PROXY
STATEMENT TABLE OF CONTENTS
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WESCO International, Inc. - 2016 Proxy Statement
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INTERNET ACCESS TO THIS PROXY STATEMENT
IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 26, 2016
The 2016 Proxy Statement and 2015 Annual Report of WESCO International, Inc. are available to review at:
www.proxydocs.com/wcc
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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 8, 2016, 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.
QUESTIONS AND ANSWERS
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1.
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Who is entitled to vote at the Annual Meeting?
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If you held shares of WESCO
International, Inc. (“WESCO” or the “Company”) Common Stock at the close of business on March 31, 2016, you may vote at the Annual Meeting. Each share is entitled to one vote on each matter presented for consideration and
action at the Annual Meeting.
In order to vote, you must either designate a proxy to vote on your behalf, or attend the Annual Meeting and vote your shares in
person. The Board of Directors requests your proxy so that your shares will count toward a quorum and be voted at the meeting.
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2.
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What matters are scheduled to be presented?
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Proposal 1—Elect five Director
nominees for a one-year term expiring at the 2017 Annual Meeting of Stockholders.
Proposal 2—Approve, on an advisory basis, the Company’s executive
compensation.
Proposal 3—Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending
December 31, 2016.
Action may be taken at the Annual Meeting with respect to any other business that properly comes before the meeting, and the proxy holders
have the right to and will vote in accordance with their judgment on any additional business.
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How do I cast my vote?
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There are four different ways you may cast your vote. You may
vote by:
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the Internet, at the address provided on the Notice;
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telephone, using the toll-free number listed on the Notice;
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following the instructions on the Notice to request a paper copy of the proxy card and proxy materials and then marking, signing, dating and returning each proxy card in the postage-paid envelope provided; or
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attending the Annual Meeting and voting your shares in person.
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The deadline for voting by Internet or telephone is 11:59
p.m., E.D.T., on Wednesday, May 25, 2016.
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4.
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What if I don’t indicate my voting choices?
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If you return your signed proxy card
but do not mark the boxes showing how you wish to vote on any particular matter, your shares will be voted “FOR” the election of each of the Director nominees named in this Proxy Statement, “FOR” the approval, on an advisory
basis, of the Company’s executive compensation, and “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our Company’s independent registered public accounting firm for the year ending December 31,
2016.
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How do I revoke or change my vote?
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If you have returned a proxy via mail, telephone
or Internet, you may revoke it at any time before it is voted at the Annual Meeting by:
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notifying the Corporate Secretary at the Company’s headquarters office;
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sending another proxy dated later than your prior proxy either by Internet, telephone or mail; or
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attending the Annual Meeting and voting in person by ballot or by proxy.
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6.
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What does it mean if I receive more than one Notice?
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If your shares are registered
differently and are in more than one account (for example, some shares may be registered directly in your name and some may be held in the Company’s 401(k) Retirement Savings Plan), you may receive more than one Notice from the Company or a
broker, bank or other nominee account with respect to your shares held in “street name”.
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WESCO International, Inc. - 2016 Proxy Statement
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Please carefully follow the instructions on each Notice you receive and vote all of the proxy requests to ensure that all your shares are voted.
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May I attend and vote my shares in person at the Annual Meeting?
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Shares held
beneficially through a broker, bank or other nominee may not be voted in person at the Annual Meeting UNLESS you obtain a “Legal Proxy”. A “Legal Proxy” must be obtained from your broker, bank or other nominee that holds your
shares. Without a “Legal Proxy”, you will not be able to attend and vote those shares in person at the Annual Meeting at the Sheraton Pittsburgh Hotel at Station Square, located at 300 West Station Square Drive, Pittsburgh, Pennsylvania.
Shares registered directly in your name with our transfer agent, Computershare, may be voted in person at the Annual Meeting.
Directions to the Annual Meeting at the Sheraton Pittsburgh Hotel at Station Square, 300 West Station Square Drive, Pittsburgh, Pennsylvania, are available at
www.wesco.com
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8.
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Who will count the votes?
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Representatives of Broadridge Financial Solutions, Inc.
will tabulate the votes, and there will be a duly appointed inspector of election who will certify his or her examination of the list of
stockholders, the number of shares held and outstanding as of the record date, and the necessary quorum for transaction of the business for this meeting. These persons will count the votes at the
Annual Meeting.
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9.
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May I elect to receive a paper copy of proxy materials in the future?
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Stockholders
can elect to receive future WESCO Proxy Statements and Annual Reports via paper copies in the mail.
If you are a “stockholder of record” you can choose to
receive future Annual Reports and Proxy Statements via paper copy at no charge by writing to WESCO International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122, Attention: Corporate Secretary. If you hold your
WESCO stock in “street name” (such as through a broker, bank, or other nominee account), follow the information provided by your nominee for instructions on how to elect to receive paper copies of future Proxy Statements and Annual
Reports.
If you enroll to receive paper copies of WESCO’s future Annual Reports and Proxy Statements, your enrollment will remain in effect for all future
stockholders’ meetings unless you cancel the enrollment.
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WESCO International, Inc. - 2016 Proxy Statement
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PROXY SOLICITATION AND VOTING INFORMATION
Holders of our Common Stock at the close of business on the record date of March 31, 2016 may vote at our Annual
Meeting. On the record date,
42,200,377 shares of our Common Stock were outstanding. A list of stockholders entitled to vote will be available at the Annual Meeting at the Sheraton Pittsburgh Hotel at Station Square, located at 300 West
Station Square Drive, Pittsburgh, Pennsylvania, and during ordinary business hours for 10 days prior to the Annual Meeting at the Company’s principal executive offices. Any stockholder of record may examine the list for any legally valid
purpose.
The Board of Directors is soliciting your proxy to vote at our Annual Meeting of Stockholders, and at any adjournment or postponement of the meeting. In
addition to soliciting proxies by mail, telephone, and the Internet, our Board of Directors, without receiving additional compensation, may solicit in person. We have engaged Morrow & Co., LLC, 470 West Ave., Stamford, CT 06902 to assist us
in the solicitation of proxies, and we expect to pay Morrow & Co., LLC approximately $8,500 for these services, plus reimbursement of their expenses. Brokerage firms and other custodians, nominees, and fiduciaries will forward proxy
soliciting material to the beneficial owners of our Common Stock, held of record by them, and we will reimburse these brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in doing so. The cost
of this proxy solicitation will consist primarily of printing, legal fees, and postage and handling. We will pay the cost of this solicitation of proxies.
To conduct
the business of the Annual Meeting, we must have a quorum. The presence, in person or by proxy, of stockholders holding at least a majority of the shares of our Common Stock outstanding will constitute a quorum. Abstentions, broker non-votes and
votes withheld from Director nominees count as
shares present for purposes of determining a quorum. A broker non-vote occurs when a broker, bank or other nominee holder does not vote on a particular item because the nominee holder does not
have discretionary authority to vote on that item and has not received instructions from the beneficial owner of the shares. In the absence of voting instructions from the beneficial owner of the shares, nominee holders will not have discretionary
authority to vote the shares at the Annual Meeting in the election of Directors, or the approval, on an advisory basis, of the Company’s executive compensation, but will have discretionary authority to vote on the ratification of the
appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016. Broker non-votes will not affect the outcome of any of the matters scheduled to be voted upon at the Annual
Meeting and are not counted as shares voting with respect to any other matter on which the broker has not voted expressly. Proxies that are transmitted by nominee holders for beneficial owners will count toward a quorum and will be voted as
instructed by the nominee holder.
