DEF 14A of Wesco International Inc
Filed Apr 10, 2025 · FY20240001193125-25-078098
Proposal 1 — Election of Directors
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: John J. Engel, Glynis A. Bryan, Anne M. Cooney, Matthew J. Espe, Bobby J. Griffin, Sundaram Nagarajan, Steven A. Raymund, James L. Singleton, Easwaran Sundaram and Laura K. Thompson.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES.
Board of Directors
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-year term 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 March 27, 2025.
Board of Directors
| Name | Age | Director Since | Audit | Compensation | Executive | Nominating and Governance | | John J. Engel | 63 | 2008 | | | | | | Glynis A. Bryan | 66 | 2023 | | | | | | Anne M. Cooney | 65 | 2021 | | | | | | Matthew J. Espe | 66 | 2016 | | | | | | Bobby J. Griffin | 76 | 2014 | | | | | | Sundaram Nagarajan | 62 | 2022 | | | | | | Steven A. Raymund | 69 | 2006 | | | | | | James L. Singleton(1) | 69 | 1998 | | | | | | Easwaran Sundaram | 54 | 2018 | | | | | | Laura K. Thompson | 60 | 2019 | | | | |
Board of Directors
| (1) Lead Director |
Board of Directors
Chair Member
Board of Directors
| Wesco 2025 Proxy Statement | Board of Directors | 6 |
Board of Directors
The following information is provided regarding our Directors as of March 27, 2025: 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-going refreshment process. The matrix below describes the self-identified gender and race or ethnicity attributes of our Directors:
Board of Directors
| Board Background Matrix | | | | Board Size: | | | | Total Number of Directors | 10 | | | Gender Identity: | Female | Male | | | 3 | 7 | | Demographic Background: | | | | African American or Black | 1 | 1 | | Asian | 0 | 2 | | White | 2 | 4 |
Board of Directors
| Wesco 2025 Proxy Statement | Board of Directors | 7 |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
Nominee Directors to Serve for a One-Year Term Expiring in 2026
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | John J. Engel Chairman, President & Chief Executive Officer John J. Engel has served as Chairman of the Board of Directors since 2011 and has served as our President and Chief Executive Officer since 2009. Previously, Mr. Engel served as our Senior Vice President and Chief Operating Officer from 2004 to 2009. Before joining Wesco in 2004, Mr. Engel served as Senior Vice President and General Manager of Gateway, Inc.; Executive Vice President and Senior Vice President of Perkin Elmer, Inc.; and Vice President and General Manager of Allied Signal, Inc. Mr. Engel also held various engineering, manufacturing and general management positions at General Electric Company. Mr. Engel serves as a director of United States Steel Corporation, is a member of the Business Roundtable and the Business Council and is a member of the Board of Directors of the National Association of Manufacturers. Qualifications: Among Mr. Engel’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Engel is the Company’s Chairman and Chief Executive Officer, previously served as its Chief Operating Officer, is the chair of the governance and sustainability committee of United States Steel Corporation (and was previously the chair of the audit committee), and has extensive experience as a senior executive and operating leader in various global industries and a diverse range of businesses. He is experienced in strategic planning, financial and capital markets, risk oversight, human capital management and environmental, social and governance matters. Mr. Engel also has expertise in managing complex operational and financial matters. | | Age: 63 Director since: 2008 Chairman of the Board Member of: Executive Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Glynis A. Bryan Former Chief Financial Officer, Insight Enterprises, Inc. Glynis A. Bryan served as Chief Financial Officer of Insight Enterprises, Inc., a Fortune 500 software and technology solutions integrator, from 2007 through December 2024. Prior to joining Insight, Ms. Bryan served as the Executive Vice President and Chief Financial Officer of Swift Transportation Co. from 2005 to 2007 and as the Chief Financial Officer of APL Logistics from 2001 to 2005. Previously, she held various senior finance roles at Ryder System, Inc., including as Senior Vice President and Chief Financial Officer of Ryder’s largest business unit, Ryder Transportation Services, from 1999 to 2000. Ms. Bryan also serves as a director of Pinnacle West Capital Corporation and Ameriprise Financial. Qualifications: Among Ms. Bryan’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Bryan brings significant experience and expertise in the areas of finance, accounting, treasury and capital structure management, business and strategic planning, risk management and digital transformations, through her more than 20 years of service as the chief financial officer for several large, multinational companies. She also has broad experience as a public company board member serving as a member of the audit, finance and nuclear & operating committees of Pinnacle West Capital Corporation. | | Age: 66 Director since: 2023 Member of: Audit Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| Wesco 2025 Proxy Statement | Board of Directors | 9 |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Anne M. Cooney Former President, Process Industries & Drives Division, Siemens Industry, Inc. Anne M. Cooney served as President of the Process Industries and Drives Division of Siemens Industry, Inc., a division of Siemens AG, from October 2014 until her retirement in December 2018. Previously, she held a variety of executive management positions at Siemens after joining the company in 2001, including serving as Chief Operating Officer, Siemens Healthcare Diagnostics, a division of Siemens AG, from 2011 until 2014, and serving as President, Drives Technologies of Siemens Industry, Inc. from 2008 until 2011. Earlier in her career, she also held various leadership roles with increasing responsibility at General Electric Company and served as Vice President, Manufacturing of Aladdin Industries, LLC. Ms. Cooney is a director of The Manitowoc Company, Inc. and former director of Summit Materials, Inc. Qualifications: Among Ms. Cooney’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Cooney has expertise in managing businesses and operations of complex global organizations, executive leadership experience in the industrial sector, and domain knowledge of electrical and utility end markets. Serving as a Chief Operating Officer, the chair of the compensation committee and a member of the corporate governance and sustainability committee of The Manitowoc Co., Inc., she also brings experience in the management and oversight of climate and sustainability initiatives, as well as expertise in human capital management and inclusion topics. | | Age: 65 Director since: 2021 Member of: Audit Committee and Nominating and Governance Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Matthew J. Espe Director, Advisor and Investor Matthew J. Espe is a prior Chief Executive Officer and has served on a number of public and private boards. He served as an Operating Partner at Strategic Value Partners, a private equity investment firm, from November 2017 through April 2023, chairing two of their portfolio company boards and sitting on the board of a third. He also served as an Operating Partner at Periphas Capital, a private equity investment firm, from February 2018 until January 2023. From February 2017 to November 2017, Mr. Espe served as the Chief Executive Officer of Radial, Inc., a multinational e-commerce company. Previously, he served as Chief Executive Officer and President of Armstrong World Industries, Inc., a global producer of flooring products and ceiling systems, a position he held from 2010 to March 2016. Previously, Mr. Espe served as Chairman and Chief Executive Officer of Ricoh Americas from 2008 to 2010 and Chairman and Chief Executive Officer of IKON Office Solutions, Inc. from 2002 to 2008. Mr. Espe began his career at General Electric Company, and he was with GE for more than 20 years, most recently as President and Chief Executive Officer of GE Lighting. Mr. Espe is also a member of the Board of Directors of Anywhere Real Estate, Inc. (formerly known as Realogy Holdings Corp.), Korn Ferry and Diebold Nixdorf, Inc. Qualifications: Among Mr. Espe’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Espe has considerable experience as a Chief Executive Officer of a Fortune 500 company, and he brings significant management experience and knowledge to the Board of Directors in the areas of finance, accounting, international business operations, risk oversight, corporate governance, climate impact, sustainability, as well as human capital management. He also brings significant experience gained from service on the board of directors of other public companies, including currently serving as a member of the compensation and talent management and chair of the nominating and corporate governance committees of Anywhere Real Estate, Inc., as a member of the audit and compensation and personnel committees of