2023 PROXY STATEMENT
and Notice of Annual Meeting of Stockholders
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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)) | ||||
| ☒ | Definitive Proxy Statement | |||
| ☐ | Definitive Additional Materials | |||
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Soliciting Material Pursuant to Section 240.14a-12 | ||||
| ☒ | No fee required. | |||
| ☐ | Fee paid previously with preliminary materials. |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and0-11. | ||||
2023 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 2023 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 | |||||
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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 https://www.virtualshareholdermeeting.com/WCC2023, 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 25, 2023. | |||||
Record Date: | March 30, 2023 | |||||
Dear Fellow Stockholders:
Wesco delivered a stellar encore performance in 2022. The success of our business model and integration efforts over the past two and a half years since our transformational combination with Anixter resulted in record full year sales of $21.4 billion, an increase of 18% over last year. We again set new company records for margin and profitability, and reduced leverage to below 3.0x for the first time since 2019. Since completing the Anixter acquisition in June 2020, we delivered a 312% stock price return through March 31, 2023. While our three-year post-merger integration plan is coming to a close this year, our digital transformation is accelerating. With our continued strong execution and the ongoing secular growth trends, we look forward with greater confidence than ever to a future of sustained growth and market outperformance.
I am pleased to invite you to attend our 20162023 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. 25, 2023. 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. | Approve, on an advisory basis, the frequency of an advisory vote on executive compensation. |
| 4. | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, |
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, 2023. Stockholders of record at the close of business on March 31, 201630, 2023 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 CONTENTSTable of Contents
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INTERNET ACCESS TO THIS PROXY STATEMENT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 26, 2016Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 25, 2023
The 20162023 Proxy Statement and 20152022 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.
Questions and Answers
| 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 (the “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.
QUESTIONS AND ANSWERSThe proxy materials for the Annual Meeting include the Notice of Annual Meeting of Stockholders, this Proxy Statement, and our Annual Report on Form 10-K. If you receive a paper copy of these materials, the proxy materials also include a proxy card or voting instruction form. Proxy materials are first being made available to stockholders on April 12, 2023.
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, 2023 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, 2023, you may vote at the Annual Meeting. On that date, there were 51,252,380 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 and save Wesco and its stockholders time and money. 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 2023 Proxy Statement | Questions and Answers | 2 |
You may attend the meeting webcast by visiting http://www.virtualshareholdermeeting.com/WCC2023. 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 25, 2023, 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, locate the “Ask a Question” section of the page, select a topic from the “Question Topic” menu, 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.
| Proposals | Board’s Recommendation | Voting Requirements | ||||
1 | Elect 9 Directors named in the Proxy Statement, each for a one-year term expiring at the Annual Meeting | FOR EACH DIRECTOR NOMINEE | Abstentions and broker non-votes will 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 and 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 | Approve, on an advisory basis, the frequency of an advisory vote on executive compensation | ONE YEAR | Abstentions and 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. If no frequency receives the affirmative vote of a majority of the represented at the meeting and entitled to vote on the matter, the Board will consider the frequency receiving the greatest number of votes as the frequency recommended by the stockholders. | |||
4 | Ratify the appointment of PricewaterhouseCoopers, LLP as our independent registered public accounting firm for the year ending December 31, 2023 | FOR | Abstentions will 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. | |||
Proposal 2—Approve, on an advisory basis, the Company’s executive compensation.
| Wesco 2023 Proxy Statement | Questions and Answers | 3 |
Proposal 3—Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016.
Action may be taken at the Annual Meeting with respect to any other business that properly comes before the meeting, and the proxy holders have the right to and will vote in accordance with their judgment on any additional business.
How do I cast my vote? |
There are four different ways you may cast your vote. You may vote by:
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 http://www.virtualshareholdermeeting.com/WCC2023.
The deadline for voting by Internet, telephone, or telephonemail is receipt by 11:59 p.m., E.D.T., on Wednesday, May 25, 2016.24, 2023. 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 shareholders) 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 24, 2023;
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 24, 2023; 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 officers, “ONE YEAR” for the approval, on an advisory basis, of the frequency of an advisory vote on executive compensation, 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, 2016.2023.
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 inon the election of Directors, on the proposal to approve, on an advisory basis, the compensation of the Company’s 401(k) Retirement Savings Plan), you may receive more than one Notice fromnamed executive officers, or the Company or a broker, bank or other nominee account with respectproposal to your shares held in “street name”.approve, on an advisory basis, the frequency of an advisory vote on executive compensation.
| Questions and Answers | 4 |
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.
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, bank or other nominee that holds your shares. Without a “Legal Proxy”, you will not be able to attend and vote those shares in person at the Annual Meeting at 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.
| 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.
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 BoardProposal 1 — 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.
Proposal 1 — 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 20172024 Annual Meeting of Stockholders): Sandra Beach Lin,Stockholders: John J. Engel, JamesAnne M. Cooney, Matthew J. O’Brien,Espe, Bobby J. Griffin, Sundaram Nagarajan, 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 2017,2024, 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, 2023.
| 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 | 61 | 2008 |
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Anne M. Cooney | 63 | 2021 |
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Matthew J. Espe | 64 | 2016 |
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Bobby J. Griffin | 67 | 2014 | Member | Member | 74 | 2014 |
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John K. Morgan | 61 | 2008 | Chair | Member | ||||||||||||||||||||||||||||||||||||||||||||
James J. O’Brien | 61 | 2016 | Member | Member | ||||||||||||||||||||||||||||||||||||||||||||
Sundaram Nagarajan | 60 | 2022 |
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Steven A. Raymund | 60 | 2006 | Chair | Member | 67 | 2006 |
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James L. Singleton(1) | 60 | 1998 | Member | Chair | Member | 67 | 1998 |
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Lynn M. Utter | 53 | 2006 | Member | Member | ||||||||||||||||||||||||||||||||||||||||||||
Easwaran Sundaram | 52 | 2018 |
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Laura K. Thompson | 58 | 2019 |
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| (1) | Lead Director |
Chair
Member
| Wesco 2023 Proxy Statement | Proposal 1 — Election of Directors | 6 |
Directors
The following information is provided regarding our Directors as of March 30, 2023.
Director Composition
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 and requires a diverse slate of candidates. During the past six years, the Board has added four new Directors as part of its refreshment process, each of whom is female or racially or ethnically diverse. The Board has a goal to be 50% or more diverse in terms of gender, race or ethnicity, and starting in 2022, we exceed this goal. In addition, the Board intends to recruit a gender diverse Director within the next year, working with a nationally recognized recruiting firm to assist with recruiting a gender diverse Director, as appropriate.
The matrix below describes the self-identified gender and race or ethnicity attributes of our Directors:
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Gender | ||||||||||||||||||||||||||||||||||||
Female | ✓ | ✓ | ||||||||||||||||||||||||||||||||||
Male | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||
Race or Ethnicity | ||||||||||||||||||||||||||||||||||||
African American or Black | ✓ | |||||||||||||||||||||||||||||||||||
Asian | ✓ | ✓ | ||||||||||||||||||||||||||||||||||
White | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||||||||||||
| Wesco 2023 Proxy Statement | Proposal 1 — Election of Directors | 7 |
ElectionDirector 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.
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NOMINEE DIRECTORS TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2017Strategic Leadership
Experience driving strategic direction and growth of an organization
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Industry Background
Knowledge of or experience in one or more of the Company’s specific industries
| 100% | ||||||||||||||||
Senior Management Leadership
Experience serving in a senior leadership role of a major organization
| 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
| 56% | ||||||||||||||||
CEO Leadership
Experience serving as the Chief Executive Officer of a major organization
| 78% | ||||||||||||||||
Environmental, Climate & Sustainability Experience
Experience or expertise working within or overseeing the sustainability function of an organization, or having educational training on relevant environmental, social and governance (“ESG”) related topics
| 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
| 67% | ||||||||||||||||
Financial Acumen and Expertise
Experience or expertise in financial accounting and reporting or the financial management of a major organization
| 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
| 78% | ||||||||||||||||
Human Capital, Talent, Inclusion & Diversity Experience
Experience working within or overseeing the human resources function of an organization, addressing compensation, benefits, talent, culture, and inclusion and diversity topics
Board composition is assessed by the Nominating and Governance Committee and the Board to achieve the appropriate mix of skills and experiences so that the Board, taken as a whole, is well-situated to fulfil 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.
| Wesco 2023 Proxy Statement | Proposal 1 — Election of Directors | 8 |
Nominee Directors to Serve for a One-Year Term Expiring in 2024
  | 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, is the chair of the governance and sustainability committee of United States Steel Corporation, and has extensive experience as a senior executive and operating leader in various global industries and a diverse range of businesses. He is experienced in strategic planning, financial and capital markets, risk oversight, human capital management and ESG matters. Mr. Engel also has expertise in managing complex operational and financial matters. | |
Age: 61 Director since: 2008 Chairman of the Board Member of: Executive | ||
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.
| 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. Serving as a Chief Operating Officer, the chair of the governance and sustainability committee and a member of the compensation committee of Summit Materials, Inc. and The Manitowoc Co., Inc., she also brings experience in the management and oversight of climate and sustainability initiatives, as well as expertise in human capital management and diversity, equity and inclusion topics. | |
Director since: 2021 Member of: Audit Committee and Nominating and Governance Committee | ||
| Wesco 2023 Proxy Statement | Proposal 1 — 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. Espe’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Espe has considerable experience as a Chief Executive Officer of a Fortune 500 company, and he brings significant management experience and knowledge to the Board of Directors in the areas of finance, accounting, international business operations, risk oversight, corporate governance, climate impact, sustainability, as well as human capital management, diversity and inclusion. He also brings significant experience gained from |
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.Anywhere Real Estate, Inc., and has experience in and knowledge of industries that are relevant to Wesco.
Director since: 2016 Member of: Compensation Committee (Chair) and Executive 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
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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
Former President, International Operations, Ryder System, Inc.
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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 senior executive in multiple industries, has supply chain expertise, has extensive international business experience, and significant experience as a public company board member. Serving as the lead independent director and a member of |
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.
Age: 74
Director since: 2014
Member of: Compensation
Committee, Executive
Committee, and Nominating
and Governance Committee
(Chair)
| 10 |
 | Sundaram “Naga” Nagarajan President and Chief Executive Officer of Nordson Corporation. Sundaram “Naga” Nagarajan has served as the President and Chief Executive Officer of Nordson Corporation, a publicly traded, innovative, precision technology company, since 2019. Prior to joining Nordson, Mr. Nagarajan held roles of increasing responsibility with Illinois Tool Works Inc. from 1995 to 2019, including serving as the Executive Vice President, ITW Automotive OEM Segment from 2015 to 2019. Mr. Nagarajan serves on the Board of Directors of Nordson Corporation, Greater Cleveland Partnership, and the Lorain County Community College Foundation and the Board of Trustees of Manufacturers Alliance. Mr. Nagarajan served as a director of Sonoco Products Company from 2015 to 2022 and is a former trustee of the Hobart Institute of Welding Technology. Qualifications: Among Mr. Nagarajan’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Nagarajan is the Chief Executive Officer of a publicly traded company with broad expertise in senior executive and operating leadership roles, including extensive experience in and knowledge of manufacturing, organizational change management, supply chain management, human capital management, and international business operations. He has worked extensively on diversity, equity and inclusion and other ESG initiatives, overseeing sustainability strategies and teams. | |
Age: 60 Director since: 2022 Member of: Audit 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 Lead Director of Jabil, Inc. Qualifications: Among Mr. Raymund’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Raymund has considerable experience as a Chief Executive Officer of a Fortune 500 company in a global distribution business. He has extensive supply chain expertise, broad experience as a public company board member in various industries, including serving as the lead independent director, chair of the nominating and governance committee, and a member of the compensation committee of Jabil, Inc., and has experience assessing sustainability topics. In addition, Mr. Raymund is an audit committee financial expert. | |
Age: 67 Director since: 2006 Member of: Audit Committee and Compensation Committee |
| Wesco 2023 Proxy Statement | Proposal 1 — 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. 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, corporate strategy, human capital management and diversity, equity and inclusion topics, as well as deep knowledge of the Company, its industry, business and history. In 2022, Mr. Singleton received the Public Company Director of Year Award from the National Association of Corporate Directors (NACD), a recognition of Mr. Singleton’s integrity and informed judgment as well as his contributions to advancing board performance and leading corporate governance practices in accordance with NACD principles. | |
Age: 67 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. He also serves on audit, nominating and governance, and technology and cybersecurity committees of SolarWinds Corporation and brings expertise in the evaluation of ESG matters, including sustainable technologies, climate impact management and diversity, equity and inclusion initiatives. | |
Age: 52 Director since: 2018 Member of: Audit Committee and Nominating and Governance Committee |
| Wesco 2023 Proxy Statement | Proposal 1 — 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, climate impact, inclusion and diversity initiatives, and business development at a Fortune 200 company. She also serves as member of the audit and nominating and governance committees of Parker Hannifin Corporation and the audit, compensation, nominating, and governance committees of Titan international, Inc. In addition, Ms. Thompson is an audit committee financial expert. | |
Age: 58 Director since: 2019 Member of: Audit Committee (Chair) and Executive Committee |
| Wesco 2023 Proxy Statement | Executive Officers | 13 |
Executive Officers
Our executive officers and their respective ages and positions as of April 8, 2016,March 30, 2023, are set forth below.
Name | Age | Position | ||||
John J. Engel | Chairman, President and Chief Executive Officer | |||||
| Executive Vice President and | |||||
William C. Geary, II | 52 | Executive Vice President and General Manager, Communications & Security Solutions (CSS) | ||||
Akash Khurana | 49 | Executive Vice President and Chief Information and Digital Officer | ||||
Diane E. Lazzaris | 56 | Executive Vice President, General Counsel and Corporate Secretary | ||||
Hemant Porwal | 49 | |||||
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Christine A. Wolf | 62 | 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.
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.
KennethHemant 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
| Wesco 2023 Proxy Statement | Executive Officers | 14 |
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.
