DEF 14A of DXP Enterprises Inc
Filed May 1, 2025 · FY20240001020710-25-000087
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS The holders of Common Stock, Series A Preferred Stock and Series B Preferred Stock, voting together as a single class, are entitled to vote with respect to each of the six nominees for election to the Board. All directors hold office until the next Annual Meeting of Shareholders and until their respective successors are duly elected and qualified or their earlier resignation or removal. It is the intention of the persons named in the proxies for the holders of Common Stock, Series A Preferred Stock and Series B Preferred Stock to vote the proxies “FOR” the election of each of the nominees named below, unless otherwise specified in any particular proxy. Management of DXP does not contemplate that any of the nominees will become unavailable for any reason, but if that should occur before the meeting, proxies will be voted for another nominee, or other nominees, to be selected by the Board. In accordance with DXP’s Bylaws and Texas law, a shareholder entitled to vote for the election of directors may withhold authority to vote for certain nominees for directors or may withhold authority to vote for all nominees for directors. The director nominees receiving a plurality of the votes of the holders of shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock, voting together as a single class, present in person or by proxy at the meeting and entitled to vote on the election of directors will be elected directors. The persons listed below have been nominated for election to fill the six director positions.
PROPOSAL 1: ELECTION OF DIRECTORS
| NOMINEE | AGE | POSITION | SINCE | | David R. Little | 73 | Chairman of the Board, President and CEO | 1996 | | Kent Yee | 50 | Senior Vice President/Chief Financial Officer | 2021 | | Timothy P. Halter | 58 | Director | 2001 | | David Patton | 75 | Director | 2016 | | Joseph R. Mannes | 66 | Director | 2020 | | Karen Hoffman | 46 | Director | 2021 |
PROPOSAL 1: ELECTION OF DIRECTORS
| ☑ Our Board recommends that you vote "FOR" each of or "FOR ALL" the election of the above nominees. |
Information Regarding Board Nominees and Directors
Information Regarding Board Nominees and Directors Background of Board Nominees for Director
Information Regarding Board Nominees and Directors
| DAVID R. LITTLE |
Information Regarding Board Nominees and Directors
| SKILLS AND QUALIFICATIONS | | | • Public company CEO and President | • M&A | | • Strategy and operations | • Finance and accounting | | • Distribution, manufacturing | • Human capital |
Information Regarding Board Nominees and Directors
Mr. Little has served as Chairman of the Board, President and Chief Executive Officer of DXP since its organization in 1996 and also has held these positions with SEPCO Industries, Inc., predecessor to the Company (“SEPCO”), since he acquired a controlling interest in SEPCO in 1986. Mr. Little has been employed by SEPCO since 1975 in various capacities, including Staff Accountant, Controller, Vice President/Finance and President. Mr. Little gives our Board insight and in-depth knowledge of our industry and our specific operations and strategies. He also provides leadership skills and knowledge of our local community and business environment, which he has gained through his long career with DXP and its predecessor companies.
Information Regarding Board Nominees and Directors
| KENT YEE |
Information Regarding Board Nominees and Directors
| SKILLS AND QUALIFICATIONS | | | • Finance and accounting | • M&A | | • Strategy and operations | • Human resources | | • Distribution, manufacturing | • Capital markets |
Information Regarding Board Nominees and Directors
Mr. Yee has served as a Director of DXP since April 2021. Mr. Yee was appointed Senior Vice President/Chief Financial Officer in June 2017. Currently, Mr. Yee is responsible for acquisitions, finance, accounting, business integrations and human resources of DXP. From March 2011 to June 2017, Mr. Yee served as Senior Vice President Corporate Development and led DXP's mergers and acquisitions, business integration and internal strategic project activities. During March 2011, Mr. Yee joined DXP from Stephens Inc.'s Industrial Distribution and Services team where he served in various positions and most recently as Vice President from August 2005 to February 2011. Prior to Stephens, Mr. Yee was a member of The Home Depot’s Strategic Business Development Group with a primary focus on acquisition activity for HD Supply. Mr. Yee was also an Associate in the Global Syndicated Finance Group at JPMorgan Chase. He has executed over 60 transactions including more than $1.8 billion in M&A and $4.5 billion in financing transactions primarily for change of control deals and numerous industrial and distribution acquisition and sale assignments. He holds a Bachelors of Arts in Urban Planning from Morehouse College and an MBA from Harvard University Graduate School of Business.
Information Regarding Board Nominees and Directors
| TIMOTHY HALTER |
Information Regarding Board Nominees and Directors
| SKILLS AND QUALIFICATIONS | | | • M&A | • Global / international experience | | • Capital markets | • Compensation / incentives | | • Strategic planning | • Entrepreneurship | | • Strategy | |
Information Regarding Board Nominees and Directors
Mr. Halter has served as a Director of DXP since July 2001. Mr. Halter is the Chairman and Chief Executive Officer of Halter Financial Group, Inc., a position he has held since 1995. Halter Financial Group is a Dallas, Texas based consulting firm specializing in the areas of mergers, acquisitions and corporate finance. Mr. Halter brings to our Board extensive experience in the area of strategic planning, corporate finance, compensation and entrepreneurship.
