | 1,125,014 | $ | 375,020 | $ 376,494 | $ 79,144 | $ | 2,620,287 | |||||||||||||
2023 | $ | 643,269 | $ | 1,031,244 | $ | 343,755 | $ 309,604 | $ 61,474 | $ | 2,389,346 | ||||||||||||||
2022 | $ | 611,731 | $ | 937,529 | $ | 312,525 | $ 567,572 | $ 18,210 | $ | 2,447,567 | ||||||||||||||
EVP and |
2024 | $ | 657,115 | $ | 1,125,014 | $ | 375,020 | $ 474,863 | $ 144,731 | $ | 2,776,743 | |||||||||||||
2023 | $ | 665,000 | $ | 1,031,244 | $ | 343,755 | $ 218,827 | $ 667,054 | $ | 2,925,880 | ||||||||||||||
2022 | $ | 644,250 | $ | 937,529 | $ | 312,525 | $ 771,892 | $ 319,598 | $ | 2,985,794 | ||||||||||||||
EVP and Chief Information and Digital Officer |
2024 | $ | 582,211 | $ | 3,900,019 | $ | 300,016 | $ 366,687 | $ 49,104 | $ | 5,198,037 | |||||||||||||
2023 | $ | 568,750 | $ | 824,892 | $ | 275,004 | $ 244,740 | $ 49,597 | $ | 1,962,983 | ||||||||||||||
2022 | $ | 531,250 | $ | 2,249,997 | $ | 249,997 | $ 677,344 | $ 31,535 | $ | 3,740,123 |
(1) |
Represents aggregate grant date fair value of RSUs and performance share awards in accordance with FASB ASC Topic 718, which, with respect to performance shares, is the value based on the target level of achievement (determined to be the probable outcome of the performance conditions at the time of grant). In the event the maximum performance conditions are met, the maximum value of the performance shares would be: for |
(2) |
Represents the grant date fair value of Stock Option awards computed in accordance with FASB ASC Topic 718. These equity awards are subject to time-based vesting criteria over a three-year period. The assumptions used in calculating these amounts are set forth on pages 80 to 82 of our notes to consolidated financial statements for the year ended |
(3) |
Represents annual cash incentive bonus amounts earned for each fiscal year in accordance with |
(4) |
See the "All Other Compensation" table below for additional information. |
Compensation Tables | 51 |
All Other Compensation
The following table describes each component of the All Other Compensation column in the Summary Compensation Table.
NEO |
Year | Other Benefits(1) |
Tax Equalization Benefit(2) |
Company Matching Contribution to 401(k) Plan |
Company Matching Contribution to Deferred Compensation Plan |
Fractional Dividend Equivalents on Fully Vested Stock Awards(3) |
Total | |||||||||||||||
Engel |
2024 | $ 32,961 | - | $ 13,172 | $ 186,427 | $ 268 | $ 232,828 | |||||||||||||||
Schulz |
2024 | $ 11,127 | - | $ 15,813 | $ 65,434 | $ 55 | $ 92,429 | |||||||||||||||
Geary |
2024 | $ 18,091 | - | $ 16,881 | $ 44,042 | $ 130 | $ 79,144 | |||||||||||||||
Squires |
2024 | $ 14,782 | $ 69,989 | $ 14,121 | $ 45,696 | $ 143 | $ 144,731 | |||||||||||||||
Khurana |
2024 | $ 250 | - | $ 10,527 | $ 38,152 | $ 175 | $ 49,104 |
(1) |
This column reports the total amount of other benefits provided, none of which exceeded |
(2) |
Before |
(3) |
Represents the payment in case of fractional dividend equivalents remaining after the last vesting RSUs and the vesting of PSUs. |
Compensation Tables | 52 |
Grants of Plan-Based Awards
The following table summarizes the grants of equity and non-equityplan-based awards made to the executive officers named in the Summary Compensation Table during the fiscal year ended
Estimated Future Payouts Under Non-EquityIncentive Plan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards: Number of Shares of Stock or Units (#)(3) |
All Other Option Awards: Number of Securities Underlying Options (#)(4) |
Exercise or Base Price of Option Awards ($/Sh)(5) |
Grant Date Fair Value of Stock and Option Awards ($)(6) |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Grant Date |
Approval Date |
Award Type | Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||||||||||||
Engel |
Short-Term Incentive | $ | 127,941 | $ | 2,047,050 | $ | 4,094,100 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Performance Share Units | - | - | - | 6,905 | 27,619 | 55,238 | - | - | - | $ | 4,200,021 | |||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | - | - | - | - | - | - | 13,809 | - | - | $ | 2,099,935 | |||||||||||||||||||||||||||||||||||||||||||
Stock Options | - | - | - | - | - | - | - | 29,146 | $ | 152.07 | $ | 2,099,969 | ||||||||||||||||||||||||||||||||||||||||||
Schulz |
Short-Term Incentive | $ | 48,359 | $ | 773,750 | $ | 1,547,500 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Performance Share Units | - | - | - | 1,792 | 7,168 | 14,336 | - | - | - | $ | 1,090,038 | |||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | - | - | - | - | - | - | 3,584 | - | - | $ | 545,019 | |||||||||||||||||||||||||||||||||||||||||||
Stock Options | - | - | - | - | - | - | - | 7,564 | $ | 152.07 | $ | 544,986 | ||||||||||||||||||||||||||||||||||||||||||
Geary |
Short-Term Incentive | $ | 14,963 | $ | 598,500 | $ | 1,197,000 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Performance Share Units | - | - | - | 1,233 | 4,932 | 9,864 | - | - | - | $ | 750,009 | |||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | - | - | - | - | - | - | 2,466 | - | - | $ | 375,005 | |||||||||||||||||||||||||||||||||||||||||||
Stock Options | - | - | - | - | - | - | - | 5,205 | $ | 152.07 | $ | 375,020 | ||||||||||||||||||||||||||||||||||||||||||
Squires |
Short-Term Incentive | $ | 15,075 | $ | 603,000 | $ | 1,206,000 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Performance Share Units | - | - | 1,233 | 4,932 | 9,864 | - | - | - | $ | 750,009 | ||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | - | - | - | - | - | - | 2,466 | - | - | $ | 375,005 | |||||||||||||||||||||||||||||||||||||||||||
Stock Options | - | - | - | - | - | - | - | 5,205 | $ | 152.07 | $ | 375,020 | ||||||||||||||||||||||||||||||||||||||||||
Khurana |
Short-Term Incentive | $ | 31,543 | $ | 504,688 | $ | 1,009,376 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Performance Share Units | - | - | - | 987 | 3,946 | 7,892 | - | - | - | $ | 600,068 | |||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | - | - | - | - | - | - | 1,973 | - | - | $ | 300,034 | |||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | - | - | - | - | - | - | 16,075 | - | - | $ | 2,999,917 | |||||||||||||||||||||||||||||||||||||||||||
Stock Options | - | - | - | - | - | - | - | 4,164 | $ | 152.07 | $ | 300,016 |
(1) |
The amounts represent the potential cash payment for the annual short-term incentive program for the fiscal year ending |
(2) |
The columns in this section show the number of shares of common stock that may be earned at "threshold", "target", and "maximum" levels of performance over a three fiscal-year performance period commencing on |
(3) |
