UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
WESCO INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
☐ | Fee paid previously with preliminary materials. |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
2022 PROXY STATEMENT
and Notice of Annual Meeting of Stockholders
WESCO INTERNATIONAL, INC. 225 West Station Square Drive, Suite 700 Pittsburgh, Pennsylvania 15219-1122 |
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Notice of 2022 Annual Meeting of
Stockholders and Proxy Statement
2016
Thursday, May 26, 2016
2:00 P.M. Eastern Time
Sheraton Pittsburgh Hotel at Station Square
300 West Station Square Drive
Pittsburgh, PA 15219
WESCO INTERNATIONAL, INC.
225 West Station Square Drive, Suite 700
Pittsburgh, Pennsylvania 15219-1122
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
When: | Thursday, May 26, | |||||
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Where: | This year’s Annual Meeting of Stockholders will be conducted exclusively as a virtual meeting via live audio webcast. You are invited to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/WCC2022, where you will be able to listen to the meeting live, submit questions and vote online. To join the meeting, you will need the 16-digit control number received with your Notice Regarding the Availability of Proxy Materials (‘‘Notice’’). When accessing our Annual Meeting, please allow ample time for online check-in, which will begin at 1:45 p.m., E.D.T., on Thursday, May 26, 2022. | |||||
Record Date: | March | |||||
30, 2022 |
Dear Fellow Stockholders:
Wesco’s performance in 2021 was exceptional and laid the foundation for the extraordinary value creation opportunity that lies before us. We achieved record sales and profitability last year, significantly growing above pre-pandemic levels, and delivered a 68% stock price return to our stockholders. Since closing the transformational acquisition of Anixter in mid-2020, our team has executed a complex integration plan with speed, agility and excellence. At the same time, we have designed and launched an important commitment to digitally transform our business to propel our growth for the next decade and beyond. Wesco’s scale, expanded portfolio and industry-leading positions, when combined with the integration plan and digital transformation, represent our catalysts for continued market outperformance and lasting value creation for all of our stakeholders.
I am pleased to invite you to attend our 20162022 Annual Meeting of Stockholders. It will be held via live audio webcast on May 26, 2016, at the Sheraton Pittsburgh Hotel at Station Square, 300 West Station Square Drive, Pittsburgh, Pennsylvania.2022. Details regarding the items of business to be conducted at the Annual Meeting are described in the accompanying Proxy Statement:
1. | Elect |
2. | Approve, on an advisory basis, the compensation of the Company’s named executive |
3. | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, |
4. | Transact any other business properly brought before the Annual Meeting. |
Voting can be completed in one of four ways:
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returning the proxy card by mail | ||||||
refer to the phone number on your voting card | www.proxyvote.com |
We are sending a Notice of InternetRegarding the Availability of Proxy Materials to you on or about April 8, 2016.12, 2022. Stockholders of record at the close of business on March 31, 201630, 2022 will be entitled to vote at our Annual Meeting or any adjournments or postponements of the meeting. You have a choice of voting in person,online during the open poll section of the meeting, over the Internet, by telephone, or by requesting a paper copy of the proxy materials and a proxy card and then executing and returning the proxy card. In order to assure a quorum, please vote over the Internet or by telephone, or request a paper copy of a proxy card and then complete, sign, date and return the proxy card in the postage-paid envelope provided, whether or not you plan to attend the meeting.
Thank you for your ongoing support of WESCO.Wesco.
By order of the Board of Directors,
John J. Engel
Chairman, President and Chief Executive Officer
PROXY STATEMENT TABLE OF CONTENTSProxy Statement Table of Contents
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Internet Access to this Proxy Statement |
INTERNET ACCESS TO THIS PROXY STATEMENT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAYImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 26, 20162022
The 20162022 Proxy Statement and 20152021 Annual Report of WESCO International, Inc. (“Wesco” or the “Company”) are available to review at:www.proxydocs.com/wcc. A copy of our Annual Report on Form 10-K is available upon request, without charge. Any request should be directed to our Corporate Secretary at the Company’s headquarters office at 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania 15219-1122.
1. | What is a proxy or proxy statement? |
The Board is soliciting your proxy to vote at the Annual Meeting. A proxy is your legal designation of another person to vote the stock you own – that person is sometimes called “your proxy.” A proxy statement is a document that Securities and Exchange Commission (“SEC”) regulations require us to provide to you when we ask you to sign a proxy designating someone to vote on your behalf.
2. | Why did I receive a Notice Regarding the Availability of Proxy Materials? What is included in the proxy materials? |
We are pleased to continue to take advantage of the SecuritiesSEC “Notice and Exchange Commission (the “SEC”)Access” rule, thatwhich permits companies to furnish proxy materials to stockholders over the Internet. On or about April 8, 2016, we will begin mailing proxy materials. A Notice of InternetRegarding the Availability of Proxy Materials (the(a “Notice”) contains instructions on how to vote online or by telephone, or in the alternative, request a paper copy ofaccess the proxy materials online, describes the matters to be considered at our Annual Meeting, and a proxy card.provides instructions on how to vote your shares. By furnishing a Notice and accessAccess to our proxy materials bythrough the Internet, we are lowering the costs and reducing the environmental impact of our Annual Meeting. We encourage you to sign up for direct email notice of the availability of future proxy materials by submitting your email address when you vote your proxy via the Internet.
The proxy materials for the Annual Meeting include the Notice of Annual Meeting of Stockholders, this Proxy Statement, and our Annual Report on Form QUESTIONS AND ANSWERS10-K. If you receive a paper copy of these materials, the proxy materials also include a proxy card or voting instruction form. Proxy materials are first being made available to stockholders on April 12, 2022.
What does it mean if I receive more than one Notice? |
If your shares are registered differently and are in more than one account (for example, some shares may be registered directly in your name and some may be held in the Company’s 401(k) Retirement Savings Plan), you may receive more than one Notice from the Company or, if your shares are beneficially owned (also known as held in “street name”), from your broker, bank or other nominee. Please carefully follow the instructions on each Notice you receive and vote all of the proxy requests to ensure that all your shares are voted.
4. | What is the record date? |
The Board established March 30, 2022 as the record date. If you held shares of WESCO International, Inc. (“WESCO” or the “Company”)Company’s Common Stock at the close of business on March 31, 2016,30, 2022, you may vote at the Annual Meeting. On that date, there were 50,709,704 shares of our Common Stock outstanding. Each share of Common Stock is entitled to one vote on each matter presented for consideration and action at the Annual Meeting.
5. | How do I attend the Annual Meeting? |
Our Annual Meeting will be exclusively conducted via live audio webcast. We are excited to leverage technology to expand stockholder access and allow for stockholders to participate from any location around the world, save Wesco and its stockholders time and money, and ensure the safety of our participants during the current global pandemic. We have designed the virtual meeting with the aim of providing all stockholders the same rights and opportunities to participate as they would have at an in-person meeting. In orderaddition to online attendance, our meeting format provides stockholders with the opportunity to hear all portions of the official meeting, submit written questions, and vote online during the open poll section of the meeting.
Wesco 2022 Proxy Statement | Questions and Answers | 2 |
You may attend the meeting webcast by visiting www.virtualshareholdermeeting.com/WCC2022. You will need the 16-digit control number received with your Notice Regarding the Availability of Proxy Materials. If a bank, brokerage firm, or other nominee holds your shares, you must either designateshould contact that organization for additional information. Rules of conduct for our Annual Meeting will be available once you access the meeting webcast.
The meeting is scheduled to begin at 2:00 pm E.D.T. on May 26, 2022, and online check-in is scheduled to begin at 1:45 p.m. E.D.T. We encourage you to access the meeting platform prior to the meeting start time. The virtual meeting platform is supported across most internet browsers and devices (such as desktops, laptops, tablets, and cell phones) running the most up-to-date version of applicable software and plug-ins. Participants should ensure that they have a proxysufficient internet connection wherever they intend to voteparticipate in the meeting. If you encounter any technical difficulties when accessing or using the virtual meeting website, please call the technical support number that will be posted on your behalf, or attendthe meeting website login page.
6. | How can I ask questions during the Annual Meeting? |
The virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meeting and vote your shares in person. Theso they can ask questions of our Board of Directors requestsor management. To submit a question, you must login to the meeting platform using your proxy socontrol number, click on the “Q&A” tab, type the question into the “Submit a question” field, and click “Submit.” During the Annual Meeting, we will answer questions submitted that your sharesare relevant to the business of the Annual Meeting as time permits and in accordance with our meeting rules and procedures. In the interest of addressing as many stockholder questions as possible in the time allotted, stockholders will count toward a quorumgenerally be limited to one question per proposal and questions that are substantially similar may be voted atgrouped and answered once. Questions that are not relevant to the official business of the Annual Meeting or that include derogatory, offensive, or uncivil language or that are otherwise inappropriate or not suitable for the conduct of the Annual Meeting will not be addressed during the meeting. Responses to any questions appropriately submitted and relevant to the official business of the Annual Meeting that were not answered during the meeting due to time constraints will be posted to our Investor Relations website (https://investors.wesco.com) as soon as practicable after the Annual Meeting.
What |
Proposal 1—Elect five Director nominees for a one-year term expiring at the 2017 Annual Meeting of Stockholders.
Proposal 2—Approve, on an advisory basis, the Company’s executive compensation.
Proposal 3—Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016.
Proposals | Board’s Recommendation | Voting Requirements | ||||
1 | Elect 9 Directors named in the Proxy Statement, each for a one-year term expiring at the 2023 Annual Meeting | FOR EACH DIRECTOR NOMINEE | Abstentions and broker non-votes have no effect on the proposal. Approval requires a plurality of votes cast. | |||
2 | Approve, on an advisory basis, the compensation of the Company’s named executive officers | FOR | Abstentions have the effect of a vote against the proposal; broker non-votes will have no effect on the proposal. Approval requires a majority of votes represented at the meeting and entitled to vote on the matter. | |||
3 | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2022 | FOR | Abstentions have the effect of a vote against the proposal; brokers may vote in their discretion on the proposal. Approval requires a majority of votes represented at the meeting and entitled to vote on the matter. |
Action may be taken at the Annual Meeting with respect to any other business that properly comes before the meeting, and the proxy holders have the right to and will vote in accordance with their judgment on any additional business.
Wesco 2022 Proxy Statement | Questions and Answers | 3 |
How do I cast my vote? |
There are four different ways you may cast your vote. You may vote by:
Internet, at the address provided on the Notice;
telephone, using the toll-free number listed on the Notice;
following the instructions on the Notice to request a paper copy of the proxy card and proxy materials and then marking, signing, dating and returning each proxy card by mail in the postage-paid envelope provided; or
attending the virtual Annual Meeting and voting your shares in person.online during the open poll section of the meeting at www.virtualshareholdermeeting.com/WCC2022.
The deadline for voting by Internet, telephone, or telephonemail is receipt by 11:59 p.m., E.D.T., on Wednesday, May 25, 2016.2022. If you have any questions or need assistance with voting, please contact our proxy solicitor, Innisfree M&A Incorporated (“Innisfree”) at (888) 750-5834 (for stockholders) or (212) 750-5833 (for banks and brokers).
How do I revoke or change my vote? |
If you have returned a proxy via Internet, telephone or mail, you may revoke it at any time before it is voted at the Annual Meeting by:
notifying the Corporate Secretary at the Company’s headquarters office in writing that is received before 11:59 p.m. E.D.T. on May 25, 2022;
sending another validly executed proxy dated later than your prior proxy either by Internet, telephone or mail that is received before 11:59 p.m. E.D.T. on May 25, 2022; or
attending the virtual Annual Meeting and voting online during the open poll section of the meeting.
10. | What is the difference between holding shares as a registered stockholder and a beneficial holder? |
If your shares are registered directly in your name with our transfer agent, Computershare, then you are considered a registered stockholder with respect to those shares. If you hold your shares through an intermediary, such as a bank, broker, or other nominee (sometimes referred to as shares held in “street name”), then you are considered the beneficial holder of those shares.
11. | What if I don’t indicate my voting choices? |
If you are a registered stockholder and return your signed proxy card but do not mark the boxes showing how you wish to vote on any particular matter, your shares will be voted “FOR” the election of each of the Director nominees named in this Proxy Statement, “FOR” the approval, on an advisory basis, of the compensation of the Company’s named executive compensation,officers, and “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our Company’s independent registered public accounting firm for the year ending December 31, 2016.2022.
If you have returnedare a proxy via mail, telephone or Internet, youbeneficial holder, then your nominee may revoke it at any time before it is votedonly vote on proposals that are considered routine matters. The only routine matter being proposed for stockholder vote at the Annual Meeting by:
If your shares are registered differently and are in more than one account (for example, some shares may be registered directly in your name and some may be held in the Company’s 401(k) Retirement Savings Plan), you may receive more than one Noticeinstructions from the Company or a broker, bank or other nominee account with respect to your shares held in “street name”.
Please carefully follow the instructions on each Notice you receive and vote allbeneficial owner of the proxy requestsshares, nominee holders will not have discretionary authority to ensure that all yourvote the shares are voted.
Shares held beneficially through a broker, bank or other nominee may not be voted in person at the Annual Meeting UNLESS you obtain a “Legal Proxy”. A “Legal Proxy” must be obtained from your broker, bankon the election of Directors, or other nominee that holds your shares. Without a “Legal Proxy”, you will not be ableon the proposal to attend and vote those shares in person atapprove, on an advisory basis, the Annual Meeting atcompensation of the Sheraton Pittsburgh Hotel at Station Square, located at 300 West Station Square Drive, Pittsburgh, Pennsylvania.
Shares registered directly in your name with our transfer agent, Computershare, may be voted in person at the Annual Meeting.
Directions to the Annual Meeting at the Sheraton Pittsburgh Hotel at Station Square, 300 West Station Square Drive, Pittsburgh, Pennsylvania, are available atwww.wesco.com.Company’s named executive officers.
Who will count the votes? |
Representatives of Broadridge Financial Solutions, Inc. (“Broadridge”) will tabulate the votes, and there will be a duly appointed inspector of election who will certify his or her examination of the list of
stockholders, the number of shares held and outstanding as of the record date, and the necessary quorum for transaction of the business for this meeting. These persons will count the votes at the Annual Meeting.
Wesco 2022 Proxy Statement | Questions and Answers | 4 |
How many votes must be present to hold the Annual Meeting? What is a quorum? |
A quorum of stockholders is necessary to transact business at the Annual Meeting. A quorum exists if the holders of a majority of the shares of the Company’s Common Stock entitled to vote at the Annual Meeting are present either in person or by proxy at the Annual Meeting. Abstentions, broker non-votes and votes withheld from Director nominees count as shares present for purposes of determining a quorum.
14. | How will Wesco solicit votes and who pays for the proxy solicitation? |
Wesco pays the cost of preparing our proxy materials and soliciting your vote. We have engaged Innisfree to assist with the solicitation of proxies for an estimated fee of $20,000 plus expenses. Wesco will reimburse brokerage firms and other persons representing beneficial owners of shares for reasonable expenses incurred by them in forwarding proxy-soliciting materials to such beneficial owners. Proxies may be solicited on our behalf by our Directors, officers, employees and agents, without additional remuneration, by telephone, electronic or facsimile transmission or in person.
15. | May I elect to receive a paper copy of proxy materials in the future? |
Stockholders can elect to receive future WESCOWesco Proxy Statements and Annual Reports via paper copies in the mail.
If you are a “stockholder of record”registered stockholder, you can choose to receive future Annual Reports and Proxy Statements via paper copy at no charge by writing to WESCO International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122, Attention: Corporate Secretary. If you hold your WESCO stock in “street name” (such as throughare a broker, bank, or other nominee account),beneficial holder, follow the information provided by your nominee for instructions on how to elect to receive paper copies of future Proxy Statements and Annual Reports.
If you enroll to receive paper copies of WESCO’sWesco’s future Annual Reports and Proxy Statements, your enrollment will remain in effect for all future stockholders’ meetings unless you cancel the enrollment.
16. | What is householding? |
Stockholders who share the same last name and address will receive one package containing a separate Notice for each individual stockholder at that address. Stockholders who have elected to receive paper copies and who share the same last name and address will receive only one set of our Annual Report on Form 10-K and Proxy Statement, unless such stockholders have notified us that they wish to continue receiving multiple copies. This method of delivery, known as “householding,” will help ensure that stockholder households do not receive multiple copies of the same document and lowers the costs and the environmental impact of our Annual Meeting.
If you are a registered stockholder, you can opt out of the householding practice and receive prompt delivery of a separate copy of the materials by calling Broadridge at 1-866-540-7095. If you would like to opt out of this practice and you are a beneficial holder, please contact your bank or broker.
If you receive multiple copies of proxy materials at your household and would prefer to receive a single copy of these materials, please contact Broadridge at the above telephone number. If you are a beneficial holder, please contact your bank or broker.
PROXY SOLICITATION AND VOTING INFORMATION
Holders of our Common Stock at the close of business on the record date of March 31, 2016 may vote at our Annual Meeting. On the record date,42,200,377 shares of our Common Stock were outstanding. A list of stockholders entitled to vote will be available at the Annual Meeting at the Sheraton Pittsburgh Hotel at Station Square, located at 300 West Station Square Drive, Pittsburgh, Pennsylvania, and during ordinary business hours for 10 days prior to the Annual Meeting at the Company’s principal executive offices. Any stockholder of record may examine the list for any legally valid purpose.
The BoardItem 1 — Proposal to Vote for Election of Directors is soliciting your proxy to vote at our Annual Meeting of Stockholders, and at any adjournment or postponement of the meeting. In addition to soliciting proxies by mail, telephone, and the Internet, our Board of Directors, without receiving additional compensation, may solicit in person. We have engaged Morrow & Co., LLC, 470 West Ave., Stamford, CT 06902 to assist us in the solicitation of proxies, and we expect to pay Morrow & Co., LLC approximately $8,500 for these services, plus reimbursement of their expenses. Brokerage firms and other custodians, nominees, and fiduciaries will forward proxy soliciting material to the beneficial owners of our Common Stock, held of record by them, and we will reimburse these brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in doing so. The cost of this proxy solicitation will consist primarily of printing, legal fees, and postage and handling. We will pay the cost of this solicitation of proxies.
To conduct the business of the Annual Meeting, we must have a quorum. The presence, in person or by proxy, of stockholders holding at least a majority of the shares of our Common Stock outstanding will constitute a quorum. Abstentions, broker non-votes and votes withheld from Director nominees count as
shares present for purposes of determining a quorum. A broker non-vote occurs when a broker, bank or other nominee holder does not vote on a particular item because the nominee holder does not have discretionary authority to vote on that item and has not received instructions from the beneficial owner of the shares. In the absence of voting instructions from the beneficial owner of the shares, nominee holders will not have discretionary authority to vote the shares at the Annual Meeting in the election of Directors, or the approval, on an advisory basis, of the Company’s executive compensation, but will have discretionary authority to vote on the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016. Broker non-votes will not affect the outcome of any of the matters scheduled to be voted upon at the Annual Meeting and are not counted as shares voting with respect to any other matter on which the broker has not voted expressly. Proxies that are transmitted by nominee holders for beneficial owners will count toward a quorum and will be voted as instructed by the nominee holder.
The election of Directors will be determined by a plurality of the votes cast. The Board has adopted a Director resignation policy in the event a Director receives less than 50% of the votes for his or her re-election in an uncontested election. Only votes “FOR” or “WITHHELD” affect the outcome of the election of Directors. The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016, and the approval, on an advisory basis, of our executive compensation will require affirmative votes by a majority of the shares present, in person or by proxy, and entitled to vote and voting on the proposal at the Annual Meeting. Abstentions will not affect the outcome of any of the matters scheduled to be voted upon at the Annual Meeting.
Item 1 — Proposal to Vote for Election of Directors
ITEM 1 — PROPOSAL TO VOTE FOR ELECTION OF DIRECTORS
The following Director Nominees have been nominated for election to our Board (withfor a term expiring at the 20172023 Annual Meeting of Stockholders): Sandra Beach Lin,Stockholders: John J. Engel, JamesAnne M. Cooney, Matthew J. O’Brien,Espe, Bobby J. Griffin, John K. Morgan, Steven A. Raymund, James L. Singleton, Easwaran Sundaram and Lynn M. Utter.Laura K. Thompson.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTEOur Board unanimously recommends a vote “FOR”
EACH OF THE DIRECTOR NOMINEES.each of the Director Nominees.
BOARD OF DIRECTORSBoard of Directors
The Board currentlyis composed of nine directors as of the filing date of this proxy statement, is currently divided into two classes. Prior to the 2014 Annual Meeting of Stockholders, each of the classes was elected to serve three-year terms which were staggered such that the classes were as equal in number as possible depending on the total number of directors at any time. At the 2014 Annual Meeting of Stockholders, upon the recommendation of and approval by the Board, our stockholders approved an amendment to the Company’s Restated Certificate of Incorporation to declassify the Board. Each Director elected after the 2014 Annual Meeting of Stockholders, whether to succeed a Director whose term has expired or to fill any vacancy, is elected for a one-year term expiring at the next annual meeting. Directors elected at the 2014 Annual Meeting of Stockholders or earlier will serve the remainder of their respective terms before standing for re-election. Accordingly, our declassified board structure will be fully implemented at the 2017 Annual Meeting of Stockholders.
Proxy Statement. The current term of the Director Nominees expires this year, and their successors are to be elected at the Annual Meeting for a one-year term expiring in 2017,2023, subject to earlier retirement, resignation or removal. Robert J. Tarr, Jr., a current Class II Director, will not be standing for re-election to the Board in accordance with the Company’s Director retirement age policy. Mr. Tarr’s term will end on May 26, 2016 at the Annual Meeting. The term of the Class III Directors does not expire until the Annual Meeting of Stockholders to be held in 2017.
Should all nominees be elected as indicated in the proposal above, theThe following is the complete list of individuals who will comprise our Board of Directors and Board Committees immediately following the Annual Meeting.as of March 30, 2022.
Name | Age | Director Since | Audit | Compensation | Executive | Nominating and Governance | Age | Director Since | Audit | Compensation | Executive | Nominating and Governance | ||||||||||||||||||||||||||||||||||||
Sandra Beach Lin | 58 | 2002 | Member | Member | Chair | |||||||||||||||||||||||||||||||||||||||||||
John J. Engel | 54 | 2008 | Member | 60 | 2008 |
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Anne M. Cooney | 62 | 2021 |
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Matthew J. Espe | 63 | 2016 |
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Bobby J. Griffin | 67 | 2014 | Member | Member | 73 | 2014 |
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John K. Morgan | 61 | 2008 | Chair | Member | 67 | 2008 |
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James J. O’Brien | 61 | 2016 | Member | Member | ||||||||||||||||||||||||||||||||||||||||||||
Steven A. Raymund | 60 | 2006 | Chair | Member | 66 | 2006 |
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James L. Singleton(1) | 60 | 1998 | Member | Chair | Member | 66 | 1998 |
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Lynn M. Utter | 53 | 2006 | Member | Member | ||||||||||||||||||||||||||||||||||||||||||||
Easwaran Sundaram | 51 | 2018 |
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Laura K. Thompson | 57 | 2019 |
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(1) | Lead Director |
Chair
Member
Wesco 2022 Proxy Statement | Item 1 — Proposal to Vote for Election of Directors | 6 |
Directors
The following information is provided regarding our Directors as of March 30, 2022.
Director Composition
Director Skills, Experience, and Background
The Board regularly reviews the skills, experience, and background that it believes are desirable to be represented on the Board and, in conjunction with the Board’s refreshment process described herein, has evaluated these skills and qualifications to align with the Company’s strategic vision, business and operations. The following is a description of some of these skills, experience and backgrounds, along with the percentage of our Directors that bring such skills and qualifications to the Board.
100% |
Strategic Leadership
Experience driving strategic direction and growth of an organization
Industry Background
Knowledge of or experience in one or more of the Company’s specific industries
67% |
Financial Acumen and Expertise
Experience or expertise in financial accounting and reporting or the financial management of a major organization
100% |
Senior Management Leadership
Experience serving in a senior leadership role of a major organization
56% |
CEO Leadership
Experience serving as the Chief Executive Officer of a major organization
100% |
Operations Management Expertise
Experience or expertise in managing the operations of a business or major organization
100% |
Public Company Board Service
Experience as a board member of another publicly traded company
89% |
Corporate Finance and M&A Experience
Experience in corporate lending or borrowing, capital markets transactions, significant mergers or acquisitions, private equity, or investment banking
67% |
Technology and Cybersecurity Background or Expertise
Experience or expertise in information technology, information security or the use of digital tools/technologies/ applications to facilitate business objectives
100% |
International Experience
Experience doing business internationally
Wesco 2022 Proxy Statement | Item 1 — Proposal to Vote for Election of Directors | 7 |
ElectionBoard composition is assessed to achieve the appropriate mix of Directorsskills and experiences so that the Board, taken as a whole, is well-situated to fulfill the needs of the Company and its stockholders. Also, it is considered particularly beneficial that 100% of Board members have strategic leadership, senior management leadership, and operational expertise, as well as international experience and public company board service.