Information Regarding Board Nominees and Directors
| JOSEPH R. MANNES, CFA |
Information Regarding Board Nominees and Directors
| SKILLS AND QUALIFICATIONS | | | • CEO and executive leadership | • Capital markets | | • Strategy and operations | • Corporate governance | | • Finance and technology | • Accounting and Finance |
Information Regarding Board Nominees and Directors
Mr. Mannes has served as a Director of DXP since February 2020. Mr. Mannes is the President and a member of the board of directors of SAMCO Capital Markets, Inc., a position he has held since 2010. Prior to that he was the Chief Operating Officer and Managing Director (Corporate Finance) of SAMCO Capital Markets, Inc., which is a regional broker/dealer based in Austin, Texas, specializing in underwriting, financial advisory, and corporate finance. Mr. Mannes brings extensive experience across multiple industries, including banking, investment banking, technology, retail, distribution and manufacturing. Mr. Mannes graduated with an AB from Dartmouth College and an MBA from the Wharton School, graduate division. His experience includes time as a chief financial officer with Clearwire Technologies and E-Certify. He was formerly the Chairman of the Board of Tandy Leather Factory, is currently President of the Provincial Foundation and serves on the boards of various private companies. Mr. Mannes is a Chartered Financial Analyst. Mr. Mannes is the Chair of the Audit Committee.
Information Regarding Board Nominees and Directors
| DAVID PATTON |
Information Regarding Board Nominees and Directors
| SKILLS AND QUALIFICATIONS | | | • Legal | • General management | | • Corporate governance | • Risk management | | • Oil and gas | • Compensation/Incentives |
Information Regarding Board Nominees and Directors
Mr. Patton has served as a Director of DXP since July 2016. Mr. Patton was a partner at Locke Lord LLP and Chair-Emeritus of the Locke Lord LLP’s Energy Practice Group where he began his career in 1977 retiring in December 2024. He has over 40 years of experience in various legal aspects of the oil and gas industry, including acquisitions and sales of assets or equity interests, drafting and negotiating leases, contracts, and agreements related to field operations. Mr. Patton has represented clients in connection with surface use conflicts, day to day exploration and development activities, and the resolution of oil and gas disputes. He is a frequent speaker on oil and gas issues and is active in the Rocky Mountain Mineral Law Foundation and the State Bar of Texas. Mr. Patton brings to our Board a diverse business background including extensive knowledge in the oil and gas industry, experience with acquisitions and overall familiarity with issues surrounding managing and leading publicly held companies. Mr. Patton is Chair of the Compensation Committee.
Information Regarding Board Nominees and Directors
| KAREN HOFFMAN, CPA |
Information Regarding Board Nominees and Directors
| SKILLS AND QUALIFICATIONS | | | • Accounting | • General management | | • Corporate governance | • Oil and gas | | • Tax | • Risk management |
Information Regarding Board Nominees and Directors
Mrs. Hoffman has served as a Director of DXP since November 2021. Mrs. Hoffman is the Global Tax Director for Transocean Ltd., a position she has held since 2020. Prior to Transocean Ltd, she spent eighteen years with PricewaterhouseCoopers LLP with experience in tax accounting and the energy industry. Mrs. Hoffman started her career at PricewaterhouseCoopers LLP. Mrs. Hoffman graduated with a B.A. from The University of Texas in Business Administration and a Masters in Professional Accounting from the graduate division. Mrs. Hoffman is a Certified Public Accountant (CPA). Mrs. Hoffman is the Chair of the Nominating and Governance Committee.
Identifying and Evaluating Nominees for Director
Identifying and Evaluating Nominees for Director The Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Nominating and Governance Committee regularly assesses the appropriate size of the Board, the make-up of the board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Governance Committee will consider various potential candidates for director. Candidates may come to the attention of the Nominating and Governance Committee through current board members, professional search firms, shareholders or other persons. These candidates will be evaluated at regular or special meetings of the Nominating and Governance Committee and may be considered at any point during the year. The Nominating and Governance Committee will consider properly submitted shareholder nominations for candidates for the Board as set forth in the Company’s bylaws, and the procedures described in the section entitled “Proposals for Next Annual Meeting” in this proxy statement. Following verification of the shareholder status of persons proposing candidates, recommendations will be aggregated and considered by the Nominating and Governance Committee at a regularly scheduled meeting prior to the issuance of the proxy statement for DXP’s Annual Meeting. If any materials are provided by a shareholder in connection with the nomination of a director candidate, such materials will be forwarded to the Nominating and Governance Committee. In evaluating such nominations, the Nominating and Governance Committee will seek to achieve a balance of knowledge, experience and capability on the Board.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS We use a combination of cash and equity-based compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, the Board and the Compensation Committee are guided by the following principles: •compensation should fairly pay directors for work required in a company of our size and scope, and differentiate among directors where appropriate to reflect different levels of responsibilities; •a significant portion of the total compensation should be paid in stock-based awards to align directors' interest with the long-term interests of our shareholders; and •the structure of the compensation program should be simple and transparent. Director’s Fees. During 2024, each of our independent directors received a fee of $13,750 for each quarterly board meeting. Our directors who are our employees or otherwise are not independent do not receive any compensation for attending board or committee meetings. Additionally, during fiscal year 2021, the Board of Directors engaged Longnecker & Associates to review both directors and executive compensation and pay. Effective, January 1, 2022, it was determined that the board would receive an increase in fees from $3,000 for each quarterly board meeting to $12,500 per quarterly board meeting. Effective July 31, 2024, the Board compensation structure was revised to include a 10% increase in the annual fee, chair fee and restricted stock awards. The following table summarizes the annual fees in cash for the Board.