Executive Leadership Diversity
 | The Company’s executive leadership committee comprises the officers shown above and Ms. Kim Warne, Senior Vice President and Chief Marketing Officer. We believe that a diversity of backgrounds and experiences enables us to run a successful enterprise that meets the needs of our stakeholders and delivers superior value. | |
We aim to increase the representation of diverse employees at every level of the organization, with a Company culture that fosters a sense of individual and group belonging, and diversity of leadership that reflects our diverse workforce. | ||
Today, five of our ten executive officers are diverse in terms of gender, race or ethnicity, including three who identify as female. |
| Corporate Governance | 15 |
Corporate Governance
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 Wesco Code of Business Ethics and Conduct and a Global Anti-CorruptionAntibribery and Anticorruption Policy which apply to our Board of Directors and all of our employees and cover all areas of professional conduct, including customer relations, conflicts of interest, insider trading, financial disclosure, and compliance with applicable laws and regulations.
We also have adopted a Senior Financial Executive Code of Principles for Senior Financial Executives, referred to as the Senior Financial Executive Code, which applies to our Chief Executive Officer, Chief Financial Officer and Corporate Controller. We disclose future amendments to, or waivers from, the Senior Financial Executive Code on the corporate governance section of our website within four business days of any amendment or waiver.
You may access our Corporate Governance Guidelines, Committee Charters, Code of Business Ethics and Conduct, Global Anti-CorruptionAnticorruption Policy, Senior Financial Executive Code, Independence Policy, and related documents on our website athttps://www.wesco.com/governance.
us/en/our-company/leadership.html#policies.
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 2016,2023, 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.Nagarajan, 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 include those that are identified on pages 3 to 5.in the Proposal 1 – Election of the Board of Directors section of this Proxy Statement.
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, 2023, 56% of our Directors were diverse in terms of gender or ethnicity.
| Wesco 2023 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 or marketinghuman capital management and inclusion and diversity expertise, ESG experience, 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. As part of its Board refreshment process, the Board has recruited a new Director in four of the past five years, each of whom is diverse in terms of gender or ethnicity. Currently, 44% 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 five of its nine members (56%) who are diverse in terms of gender, race or ethnicity, which exceeds the Board’s goal of 50%. In addition, the Board intends to recruit a gender diverse Director within the next year, working with a nationally recognized recruiting firm to assist with recruiting a gender diverse Director, as appropriate.
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 2022 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 2023 Proxy Statement | Corporate Governance | 17 |
 | Topics considered during the 2022 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 2015,2022, 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 2023 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 athttps://www.wesco.com/governance under the caption “Contact Our Board.”us/en/our-company/leadership.html#contact.
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.
| Wesco 2023 Proxy Statement | Corporate Governance | 19 |
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 2015 Annual Meeting of Stockholders.
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:that includes:
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. Any notice of director nomination submitted must comply with the additional requirements of, and include the additional information required by, Rule 14a-19(b) under the Securities Exchange Act of 1934, as amended.
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, including in the areas of 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.
| Wesco 2023 Proxy Statement | Corporate Governance | 20 |
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 CommitteeCertain topics, including succession planning and mergers and acquisitions, are of such importance that they are reviewed for the full Board discusses and reviews guidelines and policies with respectnot delegated 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.a specific committee. In addition, management assesses the Company’s enterprise risk and reviews with the entire Board significant risks and associated mitigating factors on an annual basis.
Our Board has tasked designated standing committees with oversight of certain categories of risk management. The risk oversight focus areas of the committees are:
| Wesco 2023 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 environmental, social and governance (“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, and the Audit and Compensation Committees are delegated responsibility for oversight of specific ESG topics. However, the Board receives regular updates from each of the Committees and retains ultimate oversight responsibility for ESG matters.
ESG management teams work with senior leaders to set strategy and develop goals to embed sustainability and ESG objectives across our organization. ESG management is led by the Executive Vice President, Supply Chain and Operations and reports at least annually to the Board and as appropriate to the Board Committees on the status of our ESG programs.
Sustainability Initiatives
We maintain an ethical, safe, and environmentally sustainable culture. Reducing our environmental impact is a responsibility we have to our employees and the communities in which we operate; ethical, safe and sustainable practices also benefit
| Wesco 2023 Proxy Statement | Corporate Governance | 22 |
various aspects of our business, from operational efficiency to improved customer service. To guide Company initiatives toward measurable change, we established the following 2030 sustainability goals:
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. 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. |
Achieving these goals depends on the collective action of our business and functional units, as well as alignment across our Company management. The foundation of our environmental, health and safety management is our Global Environmental, Health, Safety and Sustainability Policy, which aligns with key provisions of the ISO 14001:2015 environmental management standards. The policy includes management accountability for environmental sustainability, direct program responsibilities, key performance indicators, and other metrics to track progress. To enhance our sustainability strategy, practices, and communications, we also engage with employees, customers, suppliers, stockholders, community members and other stakeholders.
As a distribution and supply chain services company, our approach to sustainability includes not only leveraging positive actions across our organization to reduce 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 work to meet their renewable portfolio standards initiatives (solar and wind generation projects). Our lighting renovation and retrofit business is focused on improving energy efficiency in offices, schools, high rise buildings and manufacturing plants and our automation solutions are focused on reducing waste for customers.
Overall, we continue to invest in new and emerging technologies and expand our capabilities in order to meet growing demands in these areas:
 | ENERGY EFFICIENCY |  | ENERGY MANAGEMENT | |||||||
We provide some of the most efficient products on the market, including LED lighting and energy-efficient power systems. | We offer a suite of smart building solutions that help manage a facility’s environmental impact, including advanced building automation equipment and HVAC controls. | |||||||||
 | RENEWABLE ENERGY |
| SUSTAINABLE 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. | |||||||||
| Wesco 2023 Proxy Statement | Corporate Governance | 23 |
Safety
Our Sustainability Goals include a focus on employee safety, training and development, as these are core values of Wesco. We work to reduce or eliminate health and safety risks through dedicated programs, leadership commitments and employee involvement. We seek to achieve continuous improvement in the safety of our facilities and track a series of metrics that provide guidance toward that improvement. Our training programs address a variety of topics, including sales and profitability, health and safety, information security, anti-bribery and compliance, inclusion and diversity, among others.
Inclusion and Diversity
We believe that our people and our high-performance culture are our greatest assets. We take 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 inclusion and diversity programs and engage in regular discussions on matters such as workplace culture, talent development, inclusion and diversity, and employee engagement.
We work to ensure that 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 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 comprising members of our senior management to lead five Business Resource Groups (“BRGs”) – WIN (Women’s Impact Network), Mosaic (Black, Latino, Indigenous, and People of Color), Pride (LGBTQ+), VOLT (Veterans), and ABLE (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.
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
Disabled Employee Accommodations
We also expect vendors to comply with our Supplier Code of Conduct, which incorporates these human rights protections.
| Wesco 2023 Proxy Statement | Corporate Governance | 24 |
United Nations Global Compact
Wesco’s focus on sustainability includes supporting the ten principles of the United Nations Global Compact, which we joined in 2017. We also support the United Nations Sustainable Development Goals. Our recent efforts have had the most impact for the goals below.
| GOOD HEALTH AND WELL-BEING | AFFORDABLE AND CLEAN ENERGY | INDUSTRY INNOVATION & INFRASTRUCTURE | REDUCED INEQUALITIES | RESPONSIBLE CONSUMPTION AND PRODUCTION | ||||
 |  |  |  |  | ||||
Transparency
Wesco provides sustainability-related information to stakeholders. We made significant enhancements to our Sustainability Report in 2022, including the addition of TCFD-aligned disclosures. Today, we leverage the following frameworks and standards to provide robust ESG information:
ESG Reporting Standards | ||
GRI | The Global Reporting Initiative (GRI) offers a list of global standards and guidelines around sustainability reporting. | |
SASB | The Sustainability Accounting Standards Board (SASB) provides a comprehensive set of industry specific disclosure topics and guidelines. | |
CDP | Formerly the Carbon Disclosure Project (CDP), CDP is an international organization that helps companies measure and disclose environmental impact information. Wesco provides responses to both Climate Change and Water questionnaires. | |
TCFD | The Task Force on Climate-Related Financial Disclosures (TCFD) provides disclosure recommendations on ESG topics to provide stakeholders with more detailed information surrounding climate risks. | |
More information about Wesco’s sustainability activities can be found on our website at https://www.wesco.com.
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 20172024 Annual Meeting
If you wish to have a stockholder proposal included in the Company’s proxy soliciting materials for the 20172024 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, 2016.14, 2023. For any other business to be properly brought before the 20172024 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 20162023 Annual Meeting, or between January 26, 20172024, and February 25, 2017.2024. We may be required to include certain limited information concerning any such proposal in our Proxy Statement so that proxies solicited for the 20172024 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 |
Board and Committee Meetings
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 athttps://www.wesco.com/governance.us/en/our-company/leadership.html#policies.
The full Board held five meetings in 2015.2022. Each Director attended 100%75% or more of the aggregate number of meetings of the full Board held in 20152022 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. Until September 1, 2022, the Audit Committee consisted of Messes. Cooney and Thompson and Messrs. Raymund and Sundaram, with Mr. Raymund serving as Chair until May 26, 2022, and Ms. Thompson serving as Chair since May 26, 2022. Upon his appointment to the Board on September 1, 2022, Mr. Nagarajan also became a member of the Audit Committee. Our Board has determined that Ms. Thompson and Messrs. Nagarajan and Raymund 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 seven meetings in 2022.
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). Until May 26, 2022, the Compensation Committee consisted of Messrs. Morgan, Espe, Griffin and Singleton, with Mr. Morgan serving as Chair. From May 26, 2022, the Compensation Committee has consisted of Messrs. Espe, Griffin, Raymund and Singleton with Mr. Espe serving as Chair. Mr. Morgan served on the Compensation Committee until his retirement from the Board on September 30, 2022. 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 2022.
Executive Committee
From January 2015 throughUntil May 2015,26, 2022, 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 ofChair. From May 26, 2022, the Executive Committee. With the exceptionCommittee consisted of Ms. Thompson and Messrs. Engel, Espe, Griffin and Singleton, with Mr. Singleton serving as Chair. Except for 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.
2022.
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 throughUntil May 2015,26, 2022, the Nominating and Governance Committee consisted of Messes. Beach LinMessrs. Griffin, Espe and Utter and Messrs. Tarr and Vareschi,Singleton, with Ms. Beach LinMr. Griffin serving as Chair of the Nominating and Governance Committee. Following the 2015 Annual Meeting of Stockholders,Chair. From May 26, 2022, the Nominating and Governance Committee consisted of Messes. Beach Lin and UtterMs. Cooney and Messrs. Griffin, Singleton and Tarr,Sundaram, with Ms. Beach LinMr. Griffin serving as Chair of 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.Chair. 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 2015.2022.
| Wesco 2023 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. In 2022, deferred amounts were 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 results of the audit with the independent registered public accounting firm; (c) reviewing with managementfirst trading day in January. The table below sets forth 2022 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 | 2022 Annual Cash Retainer | |||
All Independent Directors | $120,000 | |||
Lead Independent Director | $ 35,000 | |||
Committee Chairs | ||||
Audit | $ 25,000 | |||
Compensation | $ 20,000 | |||
Nominating and Governance Committee | $ 17,500 | |||
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 2022, non-employee Directors received equity grants in the form of Restricted Stock Units (RSUs) in the amount of $175,000, 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 17, 2022, each non-employee Director received a grant of 1,433 RSUs with a grant date fair value of $122.09 per RSU, which was the closing price of our Common Stock on February 17, 2022.
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 expenses; and D&O liability insurance.
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 SEC 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 Compensationstock ownership guidelines.
