UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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WESCO INTERNATIONAL, INC. | ||||
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WESCO INTERNATIONAL, INC. |
Notice of 2018 Annual Meeting of Stockholders
Date And Time:
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Thursday, May 31, 2018 at 2:00 p.m., E.D.T.
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Place:
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Hyatt Regency Pittsburgh International Airport, 1111 Airport Boulevard, Pittsburgh, PA 15231
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Record Date:
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April 6, 2018
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Dear Fellow Stockholders:
I am pleased to invite you to attend our 2018 Annual Meeting of Stockholders. It will be held on May 31, 2018, at the Hyatt Regency Pittsburgh International Airport, 1111 Airport Boulevard, Pittsburgh, Pennsylvania. Details regarding the items of business to be conducted at the Annual Meeting are described in the accompanying Proxy Statement:
1. | Elect eight Directors for a one-year term expiring in 2019. |
2. | Approve, on an advisory basis, the compensation of the Companys named executive officers. |
3. | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2018. |
4. | Transact any other business properly brought before the Annual Meeting. |
Voting can be completed in one of four ways:
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returning the proxy card by mail |
refer to the phone number on your voting card | online at www.proxyvote.com | or attending the meeting to vote in person |
We are sending a Notice of Internet Availability of Proxy Materials to you on or about April 16, 2018. Stockholders of record at the close of business on April 6, 2018 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, 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, whether or not you plan to attend the meeting.
Thank you for your ongoing support of WESCO.
By order of the Board of Directors,
John J. Engel
Chairman, President and Chief Executive Officer
Table of Contents |
PROXY STATEMENT TABLE OF CONTENTS
ii | ||||
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1 | ||||
2 | ||||
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8 | ||||
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14 | ||||
16 | ||||
18 | ||||
ITEM 2 APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE COMPANYS NAMED EXECUTIVE OFFICERS |
19 | |||
21 | ||||
34 |
35 | 40 | |||||||||||||
36 | 41 | |||||||||||||
37 | 43 | |||||||||||||
38 | 44 | |||||||||||||
39 | 45 | |||||||||||||
39 | 46 |
47 | ||||
48 |
49 | 49 |
ITEM 3 RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
50 | |||
51 |
WESCO International, Inc. - 2018 Proxy Statement | | i |
INTERNET ACCESS TO THIS PROXY STATEMENT |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 31, 2018
The 2018 Proxy Statement and 2017 Annual Report of WESCO International, Inc. are available to review at: www.proxydocs.com/wcc.
We are pleased to continue to take advantage of the Securities and Exchange Commission (the SEC) rule that permits companies to furnish proxy materials to stockholders over the Internet. On or about April 16, 2018, we will begin mailing proxy materials. A Notice of Internet Availability of Proxy Materials (the Notice) contains instructions on how to vote online or by telephone, or in the alternative, request a paper copy of the proxy materials and a proxy card. By furnishing a Notice and access to our proxy materials by 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.
ii | | WESCO International, Inc. - 2018 Proxy Statement |
QUESTIONS AND ANSWERS |
WESCO International, Inc. - 2018 Proxy Statement | | iii |
Election of Directors |
ITEM 1 PROPOSAL TO VOTE FOR ELECTION OF DIRECTORS
The following Director Nominees have been nominated for election to our Board (with a term expiring at the 2019 Annual Meeting of Stockholders): Sandra Beach Lin, John J. Engel, Matthew J. Espe, Bobby J. Griffin, John K. Morgan, Steven A. Raymund, James L. Singleton, and Lynn M. Utter.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
EACH OF THE DIRECTOR NOMINEES.
The Board is currently composed of eight directors as of the filing date of this proxy statement. The current Director nominees are to be elected at the Annual Meeting for a one-year term expiring in 2019, subject to earlier retirement, resignation or removal.
Should all nominees be elected as indicated in the proposal above, the following is the complete list of individuals who comprise our Board of Directors and Board Committees.
Name | Age | Director Since |
Audit | Compensation | Executive | Nominating and Governance | ||||||
Sandra Beach Lin |
60 | 2002 | ||||||||||
John J. Engel |
56 | 2008 | ||||||||||
Matthew J. Espe |
59 | 2016 | ||||||||||
Bobby J. Griffin |
69 | 2014 | ||||||||||
John K. Morgan |
63 | 2008 | ||||||||||
Steven A. Raymund |
62 | 2006 | ||||||||||
James L. Singleton(1) |
62 | 1998 | ||||||||||
Lynn M. Utter |
55 | 2006 |
(1) | Lead Director |
Chair |
Member |
2 | | WESCO International, Inc. - 2018 Proxy Statement |
Election of Directors |
DIRECTOR NOMINEES
The following information describes certain information regarding our Director nominees as of April 6, 2018.
DIRECTOR NOMINEE COMPOSITION
DIRECTOR NOMINEE 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 Boards refreshment process described herein, has recently re-evaluated these skills and qualifications to better align with the Companys strategic vision and business and operations. The following is a description of some of these skills, experience, and background:
WESCO International, Inc. - 2018 Proxy Statement | | 3 |
Election of Directors |
The following is a summary of some of the skills, experience, and background that our Director nominees bring to the Board:
4 | | WESCO International, Inc. - 2018 Proxy Statement |
Election of Directors |
NOMINEE DIRECTORS TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2019
SANDRA BEACH LIN
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Sandra Beach Lin served as Chief Executive Officer of Calisolar, Inc., a solar silicon company, a position she held during 2010 and 2011, until her retirement at the end of 2011. She served as Executive Vice President, then as Corporate Executive Vice President, of Celanese Corporation, a global hybrid chemical company from 2007 until 2010. Previously, she served as Group Vice President of Avery Dennison Corporation and President of Alcoa Closure Systems International, Inc. Ms. Beach Lin serves as a Director of American Electric Power, PolyOne Corporation and Interface Biologics. Ms. Beach Lin is also a member of the National Association of Corporate Directors Nominating and Governance Committee Chair Advisory Council. |
Qualifications: Among Ms. Beach Lins 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 corporate governance matters and serves as a director of other public company boards; and has extensive experience with LEAN/Six Sigma.
JOHN J. ENGEL
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John J. Engel was elected as Chairman at the 2011 Annual Meeting and has served as our President and Chief Executive Officer since 2009. Previously, Mr. Engel served as our Senior Vice President and Chief Operating Officer from 2004 to 2009. Before joining WESCO in 2004, Mr. Engel served as Senior Vice President and General Manager of Gateway, Inc.; Executive Vice President and Senior Vice President of Perkin Elmer, Inc.; and Vice President and General Manager of Allied Signal, Inc. Mr. Engel also held various engineering, manufacturing and general management positions at General Electric Company. Mr. Engel also serves as a director of United States Steel Corporation, is a member of the Business Roundtable and the Business Council, and is a member of the Board of Directors of the National Association of Manufacturers. |
Qualifications: Among Mr. Engels experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Engel is the Companys 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 and a diverse range of businesses. He is experienced in strategic planning, risk oversight and managing complex operational and financial matters.
MATTHEW J. ESPE
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Matthew J. Espe is an Operating Partner at Advent International, a position he has held since November, 2017. From February 2017 to November 2017, he served as the Chief Executive Officer of Radial, Inc., a multinational e-commerce company headquartered in King of Prussia, Pennsylvania. Previously, Mr. Espe served as Chief Executive Officer and President of Armstrong World Industries, Inc., a global producer of flooring products and ceiling systems, a position he held from 2010 to March 2016. Previously, Mr. Espe served as Chairman and Chief Executive Officer of Ricoh Americas from 2008 to 2010 and Chairman and Chief Executive Officer of IKON Office Solutions, Inc. from 2002 to 2008. Mr. Espe began his career at General Electric Company, and he was with GE for more than 20 years, most recently as President and Chief Executive Officer of GE Lighting. Mr. Espe is also a member of the Board of Directors at Realogy Holdings Corp. and Foundation Building Materials, Inc. |
Qualifications: Among Mr. Espes 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 and corporate governance. He also brings significant experience gained from service on the board of directors of other public companies.
WESCO International, Inc. - 2018 Proxy Statement | | 5 |
Election of Directors |
BOBBY J. GRIFFIN
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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 2007. Beginning in 1986, Mr. Griffin served in various other management positions with Ryder System, Inc., including as Executive Vice President, International Operations from 2003 to March 2005 and Executive Vice President, Global Supply Chain Operations from 2001 to 2003. Prior to Ryder System, Inc., Mr. Griffin was an executive at ATE Management and Service Company, Inc., which was acquired by Ryder System, Inc. in 1986. He also serves as a director of Atlas Air Worldwide Holdings, Inc., Hanesbrands Inc. and United Rentals, Inc. and served as a director of Horizon Lines, Inc. from 2010 until 2012. |
Qualifications: Among Mr. Griffins 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.