Our Board proactively seeks diverse Director candidates to provide representation of varied backgrounds, perspectives and experience in the boardroom. When seeking new Director candidates, our Nominating and Governance Committee emphasizes the inclusion of women and racial or ethnic minorities in the candidate pool. Our Board currently consists of 44% women and racially or ethnically diverse Directors, and our goal is to increase this amount to 50% or more. During the past five years, the Board has added three new Directors as part of its refreshment process, each of whom is female or racially or ethnically diverse.
NOMINEE DIRECTORS TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2017The matrix below describes the self-identified gender and race or ethnicity attributes of our Directors:
Gender
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Female | ✓ | ✓ | ||||||||||||||||||||||||||||||||||
Male | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||
Did Not Disclose | ||||||||||||||||||||||||||||||||||||
Race or Ethnicity | ||||||||||||||||||||||||||||||||||||
African American or Black | ✓ | |||||||||||||||||||||||||||||||||||
Asian | ✓ | |||||||||||||||||||||||||||||||||||
White or Caucasian | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||
Did Not Disclose |
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Wesco 2022 Proxy Statement | Item 1 — Proposal to Vote for Election of Directors | 8 |
Nominee Directors to Serve for A One-Year Term Expiring In 2023
John J. Engel Chairman, President & Chief Executive Officer John J. Engel has served as |
Qualifications: Among Ms. Beach Lin’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Beach Lin: has extensive experience as a senior executive in operational roles, including serving as a Chief Executive Officer; has extensive experience managing global businesses in multiple industries; is experienced in various corporate governance matters and serves as a director of other public company boards; and has extensive experience with LEAN/Six Sigma.
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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 and has extensive experience as a senior executive and operating leader in various global industries.
Director since: 2008 Chairman of the Board Member of: Executive |
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 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. | ||
Age: 62 Director since: 2021 Member of: Audit |
Wesco 2022 Proxy Statement | Item 1 — Proposal to Vote for Election of Directors | 9 |
Matthew J. Operating Partner, Advent International Matthew J. Espe is an Operating Partner at Advent International, a private equity investment firm, a position he has held since November 2017, and is an Operating Partner at Periphas Capital, a private equity investment firm, a position he has held since February 2018. He currently serves as chairman for two privately-held portfolio companies. From February 2017 to November 2017, he served as the |
Qualifications: Among Mr. O’Brien’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. O’Brien 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 and corporate governance. He also brings significant experience gained from service on the board of directors of other public companies.Directors of Realogy Holdings Corp., Foundation Building Materials, Inc., and Periphas Capital Partnership Corporation.
Director since: 2016 Member of: Compensation Committee and Nominating and Governance Committee
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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, has supply chain expertise, has broad experience as a public company board member in various industries, and is an audit committee financial expert.
Election of Directors
Former President, International Operations, Ryder System, Inc.
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Qualifications: Among Ms. Utter’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Utter has executive leadership experience in key operating roles, most recently as President and Chief Operating Officer; has extensive experience as a senior executive in multiple industries and disciplines, including sales, manufacturing and distribution; has extensive experience in strategic planning as a Chief Strategy Officer and strategy consultant; and has been awarded recognition in the business community as a woman whose outstanding achievements serve as a model of excellence.
Retiring
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Qualifications: Among Mr. Tarr’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Tarr has broad experience serving as a Chief Executive Officer and as a board member for businesses in various industries and has extensive experience in capital markets and with mergers and acquisitions.
Board of Directors
CLASS III DIRECTORS — PRESENT TERM EXPIRES IN 2017
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Qualifications: Among Mr. Morgan’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Morgan has experience as a Chief Executive Officer with broad expertise in senior executive and operating leadership roles, including extensive experience in and knowledge of the industry in which the Company operates.
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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 is a Chief Executive Officer and has extensive expertise in the capital markets, mergers and acquisitions, and knowledge of the Company, its industry, business and history.
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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 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 |
Age: 73 Director since: 2014 Member of: Compensation Committee, Executive Committee, and Nominating and Governance Committee (Chair)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 experience as a public company board member.
Item 1 — Proposal to Vote for Election of Directors |
John K. Morgan Former Chairman, President and Chief Executive Officer, Zep Inc. John K. Morgan served as the Chairman, President and Chief Executive Officer of Zep Inc., a specialty chemicals company, from 2007 until his retirement in June 2015. From July 2007 to October 2007, he served as Executive Vice President of Acuity Brands and President and Chief Executive Officer of Acuity Specialty Products, just prior to its spinoff from Acuity Brands, Inc. From 2005 to July 2007, he served as President and Chief Executive Officer of Acuity Brands Lighting. He also served Acuity Brands as President and Chief Development Officer from 2004 to 2005, as Senior Executive Vice President and Chief Operating Officer from 2002 to 2004, and as Executive Vice President from 2001 to 2002. He previously served as a director of LSI Industries Inc. Qualifications: Among Mr. Morgan’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Morgan has experience as a Chief Executive Officer with broad expertise in senior executive and operating leadership roles, including extensive experience in and knowledge of the industry in which the Company operates. | ||
Age: 67 Director since: 2008 Member of: Compensation Committee (Chair) and Executive Committee |
Executive Officers
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 a director of Jabil, Inc. and as a member of the Board of Trustees of All Children’s Hospital, Inc. and the Board of Trustees of the University of Oregon Foundation. 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, has supply chain expertise, has broad experience as a public company board member in various industries, and is an audit committee financial expert. | ||
Age: 66
Director since: 2006 Member of: Audit Committee (Chair) and Executive Committee |
Wesco 2022 Proxy Statement | Item 1 — Proposal to Vote for Election of Directors | 11 |
James L. Singleton Chairman and Chief Executive Officer, Cürex Group Holdings, LLC James L. Singleton is Chairman and Chief Executive Officer of Cürex Group Holdings, LLC, an institutional foreign exchange execution services and data analytics provider, and has held that position since May 2014. From 2010 to May 2014, he served as the Vice Chairman of Cürex Group Holdings, LLC. From 1994 to 2005, he 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. In addition, Mr. Singleton previously served as a director of ClubCorp, Inc., Danka Business Systems PLC and William Scotsman International, Inc. 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 is a Chief Executive Officer and has extensive expertise in the capital markets, mergers and acquisitions, and knowledge of the Company, its industry, business and history. | ||
Age: 66 Director since: 1998 Lead Director Member of: Compensation Committee, Executive Committee (Chair), and Nominating and Governance Committee |
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. | ||
Age: 51 Director since: 2018 Member of: Audit Committee |
Wesco 2022 Proxy Statement | Item 1 — Proposal to Vote for Election of Directors | 12 |
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 and business development at a Fortune 200 company. In addition, Ms. Thompson is an audit committee financial expert. | ||
Age: 57 Director since: 2019 Member of: Audit Committee |
Wesco 2022 Proxy Statement | Executive Officers | 13 |
Our executive officers and their respective ages and positions as of April 8, 2016,March 30, 2022, are set forth below.
Name | Age | Position | ||||
John J. Engel | Chairman, President and Chief Executive Officer | |||||
| Executive Vice President and | |||||
Theodore A. Dosch | 62 | Executive Vice President, Strategy and Chief Transformation Officer | ||||
William C. Geary, II | 51 | Executive Vice President and General Manager, Communications & Security Solutions (CSS) | ||||
Akash Khurana | 48 | Executive Vice President and Chief Information and Digital Officer | ||||
Diane E. Lazzaris | ||||||
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David S. Schulz | 56 | Executive Vice President and Chief Financial Officer | ||||
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Christine A. Wolf | 61 | Executive Vice President and Chief Human Resources Officer |
Timothy A. Hibbardwas appointedJohn J. Engel has served as Chairman of the Board of Directors since May 2011 and as our Vice President and Corporate Controller in February 2012. From 2006 to February 2012, he served as our Corporate Controller. From 2002 to 2006, he served as Corporate Controller at Kennametal Inc. From 2000 to 2002,Chief Executive Officer since 2009. Previously, Mr. Hibbard served as Director of Finance of Kennametal’s Advanced Materials Solutions Group, and, from 1998 to 2000, he served as Controller of Greenfield Industries, Inc., a subsidiary of Kennametal Inc.
Diane E. LazzarishasEngel 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., Vice President and General Manager of Allied Signal, Inc., and also held various engineering, manufacturing and general management positions at General Electric Company.
James F. Cameron has served as our Executive Vice President and General Manager of the Utility and Broadband Solutions (UBS) strategic business unit since June 2020. From January 2014 to June 2020 he was Vice President and General Manager of the Utility and Broadband Group, and from 2011 to 2013 he was Regional Vice President of our Utility business. Prior to joining Wesco in 2011, Mr. Cameron served as Senior Vice President of the Utility Group, and Vice President of Marketing & Operations with Irby, a Sonepar Company. Earlier in his career, Mr. Cameron held various positions with Hubbell Power Systems, Thomas & Betts and ABB.
Theodore A. Dosch has served as our Executive Vice President, Strategy and Chief Transformation Officer since June 2020. Prior to the Anixter acquisition in 2020, Mr. Dosch served as the Executive Vice President – Finance and Chief Financial Officer of Anixter International Inc. from July 2011 to June 2020 after serving as its Senior Vice President – Global Finance from January 2009 to July 2011. Previously, Mr. Dosch served as CFO – North America and Vice President – Maytag Integration at Whirlpool Corporation from 2006 to 2008; and held a variety of financial related roles at Whirlpool since 1986.
William C. Geary, II has served as our Executive Vice President and General Manager of the Communications & Security Solutions (CSS) strategic business unit since June 2020. Prior to the Anixter acquisition in 2020, Mr. Geary served as Executive Vice President – Network & Security Solutions of Anixter International Inc. from July 2017 to June 2020 and Senior Vice President – Global Markets – Network & Security Solutions from January 2017 to June 2017. Previously, Mr. Geary held a variety of senior management roles at Accu-Tech Corporation, a wholly-owned subsidiary of Anixter.
Akash Khurana has served as our Executive Vice President and Chief Information and Digital Officer since joining the Company in November 2020. Before joining Wesco, Mr. Khurana served as Chief Information Officer and Chief Data Officer of Global information of McDermott International, Ltd. from March 2015 to November 2020. Previously, he served as Senior Director of Global Product Lines and Regional P&Ls at Baker Hughes and held a variety of leadership roles at GE Healthcare and Power & Water Divisions.
Diane E. Lazzaris has served as our Executive Vice President and General Counsel since JanuaryJune 2020 and also as Corporate Secretary since February 2021. From 2014 to June 2020 she served as Senior Vice President and General Counsel, and from February 2010 to December 2013 she served as our Vice President, Legal Affairs. From 2008 to February 2010, Ms. Lazzaris served as Senior Vice President – Legal, General Counsel and Corporate Secretary of Dick’s Sporting Goods, Inc. From 1994 to 2008, she held various corporate counsel positions at Alcoa Inc., most recently asincluding Group Counsel to a group of global businesses.
Kenneth
Wesco 2022 Proxy Statement | Executive Officers | 14 |
Hemant Porwal has served as our Executive Vice President, Supply Chain and Operations division since June 2020, and from January 2015 to June 2020 as Vice President of Global Supply Chain and Operations. Before joining Wesco, Mr. Porwal served as Vice President at Sears Holding Corporation, leading their global procurement function since 2011, and at PepsiCo where he held roles with increasing responsibility in Operations, Supply Chain, Procurement and Finance.
David S. ParksSchulzhas served as our Executive Vice President and Chief Financial Officer since June 2020, and from October 2016 to June 2020, he served as Senior Vice President and Chief Financial Officer. Prior to joining Wesco, Mr. Schulz served as Senior Vice President and Chief Operating Officer of Armstrong Flooring, Inc. from April 2016 to October 2016 and from November 2013 to March 2016, he served as Senior Vice President and Chief Financial Officer of Armstrong World Industries, Inc. and as Vice President, Finance of the Armstrong Building Products division from 2011 to November 2013. Prior to joining Armstrong World Industries in 2011, he held various financial leadership roles with Procter & Gamble and The J.M. Smucker Company. Mr. Schulz began his career as an officer in the United States Marine Corps.
Nelson J. Squires III has served as our Executive Vice President and General Manager of the Electrical and Electronics Solutions (EES) strategic business unit since June 2020, and from October 2019 to June 2020 he served as our Senior Vice President and Chief Financial Officer sinceOperating Officer. From January 2014, and from June 20122018 to December 2013September 2019 he served as ourGroup Vice President and Chief Financial Officer. From 2008 to February 2012, he servedGeneral Manager of Wesco Canada/International/WIS and as Group Vice President and General Manager of FinanceWesco Canada from August 2015 to January 2018. From 2010 to July 2015, he was Vice President and General Manager, North America Merchant Gases and President, Air Products Canada of United Technologies Corporation for their global FireAir Products and Security business. From 2005 to 2008, heChemicals, Inc. He has also served in regional and general management positions, as Directordirector of Investor Relations of United Technologies Corporation. He beganinvestor relations, and in various sales positions at Air Products. Earlier in his career, he was a captain in public accounting with Coopers & Lybrand.the United States Army.
Kimberly G. WindrowChristine A. Wolfhas served as our SeniorExecutive Vice President and Chief Human Resources Officer since January 2014,June 2020, and from August 2010June 2018 to December 2013 she served as our Vice President, Human Resources. From 2004 until July 2010, Ms. Windrow servedJune 2020 as Senior Vice President ofand Chief Human Resources for The McGraw Hill Companies inOfficer. Before joining Wesco from 2011 to June 2018, Ms. Wolf served as the education segment.Chief Human Resources Officer of Orbital ATK, Inc. until its acquisition by Northrop Grumman. From 2001 until 2004,2008 to 2011, she served as Senior Vice President ofthe Chief Human Resources for The MONY Group,Officer of Fannie Mae and from 1988 until 2000,2004 to 2008 she served as Chief Human Resources Officer of E*Trade Financial Corporation. Prior to that, she held various positions in various Human Resource positions at Willis, Inc.human resources with companies in a variety of industries.
Corporate Governance | 15 |
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines in conformity with the New York Stock Exchange (NYSE) listed company standards to provide a framework to assist members of our Board in fully understanding and effectively implementing their responsibilities while assuring our on-going commitment to high standards of corporate conduct and compliance.
We have adopted a Code of Business Ethics and Conduct and a Global Anti-Corruption Policy which apply to our Board of Directors and all of our employees and cover all areas of professional conduct, including customer relations, conflicts of interest, insider trading, financial disclosure, and compliance with applicable laws and regulations.
We also have adopted a Senior Financial Executive Code of Principles for Senior Executives, referred to as the Senior Financial Executive Code, which applies to our Chief Executive Officer, Chief Financial Officer and Corporate Controller. We disclose future amendments to, or waivers from, the Senior Financial Executive Code on the corporate governance section of our website within four business days of any amendment or waiver.
You may access our Corporate Governance Guidelines, Committee Charters, Code of Business Ethics and Conduct, Global Anti-Corruption Policy, Senior Financial Executive Code, Independence Policy, and related documents on our website atwww.wesco.com/governancehttps://investors.wesco.com/corporate-governance/guidelines-charters-and-policies/default.aspx.
Director Independence
Our Board has adopted independence standards that meet or exceed the independence standards of the NYSE, including the enhanced independence requirements for audit and compensation committee members. In addition, as part of our independence standards, our Board has adopted categorical standards to assist it in evaluating the independence of each of its Directors. The categorical standards are intended to assist our Board in determining whether or not certain direct or indirect relationships between its Directors and our Company or its subsidiaries are “material relationships” for purposes of the NYSE independence standards. The categorical standards establish thresholds at which any relationships arerelationship is deemed to be material.
In February 2016,2022, the independence of each Director was reviewed, applying ourapplicable independence standards. The review considered relationships and transactions between each Director and his or her immediate family and affiliates and our management and our independent registered public accounting firm.
Based on this review, our Board affirmatively determined that the following Directors are independent: Ms. Beach Lin, Mr.Messrs. Espe, Griffin, Mr. Morgan, Mr. O’Brien, Mr. Raymund, Mr. Singleton Mr. Tarr, and Ms. Utter.
Sundaram and Messes. Cooney and Thompson.
Director Qualifications and Director Diversity
Our Nominating and Governance Committee reviews with the Board at least annually the qualifications of new and existing Board members, considering the level of independence of individual members, together with such other factors, including overall skills and experience. Each Director’s particular and specific experience, qualifications, attributes or skills which support his or her position as a Director on our Board are identified on pages 36 to 5.12.
The Nominating and Governance Committee considers various factors in determining whether to recommend a candidate for nomination as a Director, including an individual’s aptitude for independent analysis, level of integrity, personal and professional ethics, soundness of business judgment, relevant experience, and ability and willingness to commit sufficient time to Board activities. The Nominating and Governance Committee consults with the Board to determine the most appropriate combination of characteristics, skills and experiences for the Board as a whole with the objective of having a Board whose members have diverse backgrounds and experiences.experiences and sufficient domain knowledge of the Company’s end markets and distribution industry. The Nominating and
Governance Committee considers candidates diverse in geographic origin, gender, ethnic background, geographic origin, age and professional experience and evaluates each individual in the context of the individual’s potential contribution to the Board as a whole to best promote the success of the Company’s business, represent stockholder interests through the exercise of sound judgment, and allow the Board to benefit from the group’s diversity of backgroundsbackground, experience and experiences.thought. The Board values inclusion and diversity, and as of March 30, 2022, 44% of our Directors were diverse in terms of gender or ethnicity.
Wesco 2022 Proxy Statement | Corporate Governance | 16 |
The Nominating and Governance Committee also reviews the characteristics of incumbent Board members and prospective Board members to ensure that the Board, as a whole, possesses the experience, expertise and competencies that are relevant or desirable. The Nominating and Governance Committee uses a skills matrix to assess the overall composition of the Board, including such characteristics as CEO experience, strategy and operational expertise, financial expertise, capital markets expertise, sales orand marketing expertise, supply chain orand industry experience, mergers and acquisitions experience, international experience, and technology expertise, and operational or strategycybersecurity experience, among
Corporate Governance
others. The Nominating and Governance Committee may also target prospective candidates for Board membership based on their attributes compared to current Board members to achieve a goodstrong overall Board composition. The Nominating and
Governance Committee applies the same criteria to all candidates that it considers, including any candidates submitted by stockholders.
Board Refreshment, Tenure and Diversity
The Board is committed to ongoing Board refreshment. The Board considers a balanced Board in terms of overall average Director tenure, comprising newer Directors as well as those who have longer experience with the Company, to benefit the Company and its stockholders by providing fresh perspectives, experience and stability. During the past five years, the Board has recruited three new Directors as part of its refreshment process. Currently, 37.5% of our independent Directors have a tenure of five years or less. In order to develop a balanced Board, we have a robust Director recruitment process that includes utilizing the assistance of a nationally recognized recruiting firm to identify and recruit potential candidates for our Board of Directors based on attributes outlined on a skills matrix that was developed by the Nominating and Governance Committee. For each recruiting engagement, the Nominating and Governance Committee, working with the independent recruiting firm and including input from the Board, develops specifications for each director position, which are used to identify and recruit director candidates. We emphasize diversity as part of our recruiting efforts and require diverse slates of candidates for each position. The Board has four of its nine members (44%) who are diverse in terms of gender, race or ethnicity, and the Board has a goal to be 50% or more diverse. We believe that our use of an independent recruiting firm expands the pool of candidates and further improves our diversity efforts.
Board, Committee and CommitteeDirector Evaluations
The Board has established a robust self-evaluation process for the Board, its Committees and individual Directors. Each year, our Board and Committees conduct evaluations to assess their effectiveness and adherence to the Corporate Governance Guidelines and Committee charters, and to identify opportunities to improve Board and Committee performance. OurAs part of that process, we also conduct individual Director evaluations, including peer assessments. As described below, the Board engages an independent corporate governance professional to conduct interviews with each Director as part of this process.
Under the leadership of our Lead Director, Mr. Singleton, the Nominating and Governance Committee has responsibility for oversightoversees our annual evaluation process focused on three components: (1) the Board, (2) Board Committees and (3) individual Directors. For the past four years, as part of its continuous improvement efforts, the Board enhanced its evaluation process by engaging an independent third party who is experienced in corporate governance matters. This independent third party interviewed each Director to obtain his or her assessment of the Board evaluation process. In addition, the Lead Director also conducts a one on one interview with each
Board member, and the Committee Chairs conduct one on one interviews with each of their respective Committee members. The resultseffectiveness of the Board and Committee Evaluations are communicatedits Committees, including identifying any opportunities the Board can focus on to allenhance effectiveness. In addition, the Board and Committee members, and allconducted a peer review process in 2021 in which the third party sought input regarding the performance of each individual Director, which the Lead Director provided to each Director in an individual session.
Wesco 2022 Proxy Statement | Corporate Governance | 17 |
Topics considered during the 2021 Board and Committee Evaluation Process included: Director Performance • Individual Director performance • Chairman (in that role) • Lead Director (in that role) • Each Committee Chair (in that role) Board and Committee Operations • Board and Committee membership, including Director skills, background, expertise and diversity • Committee structure, including whether the Committee structure enhances Board and Committee performance • Access to management • Conduct of meetings, including time allocated for, and encouragement of, candid dialogue Board Performance • Key areas of focus for the Board • Strategy oversight • Capital allocation • Consideration of stockholder value • Consideration of reputation • ESG and consideration of stakeholder value • Identification of relevant and timely topics for attention and discussion Committee Performance • Performance of Committee duties under Committee charters • Consideration of reputation • Effectiveness of outside advisors |
Director Continuing Education
As part of our efforts designed to ensure a continuing high-performance Board, membersDirectors participate in this continuous improvement process.
continuing education on current topics and developments. We bring outside experts into the Board room to review current topics and developments in their areas of expertise, and Directors regularly attend outside education sessions on relevant topics. Education topics include corporate governance, compensation, SEC developments, financial matters, economic developments, emerging technology and trends, risk management, cybersecurity, diversity and inclusion, ESG matters and others.
Compensation Committee Interlocks
None of our executive officers serves as an executive officer of, or as a member of, the compensation committee of any public company that has an executive officer, director or other designee
serving as a member of our Board. No member of our Compensation Committee has been an executive officer of the Company.
Executive Sessions and Lead Director Responsibility
During 2015,2021, the non-management members of our Board met in executive session at each regularly scheduled Board of Director’sDirectors’ meeting. Our Directors generally hold executive sessions at both the beginning and end of each Board meeting. As Lead Director, Mr. Vareschi presided over these executive sessions until his retirement at the 2015 Annual Meeting of Stockholders, at which time Mr. Singleton became the Lead Director. Following the 2015 Annual Meeting of
Stockholders, Mr. Singleton presided over these executive sessions. In addition, Mr. Singleton has broad authority to call and conduct meetings of the independent Directors. The duties and responsibilities of our Lead Director are described in more detail in the section below.
Wesco 2022 Proxy Statement | Corporate Governance | 18 |
Board Leadership Structure
Since May 2011, Mr. Engel has served as Chairman of the Board. The Board believes that Mr. Engel’s combined role of Chairman and Chief Executive Officer is in the best interests of the Company and its stockholders at this time, and that Mr. Engel is the Director best situated to serve as Chairman because of his detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company, his familiarity with the Company’s business and industry, and his ability to identify strategic priorities essential to the future success of the Company. The Board believes that thethis structure is best for the Company at this time because it provides for clear leadership responsibility and accountability, while providing for effective corporate governance and oversight by an independent Board of strong and seasoned Directors with an independent Lead Director.
Mr. Singleton became the Lead Director following the planned retirement of Mr. Vareschi. Mr. Singleton serves as the Board’s independent Lead Director and presides over executive sessions of the Board. The non-management members of our Board meet in executive session at each regularly scheduled Board meeting. The Audit, Compensation, and Nominating and Governance Committees are all chaired by and comprised solely of independent Directors in accordance with independence standards of the NYSE, and thus oversight of key matters is entrusted to the independent Directors. Each of these
Committees also meets in executive session without members of management present. The responsibilities of the Lead Director include the following:
Presides at all meetings of the Board at which the Chairman is not present, including meetings of independent Directors held in Executive Session;
Has the authority to call meetings of the independent Directors;
Leads the Board evaluation program;
Evaluates, along with the members of the Compensation Committee and the full Board, the CEO’s performance, and meets with the CEO to discuss the Board’s evaluation;
Serves as a liaison between the Chairman/CEO and the independent Directors;
Consults with the Chairman/CEO on and approves agendas and schedules for Board meetings to ensure there is sufficient time for discussion of agenda items;
Advises the Chairman/CEO on the Board’s informational requirements and approves information sent to the Board, as appropriate;
Corporate Governance
Consults with the Chair of the Nominating and Governance Committee and the Chairman regarding recommended appointmentappointments of Committee members, including Committee chairs; and
Facilitates communication between the Board and senior management.