The election of Directors will be determined by a plurality of the votes cast. The Board has adopted a Director resignation policy
in the event a Director receives less than 50% of the votes for his or her re-election in an uncontested election. Only votes “FOR” or “WITHHELD” affect the outcome of the election of Directors. The ratification of the
appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016, and the approval, on an advisory basis, of our executive compensation will require affirmative votes by a
majority of the shares present, in person or by proxy, and entitled to vote and voting on the proposal at the Annual Meeting. Abstentions will not affect the outcome of any of the matters scheduled to be voted upon at the Annual Meeting.
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WESCO International, Inc. - 2016 Proxy Statement
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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 2017 Annual Meeting of Stockholders): Sandra Beach Lin, John J. Engel, James J. O’Brien, Steven A. Raymund, and Lynn M. Utter.
OUR BOARD UNANIMOUSLY RECOMMENDS A
VOTE “FOR”
EACH OF THE DIRECTOR NOMINEES.
BOARD OF
DIRECTORS
The Board, currently composed of nine directors as of the filing date of this proxy statement, is currently divided into two classes. Prior to
the 2014 Annual Meeting of Stockholders, each of the classes was elected to serve three-year terms which were staggered such that the classes were as equal in number as possible depending on the total number of directors at any time. At the 2014
Annual Meeting of Stockholders, upon the recommendation of and approval by the Board, our stockholders approved an amendment to the Company’s Restated Certificate of Incorporation to declassify the Board. Each Director elected after the 2014
Annual Meeting of Stockholders, whether to succeed a Director whose term has expired or to fill any vacancy, is elected for a one-year term expiring at the next annual meeting. Directors elected at the 2014 Annual Meeting of Stockholders or earlier
will serve the remainder of their respective terms before standing for re-election. Accordingly, our declassified board structure will be fully implemented at the 2017 Annual Meeting of Stockholders.
The current term of the Director Nominees expires this year, and their successors are to be elected at the Annual Meeting for a one-year term expiring in 2017, subject to
earlier retirement, resignation or removal. Robert J. Tarr, Jr., a current Class II Director, will not be standing for re-election to the Board in accordance with the Company’s Director retirement age policy. Mr. Tarr’s term will end
on May 26, 2016 at the Annual Meeting. The term of the Class III Directors does not expire until the Annual Meeting of Stockholders to be held in 2017.
Should all nominees be elected as indicated in the proposal above, the following is the complete list of individuals who will comprise our Board of Directors and Board
Committees immediately following the Annual Meeting.
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Name
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Age
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Director
Since
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Audit
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Compensation
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Executive
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Nominating
and
Governance
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Sandra Beach Lin
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2002
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Member
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Member
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Chair
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John J. Engel
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2008
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Member
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Bobby J. Griffin
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2014
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Member
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Member
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John K. Morgan
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2008
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Chair
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Member
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James J. O’Brien
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2016
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Member
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Member
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Steven A. Raymund
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2006
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Chair
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Member
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James L.
Singleton
(1)
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1998
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Member
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Chair
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Member
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Lynn M. Utter
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2006
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Member
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Member
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WESCO International, Inc. - 2016 Proxy Statement
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Election of Directors
NOMINEE DIRECTORS TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2017
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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.
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Qualifications:
Among Ms. Beach
Lin’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Beach Lin: has extensive experience as a senior executive in operational roles, including serving as a
Chief Executive Officer; has extensive experience managing global businesses in multiple industries; is experienced in various corporate governance matters and serves as a director of other public company boards; and has extensive experience with
LEAN/Six Sigma.
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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.
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Qualifications:
Among Mr. Engel’s
experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Engel is the Company’s Chairman and Chief Executive Officer, previously served as its Chief Operating Officer and
has extensive experience as a senior executive and operating leader in various global industries.
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James J. O’Brien
served as the Chairman of the Board and Chief Executive Officer of Ashland Inc., a
Fortune 500 company, from 2002 through December 2014, and previously was
Ashland’s President and Chief Operating Officer. Mr. O’Brien also served as the President of Valvoline from 1995 to 2001. Currently,
he is a director of Albemarle Corporation, Eastman Chemical Company and Humana Inc. Mr.
O’Brien serves
as a member of the Dean’s Advisory Council for the Fisher Graduate College of Business at The Ohio State University.
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Qualifications:
Among
Mr. O’Brien’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. O’Brien has considerable experience as a Chief Executive Officer of a Fortune 500
company, and he brings significant management experience and knowledge to the Board of Directors in the areas of finance, accounting, international business operations, risk oversight and corporate governance. He also brings significant experience
gained from service on the board of directors of other public companies.
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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. Since 1991, he has served as Tech Data’s 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 Children’s 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.
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Qualifications:
Among
Mr. Raymund’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Raymund has considerable experience as a Chief Executive Officer of a Fortune 500 company in a
global distribution business, has supply chain expertise, has broad experience as a public company board member in various industries, and is an audit committee financial expert.
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WESCO International, Inc. - 2016 Proxy Statement
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Election of Directors
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Lynn M. Utter
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 on a number of boards at The University of Texas and at the Stanford Graduate School of Business.
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Qualifications:
Among Ms. Utter’s
experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Utter has executive leadership experience in key operating roles, most recently as President and Chief Operating
Officer; has extensive experience as a senior executive in multiple industries and disciplines, including sales, manufacturing and distribution; has extensive experience in strategic planning as a Chief Strategy Officer and strategy consultant; and
has been awarded recognition in the business community as a woman whose outstanding achievements serve as a model of excellence.
Retiring
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Robert J. Tarr, Jr.
is a professional director and private investor and has been so for more than five years. From 2000 to 2001, he served as the Chairman, Chief Executive Officer and President of
HomeRuns.com, Inc. Prior to joining HomeRuns.com, he served for more than 20 years in senior executive roles at Harcourt General, Inc., a large, broad-based publishing company, including six years as President, Chief Executive Officer and Chief
Operating Officer, and at The Neiman Marcus Group, Inc., a high-end specialty retail store and mail order business, as President, Chief Operating Officer and Chief Executive Officer from 1990 to 1997. In addition, Mr. Tarr previously served as a
director of Barneys New York, Inc.
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Qualifications:
Among Mr. Tarr’s
experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Tarr has broad experience serving as a Chief Executive Officer and as a board member for businesses in various
industries and has extensive experience in capital markets and with mergers and acquisitions.
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WESCO International, Inc. - 2016 Proxy Statement
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Board of Directors
CLASS III DIRECTORS — PRESENT TERM EXPIRES IN 2017
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John K. Morgan
served as the Chairman, President and Chief Executive Officer of Zep Inc., a specialty chemicals company, from October 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.
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Qualifications:
Among Mr. Morgan’s
experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Morgan has experience as a Chief Executive Officer with broad expertise in senior executive and operating leadership
roles, including extensive experience in and knowledge of the industry in which the Company operates.
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James L. Singleton
is Chairman and Chief Executive Officer of Cürex Group Holdings, LLC, an organization that provides technologies and financial products to the global foreign exchange
marketplace, and has held that position since May 2014. From June 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 September 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.
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Qualifications:
Among
Mr. Singleton’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Singleton is a Chief Executive Officer and has extensive expertise in the capital markets,
mergers and acquisitions, and knowledge of the Company, its industry, business and history.
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Bobby J. Griffin
served as President, International Operations of Ryder System, Inc., a global provider of commercial transportation, logistics, and supply chain management solutions, from 2005 to
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 Hanesbrands Inc. and United
Rentals, Inc. and served as a director of Horizon Lines, Inc. from May 2010 until April 2012.