JOHN K. MORGAN
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John K. Morgan served as the Chairman, President and Chief Executive Officer of Zep Inc., a specialty chemicals company, from 2007 until his retirement in June 2015. From July 2007 to October 2007, he served as Executive Vice President of Acuity Brands and President and Chief Executive Officer of Acuity Specialty Products, just prior to its spin off from Acuity Brands, Inc. From 2005 to July 2007, he served as President and Chief Executive Officer of Acuity Brands Lighting. He also served Acuity Brands as President and Chief Development Officer from 2004 to 2005, as Senior Executive Vice President and Chief Operating Officer from 2002 to 2004, and as Executive Vice President from 2001 to 2002. He also serves as a director of LSI Industries Inc. |
Qualifications: Among Mr. Morgans 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.
STEVEN A. RAYMUND
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Steven A. Raymund began his employment with Tech Data Corporation, a distributor of information technology products, in 1981. From 1986 until his retirement in 2006, he served as its Chief Executive Officer, and from 1991 to June 2017, he served as its Chairman of the Board of Directors. Mr. Raymund also serves as a director of Jabil, Inc. and as a member of the Board of Advisors for the Moffitt Cancer Center; the Board of Trustees of All Childrens Hospital, Inc.; The Board of Trustees of the University of Oregon Foundation; and the Board of Directors for Gulf Coast Jewish Family and Community Services. |
Qualifications: Among Mr. Raymunds 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.
JAMES L. SINGLETON
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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. He is also the founder and Managing Director of Pillar Capital LP, an investment management firm, and he has served in such capacity since 2007. From 1994 to 2005, he served as the President of The Cypress Group LLC, a private equity firm of which he was a co-founder. Prior to founding Cypress, he served as a Managing Director in the Merchant Banking Group at Lehman Brothers. In addition, Mr. Singleton previously served as a director of ClubCorp, Inc., Danka Business Systems PLC and William Scotsman International, Inc. |
Qualifications: Among Mr. Singletons 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.
6 | | WESCO International, Inc. - 2018 Proxy Statement |
Election of Directors |
LYNN M. UTTER
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Lynn M. Utter serves as Chief Executive Officer of First Source LLC, a packager and distributor of national branded, unbranded and private label confectionery products, nuts, snacks, specialty foods and natural products sold to retailers throughout the United States, and has held that position since April 2016. She previously served as the President and Chief Operating Officer of Knoll Office, a designer and manufacturer of office furniture products, from February 2012 to April 2015. She served as President and Chief Operating Officer of Knoll North America from 2008 to February 2012. From 1997 to 2008, she served as Chief Strategy Officer and in a number of other senior operating and strategic planning positions for Coors Brewing Company. From 1986 to 1996, Ms. Utter worked at Frito Lay and Strategic Planning Associates, LLC. Ms. Utter serves as a director of Lincoln Financial Group and a director of private equity backed Merchant Metals. She also has served as a member of the Board of Overseers for the Henry Crown Fellowship at The Aspen Institute, The University of Texas, and the United Way. |
Qualifications: Among Ms. Utters 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, including her current role as Chief Executive 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.
WESCO International, Inc. - 2018 Proxy Statement | | 7 |
Executive Officers |
Our executive officers and their respective ages and positions as of December 31, 2017, are set forth below.
Name | Age | Position | ||
John J. Engel |
55 | Chairman, President and Chief Executive Officer | ||
Diane E. Lazzaris |
50 | Senior Vice President and General Counsel | ||
Robert Minicozzi |
56 | Vice President and Chief Information Officer | ||
David S. Schulz |
52 | Senior Vice President and Chief Financial Officer | ||
Kimberly G. Windrow |
60 | Senior Vice President and Chief Human Resources Officer |
John J. Engel was elected as Chairman at the 2011 Annual Meeting and has served as our President and Chief Executive Officer since 2009. Previously, Mr. Engel served as our Senior Vice President and Chief Operating Officer from 2004 to 2009. Before joining WESCO in 2004, Mr. Engel served as Senior Vice President and General Manager of Gateway, Inc., Executive Vice President and Senior Vice President of Perkin Elmer, Inc., Vice President and General Manager of Allied Signal, Inc., and also held various engineering, manufacturing and general management positions at General Electric Company.
Diane E. Lazzaris has served as our Senior Vice President and General Counsel since January 2014, and from 2010 to December 2013 she served as our Vice President, Legal Affairs. From 2008 to 2010, Ms. Lazzaris served as Senior Vice President Legal, General Counsel and Corporate Secretary of Dicks Sporting Goods, Inc. From 1994 to 2008, she held various corporate counsel positions at Alcoa Inc., including Group Counsel to a group of global businesses.
Robert Minicozzi has served as our Vice President and Chief Information Officer since January 2016. From 2012 to December 2015, Mr. Minicozzi served as Vice President and Global Divisional Chief Information Officer of Arrow Electronics, Inc. and previously held various information systems leadership positions with Arrow Electronics, Inc.
David S. Schulz has served as our Senior Vice President and Chief Financial Officer since October 2016. From April 2016 to October 2016, Mr. Schulz served as Senior Vice President and Chief Operating Officer of Armstrong Flooring, Inc. 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.
Kimberly G. Windrow has served as our Senior Vice President and Chief Human Resources Officer since January 2014, and from 2010 to December 2013, she served as our Vice President, Human Resources. From 2004 until 2010, Ms. Windrow served as Senior Vice President of Human Resources for The McGraw Hill Companies in the education segment. From 2001 until 2004, she served as Senior Vice President of Human Resources for The MONY Group, and from 1988 until 2000, she served in various human resource positions at Willis, Inc.
8 | | WESCO International, Inc. - 2018 Proxy Statement |
Corporate Governance |
Board and Committee Evaluations
Board Refreshment and Tenure
Compensation Committee Interlocks
Executive Sessions and Lead Director
Board Leadership Structure
10 | | WESCO International, Inc. - 2018 Proxy Statement |
Corporate Governance |
Communications with Directors
Director Nominating Procedures
WESCO International, Inc. - 2018 Proxy Statement | | 11 |
Corporate Governance |
Director Resignation Policy
Stockholder Engagement
Boards Role in Oversight of Risk Management
Stockholder Proposals for 2019 Annual Meeting
12 | | WESCO International, Inc. - 2018 Proxy Statement |
Corporate Governance |
WESCO International, Inc. - 2018 Proxy Statement | | 13 |
Board and Committee Meetings |
Compensation Committee
WESCO International, Inc. - 2018 Proxy Statement | | 15 |
Security Ownership |
The following table sets forth the beneficial ownership of the Companys Common Stock as of April 6, 2018, by each person or group known by the Company to beneficially own more than five percent of the outstanding Common Stock, each Director, each of the named executive officers, and 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 April 6, 2018, 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.