The Lead Director assures that appropriate independence is brought to bear on important Board and governance matters. In addition, there is strong leadership vested in and exercised by
the independent Committee chairs, and each Director may request inclusion of specific items on the agendas for Board and Committee meetings.
Considering all of the above, the Board believes that a combined Chairman and Chief Executive Officer, together with the Lead Director, is an appropriate Board leadership structure and is in the best interests of the Company and its stockholders at this time.
Communications with Directors
Our Board has established a process by which stockholders and other interested parties may communicate with the Board, our Board Committees, and/or individual Directors by confidentiale-mail. Such communications should be sent in writing to thee-mail addresses noted in the corporate governance section of our website atwww.wesco.com/governancehttps://investors.wesco.com/corporate-governance/contact-our-board/default.aspx under the caption “Contact Our Board.”.
Our DirectorVice President of Internal Audit will review all of these communications on a timely basis and will forward appropriate communications (i.e., other than solicitations, invitations, advertisements, or similar communications) to the relevant Board members on a timely basis.
Stockholders who wish to communicate with our Board in writing via regular mail should send correspondence to: WESCO International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122, Attention: DirectorVice President of Internal Audit.
Our Board members routinely attend our Annual Meeting of Stockholders. This provides you with additional opportunities to communicate with our Board. All of our Board members were present at our 20152021 Annual Meeting of Stockholders.
Wesco 2022 Proxy Statement | Corporate Governance | 19 |
Director Nominating Procedures
Our Nominating and Governance Committee recommends potential candidates for nomination as Director based on a number of criteria, including the needs of our Board. Any stockholder who would like the Nominating and Governance Committee to consider a candidate for Board membership should send a letter of recommendation containing:
The name and address of the proposed candidate;
The proposed candidate’s resume or a listing of his or her qualifications to be a Director on our Board;
A description of what would makewhy the proposed candidate would be a goodvaluable addition to our Board;
A description of any relationship that could affect the proposed candidate’s ability to qualify as an independent Director, including identifying all other public or private company board and committee memberships;
A confirmation of the proposed candidate’s willingness to serve as a Director if selected by our Nominating and Governance Committee;
Any information about the proposed candidate that, under the federal proxy rules, would be required to be included in our Proxy Statement if the proposed candidate were a nominee or otherwise is required to be provided pursuant to our Amended and Restated By-Laws; and
The name of the stockholder submitting the proposed candidate, together with information as to the number of shares owned and the length of time of ownership.
To allow for timely consideration, recommendations must be received not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. In addition, the Company may request additional information regarding any proposed candidates. A stockholder who wishes to nominate a person for election as a Director must provide written notice to the Corporate Secretary of the Company at the address below in accordance with the procedures specified in Section 2.15 of our By-Laws. In general, to be timely, the written notice must be received by our Corporate Secretary not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. The notice must provide certain information required by the By-Laws, including (a) biographical and share ownership information of the stockholder (and certain affiliates), (b) descriptions of any material interests of the stockholder (and certain affiliates) in the nomination and any arrangements between the stockholder (and certain affiliates) and another person or entity with respect to the nomination, (c) certain biographical, employment and specific qualifications information of each nominee, and (d) a brief description of any arrangement or understanding between each individual proposed as a nominee and any other person pursuant to which the individual was selected as a nominee.
Corporate Governance
Notices of Director recommendations or Director nominations, including the information described above, should be sent to: WESCO International, Inc., 225 West Station Square Drive, Suite
700, Pittsburgh, Pennsylvania, 15219-1122, Attention: Corporate Secretary.
Director Resignation Policy
The Board has adopted a resignation policy under which any Director who does not receive a majority of votes cast for his or her
re-election is expected to offer his or her resignation for the Board’s consideration.
Stockholder Engagement
We seek to engage with current and prospective investors throughout the year in order to review our financial performance, business model and strategic initiatives, so that management and the Board can better understand stockholder perspectives. We also utilize these discussions to assess emerging issues that may help shape our practices and enhance our corporate disclosures,
Wesco 2022 Proxy Statement | Corporate Governance | 20 |
including in the areas of environmental, social and governance (“ESG”) issues, executive compensation and capital deployment strategies. We strive for a collaborative approach with our stockholders and value the variety of perspectives that we hear in our discussions with them.
Board’s Role in Oversight of Risk Management
Management is responsible for risk management, and the Board’s role is to oversee management’s efforts in this area. As part of their regular meetings and deliberations, the Board and its Committees review and discuss matters of significance regarding operational, financial and other risks that are relevant to the Company’s business. Strategic risks and operating risks are monitored by the Board through discussions regarding the Company’s strategic and operating plans and regular reviews of the Company’s operating performance. The Audit Committee of the Board discusses and reviews guidelines and policies with respect to risk assessment and risk management and discusses
with management the Company’s major financial risk exposures and the steps management takes to monitor and control such exposures. In addition, management assesses the Company’s enterprise risk and reviews with the entire Board significant risks and associated mitigating factors on an annual basis.
Our Board has tasked designated standing committees with oversight of certain categories of risk management. The risk oversight focus areas of the committees are:
Wesco 2022 Proxy Statement | Corporate Governance | 21 |
The Audit Committee, which is comprised 100% of independent members, discusses and reviews guidelines and policies with respect to risk assessment and risk management and discusses with management the Company’s major financial risk exposures and the steps management takes to monitor and control such exposures. The Audit Committee is also responsible for oversight of cybersecurity risk. The Compensation Committee, which is comprised 100% of the Boardindependent members, reviews the potential for risk related to the Company’s compensation arrangements, including compensation arrangements and policies for executives, and determines whether any such arrangements are likely to encourage excessive or inappropriate risk taking. The Nominating and Governance Committee, which is comprised 100% of independent members, is responsible for oversight of significant ESG matters that are relevant to the Company.
To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer (CISO) whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes. As part of its oversight of cybersecurity risk, the Audit Committee meets at least quarterly with the Company’s Chief Information Security Officer, the Chief Information and Digital Officer, and other senior leaders to receive updates on cybersecurity risks and threats, the status of initiatives to strengthen the Company’s information security systems and management’s assessments of the Company’s security program. The Board and its committees request and receive regular reports from management on cybersecurity topics. The Company has developed and conducts mandatory information security training programs for all employees and maintains cyber liability insurance policies.
Environmental, Social and Governance Matters
The Board is committed to supporting the Company’s efforts to conduct its business in a principled, transparent, and accountable manner. The Board believes that its effective oversight of ESG matters is central to its risk oversight function. The Nominating and Governance Committee is responsible for oversight of significant ESG matters. In 2021, the Company continued to integrate and enhance its ESG program across the combined company.
In 2021, Wesco published its sustainability report, which is based on the Global Reporting Initiative (GRI) framework with cross-references to relevant Sustainability Accounting Standards Board (SASB) principles. More information about Wesco’s corporate social responsibility activities can be found at www.wesco.com/responsibility, and our 2021 Sustainability Report can be found at www.wesco.com/responsibility/sustainability.
Commitment to Environmental Sustainability
We are committed to maintaining an ethical, safe, and environmentally sustainable culture. As a distribution and supply chain services company, our approach to sustainability includes not only leveraging positive actions across our organization to minimize the environmental impacts of our own operations, but also includes assisting our customers and suppliers with attaining their sustainability goals through our products, services, and supply chain solutions. For example, we assist our customers in areas such as lighting efficiency, energy management, renewable energy, and green procurement. We also support utilities as they meet their renewable portfolio standards initiatives (solar and wind generation projects). Our lighting renovation and retrofit business is focused on improving energy efficiency in offices, schools, high rise buildings and manufacturing plants and our automation solutions are focused on reducing waste for customers.
Wesco 2022 Proxy Statement | Corporate Governance | 22 |
Overall, we continue to invest in new and emerging technologies and expand our capabilities in order to meet growing demands in these areas:
ENERGY EFFICIENCY | ENERGY MANAGEMENT | |||||||||
We provide some of the most efficient products on the market, including LED lighting and energy-efficient power systems. | We offer a suite of smart building solutions that help manage a facility’s environmental impact, including advanced building automation equipment and HVAC controls. | |||||||||
RENEWABLE ENERGY | SUSTAINABLE MAINTENANCE, REPAIR & OPERATIONS | |||||||||
We provide turnkey renewable energy solutions ranging from large-scale photovoltaic projects to customized solar, wind, and energy solutions. | We help businesses meet green procurement goals by offering a broad range of sustainable tools, safety equipment, and miscellaneous consumables. |
We engage with stakeholders, including our employees, customers, suppliers, stockholders, and the communities in which we do business, to enhance our sustainability strategy, practices, and communications.
We had previously established sustainability goals for our business in 2016, which have guided our actions and initiatives. Following Wesco’s merger with Anixter in 2020 and the resulting change in the Company’s profile, we introduced new sustainability goals that we intend to achieve by 2030. Our performance relative to our 2016 goals, and our newly established 2030 sustainability goals are described below.
2016 - 2022 Sustainability Goals | Achieved through 2020 from Baseline | |||
Reduce greenhouse gas (“GHG”) emissions intensity 8 percent from 2016 levels by 2022. | 23 percent reduction | |||
Reduce facility energy intensity 10 percent from 2016 levels by 2022. | 9 percent reduction | |||
Improve the fuel efficiency of our trucks 3 percent from 2016 levels by 2022. | Goal met in 2018 | |||
Achieve a 40 percent reduction in the total recordable incident rate (TRIR) by 2022 from a 2017 baseline. | 55 percent reduction | |||
Reduce landfill waste intensity by 10 percent at locations in our 2016 baseline by 2022. | 13 percent increase |
The achievements described above reflect legacy Wesco only data in order to have an equal comparison to previous years. We believe a portion of the reduction in this year’s GHG and Energy intensity is due to the COVID-19 Pandemic and a reduction in employees in our offices.
2030 Sustainability Goals | ||||
Reduce absolute Scope 1 and 2 GHG emissions by 30 percent from a 2019 baseline by 2030.1 | ||||
Reduce by 2030 landfilled waste intensity by 15 percent across our U.S. and Canadian locations from a 2020 baseline. | ||||
Achieve a 15 percent reduction in the TRIR by 2030 from a 2020 baseline. | ||||
Committed to providing 425,000 hours of safety training and development to our employees by 2030. |
1 | We have based our GHG emissions goal relative to a 2019 baseline to mitigate the impacts of the COVID-19 pandemic on our operations, as we anticipate a return to normalized operations during the relevant achievement period. This baseline incorporates estimates for legacy Anixter building and fleet emissions in 2019, based on corresponding assumptions and estimates made using historical legacy Wesco data. Our total estimated 2019 baseline emissions are 107,178.8 MTC02e with a goal of achieving emissions of 75,025.2 by 2030. |
Wesco 2022 Proxy Statement | Corporate Governance | 23 |
United Nations Global Compact and Sustainable Development Goals
Our commitment to sustainability includes supporting the 10 principles of the United Nations Global Compact, which we joined in 2017. We are also committed to the United Nations Sustainable Development Goals. Our recent efforts had the most impact for the goals described below.
GOOD HEALTH | AFFORDABLE AND | INDUSTRY, INNOVATION | REDUCED | RESPONSIBLE CONSUMPTION | ||||
AND WELL-BEING | CLEAN ENERGY | AND INFRASTRUCTURE | INEQUALITIES | AND PRODUCTION | ||||
Commitment to Inclusion and Diversity – We strongly believe that our people and our high-performance culture are our greatest assets. The merger of Wesco and Anixter nearly doubled our pro forma revenue, and significantly increased our employee headcount and global footprint, including the number of countries in which we operate. We take great pride in our diverse and talented workforce and aspire to becoming the employer of choice for diverse talent in our industry. Our Compensation Committee and Board are updated routinely by management on our diversity and inclusion programs and engage in regular discussions on matters such as workplace culture, talent development, inclusion and diversity, and workforce risk.
We work to ensure that all personnel actions are administered without regard to an employee’s race, color, religion, ethnicity, gender or sexual orientation. We continually seek to recruit diverse candidates and increase our representation of women and ethnic minorities, particularly in middle and senior management roles.
The goals of Wesco’s Inclusion and Diversity program are to:
leverage the unique experiences and perspectives of our talented workforce to support Wesco’s mission,
further engage employees and build an inclusive culture,
recruit and develop talent that bring new perspectives and thought processes to Wesco,
increase representation of suppliers that are owned and operated by teams with diverse backgrounds, and
support the communities in which we operate.
Wesco has established an Inclusion & Diversity Council comprised of members of our senior management to lead the formation of five Business Resource Groups (“BRGs”) – WIN (Women’s Impact Network), Mosaic (Black, Indigenous, and People of Color), Pride (LGBTQ+), Volt (Veterans), and Employees with Diverse Abilities. These BRGs foster a sense of community and inclusion, provide opportunities to network, support advancement opportunities within the organization, and assist with recruiting. The BRGs are global and open to all employees regardless of any aspect of their personal identity.
In 2021, we were honored to again be recognized by Forbes as one of the World’s Best Employers and one of America’s Best Employers for Women.
Commitment to Human Rights – At Wesco, the way in which we conduct business is as important as the products and services that we provide. Our Human Rights policy includes protections relating to:
Inclusion, Diversity and Non-Discrimination
Harassment Prohibition
Child or Forced Labor Prohibition
Working Hours, Wages, and Benefits
Safety and Workplace Conditions
Wesco 2022 Proxy Statement | Corporate Governance | 24 |
Commitment to Safety – Safety is a core value of Wesco and we are committed to reducing or eliminating health and safety risks through dedicated programs, leadership commitment, and employee involvement. We seek to achieve continuous improvement in the safety of our facilities and industry-leading safety metrics. In response to the COVID-19 pandemic, we implemented significant operating changes to promote a safe operating environment for our employees, and to protect the communities in which we operate. As an essential business, substantially all of our distribution facilities have remained open and we implemented additional safety measures for employees doing critical on-site work and required other employees to work remotely.
Prohibition on Hedging and Pledging
The Company’s Insider Trading Policy prohibits Section 16 Directors and Officers from engaging in any hedging transactions that involve Wesco securities. Wesco believes that this ensures a strong alignment of the interests of Directors and Officers with our stockholders. The policy also prohibits all Officers, Directors, Designated Insiders and employees from selling short (including short sales “against the box”) or from trading, writing, or purchasing “put” or “call” options on Wesco securities. Section 16 Directors and Officers also are prohibited from holding securities of Wesco in a margin account and from using shares as collateral and pledging them as security for a loan. Designated Insiders and employee stockholders are not prohibited from using Wesco securities as collateral to secure a bona fide loan.
Stockholder Proposals for 20172023 Annual Meeting
If you wish to have a stockholder proposal included in the Company’s proxy soliciting materials for the 20172023 Annual Meeting of Stockholders, you must submit the proposal to the Company at its principal executive offices by our deadline, which is 120 days prior to the first anniversary of the mailing of this Proxy Statement, or December 9, 2016.13, 2022. For any other business to be properly brought before the 20172023 Annual Meeting by a stockholder, notice in writing must be delivered to the Company in accordance with the Company’s Amended and Restated
By-Laws not less than 90 days nor more than 120 days prior to the first anniversary of the 20162022 Annual Meeting, or between January 26, 20172023 and February 25, 2017.27, 2023. We may be required to include certain limited information concerning any such proposal in our Proxy Statement so that proxies solicited for the 20172023 Annual Meeting may confer discretionary authority to vote on that matter. Any stockholder proposals should be addressed to our Corporate Secretary, WESCO International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122.
Board and Committee Meetings | 25 |
Our Board has four standing committees: an Audit Committee, a Compensation Committee, an Executive Committee, and a Nominating and Governance Committee, an Audit Committee, and a Compensation Committee. Each Committee operates under a separate charter, which is available on the corporate governance section of our website atwww.wesco.com/governancehttps://investors.wesco.com/corporate-governance/guidelines-charters-and-policies/default.aspx.
The full Board held five meetings in 2015.2021. Each Director attended 100%75% or more of the aggregate number of meetings of the full Board held in 20152021 and the total number of meetings held by all Committees of the Board on which he or she served.
Audit Committee
All of the members of our Audit Committee are required to be, and were determined by our Board to be, independent Directors according to the independence standards of the SEC and the NYSE. During 2021, the Audit Committee consisted of Messrs. Raymund and Sundaram and Messes. Thompson and Utter, with Mr. Raymund serving as Chair. Ms. Cooney served on the Audit Committee upon joining the Board in September 2021, and Ms. Utter served on the Audit Committee until she retired from the Board on December 31, 2021. Our Board has determined that Mr. Raymund and Messes. Thompson and Utter are Audit Committee Financial Experts, as defined under applicable SEC regulations. Our Audit Committee is responsible, among other things, for: (a) appointing the independent registered public accounting firm to perform an integrated audit of our financial statements and to perform services related to the audit; (b) reviewing the scope and results of the audit with the independent registered public accounting firm; (c) reviewing with management our quarterly and year-end operating results; (d) considering the adequacy of our internal accounting and control procedures; (e) reviewing the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; (f) providing oversight for cybersecurity risks; and (g) reviewing any non-audit services to be performed by the independent registered public accounting firm and the potential effect on the registered public accounting firm’s independence. Our Audit Committee held eight meetings in 2021.
Compensation Committee
All of the members of our Compensation Committee are required to be, and were at all times, independent Directors according to the independence standards of the SEC and the NYSE (including the enhanced independence requirements for Compensation Committee members). During 2021, the Compensation Committee consisted of Messrs. Morgan, Espe, Griffin and Singleton, with Mr. Morgan serving as Chair. Our Compensation Committee is responsible for the review, recommendation and approval of compensation arrangements for executive officers and for the administration of certain benefit and compensation plans and arrangements of the Company. Our Compensation Committee held seven meetings in 2021.
Executive Committee
From January 2015 through May 2015,During 2021, the Executive Committee consisted of Ms. Beach Lin and Messrs. Engel, Raymund, Singleton, Tarr and Vareschi, with Mr. Vareschi serving as Chairman of the Executive Committee. Following the 2015 Annual Meeting of Stockholders, the Executive Committee consisted of Ms. Beach Lin and Messrs. Engel,Griffin, Morgan, Raymund and Singleton, with Mr. Singleton serving as Chairman of the Executive Committee.Chair. With the exception of Mr. Engel, all
Executive Committee members have been determined by our Board to be independent Directors according to the independence standards of the NYSE. The Executive Committee may exercise all the powers and authority of the Directors in the management of the business and affairs of our Company and has been delegated authority to exercise the powers of our Board between Board meetings. The Executive Committee did not meet in 2015.
2021.
Nominating and Governance Committee
TheAll of the members of our Nominating and Governance Committee are required to be, and were determined by our Board to be, independent under the independence standards of the NYSE. From January 2015 through May 2015,During 2021, the Nominating and Governance Committee consisted of Messes. Beach LinMessrs. Griffin, Espe and Singleton and Ms. Utter, and Messrs. Tarr and Vareschi, with Ms. Beach LinMr. Griffin serving as Chair of the Nominating and Governance Committee. Following the 2015 Annual Meeting of Stockholders,Chair. Ms. Utter served on the Nominating and Governance Committee consisted of Messes. Beach Lin and Utter and Messrs. Singleton and Tarr, with Ms. Beach Lin serving as Chair ofuntil she retired from the Nominating and Governance Committee. Following the 2016 Annual Meeting of
Stockholders, it is expected that the Nominating and Governance Committee will consist of Messes. Beach Lin and Utter and Messrs. O’Brien and Singleton.Board on December 31, 2021. The Nominating and Governance Committee is responsible for identifying and nominating candidates for election or appointment to our Board and determining compensation for Directors. It is also the responsibility of our Nominating and Governance Committee to review and make recommendations to our Board with respect to our corporate governance policies and practices and to develop and recommend to our Board a set of corporate governance principles. Additionally, the Nominating and Governance Committee is responsible for oversight of significant ESG matters. Our Nominating and Governance Committee held threefour meetings in 2015.2021.
Wesco 2022 Proxy Statement | Director Compensation | 26 |
Audit CommitteeDirector Compensation
Compensation
TheIndependent members of our Audit Committee are requiredthe Board of Directors receive compensation in the form of an annual retainer and an annual equity award. Directors have the ability to be, and were determined by our Boarddefer 25% to be, independent Directors according to the independence standards100% of the SECretainer. Deferred amounts are converted into stock units and credited to an account in the NYSE. From January 2015 through May 2015,Director’s name using the Audit Committee consisted of Messrs. Tarr, Raymund, and Morgan and Ms. Utter, with Mr. Tarr serving as Chairmanaverage of the Audit Committee. Following the 2015 Annual Meeting of Stockholders, Mr. Raymund became the Chairman of the Audit Committee. In February 2016, Mr. O’Brien became a member of the Audit Committee in Mr. Morgan’s place. Following the 2016 Annual Meeting of Stockholders, it is expected that the Audit Committee will consist of Messrs. Griffin, O’Brienhigh and Raymund and Ms. Utter. Our Board has determined that Messrs. O’Brien, Raymund, and Tarr are Audit Committee Financial Experts, as
defined under applicable SEC regulations. Our Audit Committee is responsible, among other things, for: (a) appointing the independent registered public accounting firm to perform an integrated auditlow trading prices of our financial statements and to perform services related toCommon Stock on the audit; (b) reviewing the scope and resultsfirst trading day in January of the audit with the independent registered public accounting firm; (c) reviewing with managementthat year. The table below sets forth 2021 annual retainers our quarterly and year-end operating results; (d) considering the adequacy of our internal accounting and control procedures; (e) reviewing the Annual Reportnon-employee Directors, as determined based on Form 10-K and Quarterly Reports on Form 10-Q; and (f) reviewing any non-audit services to be performedanalysis provided by the independent registered public accounting firm and the potential effect on the registered public accounting firm’s independence. Our Audit Committee held six meetings in 2015.
Role | 2021 Annual Cash Retainer | |||
All Independent Directors | $110,000 | |||
Lead Independent Director | $ 35,000 | |||
Committee Chairs | ||||
Audit | $ 25,000 | |||
Compensation | $ 20,000 | |||
Nominating and Governance Committee | $ 15,000 | |||
Committee Members | ||||
Audit | $ 5,000 |
In addition to the retainer, non-employee Directors are reimbursed for travel and other reasonable out-of-pocket expenses related to attendance at Board and Committee Meetings
Compensationmeetings. Directors receive no additional compensation for Board or Committee
The members meeting attendance. Members of our Compensation CommitteeBoard who are required toalso our employees do not receive compensation for their services as Directors.
For 2021, non-employee Directors received equity grants in the form of Restricted Stock Units (RSUs) in the amount of $160,000, which will vest on the first anniversary of the date of the grant. If a Director’s Board service is terminated earlier than one year from the date of grant as a result of the scheduled expiration of the Director’s term then, if such date is (1) less than three calendar months from the date of grant, then 25% of the RSUs shall be deemed vested, (2) at least three but less than six calendar months from the date of grant, then 50% of the RSUs shall be deemed vested, (3) at least six but less than nine calendar months from the date of grant, then 75% of the RSUs shall be deemed vested, and were(4) at all times, independent Directors accordingleast nine calendar months from the date of grant, then 100% of the RSUs shall be deemed vested. On February 11, 2021, each non-employee Director received a grant of 2,083 RSUs with a grant date fair value of $76.80 per RSU, which was the closing price of our Common Stock on February 11, 2021.
Distribution of deferred stock units will be made in a lump sum or in installments, in the form of shares of our Common Stock, in accordance with the distribution schedule selected by the Director at the time the deferral election is made.
As set forth on an exhibit to the independence standardsCompany’s Form 10-K filed on February 22, 2016, the Company has entered into indemnification agreements with each current Director providing for: indemnification for indemnifiable claims and losses; advancement of the SECexpenses; and the NYSE. From January 2015 through May 2015 the Compensation Committee consisted of Ms. Beach Lin and Messrs. Griffin, Morgan and Singleton, with Mr. Singleton serving as Chairman. Following the 2015 Annual Meeting of Stockholders, the CompensationD&O liability insurance.
Committee consisted of Ms. Beach Lin and Messrs. Griffin, Morgan and Singleton, with Mr. Morgan serving as Chairman. Our Compensation Committee is responsible for the review, recommendation and approval of compensation arrangements for executive officers and for the administration of certain benefit and compensation plans and arrangements of the Company. Our Compensation Committee held five meetings in 2015.
Director Compensation | 27 |
Robust Stock Ownership Guidelines
Our Board has adopted robust stock ownership guidelines for Directors, which are five times their annual cash retainer. Directors are expected to hold these ownership positions during their service as Directors. All Directors have acquired or are acquiring stock in accordance with the stock ownership guidelines.