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 |
Director Compensation for 2022
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | All Other Compensation | Total | ||||||||||||
Cooney | $ | 120,000 | $ | 175,000 |
|
|
| $ | 295,000 | |||||||
Espe | $ | 131,918 | $ | 175,000 |
|
|
| $ | 306,918 | |||||||
Griffin | $ | 137,500 | $ | 175,000 |
|
|
| $ | 312,500 | |||||||
Morgan(4) | $ | 98,068 | $ | 131,250 | $ | 10,000 | (5) | $ | 239,318 | |||||||
Nagarajan(6) | $ | 40,000 | $ | 87,500 |
|
|
| $ | 127,500 | |||||||
Raymund | $ | 130,086 | $ | 175,000 |
|
|
| $ | 305,086 | |||||||
Singleton | $ | 155,000 | $ | 175,000 |
|
|
| $ | 330,000 | |||||||
Sundaram | $ | 120,000 | $ | 175,000 |
|
|
| $ | 295,000 | |||||||
Thompson | $ | 134,897 | $ | 175,000 |
|
|
| $ | 309,897 | |||||||
| (1) | The amounts shown represents the cash portion of the annual retainer paid to the Directors. Messrs. Griffin, Nagarajan, Raymund and Sundaram elected to defer portions of their compensation into the Company’s Deferred Compensation Plan for Non-Employee Directors. |
Name | Deferred Compensation | |||
Griffin | $ | 68,750 | ||
Nagarajan | $ | 40,000 | ||
Raymund | $ | 130,086 | ||
Sundaram | $ | 120,000 | ||
| (2) | Amounts represent the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718, of RSUs. On February 17, 2022, each non-employee Director received a grant of 1,433 RSUs with a grant date fair value of $122.09 per RSU, which was the closing price of our Common Stock on February 17, 2022. These RSU awards are subject to time-based vesting criteria. The assumptions used in calculating these amounts are set forth in Note 14 to our notes to consolidated financial statements for the year ended December 31, 2022, which is located on pages 85-88 of our Annual Report on Form 10-K. |
| (3) | All the RSU awards were granted under the WESCO International, Inc. 2021 Omnibus Incentive Plan, as approved by our Board and stockholders. See the “Director Outstanding Equity Awards at the Year-End” table below for more information regarding the equity awards held by Directors as of December 31, 2022. |
| (4) | Mr. Morgan retired from our Board September 30, 2022. |
| (5) | The Company made a charitable donation of $10,000 on Mr. Morgan’s behalf in honor of his retirement from our Board. |
| (6) | Mr. Nagarajan joined our Board on September 1, 2022, and received a pro rata equity RSU grant of 724 RSUs on September 22, 2022 with a grant date fair value of $120.81 per RSU. |
| Wesco 2023 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 | — | 1,433 | ||||||
Espe | 5,122 | 1,433 | ||||||
Griffin | 13,828 | 1,433 | ||||||
Morgan | 10,504 | — | ||||||
Nagarajan | — | 724 | ||||||
Raymund | 6,138 | 1,433 | ||||||
Singleton | — | 1,433 | ||||||
Sundaram | — | 1,433 | ||||||
Thompson | — | 1,433 | ||||||
| (1) | The amounts for Messrs. Espe, Griffin, Morgan and Raymund include RSUs for which vesting was deferred. |
| Wesco 2023 Proxy Statement | Security Ownership | 29 |
Security Ownership
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, 2023, 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, 2023, 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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Name | Shares Beneficially Owned | Percent Owned Beneficially(1) | ||||||||||
John J. Engel | 675,674 | (2) | 1.3 | % |
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Anne M. Cooney | 2,108 | (3) | * |
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Matthew J. Espe | 17,146 | (3) | * |
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Bobby J. Griffin | 26,180 | (3) | * |
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Sundaram Nagarajan | 303 | (3) | * |
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Steven A. Raymund | 30,216 | (3) | * |
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James L. Singleton(4) | 36,708 | (3) | * |
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Easwaran Sundaram | 9,094 | (3) | * |
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Laura K. Thompson | 7,030 | * |
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David S. Schulz (5) | 167,525 | (2) | * |
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Nelson J. Squires, III | 117,602 | (2) | * |
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William C. Geary, II(5) | 21,215 | (2) | * |
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Akash Khurana | 9,592 | (2) | * |
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All 18 Directors and executive officers as a group(5) | 1,339,189 | (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 and Stock Options which were outstanding on March 30, 2023 and may be exercised or settled within 60 days thereafter: Mr. Engel, 330,879; Mr. Schulz, 98,961; Mr. Squires, 68,235; Mr. Geary, 7,366; Mr. Khurana, 5,868; and all executive officers as a group, 635,830. |
| (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: Ms. |
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Transactions with Related Persons
Excludes 5,000 shares of Common Stock |
| (5) | As March 30, 2023, Messrs. Schulz and Geary owned 1,771, and 4,562 depositary shares, each representing a 1/100th interest in a share of the Company’s Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock (the “Preferred Stock”), respectively. Messrs. Schulz and Geary each own less than 1% of the Preferred Stock. All 18 Directors and executive officers as a group |
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
| Wesco 2023 Proxy Statement | Security Ownership | 30 |
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, 2015,2022, 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.
Security Ownership of Principal Stockholders
The following table sets forth the beneficial ownership of the Company’s Common Stock as of March 30, 2023, 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 | | 6,407,098 | (1) | 12.5 | % | |||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | 4,652,716 | (2) | 9.1 | % | ||||
Dimensional Fund Advisors, L.P. 6300 Bee Cave Road Building One Austin, TX 78746 | 2,567,555 | (3) | 5.0 | % | ||||
| (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 February 13, 2023. Leonard Green is the beneficial owner of 6,407,098 shares, for which it has shared voting power and shared dispositive power. |
| (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 9, 2023. Vanguard is the beneficial owner of 4,652,716 shares and has shared voting power over 20,406 shares, sole dispositive power over 4,587,587 shares and shared dispositive power over 65,129 shares. |
| (3) | 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 14, 2023. Dimensional is the beneficial owner of 2,567,555 shares and has sole power to vote 2,532,211 shares, and sole dispositive power over 2,567,555 shares. |
| Wesco 2023 Proxy Statement | Transactions With Related Persons | 31 |
TRANSACTIONS WITH RELATED PERSONSTransactions 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 2022.
| Proposal 2 — Approve, on an Advisory Basis, the Compensation of the Company’s Named Executive Officers | 32 |
ItemProposal 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 COMPENSATION
Officers
This year, the Company is seeking that the stockholders approve the compensation of the Company’s named executive officers (commonly referred to as “say-on-pay”“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 20162023 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 20152022 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:, who are listed below:
| John J. Engel | Chairman, President and Chief Executive Officer | |
| David S. Schulz | Executive Vice President and Chief Financial 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) | |
| Akash Khurana | Executive Vice President and Chief Information and Digital Officer | |
| Theodore A. Dosch | Executive Vice President, Strategy and Chief Transformation Officer | |
Mr. Dosch retired from the Company on August 5, 2022.
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 approximately 96% of stockholder votes in favor of our say-on-pay proposal in 2022. The overall structure of our compensation program, which was based on significant stockholder engagement, has remained consistent. | |||
Straightforward Program | Our program is straightforward and comprises three elements: (1) Base Salary; (2) Short-Term Incentive Program (STIP); and (3) Long-Term Incentive Program (LTIP). | |||
Pay for Performance | Our performance metrics are linked to our strategy and demonstrate our pay for performance philosophy that aligns compensation earned with performance outcomes. | |||
Balanced Mix of Incentives | We have a balanced mix of short- and long-term incentives, using a blend of performance metrics. | |||
Challenging Incentive Award Goals | We set challenging short- and long-term incentive award goals. | |||
Reasonable Compensation Levels | Total compensation is reviewed annually against a range of market data from a custom peer group of companies with similar business characteristics to Wesco. | |||
Limited Perquisites | We have limited use of perquisites. | |||
No Tax Gross-Ups on Executive-Only Perquisites | We do not provide tax gross-ups on executive-only perquisites. | |||
Independent Committee and Consultant | Our Compensation Committee is 100% independent and utilizes an independent compensation consultant. | |||
Stock Ownership Guidelines | We have robust stock ownership guidelines for our 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 2023 Proxy Statement | 34 |
Pay for Performance
Our compensation program uses the following performance metrics:
| Performance Metrics | Why It’s Included | How It’s Used | ||||
Short-Term Incentive Program (STIP) | Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) | Encompasses sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability, all of which are central to the Company’s strategy and the creation of long-term stockholder value. | Based on the annual operating plan reviewed and approved by the Board each December, these metrics are used for STIP targets in the following year. | |||
| Free Cash Flow | Relates directly to the Company’s operating performance, including the effective management of working capital, which is especially relevant for a supply chain services company. Strong free cash flow is 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 supply chain services company. | |||
Return on Net Assets (RONA) Growth | Important operating metric for a supply chain services company like us, since it focuses on improving profitability and the efficient use of operating assets (working capital, property, buildings and equipment) to create value for our stockholders. | |||||
2022 Performance Highlights
Performance highlights for 2022 include:
| • | Sales Growth – Record net sales of $21.4 billion, an increase of 18% over the prior year, with strong results across all three Strategic Business Units |
| • | Gross Margin Expansion – Record gross margin of 21.8%, up 100 basis points year over year |
| • | EBITDA Growth and EBITDA Margin Expansion – Record adjusted EBITDA of $1.7 billion, up 47% year over year, and record adjusted EBITDA margin of 8.1%, up 160 basis points year over year |
| • | EPS Growth – Record adjusted earnings per diluted share of $16.42, up 65% year over year |
| • | Continued De-Leveraging – Continued to de-lever balance sheet with leverage of 2.9x, down 1.0x versus the prior year-end and down 2.8x since completion of the Anixter transaction in June 2020 |
| • | Strategic Acquisition – Acquired Rahi Systems Holdings, Inc. a leading provider of global hyperscale data center solutions with expertise in complex information technology projects, strengthening the Company’s data center solution offerings |
| • | Leadership Talent – Strengthened our talent base through development of existing leaders and addition of new talent through targeted recruiting efforts |
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 35 |
Say-on-Pay
In addition to considering the needs of the business, the corporate governance landscape, the competitive marketplace and Analysis
other trends, the Committee considers the results of the Say-on-Pay advisory vote in making compensation decisions for the following year. In 2022, the Company’s advisory vote on executive compensation received the approval of approximately 96% of the shares voted. We believe that this substantial majority of votes cast affirms shareholders’ recognition of our strong alignment of pay with performance.
Compensation Philosophy, Approach and Pay Elements
We have a straightforward and transparent compensation program that is linked to our strategy and the drivers of long-term stockholder value. It is based on our pay-for-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 and goals:
| • | Attract and retain an excellent management team. A high performing team is critical to our success as a company.Developing and strengthening our corporate relationships with our customers and suppliers over the long-term enables our business to grow profitably. Also important is the consistency of leadership in support of our corporate mission, executing our strategy, and sustaining our high-performance culture. |
| • | Enable Wesco to recruit strong leaders as we grow our business and expand our product, service, and solution offerings.We were able to recruit our NEOs because of our culture and compensation packages that aligned their performance with our strategy of creating value. Our approach in aligning our compensation plans to our strategy has been an important reason for our recruiting successes. |
| • | Reward our executives fairly and provide proper and balanced incentives for long-term value creation.We want to provide a level of annual base compensation that is fair. When our executives perform at a level of high achievement, we reward them with attractive but capped annual cash bonus awards. In years when performance measures are not met, they may receive little or no bonus. In terms of long-term incentives, we believe that the opportunity to participate in the growth in value of our share price links pay to performance. We provide equity incentives to align management’s interests with those of stockholders, and we maintain robust stock ownership guidelines to instill that mindset. |
In setting compensation levels, we annually review a range of market data to ensure that our pay is appropriately positioned as compared to retain an excellent management team. Fielding a consistentother similarly situated executives – with the majority of roles being positioned between median and high performing team is critical75th percentile. The actual positioning of target compensation relative to our success as a company. Developingthe market varies based on each executive’s experience, skill set, performance and strengthening our corporate relationshipspotential – and generally results in executives who are new in their role being placed lower in the range and those with our customers and suppliers overmore experience being placed higher in the long-term puts us in an opportune position to grow our business intelligently and profitably. Equally important isrange.
We assess the consistency of internal leadership in support of our corporate mission and sustaining our high performance culture.
The second philosophical goaleffectiveness of our compensation planning is to put the Company in a position to recruit strong leaders as we grow our businessprograms regularly and expand our product and service offerings. We were able to recruit and retain our CEO because of our culture and a compensation package that aligned his
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. 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, 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 performance of our equity is the most direct link between performance and pay. We reward our executives with equity incentives to align their interests with those of the stockholders and maintain 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 at approximately the 50th percentile of comparable companies in our peer group. The Company’s target total cash compensation and long-term incentives for the NEOs have been generally below the 50th percentile of the peer group.
We use the services of a nationally recognizedan 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
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 36 |
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 than
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
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:defined by applicable regulations.
Summary
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 PROCESSCompensation Setting Process
Our Board has delegated to the Compensation Committee composed entirely of independent Directors under the independence standards of the NYSE and SEC, the responsibility of administering executive compensation and benefit programs, policies and practices. The Committee is composed entirely of individuals who are independent Directors under the independence standards of the NYSE and SEC, including the enhanced independence requirements for compensation committee members. 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; |
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 37 |
Confirm the reasonableness of total compensation awards as well as the reasonableness of each component of compensation when compared to peer companies;
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
As previously noted, the Committee also engages an independent compensation consultant to assist in reviewing its compensation practices, to provide market comparison information, and to make recommendations.
| • | Make annual cash incentive award payments based on an evaluation of pre-established operating and financial performance factors. |
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. Our Committee meets in person or telephonically at least five times each year, and our
The Committee’s Chairman meets with management and our independent compensation consultant moreMeridian 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 GROUPAs part of our compensation review process, the Committee annually assesses the competitiveness of the target pay opportunities for each of our NEOs against similarly situated executives from a custom peer group of companies. The peer group, reviewed and approved annually by the Committee, generally reflects:
In 2015, the Committee reviewed analyses of compensation paid by companies in our comparator group through the use of marketplace compensation profiles prepared by Meridian. The comparator group comprises comparably-sized, industrial firms, distribution companies and businesses with dispersed localessimilar in size, but also companies from general industry (excluding companies that are demonstrably variant to Wesco – e.g., agriculture, financial services, healthcare, retail) to reflect the broader market for which logistics are important, companies in industries in which asset management, in addition to operating margin, is a relevanttalent
measure of company performance, and other large distributors, wholesalers and retailers, which are potential competitors for executive talent of interest to WESCO.
The compensation comparator group that we used in 2015 included the following companies:
companies with similar business and financial characteristics, including revenue size, margins, market capitalization and capital intensity
We chose a large number of similarly sized companies to ensure a proper sample size for comparison purposes and because we believe that they are representative of the companies against whom we compete to recruit and retain talent. This approach has
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The Committee reviews compensation practices among theseproven successful, as many of the executive officers that we recently hired came from large corporations that were not direct competitors of ours and not in the distribution industry. Furthermore, it is not feasible or appropriate to construct a peer group of only distributor competitors, as many of our competitors are smaller and/or privately-held companies, to providein the Committee with relevant datacase of local competitors, or larger non-U.S. based companies, 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.the case of global competitors. 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.
Our compensation peer group in 2022 comprises the following 29 companies:
2022 COMPENSATION PEER GROUP | ||||||
AECOM | Cummins Inc. | International Paper Company | TE Connectivity Ltd. | |||
Arrow Electronics, Inc. | Eaton Corporation plc | Jabil Inc. | Trane Technologies Plc | |||
Avis Budget Group, Inc. | Flex Ltd. | Johnson Controls International plc | United Natural Foods, Inc. | |||
Avnet, Inc. | Fluor Corporation | Lithia Motors, Inc. | United Rentals, Inc. | |||
CarMax, Inc. | Genuine Parts Company | 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 | |||
Corning Incorporated | ||||||
Compensation Discussion and Analysis
Role of 2015 Advisory Vote on Executive Compensation in the Compensation Setting Process
The Committee reviewedreviews with Meridian the resultscomposition of our peer group annually to ensure that companies are relevant for comparative purposes. For 2022, based on a qualitative review of our peer group, the 2015 stockholder advisory vote on NEO compensation and incorporatedCommittee added Genuine Parts Company, a distributor, to the results as onepeer group.