COMPENSATION OF DIRECTORS
| | Amount $ | | Annual fee | $55,000 | | Annual fee for Audit Committee Chair | 16,500 | | Annual fee for Compensation Committee Chair | 11,000 | | Annual fee for Nominating & Governance Chair | 11,000 | | Annual fee for IT & Cyber Committee Chair | 11,000 |
COMPENSATION OF DIRECTORS
Restricted Stock. In addition to the compensation set forth above, each non-employee director receives restricted stock granted under the 2016 Omnibus Incentive Plan. The number of whole shares granted each July 1 is calculated by dividing $82,500 by the closing price of the Common Stock on such July 1. The fair value of restricted stock awards is measured based upon the closing prices of DXP’s Common Stock on the grant dates and is recognized as compensation expense over the vesting period of the awards. On July 1, 2024, Mannes, Halter, Patton and Hoffman each received 1,862 shares of restricted stock. The shares of restricted stock vest one year on the anniversary of the date of grant.
Fiscal Year 2024 Director Compensation
Fiscal Year 2024 Director Compensation
Fiscal Year 2024 Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Joseph R. Mannes | 68,250 | 82,500 | — | — | — | — | 150,750 | | David Patton | 63,000 | 82,500 | — | — | — | — | 145,500 | | Karen Hoffman | 63,000 | 82,500 | — | — | — | — | 145,500 | | Timothy Halter | 52,500 | 82,500 | — | — | — | — | 135,000 |
Fiscal Year 2024 Director Compensation
(1) The amounts shown in the Stock Awards column reflect the full grant date fair value of restricted stock awards (“RSA”) awarded in 2024, calculated pursuant to FASB ASC Topic 718. See also Note 11, Share-Based Compensation, to our audited financial statements included in our annual report on form 10-K for the year ended December 31, 2024 filed with the SEC on March 10, 2025. Mannes, Patton, Hoffman and Halter have 14,547, 23,427, 6,269 and 50,925 RSAs outstanding, respectively, as of December 31, 2024.
Best Compensation Practices and Policies
| What We Do | | What We Do Not Do | | | ✓ | Heavy emphasis on variable compensation | ✗ | No guaranteed salary increases or incentive guarantees | | ✓ | Balance of short-term and long-term compensation to discourage short-term thinking and risk taking | ✗ | No employment contracts containing multi-year guarantees for salary increases, bonuses or equity compensation | | ✓ | Meaningful quantitative goals for performance-based annual and long-term compensation | ✗ | No discretionary incentives | | ✓ | Annual say-on-pay advisory vote | ✗ | We do not allow tax gross-ups | | ✓ | We seek independent advice through compensation consultants | ✗ | No overlapping performance metrics between short-term and long-term incentive programs | | ✓ | We have an ongoing shareholder outreach effort | ✗ | No long-term incentive compensation is paid in cash |
Our Strategy: Grow Revenue, Leverage Scale, and Invest Capital
| | GROW SALES: We plan to grow sales by remaining relevant to the business-to-business industrial customer as their preferences evolve through a combination of price, product, service and technology differentiation strategies. In 2024, sales were $1.8 billion, and we completed seven acquisitions. | | | LEVERAGE SCALE: We leverage our scale by optimizing our business segments using technology, shared services, where appropriate, and best practices. Our scale enables us to achieve cost efficiencies by maximizing our purchasing power and utilizing economies of scale through our supply chain channel. During the recent pandemic, we were able to continue to operate without any major disruptions to our business, which highlights the power of our scale due our many shared resources. | | | Growing sales and leveraging our scale increases cash flow, which enables us to: ALLOCATE CAPITAL: We continue maximizing capital investment opportunities in a disciplined and balanced manner to deliver the highest relative return. Our priorities for investing our capital are: 1) investing in acquisitions and organically where appropriate; 2) managing debt; and 3) returning cash to our shareholders via share repurchases. In 2024, we invested capital of $185.4 million, including the investment of $156.6 million in acquisitions and organic opportunities, and returning $28.8 million to shareholders through share repurchases. |
Role of the Independent Consultant
Role of the Independent Consultant Engagement of NFP Compensation Consulting ("NFP") (formerly referred to as Longnecker & Associates (“Longnecker”)) The Compensation Committee retained the services of NFP, an external independent executive compensation consultant, to assist the Compensation Committee in its review of executive compensation practices, including the competitiveness of pay levels, program design, market trends, and technical considerations. Pursuant to SEC rules, the Compensation Committee has assessed the independence of NFP and, in 2021, the Committee concluded that no conflict of interest exists that would prevent Longnecker from providing independent advice to the Compensation Committee. Longnecker does not provide any consulting advice to the Company, or any of its subsidiaries, outside the scope of executive compensation and will not do so without the prior consent of the Compensation Committee chair. NFP met with the Compensation Committee chair and the Compensation Committee outside the presence of management.