Director Compensation for 2021
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | All Other Compensation | Total | ||||||||||||||||
Cooney | $ | 38,333 | $ | 80,000 |
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Espe | $ | 110,000 | $ | 160,000 |
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| $ | 270,000 | |||||||||||
Griffin | $ | 125,000 | $ | 160,000 |
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| $ | 285,000 | |||||||||||
Morgan | $ | 130,000 | $ | 160,000 |
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| $ | 290,000 | |||||||||||
Raymund | $ | 135,000 | $ | 160,000 |
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| $ | 295,000 | |||||||||||
Singleton | $ | 145,000 | $ | 160,000 |
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| $ | 305,000 | |||||||||||
Sundaram | $ | 115,000 | $ | 160,000 |
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| $ | 275,000 | |||||||||||
Thompson | $ | 115,000 | $ | 160,000 |
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| $ | 275,000 | |||||||||||
Utter(4) | $ | 115,000 | $ | 160,000 | $ | 10,000 | (5) | $ | 285,000 |
(1) | The amounts shown represents the cash portion of the annual retainer paid to the directors. Messrs. Griffin and Sundaram elected to defer portions of their compensation into the Company’s Deferred Compensation Plan for Non-Employee Directors. |
Name | Deferred Compensation | ||||
Griffin | $ | 62,500 | |||
Sundaram | $ | 115,000 |
(2) | Amounts represent the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718, of RSUs. On February 11, 2021, each non-employee Director received a grant of 2,083 RSUs with a grant date fair value of $76.80 per RSU, which was the closing price of our Common Stock on February 11, 2021. These RSU awards are subject to time-based vesting criteria. The assumptions used in calculating these amounts are set forth in Note 15 to our notes to consolidated financial statements for the year ended December 31, 2021, which is located on pages 80 to 82 of our Annual Report on Form 10-K. |
(3) | All the RSU awards were granted under the WESCO International, Inc. 1999 Long-Term Incentive Plan, as amended and 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, 2021. |
(4) | Ms. Utter retired from our Board effective December 31, 2021. |
(5) | The Company made a charitable donation of $10,000 on Ms. Utter’s behalf in honor of her retirement from our Board. |
Wesco 2022 Proxy Statement | Director Compensation | 28 |
Director Outstanding Equity Awards at Year-End
Name | Number of Securities Underlying Unexercised Equity Awards Exercisable(1) | Number of Shares of Stock That Have Not Vested | ||||||||
Cooney | — | 685 | ||||||||
Espe | 5,122 | 2,083 | ||||||||
Griffin | 11,745 | 2,083 | ||||||||
Morgan | 7,318 | 2,083 | ||||||||
Raymund | 6,099 | 2,083 | ||||||||
Singleton | — | 2,083 | ||||||||
Sundaram | — | 2,083 | ||||||||
Thompson | — | 2,083 | ||||||||
Utter | 9,035 | 2,083 |
(1) | The amounts for Messrs. Espe, Griffin, Morgan, Raymund and Ms. Utter include RSUs that were deferred upon vesting. |
Wesco 2022 Proxy Statement | Security Ownership | 29 |
Security Ownership
of Management
The following table sets forth the beneficial ownershipnumber of theshares of Company’s Common Stockcommon stock beneficially owned as of March 31, 2016,30, 2022 by each personDirector or group known by the Company to beneficially own more than five percentnominee for Director of the outstanding Common Stock, each Director, each ofCompany, the named executive officers in the Summary Compensation Table and by all Directors and executive officers as a group. Unless otherwise indicated, the holders of all shares shown in the table have sole voting and investment power with respect to such shares. In determining the number and percentage of shares beneficially owned by each person, shares that may be acquired by such person pursuant to options or convertible stock exercisable or convertible within 60 days of March 31, 2016,30, 2022, are deemed outstanding for purposes of determining the total number of outstanding shares for such person and are not deemed outstanding for such purpose for all other stockholders. Unless indicated otherwise below, the address of each beneficial owner is c/o WESCO International, Inc., 225 West Station Square, Suite 700, Pittsburgh, PA 15219.
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John J. Engel | 725,451 | (2) | 1.4 | % |
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Anne M. Cooney | — | * |
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Matthew J. Espe | 15,712 | (3) | * |
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Bobby J. Griffin | 24,223 | (3) | * |
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John K. Morgan | 38,332 | (3) | * |
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Steven A. Raymund | 27,831 | (3) | * |
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James L. Singleton(4) | 43,277 | (3) | * |
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Easwaran Sundaram | 6,752 | (3) | * |
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Laura K. Thompson | 5,606 | * |
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David S. Schulz (5) | 168,383 | (2) | * |
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Theodore A. Dosch(5) | 22,134 | (2) | * |
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Nelson J. Squires, III | 81,552 | (2) | * |
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William C. Geary, II(5) | 10,321 | (2) | * |
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All 18 Directors and executive officers as a group(5) | 1,346,831 | (2) | 2.6 | % |
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* | Indicates ownership of less than 1% of the Common Stock. |
(1) | Based on the number of |
(2) | Includes the following shares of Common Stock not currently owned, but subject to SARs which were outstanding on March 30, 2022 and may be exercised or settled within 60 days thereafter: Mr. Engel, 482,847; Mr. Schulz, 123,242; Mr. Dosch, 3,530; Mr. Squires, 57,851; Mr. Geary, 2,774; and all executive officers as a group, 784,882. |
(3) | Includes shares of Common Stock payable to any such Director following the Director’s termination of Board service with respect to portions of annual fees deferred under the Company’s Deferred Compensation Plan for Non-Employee Directors, and restricted stock units subject to an election to defer even though such shares are not deemed currently to be beneficially owned by the Directors pursuant to Rule 13d-3, as follows: |
Transactions with Related Persons
Includes |
(5) | As March 30, 2022, Messrs. Schulz, Dosch, and Geary owned 1,771, 32,899, and 4,562 depositary shares, each representing a 1/100 |
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Under the federal securities laws of the United States, the Company’s Directors, its executive officers, and any persons beneficially holding more than ten percent of the Company’s Common Stock are required to report their ownership of the Company’s Common Stock and any changes in that ownership
to the SEC and NYSE. Specific due dates for these reports have been established. The Company is required to report in this Proxy Statement any failure to file by these dates. For the year ended December 31, 2015,2021, all such filings were made within the required time periods.periods, based on the Company’s review of forms filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, and written representations received from such persons.
Wesco 2022 Proxy Statement | Security Ownership | 30 |
TRANSACTIONS WITH RELATED PERSONSSecurity Ownership of Principal Stockholders
The following table sets forth the beneficial ownership of the Company’s Common Stock as of March 30, 2022, by each person or group known by the Company to beneficially own five percent or more of the outstanding shares of the Company’s Common Stock.
Name | Shares Beneficially Owned | Percent Owned Beneficially | ||||||||
Leonard Green & Partners, L.P. 11111 Santa Monica Blvd. Ste 2000 Los Angeles, CA 90025 | 5,700,000 | (1) | 11.2 | % | ||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | 4,312,774 | (2) | 8.5 | % | ||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 3,549,045 | (3) | 7.0 | % | ||||||
Dimensional Fund Advisors, L.P. 6300 BeeCave Road Building One Austin, TX 78746 | 3,003,507 | (4) | 5.9 | % |
(1) | This information is based solely upon a Schedule 13G/A filed by Leonard Green & Partners, L.P. (“Leonard Green”) with the Securities and Exchange Commission on July 14, 2020. Leonard Green is the beneficial owner of 5,700,000 shares and has shared voting power over 5,700,000 shares and shared dispositive power over 5,700,000 shares. |
(2) | This information is based solely upon a Schedule 13G/A filed by The Vanguard Group (“Vanguard”) with the Securities and Exchange Commission on February 10, 2022. Vanguard is the beneficial owner of 4,522,306 shares and has shared voting power over 48,711 shares, sole dispositive power over 4,435,817 shares and shared dispositive power over 86,489 shares. |
(3) | This information is based solely upon a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the Securities and Exchange Commission on February 1, 2022. BlackRock is the beneficial owner of 3,288,844 shares and has sole power to vote 3,025,065 shares, and sole dispositive power over 3,288,844 shares. |
(4) | This information is based solely upon a Schedule 13G/A filed by Dimensional Fund Advisors LP (“Dimensional”) with the Securities and Exchange Commission on February 8, 2022. Dimensional is the beneficial owner of 2,685,504 shares and has sole power to vote 2,645,258 shares, and sole dispositive power over 2,685,504 shares. |
Wesco 2022 Proxy Statement | Transactions with Related Persons | 31 |
Transactions with Related Persons
Our Company has a written policy and has implemented processes and controls in order to obtain information from our Directors and executive officers with respect to related person transactions and for then determining whether our Company or a related person has a direct or indirect material interest in the transaction, based on the facts and circumstances. Our Nominating and Governance Committee and Board review relationships and transactions between our Directors, executive officers and our Company or its customers and suppliers in order to determine whether the parties have a direct or indirect material interest. Its evaluation includes: the nature of the related person’s
interest in the transaction; material terms of the transaction; amount and type of transaction; importance of the transaction to our Company; whether the transaction would impair the judgment of a Director or executive officer to act in the best interest of our Company; and any other relevant facts and circumstances. Transactions that are determined to be directly or indirectly material to our Company or a related person are disclosed in this Proxy Statement. For the year ended December 31, 2015,Statement and there were no related partydisclosed transactions to report.for 2021.
Item 2 — Approve, on an Advisory Basis, the Compensation of the Company’s Named Executive Officers | 32 |
Item 2 –— Approve, on an Advisory Basis, the Compensation of the Company’s Named Executive Compensation
ITEM 2 — APPROVE, ON AN ADVISORY BASIS, THE COMPANY’S EXECUTIVE COMPENSATIONOfficers
This year, the Company is seeking that the stockholders approve the compensation of the Company’s named executive officers (commonly referred to as “say-on-pay”“say-on-pay”) as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding named executive officer compensation and the narrative description accompanying such disclosure. As initially approved by our stockholders at the annual meeting of stockholders in 2011,2017 regarding the frequency of the advisory vote, and consistent with the Board’s recommendation, we are submitting this proposal on an annual basis. This vote is advisory only, meaning it is non-binding on the Company; however, the Board and Compensation Committee will review and carefully consider the results when evaluating future compensation decisions.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
APPROVAL OF THE COMPENSATION OF THE COMPANY’S
NAMED EXECUTIVE COMPENSATION.OFFICERS.
We encourage stockholders to review the “Compensation Discussion and Analysis” section beginning on page 17. As described in detail under “Compensation Discussion and Analysis,” our compensation program is designed to attract and retain the highest caliber executives possible and to motivate and reward them for achieving results that create stockholder value. The Compensation Committee believes that the Company’s compensation program and practices reflect a pay-for-performance philosophy designed to align our compensation program and practices with our stockholders’ long-term interests.
Compensation Structure: Elements of our program include the following:
Item 2 – Approve, On An Advisory Basis, The Company’s Executive Compensation
The Board endorses the Company’s executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers as disclosed pursuant to Item 402 of SEC Regulation S-K, including as described under the “Compensation Discussion and Analysis” section, as well as the accompanying compensation tables and the related narrative disclosure, in the Company’s 20162022 Proxy Statement.
Compensation Discussion and Analysis | 33 |
Compensation Discussion and Analysis
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis section discusses the Company’s compensation philosophy, policies and arrangements for the 20152021 year that are applicable to our Named Executive Officers (“NEOs”): John J. Engel, Kenneth S. Parks, Timothy A. Hibbard, Diane E. Lazzaris and Kimberly G. Windrow. In accordance with applicable regulations, we also provide specific executive compensation disclosure for Stephen A. Van Oss, a former executive officer. This discussion and analysis should be read in conjunction with the “Summary Compensation Table” on page 27, its accompanying footnotes and the additional tables and narrative disclosure that follow the Summary Compensation Table.
The Compensation Discussion and Analysis includes the following key sections:
John J. Engel | Chairman, President and Chief Executive Officer | |
David S. Schulz | Executive Vice President and Chief Financial Officer | |
Theodore A. Dosch | Executive Vice President, Strategy and Chief Transformation Officer | |
Nelson J. Squires III | Executive Vice President and General Manager, Electrical & Electronics Solutions (EES) | |
William C. Geary II | Executive Vice President and General Manager, Communications & Security Solutions (CSS) |
Executive Summary
EXECUTIVE SUMMARY
Introduction
Our management and our Board of Directors have consistently believed that a straightforward and transparent philosophy and approach to compensation design is fundamental to creating stockholder value. Our program comprises three main elements: (1) base salaries; (2) annual cash incentive bonuses; and (3) long-term incentive awards. We believe that this approach has enabled us to attract and retain extraordinary management talent and to deliver strong results to our stockholders.
In our 2015 Advisory Vote on Executive Compensation, the Company’s executive compensation program receivedinclude the approval of more than 99% of the shares voted, which endorsed and confirmed our decisions on compensation structure. Our compensation program in 2015 was generally consistent with our program in 2014. Beginning at the Compensation Committee’s December meeting and ending in February, executive compensation is reviewed and a total compensation review is conducted regarding salary, bonus and equity awards, based on the compensation structure and philosophy described in this Compensation Discussion and Analysis section.
Pay for Performance – The annual cash incentive and long-term incentive components of our compensation program reflect our pay-for-performance philosophy, since annual cash incentive bonuses are paid upon the achievement of a set of measurable Company financial performance metrics and individual performance objectives. The equity award values depend on the value of the Company’s stock, and in the case of performance shares, depend on the achievement of specific performance metrics and goals, thus encouraging achievement of long-term value creation that benefits all stockholders.
The Company did not meet its profitability objectives in 2015. As a result, and consistent with our pay-for-performance
philosophy, 2015 variable compensation was below target levels, and performance shares that were based on 2013 to 2015 performance were forfeited.
Ownership Guidelines, Hedging and Clawbacks– We have stock ownership guidelines for officers and Directors, and our officers and Directors are prohibited from engaging in hedging transactions involving our stock and from pledging stock as security for loans. We have adopted a “clawback” policy to provide for recovery of incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results and also to provide for clawback of incentive compensation in the event of misconduct by an executive officer or former executive officer.
Limited Perquisites – We use perquisites on a very limited basis, and we do not provide tax gross-ups on executive-only perquisites. We have committed to 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 we have not entered into any such agreements. We have only one pre-existing employment agreement (entered into prior to 2010) that includes excise tax gross-ups under certain change in control circumstances.
In this Executive Summary, we describe our philosophy, approach and the way we assess our compensation practices. We believe that this process is a pillar of our high performance corporate culture and important to our ongoing success.
Element | Description | |||
Stockholder Support | We received the support of over 93% of stockholder votes in favor of our say-on-pay proposal in 2021. 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 targeted at the median of our peer group and compensation opportunities fall within a reasonable range around that level. | |||
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 NEOs. | |||
No Hedging or Pledging | NEOs are prohibited from hedging or pledging our stock. | |||
Clawback Policy | We have a clawback policy that applies to financial restatement and also events of misconduct. |
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis |
Pay for Performance
Our compensation program uses the following performance metrics:
Performance Metrics | Why It’s Included | How It’s Used | ||||
Short-Term Incentive Program (STIP) | Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) | Encompasses sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability, all of which are central to the Company’s strategy and the creation of long-term stockholder value. | Based on the annual operating plan reviewed and approved by the Board each December, these metrics are used for STIP targets in the following year. | |||
Free Cash Flow | Relates directly to the Company’s operating performance, including the effective management of working capital, which is especially relevant for a distributor. Strong free cash flow is a hallmark of our business and important 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 distribution business. | |||
Return on Net Assets (RONA) Growth | Important operating metric 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. |
2021 Performance Highlights
2021 performance highlights include:
Increased Stock Price - Common stock total stockholder return of 68% for 2021
Sales Growth - Net sales of $18.2 billion, up 48% due to the Anixter transaction that was completed in 2020, with strong results across all three Strategic Business Units
EBITDA Growth and EBITDA Margin Expansion - Adjusted EBITDA of $1.2 billion, up 78% year over year, and adjusted EBITDA margin of 6.5%, up 110 basis points year over year
EPS Growth - Adjusted earnings per diluted share of $9.98, up 128% year over year
Accelerated De-Leveraging - Continued to rapidly de-lever balance sheet with leverage of 3.9x, down 1.8x since completion of the Anixter transaction in June 2020
Leadership Talent - Strengthened our talent base through development of existing leaders and addition of new talent through targeted recruiting efforts
Say-on-Pay – Stockholder Engagement and Board Responsiveness
In 2021, the Company’s advisory vote on executive compensation received the approval of over 93% of the shares voted. The Compensation DiscussionCommittee considered these results and Analysisbased on our strategic objectives, the close alignment of the compensation program with stockholder interests and the strong support of stockholders, determined not to make any significant changes to our overall compensation structure. Accordingly, the Compensation Committee decided to follow the same fundamental policies and procedures in setting compensation for 2021.
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 35 |
Compensation Philosophy, Approach and Pay Elements
We have a straightforward and transparent compensation program that is linked to our strategy and the drivers of long-term stockholder value. It is based on our pay-for-performance methodology, and we use operating performance metrics that are important to our business. To be successful, we need to attract and retain executives and employees who are talented and motivated to grow long-term stockholder value.
There are three central elements to our executive total compensation:
(1) | base salary – cash-based; |
(2) | short-term incentives – cash-based, and based on the annual operating plan approved by the Board; and |
(3) | long-term incentives – stock-based, and based on three-year performance periods, linked to growth and return metrics and 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. |
Structuring a balanced, fair and properly-crafted compensation program for our executive leaders is a critical component that promotesessential to promote our high performancehigh-performance culture and contributescontribute to our ongoing success. Our compensation philosophy begins with the recognition that our success depends on the talent of our workforce and our relationships with customers and suppliers. Our focus on consistency, service and continuous improvement are critical performance factors, and topeople. To encourage high level performance of our leaders, we have constructed a compensation plan that rewards the behavior of our executives in pursuit of the following three broad goals.
The first of our philosophical tenets is to attract and retain an excellent management team. Fieldingteam, because a consistent and high performing team is critical to our success as a company. Developing and strengthening our corporate relationships with our customers and suppliers over the long-term puts us in an opportune positionenables our business to grow our business intelligently and profitably. EquallyAlso important is the consistency of internal leadership in support of our corporate mission, executing our strategy, and sustaining our high performancehigh-performance culture.
The second philosophical goal of our compensation planning is to put the Company in a positionenable Wesco to recruit strong leaders as we grow our business and expand our product, service, and servicesolution offerings. We were able to recruit and retain our CEONEOs because of our culture and a compensation packagepackages that aligned his
their performance with our strategy of creating value for our customers, suppliers and stockholders. During the past several years, we have recruited other leaders at the executive leadership level who joined the Company for the same reasons.value. Our consistency of approach in aligning our compensation plans to our strategy has been an important reason for our recruiting and retention successes.
Finally, the third goal of our compensation plan is to reward our executives fairly and provide proper and balanced incentives for long-term value creation. Essentially, 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 they perform below agreed upon standards,performance measures are not met, they may receive little or no bonus. In terms of long-term incentives, we believe that the performance of our stock is the purest measure of our performance. Fundamentally, we are owned by our stockholders who can sell their stock when they believe that we are underperforming and who may purchase more shares as we perform at higher levels of growth and profitability. We believe that the opportunity to participate in the performancegrowth in value of our equity is the most direct link between performance and pay.share price links pay to performance. We reward our executives withprovide equity incentives to align theirmanagement’s interests with those of the stockholders, and we maintain robust stock ownership guidelines to instill that mindset.
Compensation Approach
The three central elements to our executive total compensation approach, base salary, short-term incentives and long-term incentives, are further refined by design: our base salary and short-term incentives are cash based; and our long-term incentives are equity based. Based on our objectives, we believe it is appropriate that we target our three compensation elements generally at approximately the 50th percentilemedian of comparable companies in ourthe peer group. The Company’s target total cash compensation and long-term incentives for the NEOs have been generally belowwithin a reasonable range around the 50th percentilemedian of the peer group.
We assess the effectiveness of our compensation programs regularly and use the services of a nationallyan internationally recognized independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), which provides us with research information and data. Meridian serves as a resource to our Compensation Committee, (the “Committee”), providing information on new developments, best practices and trends in compensation. However, the Committee makes its own decisions, uses its own judgment and comes to its own conclusions relating to plan design and absolute determinations of total compensation rewards.
Compensation Assessment
For our compensation philosophy and approach to work properly, the Committee must assess the effectivenesscompensation. All of our compensation programs regularly, using a variety of external and internal resources. In conjunction with Meridian, the Committee reviews the composition of our peer group annually. We purposely choose a large number of similarly sized companies because we believe that those companiesmembers are representative of the talent pool that we compete with to recruit and retain talent. This approach has proven successful,independent, as the last three NEOs that we hired came from large corporations that were not direct competitors of ours and not in the distribution industry. We also believe that a large pool of comparable companies is better thandefined by applicable regulations.
choosing a smaller group to ensure a proper sample size for comparison purposes. When we engage professional search firms to assist us in identifying senior executive talent, they recruit from a set of corporations even larger than our peer group.
Our management team conducts a thorough leadership review process every year. Our focus on talent management is critical to our high performance culture and ongoing success. In the course of that intensive, annual review process, the entire Board and our Committee are informed of relevant issues relating to our senior management team. We are thus able to review personal development plans, actual performance, and alignment to
Compensation Discussion and Analysis | 36 |
Compensation Discussion and Analysis
corporate standards and expectations. From that feedback, we are able to derive a deeper understanding of whether our compensation program continues to promote our corporate
objectives. We can use this information to help assess the appropriateness of our compensation approach for any individual whose compensation we review.
Our 2015 compensation mix for our CEO reflects our emphasis on performance-based elements as follows:
SummaryCompensation Setting Process
Our philosophy, approach, and the manner in which we assess our compensation programs have been consistently applied since we became a public company. We intend to maintain our
high standards and make sure that the objectives and total compensation of our senior executives are aligned with the objectives of our stockholders.
COMPENSATION SETTING PROCESS
Our Board has delegated to the Committee, composed entirely of individuals who are independent Directors under the independence standards of the NYSE and SEC, including the enhanced independence requirements for compensation committee members, the responsibility of administering executive compensation and benefit programs, policies and practices. The Committee may also delegate certain matters to a subcommittee in its discretion. Annually theThe performance of the management team is reviewed relative to financial resultsperformance measures, and non-financial measures, including the areas of strategic and organizational development. Compensationcompensation levels for our NEOs are reviewed and approved on an annual basis.
Our compensation setting process for NEOs consists of the following steps:
Consider the Company’s financial performance;
Review external market data;
Consider stockholder feedback on say-on-pay and compensation topics;
Confirm the reasonableness of total compensation awards as well as the reasonableness of each component of compensation when compared to peer companies;
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 37 |
Assess overall Company performance in relation to our objectives, competition and industry circumstances;
Assess individual performance, changes in duties and responsibilities, and strategic and operational accomplishments;
Adjust base salaries, as appropriate, based on job performance, leadership, tenure, experience, and other factors, including market data relative to our peer companies;
Evaluate and determine annual and long-term incentive award opportunities for each NEO;
Make awards under our long-term incentive plan that reflect recent performance and an assessment of the future impact each NEO can have on the long-term success of the Company;
Review the metrics and goals of the annual incentive plan as well as the performance share plan; and
Apply consistent practices from year to year for annual cash incentive award payments based on an evaluation of pre-established operating and financial performance factors, non-financial performance criteria, and strategic, operational, and organizational development objectives.factors.
As previously noted, the Committee also engages an independent compensation consultant to assist in reviewing itsthe Company’s compensation practices, to provide market comparison information, and to make recommendations.
Role of Compensation Discussion and AnalysisConsultants
USE OF COMPENSATION CONSULTANTS
To assist in the compensation setting process, the Committee engages Meridian, an independent, internationally recognized 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 related to compensation, assist in selecting the comparatorappropriate peer group, useprepare a market data to perform a studyanalysis of the
target total compensation of senior management atfor 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. In addition, the Committee has sought the recommendation of the Chief Executive Officer regarding the other NEOs relative to compensation adjustments and individual performance objectives he believes would be appropriate to achieve the Company’s strategic and operational goals. The Committee reviews, discusses, modifies and approves, as appropriate, these compensation recommendations. Our Committee meets in person or telephonically at least five times each year, and our Committee’s Chairman meets with management and our independent compensation consultant more regularly throughout the course of the year. The working relationship between the Committee and management is constructive and independent. Our 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 COMPARATOR GROUP
In 2015,For our compensation philosophy and approach to work properly, the Committee reviewedmust assess the effectiveness of our compensation programs regularly, using a variety of external and internal resources. The Committee reviews analyses of compensation paid by companies in our comparatorpeer group through the use of marketplace compensation profiles prepared by Meridian.Meridian, the Committee’s independent compensation consultant. The comparatorCommittee engaged our independent compensation consultant to determine the Company’s peer group, comprises comparably-sized, industrial firms, distributionwhich was comprised of companies with median revenues comparable to the Company’s based on pro forma revenues of the combined Wesco and businessesAnixter organization, and the Committee reviews with dispersed locales for which logisticsMeridian the composition of our peer group annually. It is not feasible or appropriate to construct a peer group of only distributor competitors, as many of our competitors are important,smaller and/or privately-held companies, in industriesthe case of local competitors, or larger non-U.S. based companies, in which assetthe case of global competitors. We believe that revenue size is an important component, since the scope and scale of a key management role depends on revenue size of the organization. The compensation consultant selected companies, using data available in additionthe Equilar database, with similar characteristics (e.g., operating margins, moderate capital intensity, and mid-level/comparable stock price volatility), and excluded companies demonstrably variant to operating margin,Wesco (e.g., agriculture, financial services, healthcare, etc.).