The number of restricted stock units in this column represents the grants made to the named executive officers on |
(4) |
The number of stock options shown in this column represents the number of stock options granted to the named executive officers on |
(5) |
The option exercise price recorded in this column is the closing sale price of a share of Wesco Common Stock on the NYSE on the date of grant. |
(6) |
Represents the full grant date fair value of the equity awards under ASC Topic 718. With respect to awards subject to performance-based vesting conditions, grant date fair value is based on an estimate of the probable outcome at the time of grant which reflects achievement at "target" performance. For additional information on the valuation assumptions, refer to Note 14 of the Company's notes to consolidated financial statements in the Annual Report on Form 10-Kfor the year ended |
Compensation Tables | 53 |
Outstanding Equity Awards at Fiscal Year-End
The following table shows the unexercised Stock Options and SARs, RSUs, and unearned performance share awards as of
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||
|
Grant Date(1) |
Number of Securities Underlying Unexercised Equity Awards (#) Exercisable(2) |
Number of Securities Underlying Unexercised Equity Awards (#) Unexercisable(2) |
Exercise Price ($) |
Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#)(3) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(4) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4)(5) |
|||||||||||||||||||||||||||||
Engel |
125,001 | - | $ | 62.80 | - | - | - | - | ||||||||||||||||||||||||||||||
72,541 | - | $ | 54.64 | - | - | - | - | |||||||||||||||||||||||||||||||
92,893 | - | $ | 48.32 | - | - | - | - | |||||||||||||||||||||||||||||||
45,386 | - | $ | 76.80 | - | - | - | - | |||||||||||||||||||||||||||||||
20,374 | 10,188 | $ | 122.09 | 4,708 | $ | 851,960 | 58,434 | (6) | $ | 10,574,217 | ||||||||||||||||||||||||||||
8,641 | 17,283 | $ | 171.96 | 7,577 | $ | 1,371,134 | 46,230 | (7) | $ | 8,365,781 | ||||||||||||||||||||||||||||
- | 29,146 | $ | 152.07 | 13,804 | $ | 2,497,972 | 55,778 | (8) | $ | 10,093,587 | ||||||||||||||||||||||||||||
Schulz |
22,144 | - | $ | 54.64 | - | - | - | - | ||||||||||||||||||||||||||||||
27,507 | - | $ | 48.32 | - | - | - | - | |||||||||||||||||||||||||||||||
12,859 | - | $ | 76.80 | - | - | - | - | |||||||||||||||||||||||||||||||
5,384 | 2,693 | $ | 122.09 | 1,289 | $ | 233,257 | 15,442 | (6) | $ | 2,794,384 | ||||||||||||||||||||||||||||
2,215 | 4,432 | $ | 171.96 | 1,978 | $ | 357,939 | 11,852 | (7) | $ | 2,144,738 | ||||||||||||||||||||||||||||
- | 7,564 | $ | 152.07 | 3,619 | $ | 654,894 | 14,476 | (8) | $ | 2,619,577 | ||||||||||||||||||||||||||||
Geary |
3,638 | 1,820 | $ | 122.09 | 873 | $ | 157,978 | 10,434 | (6) | $ | 1,888,137 | |||||||||||||||||||||||||||
1,523 | 3,047 | $ | 171.96 | 1,360 | $ | 246,106 | 8,148 | (7) | $ | 1,474,462 | ||||||||||||||||||||||||||||
- | 5,205 | $ | 152.07 | 2,490 | $ | 450,590 | 9,960 | (8) | $ | 1,802,362 | ||||||||||||||||||||||||||||
Squires |
12,107 | - | $ | 71.65 | - | - | - | - | ||||||||||||||||||||||||||||||
16,305 | - | $ | 62.80 | - | - | - | - | |||||||||||||||||||||||||||||||
10,308 | - | $ | 54.64 | - | - | - | - | |||||||||||||||||||||||||||||||
21,645 | - | $ | 48.32 | - | - | - | - | |||||||||||||||||||||||||||||||
9,077 | - | $ | 76.80 | - | - | - | - | |||||||||||||||||||||||||||||||
3,638 | 1,820 | $ | 122.09 | 842 | $ | 152,368 | 10,434 | (6) | $ | 1,888,137 | ||||||||||||||||||||||||||||
1,523 | 3,047 | $ | 171.96 | 1,335 | $ | 241,582 | 8,148 | (7) | $ | 1,474,462 | ||||||||||||||||||||||||||||
- | 5,205 | $ | 152.07 | 2,465 | $ | 446,066 | 9,960 | (8) | $ | 1,802,362 | ||||||||||||||||||||||||||||
Khurana |
6,619 | - | $ | 76.80 | - | - | - | - | ||||||||||||||||||||||||||||||
2,910 | 1,456 | $ | 122.09 | 5,709 | $ | 1,033,101 | 8,346 | (6) | $ | 1,510,292 | ||||||||||||||||||||||||||||
1,218 | 2,438 | $ | 171.96 | 1,090 | $ | 197,246 | 6,518 | (7) | $ | 1,179,497 | ||||||||||||||||||||||||||||
- | 4,164 | $ | 152.07 | 1,992 | $ | 360,472 | 7,968 | (8) | $ | 1,441,889 | ||||||||||||||||||||||||||||
- | - | - | - | 16,193 | $ | 2,930,285 | - | - |
(1) |
An additional column showing the grant dates of Stock Options and SARs, RSUs, and PSUs has been included for better understanding. |
(2) |
Stock Options and SARs vest in three equal annual installments beginning on the first anniversary of the grant date. |
(3) |
RSUs vest in three equal annual installments beginning on the first anniversary of the grant date with the exception of RSUs granted on May 23, 2024 to |
Compensation Tables | 54 |
(4) |
The amounts in this column were calculated using a per share value of $180.96, the closing price of Company Common Stock as reported on the NYSE on December 31, 2024, the last trading day of the fiscal year. |
(5) |
The amounts shown reflect the pay-outof the PSUs based upon achievement at the maximum level of performance. The vesting and pay-outof any PSUs for the respective performance periods ending on December 31 will be determined based on the actual achievement of specified performance goals. When cash dividends are paid on |
(6) |
These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Retuon Net Assets) for the period January 1, 2022 through December 31, 2024. |
(7) |
These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Retuon Net Assets) for the period January 1, 2023 through December 31, 2025. |
(8) |
These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Retuon Net Assets) for the period January 1, 2024 through December 31, 2026. |
The Company's stockholders approved a 2021 Omnibus Incentive Plan in May 2021 that replaced the prior 1999 Long-Term Incentive Plan, as amended and restated effective May 31, 2017. Under the terms of these plans or related award agreements, SAR and RSU awards would vest upon consummation of a change in control transaction, and our performance share award agreements provide that performance share awards would vest at the target level upon consummation of a change in control transaction. Under the terms of the award agreements for PSU awards beginning in February 2022, upon a change in control that occurs during the performance period, the PSUs will immediately vest as of the date of such change in control at the higher of (i) the target level or (ii) actual performance but assuming that the performance period ended on the latest practicable date on or prior to the date of such change in control. The payments to the NEOs upon consummation of a change in control transaction for accelerated vesting of equity awards are set forth in the tables on pages 56 and 59.