Name | Shares Beneficially Owned(1) |
Percent Owned Beneficially(2) |
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FMR LLC 245 Summer Street Boston, MA 02210 |
5,805,562 | (3) | 12.3 | % | ||||
EdgePoint Investment Group Inc. 150 Bloor Street West Suite 500 Toronto, Ontario M5S 2X9 |
4,168,415 | (4) | 8.9 | % | ||||
Boston Partners One Beacon Street 30th Floor Boston, MA 02108 |
4,061,716 | (5) | 8.6 | % | ||||
Dimensional Fund Advisors LP Building One 6300 BeeCave Road Austin, TX 78746 |
3,880,755 | (6) | 8.2 | % | ||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 |
3,787,677 | (7) | 8.1 | % | ||||
John J. Engel |
736,971 | (8) | 1.5 | % | ||||
Sandra Beach Lin |
33,757 | (8) | * | |||||
Matthew J. Espe |
913 | (8) | * | |||||
Bobby J. Griffin |
6,976 | (8) | * | |||||
John K. Morgan |
40,689 | (8) | * | |||||
Steven A. Raymund(9) |
37,253 | (8) | * | |||||
James L. Singleton(10) |
36,299 | (8) | * | |||||
Lynn M. Utter |
37,994 | (8) | * | |||||
Diane E. Lazzaris |
82,332 | (8) | * | |||||
Robert Minicozzi |
17,774 | (8) | * | |||||
David S. Schulz |
21,143 | (8) | * | |||||
Kimberly G. Windrow |
87,230 | (8) | * | |||||
All 12 executive officers and Directors as a group |
1,139,331 | (8) | 2.4 | % |
* | Indicates ownership of less than 1% of the Common Stock. |
(1) | The beneficial ownership of Directors set forth in the foregoing table includes shares of Common Stock payable to any such Director following the Directors termination of Board service with respect to portions of annual fees deferred under the Companys Deferred Compensation Plan for Non-Employee Directors, even though such shares are not deemed currently to be beneficially owned by the Directors pursuant to Rule 13d-3, as follows: Ms. Beach Lin, 12,487; Mr. Espe, 913; Mr. Griffin, 4,927; Mr. Morgan, 8,804; Mr. Raymund, 12,580; Mr. Singleton, 11,751; and Ms. Utter, 16,136. |
16 | | WESCO International, Inc. - 2018 Proxy Statement |
Security Ownership |
(2) | Based on the number of shares outstanding on the record date. |
(3) | This information is based solely upon a Schedule 13G/A filed by FMR LLC, Edward C. Johnson 3rd and Abigail P. Johnson with the Securities and Exchange Commission on February 13, 2018. Fidelity Management & Research Company (FMR Co), 245 Summer Street, Boston, MA 02210, a wholly owned subsidiary of FMR LLC and an investment adviser registered under the Investment Advisors Act of 1940, is the beneficial owner of 5,805,562 shares as a result of acting as investment advisor to various investment companies registered under the Investment Company Act of 1940. Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (Fidelity Funds) advised by FMR Co which power resides with the Fidelity Funds Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by the Fidelity Funds Boards of Trustees. |
(4) | This information is based solely upon a Schedule 13G/A filed by EdgePoint Investment Group Inc. (the successor corporation to EdgePoint Investment Management Inc. EdgePoint) and EdgePoint Global Portfolio (EGP) with the Securities and Exchange Commission on February 13, 2018. EdgePoint beneficially owns 4,168,415 shares, has shared power to vote and shared power to dispose of 4,168,415 shares. |
(5) | This information is based solely upon a Schedule 13G/A filed by Boston Partners with the Securities and Exchange Commission on February 12, 2018. Boston Partners beneficially owns 3,115,309 shares, has sole power to vote 3,115,309 shares, has shared power to vote 14,331 shares and sole power to dispose of 4,061,716 shares. |
(6) | This information is based solely upon a Schedule 13G filed by Dimensional Fund Advisors LP (Dimensional) with the Securities and Exchange Commission on February 9, 2018. Dimensional is the beneficial owner of 3,880,755 shares and has sole power to vote 3,785,930 shares, and sole dispositive power over 3,880,755 shares. |
(7) | 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, 2018. Vanguard is the beneficial owner of 3,787,677 shares and has sole power to vote 25,234 shares, shared voting power over 5,302 shares, sole dispositive power over 3,761,355 shares and shared dispositive power over 26,322 shares. |
(8) | Includes the following shares of Common Stock not currently owned, but subject to SARs which were outstanding on April 6, 2018 and may be exercised or settled within 60 days thereafter: Mr. Engel, 630,186; Ms. Beach Lin, 10,708; Mr. Espe 0; Mr. Griffin, 0; Mr. Morgan, 16,742; Mr. Raymund, 16,742; Mr. Singleton, 4,642; Ms. Utter, 12,742; Ms. Lazzaris, 71,887; Mr. Minicozzi 9,774; Mr. Schulz 12,143; Ms. Windrow, 75,641; and all Directors and executive officers as a group, 861,207. |
(9) | Includes 7,931 shares of Common Stock beneficially owned indirectly through a trust which is controlled by Mr. Raymund. |
(10) | Includes 5,000 shares of Common Stock beneficially owned indirectly through a trust. Mr. Singleton exercises shared voting and investment power over such shares. |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
WESCO International, Inc. - 2018 Proxy Statement | | 17 |
Item 2 Approve, on an Advisory Basis, the Compensation of the Companys Named Executive Officers |
ITEM 2 APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE COMPANYS NAMED EXECUTIVE OFFICERS
This year, the Company is seeking that the stockholders approve the compensation of the Companys named executive officers (commonly referred to as say-on-pay) as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding named executive officer compensation and the narrative description accompanying such disclosure. As approved by our stockholders at the annual meeting of stockholders in 2017, and consistent with the Boards 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 COMPANYS NAMED EXECUTIVE OFFICERS.
We encourage stockholders to review the Compensation Discussion and Analysis section beginning on page 21. 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 Companys 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:
| Our program is straightforward and comprises three main elements: (1) base salaries; (2) annual cash incentive bonuses; and (3) long-term incentive awards. The annual cash incentive and long-term incentive components of our compensation program reflect the pay-for-performance philosophy that underscores the Companys overall compensation strategy, as a significant portion of total named executive officer compensation is at-risk; |
| Annual cash incentive bonuses are paid upon the achievement of a set of measurable Company financial performance metrics and individual performance objectives; |
| Our long-term incentive awards consist of performance shares, stock appreciation rights and restricted stock units, the value of which depends on the value of the Companys stock, thus encouraging achievement of long-term value creation benefiting all stockholders; |
| 85% of our CEOs total compensation opportunity is variable and 15% is fixed; |
| The Company did not meet its performance goals and the performance shares awarded in 2015 for the three-year performance period ended December 31, 2017 were forfeited, consistent with our pay-for-performance philosophy; |
| We believe we have an appropriate mix of short and long-term compensation based on balanced performance metrics that are tied to the Companys strategy and which align our incentive and compensation programs with the interests of stockholders; |
| Our long-term compensation opportunity is 80% performance based a combination of performance shares and stock appreciation rights, the value of which is dependent on the Companys profitable performance and 20% retention focused through the awarding of restricted stock units that vest over time; |
| Our Company uses perquisites on a very limited basis, we do not provide Supplemental Executive Retirement Plans (SERP) benefits to our named executive officers, and we do not provide tax gross-ups on executive-only perquisites; |
| The Company has 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 (the Company has one pre-existing employment contract entered into prior to 2010 that includes excise tax gross-ups under certain change in control circumstances); |
| We have stock ownership guidelines for officers and Directors, and until the stock ownership guidelines are met, an officer or Director must hold a minimum of 50% of the pre-tax value realized at the exercise or vesting of equity awards; |
| Our officers and Directors are prohibited from engaging in hedging transactions involving our stock and from pledging shares as security for loans; |
WESCO International, Inc. - 2018 Proxy Statement | | 19 |
Item 2 Approve, on an Advisory Basis, the Compensation of the Companys Named Executive Officers |
| Equity award agreements with our employees (including our named executive officers) include confidentiality and other covenants protecting our business interests and provide for forfeiture of the awards or benefits received under them if the covenants are violated; |
| We have 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; |
| The Compensation Committee annually reviews the potential for risk regarding our compensation program design, including incentive compensation; and |
| We believe that there is an effective level of corporate governance over our compensation programs, as all of our Compensation Committee members are independent according to the independence standards of the NYSE and SEC and outside directors as defined in Code Section 162(m), and the Compensation Committee retains an independent compensation consultant to conduct annual reviews of executive compensation and advise on best practices. |
The Board endorses the Companys executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of the Companys 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 Companys 2018 Proxy Statement.