Korn Ferry, and as a member of the nomination and governance, and as chair of the people and compensation committees of Diebold Nixdorf, Inc., and has experience in and knowledge of industries that are relevant to Wesco. | | Age: 66 Director since: 2016 Member of: Compensation Committee (Chair) and Executive Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| Wesco 2025 Proxy Statement | Board of Directors | 10 |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Bobby J. Griffin Former President, International Operations, Ryder System, Inc. Bobby J. Griffin served as President, International Operations of Ryder System, Inc., a global provider of commercial transportation, logistics, and supply chain management solutions, from 2005 to 2007, at which time he retired. Beginning in 1986, Mr. Griffin served in various other management positions with Ryder System, Inc., including as Executive Vice President, International Operations from 2003 to March 2005 and Executive Vice President, Global Supply Chain Operations from 2001 to 2003. Prior to Ryder System, Inc., Mr. Griffin was an executive at ATE Management and Service Company, Inc., which was acquired by Ryder System, Inc. in 1986. He also serves as a director of United Rentals, Inc. Qualifications: Among Mr. Griffin’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Griffin has served as a senior executive in multiple industries, has supply chain expertise, has extensive international business experience, and significant experience as a public company board member. Serving as the lead independent director and a member of the nominating and governance committee of United Rentals, Inc., and having served on numerous other companies’ boards and as a member of the nominating and corporate governance committee of United Rentals, Inc. Mr. Griffin also brings experience setting goals and overseeing implementation of sustainability, climate, human capital and inclusion initiatives. | | Age: 76 Director since: 2014 Member of: Compensation Committee, Executive Committee, and Nominating and Governance Committee (Chair) | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Sundaram “Naga” Nagarajan President and Chief Executive Officer of Nordson Corporation Sundaram “Naga” Nagarajan has served as the President and Chief Executive Officer of Nordson Corporation, a publicly traded, innovative, precision technology company, since 2019. Prior to joining Nordson, Mr. Nagarajan held roles of increasing responsibility with Illinois Tool Works Inc. from 1995 to 2019, including serving as the Executive Vice President, ITW Automotive OEM Segment from 2015 to 2019. Mr. Nagarajan serves on the Board of Directors of Nordson Corporation, Greater Cleveland Partnership, and the Board of Trustees of Manufacturers Alliance and Hawken School. Mr. Nagarajan served as a director of Sonoco Products Company from 2015 to 2022 and is a former trustee of the Hobart Institute of Welding Technology. Qualifications: Among Mr. Nagarajan’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Nagarajan is the Chief Executive Officer of a publicly traded company with broad expertise in senior executive and operating leadership roles, including extensive experience in and knowledge of manufacturing, organizational change management, supply chain management, human capital management, and international business operations. He has worked extensively on inclusion and other environmental, social and governance initiatives, overseeing sustainability strategies and teams. | | Age: 62 Director since: 2022 Member of: Audit Committee and Compensation Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| Wesco 2025 Proxy Statement | Board of Directors | 11 |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Steven A. Raymund Former Chairman and Chief Executive Officer, Tech Data Corporation Steven A. Raymund began his employment with Tech Data Corporation, a distributor of information technology products, in 1981. From 1986 until his retirement in 2006, he served as its Chief Executive Officer, and from 1991 to June 2017, he served as its Chairman of the Board of Directors. Mr. Raymund also serves as Lead Director of Jabil, Inc. Qualifications: Among Mr. Raymund’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Raymund has considerable experience as a Chief Executive Officer of a Fortune 500 company in a global distribution business. He has extensive supply chain expertise, broad experience as a public company board member in various industries, including serving as the lead independent director, member of the compensation and chair of the nominating and corporate governance committees of Jabil, Inc., and has experience assessing sustainability topics. | | Age: 69 Director since: 2006 Member of: Compensation Committee and Nominating and Governance Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | James L. Singleton Chairman, CGH, LLC James L. Singleton has served as Chairman of CGH, LLC since October 2023. From 2014 to 2023, he served as Chairman and Chief Executive Officer of Cürex Group Holdings, LLC. and as the Vice Chairman from 2010 to 2014. From 1994 to 2005, Mr. Singleton served as the President of The Cypress Group LLC, a private equity firm of which he was a co-founder. Prior to founding Cypress, he served as a Managing Director in the Merchant Banking Group at Lehman Brothers. Qualifications: Among Mr. Singleton’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Singleton was a Chief Executive Officer and has extensive expertise in the capital markets, mergers and acquisitions, corporate strategy, human capital management and inclusion topics, as well as deep knowledge of the Company, its industry, business and history. In 2022, Mr. Singleton received the Public Company Director of the Year Award from the National Association of Corporate Directors (NACD), a recognition of Mr. Singleton’s integrity and informed judgment as well as his contributions to advancing board performance and leading corporate governance practices in accordance with NACD principles. | | Age: 69 Director since: 1998 Lead Director Member of: Compensation Committee, Executive Committee (Chair), and Nominating and Governance Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| Wesco 2025 Proxy Statement | Board of Directors | 12 |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Easwaran Sundaram Operating Executive, Tailwind Capital Easwaran Sundaram serves as an Operating Executive at Tailwind Capital, a mid-market private equity firm focused on industrial and technology portfolios. He served as the Executive Vice President and Chief Digital & Technology Officer of JetBlue Airways Corporation from 2012 until his retirement in February 2021 and was a founding member and oversight officer of JetBlue Technology Ventures, a wholly owned subsidiary of JetBlue Airways that incubates, invests in and partners with early stage startups. Previously, he was Senior Vice President of Global Supply Chain and Chief Information Officer at Pall Corporation and served in a senior supply chain management role at PSS World Medical – McKesson Corporation. Mr. Sundaram serves as a director of SolarWinds Corporation. Qualifications: Among Mr. Sundaram’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors are his leadership experience as a technology executive of a Fortune 500 company and his expertise in digital tools and applications, cybersecurity and global supply chain management. He also serves on audit, nominating and corporate governance, and technology and cybersecurity committees of SolarWinds Corporation and brings expertise in the evaluation of environmental, social and governance matters, including sustainable technologies, climate impact management and inclusion initiatives. | | Age: 54 Director since: 2018 Member of: Audit Committee and Nominating and Governance Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| | Laura K. Thompson Former Executive Vice President and Chief Financial Officer, The Goodyear Tire & Rubber Company Laura K. Thompson served as Executive Vice President of The Goodyear Tire & Rubber Company until her retirement in March 2019, and from 2013 to 2018 she served as Executive Vice President and Chief Financial Officer. She has over 35 years of international business and finance experience, including as Vice President of Business Development and Vice President of Finance and Director of Investor Relations. Ms. Thompson is also a director of Parker Hannifin Corporation and Titan International, Inc. Qualifications: Among Ms. Thompson’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors are her financial expertise and her global executive leadership experience in finance, operations, climate impact, inclusion initiatives, and business development at a Fortune 200 company. She also serves as member of the audit and corporate governance and nominating committees of Parker Hannifin Corporation and the audit, compensation, nominating, and corporate governance committees of Titan International, Inc. In addition, Ms. Thompson is an audit committee financial expert. | | Age: 60 Director since: 2019 Member of: Audit Committee (Chair) and Executive Committee | |