Option Exercises and Stock Vested
The following table provides information pertaining to the vesting of restricted stock units and performance shares during the fiscal year ended December 31, 2024, for each of the executive officers named in the Summary Compensation Table.
Option Awards | Stock Awards | |||||||||||||||||||
|
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#)(1)(2) |
Value Realized on Vesting ($) |
||||||||||||||||
Engel |
- | - | 93,978 | $ | 14,155,599 | |||||||||||||||
Schulz |
38,045 | $ | 5,439,674 | 26,453 | $ | 3,982,650 | ||||||||||||||
Geary |
8,321 | $ | 1,073,243 | 17,187 | $ | 2,587,262 | ||||||||||||||
Squires |
- | - | 18,597 | $ | 2,801,800 | |||||||||||||||
Khurana |
- | - | 17,396 | $ | 2,600,569 |
(1) |
Includes the vesting of RSUs on February 11, 2024, February 13, 2024, and February 17, 2024, and shares withheld to cover FICA tax liability on outstanding restricted stock units for |
(2) |
Includes the payment of performance shares which were earned and vested on February 15, 2024, upon confirmation of the Compensation Committee that performance goals had been achieved as described in the "Compensation Discussion and Analysis" section of this proxy statement, subheading "Performance Shares". The value realized was determined by multiplying the number of vested shares by the closing market price of Wesco Common Stock on February 15, 2024, which was $147.44. |
Compensation Tables | 55 |
Nonqualified Deferred Compensation
The following table provides information for the executive officers named in the Summary Compensation Table regarding contributions, earnings, distributions, and year-endaccount balances with respect to the
|
Year | Executive Contribution in Last Fiscal Year ($)(1) |
Registrant Contributions in Last Fiscal Year ($)(2) |
Aggregate Earnings in Last Fiscal Year ($)(3) |
Aggregate Withdrawals/ Distributions in Last Fiscal Year ($)(4) |
Aggregate Balance at Last Fiscal Year-End ($)(5) |
||||||||||||||||||
Engel |
2024 | $ | 73,932 | $ | 186,427 | $ | 718,655 | - | $ | 6,875,761 | ||||||||||||||
Schulz |
2024 | $ | 69,875 | $ | 65,434 | $ | 253,584 | - | $ | 1,342,042 | ||||||||||||||
Geary |
2024 | - | $ | 44,042 | $ | 52,123 | - | $ | 281,597 | |||||||||||||||
Squires |
2024 | $ | 43,765 | $ | 45,696 | $ | 129,425 | - | $ | 1,021,356 | ||||||||||||||
Khurana |
2024 | $ | 143,923 | $ | 38,152 | $ | 84,474 | - | $ | 638,449 |
(1) |
Reflects participation by the named executive officers in the Deferred Compensation Plan, including employee deferral of portions of base salary and incentive compensation. |
(2) |
Amounts in this column are Company contributions to the Deferred Compensation Plan during the fiscal year. |
(3) |
Reflects investment returns or earnings (losses) calculated by applying the investment returate at the valuation date to the average balance of the participant's deferral account and Company contribution account since the last valuation date for each investment vehicle selected by the participant. Investment vehicles available to participants are a subset of those offered in the 401(k) plan and notably do not include Company Common Stock. |
(4) |
The NEOs cannot receive distributions from their Deferred Compensation Plan balances until the earlier of termination, retirement or death, except that with respect to employee contributions only a date-based distribution election may be made. |
(5) |
Each of the NEOs is fully vested in the aggregate balance of their respective accounts based upon their respective years of service. |
Deferred Compensation Plan
All of the NEOs are eligible to participate in the Deferred Compensation Plan. Participants in the Deferred Compensation Plan may generally elect to defer up to 80% of eligible base compensation and 80% of eligible cash incentive compensation.
Participants in the Deferred Compensation Plan receive a Company contribution consisting of additional amounts above the limits of the matching contributions under the Company's 401(k) Plan. Vesting in the Company contributions and any associated earnings occurs after two years of service.
The Deferred Compensation Plan is an unfunded plan, meaning that the participants' accounts are bookkeeping entries only and do not entitle them to ownership of any actual assets. The accounts represent an unsecured promise by the Company to pay participants' benefits in the future.
Participants' account balances are credited with earnings and investment gains and losses by assuming that the deferred amounts were invested in one or more investment funds made available by the Company from time to time under the Deferred Compensation Plan. The investment alternatives include funds with different degrees of risk. The investment alternatives for 2024 were based on funds which generally correspond to the investment funds made available under the Company's 401(k) Plan.
Generally, distributions under the Plan cannot be made until the earlier of termination, retirement or death, except that with respect to employee contributions only a date-based distribution election may be made. A distribution cannot begin until six months following termination or separation of service (as defined in Section 409A of the Internal Revenue Code) for certain participants. Distributions are made in cash in a lump sum, annual installments over 2 to 10 years, and/or date specific elections (available for employee contributions only).