Elements 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 COMPENSATIONCompensation
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,
In 2022, the Committee adjusts base salaries for executive officers to reflect performance, changes in job scope, and market practices among the comparator group generally based on the 50th percentileperformed its annual assessment of base salaries for comparable positions.
Effective as of April 1, 2015:in February. The Committee reviewed compensation market data, based on analysis prepared by Meridian, using our compensation peer group.
NEO | Annual Base Salary Beginning of 2022 | Annual Base Salary Effective April 1, 2022 | ||||||
Engel | $ | 1,180,000 | $ | 1,280,000 | ||||
Schulz | $ | 687,000 | $ | 725,000 | ||||
Squires | $ | 627,000 | $ | 650,000 | ||||
Geary | $ | 575,000 | $ | 625,000 | ||||
Khurana | $ | 475,000 | $ | 550,000 | ||||
Dosch | $ | 650,000 | $ | 675,000 | ||||
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.
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 39 |
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. Target short-termstrategy. Short-term incentives are designed to provide pay-for-performancecompensation opportunities generally approximating the 50th percentile of the comparator 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 20152022 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 comprises both the EBITDA for the relevant SBU and for the Company on a consolidated basis. We believe that EBITDA is an appropriate performance measure because it relates directly to the Company’s or SBU’s sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability. We believe that Free Cash Flow is an appropriate performance measure because it relates directly to the Company’s operating performance, including the management of working capital. We believe that the combination of earnings growth and Return On Invested Capital (“ROIC”) targets, along with individualeffective asset management drives value for a distribution and supply chain solutions business. Under the Company’s annual incentive plan, the Committee may apply a performance objectives. Themodifier, based on the achievement of strategic initiatives, which may increase or decrease the calculated incentive amount under the plan by +/- 25%.
For 2022, the target incentive opportunity, and relative weight assigned to each 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. |
| 40 |
Compensation DiscussionFor 2022, 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, Khurana and Dosch) | Threshold | Target | Maximum | Actual Results | ||||||||||||||||
EBITDA | $ | 919,200 | $ | 1,313,200 | $ | 1,575,800 | $ | 1,684,500 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
|
|
| |||||||||
Free Cash Flow | $ | 487,800 | $ | 696,900 | $ | 836,200 | $ | (21,700 | ) | (2 | ) | |||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 0 | % |
|
|
| |||||||||
Performance Measure (Squires) | Threshold | Target | Maximum | Actual Results | ||||||||||||||||
EBITDA | $ | 919,200 | $ | 1,313,200 | $ | 1,575,800 | $ | 1,684,500 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
|
|
| |||||||||
EBITDA for SBU | $ | 515,000 | $ | 735,700 | $ | 882,800 | $ | 842,000 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 170 | % |
|
|
| |||||||||
Free Cash Flow | $ | 487,800 | $ | 696,900 | $ | 836,200 | $ | (21,700 | ) | (2 | ) | |||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 0 | % |
|
|
| |||||||||
Performance Measure (Geary) | Threshold | Target | Maximum | Actual Results | ||||||||||||||||
EBITDA | $ | 919,200 | $ | 1,313,200 | $ | 1,575,800 | $ | 1,684,500 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 200 | % |
|
|
| |||||||||
EBITDA for SBU | $ | 430,200 | $ | 614,600 | $ | 737,500 | $ | 594,100 | (1 | ) | ||||||||||
Payment as % of Target | 25 | % | 100 | % | 200 | % | 92.5 | % |
|
|
| |||||||||
Free Cash Flow | $ | 487,800 | $ | 696,900 | $ | 836,200 | $ | (21,700 | ) | (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 33 of the Company’s Form 10-K filed with the SEC on February 21, 2023 (the “Form 10-K”), in thousands of millions, modified as follows: (1) for the Company’s Adjusted EBITDA of $1,725.6, less $41.0 of stock-based compensation expense; (2) for EES’ Adjusted EBITDA of $851.3, less $9.2 of stock-based compensation expense; and (3) for CSS’ Adjusted EBITDA of $599.0, less $4.9 of stock-based compensation expense. |
| (2) | Free Cash Flow is cash flow provided by operations, less capital expenditures, plus merger-related cash costs. |
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 maximumMeridian, present.
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 41 |
Each NEO’s 2022 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 | 2022 Salary | Target Incentive % | Target Incentive $ | Component | Component Weighting | Payout |
| |||||||||||||||||
Engel | $ | 1,255,000 | 150 | % | $ | 1,882,500 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 2,823,750 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 2,823,750 | ||||||||
Schulz | $ | 715,500 | 100 | % | $ | 715,500 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 1,073,250 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 1,073,250 | ||||||||
Squires | $ | 644,250 | 90 | % | $ | 579,825 | EBITDA | 18.75 | % | Above target EBITDA (200%) | $ | 217,434 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
|
|
|
|
|
|
|
|
| Segment EBITDA | 56.25 | % | Above target Segment EBITDA (170%) | $ | 554,458 | |||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 771,892 | ||||||||
Geary | $ | 612,500 | 90 | % | $ | 551,250 | EBITDA | 18.75 | % | Above target EBITDA (200%) | $ | 206,719 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
|
|
|
|
|
|
|
|
| Segment EBITDA | 56.25 | % | Below target Segment EBITDA (92.5%) | $ | 286,822 | |||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sub-Total | $ | 493,541 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Performance modifier (15%)(1) | $ | 74,031 | ||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 567,572 | ||||||||
Khurana | $ | 531,250 | 85 | % | $ | 451,563 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 677,344 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 677,344 | ||||||||
Dosch | $ | 387,500 | 100 | % | $ | 387,500 | EBITDA | 75 | % | Above target EBITDA (200%) | $ | 581,250 | ||||||||||||
|
|
|
|
|
|
|
|
|
| Free Cash Flow | 25 | % | Below target FCF (0%) | — | ||||||||||
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total | $ | 581,250 | ||||||||
| (1) | Under the short-term incentive plan, the Compensation Committee may apply a performance modifier of up to +/- 25% to the calculated short-term incentive amount, based on achievement of strategic initiatives. A performance modifier of 15% was applied to Mr. Geary’s short-term incentive amount for 2022, in recognition of his key role in achieving the Company’s strategic objectives, particularly relating to the Company’s acquisition of Rahi Systems Holdings, Inc. in 2022. |
Long-Term Incentives
The purpose of long-term incentives is to carefully align compensation with stockholder value creation. Executing the business strategy necessarily requires tradeoffs of shortcreation, and long-term performance. Accordingly, our incentives are designed to encourage and reward both short and long-term performance. We believe that the optimal method to deliverthus long-term incentives is through stock appreciation rights (SARs), restricted stock units (RSUs),comprise the centerpiece of executive compensation and performance shares. We use RSUs to strengthen the retention qualitiesa significant majority of our equity program and to be consistent with prevailing market practices. The mixNEOs total compensation opportunity.
Structure of these equity awards, however, is geared toward motivating and rewarding managementLong-Term Incentives
We structure our Long-Term Incentives for achieving stockholder value creation. Performance share awards for theour 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 return
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.
Long-Term Incentives | Weighting | |
Performance Shares | 50% | |
Stock Options | 25% | |
Restricted Stock Units | 25% | |
| Compensation Discussion and Analysis | 42 |
Compensation DiscussionPerformance Shares
Our performance shares are designed to reward our NEOs for drivers of long-term value that are tied to our strategy and Analysisincreased stockholder value over the long-term. We use three-year performance periods for each grant, and performance shares for the three-year period 2020-2022 were based on two equally weighted performance metrics: (1) Net Income Growth; and (2) Return on Net Assets (RONA) Growth.
Net Income Growth measures the three-year average growth rate of our net income, excluding specific items that are not indicative of ongoing results. We believe that Net Income Growth is related directly to our strategy to drive profitable revenue and earnings growth. This performance metric encompasses sales growth, margin improvement and cost control, which are important operational aspects of our business and strategy. RONA Growth measures the three-year cumulative return on net assets growth versus the base year. We believe that RONA Growth is an appropriate and important measure of performance for a distributor like us, since it focuses on improving profitability and the efficient use of operating assets (working capital, property, buildings and equipment) to create value for our stockholders. We believe that the combination of earnings growth and effective asset management drives value for a distribution and supply chain solutions business.
Performance share awards 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 Control (as defined in the Company’s Long-Term Incentive Plan),control, the performance shares will vest at the target level.
The threshold, target and maximum performance goals for the performance shares awarded in 2020 for the three-year performance period ended December 31, 2022 (the “2020 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% | 52.0% | ||||
Payment as % of Target | 0.5 x | 1.0 x | 2.0 x | 2.0x | ||||
RONA Growth (3-year cumulative RONA versus the base year, in basis points (bps)) | 0 bps | 50 bps | 100 bps | 541 bps | ||||
Payment as % of Target | 0.5 x | 1.0 x | 2.0 x | 2.0x | ||||
Based on the actual results and performance goals above, the shares earned by the NEOs are calculated as follows:
NEO | Target Award of 2020 Performance Shares(1) | Component | Component Weighting | Payout |
| |||||||||||
Engel | 53,291 | Net Income Growth | 50 | % | Above target (200%) | 53,291 | ||||||||||
|
|
|
| RONA Growth | 50 | % | Above target (200%) | 53,291 | ||||||||
|
|
|
|
|
|
|
|
| Total | 106,582 | |||||||
Schulz | 15,780 | Net Income Growth | 50 | % | Above target (200%) | 15,780 | ||||||||||
|
|
|
| RONA Growth | 50 | % | Above target (200%) | 15,780 | ||||||||
|
|
|
|
|
|
|
|
| Total | 31,560 | |||||||
Squires | 12,417 | Net Income Growth | 50 | % | Above target (200%) | 12,417 | ||||||||||
|
|
|
| RONA Growth | 50 | % | Above target (200%) | 12,417 | ||||||||
|
|
|
|
|
|
|
|
| Total | 24,834 | |||||||
| (1) | Messrs. Geary and Dosch did not receive 2020 performance shares since they joined the Company in June 2020 as part of the Anixter acquisition. Mr. Khurana did not receive 2020 performance shares since he joined the company in November 2020. |
In accordance with the Company’s pay-for-performance philosophy, the realized pay was based on the achievement of the performance metrics, which were above the maximum level for Net Income Growth and RONA Growth. Each year the Committee reviews the performance targets and metrics for the upcoming grant.
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 43 |
Stock Options and Stock Appreciation Rights
We use Stock Options (and prior to 2022, used Stock Appreciation Rights (SARs)) to both motivate and align management’s incentives with long-term stockholder value. We believe that management should have a substantial stake in the success of the Company and that enduring stock price growth reflects the effectiveness of management in executing a long-term strategic plan, not just the passage of time. Our Stock Options and SARs settle in Company common stock upon exercise, and they vest ratably over three years,years. In 2022, we started to grant stock-settled Options instead of SARs because substantively the instruments function in similar ways (i.e., a gain is settled in shares of stock) and our RSUs cliff vest after three years. Our SARs settle in stock upon exercise.
In 2015, we granted 394,000 SARs, 81,000 RSUs and 55,400 performance sharesthe usage of Options is more prevalent in the aggregatemarketplace and participants are more familiar with them.
Restricted Stock Units
Fundamentally, Restricted Stock Units (RSUs) are meant to all award recipients. balance the need for long-term retention of key executive talent while aligning realizable value with changes in stockholder wealth. RSUs are common in the marketplace and therefore are an important component of a competitive compensation opportunity. It is, however, intentionally only a modest portion of our NEOs’ total long-term incentive compensation. Our RSUs vest ratably over a three-year period.
The awardsperformance share, Stock Options and RSU grants to our NEOs on February 17, 2022 were approximately equal to 1% of the weighted average outstanding stock of the Company. as follows:
NEO | Performance Share Opportunity (reflects number of shares that could be earned at target)(1) | Stock Option Awards(2) | RSU Awards(3) | |||||||||
Engel | 28,667 | 30,562 | 14,334 | |||||||||
Schulz | 7,576 | 8,077 | 3,788 | |||||||||
Squires | 5,119 | 5,458 | 2,560 | |||||||||
Geary | 5,119 | 5,458 | 2,560 | |||||||||
Khurana | 4,095 | 4,366 | 14,334 | |||||||||
Dosch | 5,938 | 6,331 | 2,969 | |||||||||
| (1) | Performance shares are subject to a three-year performance period from January 1, 2022 to December 31, 2024. |
| (2) | The Stock Option awards vest ratably over three years and have an expiration date of February 17, 2032. |
| (3) | The RSU awards will vest in 1/3 increments on February 17, 2023, February 17, 2024 and February 17, 2025, with the exception of 12,286 RSU awards granted to Mr. Khurana, which will vest 30% on February 17, 2023, 30% on February 17, 2024, and 40% on February 17, 2025. This grant of 12,286 RSUs with a vesting term more heavily weighted toward three years was in recognition of Mr. Khurana’s key role in achieving the Company’s strategic objectives, particularly relating to the Company’s digital transformation initiatives, and the retention benefit to the Company of such an award as those initiatives progress over the years. The Committee determined the amount of this award by referencing comparable data provided by Meridian for retention grants for companies undergoing significant multi-year transformations. |
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, we granted performance shares, SAR and RSU awards to approximately 154 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,Effective January 1, 2022, the Company matched employee contributions at a rateAnixter Inc. Employee Savings Plan was merged with and into the WESCO Distribution, Inc. Retirement Savings Plan. In
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connection with this plan merger, the WESCO Distribution, Inc. Retirement Savings plan was amended to change the employer matching contribution from an amount equal to 50% of $0.50 per $1.00 ofparticipants’ total monthly contributions up to 6% of eligible compensation. The Company madecompensation to an amount equal to 100% of a participant’s eligible elective deferrals up to 3% of the participant’s eligible compensation and 50% of the next 4% of eligible compensation, and to eliminate the discretionary payment in 2015 for the plan year ended in December 2014, which was capped at $2,000 per person.employer contributions.