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Qualifications:
Among
Mr. Griffin’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Griffin has served as a senior executive in multiple industries, has supply chain expertise,
has extensive international business experience, and experience as a public company board member.
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WESCO International, Inc. - 2016 Proxy Statement
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Executive Officers
EXECUTIVE OFFICERS
Our executive officers and their respective ages and positions
as of April 8, 2016, are set forth below.
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Name
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Age
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Position
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John J. Engel
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54
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Chairman, President and Chief Executive Officer
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Timothy A. Hibbard
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59
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Vice President and Corporate Controller
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Diane E. Lazzaris
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49
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Senior Vice President and General Counsel
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Kenneth S. Parks
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52
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Senior Vice President and Chief Financial Officer
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Kimberly G. Windrow
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Senior Vice President and Chief Human Resources Officer
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Timothy A. Hibbard
was appointed as our Vice
President and Corporate Controller in February 2012. From 2006 to February 2012, he served as our Corporate Controller. From 2002 to 2006, he served as Corporate Controller at Kennametal Inc. From 2000 to 2002, Mr. Hibbard served as
Director of Finance of Kennametal’s Advanced Materials Solutions Group, and, from 1998 to 2000, he served as Controller of Greenfield Industries, Inc., a subsidiary of Kennametal Inc.
Diane E. Lazzaris
has served as our Senior Vice President and General
Counsel since January 2014, and from February 2010 to December 2013 she served as our Vice President, Legal Affairs. From 2008 to February 2010, Ms. Lazzaris served as Senior Vice President – Legal, General Counsel and Corporate
Secretary of Dick’s Sporting Goods, Inc. From 1994 to 2008, she held various corporate counsel positions at Alcoa Inc., most recently as Group Counsel to a group of global businesses.
Kenneth S. Parks
has served as our Senior Vice President and Chief Financial
Officer since January 2014, and from June 2012 to December 2013 he served as our Vice President and Chief Financial Officer. From 2008 to February 2012, he served as Vice President of Finance of United Technologies Corporation for their global
Fire and Security business. From 2005 to 2008, he served as Director of Investor Relations of United Technologies Corporation. He began his career in public accounting with Coopers & Lybrand.
Kimberly G. Windrow
has served as our Senior Vice President and Chief Human
Resources Officer since January 2014, and from August 2010 to December 2013 she served as our Vice President, Human Resources. From 2004 until July 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.
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WESCO International, Inc. - 2016 Proxy Statement
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Corporate Governance
CORPORATE GOVERNANCE
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines in conformity with the New York Stock Exchange (NYSE) listed company
standards to provide a framework to assist members of our Board in fully understanding and effectively implementing their responsibilities while assuring our on-going commitment to high standards of corporate conduct and compliance.
We have adopted a Code of Business Ethics and Conduct and a Global Anti-Corruption Policy which apply to our Board of Directors and all of our employees and cover
all areas of professional conduct, including customer relations, conflicts of interest, insider trading, financial disclosure, and compliance with applicable laws and regulations.
We also have adopted a Senior Financial Executive Code of Principles for Senior Executives, referred to as the Senior
Financial Executive Code, which applies to our Chief Executive Officer, Chief Financial Officer and Corporate Controller. We disclose future amendments to, or waivers from, the Senior Financial Executive Code on the corporate governance section
of our website within four business days of any amendment or waiver.
You may access our Corporate Governance Guidelines, Committee Charters, Code of Business
Ethics and Conduct, Global Anti-Corruption Policy, Senior Financial Executive Code, Independence Policy, and related documents on our website at
www.wesco.com/governance
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Director Independence
Our Board has adopted independence standards that meet or exceed the independence standards of the NYSE, including the
enhanced independence requirements for audit and compensation committee members. In addition, as part of our independence standards, our Board has adopted categorical standards to assist it in evaluating the independence of each of its Directors.
The categorical standards are intended to assist our Board in determining whether or not certain direct or indirect relationships between its Directors and our Company or its subsidiaries are “material relationships” for purposes of the
NYSE independence standards. The categorical standards establish thresholds at which any relationships are deemed to be material.
In February 2016, the independence of each Director was reviewed, applying our independence standards. The review
considered relationships and transactions between each Director and his or her immediate family and affiliates and our management and our independent registered public accounting firm.
Based on this review, our Board affirmatively determined that the following Directors are independent: Ms. Beach Lin, Mr. Griffin, Mr. Morgan,
Mr. O’Brien, Mr. Raymund, Mr. Singleton, Mr. Tarr, and Ms. Utter.
Director Qualifications and Director Diversity
Our Nominating and Governance Committee reviews with the Board at least annually the qualifications of new and existing
Board members, considering the level of independence of individual members, together with such other factors, including overall skills and experience. Each Director’s particular and specific experience, qualifications, attributes or skills
which support his or her position as a Director on our Board are identified on pages 3 to 5.
The Nominating and Governance Committee considers various factors in
determining whether to recommend a candidate for nomination as a Director, including an individual’s aptitude for independent analysis, level of integrity, personal and professional ethics, soundness of business judgment, and ability and
willingness to commit sufficient time to Board activities. The Nominating and Governance Committee consults with the Board to determine the most appropriate combination of characteristics, skills and experiences for the Board as a whole with
the objective of having a Board whose members have diverse backgrounds and experiences. The Nominating and
Governance Committee considers candidates diverse in geographic origin, gender, ethnic background and professional experience and evaluates each individual in the context of the individual’s
potential contribution to the Board as a whole to best promote the success of the Company’s business, represent stockholder interests through the exercise of sound judgment, and allow the Board to benefit from the group’s diversity of
backgrounds and experiences.
The Nominating and Governance Committee also reviews the characteristics of incumbent Board members and prospective Board members to
ensure that the Board, as a whole, possesses the experience, expertise and competencies that are relevant or desirable. The Nominating and Governance Committee uses a skills matrix to assess the overall composition of the Board, including such
characteristics as CEO experience, financial expertise, capital markets expertise, sales or marketing expertise, supply chain or industry experience, mergers and acquisitions experience, international experience, technology expertise, and
operational or strategy experience, among
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WESCO International, Inc. - 2016 Proxy Statement
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Corporate Governance
others. The Nominating and Governance Committee may also target prospective candidates for Board membership based on
their attributes compared to current Board members to achieve a good overall Board composition. The Nominating and
Governance Committee applies the same criteria to all candidates that it considers, including any candidates submitted by stockholders.
Board and Committee Evaluations
Each year, our Board and Committees conduct evaluations to assess their effectiveness and adherence to the Corporate
Governance Guidelines and Committee charters, and to identify opportunities to improve Board and Committee performance. Our Nominating and Governance Committee has responsibility for oversight of the Board evaluation process. In addition, the Lead
Director also conducts a one on one interview with each
Board member, and the Committee Chairs conduct one on one interviews with each of their respective Committee members. The results of the Board and Committee Evaluations are communicated to all
Board and Committee members, and all Board members participate in this continuous improvement process.
Compensation Committee Interlocks
None of our executive officers serves as an executive officer of, or as a member of, the compensation committee of any
public company that has an executive officer, director or other designee
serving as a member of our Board. No member of our Compensation Committee has been an executive officer of the Company.
Executive Sessions and Lead Director
During 2015, the non-management members of our Board met in executive session at each regularly scheduled Board of
Director’s meeting. As Lead Director, Mr. Vareschi presided over these executive sessions until his retirement at the 2015 Annual Meeting of Stockholders, at which time Mr. Singleton became the Lead Director. Following the 2015 Annual
Meeting of
Stockholders, Mr. Singleton presided over these executive sessions. In addition, Mr. Singleton has broad authority to call and conduct meetings of the independent Directors. The duties
and responsibilities of our Lead Director are described in more detail in the section below.