What We Pay and Why: Overview of Key 2024 Program Elements
| Element | Nature | Description | Why We Provide It | | Base Salary | Cash | Fixed compensation component payable in cash; reviewed annually and subject to adjustment | Attract and retain executive talent by paying competitive base compensation for expected levels of day-to-day performance | | Short-Term Bonus Incentive | Cash (variable) | STBI paid in cash based on performance against annually established goals, as determined by the Committee | Align NEOs performance with the Company's near-term financial objectives | | Long-Term Incentive Award | Stock (variable) | LTI equity awards include performance-based restricted stock awards that vest over three years | Aligns the interest of NEOs and stockholders by incentivizing achievement of long-term performance goals and encouraging retention |
Compensation Elements Link to Shareholder Value
| Component | Description | Link to Shareholder Vote | How We Determine Amount | | Annual Base Salary | Fixed cash element of compensation established within a competitive range of benchmark pay levels. | Serves to attract and retain executive talent capable of driving superior performance. | We consider individual performance, oversight responsibility, and competitive benchmarking. | | Annual Performance-Based Incentive Compensation | Performance–based element of compensation tied to the attainment of performance measures, which is paid in cash. | Rewards the achievement of short-term financial and operational objectives we believe are primary drivers of long-term shareholder value. | The Compensation Committee establishes performance metrics that will drive the current performance of the Company and enhance shareholder value. The 2024 measures included: •Normalized Earnings Per Share •Normalized EBITDA | | Long-Term Incentive Compensation | Restricted Stock – awards are made in March each year at the same time as the restricted stock grants and vest at a rate of 1/3 per year. | Supports the retention of key executive and management talent and fosters a culture of ownership. | The Compensation Committee considers several factors in determining the total long-term incentive compensation including peer comparable pay, the individual performance of each NEO, the job responsibilities of each NEO, and the overall Company performance in light of the current economic environment. Once the total target value is established for each NEO, we calculate and grant to each NEO the number of shares of restricted stock. |
Compensation for CEO and Named Executive Officers
Compensation for CEO and Named Executive Officers The Compensation Committee carefully considers the recommendations of the Chief Executive Officer when making decisions on setting base salary and granting awards under the incentive cash bonus plan to other NEOs. The Compensation Committee determines equity incentive awards for each NEO on a case by case basis. In making compensation determinations, the Compensation Committee acts on the recommendations of the Chief Executive Officer, with modifications as deemed appropriate by the Compensation Committee, for NEOs other than the Chief Executive Officer. The Compensation Committee determines each element of compensation for the Chief Executive officer and the other NEOs. For the fiscal year ended December 31, 2024, the elements of the Chief Executive Officer and NEOs compensation plans included: •Base salary; •Short-Term Annual Bonus incentive; •Long-Term Incentive equity awards; and •Broad-based benefits programs.
Annual Base Salary
Annual Base Salary We target the base salary levels of our CEO and NEOs within a competitive range of benchmark pay levels defined in the competitive benchmarking analysis performed by NFP, as mentioned on pages 33-35. We believe these levels are appropriate to motivate and retain our CEO and NEOs, who each have leadership talents and business expertise that make them attractive to other companies. In addition, when adjusting salaries, we may also consider the individual performance of the executive.
Short-Term Annual Bonus Incentive
Short-Term Annual Bonus Incentive Under the terms of the employment agreement with our Chief Executive Officer, he is entitled to receive a bonus of 5% of our profit before income tax, which is determined and paid on a quarterly basis and capped at 2x the CEO's base salary. The Compensation Committee can decide to pay all or a portion of this bonus in the form of cash or stock. The determination of whether the bonus is to be paid in cash or shares is to be made prior to the date on which the amount of the bonus is determined. If shares will be issued, the number of shares is determined by dividing the portion of the bonus to be paid by the closing price of a share of our Common Stock on the last day of the period for which the bonus was earned, rounded up to the nearest whole share. For 2024, 2023 and 2022, all incentive cash bonuses were paid in cash. At the beginning of each year, our Chief Executive Officer makes a recommendation to the Compensation Committee, which the Committee reviews and approves, regarding whether our other NEOs will receive an incentive cash bonus and, if so, how the incentive cash bonus will be calculated. For 2024, the NEOs were eligible for a cash bonus. The cash bonus was calculated by multiplying our profit before income tax by two percentages. Profit before income tax, up to a maintenance amount, was multiplied by a percentage referred to as the Maintenance Incentive Factor (which ranged on a sliding scale from 0.00% to a maximum of 1.33%). Profit before income tax above the maintenance amount was multiplied by a higher percentage referred to as the Growth Incentive Factor (which ranged on a sliding scale from 0.00% to a maximum of 4.00%). The Maintenance and Growth Incentive Factors vary by each NEO as determined by the CEO and Compensation Committee based upon the NEO's responsibilities and role. The 2024 cash bonus payout was capped at a base Growth Incentive Factor of 1.50% for Messrs. Little and Yee and 1.25% for Messrs. Maestas and Gregory.