20 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
Compensation Philosophy
Compensation Approach
Compensation Assessment
22 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
WESCO International, Inc. - 2018 Proxy Statement | | 23 |
Compensation Discussion and Analysis |
Our 2017 compensation mix for our CEO reflects our emphasis on variable compensation and performance-based elements as follows:
15% Base Salary To attract and retain talent Fixed base of cash compensation |
85% Total Variable Compensation
Short Term Incentive Plan Target Bonus To drive achievement of key business results on an annual basis Performance based and not guaranteed
Long Term Incentive Plan Equity (Performance Shares, Restricted Stock Units, Stock Appreciation Rights) To directly tie the interests of the NEOs to the interests of our stockholders To retain key talent Variable and/or performance based and not guaranteed |
COMPENSATION SETTING PROCESS
USE OF COMPENSATION CONSULTANTS
24 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
COMPENSATION PEER GROUP
2017 COMPENSATION PEER GROUP | ||||||||
Advance Auto Parts, Inc. | CarMax, Inc. | Insight Enterprises, Inc. | Owens & Minor, Inc. | TE Connectivity Ltd. | ||||
AECOM | Colfax Corporation | J.B. Hunt Transport Services, Inc. | Parker-Hannifin Corporation | United Natural Foods, Inc. | ||||
Air Products and Chemicals, Inc. | Dover Corporation | Jabil Circuit, Inc. | Plexus Corp. | United Rentals, Inc. | ||||
Arrow Electronics, Inc. | EchoStar Corporation | Jacobs Engineering Group Inc. | Ryder System, Inc. | Vulcan Materials Company | ||||
Asbury Automotive Group, Inc. | EMCOR Group, Inc. | Lennox International Inc. | Sanmina Corporation | Whole Foods Market, Inc. | ||||
AutoNation, Inc. | Fluor Corporation | Lithia Motors, Inc. | Sonic Automotive, Inc. | |||||
AutoZone, Inc. | Harsco Corporation | Masco Corporation | SpartanNash Company | |||||
Avis Budget Group, Inc. | HNI Corporation | MRC Global Inc. | Steelcase, Inc. | |||||
Benchmark Electronics, Inc. | Ingersoll-Rand plc | MSC Industrial Direct Co., Inc. | SYNNEX Corporation |
WESCO International, Inc. - 2018 Proxy Statement | | 25 |
Compensation Discussion and Analysis |
Role of 2017 Advisory Vote on Executive Compensation in the Compensation Setting Process
ELEMENTS OF COMPENSATION
Base Salaries
Short-Term Incentives
26 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
Performance Measure | Weighting | Percent Achievement |
Payout Percent of Target Opportunity(1) | |||
Earnings Before Interest Taxes Depreciation and Amortization
|
50%
|
< 85% | 0% | |||
85% to 100% | 25% up to 100% | |||||
>100% to 115% | Between 100% and 200% | |||||
Free Cash Flow
|
25%
|
< 85% | 0% | |||
85% to 100% | 25% up to 100% | |||||
>100% to 115% | Between 100% and 200% | |||||
Individual Performance | 25%
|
< 25% | 0% | |||
25% to 100% | Up to 200% | |||||
Total (as a percent of Target Opportunity) | 100% | 0% to 200% |
(1) | Amounts interpolated, as appropriate. |
For 2017, the performance goals and the actual achievement of each of the financial components is included in the chart below:
Performance Measure | Weighting | Threshold | Target | Maximum | Actual Results | |||||||||||||||
Earnings Before Interest Taxes Depreciation and Amortization | 50% | $ | 340.6 | $ | 400.7 | $ | 460.9 | $ | 384.9 | |||||||||||
Payment as % of Target | 25% | 100% | 200% | 80.2% | ||||||||||||||||
Free Cash Flow | 25% | $ | 141.6 | $ | 166.5 | $ | 191.5 | $ | 127.6 | |||||||||||
Payment as % of Target | 25% | 100% | 200% | 0.0% |
WESCO International, Inc. - 2018 Proxy Statement | | 27 |
Compensation Discussion and Analysis |
Long-Term Incentives
28 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
Performance Measure | Weighting | Threshold (Payout |
Target (Payout |
Maximum (Payout |
Actual Results |
Payout | ||||||
Net Income Growth Rate (3-year average growth rate) | 50% | 5% | 10% | 15% | (11.2%) | 0 | ||||||
Relative TSR (% rank among peer group) | 50% | 40th percentile |
50th percentile |
80th percentile |
16th percentile |
0 |
Calculation of the shares to be awarded (relative to target): | Total Payout = (TSR Payout * 50%) + (Net Income Growth Rate Payout * 50%) |
Target Award of 2015 Performance Shares |
Payout | Actual Number of Earned Shares |
||||||||||
Engel |
18,120 | x 0 | 0 | |||||||||
Lazzaris |
2,480 | x 0 | 0 | |||||||||
Windrow |
2,330 | x 0 | 0 |
Retention-Based Elements
Restricted Stock Units (20%)
WESCO International, Inc. - 2018 Proxy Statement | | 29 |
Compensation Discussion and Analysis |
The performance share, SAR and RSU grants to our NEOs in 2017 were as follows:
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 |
19,260 | 111,382 | 12,840 | 2/16/2017 | $ | 71.65 | (2) | 2/16/2027 | 2020 | |||||||||||||||||||
Schulz |
5,000 | 1/31/2017 | $ | 70.70 | (3) | 1/31/2027 | | |||||||||||||||||||||
4,920 | 28,449 | 3,280 | 2/16/2017 | $ | 71.65 | (2) | 2/16/2027 | 2020 | ||||||||||||||||||||
514 | 2,979 | 343 | 2/21/2017 | $ | 72.90 | (4) | 2/21/2027 | 2020 | ||||||||||||||||||||
4,000 | 8/11/2017 | $ | 51.10 | (3) | 8/11/2027 | | ||||||||||||||||||||||
Lazzaris |
2,722 | 15,738 | 1,814 | 2/16/2017 | $ | 71.65 | (2) | 2/16/2027 | 2020 | |||||||||||||||||||
Minicozzi |
4,535 | 2/14/2017 | $ | 71.65 | (5) | 2/14/2027 | | |||||||||||||||||||||
1,256 | 7,262 | 838 | 2/16/2017 | $ | 71.65 | (2) | 2/16/2027 | 2020 | ||||||||||||||||||||
Windrow |
2,408 | 13,921 | 1,605 | 2/16/2017 | $ | 71.65 | (2) | 2/16/2027 | 2020 |
(1) | Performance shares are subject to a three-year performance period. |
(2) | Represents the exercise price for the SARs granted and the RSUs at issuance price, which was the closing price of our Company stock on the February 16, 2017 grant date in accordance with Compensation Committee action on February 16, 2017. |
(3) | Represents the exercise price for the SARs granted, which was the closing price of our company stock on the January 31, 2017 grant date in accordance with a matching SARs purchase as set forth in Mr. Schulzs term sheet. |
(4) | Represents the exercise price for the SARs granted and the RSUs at issuance price, which was the closing price of our Company stock on the February 21, 2017 grant date in accordance with Compensation Committee action on February 21, 2017. |
(5) | Represents the exercise price for the SARs granted, which was the closing price of our company stock on February 14, 2017 grant date in accordance with a matching SARs purchase as set forth in Mr. Minicozzis term sheet. |
Realizable Pay Analysis
1 | Based on stock price of $64.05 on the February 2018 vesting date. |
30 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
Key Takeaways
| Overall, the vested value is approximately 19% of the grant value, based on actual performance over this period. |
| As described on page 29, the Performance Shares granted in 2015 were forfeited since performance vs. the net income goals and the relative TSR scale were both below threshold performance. |
| The SARs granted in 2015 carry an exercise price of $69.54 while the stock price from the mid-February 2018 vesting date of the SAR through early April 2018 was below the exercise price. As a result, the SARs currently have no realizable value. |
| The SARs remain an effective performance-based long-term instrument as compensation is inherently aligned with stock price performance. |
| The restricted stock units granted in 2015 vested and served their principal purpose of retention. They were also aligned with our stockholders interests as the value received on the vesting date was less than that on the grant date. |
These illustrations demonstrate how incentive opportunities and subsequent results create alignment of pay and performance.