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 3256 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.
Compensation DiscussionAnixter provided defined pension benefits under its pension plan and Analysis
its excess benefit plan to eligible U.S. employees, including Messrs. Geary and Dosch. Benefit accruals under the Anixter pension plan were frozen as of December 31, 2021 and the Anixter pension plan was terminated effective December 31, 2022. For certain highly compensated employees in the U.S., Anixter provided a nonqualified Excess Benefit Plan, in which. Messrs. Geary and Dosch previously participated. The Anixter Inc. Excess Benefit Plan was terminated effective December 31, 2020, and paid out to participants in May 2021.
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.costs. As a risk management measure, we also offer executive physicals involving diagnostic testing.
Perquisites
During 2015,2022, the Company provided a limited number of perquisites to the NEOs. They primarily consist of a vehicle allowance, club memberships and spousal travel 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. 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.
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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 | |
Squires | 2x | |
Geary | 2x | |
Khurana | 2x | |
These officers are expected to acquire their initial ownership positions within five years of their appointment and to hold those ownership positions during their service as executives of the Company. Until the stock ownership guidelines are met, an officer must hold a minimum of 50% of the pre-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 65x 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 100 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, 2023.
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 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) was belowcompared to a peer group, and it reviews a range of market data for target total compensation versus similarly situated roles within the 50th percentilepeer group. When setting Mr. Engel’s pay, the Committee also considers other factors including Company and individual performance, economic conditions, overall duties and responsibilities, internal equity and tenure of the Company’s comparator group.
incumbent.
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 materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent
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upon a change in control and, indeed, has not entered into any such agreements. See “Potential Payments Upon Termination” on page 3358 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 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 priornew employment letter agreements, dated May 28, 2020, between the Company and each of Mr. Dosch and Mr. Geary. Mr. Engel’s 2009 employment agreement was not modified and pursuant to a Release Agreementremains in effect. The Company entered into an employment letter agreement with Mr. Khurana, dated October 8, 2015 (the “Release”)20, 2020, upon his joining the Company.
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 as previously disclosed on the Form 8-K filedan 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 with Mr. Khurana provides for a base salary of $475,000, a target annual bonus opportunity of 75% of base salary with a payout opportunity of 0-150% of base salary, and an annual equity award opportunity that is subject to approval by the Compensation 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 for Mr. Dosch also provided for a cash retention award of $2,660,000, which vested in annual installments on each of the first two anniversaries of June 22, 2020, the closing date of the 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 his letter agreement. Mr. Dosch retired from the Company on October 9, 2015effective August 5, 2022.
The letter agreements with Messrs. Schulz, Squires, Geary, Khurana and as set forth on Exhibit 10.3 toDosch also include a severance provision entitling 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 entitledapplicable officer to receive the following severance benefits: (i) an amount equal to $56,250 payable in eachbenefits upon the termination of the first 24 months following December 2015; (ii) an amount equal to $607,500 payable at 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 portion of the monthly premiums for such coverage. Under the terms of the Release, 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 he is terminatedofficer’s employment by the Company without cause or he terminates his employmentby the officer for good reason, as described on page 35. Mr. Parkssubject 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 bound by restrictive covenants in the form of non-competitionsubject to noncompetition and employee and customer non-solicitation of employees restrictions applicable during the term of his employment and for a period of one year thereafter.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, Squires, Geary and Khurana, as well as other executive officers of the Company, have
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 47 |
been selected to participate in the CIC Plan. Mr. Dosch participated in the CIC Plan prior to his retirement on August 5, 2022. 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.
Under the 2006 SeveranceCIC Plan, described below, Mr. Hibbard would be eligible to receive eleven weeks of severance if hea participant’s employment 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 his employment andother than for a period of one year thereafter. His employment is not subject to an employment agreementcause 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 employmentparticipant for good reason, in each case on or if her employment is terminated 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 on or after 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 on or after June 22, 2020) of the employer portion of the annual cost of continued coverage under the Company’s healthcare benefit plans (including medical, prescription, dental and vision coverage); and (iv) an amount that may be used for outplacement services ($25,000 for each participant selected to participate on or after June 22, 2020). This severance payment will be provided in lieu of any severance benefits to which the participant is 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 LTIP providesstockholders approved a 2021 Omnibus Incentive Plan in May 2021 that replaced the prior 1999 Long-Term Incentive Plan, as amended and restated effective May 31, 2017. Under the terms of these plans or related award agreements, SAR and RSU awards would vest upon consummation of a 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 tabletables on pages 33 to 37.58 and 61.
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
| Wesco 2023 Proxy Statement | Compensation Discussion and Analysis | 48 |
senior management positions across the Company, and the Board also evaluates succession plans in the context of overall Company strategy. Senior management is visible to Board members through formal presentations and informal events to allow Directors to personally assess candidates. The Board also establishes steps to address emergency CEO succession planning in extraordinary circumstances. The emergency CEO succession planning is intended to help the Company respond in the event of an unexpected emergency and reduce potential disruption or loss of continuity to the Company’s business and operations.
Deductibility of Executive Compensation
We consider the anticipated accounting and tax treatment to the Company and our executive officers when reviewing executive compensation and our compensation programs, 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 20152022 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 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, 2015.2022.
Respectfully Submitted:
THE COMPENSATION COMMITTEETHE COMPENSATION COMMITTEE
John K. Morgan,Chairman
Sandra Beach LinMatthew J. Espe, Chair
Bobby J. Griffin
Steven A. Raymund
James L. Singleton
| Compensation Tables | 49 |
Compensation Tables
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 ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||
John J. Engel, Chairman, President and CEO | 2022 | $ | 1,255,000 | $ | 5,249,992 | $ | 1,749,980 | $2,823,750 | $ 83,557 | $ | 11,162,279 | |||||||||||||
| 2021 | $ | 1,160,000 | $ | 4,500,019 | $ | 1,500,007 | $2,610,000 | $ 89,061 | $ | 9,859,087 | ||||||||||||||
| 2020(5) | $ | 946,667 | $ | 7,862,514 | $ | 1,287,497 | $1,153,497 | $ 63,322 | $ | 11,313,497 | ||||||||||||||
David S. Schulz, EVP and CFO | 2022 | $ | 715,500 | $ | 1,387,431 | $ | 462,489 | $1,073,250 | $ 68,431 | $ | 3,707,101 | |||||||||||||
| 2021 | $ | 677,750 | $ | 1,275,034 | $ | 424,990 | $1,016,625 | $ 38,860 | $ | 3,433,259 | ||||||||||||||
| 2020(5) | $ | 550,000 | $ | 3,143,721 | $ | 381,247 | $ 428,346 | $ 29,299 | $ | 4,532,613 | ||||||||||||||
Nelson J. Squires III, EVP and GM, EES | 2022 | $ | 644,250 | $ | 937,529 | $ | 312,525 | $ 771,892 | $ 319,598 | $ | 2,985,794 | |||||||||||||
| 2021 | $ | 620,250 | $ | 900,019 | $ | 299,995 | $ 837,338 | $ 339,029 | $ | 2,996,631 | ||||||||||||||
| 2020(5) | $ | 505,208 | $ | 2,400,015 | $ | 300,000 | $ 370,558 | $ 702,793 | $ | 4,278,574 | ||||||||||||||
William C. Geary II, EVP and GM, CSS | 2022 | $ | 611,731 | $ | 937,529 | $ | 312,525 | $ 567,572 | $ 18,210 | $ | 2,447,567 | |||||||||||||
| 2021 | $ | 568,461 | $ | 824,986 | $ | 275,009 | $ 565,974 | $ 26,618 | $ | 2,261,048 | ||||||||||||||
Akash Khurana EVP and Chief Information and Digital Officer | 2022 | $ | 531,250 | $ | 2,249,997 | $ | 249,997 | $ 677,344 | $ 31,535 | $ | 3,740,123 | |||||||||||||
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Theodore A. Dosch, EVP Strategy and Chief Transformation Officer | 2022 | $ | 408,750 | $ | 1,087,456 | $ | 362,513 | $ 581,250 | $1,336,250 | $ | 3,776,219 | |||||||||||||
| 2021 | $ | 643,462 | $ | 1,050,009 | $ | 350,000 | $ 965,192 | $1,367,611 | $ | 4,376,274 | ||||||||||||||
| 2020(5) | $ | 324,519 | $ | 1,399,991 | — | $ 684,196 | $ 72,620 | $ | 2,481,326 | |||||||||||||||
| (1) |
| Represents aggregate grant date fair value of RSUs and performance share awards in accordance with FASB ASC Topic 718, which, with respect to performance shares, is the value based on the target level of achievement (determined to be the probable outcome of the performance conditions at the time of grant). In the event the maximum performance conditions are met, the maximum value of the performance shares would be: for Mr. Engel |
Represents the grant date fair value of Stock Option awards computed in accordance with FASB ASC Topic 718. These equity awards are subject to time-based vesting criteria over a three-year period. The assumptions used in calculating these amounts are set forth on pages 85 to 88 of our notes to consolidated financial statements for the year ended December 31, 2022 in our Annual Report on Form 10-K. All the equity awards to the NEOs in February 2022 were granted under the WESCO International, Inc. 2021 Omnibus Incentive Plan, as approved by our Board and stockholders effective May 27, 2021. |
| (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. |
| 50 |
Compensation Tables
The following table describes each component of the All Other Compensation column for 2015 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.
| 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) | Tax Equalization Benefit(2) | Company Matching Contribution to 401K Plan | Company Matching Contribution to Deferred Compensation Plan | Change in Pension Value(3) | Total | |||||||||||||||
Engel | 2022 | $ 17,720 | — | $15,250 | $50,587 | — | $ 83,557 | |||||||||||||||
Schulz | 2022 | $ 4,389 | — | $15,250 | $48,792 | — | $ 68,431 | |||||||||||||||
Squires | 2022 | $ 4,614 | $259,112 | $15,250 | $40,622 | — | $ 319,598 | |||||||||||||||
Geary | 2022 | $ 4,447 | — | $13,763 | — | — | $ 18,210 | |||||||||||||||
Khurana | 2022 | — | — | $15,250 | $16,285 | — | $ 31,535 | |||||||||||||||
Dosch | 2022 | $1,330,000 | — | $ 6,250 | — | — | $1,336,250 | |||||||||||||||
| (1) | This column reports the total amount of other benefits provided, none of which exceeded $10,000 unless otherwise noted. The amount shown for Mr. Engel |
| (2) | 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 equalization benefit for employees on assignment outside of their home country. Tax payments made in Canadian dollars were converted to U.S. dollars based on the then prevailing Canadian dollar/U.S. dollar exchange rate on the date of payment, which was approximately 0.74. |
| (3) | Represents the difference in the present value of |
| 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 | ||||||||||||||
| Compensation Tables | 51 |
Grants of Plan-Based Awards
The following table summarizes the grants of equity and non-equity plan-based awards made to the executive officers named in the Summary Compensation TablesTable during the fiscal year ended December 31, 2022. The equity awards were granted under the Company’s 2021 Omnibus Incentive Plan, approved by stockholders on May 27, 2021.
Grants of Plan-based Awards for 2015
| 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 Future Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Number of (#)(4) | All Other Number of Underlying (#)(5) | Exercise or Base | Grant of Stock Awards ($)(7) | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date (1) | Award Type | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||
John J. Engel |
|
|
| Short-Term Incentive | $ | 117,656 | $ | 1,882,500 | $ | 3,765,000 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2/17/2022 | Performance Share Units | — | — | — |
|
|
| 7,167 | 28,667 | 57,334 | — | — | — | $ | 3,499,954 | ||||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 14,334 | — | — | $ | 1,750,038 | ||||||||||||||||||||||||||||||||||||
|
| 2/17/2022 | Stock Options | — | — | — |
|
|
| — | — | — | — | 30,562 | $ | 122.09 | $ | 1,749,980 | |||||||||||||||||||||||||||||||||||
David S. Schulz |
|
|
| Short-Term Incentive | $ | 44,719 | $ | 715,500 | $ | 1,431,000 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2/17/2022 | Performance Share Units | — | — | — |
|
|
| 1,894 | 7,576 | 15,152 | — | — | — | $ | 924,954 | ||||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 3,788 | — | — | $ | 462,477 | ||||||||||||||||||||||||||||||||||||
|
| 2/17/2022 | Stock Options | — | — | — |
|
|
| — | — | — | — | 8,077 | $ | 122.09 | $ | 462,489 | |||||||||||||||||||||||||||||||||||
Nelson J. Squires III |
|
|
| Short-Term Incentive | $ | 27,179 | $ | 579,825 | $ | 1,159,650 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2/17/2022 | Performance Share Units | — | — | — |
|
|
| 1,280 | 5,119 | 10,238 | — | — | — | $ | 624,979 | ||||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 2,560 | — | — | $ | 312,550 | ||||||||||||||||||||||||||||||||||||
|
| 2/17/2022 | Stock Options | — | — | — |
|
|
| — | — | — | — | 5,458 | $ | 122.09 | $ | 312,525 | |||||||||||||||||||||||||||||||||||
William C. Geary II |
|
|
| Short-Term Incentive | $ | 25,840 | $ | 551,250 | $ | 1,102,500 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2/17/2022 | Performance Share Units | — | — |
|
|
|
|
|
| 1,280 | 5,119 | 10,238 | — | — | — | $ | 624,979 | ||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 2,560 | — | — | $ | 312,550 | ||||||||||||||||||||||||||||||||||||
|
| 2/17/2022 | Stock Options | — | — | — |
|
|
| — | — | — | — | 5,458 | $ | 122.09 | $ | 312,525 | |||||||||||||||||||||||||||||||||||
Akash Khurana |
|
|
| Short-Term Incentive | $ | 28,223 | $ | 451,563 | $ | 903,126 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2/17/2022 | Performance Share Units | — | — | — |
|
|
| 1,024 | 4,095 | 8,190 | — | — | — | $ | 499,959 | ||||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 2,048 | — | — | $ | 250,040 | ||||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 12,286 | — | — | $ | 1,499,998 | ||||||||||||||||||||||||||||||||||||
|
| 2/17/2022 | Stock Options | — | — | — |
|
|
| — | — | — | — | 4,366 | $ | 122.09 | $ | 249,997 | |||||||||||||||||||||||||||||||||||
Theodore A. Dosch |
|
|
| Short-Term Incentive | $ | 41,797 | $ | 668,750 | $ | 1,337,500 |
|
|
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| 2/17/2022 | Performance Share Units | — | — | — |
|
|
| 1,485 | 5,938 | 11,876 | — | — | — | $ | 724,971 | ||||||||||||||||||||||||||||||||||||
| 2/17/2022 | Restricted Stock Units | — | — | — |
|
|
| — | — | — | 2,969 | — | — | $ | 362,485 | ||||||||||||||||||||||||||||||||||||
|
| 2/17/2022 | Stock Options | — | — | — |
|
|
| — | — | — | — | 6,331 | $ | 122.09 | $ | 362,513 | |||||||||||||||||||||||||||||||||||
| (1) | The grant date for the Performance Shares, Restricted Stock Units, and Stock Options is the date the Board of Directors met and approved the awards. |
| (2) | The amounts represent the potential cash payment for the annual short-term incentive |
The columns in |
| Wesco 2023 Proxy Statement | Compensation Tables | 52 |
The number of restricted stock units in this column represents the grants made to the named executive officers on February 17, 2022. These restricted stock units will vest in in three equal annual instalments beginning on the first anniversary of the grant date, with the exception of the grant made to Mr. Khurana on February 17, 2022 for 12,286 restricted stock units, which will vest 30% on February 17, 2023, 30% on February 17, 2024, and 40% on February 17, 2025 as further described on page 43. |
| (5) | The number of stock options shown in this column represents the number of |
The option exercise price recorded in this column is the |
Represents the full grant date fair value of |
| 53 |
Compensation Tables
Outstanding Equity Awards at Fiscal Year-End
The following table shows the unexercised stock options and SARs, restricted stock units, and unearned performance share awards as of December 31, 2022 by the executive officers named in the Summary Compensation Table.