Potential Payments Upon Termination | 56 |
Potential Payments Upon Termination:
Each of the following potential scenarios represents circumstances under which
"Cause" means (a) a material breach of the employment agreement by
"Good Reason" means (a) a reduction in
Executive Benefits and Payments Upon Termination |
Termination Following a Change in Control(1) |
Involuntary Not for Cause or For Good Reason Termination(2) |
Death(3) | Disability(4) | Retirement(5) | |||||||||||||||
Compensation: |
||||||||||||||||||||
Base Salary and Incentive |
$ | 8,377,310 | $ | 4,823,000 | $ | 1,487,310 | $ | 1,487,310 | $ | 1,487,310 | ||||||||||
Accelerated Options & SARs(6) |
$ | 1,597,343 | $ | 1,597,343 | $ | 1,597,343 | $ | 1,597,343 | $ | 775,137 | ||||||||||
Accelerated RSUs(7) |
$ | 4,721,065 | $ | 4,721,065 | $ | 4,721,065 | $ | 4,721,065 | $ | 1,872,574 | ||||||||||
Accelerated Performance Shares(8) |
$ | 14,516,792 | - | $ | 14,516,792 | $ | 14,516,792 | $ | 9,354,727 | |||||||||||
Benefits and Perquisites: |
||||||||||||||||||||
Medical Benefits |
$ | 23,217 | $ | 23,217 | - | - | - | |||||||||||||
280G Tax Gross-Up |
- | - | - | - | - | |||||||||||||||
Total: |
$ | 29,235,727 | $ | 11,164,625 | $ | 22,322,510 | $ | 22,322,510 | $ | 13,489,748 |
(1) |
Termination After Change in Control |
• |
Two times annual base salary. |
• |
Two times the annual target bonus opportunity. |
• |
Prorated annual incentive compensation for the portion of the fiscal year employed, if earned. |
• |
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares are at target. Under the terms of the award agreements for PSU awarded on or after February 2022, the PSUs will immediately vest as of the date of a change in control at the higher of (i) the target level or (ii) actual performance but assuming that the performance period ended on the latest practicable date on or prior to the date of such change in control. |
• |
Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
• |
Additional gross-uppremium sufficient to reimburse the executive for excise taxes, if any, payable as a result of termination payments plus any income taxes on the reimbursement payment itself. Other than the pre-existingemployment agreement with |
Potential Payments Upon Termination | 57 |
(2) |
Involuntary Not for Cause or Executive for Good Reason Termination |
• |
Monthly base salary continuation for 24 months. |
• |
An amount equal to the executive's annual target bonus opportunity. |
• |
Full vesting of outstanding Stock Options, SARs, and RSUs. |
• |
Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
(3) |
Death |
• |
Any accrued and earned but unpaid bonus. |
• |
Full vesting of outstanding Stock Options, SARs, and RSUs. Vesting of performance shares at target. |
(4) |
Disability |
• |
Prorated annual incentive compensation for the portion of the fiscal year employed, if earned on a similar basis as offered to other incentive eligible employees. |
• |
Full vesting of outstanding Stock Options, SARs, and RSUs. Vesting of performance shares at target. |
(5) |
Retirement |
• |
Prorated annual incentive compensation for the portion of the fiscal year employed, if earned on a similar basis as offered to other incentive eligible employees. |
• |
|
(6) |
The closing price of Wesco Common Stock on December 31, 2024 (the last trading day of the fiscal year) was $180.96. The amount shown is the excess, if any, of the December 31, 2024 closing price over the exercise price multiplied by the number of SARs and Stock Options. |
(7) |
Represents the closing stock price on December 31, 2024 (the last trading day of the fiscal year) multiplied by the number of RSUs. |
(8) |
Represents the closing stock price on December 31, 2024 (the last trading day of the fiscal year) multiplied by the number of performance shares at target. |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
Each of the following potential scenarios represents circumstances under which the NEO's employment with the Company could potentially terminate. A description of the compensation benefits due to the NEO in each scenario is described below. In each case, the date of the termination is assumed to be December 31, 2024. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to each of Messrs. Schulz, Geary, and Squires upon separation from the Company is governed by the terms of his employment letter agreement, effective June 22, 2020, as described on pages 47 - 48, and the determination of compensation due to
Each letter agreement includes a severance provision entitling the NEO to receive the following severance benefits upon the termination of the NEO's employment by the Company without Cause or by the NEO for good reason, subject to the execution and non-revocationof a general release of claims against the Company: (i) cash severance equal to 12 months of base salary; (ii) a prorated target bonus for the year of termination; and (iii) continued medical, dental and vision benefits for one year following termination of employment. Under each letter agreement, the NEO is subject to noncompetition and employee and customer non-solicitationrestrictions applicable during employment and for one year thereafter and perpetual confidentiality and non-disparagementcovenants.
Under the CIC Plan, if a participant's employment is terminated by Company other than for cause or by the participant for good reason, in each case on or within two years following a change in control of the Company, the Company will pay or provide to the participant a cash severance payment equal to the sum of: (i) a prorated target bonus for the year of termination; (ii) an
Potential Payments Upon Termination | 58 |
amount equal to a multiple (2x for each of Messrs. Schulz, Geary, Squires, and Khurana) of the participant's base salary plus the participant's target bonus; (iii) an amount equal to a multiple (2x for each of Messrs. Schulz, Geary, Squires, and Khurana) of the employer portion of the annual cost of continued coverage under the Company's healthcare benefit plans (including medical, prescription, dental and vision coverage); and (iv) an amount that may be used for outplacement services ($25,000 for each of Messrs. Schulz, Geary, Squires, and Khurana). The CIC Plan requires that each participant execute and not revoke a general release of claims against the Company and agree to comply with one-yearpost-termination noncompetition and employee and customer non-solicitationcovenants and perpetual confidentiality and non-disparagementcovenants.
Under the letter agreements, Cause means: (i) the willful and continued failure to substantially perform the NEO's employment duties; (ii) the Company's determination, in good faith, that the NEO has engaged in willful misconduct or gross negligence relating to the business of the Company; (iii) a plea of guilty or nolo contendereby the NEO to, or the NEO's conviction of, a felony under federal or state law; or (iv) material breach of any written policy of the Company, including without limitation the Company's Code of Conduct. Under the CIC Plan, Cause means: (i) the willful and continued failure to substantially perform the participant's employment duties; or (b) the willful engaging by the participant in illegal conduct which is materially and demonstrably injurious to the Company.