Nominee Directors to Serve for a One-Year Term Expiring in 2026
| Wesco 2025 Proxy Statement | Corporate Governance | 13 |
Board and Committee Meetings
| Wesco 2025 Proxy Statement | Director Compensation | 25 |
Director Compensation
Director Compensation
Robust Stock Ownership Guidelines
| Wesco 2025 Proxy Statement | Director Compensation | 26 |
Director Compensation for 2024
Director Compensation for 2024
Director Compensation for 2024
| Name | 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 |
Director Compensation for 2024
| (1) The amounts shown represents the cash portion of the annual retainer paid to the Directors. Ms. Bryan and Messrs. Griffin, Nagarajan and Sundaram elected to defer portions of their compensation into the Company’s Deferred Compensation Plan for Non-Employee Directors. |
Director Compensation for 2024
| Name | Deferred Compensation | | Bryan | $125,000 | | Griffin | $77,500 | | Nagarajan | $125,000 | | Sundaram | $125,000 |
Director Compensation for 2024
| (2) Amounts represent the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718, of RSUs. On March 1, 2024, each non-employee Director received a grant of 1,217 RSUs with a grant date fair value of $152.07 per RSU, which was the closing price of our Common Stock on March 1, 2024. These RSU awards are subject to time-based vesting criteria. The assumptions used in calculating these amounts are set forth in Note 14 to our notes to consolidated financial statements for the year ended December 31, 2024, which is located on pages 80-82 of our Annual Report on Form 10-K. |
Director Compensation for 2024
| (3) All the RSU awards were granted under the WESCO International, Inc. 2021 Omnibus Incentive Plan, as approved by our Board and stockholders. See the “Director Outstanding Equity Awards at the Year-End” table below for more information regarding the equity awards held by Directors as of December 31, 2024. |
Director Outstanding Equity Awards at Year-End(1)
Director Outstanding Equity Awards at Year-End(1)
Director Outstanding Equity Awards at Year-End(1)
| Name | Number of Securities Underlying Unexercised Equity Awards Exercisable | Number of Shares of Stock That Have Not Vested | | 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 |
Director Outstanding Equity Awards at Year-End(1)
| (1) All Equity Award values have been adjusted by dividend equivalents issued quarterly during 2024. |
Director Outstanding Equity Awards at Year-End(1)
| Wesco 2025 Proxy Statement | Security Ownership | 27 |
Executive Summary
| Element | Description | | Stockholder Support | We received the support of approximately 97% of stockholder votes in favor of our say-on-pay proposal 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”). | | 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 Wesco. | | Limited Perquisites | We have limited use of perquisites. | | No Tax Gross-Ups on Executive-Only Perquisites | We do not provide tax gross-ups on 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 SEC rules and NYSE listing standards. |
Pay for Performance
| 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. | | | 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 return metric, 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. | | | Return on 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. | |
Compensation Philosophy, Approach and Pay Elements
| (2) short-term incentives – cash-based, and based on the annual operating plan approved by the Board; and |
Compensation Philosophy, Approach and Pay Elements
| (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 return metrics. |
Compensation Philosophy, Approach and Pay Elements
| • | 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. |
Compensation Setting Process
| • | Supported by the independent compensation consultant, review competitive data and assess compensation program design; |
Compensation Setting Process
| • | 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; |
Compensation Setting Process
| • | 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 Setting Process
| • | Make annual cash incentive award payments based on an evaluation of pre-established operating and financial performance factors; |
Compensation Setting Process
| • | 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; |
Compensation Setting Process
| • | Adjust base salaries, as appropriate, based on job performance, leadership, tenure, experience, and other factors, including market data relative to our peer companies; and |
Role of Compensation Consultants
Role of Compensation Consultants 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 SEC and NYSE rules and concluded that Meridian’s work for the Committee does not raise any conflict of interest. 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 Peer Group
Compensation Peer Group 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:
Compensation Peer Group
| • | distribution companies similar in size, but also companies from general industry (excluding companies that are demonstrably variant to Wesco – e.g., agriculture, financial services, healthcare, retail) to reflect the broader market for talent |
Compensation Peer Group
| • | companies with similar business and financial characteristics, including revenue size, margins, market capitalization and capital intensity |
Compensation Peer Group
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-U.S. based companies, in the case of global competitors. To adjust for a variation in size among our
Compensation Peer Group
| Wesco 2025 Proxy Statement | Compensation Discussion and Analysis | 38 |
Compensation Peer Group
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:
Compensation Peer Group
| 2024 COMPENSATION PEER GROUP | | | | | AECOM | Eaton Corporation plc | Johnson Controls International plc | Trane Technologies plc | | Arrow Electronics, Inc. | Flex Ltd. | Parker-Hannifin Corporation | United Natural Foods, Inc. | | Avnet, Inc. | Fluor Corporation | Performance Food Group Company | United Rentals, Inc. | | Builders FirstSource, Inc. | Genuine Parts Company | Quanta Services, Inc. | US Foods Holding Corp. | | CDW Corporation | Henry Schein, Inc. | Stanley Black & Decker, Inc. | W.W. Grainger, Inc. | | Corning Incorporated | Insight Enterprises, Inc. | TD SYNNEX Corporation | | | Cummins Inc. | Jabil Inc. | TE Connectivity Ltd. | |
Compensation Peer Group
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 Parker-Hannifin Corporation to the peer group and removed CommScope Holding Company, Inc. and Univar Solutions Inc.
Base Salaries
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.
Short-Term Incentives
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-performance compensation 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.
Short-Term Incentives
| Wesco 2025 Proxy Statement | Compensation Discussion and Analysis | 39 |
Short-Term Incentives
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:
Short-Term Incentives
| Performance Measure - Leaders with Corporate-Wide Responsibilities (Engel, Schulz, and Khurana) | Weighting | Percent Achievement | Payout Percent of Target Opportunity(1) | | 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% |
Short-Term Incentives
| (1) Amounts interpolated, as appropriate. |
Short-Term Incentives
| Performance Measure - SBU Leaders (Geary and Squires) | Weighting | Percent Achievement | Payout Percent of Target Opportunity(1) | | 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% |
Short-Term Incentives
| (1) Amounts interpolated, as appropriate. |
Short-Term Incentives
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Short-Term Incentives
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:
Short-Term Incentives
| 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% |
Short-Term Incentives
| (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-K filed with the SEC on February 14, 2025 (the “Form 10-K”), in thousands of millions, as follows: (1) the Company’s adjusted EBITDA of $1,509.1 less $28.9 of stock-based compensation expense and $14.1 for cloud computing arrangement amortization; (2) CSS’ adjusted EBITDA of $621.1 less $6.6 of stock-based compensation expense; and (3) EES’ adjusted EBITDA of $717.5 less $4.4 of stock-based compensation expense. |
Short-Term Incentives
| (2) Free Cash Flow is cash flow provided by operations, less capital expenditures, plus digital transformation and restructuring costs. |
Short-Term Incentives
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%.
Short-Term Incentives
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Short-Term Incentives
Each NEO’s 2024 Short-Term Incentive was calculated as follows based on the performance metrics and actual achievement levels described above:
Short-Term Incentives
| 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 |
Short-Term Incentives
| (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
Long-Term Incentives The purpose of long-term incentives is to carefully align compensation with stockholder value creation, and thus long-term incentives comprise the centerpiece of executive compensation and a significant majority of our NEOs total compensation opportunity.