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 38 |
We chose a large number of similarly sized companies 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 the last executive officers that we hired came from large corporations that were not direct competitors of ours and not in the distribution industry. We also believe that a large pool of comparable companies is better than choosing a relevant
measure of company performance, and other large distributors, wholesalers and retailers, which are potential competitorssmaller group to ensure a proper sample size for comparison purposes. When we engage professional search firms to assist us in identifying senior executive talent, they recruit from a set of interest to WESCO.corporations even larger than our peer group.
The compensation comparatorpeer group that we used in 2015 included2021 was comprised of the following 28 companies:
2021 COMPENSATION PEER GROUP | ||||||||||
| ||||||||||
| Corning Incorporated | International | TE Connectivity Ltd. | |||||||
| Cummins Inc. | Jabil Inc. | Trane Technologies Plc | |||||||
Avis Budget Group, Inc. | Eaton Corporation plc | Johnson Controls International plc | United Natural Foods, Inc. | |||||||
Avnet, Inc. | Flex Ltd. | Lithia Motors, Inc. | United Rentals, Inc. | |||||||
CarMax, Inc. | Fluor Corporation | Patterson Companies, Inc. | Univar Solutions Inc. | |||||||
CDW Corp. | Henry Schein, Inc. | Quanta Services, Inc. | W.W. Grainger, Inc. | |||||||
CommScope Holding Company, Inc. | Insight Enterprises, Inc. | Stanley Black & Decker, Inc. | WestRock Company |
HD Supply Holdings, Inc. was removed from the 2021 Compensation Peer Group due to its acquisition by The Home Depot in December 2020.
The Committee reviews compensation practices among these companies to provide the Committee with relevant data in setting appropriate compensation levels for its NEOs. This market analysis, which is conducted by Meridian, makes it possible to evaluate and assess compensation for numerous executive
positions that are not included in proxy statements or other public filings. To adjust for a variation in size among our Company and the companies in the comparatorpeer 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.
Compensation Discussion and Analysis
RoleElements of 2015 Advisory Vote on Executive Compensation in the Compensation Setting Process
The Committee reviewed the results of the 2015 stockholder advisory vote on NEO compensation and incorporated the results as one of the many factors considered in connection with the discharge of its responsibilities and in determining compensation policies and decisions for 2015. Because an
overwhelming majority (more than 99%) of the votes cast by our stockholders approved the executive compensation program for 2014 described in our 2015 proxy statement, our compensation program for 2015 remained generally consistent with the program in 2014.
ELEMENTS OF COMPENSATION
Base Salaries
Base salaries are intended to provide our NEOs with a level of competitive cash compensation that is critical for retention and appropriate given their positions, responsibilities and accomplishments with the Company. Salaries for NEOs are reviewed annually. The Committee reviews detailed individual salary history for the NEOs and compares their base salaries to salaries for comparable positions at companies within our comparatorpeer group. From time to time, the Committee adjusts base salaries for executive officers to reflect performance, changes in job scope, and market practices among the comparatorpeer group generally based on the 50th50th percentile of base salaries for comparable positions.
Effective asIn 2021, the Committee performed its annual assessment of April 1, 2015:base salaries in February. The Committee reviewed compensation market data, based on analysis prepared by the independent compensation consultant, using our compensation peer group.
NEO | Annual Base Salary Beginning of 2021 | Annual Base Salary Effective April 1, 2021(1) | ||||||
Engel | $ | 1,100,000 | $ | 1,180,000 | ||||
Schulz | $ | 650,000 | $ | 687,000 | ||||
Dosch | $ | 625,000 | $ | 650,000 | ||||
Squires | $ | 600,000 | $ | 627,000 | ||||
Geary | $ | 550,000 | $ | 575,000 |
(1) | The annual base salary effective April 1 for Messrs. Engel, Schulz and Squires includes a $12,000 increase due to the elimination of a vehicle allowance. |
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 39 |
In determining adjustments to base salaries, the Committee considers prevailing economic conditions, base salaries of recent additions to management, performance assessments, changes in duties and responsibilities, Company performance, comparable salary practices of companies within our peer group, the recommendation of Mr. Engel (in the case of the other NEOs), and any other factors the Committee deems relevant.
Short-Term Incentives
Our practice is to award cash incentive bonuses for achievement of performance measures linked to our strategic, financial, operational, and organizational development objectives.strategy. Target short-term incentives are designed to provide compensation opportunities generally approximating the 50th50th percentile of the comparatorpeer group and are reviewed on an annual basis.
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 20152021 annual incentive programs, the performance measures for our NEOs all of whom are corporate officers with broad-ranging responsibilities across the entire
enterprise or for multiple operating and/or corporate support functions, consist of the achievement of a combination of the following metrics: Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”)(EBITDA) and Free Cash Flow. For NEOs leading a Strategic Business Unit (SBU), including Messrs. Squires and Geary, the EBITDA component is comprised of 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 Return On Invested Capital (“ROIC”) targets, along with individualeffective asset management drives value for a distribution business.
For 2021, the target incentive opportunity, and relative weight assigned to each performance objectives. The performance measures we used to determine annual cash incentive bonusesmeasure for Messrs. Engel and Parks and Messes. Lazzaris and Windrow,each of the relative weightings of such measures and the related payoutNEOs, were as a percentage of opportunity are reflected in the table below. For Mr. Hibbard, the relative weightings were 50% EBITDA, 25% Free Cash Flow, and 25% Individual Performance.follows:
Performance Measure | Weighting | Percent Achievement | Payout Percent of Maximum Opportunity(1) | |||
Earnings Before Interest Taxes Depreciation
| 25%
| < 85% | 0% | |||
85% to 100% | Up to 50% | |||||
>100% to 115% | Between 50% and 100% | |||||
Free Cash Flow
| 25%
| < 85% | 0% | |||
85% to 100% | Up to 50% | |||||
>100% to 115% | Between 50% and 100% | |||||
Return on Invested Capital
| 25%
| < 85% | 0% | |||
85% to 100% | Up to 50% | |||||
>100% to 115% | Between 50% and 100% | |||||
Individual Performance
| 25%
| <25% | 0% | |||
25% to 100% | Up to 100% | |||||
Total (as a percent of Opportunity) | 100% | 0% to 100% |
Performance Measure—Leaders with Corporate-Wide Responsibilities | Weighting | Percent Achievement | Payout Percent of Target Opportunity(1) | |||||
EBITDA | 75% | < 70% | 0% | |||||
|
|
|
| 70% to 100% | 25% up to 100% | |||
|
|
|
| >100% to 120% | Between 100% and 200% | |||
Free Cash Flow | 25% | < 70% | 0% | |||||
|
|
|
| 70% to 100% | 25% up to 100% | |||
|
|
|
| >100% to 120% | Between 100% and 200% | |||
Total (as a percent of Target Opportunity) | 100% |
| 0% to 200% |
(1) | Amounts interpolated, as appropriate. |
Performance Measure—SBU Leaders (Squires and Geary) | Weighting | Percent Achievement | Payout Percent of Target Opportunity(1) | |||||
EBITDA | 18.75% | < 70% | 0% | |||||
|
|
|
| 70% to 100% | 25% up to 100% | |||
|
|
|
| >100% to 120% | Between 100% and 200% | |||
EBITDA for SBU | 56.25% | < 70% | 0% | |||||
|
|
|
| 70% to 100% | 25% up to 100% | |||
|
|
|
| >100% to 120% | Between 100% and 200% | |||
Free Cash Flow | 25% | < 70% | 0% | |||||
|
|
|
| 70% to 100% | 25% up to 100% | |||
|
|
|
| >100% to 120% | Between 100% and 200% | |||
Total (as a percent of Target Opportunity) | 100% |
| 0% to 200% |
(1) | Amounts interpolated, as appropriate. |
Compensation Discussion and Analysis |
Compensation DiscussionFor 2021, the performance goals (at threshold, target and Analysis
For 2015, the payout for the EBITDAmaximum levels) and ROIC components was $0, since the actual achievement of EBITDAeach of $439 millionthe financial components is included in the chart below:
Performance Goals | ||||||||||||||||||||
Performance Measure (Engel, Schulz and Dosch) | Threshold | Target | Maximum | Actual Results | ||||||||||||||||
EBITDA | $ | 641,200 | $ | 916,000 | $ | 1,099,200 | $ | 1,150,000 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
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| |||||||||
Free Cash Flow | $ | 253,330 | $ | 361,900 | $ | 434,280 | $ | 93,500 | (2 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 0 | % |
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| |||||||||
Performance Measure (Squires) | Threshold | Target | Maximum | Actual Results | ||||||||||||||||
EBITDA | $ | 641,200 | $ | 916,000 | $ | 1,099,200 | $ | 1,150,000 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
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|
| |||||||||
EBITDA for SBU | $ | 296,700 | $ | 423,900 | $ | 508,700 | $ | 602,400 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
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|
| |||||||||
Free Cash Flow | $ | 253,330 | $ | 361,900 | $ | 434,280 | $ | 93,500 | (2 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 0 | % |
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|
| |||||||||
Performance Measure (Geary) | Threshold | Target | Maximum | Actual Results | ||||||||||||||||
EBITDA | $ | 641,200 | $ | 916,000 | $ | 1,099,200 | $ | 1,150,000 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
|
|
| |||||||||
EBITDA for SBU | $ | 330,100 | $ | 471,600 | $ | 565,900 | $ | 499,300 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 130 | % |
|
|
| |||||||||
Free Cash Flow | $ | 253,330 | $ | 361,900 | $ | 434,280 | $ | 93,500 | (2 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 0 | % |
|
|
|
(1) | EBITDA is adjusted earnings before income taxes, interest, preferred stock dividends and depreciation and amortization, as shown on page 29 of the Company’s Form 10-K filed with the SEC on February 25, 2022 (the “Form 10-K”), in thousands of millions, modified as follows: (1) for the Company’s Adjusted EBITDA of $1,175.7, less $25.7 of stock-based compensation expense, as shown on page 29 of the Form 10-K; (2) for EES’s Adjusted EBITDA of $604.4, less $6.4 of stock-based compensation expense, as shown on page 29 of the Form 10-K, plus $4.4 relating to the write down of certain safety-related inventory; and (3) for CSS’s Adjusted EBITDA of $480.8, less $2.6 of stock-based compensation expense, as shown on page 29 of the Form 10-K, plus $21.1 relating to the write down of certain safety-related inventory. |
(2) | Free Cash Flow of $93.5 is cash flow provided by operations, less capital expenditures, plus merger-related cash costs, all as shown on page 23 of the Form 10-K. |
Each December, the Board reviews the Company’s annual operating plan, including these measures. Targets for the coming year’s Short-Term Incentives are consistent with the Board-approved annual operating plan, based on achievement levels as set forth in the table above. Additionally, the annual operating plan forms the basis of expectations that are provided to stockholders, in the form of sales and ROIC of 7.7% was below the threshold percentage of 85%profitability expectations, as shown on the prior page. Thewell as Free Cash Flow component represented an achievement level of 105%, based on Free Cash Flow of $261 million for 2015. The Committee reviewedgeneration. Thus, management’s Short-Term Incentive Plan is aligned with stockholder interests and made a qualitative assessment of individual performance and accomplishments as described below. expectations communicated to stockholders.
With respect to the NEOs other than himself, the Chief Executive Officer makes recommendations to the Committee for the Committee’s consideration.
Based on Mr. Engel’s base salary of $950,000 for three months The Committee’s review of the year and $975,000 for nine monthsChief Executive Officer’s bonus is conducted with only independent Directors, with the assistance of the year and a maximumindependent compensation consultant, present.
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 41 |
Each NEO’s 2021 short-term incentive payout percentage opportunity of 248%, his maximum bonus opportunity was $2,402,500. His actual bonus was $800,000,calculated as follows based on the financial componentsperformance metrics and actual achievement levels described on the prior page and an individual performance component based on the Committee’s assessment of Mr. Engel’s performance regarding strategy execution, organizational development and talent management, investor and corporate relations, progress on One WESCO initiatives, LEAN leadership and execution, and Board and overall leadership.above:
Based on Mr. Parks’ base salary of $460,000 for three months of the year and $500,000 for nine months of the year and a maximum incentive payout percentage opportunity of 150%, his maximum bonus opportunity was $735,000. His actual bonus was $275,000, based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of Mr. Parks’ performance regarding strengthening the capital structure, financial reporting and management, LEAN administrative applications, enterprise risk management, control compliance, information technology, talent management, and financial leadership.
Based on Mr. Hibbard’s salary and maximum incentive payout percentage opportunity of 100%, his maximum bonus opportunity was $301,250. His actual bonus was $125,000
based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of Mr. Hibbard’s performance regarding accounts payable effectiveness, business development support, employee engagement, LEAN administrative applications and Oracle support.
Based on Ms. Lazzaris’ base salary of $400,000 for three months of the year and $425,000 for nine months of the year and a maximum incentive payout percentage opportunity of 120%, her maximum bonus opportunity was $502,500. Her actual bonus was $188,000, based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of Ms. Lazzaris’ performance regarding legal and contracts, talent management, supporting business growth while managing cost and productivity, enterprise risk management, and legal department leadership.
Based on Ms. Windrow’s base salary of $385,000 for three months of the year and $400,000 for nine months of the year and a maximum incentive payout percentage opportunity of 120%, her maximum bonus opportunity was $475,500. Her actual bonus was $175,000, based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of Ms. Windrow’s performance regarding development of the human resources function, leading various talent management initiatives, diversity and inclusion strategy and compensation and benefits strategy.
We retain the right to increase or decrease performance objectives or to make discretionary adjustments to annual incentive awards to reflect acquisitions, changes in responsibility, external changes, or changes in business conditions that have a material impact on the fairness of the previously established performance factors.
NEO | 2021 Salary | Target Incentive % | Target Incentive $ | Component | Component Weighting | Payout |
| |||||||||||||||||
Engel | $ | 1,160,000 | 150 | % | $ | 1,740,000 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 2,610,000 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 2,610,000 | ||||||||
Schulz | $ | 677,750 | 100 | % | $ | 677,750 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 1,016,625 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 1,016,625 | ||||||||
Dosch | $ | 643,462 | 100 | % | $ | 643,462 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 965,192 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 965,192 | ||||||||
Squires | $ | 620,250 | 90 | % | $ | 558,225 | EBITDA | 18.75 | % | Above target EBITDA (200%) | $ | 209,334 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
|
|
|
|
|
|
|
|
| Segment EBITDA | 56.25 | % | Above target Segment EBITDA (200%) | 628,004 | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 837,338 | ||||||||
Geary | $ | 568,461 | 90 | % | $ | 511,615 | EBITDA | 18.75 | % | Above target EBITDA (200%) | $ | 191,856 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
|
|
|
|
|
|
|
|
| Segment EBITDA | 56.25 | % | Above target Segment EBITDA (130%) | 374,118 | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 565,974 |
Long-Term Incentives
The purpose of long-term incentives is to carefully align compensation with stockholder value creation. Executingcreation, and thus long-term incentives comprise the business strategy necessarily requires tradeoffscenterpiece of shortexecutive compensation and long-term performance. Accordingly,a significant majority of our incentivesNEOs total compensation opportunity.
Structure of Long-Term Incentives
Based on feedback from investors as part of our prior say-on-pay outreach, we have structured our Long-Term Incentives for our NEOs as follows (with 50% being based on Performance Shares):
Long-Term Incentives | Weighting | |
Performance Shares | 50% | |
Stock Appreciation Rights | 25% | |
Restricted Stock Units | 25% |
Performance Shares
Our performance shares are designed to encouragereward our NEOs for drivers of long-term value that are tied to our strategy and reward both shortincreased stockholder value over the long-term. We use three-year performance periods for each grant, and long-term performance.performance shares for the three-year period 2019-2021 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 the optimal methodNet Income Growth is related directly to deliver long-term incentives is through stock appreciation rights (SARs), restricted stock units (RSUs),our strategy to drive profitable revenue and earnings growth. This performance shares. We use RSUs to strengthen the retention qualities of our equity programmetric encompasses sales growth, margin improvement and to be consistent with prevailing market practices. The mix of these equity awards, however, is geared toward motivating and rewarding management for achieving stockholder value creation. Performance share awards for the NEOs represent 30% of the total value (at target) of each NEO’s equity award, and SARs and RSUs represent 50% and 20% of the total value, respectively. SARs have no value unless the Company stock price increases. Performance shares will be forfeited if total shareholder returncost control, which are
and other targets are not met. Performance shares awarded in 2013 for the three-year performance period ended December 31, 2015 were forfeited because the Company did not meet the threshold levels of the performance goals, which is consistent with our pay for performance methodology.
Our philosophy is to grant equity-based long-term incentives having an economic value (based on the Company’s standard stock award assumptions for accounting purposes) which generally approximates the 50th percentile of grants by companies in our comparator group. We believe this target allows us to attract, motivate and retain the executive talent necessary to develop and execute our business strategy. Notwithstanding this objective, the Company’s target long-term incentives for the NEOs were generally below the 50th percentile of the comparator group for 2015.
Compensation Discussion and Analysis | 42 |
Compensation Discussionimportant operational aspects of our business and Analysisstrategy. 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 business.
Performance share awards are based on two equally-weighted performance measures of relative total shareholder return and the three-year average net income growth rate achieved by the Company during the three-year performance period. The award vestsvest in the form of a number of shares of the Company’s common stock. The number of performance shares actually earned, if any, will dependdepends 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 Changechange in Controlcontrol (as defined in the Company’s Long-Term Incentive Plan), the performance shares will vest at the target level.
Consistent with our pay-for performance philosophy, the threshold, target and maximum performance goals for the performance shares awarded in 2019 for the three-year performance period ended December 31, 2021 (the “2019 Performance Shares”) and the actual achievement and payout levels are as shown below:
| Performance Goals | Actual Results Actual Payout | ||||||
Performance Measure |
Threshold |
Target |
Maximum | |||||
Net Income Growth (3-year average growth rate) | 0% | 5% | 10% | 29.9% | ||||
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 | (33) bps | ||||
Payment as % of Target | 0.5 x | 1.0 x | 2.0 x | 0 |
Based on the actual results and performance goals above, the shares earned by the NEOs are calculated as follows:
NEO | Target Award of 2019 Performance Shares(1) | Component | Component Weighting | Payout |
| |||||||||||
Engel | 43,466 | Net Income Growth | 50 | % | Above target (200%) | 43,466 | ||||||||||
|
|
|
| RONA Growth | 50 | % | Below threshold (0) | — | ||||||||
|
|
|
|
|
|
|
| Total | 43,466 | |||||||
Schulz | 13,269 | Net Income Growth | 50 | % | Above target (200%) | 13,269 | ||||||||||
|
|
|
| RONA Growth | 50 | % | Below threshold (0) | — | ||||||||
|
|
|
|
|
|
|
| Total | 13,269 | |||||||
Squires | 6,177 | Net Income Growth | 50 | % | Above target (200%) | 6,177 | ||||||||||
|
|
|
| RONA Growth | 50 | % | Below threshold (0) | — | ||||||||
|
|
|
|
|
|
|
| Total | 6,177 |
(1) | Messrs. Dosch and Geary did not receive 2019 performance shares since they joined the Company in June 2020 as part of the Anixter acquisition. |
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 target for Net Income Growth and below threshold for RONA Growth. Each year the Committee reviews the performance targets and metrics for the upcoming grant. The current structure of our performance shares award program, including performance metrics, reflects changes made in prior years in response to stockholder feedback. In 2021, the Committee followed a consistent approach as in prior years.
Stock Appreciation Rights
We use 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 SARs settle in Company common stock upon exercise, and they vest ratably over three years,years.
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 43 |
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 cliff vest after three years. ratably over a three-year period.
Our SARs settlephilosophy is to grant equity-based long-term incentives having an economic value which generally approximates the 50th percentile of grants by companies in stock upon exercise.our peer group. We believe this target allows us to attract, motivate and retain the executive talent necessary to develop and execute our business strategy. The performance share, SAR and RSU grants to our NEOs on February 11, 2021 were as follows:
NEO | Performance Share Opportunity (reflects number of shares that could be earned at target)(1) | SAR Awards(2) | RSU Awards(3) | |||||||||
Engel | 39,063 | 45,386 | 19,531 | |||||||||
Schulz | 11,068 | 12,859 | 5,534 | |||||||||
Dosch | 9,115 | 10,590 | 4,557 | |||||||||
Squires | 7,813 | 9,077 | 3,906 | |||||||||
Geary | 7,161 | 8,321 | 3,581 |
(1) | Performance shares are subject to a three-year performance period from January 1, 2021 to December 31, 2023. |
(2) | The SAR awards vest ratably over three years and have an expiration date of February 11, 2031. |
(3) | The RSU awards will vest in 1/3 increments on February 11, 2022, February 11, 2023 and February 11, 2024, |
The Company’s target long-term incentives for the NEOs’ annual grants were generally at the 50th percentile of the peer group for 2021.
In 2015,2021, we granted 394,000120,238 performance shares, 139,592 SARs, 81,000and 314,480 RSUs and 55,400 performance shares in the aggregate to all award recipients. The awards were approximately equal to 1%1.1% of the weighted average outstanding stock of the Company. 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 Compensation Committee determines (without the input of the Chief Executive Officer) the amount of his grant. In 2015,2021, we granted performance shares, SAR and RSUequity awards to approximately 154391 employees.
The performance share, SAR and RSU grants to our NEOs in 2015 were as follows:No Hedging or Pledging
NEO | Performance Share (reflects number of shares that could | SAR Awards | RSU Awards | Grant Date | Grant Price | SARs Expiration Date | RSU Cliff - Vesting Date | |||||||||||||||||||||
Engel | 18,120 | 96,865 | 12,078 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Parks | 4,962 | 26,521 | 3,307 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Hibbard | 1,014 | 5,419 | 676 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Lazzaris | 2,480 | 13,262 | 1,654 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Windrow | 2,330 | 12,453 | 1,553 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Van Oss(3) | 6,472 | 34,595 | 4,313 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 |
Our Insider Trading Policy prohibits our Directors and NEOs from engaging in hedging transactions involving Company securities and from pledging Company securities as collateral for loans.
Performance Shares awarded in 2013 for the three-year performance period ended December 31, 2015 (the “2013
Performance Shares”) were forfeited because the performance goals were not met. Performance was measured over a three-year cycle and used two performance goals, relative Total Shareholder Return (TSR) and three-year average Net Income Growth, with each goal weighted 50% of the target performance share award.
Retirement Savings
Our Company maintains a 401(k) Retirement Savings Planretirement savings plan for all eligible employees, including the NEOs. In 2015,2021, the Company matchedhad two separate retirement savings plans, as the Wesco and Anixter plans were not yet integrated for the combined organization. The Wesco Retirement Savings Plan provided an employer match based on employee contributions at a rate of $0.50 per $1.00 of contributions up to 6% of eligible compensation. The Company madeAnixter Retirement Savings Plan provided an employer match based on employee contributions at a discretionary payment in 2015 forrate of $0.50 per $1.00 of contributions up to 5% of eligible compensation, plus an annual employer non-elective contribution of 2.0% or 2.5% (based on years of participatory service). The Anixter plan was merged with the Wesco plan, year ended in December 2014, which was capped at $2,000 per person.effective January 1, 2022.
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 44 |
We also maintain an unfunded nonqualified deferred compensation plan for a select group of qualifying management or highly compensated employees, including the NEOs. Participants may defer a portion of their salary and are eligible forsalary. Eligible participants receive a Company match at a rate of $0.50 per $1.00 up to 6% of eligible compensation less any Company match paid under the 401(k) plan. Earnings are credited to employees’ accounts based
on their deemed investment selections from offered investment funds. Notwithstanding any provision of the Deferred Compensation Plan or benefit election made by any participant deemed to be a key employee, benefits payable under the Deferred Compensation Plan will not commence until at least six months after the key employee’s separation from employment. See the “Nonqualified Deferred Compensation” table on page 3255 for more information regarding the NEOs’ benefits under the Deferred Compensation Plan.
Our Company Wesco does not have a defined benefit or supplemental retirement plan or any plans providing for post-retirement health benefits for our NEOs.