Short-Term Annual Bonus Incentive
| | 2024 Annual Cash | 2023 Annual Cash | | | Bonus Award Received | Bonus Award Received | | | (% of Base Salary) | (% of Base Salary) | | David Little | 200.0% | 200.0% | | Nick Little | 82.2% | 85.7% | | Kent Yee | 55.0% | 75.0% | | Paz Maestas | 75.0% | 100.0% | | Chris Gregory | 75.0% | 100.0% |
Short-Term Annual Bonus Incentive
See “2024 Summary Compensation Table — Non-Equity Incentive Plan Compensation” below for more details.
Long-Term Incentive Equity Award Changes Starting in 2021
Long-Term Incentive Equity Award Changes Starting in 2021 For fiscal year 2021, the Compensation Committee revised the Long-Term Incentive equity award for the CEO and NEOs after consultation and based upon the review with NFP. The Compensation Committee determined for fiscal year 2021 that the CEO and NEOs would have a target long-term grant award based upon achieving a target EBITDA for fiscal year 2021 that was paid out based upon achieving a percentage of the target with a threshold amount established at 70% of target. In fiscal year 2022, the CEO and NEOs had a target long-term grant award based upon achieving a target EBITDA for fiscal year 2022 of $81 million or growing 14% over fiscal fiscal 2021. Similarly, in fiscal year 2023, the CEO and NEOs had a target long-term grant award based upon achieving a target EBITDA for fiscal year 2023 of $139 million. In fiscal year 2024, the CEO and NEOs had a target long-term grant award based upon achieving a target EBITDA for fiscal year 2024 of $180 million or growing 3.3% over fiscal year 2023. The diagram below illustrates the annual long-term incentive award opportunities that the Compensation Committee determined for the Company's NEOs. Below is the chart with the target and the established threshold percentage:
Long-Term Incentive Equity Award Changes Starting in 2021
| Threshold | Payout Percentage | | 70% of target | 50% | | 80% of target | 75% | | 90% of target | 90% | | 98% of target | 100% | | 105% of target | 110% | | 115% of target | 125% | | 125% of target | 150% | | 135% of target | 200% |
Long-Term Incentive Equity Award Changes Starting in 2021
All of these awards are granted pursuant to the 2016 Omnibus Incentive Plan.
Executive Employment Agreements
Executive Employment Agreements DXP entered into an employment agreement effective January 1, 2004, as amended, with Mr. Little. The agreement was for an initial term of three years, renewable annually for a term to extend three years from such renewal date. The agreement provides for compensation of a minimum amount of $448,000 per year, to be reviewed at least annually for possible increases, monthly bonuses equal to 5% of the profit before tax of DXP as shown on the books and records of DXP at the end of each month and other perquisites in accordance with DXP policy (the Company computes and pays this bonus on a quarterly basis). The aggregate of the monthly bonuses in any calendar year must not exceed twice his annual base salary. In the event Mr. Little terminates his employment for “Good Reason” (as defined in the employment agreement), or is terminated by the Company for other than “Good Cause” (as defined in the employment agreement), Mr. Little would receive a cash lump-sum payment equal to the sum of (i) the base salary for the remainder of the employment period under the agreement, (ii) an amount equal to the sum of the most recent 12 months of bonus paid to him, (iii) two times the sum of his current annual base salary plus the total of the most recent 12 months of bonuses, (iv) all compensation previously deferred and any accrued interest thereon, and any accrued vacation pay not yet paid by the Company, and (v) continuation of benefits under the Company’s benefit plans for the current employment period. Mr. Little is also entitled under the agreement to certain gross-up payments if an excise tax is imposed pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended, which imposes an excise tax on certain severance payments in excess of three times an annualized compensation amount following certain changes in control or any payment of distribution made to him. In the event of Mr. Little’s death while employed by DXP, his estate will receive Mr. Little’s base salary in equal bi-weekly installments for a period of twenty-four months after the month of his death.
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control None of our NEOs, other than Mr. Little is entitled to any payments from the Company in the event his employment by the Company terminates as a result of death or disability, or as the result of the voluntary or involuntary termination of his employment. None of our NEOs are entitled to any payments upon a change of control of the Company pursuant to an employment agreement; however, acceleration of vesting events may occur in conjunction with our 2016 Omnibus Incentive Plan. Mr. Little is not entitled to any payments from the Company in the event his employment by the Company terminates as a result of his voluntary termination other than for “Good Reason” (as defined in his employment agreement) or his involuntary termination by the Company for “Good Cause” (as defined in his employment agreement). In the event that the Company had terminated Mr. Little’s employment without “Good Cause” or he had voluntarily terminated with “Good Reason” on December 31, 2024, Mr. Little would have been entitled to a lump-sum severance payment of $8,893,500 and continuation of healthcare benefits and social club dues having a value of $200,761 for a total value of $9,094,261. In the event of Mr. Little’s death, his estate will receive Mr. Little’s base salary in equal bi-weekly installments for a period of twenty-four months after the month of his death. In the event Mr. Little had died on December 31, 2024, his family would have been entitled to payments totaling $1,617,000.