Board Leadership Structure
Since May 2011, Mr. Engel has served as Chairman of the Board. The Board believes that Mr. Engel’s combined
role of Chairman and Chief Executive Officer is in the best interests of the Company and its stockholders at this time, and that Mr. Engel is the Director best situated to serve as Chairman because of his detailed and in-depth knowledge of the
issues, opportunities and challenges facing the Company, his familiarity with the Company’s business and industry, and his ability to identify strategic priorities essential to the future success of the Company. The Board believes that the
structure is best for the Company at this time because it provides for clear leadership responsibility and accountability, while providing for effective corporate governance and oversight by an independent Board of strong and seasoned Directors
with an independent Lead Director.
Mr. Singleton became the Lead Director following the planned retirement of Mr. Vareschi. Mr. Singleton serves as
the Board’s independent Lead Director and presides over executive sessions of the Board. The non-management members of our Board meet in executive session at each regularly scheduled Board meeting. The Audit, Compensation, and Nominating
and Governance Committees are all chaired by and comprised solely of independent Directors in accordance with independence standards of the NYSE, and thus oversight of key matters is entrusted to the independent Directors. Each of these
Committees also meets in executive session without members of management present. The responsibilities of the Lead Director include the following:
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Presides at all meetings of the Board at which the Chairman is not present, including meetings of independent Directors held in Executive Session;
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Has the authority to call meetings of the independent Directors;
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Oversees the Board evaluation program;
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Evaluates, along with the members of the Compensation Committee and the full Board, the CEO’s performance, and meets with the CEO to discuss the Board’s evaluation;
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Serves as a liaison between the Chairman/CEO and the independent Directors;
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Consults with the Chairman/CEO on and approves agendas and schedules for Board meetings to ensure there is sufficient time for discussion of agenda items;
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Advises the Chairman/CEO on the Board’s informational requirements and approves information sent to the Board, as appropriate;
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Corporate Governance
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Consults with the Chair of Nominating and Governance Committee and the Chairman regarding recommended appointment of Committee members, including Committee chairs; and
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Facilitates communication between the Board and senior management.
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The Lead Director assures that appropriate
independence is brought to bear on important Board and governance matters. In addition, there is strong leadership vested in and exercised by
the independent Committee chairs, and each Director may request inclusion of specific items on the agendas for Board and Committee meetings.
Considering all of the above, the Board believes that a combined Chairman and Chief Executive Officer, together with the Lead Director, is an appropriate Board
leadership structure and is in the best interests of the Company and its stockholders at this time.
Communications with Directors
Our Board has established a process by which stockholders and other interested parties may communicate with the Board, our
Board Committees, and/or individual Directors by confidential
e-mail.
Such communications should be sent in writing to the
e-mail
addresses noted in the corporate
governance section of our website at
www.wesco.com/governance
under the caption “Contact Our Board.”
Our Director of Internal Audit will review all of these communications on a timely basis and will forward appropriate communications (i.e., other than solicitations,
invitations, advertisements, or similar communications) to the relevant Board members on a timely basis.
Stockholders who wish to communicate with our Board in writing via regular mail should send correspondence to: WESCO
International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122, Attention: Director of Internal Audit.
Our Board members
routinely attend our Annual Meeting of Stockholders. This provides you with additional opportunities to communicate with our Board. All of our Board members were present at our 2015 Annual Meeting of Stockholders.
Director Nominating Procedures
Our Nominating and Governance Committee recommends potential candidates for nomination as Director based on a number of
criteria, including the needs of our Board. Any stockholder who would like the Nominating and Governance Committee to consider a candidate for Board membership should send a letter of recommendation containing:
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The name and address of the proposed candidate;
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The proposed candidate’s resume or a listing of his or her qualifications to be a Director on our Board;
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A description of what would make the proposed candidate a good addition to our Board;
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A description of any relationship that could affect the proposed candidate’s ability to qualify as an independent Director, including identifying all other public company board and committee memberships;
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A confirmation of the proposed candidate’s willingness to serve as a Director if selected by our Nominating and Governance Committee;
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Any information about the proposed candidate that, under the federal proxy rules, would be required to be included in our Proxy Statement if the proposed candidate were a nominee or otherwise is required to be provided
pursuant to our Amended and Restated By-Laws; and
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The name of the stockholder submitting the proposed candidate, together with information as to the number of shares owned and the length of time of ownership.
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To allow for timely consideration, recommendations must be received not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. In
addition, the Company may request additional information regarding any proposed candidates. A stockholder who wishes to nominate a person for election as a Director must provide written notice to the Corporate Secretary of the Company at the address
below in accordance with the procedures specified in Section 2.15 of our By-Laws. In general, to be timely, the written notice must be received by our Corporate Secretary not less than 90 days prior to the first anniversary of the date of our
most recent Annual Meeting. The notice must provide certain information required by the By-Laws, including (a) biographical and share ownership information of the stockholder (and certain affiliates), (b) descriptions of any material
interests of the stockholder (and certain affiliates) in the nomination and any arrangements between the stockholder (and certain affiliates) and another person or entity with respect to the nomination, (c) certain biographical, employment and
specific qualifications information of each nominee, and (d) a brief description of any arrangement or understanding between each individual proposed as a nominee and any other person pursuant to which the individual was selected as a nominee.
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Corporate Governance
Notices of Director recommendations or Director nominations, including the information described above, should be sent to:
WESCO International, Inc., 225 West Station Square Drive, Suite
700, Pittsburgh, Pennsylvania, 15219-1122, Attention: Corporate Secretary.
Director Resignation Policy
The Board has adopted a resignation policy under which any Director who does not receive a majority of votes for his or her
re-election is expected to offer his or her resignation for the Board’s consideration.
Board’s Role in Oversight of Risk Management
Management is responsible for risk management, and the Board’s role is to oversee management’s efforts in this
area. As part of their regular meetings and deliberations, the Board and its Committees review and discuss matters of significance regarding operational, financial and other risks that are relevant to the Company’s business. Strategic risks and
operating risks are monitored by the Board through discussions regarding the Company’s strategic and operating plans and regular reviews of the Company’s operating performance. The Audit Committee of the Board discusses and reviews
guidelines and policies with respect to risk assessment and risk management and discusses
with management the Company’s major financial risk exposures and the steps management takes to monitor and control such exposures. In addition, management assesses the Company’s
enterprise risk and reviews with the entire Board significant risks and associated mitigating factors on an annual basis. The Compensation Committee of the Board reviews the potential for risk related to the Company’s compensation arrangements,
including compensation arrangements and policies for executives, and determines whether any such arrangements are likely to encourage excessive or inappropriate risk taking.
Stockholder Proposals for 2017
Annual Meeting
If you wish to have a stockholder proposal included in the Company’s proxy soliciting materials for the 2017 Annual
Meeting of Stockholders, you must submit the proposal to the Company at its principal executive offices by our deadline, which is 120 days prior to the first anniversary of the mailing of this Proxy Statement, or December 9, 2016. For any other
business to be properly brought before the 2017 Annual Meeting by a stockholder, notice in writing must be delivered to the Company in accordance with the Company’s Amended and Restated
By-Laws not less than 90 days nor more than 120 days prior to the first anniversary of the 2016 Annual Meeting, or between
January 26, 2017 and February 25, 2017. We may be required to include certain limited information concerning any such proposal in our Proxy Statement so that proxies solicited for the 2017 Annual Meeting may confer discretionary authority
to vote on that matter. Any stockholder proposals should be addressed to our Corporate Secretary, 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122.