Structure of Long-Term Incentives
Structure of Long-Term Incentives We structure our Long-Term Incentives (“LTI”) for our NEOs as follows:
Structure of Long-Term Incentives
| Long-Term Incentives | Weighting | | Performance Shares | 50% | | Stock Options | 25% | | Restricted Stock Units | 25% |
Timing of LTI Grants
Timing of LTI Grants Our practice has been to grant LTI equity awards on a predetermined schedule. As part of our annual performance and compensation review process, the Committee reviews and approves annual equity awards (inclusive of Stock Options, Restricted Stock Units and Performance Share Units) at the first quarterly meeting of each fiscal year, which occurs after the announcement
Timing of LTI Grants
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Timing of LTI Grants
of our annual results. Beginning in 2024, the grant date for annual equity awards has been established as March 1 of each year, which typically follows the filing of our Annual Report on Form 10-K 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 Form 10-K. 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. For stock option awards, the exercise price is the closing sale price of our common stock on the NYSE on the date of the grant. If the grant date falls on a non-trading 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. As required by Item 402(x) of Regulation S-K under the Securities Exchange Act of 1934, we are providing the following information about the stock options granted to our NEOs on March 1, 2024, which is within four business days before our filing of a Form 8-K on March 5, 2024, disclosing information to be presented by our executives to investors at the Raymond James Institutional Investors Conference:
Timing of LTI Grants
| Name | 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 | 3/1/2024 | 29,146 | $152.07 | $2,099,969 | 2.7% | | Schulz | 3/1/2024 | 7,564 | $152.07 | $544,986 | 2.7% | | Geary | 3/1/2024 | 5,205 | $152.07 | $375,020 | 2.7% | | Squires | 3/1/2024 | 5,205 | $152.07 | $375,020 | 2.7% | | Khurana | 3/1/2024 | 4,164 | $152.07 | $300,016 | 2.7% |
Performance Shares
Performance Shares Our performance shares (“PSUs”) are designed to reward our NEOs for drivers of long-term value that are tied to our strategy and increased stockholder value over the long-term. We use three-year performance periods for each grant, and performance shares for the three-year period 2022-2024 were based on two equally weighted performance metrics: (1) Net Income Growth; and (2) Return on Net Assets (“RONA”) Growth. Net Income Growth measures the three-year average growth rate of our net income, excluding specific items that are not indicative of ongoing results. We believe that Net Income Growth is related directly to our strategy to drive profitable revenue and earnings growth. This performance metric encompasses sales growth, margin improvement and cost control, which are important operational aspects of our business and strategy. RONA Growth measures the three-year cumulative return on net assets growth versus the base year. We believe that RONA Growth is an appropriate and important measure of performance for a distributor 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. We believe that the combination of earnings growth and effective asset management drives value for a distribution and supply chain solutions business. Performance share awards vest in the form of a number of shares of the Company’s Common Stock. The number of performance shares actually earned, if any, depends on the attainment of certain levels (threshold, target, maximum) of the performance measures and may range from one-half 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.
Performance Shares
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Performance Shares
The threshold, target and maximum performance goals for the performance shares awarded in 2022 for the three-year performance period ended December 31, 2024 (the “2022 Performance Shares”) and the actual achievement and payout levels are as shown below:
Performance Shares
| Performance Measure | Threshold | Target | Maximum | Actual Payout | | Net Income Growth (3-year average 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-year cumulative 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 |
Performance Shares
Based on the actual results and performance goals above, the shares earned by the NEOs are calculated as follows:
Performance Shares
| 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 |
Performance Shares
| (1) Includes dividend equivalents accrued on performance shares. |
Performance Shares
In accordance with the Company’s pay-for-performance philosophy, 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
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 March 1, which typically follows the filing of our Annual Report on Form 10-K 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 Company’s Annual Report on Form 10-K.
Stock Options and Stock Appreciation Rights
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Restricted Stock Units
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:
Restricted Stock Units
| 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 |
Restricted Stock Units
| (1) Performance shares are subject to a three-year performance period from January 1, 2024 to December 31, 2026. |
Restricted Stock Units
| (2) The Stock Option awards vest ratably over three years and have an expiration date of March 1, 2034. |
Restricted Stock Units
| (3) The RSU awards vest in 1/3 increments on March 1, 2025, March 1, 2026 and March 1, 2027, with the exception of 16,075 RSU awards granted to Mr. Khurana, which will cliff vest on May 23, 2028, four years after the grant date. Mr. Khurana is leading the technology design and development for the Company’s digital transformation. Given the significant investment in this initiative and the criticality of Mr. Khurana’s continued leadership of the project through completion, a retention award of approximately 2.5x his annual award was granted by the Committee to secure his services through the four-year vesting period. |
Restricted Stock Units
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.
Restricted Stock Units
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Chief Executive Officer Compensation
Chief Executive Officer Compensation Mr. Engel’s compensation is higher than the compensation of other NEOs due to the broad scope of his responsibilities as Chief Executive Officer, including executive leadership in the development, articulation and promotion of the Company’s mission, vision and values, the development and execution of the Company’s long-term strategy and annual operating and financial plans, the development and motivation of the senior management team, ensuring the recruitment, training and development of the required human resources to meet the needs of the Company, and overall service as the principal spokesperson for the Company in communicating with stockholders, employees, customers, suppliers, and our Board and Board Committees. As described previously, the Committee engages Meridian to prepare an annual market analysis of target total compensation (the total of salary, target annual cash incentive and long-term incentives) compared to a peer group, and it reviews a range of market data for target total compensation versus similarly situated roles within the peer group. When setting Mr. Engel’s pay, the Committee also considers other factors including Company and individual performance, economic conditions, overall duties and responsibilities, internal equity and tenure of the incumbent.
Employment, Severance, Change in Control or Other Arrangements
Employment, Severance, Change in Control or Other Arrangements As disclosed previously, Mr. Engel has a 2009 employment agreement that provides for, among other things, a base salary amount and a target bonus of not less than 100% of base salary, as may be adjusted by the Committee. Mr. Engel also receives long-term equity-based incentives under the Company’s Long-Term Incentive Plan as determined by the Committee. In the event that prior to a change in control Mr. Engel’s employment is terminated by the Company without cause or by Mr. Engel for good reason, he will be entitled to receive monthly cash payments for 24 months in an amount equal to his monthly base salary as of the termination date, a lump sum cash amount equal to his target annual incentive opportunity for the year in which he was terminated and accelerated vesting of all stock-based awards, exercisable for up to 18 months, except for performance based awards where operational or performance criteria have not been met. If such termination occurs within two years after a change in control, Mr. Engel will instead be entitled to receive (i) a lump sum cash payment equal to two times the sum of his annual base salary and his annual target incentive opportunity as of the termination date, (ii) a gross-up payment to offset certain excise taxes, if any, (iii) prorated incentive compensation for the year in which he was terminated and (iv) accelerated vesting of all stock-based awards, exercisable for up to 18 months. As disclosed previously, other than the pre-existing employment agreement with Mr. Engel, the Company has no other agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control. In addition, the Company committed that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control and, indeed, has not entered into any such agreements. See “Potential Payments Upon Termination” on page 56 for additional information. The 2009 employment agreement had an initial term of three years and thereafter is subject to one-year automatic extensions. Mr. Engel is subject to confidentiality obligations during the term of his employment and for five years thereafter. He is bound by restrictive covenants in the form of non-competition and non-solicitation of employees and customers during the term of his employment and for a period of two years thereafter. On June 22, 2020, in conjunction with the closing date of the acquisition of Anixter, the Company entered into new employment letter agreements with each of Messrs. Schulz and Squires. Each letter agreement superseded and replaced the applicable officer’s prior employment letter agreement with the Company. Effective on June 22, 2020, in conjunction with the closing date of the acquisition of Anixter, Mr. Geary joined the Company pursuant to the terms of a new employment letter agreement, dated May 28, 2020, between the Company and Mr. Geary. Mr. Engel’s 2009 employment agreement was not modified and remains in effect. The Company entered into an employment letter agreement with Mr. Khurana, dated October 20, 2020, upon his joining the Company. The letter agreement with Mr. Schulz provides for a base salary, a target annual bonus opportunity of 100% of base salary with a payout opportunity of 0-200% of base salary, and an annual equity award opportunity that is subject to approval by the Compensation Committee. 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 Mr. Khurana has a target annual bonus opportunity of 85% of base salary with a payout opportunity of 0-170% of base salary. 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
Employment, Severance, Change in Control or Other Arrangements
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Employment, Severance, Change in Control or Other Arrangements
without cause or by the officer for good reason, subject to the officer’s execution and non-revocation of 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-solicitation restrictions applicable during employment and for one year thereafter and perpetual confidentiality and non-disparagement covenants.