Good reason means, without written consent: (i) a reduction in the NEO's annual base salary, excluding any reduction that occurs in connection with an across-the-boardreduction of the salaries of substantially the entire senior management team; (ii) a relocation of the NEO's primary place of employment to a location more than 50 miles from
Messrs. Schulz, Geary, Squires, and Khurana are entitled to receive a prorated incentive payment in the event of death, disability, and retirement and equity award treatment in the event of their retirement on a similar basis as offered to other salaried
Potential Payments Upon Termination | 59 |
Executive Benefits and Payments Upon Termination | David S. Schulz |
William C. Geary, II |
Nelson J. Squires, III |
Akash Khurana |
||||||||||||||||
Payments Upon Termination Following aChange in Control |
||||||||||||||||||||
Base Salary & Incentive |
$ | 3,900,000 | $ | 3,149,000 | $ | 3,149,000 | $ | 2,730,000 | ||||||||||||
Equity: |
||||||||||||||||||||
Accelerated SARs & Stock Options(1) |
$ | 416,949 | $ | 284,939 | $ | 284,939 | $ | 227,955 | ||||||||||||
Accelerated Restricted Stock Units(2) |
$ | 1,246,091 | $ | 854,674 | $ | 840,016 | $ | 4,521,105 | ||||||||||||
Accelerated Performance Stock Units(3) |
$ | 3,779,350 | $ | 2,582,480 | $ | 2,582,480 | $ | 2,065,839 | ||||||||||||
Medical Benefits |
$ | 23,267 | $ | 33,204 | $ | 33,204 | $ | - | ||||||||||||
Outplacement |
$ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||
Total |
$ | 9,390,657 | $ | 6,929,297 | $ | 6,914,639 | $ | 9,569,899 | ||||||||||||
Involuntary Not for Cause or For Good Reason Termination |
||||||||||||||||||||
Base Salary & Incentive |
$ | 1,560,000 | $ | 1,273,000 | $ | 1,273,000 | $ | 1,110,000 | ||||||||||||
Medical Benefits |
$ | 11,633 | $ | 16,602 | $ | 16,602 | $ | - | ||||||||||||
Total |
$ | 1,571,633 | $ | 1,289,602 | $ | 1,289,602 | $ | 1,110,000 | ||||||||||||
Death |
||||||||||||||||||||
Incentive |
$ | 562,178 | $ | 376,494 | $ | 474,863 | $ | 366,687 | ||||||||||||
Equity: |
||||||||||||||||||||
Accelerated SARs & Stock Options(1) |
$ | 416,949 | $ | 284,939 | $ | 284,939 | $ | 227,955 | ||||||||||||
Accelerated Restricted Stock Units(2) |
$ | 1,246,091 | $ | 854,674 | $ | 840,016 | $ | 4,521,105 | ||||||||||||
Accelerated Performance Stock Units(3) |
$ | 3,779,350 | $ | 2,582,480 | $ | 2,582,480 | $ | 2,065,839 | ||||||||||||
Total |
$ | 6,004,568 | $ | 4,098,587 | $ | 4,182,298 | $ | 7,181,586 | ||||||||||||
Disability |
||||||||||||||||||||
Incentive |
$ | 562,178 | $ | 376,494 | $ | 474,863 | $ | 366,687 | ||||||||||||
Equity: |
||||||||||||||||||||
Accelerated SARs & Stock Options(1) |
$ | 416,949 | $ | 284,939 | $ | 284,939 | $ | 227,955 | ||||||||||||
Accelerated Restricted Stock Units(2) |
$ | 1,246,091 | $ | 854,674 | $ | 840,016 | $ | 4,521,105 | ||||||||||||
Accelerated Performance Stock Units(3) |
$ | 3,779,350 | $ | 2,582,480 | $ | 2,582,480 | $ | 2,065,839 | ||||||||||||
Total |
$ | 6,004,568 | $ | 4,098,587 | $ | 4,182,298 | $ | 7,181,586 | ||||||||||||
Retirement |
||||||||||||||||||||
Incentive |
- | - | $ | 474,863 | - | |||||||||||||||
Equity: |
||||||||||||||||||||
Accelerated SARs & Stock Options(1) |
- | - | $ | 138,322 | - | |||||||||||||||
Accelerated Restricted Stock Units(2) |
- | - | $ | 333,328 | - | |||||||||||||||
Accelerated Performance Stock Units(3) |
- | - | $ | 1,664,289 | - | |||||||||||||||
Total |
- | - | $ | 2,610,802 | - |
(1) |
The closing price of Wesco Common Stock on December 31, 2024 (the last trading day in the fiscal year) was $180.96. The amount shown is the excess, if any, of the December 31, 2024 closing price over the exercise price multiplied by the number of SARs and Stock Options. |
(2) |
Represents the closing stock price on December 31, 2024 multiplied by the number of RSUs. |
(3) |
Represents the closing stock price on December 31, 2024 multiplied by the number of performance shares at target. |
Pay Ratio | 60 |
Chief Executive Officer Pay Ratio
As required by
For 2024: (1) the annual total compensation of our median employee was $65,066; and (2) the annual total compensation of our CEO was $11,458,263. Based on this information, for 2024 the ratio of the annual total compensation for our CEO to the annual total compensation of our median employee was approximately 176 to 1. We believe that the pay ratio is a reasonable estimate calculated consistent with Regulation S-KItem 402(u).
As we disclosed last year, the methodology and the material assumptions, adjustments, and estimates that we used for this calculation were as follows: We determined that, as of December 31, 2023, our employee population consisted of approximately 20,567 employees at our parent company and consolidated subsidiaries, of which 13,304 were
For 2024, we combined all of the elements of our median employee's compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K,resulting in annual total compensation of $65,066. The difference between such employee's wages and the employee's annual total compensation represents the value of the employee's retirement benefits.
With respect to the annual total compensation of our CEO, we used the amount reported in the "Total" column of our 2024 Summary Compensation Table included in this Proxy Statement.
2025 Proxy Statement |
Pay vs. Performance |
61
|
philosophy and how the Company aligns executive compensation with the Company's performance, refer to the Compensation Discussion and Analysis.
Value of Initial Fixed $100
Investment Based on: |
||||||||||||||||||||||||||||||||
Year
|
Summary
Compensation Table Total for PEO ($) (1)
|
Compensation
Actually Paid to PEO ($) (2)
|
Average
Summary Compensation Table Total for Non-PEO
NEOs ($) (1)
|
Average
Compensation Actually Paid to Non-PEO
NEOs ($) (2)
|
Cumulative
Total Shareholder Retu($) |
Cumulative Total Shareholder Retu($) (3)
|
Net Income
($) |
Adj.
EBITDA ($) (4)
|
||||||||||||||||||||||||
2024
|
$ | 11,458,263 | $ | 2,071,847 | $ | 3,547,117 | $ | 1,714,170 | $ | 310.56 | $ | 283.54 | $ | 660,200 | $ | 1,480,200 | ||||||||||||||||
2023
|
$ | 10,331,662 | $ | 30,260,210 | $ | 2,675,765 | $ | 6,710,486 | $ | 295.53 | $ | 218.76 | $ | 708,100 | $ | 1,659,800 | ||||||||||||||||
2022
|
$ | 11,162,279 | $ | 15,461,278 | $ | 3,331,361 | $ | 2,702,071 | $ | 210.81 | $ | 157.63 | $ | 803,063 | $ | 1,684,545 | ||||||||||||||||
2021
|
$ | 9,859,087 | $ | 38,809,795 | $ | 3,266,803 | $ | 9,765,176 | $ | 221.57 | $ | 169.28 | $ | 407,974 | $ | 1,149,984 | ||||||||||||||||
2020
|
$ | 11,313,497 | $ | 24,140,383 | $ | 3,427,092 | $ | 7,639,723 | $ | 132.18 | $ | 120.94 | $ | 70,421 | $ | 643,603 |
(1)
|
|
·
|
2024: Messrs. Schulz, Geary, Squires and Khurana
|
·
|
2023: Messrs. Schulz, Cameron, Geary and Squires
|
·
|
2022: Messrs. Schulz, Squires, Geary, Khurana and Dosch
|
·
|
2021: Messrs. Schulz, Squires, Geary and Dosch
|
·
|
2020: Messrs. Schulz, Squires and Dosch and
|
Variations in the Average Summary Compensation for the other NEOs from year to year are partly due to the changes in the composition of the NEOs from year to year.