| 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 | |||||||||||||||||||||||||||
Engel | 7/01/2006 | 37,500 | — | $ | 69.00 | 7/01/2016 | — | — | — | — | ||||||||||||||||||||||||||
| 7/01/2007 | 45,000 | — | $ | 60.45 | 7/01/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 7/01/2008 | 75,000 | — | $ | 40.04 | 7/01/2018 | — | — | — | — | |||||||||||||||||||||||||||
| 7/01/2009 | 150,673 | — | $ | 25.37 | 7/01/2019 | — | — | — | — | |||||||||||||||||||||||||||
| 7/01/2010 | 125,597 | — | $ | 33.05 | 7/01/2020 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2011 | 77,323 | — | $ | 60.05 | 2/16/2021 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2012 | 55,396 | — | $ | 64.33 | 2/16/2022 | — | — | — | — | |||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||
| 2/17/2015 | — | 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 | — | — | ||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||
| 2/17/2015 | — | 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 | ||||||||||||||||||||||||||||
Hibbard | 4/24/2007 | 3,200 | — | $ | 62.08 | 4/24/2017 | — | — | — | — | ||||||||||||||||||||||||||
| 7/01/2007 | 6,000 | — | $ | 60.45 | 7/01/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 7/01/2008 | 10,000 | — | $ | 40.04 | 7/01/2018 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2011 | 5,056 | — | $ | 60.05 | 2/16/2021 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2012 | 3,575 | — | $ | 64.33 | 2/16/2022 | — | — | — | — | |||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||
| 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 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2011 | 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 | — | — | — | — | |||||||||||||||||||||||||||
| 7/01/2009 | 107,623 | — | $ | 25.37 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 7/01/2010 | 81,911 | — | $ | 33.05 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2011 | 44,610 | — | $ | 60.05 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 2/16/2012 | 29,486 | — | $ | 64.33 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 2/21/2013 | 27,927 | — | $ | 72.15 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 2/18/2014 | 28,539 | — | $ | 85.35 | 6/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
| 2/17/2015 | 34,595 | — | $ | 69.54 | 6/30/2017 | — | — | 1,798 | $ | 78,536 | ||||||||||||||||||||||||||
Total: | 512,191 | — | — | — | 1,798 | $ | 78,536 | |||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
Name | Grant Date(1) | Number of Securities Underlying Unexercised Equity Awards (#) Exercisable(2) | Number of Securities Underlying Unexercised Equity Awards (#) Unexercisable(2) | Exercise Price ($) | Expiration Date | Number of Shares or of Stock (#)(3) | Market Shares or of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Unearned or Other Vested (#)(5) | Equity Market or Unearned Units or Other Rights That Have ($)(4)(5) | |||||||||||||||||||||||||||||||
John J. Engel | 2/17/2015 | 96,865 | — | $ | 69.54 | 2/17/2025 | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/16/2017 | 111,382 | — | $ | 71.65 | 2/16/2027 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2018 | 125,001 | — | $ | 62.80 | 2/13/2028 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2019 | 72,541 | — | $ | 54.64 | 2/13/2029 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2020 | 61,929 | 30,964 | $ | 48.32 | 2/13/2030 | 26,645 | $ | 3,335,954 | 106,582 | (6) | $ | 13,344,066 | ||||||||||||||||||||||||||||
| 7/02/2020 | — | — | — | — | 49,721 | $ | 6,225,069 | — | — | |||||||||||||||||||||||||||||||
| 2/11/2021 | 15,129 | 30,257 | $ | 76.80 | 2/11/2031 | 13,020 | $ | 1,630,104 | 78,126 | (7) | $ | 9,781,375 | ||||||||||||||||||||||||||||
| 2/17/2022 | — | 30,562 | $ | 122.09 | 2/17/2032 | 14,334 | $ | 1,794,617 | 57,334 | (8) | $ | 7,178,217 | ||||||||||||||||||||||||||||
David S. Schulz | 1/31/2017 | 5,000 | — | $ | 70.70 | 1/31/2027 | — | — | — | — | ||||||||||||||||||||||||||||||
| 2/16/2017 | 28,449 | — | $ | 71.65 | 2/16/2027 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/21/2017 | 2,979 | — | $ | 72.90 | 2/21/2027 | — | — | — | — | |||||||||||||||||||||||||||||||
| 8/11/2017 | 4,000 | — | $ | 51.10 | 8/11/2027 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2018 | 38,045 | — | $ | 62.80 | 2/13/2028 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2019 | 22,144 | — | $ | 54.64 | 2/13/2029 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2020 | 18,338 | 9,169 | $ | 48.32 | 2/13/2030 | 7,890 | $ | 987,828 | 31,560 | (6) | $ | 3,951,312 | ||||||||||||||||||||||||||||
| 7/02/2020 | — | — | — | — | 24,860 | $ | 3,112,472 | — | — | |||||||||||||||||||||||||||||||
| 2/11/2021 | 4,287 | 8,572 | $ | 76.80 | 2/11/2031 | 3,689 | $ | 461,863 | 22,136 | (7) | $ | 2,771,427 | ||||||||||||||||||||||||||||
| 2/17/2022 | — | 8,077 | $ | 122.09 | 2/17/2032 | 3,788 | $ | 474,258 | 15,152 | (8) | $ | 1,897,030 | ||||||||||||||||||||||||||||
Nelson J. Squires III | 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 | 10,308 | — | $ | 54.64 | 2/13/2029 | — | — | — | — | |||||||||||||||||||||||||||||||
| 2/13/2020 | 14,430 | 7,215 | $ | 48.32 | 2/13/2030 | 6,209 | $ | 777,367 | 24,834 | (6) | $ | 3,109,217 | ||||||||||||||||||||||||||||
| 7/02/2020 | — | — | — | — | 18,646 | $ | 2,334,479 | — | — | |||||||||||||||||||||||||||||||
| 2/11/2021 | 3,026 | 6,051 | $ | 76.80 | 2/11/2031 | 2,604 | $ | 326,021 | 15,626 | (7) | $ | 1,956,375 | ||||||||||||||||||||||||||||
| 2/17/2022 | — | 5,458 | $ | 122.09 | 2/17/2032 | 2,560 | $ | 320,512 | 10,238 | (8) | $ | 1,281,798 | ||||||||||||||||||||||||||||
William C. Geary II | 6/22/2020 | (9) | — | — | — | — | 6,527 | (9) | $ | 817,180 | — | — | ||||||||||||||||||||||||||||
| 7/02/2020 | — | — | — | — | 12,430 | $ | 1,556,236 | — | — | |||||||||||||||||||||||||||||||
| 2/11/2021 | 2,774 | 5,547 | $ | 76.80 | 2/11/2031 | 2,387 | $ | 298,852 | 14,322 | (7) | $ | 1,793,114 | ||||||||||||||||||||||||||||
| 2/17/2022 | — | 5,458 | $ | 122.09 | 2/17/2032 | 2,560 | $ | 320,512 | 10,238 | (8) | $ | 1,281,798 | ||||||||||||||||||||||||||||
Akash Khurana | 2/11/2021 | 2,207 | 4,412 | $ | 76.80 | 2/11/2031 | 1,898 | $ | 237,630 | 11,394 | (7) | $ | 1,426,529 | |||||||||||||||||||||||||||
| 2/17/2022 | — | 4,366 | $ | 122.09 | 2/17/2032 | 2,048 | $ | 256,410 | 8,190 | (8) | $ | 1,025,388 | ||||||||||||||||||||||||||||
| 2/17/2022 | — | — | — | — | 12,286 | $ | 1,538,207 | — | — | |||||||||||||||||||||||||||||||
Theodore A. Dosch(10) | 2/11/2021 | 5,001 | — | $ | 76.80 | 8/05/2023 | 633 | $ | 79,252 | 8,608 | (7) | $ | 1,077,722 | |||||||||||||||||||||||||||
| 2/17/2022 | 879 | — | $ | 122.09 | 8/05/2023 | 412 | $ | 51,582 | 1,650 | (8) | $ | 206,580 | ||||||||||||||||||||||||||||
| Compensation Tables | 54 |
| (1) | An additional column showing the grant dates of stock options and SARs, restricted stock units, and performance shares has been included for better understanding. |
| (2) | Stock options and SARs vest in three equal annual instalments beginning on the first anniversary of the grant date. |
| (3) | Restricted stock units vest in three equal annual instalments beginning on the first anniversary of the grant date, with the exception of RSUs granted on February 13, 2020 which cliff vest on February 13, 2023, RSUs granted on July 2, 2020 which vest 30% on July 2, 2021; 30% on July 2, 2022; and 40% on July 2, 2023 and the grant made to Mr. Khurana on February 17, 2022 for 12,286 restricted stock units, which will vest 30% on February 17, 2023, 30% on February 17, 2024, and 40% on February 17, 2025. |
| (4) | The amounts in this column were calculated using a per share value of $125.20, the closing price of Company common stock as reported on the NYSE on December 30, 2022, the last trading day of the fiscal year. |
| (5) | The amounts shown reflect the pay-out of the performance units based upon achievement at the maximum level of performance. The vesting and pay-out of any performance shares for the respective performance periods ending on December 31 will be determined based on the actual achievement of specified performance goals. |
| (6) | These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Return on Net Assets) for the period January 1, 2020 through December 31, 2022 |
| (7) | These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Return on Net Assets) for the period January 1, 2021 through December 31, 2023. |
| (8) | These shares correspond to a long-term incentive award relating to two equally-weighted performance growth measures (Net Income Growth and Return on Net Assets) for the period January 1, 2022 through December 31, 2024. |
| (9) | Under the terms of the Anixter merger agreement, the RSUs granted to Mr. Geary on March 1, 2020 converted to phantom shares at a rate of 2.5457 when the merger occurred on June 22, 2020. WCC stock price used was $38.47. The Average Parent Stock Price, the average of the volume weighted averages of the trading prices of Wesco common stock on the NYSE on each of the 10 consecutive trading days ending on (and including) the trading day that is 3 trading days prior to the closing date, is $38.47. Time-based vesting in 1/3 increments on March 1, 2021; March 1, 2022; and March 1, 2023. |
| (10) | Mr. Dosch’s SARs, stock options, performance shares and restricted stock awards were pro-rated in accordance with the terms of the award agreements upon his retirement on August 5, 2022. |
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 | |
| ||
6/22/2020 | Under the terms of the Anixter merger agreement, the RSUs granted to Messrs. Dosch and Geary on March 1, 2020 converted to phantom shares at a rate of 2.5457 when the merger occurred on June 22, 2020. WCC stock price used was $38.47. The Average Parent Stock Price, the average of the volume weighted averages of the trading prices of Wesco common stock on the NYSE on each of the 10 consecutive trading days ending on (and including) the trading day that is 3 trading days prior to the closing date, is $38.47. Time-based vesting in 1/3 increments on March 1, 2021; March 1, 2022; and March 1, 2023. | |
7/02/2020 | RSUs: Time-based vesting at 30% on July 2, 2021; 30% on July 2, 2022; and 40% on July 2, 2023. | |
2/ | SARs: Time-based vesting in 1/3 increments on February
RSUs:
Performance shares: based on two equally-weighted performance measures | |
2/17/2022 | Stock Options: Time-based vesting in 1/3 increments on February 17, 2023; February 17, 2024; and February 17, 2025. RSUs: Time-based vesting in 1/3 increments on February 17, 2023; February 17, 2024; and February 17, 2025. with the Performance shares: based on two equally-weighted performance measures during the three-year performance period ending December 31, 2024, as | |
Option Exercises and Stock Vested
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise | Number of Shares (#)(3)(4) | Value Realized on Vesting ($) | ||||||||||||
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 | |||||||||
The Company’s stockholders approved a 2021 Omnibus Incentive Plan in May 2021 that replaced the prior 1999 Long-Term Incentive Plan, as amended and restated effective May 31, 2017. Under the terms of these plans or related award agreements, SAR and RSU awards would vest upon consummation of a change in control transaction, and our performance share award agreements provide that performance share awards would vest at the target level upon consummation of a change in control
| 55 |
transaction. Under the terms of the award agreements for PSU awards beginning in February 2022, upon a change in control that occurs during the performance period, the PSUs will immediately vest as of the date of such change in control at the higher of (i) the target level or (ii) actual performance but assuming that the performance period ended on the latest practicable date on or prior to the date of such change in control. The payments to the NEOs upon consummation of a change in control transaction for accelerated vesting of equity awards are set forth in the tables on pages 58 and 61.