2018 Performance Shares
Anti-Hedging Policy
Retirement Savings
Health and Welfare Benefits
WESCO International, Inc. - 2018 Proxy Statement | | 31 |
Compensation Discussion and Analysis |
Perquisites
Clawback Provisions
OTHER COMPENSATION AND EMPLOYMENT ARRANGEMENTS
Stock Ownership Guidelines and Holding Periods for Executive Officers
Chief Executive Officer Compensation
Employment, Severance, Change in Control or Other Arrangements
32 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Discussion and Analysis |
Compensation Practices and Risk
WESCO International, Inc. - 2018 Proxy Statement | | 33 |
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, |
2017 | $ | 1,000,000 | $ | 2,300,161 | $ | 2,395,687 | $ | 1,156,639 | $ | 110,268 | $ | 6,962,755 | ||||||||||||||||||||||
Chairman, President and CEO |
2016 | $ | 974,519 | (5) | $ | 2,250,005 | $ | 2,395,053 | $ | 1,300,000 | $ | 91,912 | $ | 7,011,489 | |||||||||||||||||||||
2015 | $ | 950,000 | (5) | $ | 2,100,033 | $ | 2,073,514 | (6) | $ | 800,000 | $ | 90,558 | $ | 6,014,105 | |||||||||||||||||||||
David S. Schulz, |
2017 | $ | 536,250 | $ | 809,549 | $ | 676,691 | $ | 350,000 | $ | 54,108 | $ | 2,426,598 | ||||||||||||||||||||||
SVP and CFO |
2016 | $ | 109,375 | | $ | 999,983 | $ | 100,000 | $ | 9,532 | $ | 1,218,890 | |||||||||||||||||||||||
Diane E. Lazzaris, |
2017 | $ | 457,500 | $ | 325,007 | $ | 338,533 | $ | 235,000 | $ | 28,078 | $ | 1,384,118 | ||||||||||||||||||||||
SVP and GC |
2016 | $ | 435,096 | (5) | $ | 324,993 | $ | 345,963 | $ | 265,000 | $ | 25,684 | $ | 1,396,736 | |||||||||||||||||||||
2015 | $ | 410,577 | (5) | $ | 287,520 | $ | 283,858 | (6) | $ | 188,000 | $ | 26,773 | $ | 1,196,728 | |||||||||||||||||||||
Robert Minicozzi, |
2017 | $ | 336,250 | $ | 243,815 | $ | 156,277 | $ | 150,000 | $ | 21,728 | $ | 908,070 | ||||||||||||||||||||||
VP and CIO |
|||||||||||||||||||||||||||||||||||
Kimberly G. Windrow, |
2017 | $ | 417,500 | $ | 287,484 | $ | 299,499 | $ | 215,000 | $ | 34,346 | $ | 1,253,829 | ||||||||||||||||||||||
SVP and CHRO |
2016 | $ | 399,615 | (5) | $ | 287,513 | $ | 306,020 | $ | 250,000 | $ | 32,261 | $ | 1,275,409 | |||||||||||||||||||||
2015 | $ | 380,865 | (5) | $ | 269,981 | $ | 266,622 | (6) | $ | 175,000 | $ | 30,189 | $ | 1,122,657 |
(1) | Represents the grant date fair value of SAR awards computed in accordance with FASB ASC Topic 718. These equity awards are subject to time-based vesting criteria. The assumptions used in calculating these amounts are set forth on pages 61 to 63 of our financial statements for the year ended December 31, 2017 Annual Report on Form 10-K. All the equity awards were granted under the WESCO International, Inc. 1999 Long-Term Incentive Plan, as amended and approved by our Board and stockholders. |
(2) | Represents aggregate grant date fair value of RSUs and performance share awards in accordance with FASB ASC Topic 718, which, with respect to performance shares, is the value based on the target level of achievement (determined to be the probable outcome of the performance conditions at the time of grant). In the event the maximum performance conditions are met, the maximum value of the performance shares would be: for Mr. Engel $2,951,402; Mr. Schulz $833,349; Ms. Lazzaris $417,119; Mr. Minicozzi $192,469; and Ms. Windrow $369,002. RSUs are subject to time-based vesting criteria and performance shares are subject to achievement of certain performance targets over a three-year performance period. The assumptions used in calculating these amounts are set forth on pages 61 to 63 of our financial statements for the year ended December 31, 2017 in our Annual Report on Form 10-K. All the equity awards were granted under the WESCO International, Inc. 1999 Long-Term Incentive Plan, as amended and approved by our Board and stockholders. |
(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 36 for additional information. |
(5) | Amounts shown are less than the individuals stated base salary because during 2015 and 2016 the Company had a cost-savings program of mandatory unpaid leaves of absence in which individuals took a weeks leave of absence. Individuals also had the option to take an additional week of unpaid leave on a voluntary basis. |
(6) | Performance shares awarded in 2015 for the three-year performance period ended December 31, 2017 were forfeited, which represents approximately 60% of this amount. |
WESCO International, Inc. - 2018 Proxy Statement | | 35 |
Compensation Tables |
The following table describes each component of the All Other Compensation column for 2017 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 |
2017 | $ | 29,268 | $ | 12,000 | | $ | 69,000 | $ | 110,268 | ||||||||||||||||||||
Schulz |
2017 | $ | 34,008 | $ | 12,000 | | $ | 8,100 | $ | 54,108 | ||||||||||||||||||||
Lazzaris |
2017 | $ | 140 | $ | 12,000 | | $ | 15,938 | $ | 28,078 | ||||||||||||||||||||
Minicozzi |
2017 | $ | 140 | $ | 11,500 | | $ | 10,088 | $ | 21,728 | ||||||||||||||||||||
Windrow |
2017 | $ | 2,321 | $ | 12,000 | | $ | 20,025 | $ | 34,346 |
(1) | This column reports the total amount of other benefits provided, none of which exceeded $10,000 unless otherwise noted. The amount for Mr. Engel includes club dues of $14,633 and imputed income for spousal travel. The amount for Mr. Schulz includes relocation expenses of $29,786. |
(2) | Represents a monthly automobile allowance. |
(3) | The Company does not provide tax gross-ups on executive-only perquisites. |
(4) | The retirement savings program includes both the Retirement Savings Plan, a qualified 401(k) plan, and the Deferred Compensation Plan, a non-qualified deferred compensation plan for certain management and highly compensated employees. Company contributions to the retirement savings program include matching contributions and discretionary contributions. The table below breaks down the Company contribution by plan and contribution type. Company matching contributions are capped at 50% of participant deferrals, not to exceed 3% of eligible compensation. Matching contributions are made to the 401(k) plan up to maximum limits established by the IRS, with any excess contributed to the deferred compensation plan. Similarly, discretionary contributions are made to the 401(k) plan up to maximum limits established by the IRS, with the excess contributed to the deferred compensation plan. |
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 |
2017 | $ | 8,100 | $ | 60,900 | | | $ | 69,000 | |||||||||||||||||||||
Schulz |
2017 | $ | 8,100 | | | | $ | 8,100 | ||||||||||||||||||||||
Lazzaris |
2017 | $ | 8,100 | $ | 7,838 | | | $ | 15,938 | |||||||||||||||||||||
Minicozzi |
2017 | $ | 8,100 | $ | 1,988 | | | $ | 10,088 | |||||||||||||||||||||
Windrow |
2017 | $ | 8,100 | $ | 11,925 | | | $ | 20,025 |
36 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Tables |
Grants of Plan-Based Awards for 2017
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 |
2/16/17 | 9,630 | 19,260 | 38,520 | 111,382 | 12,840 | $ | 71.65 | (6) | $ | 4,695,848 | |||||||||||||||||||||||||||||||||
$ | 1,350,000 | $ | 2,700,000 | |||||||||||||||||||||||||||||||||||||||||
Schulz |
1/31/17 | 5,000 | $ | 70.70 | (7) | $ | 101,850 | |||||||||||||||||||||||||||||||||||||
2/16/17 | 2,460 | 4,920 | 9,840 | 28,449 | 3,280 | $ | 71.65 | (6) | $ | 1,199,486 | ||||||||||||||||||||||||||||||||||
$ | 402,188 | $ | 804,375 | |||||||||||||||||||||||||||||||||||||||||
2/21/17 | 257 | 514 | 1,028 | 2,979 | 343 | $ | 72.90 | (8) | $ | 127,224 | ||||||||||||||||||||||||||||||||||
8/11/17 | 4,000 | $ | 51.10 | (9) | $ | 57,680 | ||||||||||||||||||||||||||||||||||||||
Lazzaris |
2/16/17 | 1,361 | 2,722 | 5,444 | 15,738 | 1,814 | $ | 71.65 | (6) | $ | 663,540 | |||||||||||||||||||||||||||||||||
$ | 274,500 | $ | 549,000 | |||||||||||||||||||||||||||||||||||||||||
Minicozzi |
2/14/17 | 4.535 | $ | 71.65 | (10) | $ | 93,846 | |||||||||||||||||||||||||||||||||||||
2/16/17 | 628 | 1,256 | 2,512 | 7,262 | 838 | $ | 71.65 | (6) | $ | 306,246 | ||||||||||||||||||||||||||||||||||
$ | 162,500 | $ | 325,000 | |||||||||||||||||||||||||||||||||||||||||
Windrow |
2/16/17 | 1,204 | 2,408 | 4,816 | 13,921 | 1,605 | $ | 71.65 | (6) | $ | 586,983 | |||||||||||||||||||||||||||||||||
$ | 250,500 | $ | 501,000 |
(1) | Represents possible annual incentive cash awards that could have been earned in 2017 at target and maximum levels of performance. Amounts actually received by the NEOs under the annual incentive plans for 2017 performance are set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 35. For further information about the annual incentive plans, please see the related discussion beginning on page 26. |
(2) | Represents possible performance share awards granted in 2017 that could be earned at threshold, target, and maximum levels of performance over a three-year performance period. Each performance share award is based on two equally-weighted performance measures during the three-year performance period beginning January 1, 2017 and ending December 31, 2019, as discussed on pages 28 to 30. |