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Board and Committee Meetings
BOARD AND COMMITTEE MEETINGS
Our Board has four standing committees: an Executive Committee, a Nominating and Governance Committee, an Audit Committee,
and a Compensation Committee. Each Committee operates under a separate charter, which is available on the corporate governance section of our website at
www.wesco.com/governance
.
The full Board held five meetings in 2015. Each Director attended 100% of the aggregate number of meetings of the full
Board held in 2015 and the total number of meetings held by all Committees of the Board on which he or she served.
Executive Committee
From January 2015 through May 2015, the Executive Committee consisted of Ms. Beach Lin and Messrs. Engel, Raymund,
Singleton, Tarr and Vareschi, with Mr. Vareschi serving as Chairman of the Executive Committee. Following the 2015 Annual Meeting of Stockholders, the Executive Committee consisted of Ms. Beach Lin and Messrs. Engel, Morgan, Raymund and
Singleton, with Mr. Singleton serving as Chairman of the Executive Committee. With the exception of Mr. Engel, all
Executive Committee members have been determined by our Board to be independent Directors according to the independence standards of the NYSE. The Executive Committee may exercise all the powers
and authority of the Directors in the management of the business and affairs of our Company and has been delegated authority to exercise the powers of our Board between Board meetings. The Executive Committee did not meet in 2015.
Nominating and Governance Committee
The members of our Nominating and Governance Committee are required to be, and were determined by our Board to be,
independent under the independence standards of the NYSE. From January 2015 through May 2015, the Nominating and Governance Committee consisted of Messes. Beach Lin and Utter and Messrs. Tarr and Vareschi, with Ms. Beach Lin serving as Chair of
the Nominating and Governance Committee. Following the 2015 Annual Meeting of Stockholders, the Nominating and Governance Committee consisted of Messes. Beach Lin and Utter and Messrs. Singleton and Tarr, with Ms. Beach Lin
serving as Chair of the Nominating and Governance Committee. Following the 2016 Annual Meeting of
Stockholders, it is expected that the Nominating and Governance Committee will consist of Messes. Beach Lin and Utter and Messrs. O’Brien and Singleton. The Nominating and Governance
Committee is responsible for identifying and nominating candidates for election or appointment to our Board and determining compensation for Directors. It is also the responsibility of our Nominating and Governance Committee to review and make
recommendations to our Board with respect to our corporate governance policies and practices and to develop and recommend to our Board a set of corporate governance principles. Our Nominating and Governance Committee held three meetings in
2015.
Audit Committee
The members of our Audit Committee are required to be, and were determined by our Board to be, independent Directors
according to the independence standards of the SEC and the NYSE. From January 2015 through May 2015, the Audit Committee consisted of Messrs. Tarr, Raymund, and Morgan and Ms. Utter, with Mr. Tarr serving as Chairman of the Audit
Committee. Following the 2015 Annual Meeting of Stockholders, Mr. Raymund became the Chairman of the Audit Committee. In February 2016, Mr. O’Brien became a member of the Audit Committee in Mr. Morgan’s place. Following the
2016 Annual Meeting of Stockholders, it is expected that the Audit Committee will consist of Messrs. Griffin, O’Brien and Raymund and Ms. Utter. Our Board has determined that Messrs. O’Brien, Raymund, and Tarr are Audit Committee
Financial Experts, as
defined under applicable SEC regulations. Our Audit Committee is responsible, among other things, for: (a) appointing the independent registered public accounting firm to perform an
integrated audit of our financial statements and to perform services related to the audit; (b) reviewing the scope and results of the audit with the independent registered public accounting firm; (c) reviewing with management our quarterly
and year-end operating results; (d) considering the adequacy of our internal accounting and control procedures; (e) reviewing the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; and (f) reviewing any non-audit
services to be performed by the independent registered public accounting firm and the potential effect on the registered public accounting firm’s independence. Our Audit Committee held six meetings in 2015.
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Board and Committee Meetings
Compensation Committee
The members of our Compensation Committee are required to be, and were at all times, independent Directors according to the
independence standards of the SEC and the NYSE. From January 2015 through May 2015 the Compensation Committee consisted of Ms. Beach Lin and Messrs. Griffin, Morgan and Singleton, with Mr. Singleton serving as Chairman. Following the 2015
Annual Meeting of Stockholders, the Compensation
Committee consisted of Ms. Beach Lin and Messrs. Griffin, Morgan and Singleton, with Mr. Morgan serving as Chairman. Our Compensation Committee is responsible for the review,
recommendation and approval of compensation arrangements for executive officers and for the administration of certain benefit and compensation plans and arrangements of the Company. Our Compensation Committee held five meetings in 2015.
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WESCO International, Inc. - 2016 Proxy Statement
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Security Ownership
SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of the
Company’s Common Stock as of March 31, 2016, 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 March 31, 2016, are deemed outstanding for purposes of determining the total number of outstanding
shares for such person and are not deemed outstanding for such purpose for all other stockholders. Unless indicated otherwise below, the address of each beneficial owner is c/o WESCO International, Inc., 225 West Station Square, Suite 700,
Pittsburgh, PA 15219.
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Name
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Shares
Beneficially
Owned
(1)
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Percent
Owned
Beneficially
(2)
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EdgePoint Investment Group Inc.
150 Bloor Street West
Suite 500
Toronto, Ontario M5S 2X9
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6,762,532
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(3)
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16%
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FMR LLC
245 Summer Street
Boston, MA 02210
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6,319,640
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(4)
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15%
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Boston Partners
One Beacon Street
30th Floor
Boston, MA 02108
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4,263,863
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(5)
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10.1%
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The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
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2,765,780
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(6)
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6.6%
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Invesco Ltd.
1555 Peachtree Street NE
Suite 1800
Atlanta, GA 30309
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2,114,309
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(7)
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5%
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John J. Engel
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791,910
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(8)
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1.8%
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Sandra Beach Lin
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35,156
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(8)
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*
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Bobby J. Griffin
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1,471
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(8)
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*
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John K. Morgan
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38,488
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(8)
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*
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James J. O’Brien
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1,550
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(8)
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*
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Steven A. Raymund
(9)
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36,352
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(8)
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*
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James L. Singleton
(10)
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52,236
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(8)
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*
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Robert J. Tarr, Jr.
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75,106
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(8)
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*
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Lynn M. Utter
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41,739
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(8)
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*
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Timothy A. Hibbard
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38,420
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(8)
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*
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Diane E. Lazzaris
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61,615
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(8)
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*
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Kenneth S. Parks
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45,895
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(8)
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*
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Kimberly G. Windrow
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54,872
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(8)
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*
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Stephen A. Van Oss
(11)
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617,437
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(8)
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1.4%
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All 13 executive officers and Directors as a group
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1,274,810
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(8)
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3%
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*
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Indicates ownership of less than 1% of the Common Stock.
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(1)
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The beneficial ownership of Directors set forth in the foregoing table includes shares of Common Stock payable to any such Director following the Director’s termination of Board service with respect to portions of
annual fees deferred under the Company’s Deferred Compensation Plan for Non-Employee Directors, 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. Griffin, 1,471; Mr. Morgan, 8,804; Mr. O’Brien, 0; Mr. Raymund, 8,368; Mr. Singleton, 9,551; Mr. Tarr, 24,242; and Ms. Utter, 12,491.
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WESCO International, Inc. - 2016 Proxy Statement
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Transactions with Related Persons
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(2)
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Based on the number of shares outstanding on the record date.