|
2025 Proxy Statement |
Pay vs. Performance |
62
|
(2)
|
The Summary Compensation Table totals reported for the PEO and the average of the other NEOs for each year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation
S-K
to calculate the "compensation actually paid": |
2024
|
2023
|
2022
|
2021
|
2020
|
||||||||||||||||||||||||||||||||||||
PEO
|
Average
for Other
NEOs |
PEO
|
Average
for Other
NEOs |
PEO
|
Average
for Other
NEOs |
PEO
|
Average
for Other
NEOs |
PEO
|
Average
for Other
NEOs |
|||||||||||||||||||||||||||||||
Adjustments
|
||||||||||||||||||||||||||||||||||||||||
Deduction for amounts reported under the "Stock Awards" and "Option Awards" columns in the Summary Compensation Table for applicable FY
|
$ | (8,399,925 | ) | $ | (2,345,037 | ) | $ | (7,800,082 | ) | $ | (1,499,996 | ) | $ | (6,999,972 | ) | $ | (1,659,998 | ) | $ | (6,000,026 | ) | $ | (1,350,011 | ) | $ | (9,150,011 | ) | $ | (2,326,236 | ) | ||||||||||
Increase based on ASC 718 fair value of awards granted during applicable FY that remain unvested as of applicable FY end, determined as of applicable FY end
|
$ | 9,859,967 | $ | 2,603,182 | $ | 7,926,128 | $ | 1,524,235 | $ | 9,130,790 | $ | 1,744,611 | $ | 13,830,960 | $ | 3,112,074 | $ | 20,083,054 | $ | 6,227,104 | ||||||||||||||||||||
Increase based on ASC 718 fair value of awards granted during applicable FY that vested during applicable FY, determined as of vesting date
|
$ | 26,813 | $ | 1,206 | - | - | - | $ | 12,529 | - | - | - | - | |||||||||||||||||||||||||||
Increase/deduction for awards granted during prior FY that were outstanding and unvested as of applicable FY end, determined based on change in ASC 718 fair value from prior FY end to applicable FY end
|
$ | (8,823,235 | ) | $ | (1,662,515 | ) | $ | 9,869,786 | $ | 1,926,057 | $ | 4,224,922 | $ | 556,768 | $ | 19,974,834 | $ | 4,324,626 | $ | 2,888,105 | $ | 454,520 | ||||||||||||||||||
Increase/deduction for awards granted during prior FY that vested during applicable FY, determined based on change in ASC 718 fair value from prior FY end to vesting date
|
$ | (2,203,056 | ) | $ | (465,744 | ) | $ | 9,703,195 | $ | 2,034,825 | $ | (2,056,741 | ) | $ | (484,552 | ) | $ | 1,144,940 | $ | 411,684 | $ | (994,262 | ) | $ | (142,757 | ) | ||||||||||||||
Deduction of ASC 718 fair value of awards granted during prior FY that were forfeited during applicable FY, determined as of prior FY end
|
- | - | - | - | - | $ | (798,648 | ) | - | - | - | - | ||||||||||||||||||||||||||||
Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date
|
$ | 153,020 | $ | 35,961 | $ | 229,521 | $ | 49,600 | - | - | - | - | - | - | ||||||||||||||||||||||||||
TOTAL ADJUSTMENTS
|
$
|
(9,386,416
|
)
|
$
|
(1,832,947
|
)
|
$
|
19,928,548
|
$
|
4,034,721
|
$
|
4,298,999
|
$
|
(629,290
|
)
|
$
|
28,950,708
|
$
|
6,498,373
|
$
|
12,826,886
|
$
|
4,212,631
|
(3)
|
The peer group used for calculating Peer Group Total Shareholder Retufor 2024, 2023, 2022, 2021 and 2020 consists of the following companies listed as our performance peer group:
|
(4)
|
The Company has identified Adjusted EBITDA as the company-selected measure for the pay versus performance disclosure, as it represents the most important financial performance measure used to link compensation actually paid to the PEO and the other NEOs in 2024 to the Company's performance. EBITDA is adjusted earnings before income taxes, interest, preferred stock dividends and depreciation and amortization, as shown on page 30 of the Company's Form
10-K
filed with the |
2025 Proxy Statement |
Pay vs. Performance |
63
|
2025 Proxy Statement |
Pay vs. Performance |
64
|
Most Important Performance Measures
|
Adjusted EBITDA
|
Net Income
|
Total Shareholder Retu(TSR)
|
Proposal 3 - Approve Amendments to the Company's Restated Certificate of Incorporation to Provide Stockholders with the Right to Request a Special Meeting of Stockholders |
65 |
Proposal 3: Approve Amendments to the Company's Restated Certificate of Incorporation to Provide Stockholders with the Right to Request a Special Meeting of Stockholders
The Board of Directors has unanimously approved, and recommends that stockholders approve, an amendment to our Restated Certificate of Incorporation, as amended (the "Restated Certificate of Incorporation"), to provide stockholders owning a combined 25% or more of our outstanding Common Stock with the right to request a special meeting of stockholders.
Background of the Proposal
Currently, under our Restated Certificate of Incorporation and our Amended and Restated By-Laws,only the Chairman or the Board of Directors may call a special meeting of stockholders. As part of the Board's ongoing review of our corporate governance practices and consideration of stockholder feedback, the Board has determined it is appropriate to provide stockholders with the right to request special meetings of stockholders, subject to appropriate procedural requirements and safeguards.
Proposed Amendment to Our Restated Certificate of Incorporation
The proposed changes to Article XI of our current Restated Certificate of Incorporation pursuant to the proposed amendments contemplated by Proposal 3, are indicated below, with additions marked by underlined text and deletions indicated by strike-outtext.
ARTICLE XI.
Subject to the requirements of applicable law, a special meeting of the stockholders of the Corporation may be called (i) by a majority of the members of the Board of Directors, (ii) by the Chairman of the Board, or (iii) by the Secretary of the Corporation upon receipt of the written request of one or more holders (and the record or beneficial owners, if any, such holders represent) representing ownership of an aggregate of not less than 25% of the voting power of all issued and outstanding shares of Common Stock of the Corporation that is entitled under applicable law to vote on the matter proposed to be brought before the proposed special meeting, provided such one or more requesting holders and such request fully complies with the procedures and other requirements for calling a special meeting of stockholders as set forth in the Corporation's By-laws, as may be amended from time to time.The stockholders of the Corporation shall have no authority to call a special meeting of the stockholders,subject to the rights of the holdersNotwithstanding anything in this Article XI to the contrary, the rightsof any class or series of capital stock having a preference over the Common Stock and Class B Common Stock as to dividends or upon liquidation shall not be affected by this Article XI. The foregoing provisions of this Article XI shall be subject to all provisions of the Corporation's By-laws,as amended from time to time, that limit the ability of stockholders of the Corporation to make a request for a special meeting or that specify the circumstances pursuant to which a request for a special meeting will be deemed to be revoked. Except as otherwise required by applicable law, and except as otherwise provided in this Article XI, special meetings of the stockholders of the Corporation may not be called by any other person or persons.