Policies and Practices for Granting Certain Equity Awards
Policies and Practices for Granting Certain Equity Awards Our Compensation Committee is responsible for granting long-term equity-based compensation under our omnibus stock incentive plans. Awards for the CEO are granted by the Committee following approval by the independent members of the Board. Awards for executive officers other than the CEO are granted by the Committee and discussed with the Board. Management determines the allocation of equity-based grants for other groups within the Company and individual recommendations are made by the heads of the groups and approved by the CEO. In addition to considering the value of each equity-based award, management and the Committee also consider, as an additional factor in approving long-term equity awards, the overall potential shareholder dilution impact and burn rate, which is the rate at which awards are granted as a percentage of DXP shares outstanding. The regular Board and Compensation Committee meeting with meetings held quarterly in late February, late April, late July and late October. Annual grants of equity-based awards to our NEOs and other executives, as well as to other eligible employees, are made at the Compensation Committee’s February meeting. Additionally, specific grants may be made at other Committee meetings to recognize an employee’s promotion, change in responsibility or specific achievement, or to achieve other key compensation objectives, such as retention. Generally, the Committee sets the grant date for equity awards in late March following the Company’s announcement of earnings. The Company does not time the release of material non-public information for the purpose of affecting the values of equity grants. At the time equity grant decisions are made, our Compensation Committee is aware of the earnings results, but it does not adjust the size or the mix of grants to reflect possible market reaction. In addition,restricted stock awards do not accrue or pay dividends or dividend equivalents prior to vesting.
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE The following table shows the compensation earned during each of the fiscal years ended December 31, 2024, 2023, and 2022 by our NEOs.
2024 SUMMARY COMPENSATION TABLE
| Name & Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Non- Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | David R. Little President and CEO | 2024 | 808,500 | 2,700,000 | 1,617,000 | 128,817 | 5,254,317 | | | 2023 | 770,000 | 2,700,000 | 1,540,000 | 93,439 | 5,103,439 | | | 2022 | 700,000 | 1,215,000 | 1,400,000 | 102,956 | 3,417,956 | | Nick Little Senior VP and COO | 2024 | 400,000 | 700,000 | 328,685 | 20,127 | 1,448,812 | | | 2023 | 350,000 | 700,000 | 300,000 | 15,429 | 1,365,429 | | | 2022 | 200,000 | 315,000 | 300,000 | 10,386 | 825,386 | | Kent Yee Senior VP and CFO | 2024 | 450,000 | 600,000 | 247,500 | 22,729 | 1,320,229 | | | 2023 | 400,000 | 1,000,000 | 300,000 | 18,587 | 1,718,587 | | | 2022 | 200,000 | 500,000 | 300,000 | 8,890 | 1,008,890 | | Paz Maestas Senior VP, Chief Marketing and Technology Officer | 2024 | 350,000 | 300,000 | 262,521 | 17,160 | 929,681 | | | 2023 | 300,000 | 200,000 | 300,000 | 21,000 | 821,000 | | | 2022 | 200,000 | 90,000 | 250,000 | 11,914 | 551,914 | | Chris Gregory Senior VP and CIO | 2024 | 350,000 | 300,000 | 262,521 | 27,017 | 939,538 | | | 2023 | 300,000 | 200,000 | 300,000 | 21,583 | 821,583 | | | 2022 | 200,000 | 90,000 | 250,000 | 17,989 | 557,989 |
2024 SUMMARY COMPENSATION TABLE
(1)The amounts shown in the Stock Awards column reflect the full grant date fair value of restricted stock awards (“RSA”) awarded in 2024, 2023, and 2022, respectively, computed in accordance with applicable accounting guidance, as required by Securities and Exchange Commission regulations. See also Note 11, Share-Based Compensation, to our audited financial statements included in our annual report on form 10-K for the year ended December 31, 2024. The amounts shown in the Stock Awards column reflects shares granted as part of the incentive stock bonus and the other equity based compensation for our NEOs as described further in Grant of Plan-Based Awards. The Stock Awards reflect stock grants based upon the previous years financial performance and the Company's transition to a long-term incentive plan starting in FY2021 and fully executed in FY2022. See discussion regarding Compensation Discussion and Analysis. (2)Amounts disclosed under “Non-Equity Incentive Plan Compensation” represents bonuses earned during the indicated fiscal year based upon pre-tax income pursuant to DXP’s incentive cash bonus plans, described in Grants of Plan-Based Awards, for services rendered in the indicated fiscal year. Bonus amounts earned are determined and paid quarterly. (3)Amounts disclosed are derived from the chart "All Other Compensation". Amounts disclosed under “All Other Compensation” for 2024 consists of the following:
2024 SUMMARY COMPENSATION TABLE
| | ALL OTHER COMPENSATION | | | | | | | David Little | Nick Little | Kent Yee | Paz Maestas | Chris Gregory | | Other Compensation | | | | | | | 401(K) Match | $13,800 | $13,800 | $13,800 | $9,360 | $13,800 | | Perquisites: | | | | | | | Personal use of company plane | 90,266 | — | — | — | — | | Personal use of company-owned auto | — | 6,327 | 8,929 | — | 13,217 | | Car allowance | — | — | — | 7,800 | — | | Social club dues | 24,751 | — | — | — | — | | TOTAL: | $128,817 | $20,127 | $22,729 | $17,160 | $27,017 |
OUTSTANDING EQUITY AWARDS
OUTSTANDING EQUITY AWARDS The following table sets forth certain information with respect to outstanding equity awards to the NEOs as of December 31, 2024. As of December 31, 2024, none of the Company’s NEOs held any option awards.