(3) | Represents the number of SARs granted in 2017 to the NEOs. These SARs will time vest and become exercisable ratably in three equal increments annually on the anniversary date. |
(4) | Represents the number of RSUs granted in 2017 to the NEOs. The RSUs will cliff vest on the anniversary date in 2020. |
(5) | Represents the full grant date fair value of SARs, RSUs and performance shares under ASC Topic 718 granted to the NEOs. With respect to awards subject to performance-based vesting conditions, grant date fair value is based on an estimate of the probable outcome at the time of grant which reflects achievement at target performance. For additional information on the valuation assumptions, refer to Note 12 of the Companys financial statements in the Annual Report on Form 10-K for the year ended December 31, 2017. |
(6) | Represents the exercise price for the SARs and the grant date per share value of RSUs granted, which was the closing price of our Company stock on February 16, 2017, in accordance with Committee action on the grant date indicated. |
(7) | Represents the exercise price for the SARs granted, which was the closing price of our Company stock on January 31, 2017. In accordance with the provisions set forth on Mr. Schulzs term sheet, which provide for grants of SARs equal to the number of shares purchased for long-term investment by Mr. Schulz during the first twelve months of his employment, subject to the limitations set forth in his term sheet. |
(8) | Represents the exercise price for the SARs and the grant date per share value of RSUs granted, which was the closing price of our Company stock on February 21, 2017, in accordance with Committee action on the grant date indicated. |
(9) | Represents the exercise price for the SARs granted, which was the closing price of our Company stock on August 11, 2017. In accordance with the provisions set forth on Mr. Schulzs term sheet, which provide for grants of SARs equal to the number of shares purchased for long-term investment by Mr. Schulz during the first twelve months of his employment, subject to the limitations set forth in his term sheet. |
(10) | Represents the exercise price for the SARs granted, which was the closing price of our Company stock on February 14, 2017 grant date. In accordance with the provisions set forth on Mr. Minicozzis term sheet, which provide for grants of SARs equal to the number of shares purchased for long-term investment by Mr. Minicozzi during the first twelve months of his employment, subject to the limitations set forth in his term sheet. |
WESCO International, Inc. - 2018 Proxy Statement | | 37 |
Compensation Tables |
Outstanding Equity Awards at Year-End
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 Value of Shares of Stock That Have Not |
Equity Incentive Number of Shares, Units or Other Rights That |
Equity Not Vested |
|||||||||||||||||||||||||||
Engel |
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 | 57,453 | | $ | 72.15 | 2/21/2023 | | | | | |||||||||||||||||||||||||||
2/18/2014 | 63,601 | | $ | 85.35 | 2/18/2024 | | | | | |||||||||||||||||||||||||||
2/17/2015 | 64,577 | 32,288 | $ | 69.54 | 2/17/2025 | 12,078 | $ | 823,116 | | | ||||||||||||||||||||||||||
2/16/2016 | 58,412 | 116,822 | $ | 42.44 | 2/16/2026 | 21,206 | $ | 1,445,189 | 31,810 | $ | 2,167,852 | |||||||||||||||||||||||||
2/16/2017 | | 111,382 | $ | 71.65 | 2/16/2027 | 12,840 | $ | 875,046 | 19,260 | $ | 1,312,569 | |||||||||||||||||||||||||
Total: |
502,359 | 260,492 | 46,124 | $ | 3,143,351 | 51,070 | $ | 3,480,421 | ||||||||||||||||||||||||||||
Schulz |
10/19/2016 | | | $ | 58.65 | 10/19/2026 | 17,050 | $ | 1,161,958 | | | |||||||||||||||||||||||||
1/31/2017 | | 5,000 | $ | 70.70 | 1/31/2027 | | | | | |||||||||||||||||||||||||||
2/16/2017 | | 28,449 | $ | 71.65 | 2/16/2027 | 3,280 | $ | 223,532 | 4,920 | $ | 335,298 | |||||||||||||||||||||||||
2/21/2017 | | 2,979 | $ | 72.90 | 2/21/2027 | 343 | $ | 23,375 | 514 | $ | 35,029 | |||||||||||||||||||||||||
8/11/2017 | | 4,000 | $ | 51.10 | 8/11/2027 | | | | | |||||||||||||||||||||||||||
| 40,428 | 20,673 | $ | 1,408,865 | 5,434 | $ | 370,327 | |||||||||||||||||||||||||||||
Lazzaris |
5/14/2010 | 4,000 | | $ | 37.90 | 5/14/2020 | | | | | ||||||||||||||||||||||||||
2/16/2011 | 9,665 | | $ | 60.05 | 2/16/2021 | | | | | |||||||||||||||||||||||||||
2/16/2012 | 6,700 | | $ | 64.33 | 2/16/2022 | | | | | |||||||||||||||||||||||||||
2/21/2013 | 7,580 | | $ | 72.15 | 2/21/2023 | | | | | |||||||||||||||||||||||||||
2/18/2014 | 8,560 | | $ | 85.35 | 2/18/2024 | | | | | |||||||||||||||||||||||||||
2/17/2015 | 8,841 | 4,421 | $ | 69.54 | 2/17/2025 | 1,654 | $ | 112,720 | | | ||||||||||||||||||||||||||
2/16/2016 | 8,437 | 16,874 | $ | 42.44 | 2/16/2026 | 3,062 | $ | 208,675 | 4,596 | $ | 313,217 | |||||||||||||||||||||||||
2/16/2017 | | 15,738 | $ | 71.65 | 2/16/2027 | 1,814 | $ | 123,624 | 2,722 | $ | 185,504 | |||||||||||||||||||||||||
Total: |
53,783 | 37,033 | 6,530 | $ | 445,019 | 7,318 | $ | 498,721 | ||||||||||||||||||||||||||||
Minicozzi |
2/16/2016 | 2,921 | 5,840 | $ | 42.44 | 2/16/2026 | 1,059 | $ | 72,171 | 1,592 | $ | 108,495 | ||||||||||||||||||||||||
2/16/2016 | | | $ | 42.44 | 2/16/2026 | 3,534 | $ | 240,842 | | | ||||||||||||||||||||||||||
2/14/2017 | | 4,535 | $ | 71.65 | 2/14/2027 | | | | | |||||||||||||||||||||||||||
2/16/2017 | | 7,262 | $ | 71.65 | 2/16/2027 | 838 | $ | 57,110 | 1,256 | $ | 85,596 | |||||||||||||||||||||||||
Total: |
2,921 | 17,637 | 5,431 | $ | 370,123 | 2,848 | $ | 194,091 | ||||||||||||||||||||||||||||
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 | 7,180 | | $ | 72.15 | 2/21/2023 | | | | | |||||||||||||||||||||||||||
2/18/2014 | 8,154 | | $ | 85.35 | 2/18/2024 | | | | | |||||||||||||||||||||||||||
2/17/2015 | 8,302 | 4,151 | $ | 69.54 | 2/17/2025 | 1,553 | $ | 105,837 | | | ||||||||||||||||||||||||||
2/16/2016 | 7,464 | 14,928 | $ | 42.44 | 2/16/2026 | 2,710 | $ | 184,687 | 4,064 | $ | 276,962 | |||||||||||||||||||||||||
2/16/2017 | | 13,921 | $ | 71.65 | 2/16/2027 | 1,605 | $ | 109,381 | 2,408 | $ | 164,105 | |||||||||||||||||||||||||
Total: |
59,385 | 33,000 | 5,868 | $ | 399,905 | 6,472 | $ | 441,067 |
(1) | The amounts included in the table above reflect target payouts for performance shares as the current results for 2015 and 2016 are below target. The final amounts will be interpolated based on actual final results. |
38 | | WESCO International, Inc. - 2018 Proxy Statement |
Compensation Tables |
Equity Awards Vesting Schedule
Grant Date | Vesting Schedule | |
2/17/2015 | SARs: Time-based vesting in 1/3 increments on February 17, 2016; February 17, 2017; and February 17, 2018.
RSUs: Cliff vest on February 17, 2018.
Performance shares: based on two equally-weighted performance measures during the three-year performance period ending December 31, 2017, as discussed on page 28. The award vests in the form of a number of shares of the Companys common stock. None of these shares vested. | |
2/16/2016 | SARs: Time-based vesting in 1/3 increments on February 16, 2017; February 16, 2018; and February 16, 2019.
RSUs: Cliff vest on February 16, 2019.
Performance shares: based on two equally-weighted performance measures during the three-year performance period ending December 31, 2018, as discussed on page 28. The award vests in the form of a number of shares of the Companys common stock. | |
10/19/2016 | RSUs: Cliff vest on October 19, 2019. | |
1/31/2017 | SARs: Time-based vesting in 1/3 increments on January 31, 2018; January 31, 2019; and January 31, 2020. | |
2/14/2017 | SARs: Time-based vesting in 1/3 increments on February 14, 2018; February 14, 2019; and February 14, 2020. | |
2/16/2017 | SARs: Time-based vesting in 1/3 increments on February 16, 2018; February 16, 2019; and February 16, 2020.
RSUs: Cliff vest on February 16, 2020.
Performance shares: based on two equally-weighted performance measures during the three-year performance period ending December 31, 2019, as discussed on page 28. The award vests in the form of a number of shares of the Companys common stock. | |
2/21/2017 | SARs: Time-based vesting in 1/3 increments on February 21, 2018; February 21, 2019; and February 21, 2020.
RSUs: Cliff vest on February 21, 2020.
Performance shares: based on two equally-weighted performance measures during the three-year performance period ending December 31, 2019, as discussed on page 28. The award vests in the form of a number of shares of the Companys common stock. | |
8/11/2017 | SARs: Time-based vesting in 1/3 increments on August 11, 2018; August 11, 2019; and August 11, 2020. |
Under the generally applicable terms of the Companys 1999 Long-Term Incentive Plan, amended and approved by our Board and stockholders and restated effective May 31, 2017, SARs and RSUs would vest upon a Change in Control, as defined in the Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors. Under the general terms of the Companys Performance share awards, performance shares would vest at target upon a Change in Control.