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(3)
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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 16, 2016. EdgePoint beneficially owns 6,762,532 shares, has shared power to vote and shared power to dispose of 6,762,532 shares. EGP beneficially owns 3,458,213 shares,
has shared power to vote and shared power to dispose of 3,458,213 shares.
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(4)
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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 12, 2016. 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 6,319,640 shares as a result
of acting as investment advisor to various investment companies registered under the Investment Company Act of 1940. Edward C. Johnson 3rd is a Director and the Chairman of FMR LLC and Abigail P. Johnson is a Director, the Vice Chairman, the Chief
Executive Officer and the President of FMR LLC. Members of the family of Edward C. Johnson 3rd, 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 Edward C. Johnson 3rd 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.
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(5)
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This information is based solely upon a Schedule 13G/A filed by Boston Partners with the Securities and Exchange Commission on February 29, 2016. Boston Partners beneficially owns 4,263,863 shares, has sole power
to vote 3,208,279 shares, has shared power to vote 17,025 shares and sole power to dispose of 4,263,863 shares.
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(6)
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This information is based solely upon a Schedule 13G/A filed by The Vanguard Group (“Vanguard”) with the Securities and Exchange Commission on February 11, 2016. Vanguard is the beneficial owner of
2,765,780 shares and has sole power to vote 30,800 shares, sole dispositive power over 2,735,380 shares and shared dispositive power over 30,400 shares.
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(7)
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This information is based solely upon a Schedule 13G filed by Invesco Ltd. (“Invesco”) with the Securities and Exchange Commission on February 16, 2016. Invesco is the beneficial owner of 2,114,309 shares
and has sole power to vote and sole dispositive power over 2,114,309 shares.
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(8)
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Includes the following shares of Common Stock not currently owned, but subject to SARs which were outstanding on March 31, 2016 and may be exercised or settled within 60 days thereafter: Mr. Engel, 698,632;
Ms. Beach Lin, 14,708; Mr. Griffin, 0; Mr. Morgan, 16,742; Mr. O’Brien, 0; Mr. Raymund, 22,742; Mr. Singleton, 22,742; Mr. Tarr, 2,500; Ms. Utter, 22,742; Mr. Hibbard, 35,277; Ms. Lazzaris,
53,090; Mr. Parks, 41,781; Ms. Windrow, 45,052; Mr. Van Oss, 512,191; and all Directors and executive officers as a group, 976,008.
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(9)
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Includes 5,242 shares of Common Stock beneficially owned indirectly through a trust which is controlled by Mr. Raymund.
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(10)
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Includes 5,000 shares of Common Stock beneficially owned indirectly through a trust. Mr. Singleton exercises shared voting and investment power over such shares.
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(11)
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Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
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Section 16(a) Beneficial Ownership Reporting Compliance
Under the federal securities laws of the United States, the Company’s Directors, its executive officers, and any
persons beneficially holding more than ten percent of the Company’s Common Stock are required to report their ownership of the Company’s Common Stock and any changes in that ownership
to the SEC and NYSE. Specific due dates for these reports have been established. The Company is required to report in this Proxy Statement any failure to file by these dates. For the year ended
December 31, 2015, all such filings were made within the required time periods.
TRANSACTIONS WITH RELATED PERSONS
Our Company has a written policy and has implemented processes and controls in order to obtain information from our
Directors and executive officers with respect to related person transactions and for then determining whether our Company or a related person has a direct or indirect material interest in the transaction, based on the facts and circumstances. Our
Nominating and Governance Committee and Board review relationships and transactions between our Directors, executive officers and our Company or its customers and suppliers in order to determine whether the parties have a direct or indirect material
interest. Its evaluation includes: the nature of the related person’s
interest in the transaction; material terms of the transaction; amount and type of transaction; importance of the transaction to our Company; whether the transaction would impair the judgment of
a Director or executive officer to act in the best interest of our Company; and any other relevant facts and circumstances. Transactions that are determined to be directly or indirectly material to our Company or a related person are disclosed in
this Proxy Statement. For the year ended December 31, 2015, there were no related party transactions to report.
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WESCO International, Inc. - 2016 Proxy Statement
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ITEM 2 — APPROVE, ON AN ADVISORY
BASIS, THE COMPANY’S EXECUTIVE COMPENSATION
This year, the Company is seeking that the stockholders approve the compensation of the Company’s named executive officers (commonly referred to as
“say-on-pay”) as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding named executive officer compensation and the narrative description accompanying such disclosure. As initially
approved by our stockholders at the annual meeting of stockholders in 2011, and consistent with the Board’s recommendation, we are submitting this proposal on an annual basis. This vote is advisory only, meaning it is non-binding on the
Company; however, the Board and Compensation Committee will review and carefully consider the results when evaluating future compensation decisions.
OUR BOARD UNANIMOUSLY
RECOMMENDS A VOTE “FOR”
APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION.
We encourage stockholders to review the
“Compensation Discussion and Analysis” section beginning on page 17. As described in detail under “Compensation Discussion and Analysis,” our compensation program is designed to attract and retain the highest caliber
executives possible and to motivate and reward them for achieving results that create stockholder value. The Compensation Committee believes that the Company’s compensation program and practices reflect a pay-for-performance philosophy designed
to align our compensation program and practices with our stockholders’ long-term interests.
Compensation
Structure:
Elements of our program include the following:
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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 Company’s overall compensation strategy, as a significant portion of total named executive officer compensation is at-risk;
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In our 2015 advisory vote on executive compensation, the Company’s executive compensation program received the approval of more than 99% of the shares voted, and we kept our compensation program in 2015 similar to
our program in 2014 overall. We believe the vote reinforces our Compensation Committee’s decisions on compensation structure;
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Annual cash incentive bonuses are paid upon the achievement of a set of measurable Company financial performance metrics and individual performance objectives;
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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 Company’s stock, thus encouraging achievement of
long-term value creation benefiting all stockholders;
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Because the Company did not meet its profitability objectives in 2015, incentive bonuses were below target levels, and performance shares awarded in 2013 for the three-year performance period ended December 31,
2015 were forfeited, consistent with our pay-for-performance philosophy;
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We believe we have an appropriate mix of short and long-term compensation based on balanced performance metrics which align our incentive and compensation programs with the interests of stockholders;
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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;
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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);
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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;
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Our officers and Directors are prohibited from engaging in hedging transactions involving our stock and from pledging shares as security for loans;
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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;
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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;
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WESCO International, Inc. - 2016 Proxy Statement
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Item 2 – Approve, On An Advisory Basis, The Company’s Executive Compensation
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The Compensation Committee annually reviews the potential for risk regarding our compensation program design, including incentive compensation; and
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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 the Compensation Committee retains an independent compensation consultant to conduct annual reviews of executive compensation and advise on best practices.
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The Board endorses the Company’s executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers as disclosed pursuant to
Item 402 of SEC Regulation S-K, including as described under the “Compensation Discussion and Analysis” section, as well as the accompanying compensation tables and the related narrative disclosure, in the Company’s 2016 Proxy
Statement.
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WESCO International, Inc. - 2016 Proxy Statement
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Compensation Discussion and Analysis
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis section discusses the Company’s compensation philosophy, policies and
arrangements for the 2015 year that are applicable to our Named Executive Officers (“NEOs”): John J. Engel, Kenneth S. Parks, Timothy A. Hibbard, Diane E. Lazzaris and Kimberly G. Windrow. In accordance with applicable regulations, we
also provide specific executive compensation disclosure for Stephen A. Van Oss, a former executive officer. This discussion and analysis should be read in conjunction with the “Summary Compensation Table” on page 27, its accompanying
footnotes and the additional tables and narrative disclosure that follow the Summary Compensation Table.