Anixter provided defined pension benefits under its pension plan and its excess benefit plan to eligible U.S. employees, including Messrs. Dosch and Geary. The pension plan benefit consists of two components: (i) until December 31, 2013, the Final Average Pay (FAP) benefit for employees hired prior to June 1, 2004, and (ii) the Personal Retirement Account (PRA) benefit for all employees hired on or after June 1, 2004 and beginning January 1, 2014, for all employees. This pension plan was closed to new hires or rehires as of July 1, 2015. Mr. Geary has accrued FAP benefits since January 2003, and Mr. Dosch and Mr. Geary have accrued PRA benefits since January 2009 and January 2003, respectively. For the PRA Benefit, each participant has a personal retirement account, which is a notional account that receives an annual pay credit equal to 2.0% of salary (up to the applicable Code limits) for each plan year in which the participant’s years of continuous service are fewer than five and 2.5% of salary (up to the applicable Code limits) for each plan year in which the participant’s years of continuous service are five or greater. Benefit accruals under the Anixter pension plan were frozen as of December 31, 2021.
Compensation DiscussionFor certain highly compensated employees in the U.S., Anixter provided a nonqualified Excess Benefit Plan which extends the applicable benefit formula in the qualified pension plan to eligible compensation that exceeds the amount allowed by the Code to be taken into account under the qualified plan. Messrs. Dosch and AnalysisGeary previously participated in the Anixter Inc. Excess Benefit Plan. This plan was terminated effective December 31, 2020, and paid out to participants in May 2021.
Until the end of 2021, Anixter Inc. maintained a defined contribution plan covering all of its non-union U.S. employees, including Messrs. Dosch and Geary. The Anixter plan was merged with the Company’s 401(k) Retirement Savings Plan, effective January 1, 2022.
Health and Welfare Benefits
We provide health benefits to full-time employees, including the NEOs, who meet the eligibility requirements. Employees pay a portion of the cost of healthcare on an increasing scale correlated to higher annual incomes. Accordingly, the NEOs’ percentage share of the cost of benefit coverage under our plan is higher than other employees. Our health and welfare benefits
are evaluated periodically by external benefits consultants to assess plan performance and costs and to ensure that benefit levels approximate the median value provided to employees of peer companies. As a risk management measure, we also offer executive physicals involving diagnostic testing.
Perquisites
During 2015,2021, the Company provided a limited number of perquisites to the NEOs. They primarily consist of a vehicle allowance, club memberships and spousal travelfor the first three months of 2021, a vehicle allowance. Effective April 1, 2021, the Company terminated the vehicle allowance of $1,000 per month and instead added that amount to certain business functions. The Compensation Committee determined that it is in the Company’s best interest to continue providing
these perquisites in order to offer a competitive pay package.base salary. The Company does not provide tax gross-ups on executive-only perquisites. See the “All Other Compensation” table on page 2850 for more information regarding the perquisites given to our NEOs.
Clawback Provisions
We have adopted a “clawback” policy to provide for recovery of incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results
and also to provide for clawback of cash and equity incentive compensation in the event of misconduct by an executive officer or former executive officer.
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 45 |
OTHER COMPENSATION AND EMPLOYMENT ARRANGEMENTS
Robust Stock Ownership Guidelines and Holding Periods for Executive Officers
Our Board has adopted robust stock ownership guidelines for certain executive officers. For the NEOs, the ownership guidelines are as follows:
NEO | Ownership Requirement as a Multiple of Base Salary | |
Engel | 5x | |
Schulz | 3x | |
Dosch | 2x | |
Squires | 2x | |
Geary | 2x |
These officers are expected to acquire their initial ownership positions within five years of their appointment and to hold those ownership positions during their service as executives of the Company. Until the stock ownership guidelines are met, an officer must hold a minimum of 50% of the pre-tax value realized at the exercise or vesting of equity awards. AllThe Board reviews compliance with these guidelines annually, and all of our NEOs have acquired or are acquiring equity in accordance with the guidelines. See “Security Ownership” on page 13Our CEO’s ownership level is approximately 67x base salary, well in excess of his 5x requirement.
In addition, the Company has stock ownership guidelines for more information on theirother officers and members of management who are not NEOs. In total, approximately 70 individuals were subject to stock ownership positions. See also “Director Compensation” on page 38 for information about Stock Ownership Guidelines for Directors.
guidelines as of March 30, 2022.
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 goals 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. DuringAs described previously, the year, Mr. Engel’sCommittee engages an independent compensation consultant, Meridian, to prepare an annual market analysis of target total compensation for 2015 (the total of salary, target annual cash incentive and long-term incentives) compared to a peer group, and it generally targets total compensation at median within a range that it considers competitive. Based on the annual compensation analysis prepared by Meridian, the CEO’s target total compensation for 2021 was below the 50th percentile of the Company’s comparator group.
within that range.
Employment, Severance, Change in Control or Other Arrangements
As disclosed previously, Mr. Engel has a 2009 Employment Agreementemployment agreement that provides for, among other things, an initial annuala base salary of $725,000
withamount and a target bonus of not less than 100% of base salary, as may be adjusted inby the Compensation Committee’s discretion.
Compensation Discussion and Analysis
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, except for performance-based awards where operational or performance criteria have not been met.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
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 46 |
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 3356 for additional information. The 2009 employment agreement has ahad 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.
ConsistentOn June 22, 2020, in conjunction with the closing date of the acquisition of Anixter, the Company entered into new employment letter agreements (each, a “Letter Agreement”) with each of Mr. Schulz and Mr. 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. Dosch and Mr. Geary joined the Company pursuant to the terms of his prior employment agreementnew letter agreements, dated May 28, 2020, between the Company and pursuanteach of Mr. Dosch and Mr. Geary (each, also a “Letter Agreement”). Mr. Engel’s 2009 Employment Agreement was not modified and remains in effect.
The Letter Agreement with Mr. Schulz provides for a base salary of $650,000, 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 a Release Agreement dated October 8, 2015 (the “Release”) and as previously disclosed on the Form 8-K filedapproval by the CompanyCompensation Committee.
The Letter Agreement with Mr. Dosch provides for a base salary of $625,000, 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 Agreement with Mr. Squires provides for a base salary of $600,000, a target annual bonus opportunity of 90% of base salary with a payout opportunity of 0-180% of base salary, and an annual equity award opportunity that is subject to approval by the Compensation Committee.
The Letter Agreement with Mr. Geary provides for a base salary of $550,000, a target annual bonus opportunity of 90% of base salary with a payout opportunity of 0-180% of base salary, and an annual equity award opportunity that is subject to approval by the Compensation Committee.
The Letter Agreement for Mr. Dosch also provided for a cash retention award of $2,660,000, which vests in annual installments on October 9, 2015 and as set forth on Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for its quarter ended September 30, 2015. Mr. Stephen A. Van Oss, former Senior Vice President and Chief Operating Officer is entitled to receive the following severance benefits: (i) an amount equal to $56,250 payable in each of the first 24 months following December 2015; (ii) an amount equal to $607,500 payable attwo anniversaries of June 22, 2020, the end of 2015; (iii) full vesting of his SARs and RSUs (except Performance Share Awards were unvested and forfeited); and (iv) for a period of 24 months after December 2015, coverage with health, dental and vision benefits subject to his payment of a portionclosing date of the monthly premiums for such coverage.Anixter transaction. This amount was in lieu of any rights or entitlements that Mr. Dosch would have had under a prior change in control agreement with Anixter, which he agreed was superseded in its entirety by the Letter Agreement. Under the terms of the Release,Letter Agreement, if Mr. Van Oss agreed to a general release of
claims with respect to the Company and to non-competition, non-solicitation, non-disparagement, and confidentiality provisions.
Mr. Parks would be entitled to receive a severance payment equal to one year’s base salary plus pro rata bonus if heDosch’s employment is terminated by the Company without cause, or he terminatesthen any unvested portion of the cash retention award will vest, subject to his employment for good reason, as described on page 35. Mr. Parks is bound by restrictive covenants inexecution and delivery of a release.
Each Letter Agreement also includes a severance provision entitling the form of non-competition and non-solicitation of employees during the term of his employment and for a period of one year thereafter.
Under the 2006 Severance Plan described below, Mr. Hibbard would be eligibleapplicable officer to receive eleven weeksthe following severance benefits upon the termination of severance if he is terminated by the Company without cause. Mr. Hibbard is bound by restrictive covenants in the form of noncompetition and non-solicitation of employees during the term of hisofficer’s employment and for a period of one year thereafter. His employment is not subject to an employment agreement or term sheet with the Company.
Ms. Lazzaris would be entitled to receive a severance payment equal to one year’s base salary plus pro rata bonus if she is terminated by the Company without cause if she terminates her employmentor by the officer for good reason, orsubject 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
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, Dosch, Squires and Geary, 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, as his benefits are specified in his pre-existing 2009 employment agreement, which was not modified and remains in effect.
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 47 |
Under the CIC Plan, if hera participant’s employment is terminated by Company other than for cause or by the participant for good reason, in each case on or within one yeartwo years following a change in control of the Company, (other than for cause), as described on page 36.
Ms. Windrow would be entitledthe Company will pay or provide to receivethe participant a cash severance payment equal to one year’sthe 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 as of June 22, 2020) of the participant’s base salary plus pro rata bonus if shethe participant’s target bonus; (iii) an amount equal to a multiple (2x for each participant selected to participate as of 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 as of June 22, 2020). This severance payment will be provided in lieu of any severance benefits to which the participant is terminated byotherwise 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 withoutand 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 or she terminates her employment for good reason, as described on page 37. Ms. Windrow is bound by restrictive covenantsa 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 form of non-competition and non-solicitation of employees duringparticipant were to pay the term of her employment and for a period of one year thereafter.excise tax.
The Company’s LTIPWESCO International, Inc. 1999 Long-Term Incentive Plan, as amended and restated effective May 31, 2017, provides that SAR and RSU awards would vest upon consummation of a Changechange in Controlcontrol transaction, and our performance share award agreements provide that performance share awards would vest at the target level upon consummation of a Changechange in Controlcontrol transaction. The payments to the NEOs upon consummation of a Changechange in Controlcontrol transaction for accelerated vesting of equity awards are set forth in the first column of each table on pages 3356 to 37.59. The Company’s stockholders approved a 2021 Omnibus Incentive Plan in May 2021 that replaced the prior 1999 Long-Term Incentive Plan. No grants were made to the NEOs under the new plan prior to 2022.
During 2006, our Board adopted the WESCO Distribution, Inc. 2006 Severance Plan which provides severance benefits to all eligible employees, not limited to executives. In accordanceThe Company has entered into indemnification agreements with the WESCO Distribution, Inc. 2006 Severance Plan,NEOs, in the event of an involuntary termination without cause, an eligible employee would receive severance payments of up to 52 weeks of base pay based on the employee’s completed years of service.
Asform as set forth on an exhibit to the Company’s Form 10-K filed on February 22, 2016, the Company has entered into indemnification agreements with Messrs. Engel and Parks and Messes. Lazzaris and Windrow providing for: indemnification for indemnifiable claims and losses; advancement of expenses; and D&O liability insurance.
Compensation Discussion and Analysis
Compensation Practices and Risk
On an annual basis, the Committee reviews the potential for risk regarding our compensation program design, including incentive compensation. The Committee has reviewed the Company’s compensation programs for employees generally and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the Company. The Committee believes that the design of the Company’s annual cash and long-term equity incentives provides an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long-term
stockholder value creation and does not encourage the taking of short-term risks at the expense of long-term results. Short-term incentive award payouts to the NEOs are subject to review and approval of the Committee, and the Committee also reviews with the independent members of the Board the CEO’s incentive award. In addition, incentive award payouts are capped at 2x target. The Committee has the discretionary authority to reduce or eliminate any incentive payouts. As previously noted above, the Company also maintains stock ownership guidelines and has adopted a clawback policy that applies to incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results and also to provide for clawback of incentive compensation in the event of misconduct by an executive officer or former executive officer.
CEO and Senior Management Succession Planning
Management succession planning and talent development are reviewed by the Board annually as part of its leadership and organizational review process. The Board reviews and discusses with management succession plans for the NEOs and other senior management positions across the Company, and the Board also evaluates succession plans in the context of overall Company strategy. Senior management is visible to Board members through formal presentations and informal events to allow
Wesco 2022 Proxy Statement | Compensation Discussion and Analysis | 48 |
Directors to personally assess candidates. The Board also establishes steps to address emergency CEO succession planning in extraordinary circumstances. The emergency CEO succession planning is intended to help the Company respond in the event of an unexpected emergency and reduce potential disruption or loss of continuity to the Company’s business and operations.
Deductibility of Executive Compensation
We consider the anticipated accounting and tax treatment to the Company and our executive officers when reviewing executive compensation and our compensation programs, and generally intend for compensation paid to its executive officers to be within the limits of, or exempt from, the deductibility limits of Section 162(m) of the Internal Revenue Code. However,but the Company reserves the right to pay compensation that is not tax deductible and a portion of the executive officers’ compensation paid in 20152021 was not tax deductible. The deductibility of some types of compensation payments can depend upon the timing of an executive’s vesting or exercise of previously granted rights or termination of employment.
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 CEONEOs. 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 certain other highly compensated executive officers (together, the “covered employees”). This limitation doesperformance share awards. We expect to continue to authorize compensation in excess of $1 million to covered employees, which will not apply to compensation that meets the requirementsbe deductible under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only ifwhen we believe doing so is in the individual’s orbest interests of the Company’s performance meetspre-established objective goals based on stockholder-approved performance criteria).Company and our stockholders.
An annual incentive pool is established and approved based on achievement of certain performance conditions from which RSUs and annual incentive plan awards are paid to covered employees, and then negative discretion is applied to this pool to decrease (but not increase) the amount of any award payable from the pool to covered employees.
COMPENSATION COMMITTEE REPORTCompensation Committee Report
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and based on that review and those discussions, it recommended to the Board of Directors that the foregoing Compensation Discussion and Analysis be included in our Proxy Statement, and incorporated by reference in ourthe Annual Report on Form 10-K of the Company for the year ended December 31, 2015.2021.
Respectfully Submitted:
THE COMPENSATION COMMITTEETHE COMPENSATION COMMITTEE
John K. Morgan,Chairman
Sandra Beach LinMatthew J. Espe
Bobby J. Griffin
James L. Singleton
Compensation Tables | 49 |
COMPENSATION TABLES
Name and Principal Position | Year | Salary | Option Awards(1) | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | |||||||||||||||||||||
John J. Engel, | 2015 | $ | 950,000 | (6) | $ | 2,100,033 | $ | 2,073,514 | $ | 800,000 | $ | 90,558 | $ | 6,014,105 | ||||||||||||||
Chairman, President | 2014 | $ | 942,500 | $ | 1,950,007 | $ | 1,967,812 | $ | 800,000 | $ | 96,508 | $ | 5,756,827 | |||||||||||||||
and CEO | 2013 | $ | 892,500 | $ | 1,800,002 | $ | 1,890,491 | (7) | $ | 1,000,000 | $ | 202,287 | $ | 5,785,280 | ||||||||||||||
Kenneth S. Parks, | 2015 | $ | 480,385 | (6) | $ | 574,975 | $ | 567,782 | $ | 275,000 | $ | 22,183 | $ | 1,920,325 | ||||||||||||||
SVP and CFO | 2014 | $ | 445,000 | $ | 500,034 | $ | 504,551 | $ | 250,000 | $ | 18,777 | $ | 1,718,362 | |||||||||||||||
2013 | $ | 380,000 | $ | 485,553 | $ | 420,105 | (7) | $ | 225,000 | $ | 26,143 | $ | 1,536,801 | |||||||||||||||
Timothy A. Hibbard, | 2015 | $ | 295,385 | (6) | $ | 117,484 | $ | 116,042 | $ | 125,000 | $ | 23,191 | $ | 677,102 | ||||||||||||||
VP and Corporate Controller | ||||||||||||||||||||||||||||
Diane E. Lazzaris, | 2015 | $ | 410,577 | (6) | $ | 287,520 | $ | 283,858 | $ | 188,000 | $ | 26,773 | $ | 1,196,728 | ||||||||||||||
SVP and GC | 2014 | $ | 390,000 | $ | 262,500 | $ | 264,936 | $ | 150,000 | $ | 23,952 | $ | 1,091,388 | |||||||||||||||
2013 | $ | 350,000 | $ | 237,481 | $ | 249,462 | (7) | $ | 205,000 | $ | 44,939 | $ | 1,086,882 | |||||||||||||||
Kimberly G. Windrow, | 2015 | $ | 380,865 | (6) | $ | 269,981 | $ | 266,622 | $ | 175,000 | $ | 30,189 | $ | 1,122,657 | ||||||||||||||
SVP and CHRO | 2014 | $ | 376,250 | $ | 250,002 | $ | 252,275 | $ | 150,000 | $ | 29,390 | $ | 1,057,917 | |||||||||||||||
2013 | $ | 345,000 | $ | 224,949 | $ | 236,352 | (7) | $ | 200,000 | $ | 61,319 | $ | 1,067,620 | |||||||||||||||
Stephen A. Van Oss, (5) | 2015 | $ | 662,019 | (6) | $ | 750,020 | $ | 740,540 | — | $ | 665,900 | $ | 2,818,479 | |||||||||||||||
Former SVP and COO | 2014 | $ | 668,750 | $ | 875,006 | $ | 883,006 | $ | 375,000 | $ | 56,098 | $ | 2,857,860 | |||||||||||||||
2013 | $ | 645,000 | $ | 874,952 | $ | 919,030 | (7) | $ | 290,250 | $ | 129,138 | $ | 2,858,370 |
Name and Principal Position | Year | Salary | Option Awards(1) | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | |||||||||||||||||||||
John J. Engel, Chairman, President and CEO | 2021 | $ | 1,160,000 | $ | 1,500,007 | $ | 4,500,019 | $2,610,000 | $ 89,061 | $ | 9,859,087 | |||||||||||||||||
2020(5) | $ | 946,667 | $ | 1,287,497 | $ | 7,862,514 | $1,153,497 | $ 63,322 | $ | 11,313,497 | ||||||||||||||||||
2019 | $ | 1,040,000 | $ | 1,187,496 | $ | 3,562,473 | $ 617,058 | $ 235,165 | $ | 6,642,192 | ||||||||||||||||||
David S. Schulz, EVP and CFO | 2021 | $ | 677,750 | $ | 424,990 | $ | 1,275,034 | $1,016,625 | $ 38,860 | $ | 3,433,259 | |||||||||||||||||
2020(5) | $ | 550,000 | $ | 381,247 | $ | 3,143,721 | $ 428,346 | $ 29,299 | $ | 4,532,613 | ||||||||||||||||||
2019 | $ | 595,000 | $ | 362,497 | $ | 1,087,500 | $ 209,202 | $ 83,617 | $ | 2,337,816 | ||||||||||||||||||
Theodore A. Dosch, EVP Strategy and Chief Transformation Officer | 2021 | $ | 643,462 | $ | 350,000 | $ | 1,050,009 | $ 965,192 | $1,367,611 | $ | 4,376,274 | |||||||||||||||||
2020(5) | $ | 324,519 | $ | — | $ | 1,399,991 | $ 684,196 | $ 72,620 | $ | 2,481,326 | ||||||||||||||||||
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Nelson J. Squires III, EVP and GM, EES | 2021 | $ | 620,250 | $ | 299,995 | $ | 900,019 | $ 837,338 | $ 339,029 | $ | 2,996,631 | |||||||||||||||||
2020(5) | $ | 505,208 | $ | 300,000 | $ | 2,400,015 | $ 370,558 | $ 702,793 | $ | 4,278,574 | ||||||||||||||||||
2019 | $ | 461,250 | $ | 168,742 | $ | 831,246 | $ 69,241 | $ 428,328 | $ | 1,958,807 | ||||||||||||||||||
William C. Geary II, EVP and GM, CSS | 2021 | $ | 568,461 | $ | 275,009 | $ | 824,986 | $ 565,974 | $ 26,618 | $ | 2,261,048 | |||||||||||||||||
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(1) | Represents the grant date fair value of SAR awards computed in accordance with FASB ASC Topic 718. These equity awards are subject to time-based vesting |
(2) | 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 |
(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. |
(4) | See the “All Other Compensation” table on page |
(5) | For 2020, the salary amounts for Messrs. Engel, Schulz and Squires reflect a 25% reduction in salary from May 1 to September 30 due to COVID-related cost reduction actions. For 2020, reflects Mr. |
Compensation Tables |
Compensation Tables
The following table describes each component of the All Other Compensation column for 20152021 in the Summary Compensation Table. The most significant component of this table is Company payments or contributions to employee retirement savings programs. These payments are further analyzed in the table contained in footnote (4) and include payments that are also presented and discussed there.in that footnote.