Option Exercises and Stock Vested
Option Awards | Stock Awards | |||||||||||||||
Name |
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise |
Number of Shares (#)(3) |
Value Realized on Vesting ($) |
||||||||||||
Engel |
270,673 | $ | 9,590,757 | 9,139 | 658,465 | |||||||||||
Schulz |
| | | | ||||||||||||
Lazzaris |
| | 1,230 | 88,622 | ||||||||||||
Minicozzi |
| | | | ||||||||||||
Windrow |
| | 1,171 | 84,371 |
(1) | Computed by multiplying the number of shares of our Common Stock acquired upon exercise by the difference between the closing price of our common stock on the date of exercise and the exercise price of the option or SARs. |
(2) | All amounts in this column are before any applicable taxes. |
(3) | Reflects RSUs that vested on February 18, 2017. |
WESCO International, Inc. - 2018 Proxy Statement | | 39 |
Compensation Tables |
Nonqualified Deferred Compensation
The table below provides information on the nonqualified deferred compensation of the NEOs in 2017.
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 |
2017 | $ | 138,000 | $ | 60,900 | $ | 422,051 | | $ | 2,970,289 | ||||||||||||||
Schulz |
2017 | | | | | | ||||||||||||||||||
Lazzaris |
2017 | $ | 21,675 | $ | 7,838 | $ | 31,785 | | $ | 217,800 | ||||||||||||||
Minicozzi |
2017 | $ | 23,538 | $ | 1,988 | $ | 255 | | $ | 25,780 | ||||||||||||||
Windrow |
2017 | $ | 40,050 | $ | 11,925 | $ | 56,413 | | $ | 383,233 |
(1) | Reflects participation by the NEOs in the Deferred Compensation Plan, including deferral of portions of both base salary and incentive compensation. The NEOs cannot withdraw any amounts from their deferred compensation balances until termination, retirement, death or disability with the exception that the Compensation Committee may approve an amount (hardship withdrawal) necessary to meet unforeseen needs in the event of an emergency. |
(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 table on page 35. |
(3) | Reflects investment returns or earnings (losses) calculated by applying the investment return rate at the valuation date to the average balance of the participants 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) | Based upon years of service to the Company, Mr. Engel and Messes. Lazzaris and Windrow are each fully vested in the aggregate balance of their respective accounts at last year-end. Mr. Minicozzi is 25% vested in the matching portion of his account and 100% vested in the executive contribution at last year end. Mr. Schulz did not participate in the Deferred Compensation Plan. |
40 | | WESCO International, Inc. - 2018 Proxy Statement |
Potential Payments Upon Termination |
POTENTIAL PAYMENTS UPON TERMINATION: MR. ENGEL
Each of the following potential scenarios represents circumstances under which Mr. Engels 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, 2017. 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 Companys Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of a sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
Good Reason means (a) a reduction in Mr. Engels 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. Engels primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) any material reduction in Mr. Engels 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) | ||||||||||||
Compensation: |
||||||||||||||||
Base Salary and Incentive |
$ | 5,856,639 | $ | 3,350,000 | $ | 1,156,639 | | |||||||||
Accelerated Options & SARs(5) |
$ | 3,003,494 | $ | 3,003,494 | $ | 3,003,494 | $ | 3,003,494 | ||||||||
Accelerated RSUs(6) |
$ | 3,143,351 | $ | 3,143,351 | $ | 3,143,351 | $ | 3,143,351 | ||||||||
Accelerated Performance Shares(7) |
$ | 3,480,421 | | $ | 3,480,421 | $ | 3,480,421 | |||||||||
Benefits and Perquisites: |
||||||||||||||||
Medical Benefits |
$ | 20,605 | $ | 20,605 | | | ||||||||||
280G Tax Gross-Up |
| | | | ||||||||||||
Total: |
$ | 15,504,510 | $ | 9,517,450 | $ | 10,783,905 | $ | 9,627,266 |
(1) | Termination after Change in Control |
Mr. Engels Change in Control benefits are double-triggered (other than equity awards which vest on a Change in Control), meaning that he will receive these payments only if (i) there is a Change in Control and (ii) Mr. Engels 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 executives annual target bonus opportunity. |
| Full vesting of outstanding stock options, SARs, and RSUs. |
| Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
WESCO International, Inc. - 2018 Proxy Statement | | 41 |
Potential Payments Upon Termination |
(3) | Death |
| Any accrued and earned but unpaid bonus. |
| Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target. |
(4) | Disability |
| Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target. |
(5) | The closing price of WESCO common stock on December 29, 2017 was $68.15. The amount shown is the excess, if any, of the December 29, 2017 closing price over the exercise price multiplied by the number of SARs. |
(6) | Represents the closing stock price on December 29, 2017 multiplied by the number of RSUs. |
(7) | Represents the closing stock price on December 29, 2017 multiplied by the number of performance shares at target. |
42 | | WESCO International, Inc. - 2018 Proxy Statement |
Potential Payments Upon Termination |
POTENTIAL PAYMENTS UPON TERMINATION: MR. SCHULZ
Each of the following potential scenarios represents circumstances under which Mr. Schulzs employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Schulz in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2017. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Mr. Schulz upon separation from the Company is governed by a term sheet dated October 6, 2016. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
Cause means (a) engaging in a felony or engaging in conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers or stockholders; (b) inability to meet the expectations of employees job responsibilities or failure to timely and adequately perform employees 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 Companys Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of 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. Schulzs 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 without Mr. Schulzs consent; or (c) any material reduction in Mr. Schulzs authority, duties or responsibilities without his consent.
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 |
$ | 890,000 | $890,000 | |||||
Accelerated SARs(3) |
$ | 68,200 | $ 68,200 | |||||
Restricted Stock Units(4) |
$ | 1,408,865 | | |||||
Performance Shares(5) |
$ | 370,327 | | |||||
Benefits and Perquisites: |
||||||||
Medical Benefits |
$ | 10,010 | $ 10,010 | |||||
Total: |
$ | 2,747,402 | $968,210 |
(1) | Termination After Change in Control |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination or Termination by the Company Upon or Within Two Years After a Change of Control of the Company |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(3) | The closing price of WESCO common stock on December 29, 2017 was $68.15. The amount shown is the excess, if any, of the December 29, 2017 closing price over the exercise price multiplied by the number of SARs. |
(4) | Represents the closing stock price on December 29, 2017 multiplied by the number of RSUs. |
(5) | Represents the closing stock price on December 29, 2017 multiplied by the number of performance shares at target. |
WESCO International, Inc. - 2018 Proxy Statement | | 43 |
Potential Payments Upon Termination |
POTENTIAL PAYMENTS UPON TERMINATION: MS. LAZZARIS
Each of the following potential scenarios represents circumstances under which Ms. Lazzaris employment with the Company could potentially terminate. A description of the compensation benefits due Ms. Lazzaris in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2017. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Ms. Lazzaris upon separation from the Company is governed by a term sheet dated January 15, 2010. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
Cause means (a) engaging in a felony or engaging in conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers or stockholders; (b) inability to meet the expectations of employees job responsibilities or failure to timely and adequately perform employees 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 Companys Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of a sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
Good Reason means (a) a reduction in 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 without Ms. Lazzaris consent; or (c) any material reduction in Ms. Lazzaris offices, titles, authority, duties or responsibilities without her consent.
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 |
$ | 695,000 | $ | 695,000 | ||||
Accelerated SARs(3) |
$ | 433,831 | | |||||
Restricted Stock Units(4) |
$ | 445,019 | | |||||
Performance Shares(5) |
$ | 498,721 | | |||||
Benefits and Perquisites: |
||||||||
Medical Benefits |
$ | 10,303 | $ | 10,303 | ||||
Total: |
$ | 2,082,874 | $ | 705,303 |
(1) | Termination After Change in Control |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination or Termination Within One Year Following Change of Control of the Company (Other than for Cause) |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(3) | The closing price of WESCO common stock on December 29, 2017 was $68.15. The amount shown is the excess, if any, of the December 29, 2017 closing price over the exercise price multiplied by the number of SARs. |
(4) | Represents the closing stock price on December 29, 2017 multiplied by the number of RSUs. |
(5) | Represents the closing stock price on December 29, 2017 multiplied by the number of performance shares at target. |
44 | | WESCO International, Inc. - 2018 Proxy Statement |
Potential Payments Upon Termination |
POTENTIAL PAYMENTS UPON TERMINATION: MR. MINICOZZI
Each of the following potential scenarios represents circumstances under which Mr. Minicozzis employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Minicozzi in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2017. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Mr. Minicozzi upon separation from the Company is governed by a term sheet dated December 4, 2015. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
Cause means (a) engaging in a felony or engaging in conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers or stockholders; (b) inability to meet the expectations of employees job responsibilities or failure to timely and adequately perform employees 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 Companys Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of a sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
Good Reason means (a) a reduction in Mr. Minicozzis 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 without Mr. Minicozzis consent; or (c) any material reduction in Mr. Minicozzis offices, titles, authority, duties or responsibilities without his consent.