OUTSTANDING EQUITY AWARDS
| Outstanding Equity Awards at 2024 Fiscal Year End | | | | | | | | | Stock Awards | | | | | Name | Grant Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock that Have Not Vested ($)* | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units, or Other Rights that Have Not Vested ($) | | David R. Little | 3/31/2022 | 14,950 | 1,227,096 | — | — | | | 3/31/2023 | 66,864 | 5,488,197 | — | — | | | 3/28/2024 | 50,251 | 4,124,602 | — | — | | Nick Little | 3/31/2022 | 3,876 | 318,142 | — | — | | | 3/31/2023 | 17,335 | 1,422,857 | — | — | | | 3/28/2024 | 5,583 | 458,253 | — | — | | Kent Yee | 3/31/2022 | 6,153 | 505,038 | — | — | | | 3/31/2023 | 24,765 | 2,032,711 | — | — | | | 3/28/2024 | 11,167 | 916,587 | — | — | | Paz Maestas | 3/31/2022 | 1,108 | 90,945 | — | — | | | 3/31/2023 | 4,952 | 406,460 | — | — | | | 3/28/2024 | 5,583 | 458,253 | — | — | | Chris Gregory | 2/1/2018 | 8,000 | 656,640 | — | — | | | 3/31/2022 | 1,108 | 90,945 | — | — | | | 3/31/2023 | 4,953 | 406,542 | — | — | | | 3/28/2024 | 5,583 | 458,253 | — | — |
OUTSTANDING EQUITY AWARDS
* The market value of shares of stock is computed by multiplying the closing market price of our stock at the end of the last day of the completed fiscal year by the number of shares of stock set forth to the left of such figure.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED The following table sets forth certain information with respect to option exercises and stock awards that vested during the fiscal year ending December 31, 2024 to the NEOs.
OPTION EXERCISES AND STOCK VESTED
| Option Exercises and Stock Vested Table at 2024 Fiscal Year-End | | | | | | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | David R. Little | — | — | 55,383 | 2,989,729 | | Nick Little | — | — | 12,544 | 673,989 | | Kent Yee | — | — | 19,684 | 1,036,806 | | Paz Maestas | — | — | 3,584 | 192,568 | | Chris Gregory | — | — | 5,583 | 258,715 |
OPTION EXERCISES AND STOCK VESTED
(1) Value realized on vesting is calculated by multiplying the closing price of our shares on the NASDAQ on the date of vesting by the number of gross shares that vested on such date, including any shares subsequently withheld in satisfaction of requisite tax withholding.
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended December 31, 2024 to the NEOs.
GRANTS OF PLAN-BASED AWARDS
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards : Numbers of Shares of Stock or Units (#) | All Other Stock Awards : Numbers of Securities Underlying Options (#) | Exercise or Base Price of Option Award ($/SH) | | | | | Threshold ($) | Target ($) | Max ($) | Threshold # | Target # | Max # | | | | | | | | | | | | | | | | | Grant Date Fair Value of Stock Awards ($)(3) | | David R. Little | 3/28/24 | — | (2) | — | — | — | | 50,251 | — | — | $2,700,000 | | Nick Little | 3/28/24 | — | (1) | — | — | — | | 13,028 | — | — | $700,000 | | Kent Yee | 3/28/24 | — | (1) | — | — | — | | 11,167 | — | — | $600,000 | | Paz Maestas | 3/28/24 | — | (1) | — | — | — | | 5,583 | — | — | $300,000 | | Chris Gregory | 3/28/24 | — | (1) | — | — | — | | 5,583 | — | — | $300,000 |
GRANTS OF PLAN-BASED AWARDS
| (1) For 2024, the NEOs were eligible for a cash bonus based on the Company’s performance for that year. The actual amount earned by each of the Named Executives for fiscal year ended December 31, 2024 is set forth in the 2024 Summary Compensation Table under the column Non-Equity Incentive Plan Compensation. | | (2) Under the terms of the employment agreement with Mr. Little, he could receive a bonus of 5% of our profit before income tax, which is determined and paid on a quarterly basis, capped at 2x the CEO's base salary. The Compensation Committee can decide to pay all or a portion of this bonus in the form of restricted stock. For 2024, the Compensation Committee decided to pay this bonus in cash. In 2024, the maximum incentive bonus for Mr. Little was 1,617,000, of which he earned 1,617,000 in cash. | | (3) Represents the full grant date fair value of each award computed in accordance with applicable accounting guidance, as required by Securities and Exchange Commission regulations. See also Note 12, Share-based Compensation, to our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2024. |
CEO PAY RATIO