NEO | Year | Other Benefits(1) | Auto Allowance(2) | Tax Payments(3) | Payments Retirement | Total | ||||||||||||||||||
Engel | 2015 | $ | 24,058 | $ | 12,000 | — | $ | 54,500 | $ | 90,558 | ||||||||||||||
Parks | �� | 2015 | $ | 233 | $ | 12,000 | — | $ | 9,950 | $ | 22,183 | |||||||||||||
Hibbard | 2015 | $ | 179 | $ | 9,000 | — | $ | 14,012 | $ | 23,191 | ||||||||||||||
Lazzaris | 2015 | $ | 189 | $ | 12,000 | — | $ | 14,584 | $ | 26,773 | ||||||||||||||
Windrow | 2015 | $ | 263 | $ | 12,000 | — | $ | 17,926 | $ | 30,189 | ||||||||||||||
Van Oss(5) | 2015 | $ | 620,789 | $ | 12,000 | — | $ | 33,111 | $ | 665,900 |
NEO | Year | Other Benefits(1) | Vehicle Allowance(2) | Tax Equalization Benefit | Payments Relating to Employee Retirement Savings Programs(4) | Total | ||||||
Engel | 2021 | $ 16,656 | $3,000 | — | $69,405 | $ 89,061 | ||||||
Schulz | 2021 | $ 1,854 | $3,000 | — | $34,006 | $ 38,860 | ||||||
Dosch | 2021 | $1,330,000 | $ — | — | $37,611 | $1,367,611 | ||||||
Squires | 2021 | $ 154 | $3,000 | $317,800(3) | $18,075 | $ 339,029 | ||||||
Geary | 2021 | $ — | $ — | — | $26,618 | $ 26,618 |
(1) | This column reports the total amount of other benefits provided, none of which exceeded $10,000 unless otherwise noted. The amount for Mr. Engel |
(2) | Represented a monthly |
(3) | Before Mr. Squires was promoted and became an NEO, he was the leader of the Company’s Canadian business. While living in Canada, he was eligible for our standard expatriate assignment program, which includes a tax |
(4) | The retirement savings program for the NEOs (other than Mr. Dosch and Mr. Geary) includes both the Retirement Savings Plan, a qualified 401(k) plan, and the Deferred Compensation Plan, a |
NEO | Year | Company Matching Contribution to 401k Plan | Company Matching Contribution to Deferred Compensation Plan | Company Discretionary Contribution to 401k Plan | Company Rollover Contribution to Deferred Compensation Plan | Total | ||||||||||||||||||
Engel | 2015 | $ | 7,950 | $ | 44,550 | $ | 2,000 | — | $ | 54,500 | ||||||||||||||
Parks | 2015 | $ | 7,950 | — | $ | 2,000 | — | $ | 9,950 | |||||||||||||||
Hibbard | 2015 | $ | 7,950 | $ | 4,062 | $ | 2,000 | — | $ | 14,012 | ||||||||||||||
Lazzaris | 2015 | $ | 7,950 | $ | 4,634 | $ | 2,000 | — | $ | 14,584 | ||||||||||||||
Windrow | 2015 | $ | 7,950 | $ | 7,976 | $ | 2,000 | — | $ | 17,926 | ||||||||||||||
Van Oss | 2015 | $ | 7,950 | $ | 23,161 | $ | 2,000 | — | $ | 33,111 |
NEO | Year | Company Matching Contribution to 401k Plan | Company Matching Contribution to Deferred Compensation Plan(3) | Company 401k Discretionary Contribution | Change Pension Value(4) | Total | ||||||
Engel | 2021 | $ 8,550 | $60,855 | $— | $— | $69,405 | ||||||
Schulz | 2021 | $ 9,373(1) | $24,633 | $— | $— | $34,006 | ||||||
Dosch | 2021 | $ 8,226(2) | $29,385 | $— | $— | $37,611 | ||||||
Squires | 2021 | $10,458(1) | $ 7,617 | $— | $— | $18,075 | ||||||
Geary | 2021 | $ 7,685(2) | $18,933 | $— | $— | $26,618 |
Messrs. Schulz and Squires includes a true-up payment of $823 and $3,208 respectively. |
(2) | As described on page 44, Messrs. Dosch and Geary have accrued a Personal Retirement Account (PRA) benefit. Amounts include the employer’s contributions to the Personal Retirement Enhancement Account (PREA). The PREA is interest paid on the |
(3) | Messrs. Dosch and Geary were participants in the Anixter Inc. Deferred Compensation Plan and the Anixter Inc. Excess Benefit Plan, which were both terminated effective December 31, 2020. As of December 31, 2020, Messrs. Dosch and Geary had aggregate balances in the Anixter Deferred Compensation |
Compensation Tables | 51 |
Plan of $661,257 and $422,113, respectively. Interest was accrued in the amounts of $3,443 for Mr. Dosch and $2,198 for Mr. Geary under the Deferred Compensation Plan prior to the payout in May 2021. Effective January 1, 2021, the Wesco Excess Benefit Plan for Select Anixter Employees was created to provide participants in the Anixter Inc. Pension Plan, a tax-qualified defined benefit retirement plan, with the additional benefits that they would have received under that pension plan if annual Code limits did not apply. Amounts accrued under the Wesco Excess Benefit Plan for Select Anixter Employees were $25,942 for Mr. Dosch and $16,735 for Mr. Geary. Benefit accruals under both the Anixter Inc. Pension Plan and the Wesco Excess Benefit Plan for Select Anixter Employees were frozen as of December 31, 2021. |
(4) | Represents the difference in the present value of accumulated benefits determined as of December 31, 2021, and December 31, 2020, for both the Anixter Inc. Pension Plan and the Anixter Inc. Excess Benefit Plan benefits. The amount was capped at zero as the difference is less than zero due to the higher discount rate and the Excess Benefit Plan termination effective December 31, 2020. The change in pension value from the Anixter, Inc. Pension Plan is $8,372 for Ted Dosch (PRA) and $(13,800) for Bill Geary (PRA/FAP). The present value of the PRA (Personal Retirement Account) portion of the benefits increased with interest and accruals. As described on page 44, the Final Average Pay accrued benefit (FAP) portion is frozen but the value of the frozen benefit will continue to fluctuate based on changes in actuarial assumptions and the passage of time. |
Compensation Tables
Wesco 2022 Proxy Statement | Compensation Tables | 52 |
Grants of Plan-basedPlan-Based Awards for 20152021
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Option Awards: Number of Securities Underlying Options (#)(3) | All Other Stock Awards: Number of Securities Underlying Stock Units (#)(4) | Exercise or Base Price of Option Awards ($/SH) | Grant Date Fair Value of Stock and Option Awards(5) | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||
Engel | 2/17/15 | 9,060 | 18,120 | 36,240 | 96,865 | 12,078 | $ | 69.54 | (6) | $ | 4,173,547 | |||||||||||||||||||||||||||||
$ | 1,201,250 | $ | 2,402,500 | |||||||||||||||||||||||||||||||||||||
Parks | 2/17/15 | 2,481 | 4,962 | 9,924 | 26,521 | 3,307 | $ | 69.54 | (6) | $ | 1,142,757 | |||||||||||||||||||||||||||||
$ | 367,500 | $ | 735,000 | |||||||||||||||||||||||||||||||||||||
Hibbard | 2/17/15 | 507 | 1,014 | 2,028 | 5,419 | 676 | $ | 69.54 | (6) | $ | 233,526 | |||||||||||||||||||||||||||||
$ | 150,625 | $ | 301,250 | |||||||||||||||||||||||||||||||||||||
Lazzaris | 2/17/15 | 1,240 | 2,480 | 4,960 | 13,262 | 1,654 | $ | 69.54 | (6) | $ | 571,378 | |||||||||||||||||||||||||||||
$ | 251,250 | $ | 502,500 | |||||||||||||||||||||||||||||||||||||
Windrow | 2/17/15 | 1,165 | 2,330 | 4,660 | 12,453 | 1,553 | $ | 69.54 | (6) | $ | 536,603 | |||||||||||||||||||||||||||||
$ | 237,750 | $ | 475,500 | |||||||||||||||||||||||||||||||||||||
Van Oss(7) | 2/17/15 | 3,236 | 6,472 | 12,944 | 34,595 | 4,313 | $ | 69.54 | (6) | $ | 1,490,559 | |||||||||||||||||||||||||||||
— | — |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Securities Underlying Stock Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/SH)(5) | Grant Date Fair Value of Stock and Option Awards(6) | |||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Award Type | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||
Engel |
|
|
| Cash | $ | 1,740,000 | $ | 3,480,000 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/11/2021 | PSU | — | — |
|
|
| 19,531 | 390,063 | 78,126 | — | — | — | $ | 3,000,038 | |||||||||||||||||||||||||||||||||
| 2/11/2021 | SAR | — | — |
|
|
| — | — | — | — | 45,386 | $ | 76.80 | $ | 1,500,007 | ||||||||||||||||||||||||||||||||
| 2/11/2021 | RSU | — | — |
|
|
| — | — | — | 19,531 | — | — | $ | 1,499,981 | |||||||||||||||||||||||||||||||||
Schulz |
|
|
| Cash | $ | 677,750 | $ | 1,355,500 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/11/2021 | PSU | — | — |
|
|
| 5,534 | 11,068 | 22,136 | — | — | — | $ | 850,023 | |||||||||||||||||||||||||||||||||
| 2/11/2021 | SAR | — | — |
|
|
| — | — | — | — | 12,859 | $ | 76.80 | $ | 424,990 | ||||||||||||||||||||||||||||||||
| 2/11/2021 | RSU | — | — |
|
|
| — | — | — | 5,534 | — | — | $ | 425,011 | |||||||||||||||||||||||||||||||||
Dosch |
|
|
| Cash | $ | 643,462 | $ | 1,286,923 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/11/2021 | PSU | — | — |
|
|
| 4,557 | 9,115 | 18,230 | — | — | — | $ | 700,032 | |||||||||||||||||||||||||||||||||
| 2/11/2021 | SAR | — | — |
|
|
| — | — | — | — | 10,590 | $ | 76.80 | $ | 350,000 | ||||||||||||||||||||||||||||||||
| 2/11/2021 | RSU | — | — |
|
|
| — | — | — | 4,557 | — | — | $ | 349,977 | |||||||||||||||||||||||||||||||||
Squires |
|
|
| Cash | $ | 558,225 | $ | 1,116,450 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/11/2021 | PSU | — | — |
|
|
| 3,906 | 7,813 | 15,626 | — | — | — | $ | 600,038 | |||||||||||||||||||||||||||||||||
| 2/11/2021 | SAR | — | — |
|
|
| — | — | — | — | 9,077 | $ | 76.80 | $ | 299,995 | ||||||||||||||||||||||||||||||||
| 2/11/2021 | RSU | — | — |
|
|
| — | — | — | 3,906 | — | — | $ | 299,981 | |||||||||||||||||||||||||||||||||
Geary |
|
|
| Cash | $ | 511,615 | $ | 1,023,231 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/11/2021 | PSU | — | — |
|
|
| 3,581 | 7,161 | 14,322 | — | — | — | $ | 549,965 | |||||||||||||||||||||||||||||||||
| 2/11/2021 | SAR | — | — |
|
|
| — | — | — | — | 8,321 | $ | 76.80 | $ | 275,009 | ||||||||||||||||||||||||||||||||
| 2/11/2021 | RSU | — | — |
|
|
| — | — | — | 3,581 | — | — | $ | 275,021 |
(1) | Represents possible annual incentive cash awards that could have been earned in |
(2) | Represents possible performance share awards granted in |
(3) | Represents the |
Represents the number of SARs granted in |
(5) | Represents the exercise price for the SARs, which was the closing price of our Company stock on February 11, 2021, in accordance with Committee action on the |
Represents the full grant date fair value of SARs, RSUs and performance shares under ASC Topic 718 granted to the NEOs. 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 |
Compensation Tables |
Compensation Tables
Outstanding Equity Awards at Year-End
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Equity Awards Exercisable | Number of Securities Underlying Unexercised Equity Awards Un-exercisable | Exercise Price | Expiration Date | Number of Shares of Stock That Have Not Vested | Market Stock That | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(1) | Equity Not Vested | Grant Date | Number of Securities Underlying Unexercised Equity Awards Exercisable | Number of Securities Underlying Unexercised Equity Awards Un-exercisable | Exercise Price | Expiration Date | Number of Shares of Stock That Have Not Vested | Market Value of Shares of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(1)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Engel | 7/01/2006 | 37,500 | — | $ | 69.00 | 7/01/2016 | — | — | — | — | 2/17/2015 | 96,865 | — | $ | 69.54 | 2/17/2025 |
| — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2007 | 45,000 | — | $ | 60.45 | 7/01/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2008 | 75,000 | — | $ | 40.04 | 7/01/2018 | — | — | — | — | 2/16/2017 | 111,382 | — | $ | 71.65 | 2/16/2027 |
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2009 | 150,673 | — | $ | 25.37 | 7/01/2019 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2010 | 125,597 | — | $ | 33.05 | 7/01/2020 | — | — | — | — | 2/13/2018 | 125,001 |
| $ | 62.80 | 2/13/2028 |
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2011 | 77,323 | — | $ | 60.05 | 2/16/2021 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2012 | 55,396 | — | $ | 64.33 | 2/16/2022 | — | — | — | — | 2/13/2019 | 48,361 | 24,180 | $ | 54.64 | 2/13/2029 |
| 21,733 | $ | 2,859,845 | 43,466 | $ | 5,719,691 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2013 | 38,302 | 19,151 | $ | 72.15 | 2/21/2023 | 9,978 | $ | 435,839 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 21,201 | 42,400 | $ | 85.35 | 2/18/2024 | 9,139 | $ | 399,191 | 13,708 | $ | 598,765 | 2/13/2020 | 30,965 | 61,928 | $ | 48.32 | 2/13/2030 |
| 26,645 | $ | 3,506,216 | 53,291 | $ | 7,012,563 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2/17/2015 | — | 96,865 | $ | 69.54 | 2/17/2025 | 12,078 | $ | 527,567 | 18,120 | $ | 791,481 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | 625,992 | 158,416 | 31,195 | $ | 1,362,597 | 31,828 | $ | 1,390,246 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parks | 6/08/2012 | 7,500 | — | $ | 58.04 | 6/08/2022 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2013 | 8,511 | 4,256 | $ | 72.15 | 2/21/2023 | 2,218 | $ | 96,882 | — | — | 7/2/2020 | — | — | — | — |
| 87,011 | $ | 11,449,778 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/03/2013 | 1,800 | 900 | $ | 74.00 | 6/03/2023 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 5,437 | 10,872 | $ | 85.35 | 2/18/2024 | 2,342 | $ | 102,298 | 3,516 | $ | 153,579 | 2/11/2021 | — | 45,386 | $ | 76.80 | 2/11/2031 |
| 19,531 | $ | 2,570,084 | 39,063 | $ | 5,140,300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2/17/2015 | — | 26,521 | $ | 69.54 | 2/17/2025 | 3,307 | $ | 144,449 | 4,962 | $ | 216,740 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | 23,248 | 42,549 | 7,867 | $ | 343,629 | 8,478 | $ | 370,319 |
| 412,574 | 131,494 |
|
|
| 154,920 | $ | 20,385,923 | 135,820 | $ | 17,872,554 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hibbard | 4/24/2007 | 3,200 | — | $ | 62.08 | 4/24/2017 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schulz | 1/31/2017 | 5,000 | — | $ | 70.70 | 1/31/2027 |
|
| — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2007 | 6,000 | — | $ | 60.45 | 7/01/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2008 | 10,000 | — | $ | 40.04 | 7/01/2018 | — | — | — | — | 2/16/2017 | 28,449 | — | $ | 71.65 | 2/16/2027 |
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2011 | 5,056 | — | $ | 60.05 | 2/16/2021 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2012 | 3,575 | — | $ | 64.33 | 2/16/2022 | — | — | — | — | 2/21/2017 | 2,979 | — | $ | 72.90 | 2/21/2027 |
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2013 | 2,128 | 1,064 | $ | 72.15 | 2/21/2023 | 554 | $ | 24,199 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 1,224 | 2,446 | $ | 85.35 | 2/18/2024 | 526 | $ | 22,976 | 792 | $ | 34,595 | 8/11/2017 | 4,000 | — | $ | 51.10 | 8/11/2027 |
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/17/2015 | — | 5,419 | $ | 69.54 | 2/17/2025 | 676 | $ | 29,528 | 1,014 | $ | 44,292 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | 31,183 | 8,929 | 1,756 | $ | 76,703 | 1,806 | $ | 78,887 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lazzaris | 5/14/2010 | 4,000 | — | $ | 37.90 | 5/14/2020 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2010 | 15,017 | — | $ | 33.05 | 7/01/2020 | — | — | — | — | 2/13/2018 | 38,045 | — | $ | 62.80 | 2/13/2028 |
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2011 | 9,665 | — | $ | 60.05 | 2/16/2021 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2012 | 6,700 | — | $ | 64.33 | 2/16/2022 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2013 | 5,053 | 2,527 | $ | 72.15 | 2/21/2023 | 1,316 | $ | 57,483 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 2,854 | 5,706 | $ | 85.35 | 2/18/2024 | 1,230 | $ | 53,726 | 1,846 | $ | 80,633 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/17/2015 | — | 13,262 | $ | 69.54 | 2/17/2025 | 1,654 | $ | 72,247 | 2,480 | $ | 108,326 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | 43,289 | 21,495 | 4,200 | $ | 183,456 | 4,326 | $ | 188,959 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Windrow | 9/27/2010 | 3,850 | — | $ | 39.26 | 9/27/2020 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9/28/2010 | 7,500 | — | $ | 40.20 | 9/28/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2011 | 7,435 | — | $ | 60.05 | 2/16/2021 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5/13/2011 | 2,800 | — | $ | 54.84 | 5/13/2021 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2012 | 6,700 | — | $ | 64.33 | 2/16/2022 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2013 | 4,787 | 2,393 | $ | 72.15 | 2/21/2023 | 1,247 | $ | 54,468 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 2,718 | 5,436 | $ | 85.35 | 2/18/2024 | 1,171 | $ | 51,149 | 1,758 | $ | 76,789 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/17/2015 | — | 12,453 | $ | 69.54 | 2/17/2025 | 1,553 | $ | 67,835 | 2,330 | $ | 101,774 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | 35,790 | 20,282 | 3,971 | $ | 173,452 | 4,088 | $ | 178,563 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Van Oss(2) | 7/01/2006 | 37,500 | — | $ | 69.00 | 7/01/2016 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2007 | 45,000 | — | $ | 60.45 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2008 | 75,000 | — | $ | 40.04 | 6/30/2017 | — | — | — | — | 2/13/2019 | 14,763 | 7,381 | $ | 54.64 | 2/13/2029 |
| 6,634 | $ | 872,968 | 13,269 | $ | 1,746,068 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2009 | 107,623 | — | $ | 25.37 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/01/2010 | 81,911 | — | $ | 33.05 | 6/30/2017 | — | — | — | — | 2/13/2020 | 9,169 | 18,338 | $ | 48.32 | 2/13/2030 |
| 7,890 | $ | 1,038,245 | 15,780 | $ | 2,076,490 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2011 | 44,610 | — | $ | 60.05 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/16/2012 | 29,486 | — | $ | 64.33 | 6/30/2017 | — | — | — | — | 7/2/2020 | — | — | — | — |
| 43,505 | $ | 5,724,823 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2013 | 27,927 | — | $ | 72.15 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 28,539 | — | $ | 85.35 | 6/30/2017 | — | — | — | — | 2/11/2021 | — | 12,859 | $ | 76.80 | 2/11/2031 |
| 5,534 | $ | 728,219 | 11,068 | $ | 1,456,438 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/17/2015 | 34,595 | — | $ | 69.54 | 6/30/2017 | — | — | 1,798 | $ | 78,536 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | 512,191 | — | — | — | 1,798 | $ | 78,536 |
| 102,405 | 38,578 |
|
|
| 63,563 | $ | 8,364,255 | 40,117 | $ | 5,278,996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Squires | 6/08/2016 | 800 | — | $ | 61.59 | 6/08/2026 |
| — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9/13/2016 | 875 | — | $ | 57.34 | 9/13/2026 |
| — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/16/2017 | 12,107 | — | $ | 71.65 | 2/16/2027 |
| — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/13/2018 | 16,305 | — | $ | 62.80 | 2/13/2028 |
| — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/13/2019 | 6,872 | 3,436 | $ | 54.64 | 2/13/2029 |
| 3,088 | $ | 406,350 | 6,177 | $ | 812,831 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10/1/2019 | — | — | — | — |
| 7,154 | $ | 941,395 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/13/2020 | 7,215 | 14,430 | $ | 48.32 | 2/13/2030 |
| 6,209 | $ | 817,042 | 12,417 | $ | 1,633,953 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/2/2020 | — | — | — | — |
| 32,630 | $ | 4,293,782 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/11/2021 | — | 9,077 | $ | 76.80 | 2/11/2031 |
| 3,906 | $ | 513,991 | 7,813 | $ | 1,028,113 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: |
| 44,174 | 26,943 |
|
|
| 52,987 | $ | 6,972,560 | 26,407 | $ | 3,474,897 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dosch | 6/22/2020 | — | — | — | — |
| 31,329 | $ | 4,122,583 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/02/2020 | — | — | — | — |
| 30,454 | $ | 4,007,442 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/11/2021 | — | 10,590 | $ | 76.80 | 2/11/2031 |
| 4,557 | $ | 599,656 | 9,115 | $ | 1,199,443 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: |
| — | 10,590 |
|
|
| 66,340 | $ | 8,729,681 | 9,115 | $ | 1,199,443 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geary | 6/22/2020 | — | — | — |
|
| 13,054 | $ | 1,717,776 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/02/2020 | — | — | — |
|
| 21,753 | $ | 2,862,477 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/11/2021 | — | 8,321 | $ | 76.80 | 2/11/2031 |
| 3,581 | $ | 471,224 | 7,161 | $ | 942,316 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: |
| — | 8,321 |
|
|
| 38,388 | $ | 5,051,477 | 7,161 | $ | 942,316 |
(1) | The amounts included in the table above for 2019 performance shares reflect final results as certified by the Compensation Committee and described on page 42, which is an above target result for the net income-based component and no payout for the RONA-based component. |
(2) | The amounts included in the table above for 2020 and 2021 performance shares reflect target |
Compensation Tables | 54 |
Compensation Tables
Equity Awards Vesting Schedule
Grant Date | Vesting Schedule | |
2/ | SARs: Time-based vesting in 1/3 increments on February
RSUs: Cliff vest on February
Performance shares: based on two equally-weighted performance measures | |
| ||
10/01/2019 | RSUs: Cliff vest on October 1, 2022. | |
2/ | SARs: Time-based vesting in 1/3 increments on February
RSUs: Cliff vest on February
Performance shares: based on two equally-weighted performance measures | |
6/22/2020 | Under the | |
7/02/2020 | RSUs: Time-based vesting at 30% on July 2, 2021; 30% on July 2, 2022; and | |
2/11/2021 | SARs: Time-based vesting in 1/3 increments on February 11, 2022; February 11, 2023; and RSUs: Time-based vesting in Performance shares: based on two equally-weighted performance measures during the three-year performance period ending December 31, 2023, as |
Option Exercises and Stock Vested
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise | Number of Shares (#)(3)(4) | Value Realized on Vesting ($) | ||||||||||||
Engel | 75,000 | $ | 2,936,250 | 22,939 | $ | 1,582,264 | ||||||||||
Parks | — | — | — | — | ||||||||||||
Hibbard | — | — | 1,479 | $ | 102,016 | |||||||||||
Lazzaris | — | — | 2,775 | $ | 191,412 | |||||||||||
Windrow | — | — | 2,775 | $ | 191,412 | |||||||||||
Van Oss(5) | 75,000 | $ | 2,936,250 | 25,471 | (6) | $ | 1,421,398 |
Under the generally applicable terms of the Company’s 1999 Long-Term Incentive Plan, amended and approved by our Board and stockholders and restated effective May 31, 2017, SARs and RSUs would vest upon a change in control, as defined in the Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors. Under the general terms of the Company’s Performance share awards, performance shares would vest at target upon a change in control. The Company included these provisions in the Long-Term Incentive Plan, which was approved by stockholders in 2017, to align management’s interests with stockholders’ interest. Starting in 2022, grants to the NEOs will be under the Company’s 2021 Omnibus Incentive Plan, as approved by our Board and stockholders effective May 27, 2021.
Compensation Tables |
Compensation TablesOption Exercises and Stock Vested
Option Awards | Stock Awards | |||||||||||||||||||
Name | Number of Shares Acquired on (#)(1) | Value Realized on Exercise ($) | Number of Shares Acquired on (#)(2) | Value Realized on Vesting ($) | ||||||||||||||||
Engel | 351,684 | $ | 21,708,187 | 64,355 | $ | 6,000,383 | ||||||||||||||
Schulz | — | $ | — | 26,882 | $ | 2,583,061 | ||||||||||||||
Dosch | — | $ | — | 28,716 | $ | 2,676,194 | ||||||||||||||
Squires | 19,556 | $ | 1,379,338 | 17,513 | $ | 1,728,656 | ||||||||||||||
Geary | — | $ | — | 15,850 | $ | 1,518,009 |
(1) | Reflects SARs that were exercised on May 11, 2021, September 13, 2021 and November 9, 2021. |
(2) | Reflects RSUs that vested on February 13, 2021 and July 2, 2021. Also reflects PSUs that were earned on February 11, 2021. For Messrs. Dosch and Geary, also reflects the vesting on March 1, 2021 of phantom shares granted on March 1, 2020. Under the terms of the merger agreement, RSUs granted to Messrs. Dosch and Geary on March 1, 2020 converted to phantom shares at a rate of 2.5457 upon the closing of the merger on June 22, 2020. |
Nonqualified Deferred Compensation
The table below provides information on the nonqualified deferred compensation of the NEOs in 2015.2021.
Name | Year | Executive in Last FY(1) | Company in Last FY(2) | Aggregate Earnings in Last FY(3) | Aggregate Distributions | Aggregate Balance at Last FYE(4) | ||||||||||||||||||
Engel | 2015 | $ | 105,000 | $ | 44,550 | ($ | 27,826 | ) | — | $ | 2,066,828 | |||||||||||||
Parks | 2015 | — | — | — | — | — | ||||||||||||||||||
Hibbard | 2015 | $ | 126,346 | $ | 4,062 | $ | 19,138 | — | $ | 856,976 | ||||||||||||||
Lazzaris | 2015 | $ | 16,817 | $ | 4,634 | $ | 439 | — | $ | 119,434 | ||||||||||||||
Windrow | 2015 | $ | 31,852 | $ | 7,976 | ($ | 5,000 | ) | — | $ | 217,038 | |||||||||||||
Van Oss(5) | 2015 | $ | 452,308 | $ | 23,161 | ($ | 21,964 | ) | — | $ | 6,744,553 |
Name | Year | Executive Contribution in Last FY(1) | Company Contributions in Last FY(2) | Aggregate Earnings in Last | Aggregate Withdrawals/ Distributions | Aggregate Balance Last | ||||||||||||||||||||||||
Engel | 2021 | $ | 138,810 | $ | 60,855 | $ | 698,130 | — | $ | 5,555,373 | ||||||||||||||||||||
Schulz | 2021 | $ | 83,500 | $ | 24,633 | $ | 86,002 | — | $ | 433,103 | ||||||||||||||||||||
Dosch | 2021 | $ | 32,173 | $ | 25,942 | $ | 2,762 | — | $ | 60,877 | ||||||||||||||||||||
Squires | 2021 | $ | 92,640 | $ | 7,617 | $ | 17,039 | — | $ | 231,721 | ||||||||||||||||||||
Geary | 2021 | $ | 17,054 | $ | 16,735 | $ | 4,088 | — | $ | 37,877 |
(1) | Reflects participation by the NEOs in the Deferred Compensation Plan, including deferral of portions of both base salary and incentive compensation. The NEOs cannot withdraw any amounts from their deferred compensation balances until termination, retirement, death or disability with the exception that the |
(2) | Amounts in this column are Company matching contributions to the Deferred Compensation Plan and include rollover contributions from the 401(k) plan to the Deferred Compensation Plan. Please refer to footnote 4 of the All Other Compensation table for a discussion of the determination of these contributions, which amounts are reported as compensation in the “All Other Compensation” column of the Summary 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 stock. |
(4) | Each of |
Compensation Tables | 56 |
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MR. ENGELTermination: 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, 2015.2021. 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. 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.
“Change in Control” has the meaning given to such term in the Company’s Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of a sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“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.
Executive Benefits and Payments Upon Termination | Termination After Change in Control(1) | Involuntary Not for Cause or For Good Reason Termination(2) | Death(3) | Disability(4) | Termination After Change in Control(1) | Involuntary Not for Cause For Good Termination(2) | Death(3) | Disability(4) | ||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||
Base Salary and Incentive | $ | 5,168,000 | $ | 3,159,000 | $ | 800,000 | — | $ | 8,510,000 | $ | 4,130,000 | $ | 2,610,000 | — | ||||||||||||||||||||||
Accelerated Options & SARs(5) | — | — | — | — | $ | 9,504,095 | $ | 9,504,095 | $ | 9,504,095 | $ | 9,504,095 | ||||||||||||||||||||||||
Accelerated RSUs(6) | $ | 1,362,598 | $ | 1,362,598 | $ | 1,362,598 | $ | 1,362,598 | $ | 20,385,923 | $ | 20,385,923 | $ | 20,385,923 | $ | 20,385,923 | ||||||||||||||||||||
Accelerated Performance Shares(7) | $ | 1,390,246 | — | $ | 1,390,246 | $ | 1,390,246 | $ | 17,872,554 | — | $ | 17,872,554 | $ | 17,872,554 | ||||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||||||||||
Medical Benefits | $ | 15,079 | $ | 15,079 | — | — | $ | 21,394 | $ | 21,394 | — | — | ||||||||||||||||||||||||
280G Tax Gross-Up | — | — | — | — | $ | 22,731,875 | — | — | — | |||||||||||||||||||||||||||
Total: | $ | 7,935,923 | $ | 4,536,677 | $ | 3,552,844 | $ | 2,752,844 | $ | 79,025,841 | $ | 34,041,412 | $ | 50,372,572 | $ | 47,762,572 |
(1) | Termination |
Mr. Engel’s Change in Control benefits 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:
Two times annual base salary.