Executive Benefits and Payments Upon Termination | Termination After Change in Control(1) |
Involuntary Not for Cause or Good Reason Termination(2) |
||||||
Compensation: |
||||||||
Base Salary |
$ | 340,000 | $ | 340,000 | ||||
Accelerated SARs(3) |
$ | 150,146 | | |||||
Restricted Stock Units(4) |
$ | 370,123 | | |||||
Performance Shares(5) |
$ | 194,091 | | |||||
Benefits and Perquisites: |
||||||||
Medical Benefits |
| | ||||||
Total: |
$ | 1,054,360 | $ | 340,000 |
(1) | Termination After Change in Control |
| Payment equal to one-years base salary. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination |
| Payment equal to one-years base salary. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
(3) | The closing price of WESCO common stock on December 29, 2017 was $68.15. The amount shown is the excess, if any, of the December 29, 2017 closing price over the exercise price multiplied by the number of SARs. |
(4) | Represents the closing stock price on December 29, 2017 multiplied by the number of RSUs. |
(5) | Represents the closing stock price on December 29, 2017 multiplied by the number of performance shares at target. |
WESCO International, Inc. - 2018 Proxy Statement | | 45 |
Potential Payments Upon Termination |
POTENTIAL PAYMENTS UPON TERMINATION: MS. WINDROW
Each of the following potential scenarios represents circumstances under which Ms. Windrows employment with the Company could potentially terminate. A description of the compensation benefits due Ms. Windrow in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 2017. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Ms. Windrow upon separation from the Company is governed by a term sheet dated June 18, 2010. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
Cause means (a) engaging in a felony or engaging in conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers or stockholders; (b) inability to meet the expectations of employees job responsibilities or failure to timely and adequately perform employees 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 Companys Long-Term Incentive Plan, which means (a) the consummation of an acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) the consummation of a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the consummation of a sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
Good Reason means (a) a reduction in Ms. Windrows 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 without Ms. Windrows consent; or (c) any material reduction in Ms. Windrows offices, titles, authority, duties or responsibilities without her consent.
Executive Benefits and Payments Upon Termination | Termination After Change in Control(1) |
Involuntary Not for Cause or Good Reason Termination(2) |
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Compensation: |
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Base Salary and Incentive |
$ | 635,000 | $ | 635,000 | ||||
Accelerated SARs(3) |
$ | 383,799 | | |||||
Restricted Stock Units(4) |
$ | 399,905 | | |||||
Performance Shares(5) |
$ | 441,067 | | |||||
Benefits and Perquisites: |
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Medical Benefits |
$ | 3,378 | $ | 3,378 | ||||
Total: |
$ | 1,863,149 | $ | 638,378 |
(1) | Termination After Change in Control |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(3) | The closing price of WESCO common stock on December 29, 2017 was $68.15. The amount shown is the excess, if any, of the December 29, 2017 closing price over the exercise price multiplied by the number of SARs. |
(4) | Represents the closing stock price on December 29, 2017 multiplied by the number of RSUs. |
(5) | Represents the closing stock price on December 29, 2017 multiplied by the number of performance shares at target. |
46 | | WESCO International, Inc. - 2018 Proxy Statement |
Director Compensation |
DIRECTOR COMPENSATION FOR 2017
Name |
Fees Earned or Paid in |
Stock Awards(2)(3) |
Other | Total | ||||||||||||
Beach Lin | $ | 104,000 | $ | 121,017 | | $ | 225,017 | |||||||||
Espe | $ | 99,000 | $ | 121,017 | | $ | 220,017 | |||||||||
Griffin | $ | 94,000 | $ | 121,017 | | $ | 215,017 | |||||||||
Morgan | $ | 109,000 | $ | 121,017 | | $ | 230,017 | |||||||||
OBrien(4) | $ | 24,750 | $ | 121,017 | | $ | 24,750 | |||||||||
Raymund | $ | 114,000 | $ | 121,017 | | $ | 235,017 | |||||||||
Singleton | $ | 119,000 | $ | 121,017 | | $ | 240,017 | |||||||||
Utter | $ | 99,000 | $ | 121,017 | | $ | 220,017 |
(1) | Represents the amount of the Directors annual retainer, for which Mr. Espe, Mr. OBrien, and Mr. Singleton received $49,500, $12,375, and $59,500, respectively, in cash during 2017. The Directors Fees for Messrs. Griffin and Raymund and Ms. Utter were deferred into the Companys Deferred Compensation Plan for Non-Employee Directors. |
(2) | Amounts represent the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718, of RSUs. On February 16, 2017, each Director was awarded 1,689 RSUs with a grant date fair value of $71.65 per RSU, which was the closing price of our Common Stock on February 16, 2017. These RSU awards are subject to time-based vesting criteria. The assumptions used in calculating these amounts are set forth in Note 12 to our financial statements for the year ended December 31, 2017, which is located on pages 61 to 63 of our Annual Report on Form 10-K. |
(3) | All the RSU awards were granted under the WESCO International, Inc. 1999 Long-Term Incentive Plan, as amended and approved by our Board and stockholders. See the Director Outstanding Equity Awards at the Year-End table below for more information regarding the equity awards held by Directors as of December 31, 2017. |
(4) | Mr. OBrien served as a Director from January 1, 2016 until his resignation from the Board effective March 31, 2017. His 2017 RSU grant was forfeited. |
DIRECTOR OUTSTANDING EQUITY AWARDS AT YEAR-END
Name | Number of Securities Underlying Unexercised Equity Awards Exercisable |
Number of Shares of Stock That |
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Beach Lin | 10,708 | 5,837 | ||||||
Espe | | 2,087 | ||||||
Griffin | | 5,837 | ||||||
Morgan | 16,742 | 5,837 | ||||||
OBrien(1) | | | ||||||
Raymund | 16,742 | 5,837 | ||||||
Singleton | 4,642 | 5,837 | ||||||
Utter | 16,742 | 5,837 |
(1) | Mr. OBrien resigned from the Board effective March 31, 2017. |
WESCO International, Inc. - 2018 Proxy Statement | | 49 |
Item 3 Ratify The Appointment of Independent Registered Public Accounting Firm |
ITEM 3 RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2018.
50 | | WESCO International, Inc. - 2018 Proxy Statement |
Item 3 Ratify The Appointment of Independent Registered Public Accounting Firm |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Appointment of Independent Registered Public Accounting Firm
Independent Registered Public Accounting Firm Fees and Services
Audit Committee Pre-Approval Policies and Procedures
WESCO International, Inc. - 2018 Proxy Statement | | 51 |
Item 3 Ratify The Appointment of Independent Registered Public Accounting Firm |
52 | | WESCO International, Inc. - 2018 Proxy Statement |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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. | |||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following: | ||||||||||||||||||||||||||||
1. Elect eight Directors for a one-year term expiring in 2019. |
☐ | ☐ | ☐ |
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Nominees
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01 Sandra Beach Lin 02 John J. Engel 03 Matthew J. Espe 04 Bobby J. Griffin 05 John K. Morgan 06 Steven A. Raymund 07 James L. Singleton 08 Lynn M. Utter |
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The Board of Directors recommends you vote FOR proposals 2. and 3. |
For | Against | Abstain | |||||||||||||||||||||||||
2. Approve, on an advisory basis, the compensation of the Companys named executive officers. |
☐ |
☐ |
☐ |
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3. Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2018. |
☐ |
☐ |
☐ |
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NOTE: Such other business as may properly come before the meeting or any adjournment thereof.
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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. |
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Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and the Annual Report are available at www.proxyvote.com
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WESCO INTERNATIONAL, INC. This proxy is solicited by the Board of Directors. Annual Meeting of Stockholders May 31, 2018 at 2:00 P.M., Eastern Time
The undersigned hereby appoints David S. Schulz, Diane E. Lazzaris, and Samantha L. ODonoghue, and each of them, as Proxies with full power of substitution, to represent the undersigned and to vote all the shares of Common Stock of WESCO International, Inc., which the undersigned would be entitled to vote if personally present and voting at the Annual Meeting of Stockholders to be held at the Hyatt Regency Pittsburgh International Airport at 1111 Airport Boulevard, Pittsburgh, PA 15231 on May 31, 2018, at 2:00 p.m., Eastern Daylight Time, or any adjournment or postponement thereof, upon all matters properly coming before the meeting.
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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