Option Exercises and Stock Vested
The following table provides information pertaining to the vesting of restricted stock units and performance shares during the fiscal year ended December 31, 2022, for each of the executive officers named in the Summary Compensation TablesTable.
Nonqualified Deferred Compensation
The table below provides information on the nonqualified deferred compensation of the NEOs in 2015.
| 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 | |||||||||||||
| Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on (#) | Value Realized on Exercise ($) | Number of Shares Acquired on (#)(1)(2) | Value Realized on Vesting ($) | ||||||||||||
John J. Engel | — | — | 109,000 | $ | 12,741,299 | |||||||||||
David S. Schulz | — | — | 40,393 | $ | 4,640,369 | |||||||||||
Nelson J. Squires III | — | — | 31,705 | $ | 3,630,286 | |||||||||||
William C. Geary II | — | — | 17,044 | $ | 1,909,932 | |||||||||||
Akash Khurana | — | — | 950 | $ | 117,325 | |||||||||||
Theodore A. Dosch | — | — | 45,900 | (3) | $ | 5,476,875 | (3) | |||||||||
| (1) | Includes the vesting of restricted stock units on February 11, 2022, February 13, 2022, and July 2, 2022. The value realized was determined by multiplying the number of vested units by the closing market price of the Company’s common stock on the date of vesting. If the vesting date fell on a weekend or holiday, the closing market price of the common stock on the business day immediately preceding the vesting date was used to determine the value realized. |
| (2) | Includes the payment of performance shares which were earned and vested on February 17, 2022, upon confirmation of the Compensation Committee that performance goals had been achieved as described in the “Compensation Discussion and Analysis” section of this proxy statement, subheading “Performance Shares”. The value realized was determined by multiplying the number of vested shares by the closing market price of Wesco common stock on February 17, 2022, which was $122.09. |
| (3) | Includes the vesting of 15,665 phantom shares, paid in cash in the amount of $130.635 per share (i.e. the average of the high and low stock price on the vesting date) upon Mr. Dosch’s retirement on August 5, 2022, pursuant to the terms of the award agreements and the Committee’s determination that Mr. Dosch’s retirement was a qualifying retirement under the terms of such agreements. The value realized on vesting represents Wesco phantom shares that were converted from Anixter International Inc. restricted stock units, upon the completion of Wesco’s acquisition of Anixter in 2020. |
Pension Benefits
The following table provides information concerning the Anixter Inc. Pension Plan that provides for payments or benefits to two of the executive officers named in the Summary Compensation Table.
Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(1)(2) | Payments During Last Fiscal Year ($) | ||||||||||||
William C. Geary II | Anixter Inc. Pension Plan | 19.00 | (3) | $ | 306,197 | $ | — | |||||||||
Theodore A. Dosch | Anixter Inc. Pension Plan | 12.95 | $ | — | (4) | $ | 112,145 | |||||||||
| (1) | Present Value of Accumulated Benefit is based on the December 31, 2022 year end ASC 715 disclosure assumptions with the exception of pre-retirement mortality, withdrawal, and the age at which participants are assumed to retire. We have assumed no pre-retirement mortality or withdrawal and retirement age of 65. The present values are calculated using a discount rate of 4.41% and post-retirement mortality used in the ASC 715 Anixter, Inc. Pension Plan disclosure as of 12/31/2022. |
| (2) | The Anixter Inc. Pension Plan’s benefit accruals were frozen effective January 1, 2022. |
| Wesco 2023 Proxy Statement | Compensation Tables | 56 |
| (3) | Mr. Geary’s credited service is 19.00 years and is based on when he joined Anixter. His vesting service amount is 28.49 years, including his service with Accu-Tech. |
| (4) | Mr. Dosch’s PRA balance was paid out during the 2022 fiscal year due to his retirement, and thus his Present Value of Accumulated Benefit was reduced to zero. Mr. Dosch retired from the Company on August 5, 2022. |
The Anixter Inc. 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. Geary and Dosch 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 and the Anixter pension plan was terminated effective December 31, 2022.
Nonqualified Deferred Compensation
The following table provides information for the executive officers named in the Summary Compensation Table regarding contributions, earnings, distributions, and year-end account balances with respect to the Wesco Distribution, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”).
Name | Year | Executive Contribution in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions in Last Fiscal Year ($)(4) | Aggregate Balance at Last Fiscal Year-End ($)(5) | ||||||||||||||||||
Engel | 2022 | $ | 75,300 | $ | 50,587 | $ | (783,374 | ) | — | $ | 4,897,886 | |||||||||||||
Schulz | 2022 | $ | 132,547 | $ | 48,792 | $ | (91,524 | ) | — | $ | 522,918 | |||||||||||||
Squires | 2022 | $ | 209,335 | $ | 40,622 | $ | (44,182 | ) | — | $ | 437,494 | |||||||||||||
Geary | 2022 | $ | 52,768 | — | $ | (10,201 | ) | — | $ | 80,443 | ||||||||||||||
Khurana | 2022 | $ | 88,240 | $ | 16,285 | $ | (10,306 | ) | — | $ | 132,482 | |||||||||||||
Dosch | 2022 | $ | 48,260 | — | $ | (10,555 | ) | — | $ | 98,580 | ||||||||||||||
| (1) | Reflects participation by 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) | The NEOs cannot withdraw any amounts from their deferred compensation balances until termination, retirement, death or disability with the exception that the Committee may approve a hardship withdrawal amount necessary to meet unforeseen needs in the event of |
| (5) | Each of the |
All the NEOs are eligible to participate in the Wesco Deferred Compensation Plan. Participants in the plan may generally elect to defer up to 80% of eligible base compensation and 80% of eligible cash incentive compensation.
Participants in the Plan receive a Company contribution consisting of additional amounts above the limits of the matching contributions under the Company’s 401(k) Plan. Vesting in the Company contributions and any associated earnings occurs after two years of service.
| Compensation Tables | 57 |
The plan is an unfunded plan, meaning that the participants’ accounts are bookkeeping entries only and do not entitle them to ownership of any actual assets. The accounts represent an unsecured promise by the Company to pay participants’ benefits in the future.
Participants’ account balances are credited with earnings and investment gains and losses by assuming that the deferred amounts were invested in one or more investment funds made available by the Company from time to time under the Plan. The investment alternatives include funds with different degrees of risk. The investment alternatives for 2022 were based on funds which generally correspond to the investment funds made available under the Company’s 401(k) Plan.
Generally, distributions under the Plan cannot be made until termination, retirement, death, or disability with the exception that the Committee may approve a hardship withdrawal amount necessary to meet unforeseen needs in the event of an emergency. A distribution cannot begin until six months following termination or separation of service (as defined in Section 409A of the Internal Revenue Code) for certain participants. Distributions are made in cash in a lump sum, annual instalments over 2 to 10 years, and/or date specific elections (available for employee contributions only).
| Wesco 2023 Proxy Statement | Potential Payments Upon Termination: Mr. Engel | 58 |
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MR. ENGEL
Termination: Mr. Engel
Each of the following potential scenarios represents circumstances under which Mr. Engel’s employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Engel in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2015.2022. 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 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 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 or For Good Reason Termination(2) | Death(3) | Disability(4) | ||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||
Base Salary and Incentive | $ | 5,168,000 | $ | 3,159,000 | $ | 800,000 | — | $ | 9,223,750 | $ | 4,480,000 | $ | 2,823,750 | — | ||||||||||||||||||
Accelerated Options & SARs(5) | — | — | — | — | $ | 3,939,999 | $ | 3,939,999 | $ | 3,939,999 | $ | 3,939,999 | ||||||||||||||||||||
Accelerated RSUs(6) | $ | 1,362,598 | $ | 1,362,598 | $ | 1,362,598 | $ | 1,362,598 | $ | 12,985,744 | $ | 12,985,744 | $ | 12,985,744 | $ | 12,985,744 | ||||||||||||||||
Accelerated Performance Shares(7) | $ | 1,390,246 | — | $ | 1,390,246 | $ | 1,390,246 | $ | 15,151,829 | — | $ | 15,151,829 | $ | 15,151,829 | ||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||||||
Medical Benefits | $ | 15,079 | $ | 15,079 | — | — | $ | 22,454 | $ | 22,454 | — | — | ||||||||||||||||||||
280G Tax Gross-Up | — | — | — | — | $ | 14,838,898 | — | — | — | |||||||||||||||||||||||
Total: | $ | 7,935,923 | $ | 4,536,677 | $ | 3,552,844 | $ | 2,752,844 | $ | 56,162,674 | $ | 21,428,197 | $ | 34,901,322 | $ | 32,077,572 | ||||||||||||||||
| (1) | Termination |
Mr. Engel’s benefits upon a change in control of the Company are double-triggered (other than equity awards which vest on a change in control), meaning that he will receive these payments only if (i) there is a change in control and (ii) Mr. Engel’s employment is terminated within two years following a change in control without Cause or by Mr. Engel for Good Reason, in which case Mr. Engel will be entitled to receive:
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. |
| (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.
| Wesco 2023 Proxy Statement | Potential Payments Upon Termination: Mr. Engel | 59 |
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, |
Mr. Engel is entitled to receive equity award treatment in the event of his retirement on a similar basis as offered to other salaried U.S. employees who are equity award recipients. In the event of Mr. Engel’s termination of service due to early retirement after attaining a minimum age of 60 and a minimum of five years of service with the Company, (i) RSU awards will vest on a pro rata basis, (ii) PSU awards will continue to vest on a pro rata basis on the vesting date, based on actual performance to the extent that the performance metrics are achieved, and (iii) options and SAR awards will vest and become exercisable on a pro rata basis. At December 31, 2022 and using the same assumptions as used for the table above, Mr. Engel was eligible to receive accelerated or continued vesting of his equity awards in the amount of $20,434,772.
| Potential Payments Upon Termination | 60 |
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MR. PARKS
Termination: Mr. Schulz; Mr. Squires; Mr. Geary; and Mr. Khurana
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, 2015.2022. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Mr. Parkseach of Messrs. Schulz, Squires and Geary upon separation from the Company is governed by the terms of his employment letter agreement, effective June 22, 2020, and the determination of compensation due to Mr. Khurana upon separation from the Company is governed by the terms of his employment letter agreement, dated October 20, 2020, as described on page 46, the terms of the CIC Plan, as described on pages 46 to 47, and applicable equity award agreements. Mr. Dosch retired from the Company on August 5, 2022.
Each letter agreement includes a term sheet dated May 31, 2012. Payment ofseverance provision entitling the NEO to receive the following severance benefits inupon the eventtermination of a terminationthe NEO’s employment by the Company without cause isCause or by the NEO for good reason, subject to the execution and non-revocationof a release.general release of claims against the Company: (i) cash severance equal to 12 months of base salary; (ii) a prorated target bonus for the year of termination; and (iii) continued medical, dental and vision benefits for one year following termination of employment. Under each letter agreement, the NEO is subject to noncompetition and employee and customer non-solicitation restrictions applicable during employment and for one year thereafter and perpetual confidentiality and non-disparagement covenants.
“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, Squires, Geary and Khurana) of the participant’s base salary plus the participant’s target bonus; (iii) an amount equal to a multiple (2x for each of Messrs. Schulz, Squires, Geary and Khurana) of the employer portion of the annual cost of continued coverage under the Company’s healthcare benefit plans (including medical, prescription, dental and vision coverage); and (iv) an amount that may be used for outplacement services ($25,000 for each of Messrs. Schulz, Squires, Geary and Khurana). The CIC Plan requires that each participant execute and not revoke a general release of claims against the Company and agree to comply with one-year post-termination noncompetition and employee and customer non-solicitation covenants and perpetual confidentiality and non-disparagement covenants.
Under the letter agreements, Cause means: (i) the willful and continued failure to substantially perform the NEO’s employment duties; (ii) the Company’s determination, in good faith, that the NEO has engaged in willful misconduct or gross negligence relating to the business of the Company; (iii) a plea of guilty or nolo contendere by the NEO to, or the NEO’s conviction of, a felony under federal or 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. Geary, the facility in which each is based); or (c) a change(iii) any material reduction in the NEO’s authority, duties or responsibilities that materiallyresponsibilities.