Change in Control Severance Plan
Change in Control Severance Plan Effective as of June 22, 2020, the Board adopted the WESCO International, Inc. Change in Control Severance Plan (the “CIC Plan”), which will provide severance benefits under certain circumstances to CIC Plan participants selected by the Compensation Committee of the Board. Messrs. Schulz, Geary, Squires and Khurana, as well as other executive officers of the Company, have been selected to participate in the CIC Plan. Mr. Engel does not participate in the CIC Plan, as his benefits are specified in his pre-existing 2009 employment agreement, which was not modified and remains in effect. 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 June 22, 2020) of the participant’s base salary plus the participant’s target bonus; (iii) an amount equal to a multiple (2x for each participant selected to participate on or after June 22, 2020) 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 participant selected to participate on or after June 22, 2020). This severance payment will be provided in lieu of any severance benefits to which the participant is otherwise entitled under any other arrangement with the Company. 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-year post-termination noncompetition and employee and customer non-solicitation covenants and perpetual confidentiality and non-disparagement covenants. 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-tax position than if the participant were to pay the excise tax. 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. 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. 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-K filed on February 22, 2016, providing for: indemnification for indemnifiable claims and losses; advancement of expenses; and D&O liability insurance.
Deductibility of Executive Compensation
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 $1 million limit on the amount that a public company may deduct for compensation, including performance-based compensation, paid to “covered employees”. Under Code Section 162(m) as currently in effect, the definition of covered employees generally includes a) the Company’s principal executive officer (“PEO”) and principal financial officer (“PFO”), whether serving in that capacity at the end of the tax year or not, b) the three highest compensated officers for the taxable year other than the PEO and PFO even if the officer’s compensation is not required to be reported under the Exchange Act, and c) any individual who was a covered employee of the Company at any time after December 31, 2016. Thus, the definition of covered employees includes, but is not limited to, the Company’s NEOs. Notwithstanding the limitation on the tax deductibility of performance-based compensation, we generally will continue to emphasize the use of performance-based compensation, including annual incentive payments, compensatory stock options, stock appreciation rights, RSUs, and performance share awards. We expect to continue to authorize compensation in excess of $1 million to covered employees, which will not be deductible under Section 162(m), when we believe doing so is in the best interests of the Company and our stockholders.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | John J. Engel 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 | | David S. Schulz 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 | | William C. Geary, II EVP and GM, CSS | 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 | | Nelson J. Squires, III EVP and GM, EES | 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 | | Akash Khurana 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 |
Summary Compensation Table
| (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 Mr. Engel $8,400,042; Mr. Schulz $2,180,076; Mr. Geary $1,500,018; Mr. Squires $1,500,018 and Mr. Khurana $1,200,136. RSUs are subject to time-based vesting criteria and performance shares are subject to achievement of certain performance targets over a three-year performance 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 December 31, 2024 in our Annual Report on Form 10-K. |
Summary Compensation Table
| (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 December 31, 2024 in our Annual Report on Form 10-K. All the equity awards to the NEOs in March 2024 were granted under the WESCO International, Inc. 2021 Omnibus Incentive Plan. |
Summary Compensation Table
| (3) Represents annual cash incentive bonus amounts earned for each fiscal year in accordance with SEC rules but approved and paid in the following year. |
Summary Compensation Table
| (4) See the “All Other Compensation” table below for additional information. |
Summary Compensation Table
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All Other Compensation
| (3) Represents the payment in case of fractional dividend equivalents remaining after the last vesting RSUs and the vesting of PSUs. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table summarizes the grants of equity and non-equity plan-based awards made to the executive officers named in the Summary Compensation Table during the fiscal year ended December 31, 2024. The equity awards were granted under the Company’s 2021 Omnibus Incentive Plan.
Grants of Plan-Based Awards
| | | | | Estimated Future Payouts Under Non-Equity Incentive 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 ($)(6) | | Name | Grant Date | Approval Date | Award Type | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Engel | | | Short-Term Incentive | $127,941 | $2,047,050 | $4,094,100 | — | — | — | — | — | — | — | | | 3/1/2024 | 2/15/2024 | Performance Share Units | — | — | — | 6,905 | 27,619 | 55,238 | — | — | — | $4,200,021 | | | 3/1/2024 | 2/15/2024 | Restricted Stock Units | — | — | — | — | — | — | 13,809 | — | — | $2,099,935 | | | 3/1/2024 | 2/15/2024 | Stock Options | — | — | — | — | — | — | — | 29,146 | $152.07 | $2,099,969 | | Schulz | | | Short-Term Incentive | $48,359 | $773,750 | $1,547,500 | — | — | — | — | — | — | — | | | 3/1/2024 | 2/15/2024 | Performance Share Units | — | — | — | 1,792 | 7,168 | 14,336 | — | — | — | $1,090,038 | | | 3/1/2024 | 2/15/2024 | Restricted Stock Units | — | — | — | — | — | — | 3,584 | — | — | $545,019 | | | 3/1/2024 | 2/15/2024 | Stock Options | — | — | — | — | — | — | — | 7,564 | $152.07 | $544,986 | | Geary | | | Short-Term Incentive | $14,963 | $598,500 | $1,197,000 | — | — | — | — | — | — | — | | | 3/1/2024 | 2/15/2024 | Performance Share Units | — | — | — | 1,233 | 4,932 | 9,864 | — | — | — | $750,009 | | | 3/1/2024 | 2/15/2024 | Restricted Stock Units | — | — | — | — | — | — | 2,466 | — | — | $375,005 | | | 3/1/2024 | 2/15/2024 | Stock Options | — | — | — | — | — | — | — | 5,205 | $152.07 | $375,020 | | Squires | | | Short-Term Incentive | $15,075 | $603,000 | $1,206,000 | — | — | — | — | — | — | — | | | 3/1/2024 | 2/15/2024 | Performance Share Units | — | — | | 1,233 | 4,932 | 9,864 | — | — | — | $750,009 | | | 3/1/2024 | 2/15/2024 | Restricted Stock Units | — | — | — | — | — | — | 2,466 | — | — | $375,005 | | | 3/1/2024 | 2/15/2024 | Stock Options | — | — | — | — | — | — | — | 5,205 | $152.07 | $375,020 | | Khurana | | | Short-Term Incentive | $31,543 | $504,688 | $1,009,376 | — | — | — | — | — | — | — | | | 3/1/2024 | 2/15/2024 | Performance Share Units | — | — | — | 987 | 3,946 | 7,892 | — | — | — | $600,068 | | | 3/1/2024 | 2/15/2024 | Restricted Stock Units | — | — | — | — | — | — | 1,973 | — | — | $300,034 | | | 5/23/2024 | 5/23/2024 | Restricted Stock Units | — | — | — | — | — | — | 16,075 | — | — | $2,999,917 | | | 3/1/2024 | 2/15/2024 | Stock Options | — | — | — | — | — | — | — | 4,164 | $152.07 | $300,016 |
Grants of Plan-Based Awards