The Compensation Discussion and Analysis includes the following key sections:
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Compensation Setting Process
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Use of Compensation Consultants
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Compensation Comparator Group
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Elements of Compensation
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•
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Other Compensation and Employment Arrangements
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EXECUTIVE SUMMARY
Introduction
Our management and our Board of Directors have consistently believed that a straightforward and transparent philosophy and
approach to compensation design is fundamental to creating stockholder value. Our program comprises three main elements: (1) base salaries; (2) annual cash incentive bonuses; and (3) long-term incentive awards. We believe that this
approach has enabled us to attract and retain extraordinary management talent and to deliver strong results to our stockholders.
In our 2015 Advisory Vote on
Executive Compensation, the Company’s executive compensation program received the approval of more than 99% of the shares voted, which endorsed and confirmed our decisions on compensation structure. Our compensation program in 2015 was
generally consistent with our program in 2014. Beginning at the Compensation Committee’s December meeting and ending in February, executive compensation is reviewed and a total compensation review is conducted regarding salary, bonus and equity
awards, based on the compensation structure and philosophy described in this Compensation Discussion and Analysis section.
Pay for Performance
– The annual cash incentive and long-term incentive components of our compensation program reflect our pay-for-performance philosophy,
since annual cash incentive bonuses are paid upon the achievement of a set of measurable Company financial performance metrics and individual performance objectives. The equity award values depend on the value of the Company’s stock, and in the
case of performance shares, depend on the achievement of specific performance metrics and goals, thus encouraging achievement of long-term value creation that benefits all stockholders.
The Company did not meet its profitability objectives in 2015. As a result, and consistent with our pay-for-performance
philosophy, 2015 variable compensation was below target levels, and performance shares that were based on 2013 to 2015 performance were forfeited.
Ownership Guidelines, Hedging and Clawbacks
– We have stock ownership
guidelines for officers and Directors, and our officers and Directors are prohibited from engaging in hedging transactions involving our stock and from pledging stock as security for loans. We have adopted a “clawback” policy to provide
for recovery of incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results and also to provide for clawback of
incentive compensation in the event of misconduct by an executive officer or former executive officer.
Limited Perquisites
– We use perquisites on a very limited basis, and
we do not provide tax gross-ups on executive-only perquisites. We have committed to not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a
change in control, and we have not entered into any such agreements. We have only one pre-existing employment agreement (entered into prior to 2010) that includes excise tax gross-ups under certain change in control circumstances.
In this Executive Summary, we describe our philosophy, approach and the way we assess our compensation practices. We believe that this process is a pillar of our high
performance corporate culture and important to our ongoing success.
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WESCO International, Inc. - 2016 Proxy Statement
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| 17
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Compensation Discussion and Analysis
Compensation Philosophy
Structuring a balanced, fair and properly-crafted compensation program for our executive leaders is a critical component
that promotes our high performance culture and contributes to our ongoing success. Our compensation philosophy begins with the recognition that our success depends on the talent of our workforce and our relationships with customers and suppliers.
Our focus on consistency, service and continuous improvement are critical performance factors, and to encourage high level performance of our leaders we have constructed a compensation plan that rewards the behavior of our executives in pursuit of
the following three broad goals.
The first of our philosophical tenets is to retain an excellent management team. Fielding a consistent and high performing team is
critical to our success as a company. Developing and strengthening our corporate relationships with our customers and suppliers over the long-term puts us in an opportune position to grow our business intelligently and profitably. Equally important
is the consistency of internal leadership in support of our corporate mission and sustaining our high performance culture.
The second philosophical goal of our
compensation planning is to put the Company in a position to recruit strong leaders as we grow our business and expand our product and service offerings. We were able to recruit and retain our CEO because of our culture and a compensation package
that aligned his
performance with our strategy of creating value for our customers, suppliers and stockholders. During the past several years, we have recruited other leaders at the executive leadership level who
joined the Company for the same reasons. Our consistency of approach in aligning our compensation plans to our strategy has been an important reason for our recruiting and retention successes.
Finally, the third goal of our compensation plan is to reward our executives fairly and provide proper and balanced incentives for long-term value creation. Essentially,
we want to provide a level of annual base compensation that is fair. When our executives perform at a level of high achievement, we reward them with attractive but capped annual cash bonus awards. In years when they perform below agreed upon
standards, they may receive little or no bonus. In terms of long-term incentives, we believe that the performance of our stock is the purest measure of our performance. Fundamentally, we are owned by our stockholders who can sell their stock when
they believe that we are underperforming and who may purchase more shares as we perform at higher levels of growth and profitability. We believe that the opportunity to participate in the performance of our equity is the most direct link between
performance and pay. We reward our executives with equity incentives to align their interests with those of the stockholders and maintain ownership guidelines to instill that mindset.
Compensation Approach
The three central elements to our executive total compensation approach, base salary, short-term incentives and long-term
incentives, are further refined by design: our base salary and short-term incentives are cash based; and our long-term incentives are equity based. Based on our objectives, we believe it is appropriate that we target our three compensation elements
at approximately the 50
th
percentile of comparable companies in our peer group. The Company’s target total cash compensation and long-term incentives for the NEOs have been generally below
the 50
th
percentile of the peer group.
We use the services of a nationally recognized independent compensation consultant, Meridian Compensation Partners, LLC
(“Meridian”), which provides us with research information and data. Meridian serves as a resource to our Compensation Committee (the “Committee”), providing information on new developments, best practices and trends in
compensation. However, the Committee makes its own decisions, uses its own judgment and comes to its own conclusions relating to plan design and absolute determinations of total compensation rewards.
Compensation Assessment
For our compensation philosophy and approach to work properly, the Committee must assess the effectiveness of our
compensation programs regularly, using a variety of external and internal resources. In conjunction with Meridian, the Committee reviews the composition of our peer group annually. We purposely choose a large number of similarly sized companies
because we believe that those companies are representative of the talent pool that we compete with to recruit and retain talent. This approach has proven successful, as the last three NEOs that we hired came from large corporations that were not
direct competitors of ours and not in the distribution industry. We also believe that a large pool of comparable companies is better than
choosing a smaller group to ensure a proper sample size for comparison purposes. When we engage professional search firms to assist us in identifying senior executive talent, they recruit from a
set of corporations even larger than our peer group.
Our management team conducts a thorough leadership review process every year. Our focus on talent management is
critical to our high performance culture and ongoing success. In the course of that intensive, annual review process, the entire Board and our Committee are informed of relevant issues relating to our senior management team. We are thus able to
review personal development plans, actual performance, and alignment to
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WESCO International, Inc. - 2016 Proxy Statement
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Compensation Discussion and Analysis
corporate standards and expectations. From that feedback, we are able to derive a deeper understanding of whether our
compensation program continues to promote our corporate
objectives. We can use this information to help assess the appropriateness of our compensation approach for any individual whose compensation we review.
Our 2015 compensation mix for our CEO reflects our
emphasis on performance-based elements as follows:
Summary
Our philosophy, approach, and the manner in which we assess our compensation programs have been consistently applied since
we became a public company. We intend to maintain our
high standards and make sure that the objectives and total compensation of our senior executives are aligned with the objectives of our stockholders.
COMPENSATION SETTING
PROCESS
Our Board has delegated to the Committee, composed entirely of independent Directors under the independence standards of
the NYSE and SEC, the responsibility of administering executive compensation and benefit programs, policies and practices. The Committee may also delegate certain matters to a subcommittee in its discretion. Annually the performance of the
management team is reviewed relative to financial results and non-financial measures, including the areas of strategic and organizational development. Compensation levels for our NEOs are reviewed and approved on an annual basis.