CEO PAY RATIO Pursuant to the Dodd-Frank Act, the Securities and Exchange Commission adopted a rule requiring annual disclosure of the ratio of the total annual compensation of the principal executive officer (“PEO”), Mr. Little, to the median employee’s annual total compensation. Our methodology, material assumptions and estimates for the calculation of this ratio is described below. •The median employee was identified as of December 31, 2024 by calculating the median for total cash compensation for 2024 for all full-time, part-time, seasonal, or temporary employees (excluding our CEO), whether located in the U.S., Canada, Mexico or the United Arab Emirates. •Total cash compensation for each employee is used as our consistently applied compensation measure, and this number is derived from amounts reported in our payroll records. The Company believes that total cash compensation is an appropriate measure to identify the median employee, since the use of long-term equity compensation is not widespread at the Company. •If a full-time or part-time employee was not employed by the Company for the entirety of the year, an annualized total compensation was calculated for that employee; however, part-time employees were not converted to full-time as part of this annualization. •After we identified the median employee based on total cash compensation, we calculated the annual total compensation for both Mr. Little and the median employee using the methodology for calculating the total compensation set forth in the Summary Compensation Table (“SCT”) of this proxy statement. Our annual total compensation in 2024 was determined to be $66,003 for our median employee and $5,254,317 for Mr. Little. •The CEO pay ratio was then calculated by dividing the annual total compensation for Mr. Little by the annual total compensation for the median employee, which yielded the ratio of 80:1. Thus, we estimate that Mr. Little’s 2024 annual total compensation was approximately 80 times that of our median employee.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive Compensation Actually Paid (“CAP”) and certain financial performance of the Company. For further information concerning the Company's pay-for-performance philosophy and how the Company aligns executive compensation, refer to the "Compensation Discussion and Analysis" starting on pages 33-35. The following table displays our NEOs compensation relative to the Company’s key performance measures of net income, adjusted EBITDA and returns on a $100 calculated investment in the Company's common stock compared to the Dow Jones U.S Industrial Suppliers Index (DJUSDS), NASDAQ Industrial Index (^INDS) and S&P 400 Index (SP400).
Pay Versus Performance
| Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO (1) | Average Summary Compensation Table Total for Non-CEO NEOs | Average Compensation Actually Paid to Non-CEO NEOs (2) | Total Shareholder Return(3) | Peer Group Total Shareholder Return(4) | Net Income (in millions) | Adjusted EBITDA | | 2024 | $5,254,317 | $9,060,415 | $1,159,565 | $2,000,817 | $207 | $184 | $70.4 | $191.3 | | 2023 | 5,103,439 | 3,915,330 | 1,181,650 | 942,193 | 84 | 159 | 68.7 | 174.3 | | 2022 | 3,417,956 | 2,277,567 | 736,045 | 773,910 | 69 | 122 | 48.1 | 126.8 | | 2021 | 2,380,437 | 1,828,867 | 352,607 | 371,171 | 64 | 156 | 16.4 | 70.2 | | 2020 | 2,120,480 | 1,527,282 | 247,190 | 100,316 | 56 | 130 | (29.4) | 59.0 |
Pay Versus Performance
(1) Amounts represent compensation actually paid to David Little - Chief Executive Officer. (2) Amounts represent average compensation actually paid to Non-CEO NEOs - Nick Little, Kent Yee, Paz Maestas, and Chris Gregory. (3) Reflects a $100 calculated as an investment in DXP Enterprises, Inc. from the beginning of the year to the end of the fiscal year. (4) Reflects a $100 investment in a peer group consisting Dow Jones US Industrial Supplies Index, NASDAQ Industrial Index and S&P 400 Index.
Executive Compensation
| Compensation Actually Paid to CEO | 2024 | 2023 | 2022 | | Summary Compensation Table | $5,254,317 | $5,103,439 | $3,417,956 | | Deductions for amounts reported under the "Stock Awards" column in the Summary Compensation Table | (2,700,000) | (2,700,000) | (1,215,000) | | Change in fair value of awards granted during the year that remain unvested as of year-end | 1,424,616 | 680,014 | 20,631 | | Increase/(deduction) for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | 3,958,161 | 226,935 | 38,665 | | Increase/(deduction) for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during the year | 1,123,321 | 604,942 | 15,315 | | Compensation Actually Paid to CEO | $9,060,415 | $3,915,330 | $2,277,567 |
Executive Compensation
| Compensation Actually Paid to Other NEOs | 2024 | 2023 | 2022 | | Summary Compensation Table | $1,159,565 | $1,181,650 | $736,045 | | Deductions for amounts reported under the "Stock Awards" column in the Summary Compensation Table | (475,000) | (525,000) | (248,750) | | Change in fair value of awards granted during the year that remain unvested as of year-end | 250,621 | 132,224 | 252,971 | | Increase/(deduction) for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | 873,864 | 54,792 | 28,073 | | Increase/(deduction) for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during the year | 191,767 | 98,527 | 5,571 | | Average Compensation Actually Paid to NEOs | $2,000,817 | $942,193 | $773,910 |