| (1) The amounts represent the potential cash payment for the annual short-term incentive program for the fiscal year ending December 31, 2024 at “threshold”, “target”, and “maximum” levels of performance. Amounts actually received by the named executive officers under the short-term incentive program for 2024 performance are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 50. For further information about the short-term incentive program, please see the related discussion beginning on page 38. |
Grants of Plan-Based Awards
| (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 January 1, 2024 and ending on December 31, 2026, as discussed on pages 42 - 43. |
Grants of Plan-Based Awards
| (3) The number of restricted stock units in this column represents the grants made to the named executive officers on March 1, 2024. These restricted stock units will vest in in three equal annual installments beginning on the first anniversary of the grant date, with the exception of the grant made to Mr. Khurana on May 23, 2024 for 16,075 restricted stock units, which cliff vest four years after the grate date (on May 23, 2028) as further described on page 44. |
Grants of Plan-Based Awards
| (4) The number of stock options shown in this column represents the number of stock options granted to the named executive officers on March 1, 2024. The stock options vest in three equal annual installments starting on the first anniversary of the grant date. |
Grants of Plan-Based Awards
| (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. |
Grants of Plan-Based Awards
| (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-K for the year ended December 31, 2024. |
Grants of Plan-Based Awards
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Outstanding Equity Awards at Fiscal Year-End
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 December 31, 2024 by the executive officers named in the Summary Compensation Table.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | 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 | 2/13/2018 | 125,001 | — | $62.80 | 2/13/2028 | — | — | — | — | | | 2/13/2019 | 72,541 | — | $54.64 | 2/13/2029 | — | — | — | — | | | 2/13/2020 | 92,893 | — | $48.32 | 2/13/2030 | — | — | — | — | | | 2/11/2021 | 45,386 | — | $76.80 | 2/11/2031 | — | — | — | — | | | 2/17/2022 | 20,374 | 10,188 | $122.09 | 2/17/2032 | 4,708 | $851,960 | 58,434(6) | $10,574,217 | | | 2/16/2023 | 8,641 | 17,283 | $171.96 | 2/16/2033 | 7,577 | $1,371,134 | 46,230(7) | $8,365,781 | | | 3/1/2024 | — | 29,146 | $152.07 | 3/1/2034 | 13,804 | $2,497,972 | 55,778(8) | $10,093,587 | | Schulz | 2/13/2019 | 22,144 | — | $54.64 | 2/13/2029 | — | — | — | — | | | 2/13/2020 | 27,507 | — | $48.32 | 2/13/2030 | — | — | — | — | | | 2/11/2021 | 12,859 | — | $76.80 | 2/11/2031 | — | — | — | — | | | 2/17/2022 | 5,384 | 2,693 | $122.09 | 2/17/2032 | 1,289 | $233,257 | 15,442(6) | $2,794,384 | | | 2/16/2023 | 2,215 | 4,432 | $171.96 | 2/16/2033 | 1,978 | $357,939 | 11,852(7) | $2,144,738 | | | 3/1/2024 | — | 7,564 | $152.07 | 3/1/2034 | 3,619 | $654,894 | 14,476(8) | $2,619,577 | | Geary | 2/17/2022 | 3,638 | 1,820 | $122.09 | 2/17/2032 | 873 | $157,978 | 10,434(6) | $1,888,137 | | | 2/16/2023 | 1,523 | 3,047 | $171.96 | 2/16/2033 | 1,360 | $246,106 | 8,148(7) | $1,474,462 | | | 3/1/2024 | — | 5,205 | $152.07 | 3/1/2034 | 2,490 | $450,590 | 9,960(8) | $1,802,362 | | Squires | 2/16/2017 | 12,107 | — | $71.65 | 2/16/2027 | — | — | — | — | | | 2/13/2018 | 16,305 | — | $62.80 | 2/13/2028 | — | — | — | — | | | 2/13/2019 | 10,308 | — | $54.64 | 2/13/2029 | — | — | — | — | | | 2/13/2020 | 21,645 | — | $48.32 | 2/13/2030 | — | — | — | — | | | 2/11/2021 | 9,077 | — | $76.80 | 2/11/2031 | — | — | — | — | | | 2/17/2022 | 3,638 | 1,820 | $122.09 | 2/17/2032 | 842 | $152,368 | 10,434(6) | $1,888,137 | | | 2/16/2023 | 1,523 | 3,047 | $171.96 | 2/16/2033 | 1,335 | $241,582 | 8,148(7) | $1,474,462 | | | 3/1/2024 | — | 5,205 | $152.07 | 3/1/2034 | 2,465 | $446,066 | 9,960(8) | $1,802,362 | | Khurana | 2/11/2021 | 6,619 | — | $76.80 | 2/11/2031 | — | — | — | — | | | 2/17/2022 | 2,910 | 1,456 | $122.09 | 2/17/2032 | 5,709 | $1,033,101 | 8,346(6) | $1,510,292 | | | 2/16/2023 | 1,218 | 2,438 | $171.96 | 2/16/2033 | 1,090 | $197,246 | 6,518(7) | $1,179,497 | | | 3/1/2024 | — | 4,164 | $152.07 | 3/1/2034 | 1,992 | $360,472 | 7,968(8) | $1,441,889 | | | 5/23/2024 | — | — | — | — | 16,193 | $2,930,285 | — | — |
Outstanding Equity Awards at Fiscal Year-End
| (1) An additional column showing the grant dates of Stock Options and SARs, RSUs, and PSUs has been included for better understanding. |
Outstanding Equity Awards at Fiscal Year-End
| (2) Stock Options and SARs vest in three equal annual installments beginning on the first anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (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 Mr. Khurana which cliff vest on May 23, 2028, and the RSUs granted on February 17, 2022 to Mr. Khurana which vest as follows: 30% on February 17, 2023, 30% on February 17, 2024 and 40% on February 17, 2025. When cash dividends are paid on Wesco common stock, dividend equivalent rights are credited and converted into additional RSUs, subject to the same terms and conditions as the underlying RSUs. The number of RSUs shown includes the dividend equivalent rights through December 31, 2024. Amounts presented are net of shares withheld to cover FICA tax liability for Messrs. Engel and Squires who each met the retirement criteria under the related award agreements. |
Outstanding Equity Awards at Fiscal Year-End
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Outstanding Equity Awards at Fiscal Year-End
| (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. |
Outstanding Equity Awards at Fiscal Year-End
| (5) The amounts shown reflect the pay-out of the PSUs based upon achievement at the maximum level of performance. The vesting and pay-out of 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 Wesco common stock, dividend equivalent rights are credited and converted into additional performance units, subject to the same terms and conditions as the underlying award. The number of PSUs shown includes dividend equivalent rights through December 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (6) These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Return on Net Assets) for the period January 1, 2022 through December 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (7) These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Return on Net Assets) for the period January 1, 2023 through December 31, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (8) These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Return on Net Assets) for the period January 1, 2024 through December 31, 2026. |
Outstanding Equity Awards at Fiscal Year-End
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
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 Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | 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 |
Option Exercises and Stock Vested
| (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 Mr. Engel and Mr. Squires who each met the retirement criteria under the related award agreements. The value realized was determined by multiplying the number of vested units by the closing market price of the Company’s Common Stock on the date of vesting. If the vesting date fell on a weekend or holiday, the closing market price of the Common Stock on the business day immediately preceding the vesting date was used to determine the value realized. |
Option Exercises and Stock Vested
| (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 $147.44. |
Option Exercises and Stock Vested
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Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table provides information for the executive officers named in the Summary Compensation Table regarding contributions, earnings, distributions, and year-end account balances with respect to the Wesco Distribution, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”).