Messrs. Schulz, Squires, Geary and adversely affect Mr. Parks’ roleKhurana are entitled to receive equity award treatment in the organization.event of their retirement on a similar basis as offered to other salaried U.S. employees who are equity award recipients. The Company provides accelerated or continued vesting of equity awards for participants who are eligible for retirement, with the eligibility dependent on the individual’s age and length of service and the terms of the applicable award agreement. Upon a participant’s termination of service due to early retirement after attaining a minimum age of 60 and a minimum of five years of service with the Company, (i) RSU awards will vest on a pro rata basis, (ii) PSU awards will continue to vest on a pro rata basis on the vesting date, based on actual performance to the extent that the performance metrics are achieved, and (iii) options and SARs will vest and become exercisable on a pro rata basis. At December 31, 2022 and using the same assumptions as used for the table below, Mr. Squires was eligible to receive accelerated or continued vesting of his equity awards in the amount of $4,991,794. Messrs. Schulz, Geary and Khurana were not eligible for early retirement as of December 31, 2022.
| Wesco 2023 Proxy Statement | Potential Payments Upon Termination | 61 |
Mr. Dosch is excluded from the below table due to his retirement on August 5, 2022. For additional information regarding the treatment of Mr. Dosch’s outstanding equity awards in connection with his retirement, see “Outstanding Equity Awards at Fiscal Year-End” and “Option Exercises and Stock Vested” in this proxy.
| 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 | $ | 775,000 | $ | 775,000 | ||||
Accelerated SARs(3) | — | — | ||||||
Restricted Stock Units(4) | $ | 343,630 | — | |||||
Performance Shares(5) | $ | 370,319 | — | |||||
Benefits and Perquisites: | ||||||||
Medical Benefits | $ | 4,697 | $ | 4,697 | ||||
Total: | $ | 1,493,646 | $ | 779,697 | ||||
| Executive Benefits and Payments Upon Termination | David S. Schulz | Nelson J. Squires III | William C. Geary II | Akash Khurana | ||||||||||||
Involuntary Not for Cause or For Good Reason Termination | ||||||||||||||||
Base Salary & Incentive | $ | 1,450,000 | $ | 1,235,000 | $ | 1,187,500 | $ | 1,017,500 | ||||||||
Medical Benefits | $ | 15,076 | $ | 16,076 | $ | 16,076 | — | |||||||||
Total | $ | 1,465,076 | $ | 1,251,076 | $ | 1,203,576 | $ | 1,017,500 | ||||||||
Payments Upon Termination Following a Change in Control | ||||||||||||||||
Base Salary & Incentive | $ | 3,973,250 | $ | 3,241,892 | $ | 2,868,541 | $ | 2,712,344 | ||||||||
Equity | ||||||||||||||||
Accelerated SARs & Stock Options(1) | $ | 1,144,917 | $ | 864,532 | $ | 285,449 | $ | 227,119 | ||||||||
Accelerated Restricted Stock Units(2) | $ | 5,036,420 | $ | 3,758,379 | $ | 2,992,781 | $ | 2,032,246 | ||||||||
Accelerated Performance Stock Units(3) | $ | 4,309,885 | $ | 3,173,695 | $ | 1,537,456 | $ | 1,225,958 | ||||||||
Medical Benefits | $ | 30,152 | $ | 32,152 | $ | 32,152 | — | |||||||||
Outplacement | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||
Total | $ | 14,519,624 | $ | 11,095,650 | $ | 7,741,379 | $ | 6,222,667 | ||||||||
| (1) |
| The closing price of |
Represents the closing stock price on December 31, |
Represents the closing stock price on December 31, |
| 62 |
Potential Payments Upon Termination
Chief Executive Officer Pay Ratio
POTENTIAL PAYMENTS UPON TERMINATION: MS. LAZZARISAs 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 2022, 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. As permitted by SEC rules, we excluded approximately 750 employees of Rahi Systems Holdings, Inc., which we acquired on November 1, 2022. Therefore, we are using the same median employee in our pay ratio calculation.
EachFor 2022: (1) the annual total compensation of our median employee was $70,106; and (2) the annual total compensation of our CEO was $11,162,000. Based on this information, for 2022 the ratio of the following potential scenarios represents circumstances under which Ms. Lazzaris’ employmentannual total compensation for our CEO to the annual total compensation of our median employee was approximately 159 to 1. We believe that the pay ratio is a reasonable estimate calculated consistent with Regulation S-K Item 402(u).
As we disclosed previously, 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. Lazzaris 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. Lazzaris 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 January 15, 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 2022, we combined voting power; (c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assetselements 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 | ||||
With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2022 Summary Compensation Table included in this Proxy Statement.
Wesco | Pay vs. Performance | 63 |
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MS. WINDROW
Each
“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 personalCompensation Discussion 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. 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 | ||||
Value of Initial Fixed $100 Investment Based on: | ||||||||||||||||
Summary Compensation Table Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (1) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2) | Cumulative Total Shareholder Return ($) | Peer Group Cumulative Total Shareholder Return ($) (3) | Net Income (Thousands) ($) | Adj. EBITDA (Thousands) ($) (4) | |||||||||
| 2022 | $11,162,279 | $15,461,278 | $3,331,361 | $2,702,071 | $210.81 | $157.63 | $803,063 | $1,684,545 | ||||||||
| 2021 | $9,859,087 | $38,809,795 | $3,266,803 | $9,765,176 | $221.57 | $169.28 | $407,974 | $1,149,984 | ||||||||
| 2020 | $11,313,497 | $24,140,383 | $3,427,092 | $7,639,723 | $132.18 | $120.94 | $70,421 | $643,603 | ||||||||
| (1) |
| all three years (2020 – 2022). The |
| (2) | The Summary Compensation Table totals reported for the S-K to calculate the “compensation actually paid”: |
2022 | 2021 | 2020 | ||||||||||||||||||||||
PEO | Average for Other NEOs | PEO | Average for Other NEOs | PEO | Average for Other NEOs | |||||||||||||||||||
Adjustments | ||||||||||||||||||||||||
| Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for applicable FY | $ | (6,999,972 | ) | $ | (1,659,998 | ) | $ | (6,000,026 | ) | $ | (1,350,011 | ) | $ | (9,150,011 | ) | $ | (2,326,236 | ) | ||||||
| Increase based on ASC 718 fair value of awards granted during applicable FY that remain unvested as of applicable FY end, determined as of applicable FY end | $ | 9,130,790 | $ | 1,744,611 | $ | 13,830,960 | $ | 3,112,074 | $ | 20,083,054 | $ | 6,227,104 | ||||||||||||
| Increase based on ASC 718 fair value of awards granted during applicable FY that vested during applicable FY, determined as of vesting date | — | $ | 12,529 | — | — | — | — | |||||||||||||||||
| Increase/deduction for awards granted during prior FY that were outstanding and unvested as of applicable FY end, determined based on change in ASC 718 fair value from prior FY end to applicable FY end | $ | 4,224,922 | $ | 556,768 | $ | 19,974,834 | $ | 4,324,626 | $ | 2,888,105 | $ | 454,520 | ||||||||||||
| Increase/deduction for awards granted during prior FY that vested during applicable FY, determined based on change in ASC 718 fair value from prior FY end to vesting date | $ | (2,056,741 | ) | $ | (484,552 | ) | $ | 1,144,940 | $ | 411,684 | $ | (994,262 | ) | $ | (142,757 | ) | ||||||||
| Deduction of ASC 718 fair value of awards granted during prior FY that were forfeited during applicable FY, determined as of prior FY end | — | $ | (798,648 | ) | — | — | — | — | ||||||||||||||||
TOTAL ADJUSTMENTS | $ | 4,298,999 | $ | (629,290 | ) | $ | 28,950,708 | $ | 6,498,373 | $ | 12,826,886 | $ | 4,212,631 | |||||||||||
Wesco | 64 |
Director
| (3) | The peer group used for calculating Peer Group Total Shareholder Return for 2022 and 2021 consists of the following companies listed as our performance peer group: Applied Industrial Technologies, Inc., Arrow Electronics, Inc., Avnet, Inc., Barnes Group Inc., Eaton Corporation Plc, Fastenal Company, Genuine Parts Company, Hubbell, Inc., MRC Global, Inc., MSC Industrial Direct Co., Inc., Rexel SA, Rockwell Automation, Inc. and W.W. Grainger, Inc. The peer group used for calculating Peer Group Total Shareholder Return for 2020 consists of the above companies, plus HD Supply Holdings, Inc. HD Supply Holdings, Inc, was acquired in December 2020 and removed from the performance peer group for 2021. |
| (4) | The Company has identified Adjusted EBITDA as the company-selected measure for the pay versus performance disclosure, as it represents the most important financial performance measure used to link compensation actually paid to the PEO and the other NEOs in 2022 to the Company’s performance. EBITDA is adjusted earnings before income taxes, interest, preferred stock dividends and depreciation and amortization, as shown on page 33 of the Company’s Form 10-K filed with the SEC on February 21, 2023. For 2020—2022, this number was adjusted to remove the impact of stock-based compensation expense. |
Independent members ofThe table below reflects the Board of Directors receiverelationship between the compensation actually paid (“CAP”) to our PEO and other NEOs in 2020, 2021 and 2022 and the following performance measures: Total Shareholder Return, net income attributable to common stockholders and Adjusted EBITDA.
Period | Compensation Actually Paid to PEO | Average Compensation Actually Paid to Other NEOs | Wesco TSR | Peer Group TSR | Net Income attributable to Common Stockholders | Adjusted EBITDA Growth | ||||||||||||||||||
| 2020 to 2021 | 60.8 | %  | 27.8 | % | 67.6 | % | 40.0 | % | 479.3 | % | 78.7 | % | ||||||||||||
| 2021 to 2022 | (60.2 | )%  | (72.3 | )% | (4.9 | )% | (6.9 | )% | 96.8 | % | 46.5 | % | ||||||||||||
| 2020 to 2022 (cumulative) | (36.0 | )% | (64.6 | )% | 59.5 | % | 30.3 | % | 1,040.4 | % | 161.7 | % | ||||||||||||
The Nominating and Governance Committee works with an independent 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 by the Director at the time the deferral election is made. All distributions will be made or begin as soon as practical after January 1 of the year following the Director’s termination of Board service.
As set forth on an exhibit64.6%, respectively, compared to the Company’s Form 10-K filed on February 22, 2016,cumulative TSR of 59.5% over the Company has entered into indemnification agreementssame period. The Company’s cumulative TSR from 2020 through 2022 was almost double the TSR of our performance peer group over the same period.
Stock Ownership Guidelines
Our Board has adopted stock ownership guidelines for Directors. In 2015, Directors were expected to hold beneficial ownership
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.
Wesco | Pay vs. Performance | 65 |
Director
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 | ||||||||
Most Important Performance Measures |
| Adjusted EBITDA |
| Net Income |
| Total Shareholder Return (TSR) |
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 | ||||||
| 66 |
ItemProposal 3 – Advisory Vote on the Frequency of Advisory Vote on Executive Compensation
In connection with the advisory vote on executive compensation discussed in the Compensation Discussion and Analysis section of this Proxy Statement, we are also asking stockholders to vote on whether the say-on-pay vote should occur every one, two or three years. SEC rules require this frequency to be presented once every six years, and we last presented this proposal in 2017. As with the say-on-pay vote, the vote on the frequency of the say-on-pay vote is advisory, or nonbinding. For the reasons discussed below, the Board recommends that the stockholders select a frequency of every year.
During its evaluation, our Board considered that an annual advisory vote on executive compensation allows our stockholders to provide the Company with regular input on the Company’s compensation practices, and a one year frequency has received the strong support of stockholders previously.
Although the vote is non-binding, our Board and Compensation Committee will take into account the outcome of the vote when making future decisions regarding the Company’s executive compensation policies and procedures and how often the Company should submit to stockholders an advisory vote to approve executive compensation.
Stockholders may vote to hold the say-on-pay vote every one, two or three years, or they may abstain. Accordingly, you will not be voting to approve or disapprove the Board’s recommendation.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
“ONE YEAR” ON THE PROPOSAL
RECOMMENDING THE FREQUENCY OF ADVISORY
VOTES ON EXECUTIVE COMPENSATION
| Wesco 2023 Proxy Statement | Proposal 4 – Ratify the Appointment of Independent Registered Public Accounting Firm | 67 |
Proposal 4 – 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, 2016.2023.
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, 2016.2023.
| Independent Registered Public Accounting Firm | 68 |
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 20162023 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, 20152022 and 20142021 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) | 2022 | 2021 | ||||||
Audit fees | $ | 5.6 | $ | 5.3 | ||||
Audit-related fees | — | — | ||||||
Tax fees | ||||||||
Compliance | $ | 0.7 | $ | 0.4 | ||||
Planning and consulting | — | — | ||||||
Other fees | — | — | ||||||
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| $ | 6.3 | $ | 5.7 | ||||
The audit fees for the years ended December 31, 20152022 and 20142021 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, 20152022 and 20142021 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 20152022 and 2014,2021, 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, 20152022 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 2023 Proxy Statement | Independent Registered Public Accounting Firm | 69 |
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, 2015,2022, 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.
2022.
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, 2015,2022, 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 2016.2023.
Respectfully Submitted:
THE AUDIT COMMITTEETHE AUDIT COMMITTEE
Laura K. Thompson, Chair
Anne M. Cooney
Sundaram Nagarajan
Steven A. RaymundChairman
James J. O’BrienEaswaran Sundaram
Lynn M. Utter
Robert J. Tarr, Jr.
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: CORPORATE SECRETARY | VOTE BY INTERNET Before The Meeting - | Go to www.proxyvote.comor scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on May 24, 2023 for shares held directly and by 11:59 P.M. Eastern Time on May 22, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/WCC2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on May 24, 2023 for shares held directly and by 11:59 P.M. Eastern Time on May 22, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M., Eastern Time, Wednesday, May 25, 2016. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M., Eastern Time, Wednesday, May 25, 2016. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
V09731-P86200 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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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. | ||||||||||||||||||||||||||||||||
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The Board of Directors recommends you vote FOR the following: | |||||||||||||||||||||||||||||||||||
1. Elect nine Directors for a one-year term expiring in 2024. Nominees: | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||
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02) Anne M. Cooney 07) James L. Singleton 03) Matthew J. Espe 08) Easwaran Sundaram 04) Bobby J. Griffin 09) Laura K. Thompson 05) Sundaram Nagarajan | |||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals 2, 4 and 1 YEAR on proposal 3. | Abstain | ||||||||||||||||||||||||||||||||||
2. Approve, on an advisory basis, the compensation of the Company’s named executive officers. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||
1 Year | 2 Years | 3 Years | Abstain | ||||||||||||||||||||||||||||||||
3. Approve, on an advisory basis, the frequency of an advisory vote on executive compensation. | ☐ | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||
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4. Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, |
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NOTE: Transact any other business properly brought before the Annual Meeting. | |||||||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | |||||||||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | |||||||||||||||||||||||||
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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V09732-P86200
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WESCO INTERNATIONAL, INC. This proxy is solicited by the Board of Annual Meeting of Stockholders May
The undersigned hereby appoints
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made on any particular matter, this proxy will be voted in accordance with the Board of Directors’ recommendations on any such matter.
Continued and to be signed on reverse side
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