The Board's Rationale
While the Board recognizes that special meetings of the stockholders can be an important corporate governance practice, special meetings should be extraordinary events that require substantial stockholder support. Special meetings impose significant administrative and operational costs on the Company and require substantial time and attention from our Board and management team, potentially diverting resources from their primary focus of operating our business and creating long-term stockholder value.
The Board believes that requiring a 25% ownership threshold strikes an appropriate balance between enhancing stockholder rights and protecting the long-term interests of the Company and all stockholders. This threshold helps ensure that special meetings are called for matters of genuine conceto a significant portion of our stockholders while preventing a small minority of stockholders from using special meetings to advance narrow interests that may not be shared by the broader stockholder base.
The Board also believes that this approach aligns with market practice. According to recent FactSet data, approximately 55% of S&P 500 companies that provide stockholders with special meeting rights have set the ownership threshold at 25% or higher,
Proposal 3 - Approve Amendments to the Company's Restated Certificate of Incorporation to Provide Stockholders with the Right to Request a Special Meeting of Stockholders |
66 |
while only about 15% have adopted a 10% threshold. As further discussed under "Proposal 5 - Shareholder Proposal to Give Shareholders the Ability to Call for a Special Shareholder Meeting - Board of Directors' Statement in Opposition to the Shareholder Proposal," a 25% threshold serves the best interests of our stockholders as a whole by reducing the risk that one or a small minority of stockholders may pursue special interests not deemed critical by our stockholders generally. Providing a special meeting right at a lower threshold may give a small number of stockholders a disproportionate amount of influence over the Company's affairs. The Board also believes that a 25% ownership threshold is appropriate and consistent with market practice for corporate governance programs.
Implementation and Competing Proposals
The proposed amendment to the Restated Certificate of Incorporation would establish the fundamental right of stockholders holding 25% or more outstanding shares to request a special meeting. If approved, the Board will also adopt certain amendments to our By-Lawsto implement appropriate procedural requirements and limitations (which may be updated or modified by the Board from time to time) regarding the exercise of this right, including that requesting stockholders must maintain their qualifying ownership (on a "net long" basis) through the meeting date, while also specifying circumstances under which the Secretary shall not call such meetings, such as when requests do not meet procedural requirements, relate to improper matters, duplicate recent or upcoming meetings, arrive during specified time periods, or would violate applicable laws.
Stockholders are being asked to vote on two proposals regarding special meeting rights: this Proposal 3 and a shareholder proposal (Proposal 5) requesting a 10% threshold. If both proposals receive the requisite vote for approval, and Proposal 3 receives more affirmative votes than Proposal 5, only Proposal 3 will be implemented through amendments to the Restated Certificate of Incorporation and By-Laws.This is because the proposals contain different and mutually exclusive thresholds for calling special meetings.
If this Proposal 3 receives the requisite vote for approval and more affirmative votes than Proposal 5, the amendment to the Restated Certificate of Incorporation will become effective upon filing with the Secretary of State of the
Vote Required and Recommendation of the Board of Directors
The affirmative vote of the holders of a majority of the outstanding shares of our Common Stock entitled to vote on this proposal will be required to approve this proposal.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THE PROPOSED AMENDMENT TO
OUR RESTATED CERTIFICATE OF INCORPORATION
TO PROVIDE STOCKHOLDERS THE RIGHT TO REQUEST
A SPECIAL MEETING OF STOCKHOLDERS
|
Proposal 4 - Ratify the Appointment of Independent Registered Public Accounting Firm | 67 |
Proposal 4 - Ratify the Appointment of Independent Registered Public Accounting Firm
The Audit Committee of our Board has selected
We are submitting the appointment of the independent registered public accounting firm to you for ratification at the Annual Meeting. Although ratification of this appointment is not legally required, our Board believes it is appropriate for you to ratify this selection. In the event that you do not ratify the selection of PwC as our Company's independent registered public accounting firm, our Audit Committee may reconsider its selection.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2025.
|
Independent Registered Public Accounting Firm | 68 |
Independent Registered Public Accounting Firm
Appointment of Independent Registered Public Accounting Firm
Our Audit Committee has appointed PwC as our independent registered public accounting firm to audit our 2025 consolidated financial statements.
PwC has served as our independent registered public accounting firm since 1994. Representatives of PwC are scheduled to be present at the Annual Meeting and have an opportunity to make a statement and be available to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees and Services
Aggregate fees for all professional services rendered to us by PwC for the years ended December 31, 2024 and 2023 were as follows:
(In millions) |
2024 | 2023 | ||||||
Audit fees |
$ | 7.8 | $ | 6.5 | ||||
Audit-related fees |
$ | 0.1 | - | |||||
Tax fees |
||||||||
Compliance |
$ | 0.1 | $ | 0.2 | ||||
Planning and consulting |
$ | 2.3 | $ | 0.6 | ||||
Other fees |
- | - | ||||||
$ | 10.3 | $ | 7.3 |
The audit fees for the years ended December 31, 2024 and 2023 were for professional services rendered for the integrated audits of our consolidated financial statements and of our internal control over financial reporting, reviews of quarterly consolidated financial statements and statutory audits.
Tax compliance fees for the years ended December 31, 2024 and 2023 were for services related to the preparation and review of tax returns. The increase in tax planning and consulting fees for the year ended December 31, 2024 includes services provided by PwC in 2024 previously provided by other firms in 2023.
Audit Committee Pre-ApprovalPolicies and Procedures
Our Audit Committee has the sole authority to pre-approveand has policies and procedures that require the pre-approvalby them of all fees paid for services performed by our independent registered public accounting firm. At the beginning of each year, the Audit Committee approves the proposed services for the year, including the nature, type and scope of services and the related fees. Audit Committee pre-approvalis also obtained for any other engagements that arise during the course of the year. During 2024 and 2023, all of the audit and non-auditservices provided by PwC were pre-approvedby the Audit Committee.
Report of the Audit Committee
It is the responsibility of the Company's management to prepare the Company's financial statements and to develop and maintain adequate systems of internal accounting and financial controls. The Audit Committee is responsible for assisting the Board in its oversight of the quality and integrity of the Company's financial statements and the independent audit thereof, its oversight of the Company's accounting and financial reporting principles, policies and internal controls, and the performance of the internal audit function, evaluating the independence, qualifications and performance of the Company's independent registered public accounting firm, and evaluating the performance of the Company's internal auditors.