Nonqualified Deferred Compensation
| Name | Year | Executive Contribution in Last Fiscal Year ($)(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 |
Nonqualified Deferred Compensation
| (1) Reflects participation by the named executive officers in the Deferred Compensation Plan, including employee deferral of portions of base salary and incentive compensation. |
Nonqualified Deferred Compensation
| (2) Amounts in this column are Company contributions to the Deferred Compensation Plan during the fiscal year. |
Nonqualified Deferred Compensation
| (3) Reflects investment returns or earnings (losses) calculated by applying the investment return rate 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. |
Nonqualified Deferred Compensation
| (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. |
Nonqualified Deferred Compensation
| (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
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Potential Payments Upon Termination: Mr. Engel
Potential Payments Upon Termination: Mr. Engel Each of the following potential scenarios represents circumstances under which Mr. Engel’s employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Engel in each scenario is provided. 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 Mr. Engel upon separation from the Company is governed by his Amended and Restated Employment Agreement dated September 1, 2009 or under the terms of the applicable equity award agreements and company programs. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release. “Cause” means (a) a material breach of the employment agreement by Mr. Engel; (b) engaging in a felony or conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers, or stockholders; (c) failure to timely and adequately perform his duties under the employment agreement; or (d) material breach of any manual or written policy, code or procedure of the Company. “Good Reason” means (a) a reduction in Mr. Engel’s base salary, excluding any reduction that occurs in connection with an across-the-board reduction of the salaries of the entire senior management team; (b) a relocation of Mr. Engel’s primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) any material reduction in Mr. Engel’s offices, titles, authority, duties or responsibilities.
Potential Payments Upon Termination: Mr. Engel
| 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 |
Potential Payments Upon Termination: Mr. Engel
| (1) Termination After Change in Control |
Potential Payments Upon Termination: Mr. Engel
Mr. Engel’s benefits upon a change in control of the Company are double-triggered (other than equity awards which vest on a change in control), meaning that he will receive these payments only if (i) there is a change in control and (ii) Mr. Engel’s employment is terminated within two years following a change in control without Cause or by Mr. Engel for Good Reason, in which case Mr. Engel will be entitled to receive:
Potential Payments Upon Termination: Mr. Engel
| • | Two times annual base salary. |
Potential Payments Upon Termination: Mr. Engel
| • | Two times the annual target bonus opportunity. |
Potential Payments Upon Termination: Mr. Engel
| • | Prorated annual incentive compensation for the portion of the fiscal year employed, if earned. |
Potential Payments Upon Termination: Mr. Engel
| • | 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. |
Potential Payments Upon Termination: Mr. Engel
| • | Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
Potential Payments Upon Termination: Mr. Engel
| • | Additional gross-up premium 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-existing employment agreement with Mr. Engel, the Company has no other agreement with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control. In addition, the Company committed that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control and, indeed, has not entered into any such agreements. |
Potential Payments Upon Termination: Mr. Engel
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Potential Payments Upon Termination: Mr. Engel
| (2) Involuntary Not for Cause or Executive for Good Reason Termination |
Potential Payments Upon Termination: Mr. Engel
| • | Monthly base salary continuation for 24 months. |
Potential Payments Upon Termination: Mr. Engel
| • | An amount equal to the executive’s annual target bonus opportunity. |
Potential Payments Upon Termination: Mr. Engel
| • | Full vesting of outstanding Stock Options, SARs, and RSUs. |
Potential Payments Upon Termination: Mr. Engel
| • | Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
Potential Payments Upon Termination: Mr. Engel
| (3) Death |
Potential Payments Upon Termination: Mr. Engel
| • | Any accrued and earned but unpaid bonus. |
Potential Payments Upon Termination: Mr. Engel
| • | Full vesting of outstanding Stock Options, SARs, and RSUs. Vesting of performance shares at target. |
Potential Payments Upon Termination: Mr. Engel
| (4) Disability |
Potential Payments Upon Termination: Mr. Engel
| • | 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. |
Potential Payments Upon Termination: Mr. Engel
| • | Full vesting of outstanding Stock Options, SARs, and RSUs. Vesting of performance shares at target. |
Potential Payments Upon Termination: Mr. Engel
| (5) Retirement |
Potential Payments Upon Termination: Mr. Engel
| • | 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. |
Potential Payments Upon Termination: Mr. Engel
| • | Mr. Engel is entitled to receive equity award treatment in the event of his retirement on a similar basis as offered to other salaried U.S. employees who are equity award recipients. In the event of Mr. Engel’s termination of service due to early retirement after attaining a minimum age of 60 and a minimum of five years of service with the Company, (i) RSU awards will vest on a pro rata basis, (ii) PSU awards will continue to vest on a pro rata basis on the vesting date, based on actual performance to the extent that the performance metrics are achieved, and (iii) options and SAR awards will vest and become exercisable on a pro rata basis. |
Potential Payments Upon Termination: Mr. Engel
| (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. |
Potential Payments Upon Termination: Mr. Engel
| (7) Represents the closing stock price on December 31, 2024 (the last trading day of the fiscal year) multiplied by the number of RSUs. |
Potential Payments Upon Termination: Mr. Engel
| (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
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 Mr. Khurana upon separation from the Company is governed by the terms of his employment letter agreement, dated October 20, 2020, as described on pages 47 - 48, the terms of the CIC Plan, as described on page 48, and applicable equity award agreements and Company programs. 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-revocation of 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-solicitation restrictions applicable during employment and for one year thereafter and perpetual confidentiality and non-disparagement covenants. 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: Messrs. Schulz, Geary, Squires, and Khurana
| Wesco 2025 Proxy Statement | Potential Payments Upon Termination | 58 |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
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-year post-termination noncompetition and employee and customer non-solicitation covenants and perpetual confidentiality and non-disparagement covenants. 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 contendere by 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-board reduction 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 Pittsburgh, Pennsylvania (or with respect to Mr. Geary, the facility in which he is based); or (iii) any material reduction in the NEO’s authority, duties or responsibilities. 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 U.S. employees who are incentive and equity award recipients. The Company provides accelerated or continued vesting of equity awards for participants who are eligible for retirement, with the eligibility dependent on the individual’s age and length of service and the terms of the applicable award agreement. Upon a participant’s termination of service due to early retirement after attaining a minimum age of 60 and a minimum of five years of service with the Company, (i) RSU awards will vest on a pro rata basis, (ii) PSU awards will continue to vest on a pro rata basis on the vesting date, based on actual performance to the extent that the performance metrics are achieved, and (iii) options and SARs will vest and become exercisable on a pro rata basis. At December 31, 2024 and using the same assumptions as used for the table below, Mr. Squires was eligible to receive accelerated or continued vesting of his equity awards. Messrs. Schulz, Geary, and Khurana were not eligible for early retirement as of December 31, 2024.