Two times the annual target bonus opportunity.
Prorated annual incentive compensation for the portion of the fiscal year employed, if earned.
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target.
Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums.
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.
Wesco 2022 Proxy Statement | Compensation Tables | 57 |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination |
Monthly base salary continuation for 24 months.
An amount equal to the executive’s annual target bonus opportunity.
Full vesting of outstanding stock options, SARs, and RSUs.
Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums.
(3) | ||||
Potential Payments Upon Termination
Death |
Any accrued and earned but unpaid bonus.
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target
(4) | Disability |
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target.
The closing price of |
(6) | Represents the closing stock price on December 31, |
(7) | Represents the closing stock price on December 31, |
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MR. PARKSTermination: Mr. Schulz; Mr. Dosch; Mr. Squires; and Mr. Geary
Each of the following potential scenarios represents circumstances under which Mr. Parks’the NEO’s employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Parksto the NEO in each scenario is provided.described below. In each case, the date of the termination is assumed to be December 31, 2015.2021. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Mr. Parkseach NEO upon separation from the Company is governed by the terms of his Letter Agreement, effective June 22, 2020, as described on page 46, the terms of the CIC Plan, as described on page 46 - 47, and applicable equity award agreements.
Each Letter Agreement includes a term sheet dated May 31, 2012. Payment ofseverance 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 Mr. Dosch’s Letter Agreement with the Company, in the event of a termination of his employment by the Company without cause isCause, subject to the execution and delivery of a release.release of claims, any unvested portion of the cash retention award described on page 46 will vest. 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.
“Cause” means (a) engagingUnder 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 of Messrs. Schulz, Dosch, Squires and Geary) 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, Dosch, Squires and Geary) 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, Dosch, Squires and Geary). 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.
Wesco 2022 Proxy Statement | Compensation Tables | 58 |
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 engaging in 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, suppliersstate law; or stockholders; (b) inability to meet the expectations of employee’s job responsibilities or failure to timely and adequately perform employee’s duties; or (c)(iv) material breach of any manual or written policy codeof 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 procedure of(b) the willful engaging by the participant in illegal conduct which is materially and demonstrably injurious to the Company.
“Change in Control” has the meaning given to such term in the Company’s Long-Term Incentive Plan, whichGood reason means, (a) the acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a)without written consent: (i) a reduction in Mr. Parksthe NEO’s annual base salary, excluding any reduction that occurs in connection with an across the boardacross-the-board reduction of the salaries of substantially the entire senior management team; (b)(ii) a relocation of the NEO’s primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania;Pennsylvania (or with respect to Mr. Dosch or (c)Mr. Geary, the facility in which each is based); or (iii) any material reduction in the NEO’s authority, duties or responsibilities.
Change in control means: (a) an acquisition by any individual, entity or group of beneficial ownership of 30% or more of either the outstanding shares of common stock of the Company or the combined voting power of the outstanding voting securities of the Company entitled to vote generally in the election of directors (with certain exceptions); (b) a change in the authority, dutiescomposition of the Board such that individuals who constitute the incumbent board cease to constitute at least a majority of the Board; (c) the consummation of a reorganization, merger, statutory share exchange or responsibilities that materiallyconsolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (with certain exceptions); and adversely affect Mr. Parks’ role in(d) the organization.approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
Executive Benefits and Payments Upon Termination | Termination After Change in Control(1) | Involuntary Not for Cause or Good Reason Termination(2) | ||||||||||||||||
Executive Benefits and Payments Upon Termination – Mr. Schulz | Qualifying Termination After Change in Control | Involuntary Not for Cause or Good Reason Termination | ||||||||||||||||
Compensation: | ||||||||||||||||||
Base Salary and Incentive | $ | 775,000 | $ | 775,000 | ||||||||||||||
Base Salary and Bonus | $ | 3,435,000 | $ | 1,374,000 | ||||||||||||||
Accelerated SARs | — | — | $ | 2,799,518 | — | |||||||||||||
Restricted Stock Units | $ | 343,630 | — | $ | 8,364,255 | — | ||||||||||||
Performance Shares | $ | 370,319 | — | $ | 5,278,996 | — | ||||||||||||
Benefits and Perquisites: | ||||||||||||||||||
Medical Benefits | $ | 4,697 | $ | 4,697 | ||||||||||||||
Healthcare Benefits | $ | 28,730 | $ | 14,365 | ||||||||||||||
Outplacement | $ | 25,000 | — | |||||||||||||||
Total: | $ | 1,493,646 | $ | 779,697 | $ | 19,931,499 | $ | 1,388,365 |
Executive Benefits and Payments Upon Termination – Mr. Dosch | Qualifying Termination After Change in Control | Involuntary Not for Cause or Good Reason Termination | ||||||||
Compensation: | ||||||||||
Base Salary and Bonus | $ | 3,250,000 | $ | 1,300,000 | ||||||
Accelerated SARs(1) | $ | 580,226 | — | |||||||
Restricted Stock Units(2) | $ | 4,607,097 | — | |||||||
Performance Shares(3) | $ | 1,199,443 | — | |||||||
Cash Incentive Awards(4) | $ | 1,330,000 | $ | 1,330,000 | ||||||
Benefits and Perquisites: | ||||||||||
Healthcare Benefits | $ | 20,084 | $ | 10,042 | ||||||
Outplacement | $ | 25,000 | — | |||||||
Total: | $ | 11,011,850 | $ | 2,640,042 |
Wesco 2022 Proxy Statement | Compensation Tables | 59 |
Executive Benefits and Payments Upon Termination – Mr. Squires | Qualifying Termination After Change in Control | Involuntary Not for Cause or Good Reason Termination | ||||||||
Compensation: | ||||||||||
Base Salary and Bonus | $ | 2,946,900 | $ | 1,191,300 | ||||||
Accelerated SARs(1) | $ | 1,963,315 | — | |||||||
Restricted Stock Units(2) | $ | 6,972,559 | — | |||||||
Performance Shares(3) | $ | 3,474,897 | — | |||||||
Benefits and Perquisites: | ||||||||||
Healthcare Benefits | $ | 28,730 | $ | 14,365 | ||||||
Outplacement | $ | 25,000 | — | |||||||
Total: | $ | 15,411,401 | $ | 1,205,665 |
Executive Benefits and Payments Upon Termination – Mr. Geary | Qualifying Termination After Change in Control | Involuntary Not for Cause or Good Reason Termination | ||||||||
Compensation: | ||||||||||
Base Salary and Bonus | $ | 2,702,500 | $ | 1,092,550 | ||||||
Accelerated SARs(1) | $ | 455,908 | — | |||||||
Restricted Stock Units(2) | $ | 3,333,701 | — | |||||||
Performance Shares(3) | $ | 942,316 | — | |||||||
Benefits and Perquisites: | ||||||||||
Healthcare Benefits | $ | 27,436 | $ | 13,718 | ||||||
Outplacement | $ | 25,000 | — | |||||||
Total: | $ | 7,486,861 | $ | 1,106,268 |
(1) |
The closing price of |
Represents the closing stock price on December 31, |
Represents the closing stock price on December 31, |
(4) | ||||
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MS. LAZZARIS
Each of the following potential scenarios represents circumstances under which Ms. Lazzaris’ employment with the Company could potentially terminate. A description of the compensation benefits due Ms. Lazzaris in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2015. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Ms. Lazzaris upon separation from the Company is governed by a term sheet dated January 15, 2010. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
“Cause” means (a) engaging in a felony or engaging in 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; (b) inability to meet the expectations of employee’s job responsibilities or failure to timely and adequately perform employee’s duties; or (c) material breach of any manual or written policy, code or procedure of the Company.
“Change in Control” has the meaning given to such term in the Company’s Long-Term Incentive Plan, which means (a) the acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a) a reduction in Ms. Lazzaris’ base salary, excluding any reduction that occurs in connection with an across the board reduction of the salaries of the senior management team; (b) a relocation of primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) a change in the authority, duties or responsibilities that materially and adversely affect Ms. Lazzaris’ role in the organization.
Executive Benefits and Payments Upon Termination | Termination After Change in Control(1) | Involuntary Not for Cause or Good Reason Termination(2) | ||||||
Compensation: | ||||||||
Base Salary and Incentive | $ | 613,000 | $ | 613,000 | ||||
Accelerated SARs(3) | — | — | ||||||
Restricted Stock Units(4) | $ | 183,456 | — | |||||
Performance Shares(5) | $ | 188,959 | — | |||||
Benefits and Perquisites: | ||||||||
Medical Benefits | $ | 7,540 | $ | 7,540 | ||||
Total: | $ | 992,955 | $ | 620,540 |
Represents the unvested portion of year worked.
Chief Executive Officer Pay Ratio | 60 |
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MS. WINDROWChief 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 2021, our last completed fiscal year, there was no change in our employee population or employee compensation arrangements that we believe would significantly impact the pay ratio disclosure for the fiscal year. Therefore, we are using the same median employee in our pay ratio calculation.
EachFor 2021: (1) the annual total compensation of our median employee was $62,893; and (2) the annual total compensation of our CEO was $9,859,087. Based on this information, for 2021 the ratio of the following potential scenarios represents circumstances under which Ms. Windrow’s employmentannual total compensation for our CEO to the annual total compensation of our median employee was approximately 157 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 Company could potentially terminate. A descriptionmethodology and the material assumptions, adjustments, and estimates that we used for this calculation were as follows: We determined that, as of the compensation benefits due Ms. Windrow in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2015. The amounts described in2020, our employee population consisted of approximately 17,939 employees at our parent company and consolidated subsidiaries, of which 12,069 were U.S. employees and 5,870 were non-U.S. employees. Our employee population, after taking into consideration the table below will change based on the assumed termination date. The determinationadjustments permitted by SEC rules, consisted of compensation due to Ms. Windrow upon separationapproximately 17,093 individuals, of which 12,069 were U.S. employees and 5,024 were non-U.S. employees. For these purposes, we excluded approximately 846 employees from the Company is governed byfollowing jurisdictions: China (71), Brazil (69), Poland (59), New Zealand (58), Belgium (56), Argentina (44), United Arab Emirates (44), Ireland (42), Panama (34), India (33), Spain (30), Costa Rica (27), Saudi Arabia (25), Germany (21), Italy (21), Jamaica (17), Ecuador (16), France (16), Netherlands (16), Hong Kong (15), Sweden (15), Turkey (11), Switzerland (10), Japan (10), Malaysia (9), Trinidad and Tobago (9), Philippines (8), Barbados (7), Russian Federation (7), Morocco (6), Portugal (6), Austria (5), Egypt (5), Czech Republic (4), Guatemala (4), Indonesia (4), Taiwan (4), Uruguay (4), Norway (4) and Denmark (1).
SEC rules allow companies to use a term sheet dated June 18, 2010. Paymentvariety of severance benefits inassumptions, adjustments, methodologies, and estimates. Therefore, the eventratio figure reported above may not be capable of a termination without cause is subjectcomparison to the execution ofratio figures reported by companies in our peer group or by any other company. With respect to identifying the “median employee,” we used a release.
“Cause” means (a) engaging in a felony or engaging in conductconsistently applied compensation measure, which is in the good faith judgmentsum of an employee’s estimated annual salary/wages, commissions and bonus. For employees outside the Board, applying reasonable standards of personal and professional conduct, injuriousU.S., we converted local currency amounts to the Company, its customers, employees, suppliers or stockholders; (b) inability to meet the expectations of employee’s job responsibilities or failure to timely and adequately perform employee’s duties; or (c) material breach of any manual or written policy, code or procedure of the Company.U.S. dollars.
“Change in Control” has the meaning given to such term in the Company’s Long-Term Incentive Plan, which means (a) the acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or consolidation of the Company resulting in Company stockholders having less than 70% of theFor 2021, we combined voting power; (c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a) a reduction in Ms. Windrow’s base salary, excluding any reduction that occurs in connection with an across the board reduction of the salaries of the senior management team; (b) a relocation of primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) a change in the authority, duties or responsibilities that materially and adversely affect Ms. Windrow’s role in the organization.
Executive Benefits and Payments Upon Termination | Termination After Change in Control(1) | Involuntary Not for Cause or Good Reason Termination(2) | ||||||
Compensation: | ||||||||
Base Salary and Incentive | $ | 550,000 | $ | 550,000 | ||||
Accelerated SARs(3) | — | — | ||||||
Restricted Stock Units(4) | $ | 173,452 | — | |||||
Performance Shares(5) | $ | 178,563 | — | |||||
Benefits and Perquisites: | ||||||||
Medical Benefits | $ | 2,472 | $ | 2,472 | ||||
Total: | $ | 904,487 | $ | 552,472 |
Director Compensation
Compensation
Independent members of the Board of Directors receive compensation in the form of an annual retainer and an annual equity award. Directors have the ability to defer 25% to 100% of the retainer. Deferred amounts are converted into stock units and credited to an account in the Director’s name using the average of the high and low trading priceselements of our Common Stock on the first trading day in January of that year. In 2015, each Board member received an annual retainer of $90,000, and the Lead Director received an additional retainer of $20,000. The Chair of the Audit Committee received an additional retainer of $20,000, each other member of the Audit Committee received an additional retainer of $5,000, the Chair of the Nominating and Governance Committee received an additional retainer of $10,000 and the Chair of the Compensation Committee received an additional retainer of $15,000.
The Nominating and Governance Committee works with an independentmedian employee’s compensation consultant, Meridian, to do an annual assessment of Director compensation, including providing the Nominating and Governance Committee with market research and benchmarking data using a peer group of companies similar to that used in the Compensation Committee’s evaluation of executive compensation. We query our consultant on new developments, best practices and trends in Director Compensation, and Meridian serves as a resource to the Nominating and Governance Committee. However, the Nominating and Governance Committee makes its own decisions, uses its own judgment and comes to its own conclusions.
In addition to the retainer, non-employee Directors are reimbursed for travel and other reasonable out-of-pocket expenses related to attendance at Board and Committee meetings. Directors receive no additional compensation for
Board or Committee meeting attendance. Members of our Board who are also our employees do not receive compensation for their services as Directors.
For 2015, non-employee Directors received equity grants in the form of RSUs in the amount of approximately $100,000, prorated based on service. RSUs vest on the third anniversary of the date of the grant. If a Director’s Board service ends as a result of a scheduled Board term expiration, then all of the Director’s equity will vest in full. If a Director’s Board service is terminated prior to a normal termination or re-election date, then unvested equity is forfeited. In February 2015, each non-employee Director received a grant of 1,438 RSUs, prorated based on service. The RSUs awarded February 17, 2015 have a grant date fair value of $69.54, the closing price of our Common Stock on February 17, 2015.
For 2016, the Board adjusted the annual equity grants of RSUs to $115,000 from $100,000 and the Lead Director retainer to $25,000 from $20,000.
Distribution of deferred stock units will be made in a lump sum or in installments, in the form of shares of our Common Stock, in accordance with the distribution schedule selected byrequirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $62,893. The difference between such employee’s wages and the Director atemployee’s annual total compensation represents the time the deferral election is made. All distributions will be made or begin as soon as practical after January 1value of the year following the Director’s termination of Board service.employee’s retirement benefits.
As set forth on an exhibitWith respect to the Company’s Form 10-K filed on February 22, 2016,annual total compensation of our CEO, we used the Company has entered into indemnification agreements with each current Director providing for: indemnification for indemnifiable claims and losses; advancementamount reported in the “Total” column of expenses; and D&O liability insurance.our 2021 Summary Compensation Table included in this Proxy Statement.
Stock Ownership Guidelines
Our Board has adopted stock ownership guidelines for Directors. In 2015, Directors were expected to hold beneficial ownership of at least four times their annual cash retainer. In 2016, this amount was increased to five times their annual cash retainer.
Directors are expected to hold these ownership positions during their service as Directors. All Directors have acquired or are acquiring stock in accordance with the stock ownership guidelines.
Director Compensation
DIRECTOR COMPENSATION FOR 2015
Name | Fees Earned or Paid in | Stock Awards(2)(3) | Other(4) | Total | ||||||||||||
Beach Lin | $ | 100,000 | $ | 99,999 | — | $ | 199,999 | |||||||||
Griffin | $ | 90,000 | $ | 99,999 | — | $ | 189,999 | |||||||||
Morgan | $ | 103,750 | $ | 99,999 | — | $ | 203,749 | |||||||||
Raymund | $ | 103,750 | $ | 99,999 | — | $ | 203,749 | |||||||||
Singleton | $ | 107,917 | $ | 99,999 | — | $ | 207,916 | |||||||||
Tarr | $ | 101,250 | $ | 99,999 | — | $ | 201,249 | |||||||||
Utter | $ | 95,000 | $ | 99,999 | — | $ | 194,999 | |||||||||
Vareschi | $ | 45,810 | $ | 49,999 | $ | 10,000 | $ | 105,809 |
61 |
DIRECTOR OUTSTANDING EQUITY AWARDS AT YEAR-END
Name | Number of Securities Underlying Unexercised Equity Awards Exercisable | Number of Shares of Stock That | ||||||
Beach Lin | 14,708 | 3,927 | ||||||
Griffin | — | 2,049 | ||||||
Morgan | 16,742 | 3,927 | ||||||
Raymund | 22,742 | 3,927 | ||||||
Singleton | 22,742 | 3,927 | ||||||
Tarr | 2,500 | 3,927 | ||||||
Utter | 22,742 | 3,927 |
Item 3 –— Ratify Thethe Appointment of Independent Registered Public Accounting Firm
ITEM 3 – RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board has selected PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for the year ending December 31, 2016.2022.
We are submitting the appointment of the independent registered public accounting firm to you for ratification at the
Annual Meeting. Although ratification of this appointment is not legally required, our Board believes it is appropriate for you to ratify this selection. In the event that you do not ratify the selection of PricewaterhouseCoopers LLPPwC as our Company’s independent registered public accounting firm, our Audit Committee may reconsider its selection.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2016.2022.
Independent Registered Public Accounting Firm | 62 |
Item 3 – Ratify The Appointment of Independent Registered Public Accounting Firm
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Appointment of Independent Registered Public Accounting Firm
Our Audit Committee has appointed PricewaterhouseCoopers LLPPwC as our independent registered public accounting firm to audit our 20162022 consolidated financial statements.
PricewaterhouseCoopers LLPPwC has served as our independent registered public accounting firm since 1994. In addition to performing the audit, Representatives of PricewaterhouseCoopers LLP willPwC are scheduled to be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees and Services
Aggregate fees for all professional services rendered to us by PricewaterhouseCoopers LLPPwC for the years ended December 31, 20152021 and 20142020 were as follows:
(In millions) | 2015 | 2014 | ||||||
Audit fees | $ | 1.8 | $ | 2.0 | ||||
Audit-related fees | — | — | ||||||
Tax fees | ||||||||
Compliance | $ | 0.1 | $ | 0.4 | ||||
Planning and consulting | $ | 0.2 | $ | 0.6 | ||||
Other fees | — | — | ||||||
$ | 2.1 | $ | 3.0 |
(In millions) | 2021 | 2020 | ||||||
Audit fees | $ | 5.3 | $ | 5.3 | ||||
Audit-related fees | — | — | ||||||
Tax fees | ||||||||
Compliance | $ | 0.4 | $ | 0.3 | ||||
Planning and consulting | — | — | ||||||
Other fees | — | — | ||||||
| $ | 5.7 | $ | 5.6 |
The audit fees for the years ended December 31, 20152021 and 20142020 were for professional services rendered for the integrated audits of our consolidated financial statements and of our internal control over financial reporting, reviews of quarterly consolidated financial statements and statutory audits.
Tax compliance fees for the years ended December 31, 20152021 and 20142020 were for services related to the preparation and review of tax returns.
Tax planning and consulting fees for the years ended December 31, 2015 and 2014 were for services involving advice and consultation on tax matters.
Audit Committee Pre-Approval Policies and Procedures
Our Audit Committee has the sole authority to pre-approve and has policies and procedures that require the pre-approval by them of all fees paid for services performed by our independent registered public accounting firm. At the beginning of each year, the Audit Committee approves the proposed services for the
year, including the nature, type and scope of services and the related fees. Audit Committee pre-approval is also obtained for any other engagements that arise during the course of the year. During 20152021 and 2014,2020, all of the audit and non-audit services provided by PricewaterhouseCoopers LLPPwC were pre-approved by the Audit Committee.
Item 3 – Ratify The Appointment of Independent Registered Public Accounting Firm
Report of the Audit Committee
It is the responsibility of the Company’s management to prepare the Company’s financial statements and to develop and maintain adequate systems of internal accounting and financial controls. The Audit Committee is responsible for assisting the Board in its oversight of the quality and integrity of the Company’s financial statements and the independent audit thereof, its oversight of the Company’s accounting and financial reporting principles, policies and internal controls, and the performance of the internal audit function, evaluating the independence, qualifications and performance of the Company’s independent registered public accounting firm, and evaluating the performance of the Company’s internal auditors.
In this context, the Audit Committee has reviewed and discussed the Company’s audited financial statements for the year ended December 31, 20152021 with management and the independent registered public accounting firm. Management represented to the Audit Committee that the financial statements of the Company were prepared in accordance with generally accepted accounting
Wesco 2022 Proxy Statement | Independent Registered Public Accounting Firm | 63 |
principles. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standards No. 16,1301, “Communication with Audit Committees,” as adopted by the PCAOB. The Audit Committee also discussed with management their assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015,2021, and the independent registered public accounting firm’s opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015.
2021.
In addition, the Audit Committee has discussed with its independent registered public accounting firm, the independent registered public accounting firm’s independence from the Company and its management, including the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, which have been received by the Audit Committee. The Audit Committee discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope and plan for their respective audits. The Audit Committee meets with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their audits, including their audit of the Company’s internal controls and the overall quality of the Company’s financial reporting. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to our Board and our Board has approved, that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2015,2021, for filing with the Securities and Exchange Commission. The Audit Committee and our Board also appointed PricewaterhouseCoopers LLPPwC as the Company’s independent registered public accounting firm for 2016.2022.
Respectfully Submitted:
THE AUDIT COMMITTEETHE AUDIT COMMITTEE
Steven A. Raymund,Chairman
James J. O’BrienAnne M. Cooney
Lynn M. UtterEaswaran Sundaram
Robert J. Tarr, Jr.Laura K. Thompson
Ingenuity delivered. | Wesco.com WESCO International, Inc. 225 West Station Square Drive, Suite 700 Pittsburgh, PA 15219 412.454.2200 220104W001 © 2022 Wesco International |
WESCO INTERNATIONAL, INC. 225 WEST STATION SQ. DR. SUITE 700 PITTSBURGH, PA 15219 ATTN: DIANE E. LAZZARIS | VOTE BY INTERNET Before The Meeting - |
WESCO INTERNATIONAL, INC.
Suite 700
225 West Station Square Drive
Pittsburgh, PA 15219-1122
Phone: 412-454-2200
www.wesco.com
WESCO INTERNATIONAL, INC.
225 WEST STATION SQ. DR.
SUITE 700
PITTSBURGH, PA 15219
ATTN: SAMANTHA L. O’DONOGHUE
VOTE BY INTERNET - www.proxyvote.com
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WESCO INTERNATIONAL, INC.
The Board of Directors recommends you vote FOR the following: | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||||||||||||||||||||||
1. | Elect nine Directors for a one-year term expiring in 2023. | ☐
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Nominees: | ||||||||||||||||||||||||||||||||||||
01) | John J. Engel | 06) | Steven A. Raymund | |||||||||||||||||||||||||||||||||
02) | Anne M. Cooney | 07) | James L. Singleton | |||||||||||||||||||||||||||||||||
03) | Matthew J. Espe | 08) | Easwaran Sundaram | |||||||||||||||||||||||||||||||||
04) | Bobby J. Griffin | 09) | Laura K. Thompson | |||||||||||||||||||||||||||||||||
05) | John K. Morgan | |||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals 2 and 3. | For | Against | Abstain | |||||||||||||||||||||||||||||||||
2. | Approve, on an advisory basis, the compensation of the Company’s named executive officers. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||
3. | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2022. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||
NOTE: Transact any other business properly brought before the Annual Meeting. | ||||||||||||||||||||||||||||||||||||
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Signature [PLEASE SIGN WITHIN BOX]
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