In this context, the Audit Committee has reviewed and discussed the Company's audited financial statements for the year ended December 31, 2024 with management and the independent registered public accounting firm. Management represented to the Audit Committee that the financial statements of the Company were prepared in accordance with generally accepted accounting principles. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standards No. 1301, "Communication with Audit Committees," as adopted by the PCAOB. The Audit Committee also discussed with management their assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2024, and the independent registered public accounting firm's opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2024.
|
Independent Registered Public Accounting Firm | 69 |
In addition, the Audit Committee has discussed with its independent registered public accounting firm, the independent registered public accounting firm's independence from the Company and its management, including the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence, which have been received by the Audit Committee. The Audit Committee discussed with the Company's internal auditors and independent registered public accounting firm the overall scope and plan for their respective audits. The Audit Committee meets with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their audits, including their audit of the Company's internal controls and the overall quality of the Company's financial reporting. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to our Board and our Board has approved, that the audited financial statements be included in the Annual Report on Form 10-Kfor the year ended December 31, 2024, for filing with the Securities and Exchange Commission. The Audit Committee and our Board also appointed PwC as the Company's independent registered public accounting firm for 2025.
Respectfully Submitted:
THE AUDIT COMMITTEE
Proposal 5 - Shareholder Proposal to Give Shareholders the Ability to Call for a Special Shareholder Meeting |
70 |
Proposal 5 - Shareholder Proposal to Give Shareholders the Ability to Call for a Special Shareholder Meeting
Mr.
Shareholder Proposal
Proposal 5 - Give Shareholders the Ability to Call for a Special Shareholder Meeting
Shareholders ask our Board of Directors to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting or the owners of the lowest percentage of shareholders, as governed by state law, the power to call a special shareholder meeting. This includes that all the requirements for shareholders to call a special shareholder meeting be included in the bylaws.
A shareholder right to call for a special shareholder meeting, as called for in this proposal, can help make shareholder engagement meaningful. A shareholder right to call for a special shareholder meeting will help ensure that the WESCO Board and management engages with shareholders in good faith because shareholders will have a viable Plan B by calling for a special shareholder meeting.
Companies like to claim that shareholders have multiple means to communicate with management but in most cases these means are as effective as mailing a letter to the CEO.
Since a special shareholder meeting can be called to replace a director, adoption of this proposal could foster better performance by our directors.
With the widespread use of online shareholder meetings it is much easier for management to conduct a special shareholder meeting for important issues and
Please vote yes:
Give Shareholders the Ability to Call for a Special Shareholder Meeting - Proposal 5
Board of Directors' Statement in Opposition to the Shareholder Proposal
After careful consideration, the Board has concluded that this shareholder proposal requesting a 10% threshold for calling special meetings is not in the best interests of the Company and its stockholders. Accordingly, the Board unanimously recommends a vote AGAINST this proposal.
The Board recognizes that providing stockholders with special meeting rights can be an important governance practice. For this reason, the Board has recommended that stockholders approve Proposal 3 to provide stockholders owning a combined 25% of our outstanding shares of Common Stock the right to request a special meeting, subject to the procedural and related requirements described in Proposal 3. The Board believes a 25% ownership threshold strikes the appropriate balance between enhancing stockholder rights and protecting the long-term interests of the Company and its stockholders.
Market Practice Supports a 25% Threshold- The 10% threshold requested by the stockholder is lower than that of a significant majority of S&P 500 companies that offer stockholders a special meeting right. According to recent FactSet data, approximately 55% of S&P 500 companies that provide stockholders with special meeting rights have set the ownership
Proposal 5 - Shareholder Proposal to Give Shareholders the Ability to Call for a Special Shareholder Meeting |
71 |
threshold at 25% or higher, while only about 15% have adopted a 10% threshold. The Board believes that aligning with market standards better serves the interests of our stockholders.
Protection Against Misuse and Disproportionate Influence- Special meetings impose significant costs on the Company, both administrative and operational. Our Board, management team, and employees must devote substantial time and attention to prepare for a special meeting, diverting resources from their primary focus of operating our business and creating long-term stockholder value. Given the Company's current ownership structure, a 10% threshold could allow a single stockholder or small group of stockholders to unilaterally call a special meeting to advance narrow interests that may not be shared by the broader stockholder base.
Appropriate Safeguards and Cost Considerations- The Board believes the 25% threshold creates appropriate safeguards while still ensuring stockholder access. This structure helps prevent duplicative meetings and ensures that special meetings are called only by stockholders with demonstrated long-term investment in the Company's success. Each special meeting imposes substantial costs, including:
• |
preparation and distribution of required disclosure documents |
• |
proxy solicitation expenses and vote tabulation |
• |
costs to host the meeting virtually or in person |
• |
significant legal and administrative expenses |
• |
time and resources diverted from business management and operations |
These resources could be better directed toward operating our business and creating long-term value for all stockholders. The 25% threshold helps prevent unnecessary meetings about matters that:
• |
are substantially similar to items recently considered |
• |
will be addressed at an upcoming annual meeting |
• |
lack broad stockholder support |
• |
could be more efficiently addressed through our regular stockholder engagement program |
Strong Existing Governance Framework- We maintain robust corporate governance practices that promote Board accountability and protect stockholder interests, including:
• |
100% of our Audit, Compensation, and Nominating & Governance Committee members are independent, and 90% of our Board members are independent |
• |
strong lead independent director role |
• |
regular stockholder engagement program |
• |
annual election of directors |
• |
annual say-on-payvote |
• |
annual review and evaluation of the Board by the Nominating & Governance Committee |
Implementation- This proposal is not binding upon the Company or our Board. Notwithstanding the non-bindingnature of this vote, our Board values the opinions expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when considering whether to implement this Proposal 5 or the Board's Proposal 3. As detailed in Proposal 3, if both this shareholder proposal and the Board's proposal receive sufficient votes for approval, and Proposal 3 receives more affirmative votes than this proposal, the Company will amend our Restated Certificate of Incorporation to implement the 25% threshold. The Board strongly believes that the 25% threshold outlined in Proposal 3 better serves the interests of all stockholders and encourages stockholders to vote FOR Proposal 3 while voting AGAINST Proposal 5.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE "AGAINST"
THIS PROPOSAL 5 REQUESTING A 10% THRESHOLD FOR CALLING SPECIAL MEETINGS AND A VOTE "FOR" MANAGEMENT'S PROPOSAL TO PROVIDE THE 25% THRESHOLD DESCRIBED IN PROPOSAL 3
Ingenuity delivered. |
Wesco.com 225 West Station Square Drive, Suite 700 412.454.2200 |
SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. EasteTime on May 21, 2025 for shares held directly and by 11:59 P.M. EasteTime on May 19, 2025 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/WCC2025 You may attend the meeting via the internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. EasteTime on May 21, 2025 for shares held directly and by 11:59 P.M. EasteTime on May 19, 2025 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and retuit in the postage-paid envelope we have provided or retuit to Vote Processing, c/o Broadridge, 51 Mercedes Way,
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. V68708-P25959
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