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
| Wesco 2025 Proxy Statement | Potential Payments Upon Termination | 59 |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
| Executive Benefits and Payments Upon Termination | David S. Schulz | William C. Geary, II | Nelson J. Squires, III | Akash Khurana | | Payments Upon Termination Following a Change 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 | — |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
| (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. |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
| (2) Represents the closing stock price on December 31, 2024 multiplied by the number of RSUs. |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
| (3) Represents the closing stock price on December 31, 2024 multiplied by the number of performance shares at target. |
Potential Payments Upon Termination: Messrs. Schulz, Geary, Squires, and Khurana
| Wesco 2025 Proxy Statement | Pay Ratio | 60 |
Chief Executive Officer Pay Ratio
Chief Executive Officer Pay Ratio As required by SEC rules, we are providing the following information about the ratio of annual total compensation of all of our employees, other than our CEO, to the annual total compensation of our CEO. For our fiscal year 2024 pay ratio analysis, we determined that there has been no change in either our employee population or our employee compensation arrangements that we believe would significantly impact our fiscal year 2024 pay ratio disclosure. However, because there were changes in the circumstances of the median employee who we identified for our fiscal year 2023 pay ratio analysis, we are using another employee whose compensation is substantially similar to the original median employee based on the compensation measure used to select the original median employee, as permitted by SEC rules. 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-K Item 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 U.S. employees and 7,263 were non-U.S. employees. Our employee population, after taking into consideration the adjustments permitted by SEC rules, consisted of approximately 19,563 individuals, of which 13,304 were U.S. employees and 6,259 were non-U.S. employees. For these purposes, we excluded approximately 1,004 employees from the following jurisdictions: Poland (89), Brazil (85), China (84), Malaysia (69), Belgium (62), New Zealand (59), United Arab Emirates (57), Taiwan (42), Argentina (40), Netherlands (38), Germany (37), Panama (33), Costa Rica (32), Saudi Arabia (31), Japan (29) Spain (29), Jamaica (20), Italy (18), Sweden (16), France (15), Hong Kong (12), Egypt (11),Turkey (11), Trinidad and Tobago (10), Barbados (7), Guatemala (7), Morocco (7), Portugal (7), Switzerland (7), Indonesia (6), Republic of Korea (6), Israel (5) Uruguay (5), Austria (4), Angola (3), Norway (3), South Africa (3), Czech Republic (2), Denmark (1), Thailand (1) and Vietnam (1). SEC rules allow companies to use a variety of assumptions, adjustments, methodologies, and estimates. Therefore, the ratio figure reported above may not be capable of comparison to the ratio figures reported by companies in our peer group or by any other company. With respect to identifying the “median employee,” we used a consistently applied compensation measure, which is the sum of an employee’s estimated annual salary/wages, commissions and bonus. For employees outside the U.S., we converted local currency amounts to U.S. dollars. 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.
Chief Executive Officer Pay Ratio
| Wesco 2025 Proxy Statement | Pay vs. Performance | 61 |
Pay vs. Performance
Pay vs. Performance The following table summarizes the total compensation of our principal executive officer (“PEO”) and the average of the total compensation of our other NEOs as reported in the Summary Compensation Table for the past five fiscal years, as well as their “compensation actually paid” as calculated pursuant to SEC rules and certain performance measures required by the rules. Compensation actually paid, as determined under SEC requirements, does not reflect the actual amount of compensation earned by or paid to our executive officers during a covered year. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis.
Pay vs. Performance
| | | | | | 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 ($) (2) | Cumulative Total Shareholder Return ($) | Peer Group Cumulative Total Shareholder Return ($) (3) | Net Income ($) | 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 |
Pay vs. Performance
| (1) Mr. Engel served as our PEO for all five years (2020 – 2024). The other NEOs consist of the following individuals in each year: |
Pay vs. Performance
| • | 2024: Messrs. Schulz, Geary, Squires and Khurana |
Pay vs. Performance
| • | 2023: Messrs. Schulz, Cameron, Geary and Squires |
Pay vs. Performance
| • | 2022: Messrs. Schulz, Squires, Geary, Khurana and Dosch |
Pay vs. Performance
| • | 2021: Messrs. Schulz, Squires, Geary and Dosch |
Pay vs. Performance
| • | 2020: Messrs. Schulz, Squires and Dosch and Ms. Lazzaris |
Pay vs. Performance
| 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. |
Pay vs. Performance
| Wesco 2025 Proxy Statement | Pay vs. Performance | 62 |
Pay vs. Performance
| (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”: |
Pay vs. Performance
| | 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 |
Pay vs. Performance
| (3) The peer group used for calculating Peer Group Total Shareholder Return for 2024, 2023, 2022, 2021 and 2020 consists of the following companies listed as our performance peer group: Applied Industrial Technologies, Inc., Arrow Electronics, Inc., Avnet, Inc., Barnes Group Inc., Eaton Corporation Plc, Fastenal Company, Genuine Parts Company, Hubbell, Inc., MRC Global, Inc., MSC Industrial Direct Co., Inc., Rexel SA, Rockwell Automation, Inc. and W.W. Grainger, Inc. |
Pay vs. Performance
| (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 SEC on February 14, 2025. For 2020 – 2024, this number was adjusted to remove the impact of stock-based compensation expense and cloud computing arrangement amortization. |
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid and Performance Measures Below are graphs reflecting the relationship between the compensation actually paid (“CAP”) to our PEO and other NEOs in 2020, 2021, 2022, 2023 and 2024 and the following performance measures: Total Shareholder Return (“TSR”), net income attributable to common stockholders and Adjusted EBITDA. Relationship Between Compensation Actually Paid and Cumulative TSR As reflected in the graph below, from 2020 to 2024, the compensation actually paid to our PEO and the average of the compensation actually paid to our other NEOs decreased by 91.4% and 77.6%, respectively, compared to the Company’s cumulative TSR of 135.0% over the same period. As described in “Compensation Discussion and Analysis,” the Company’s long-term incentive plan is a centerpiece of our executive compensation and a significant portion of the compensation actually paid to our PEO and our other NEOs comprises
Relationship Between Compensation Actually Paid and Performance Measures
| Wesco 2025 Proxy Statement | Pay vs. Performance | 63 |
Relationship Between Compensation Actually Paid and Performance Measures
equity awards. As a result, the compensation actually paid to our PEO and other NEOs is aligned with our cumulative TSR performance and stockholder value creation over the applicable measurement periods. Relationship Between Compensation Actually Paid and Net Income Attributable to Common Stockholders From 2020 to 2024, the compensation actually paid to our PEO and to our other NEOs decreased by 91.4% and 77.6%, respectively, compared to a 837.5% increase in net income attributable to common stockholders (from $70.4 million for 2020 to $660.2 million for 2024) over the same time period. Compensation Actually Paid and Adjusted EBITDA As reflected in the following graph, from 2020 to 2024, compensation actually paid to our PEO and to our other NEOs decreased by 91.4% and 77.6%, respectively, compared to a 130.0% increase in Adjusted EBITDA over the same time period. The Company has identified Adjusted EBITDA as the company-selected measure for the pay versus performance disclosure, as it represents an important financial performance measure used to link compensation actually paid to the PEO and the other NEOs in 2024 to the Company’s performance.
Relationship Between Compensation Actually Paid and Performance Measures
| Wesco 2025 Proxy Statement | Pay vs. Performance | 64 |
Relationship Between Compensation Actually Paid and Performance Measures
Listed below are the financial performance measures that we believe represent the most important financial performance measures we use to link compensation actually paid to our NEOs to our performance for the most recently completed fiscal year.
Relationship Between Compensation Actually Paid and Performance Measures
| Most Important Performance Measures | | Adjusted EBITDA | | Net Income | | Total Shareholder Return (TSR) |
Relationship Between Compensation Actually Paid and Performance Measures
| Wesco 2025 Proxy Statement | 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 |
Relationship Between Compensation Actually Paid and Performance Measures
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.
The Board’s Rationale
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 concern to 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,
The Board’s Rationale
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
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-Laws to 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 State of Delaware, which the Company would do following the Annual Meeting. Other than the proposed amendments to Article XI, the remainder of our Restated Certificate of Incorporation will remain unchanged. If our stockholders do not approve this proposal, then the proposed amendment will not be implemented or become effective.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “AGAINST”
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