Our compensation setting process for NEOs consists of the following steps:
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Consider the Company’s financial performance;
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Review external market data;
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Confirm the reasonableness of total compensation awards as well as the reasonableness of each component of compensation when compared to peer companies;
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Assess overall Company performance in relation to our objectives, competition and industry circumstances;
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Assess individual performance, changes in duties and responsibilities, and strategic and operational accomplishments;
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Adjust base salaries, as appropriate, based on job performance, leadership, tenure, experience, and other factors, including market data relative to our peer companies;
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Make awards under our long-term incentive plan that reflect recent performance and an assessment of the future impact each NEO can have on the long-term success of the Company;
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Review the metrics and goals of the performance share plan; and
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Apply consistent practices from year to year for annual cash incentive award payments based on an evaluation of pre-established operating and financial performance factors, non-financial performance criteria, and
strategic, operational, and organizational development objectives.
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As previously noted, the Committee also engages an independent compensation
consultant to assist in reviewing its compensation practices, to provide market comparison information, and to make recommendations.
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WESCO International, Inc. - 2016 Proxy Statement
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| 19
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Compensation Discussion and Analysis
USE OF COMPENSATION CONSULTANTS
To assist in the compensation setting process, the Committee engages Meridian, an independent, internationally recognized
executive compensation consultancy firm, to provide information and advice regarding compensation and benefit levels and incentive plan designs. Meridian is engaged by, and reports directly to, the Committee, which has the sole authority to hire or
fire Meridian and to approve fee arrangements for work performed. The Committee has authorized Meridian to interact with management on behalf of the Committee, as needed in connection with advising the Committee. The Committee has assessed the
independence of Meridian pursuant to SEC and NYSE rules and concluded that Meridian’s work for the Committee does not raise any conflict of interest.
In
particular, the Committee retains Meridian to prepare compensation plan reviews, identify general trends and practices in executive compensation programs, assist in selecting the comparator group, use market data to perform a study of the
compensation of senior management at comparable and similarly-sized (by revenue) companies, and furnish its input regarding
the compensation and incentives of the Chief Executive Officer and other executives. In addition, the Committee has sought the recommendation of the Chief Executive Officer regarding the other NEOs relative to compensation adjustments and individual
performance objectives he believes would be appropriate to achieve the Company’s strategic and operational goals. Our Committee meets in person or telephonically at least five times each year, and our Committee’s Chairman meets with
management and our independent compensation consultant more regularly throughout the course of the year. The working relationship between the Committee and management is constructive and independent. Our Committee reports to the entire Board of
Directors at every Board meeting on its activities, the research commissioned from our compensation consultant and on the Committee’s specific compensation deliberations and decisions that directly affect our executive leadership team.
COMPENSATION COMPARATOR
GROUP
In 2015, the Committee reviewed analyses of compensation paid by companies in our comparator group through the use of
marketplace compensation profiles prepared by Meridian. The comparator group comprises comparably-sized, industrial firms, distribution companies and businesses with dispersed locales for which logistics are important, companies in industries in
which asset management, in addition to operating margin, is a relevant
measure of company performance, and other large distributors, wholesalers and retailers, which are potential competitors for executive talent of interest to WESCO.
The compensation comparator group that we used in 2015 included the following companies:
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COMPENSATION COMPARATOR GROUP
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Andersen Corporation
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Cameron International
Corporation
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Ingredion Inc.
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Rockwell Automation
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W.W. Grainger, Inc.
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Anixter International, Inc.
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Darden Restaurants, Inc.
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Kohler Company
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Ross Stores, Inc.
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Waste Management, Inc.
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Applied Industrial
Technologies
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Dover Corporation
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Lennox International, Inc.
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Ryder System, Inc.
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Watsco, Inc.
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AutoZone, Inc.
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Ecolab
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MSC Industrial
Direct Co., Inc.
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Schneider National, Inc.
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Avis Budget Group
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Essendant, Inc.
1
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NCR Corporation
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Sonoco Products Company
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Belk, Inc.
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Fastenal Company
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NewPage Corporation
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Spartan Stores, Inc.
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Big Lots, Inc.
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FMC Technologies
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Packaging Corporation of America
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The Bon-Ton Stores, Inc.
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BorgWarner
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Hubbell Incorporated
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Pitney Bowes, Inc.
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The Pantry, Inc.
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Brinker International, Inc.
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Hy-Vee, Inc.
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Praxair, Inc.
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Vulcan Materials Company
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1
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United Stationers, Inc. changed its name to Essendant, Inc.
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2
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Boise, Inc. was acquired by Packaging Corporation of America which was added to the group.
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The Committee reviews compensation practices among these companies to provide the Committee with relevant data in setting
appropriate compensation levels for its NEOs. This market analysis, which is conducted by Meridian, makes it possible to evaluate and assess compensation for numerous executive
positions that are not included in proxy statements or other public filings. To adjust for a variation in size among our Company and the companies in the comparator group and to get comparable
data for its analysis, Meridian uses regression analysis to adjust market values for differences in company size, based on annual revenues.
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WESCO International, Inc. - 2016 Proxy Statement
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Compensation Discussion and Analysis
Role of 2015 Advisory Vote on Executive Compensation in
the Compensation Setting Process
The Committee reviewed the results of the 2015 stockholder advisory vote on NEO compensation and incorporated the results
as one of the many factors considered in connection with the discharge of its responsibilities and in determining compensation policies and decisions for 2015. Because an
overwhelming majority (more than 99%) of the votes cast by our stockholders approved the executive compensation program for 2014 described in our 2015 proxy statement, our compensation program
for 2015 remained generally consistent with the program in 2014.
ELEMENTS OF COMPENSATION
Base Salaries
Base salaries are intended to provide our NEOs with a level of competitive cash compensation that is critical for retention
and appropriate given their positions, responsibilities and accomplishments with the Company. Salaries for NEOs are reviewed annually. The Committee reviews detailed individual salary history for the NEOs and compares their base salaries to salaries
for comparable positions at companies within our comparator group. From time to time, the Committee adjusts base salaries for executive officers to reflect performance, changes in job scope, and market practices among the comparator group generally
based on the 50
th
percentile of base salaries for comparable positions.
Effective as of April 1, 2015:
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Mr. Engel’s base salary was increased to $975,000 from an annualized rate of $950,000;
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Mr. Parks’ base salary was increased to $500,000 from an annualized rate of $460,000;
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Mr. Hibbard’s base salary was increased to $305,000 from an annualized rate of $290,000;
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Ms. Lazzaris’ base salary was increased to $425,000 from an annualized rate of $400,000; and
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Ms. Windrow’s base salary was increased to $400,000 from an annualized rate of $385,000.
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In determining
adjustments to base salaries, the Committee considers prevailing economic conditions, base salaries of recent additions to management, performance assessments, changes in duties and responsibilities, Company performance, comparable salary practices
of companies within our peer group, the recommendation of Mr. Engel (in the case of the other NEOs), and any other factors the Committee deems relevant.
Short-Term Incentives
Our practice is to award cash incentive bonuses for achievement of our strategic, financial, operational, and
organizational development objectives. Target short-term incentives are designed to provide compensation opportunities generally approximating the 50
th
percentile of the comparator group and are
reviewed on an annual basis.
Annually, the Company’s performance criteria and financial and operational targets are reviewed and approved for the upcoming year.
For purposes of the 2015 annual incentive programs, the performance measures for our NEOs, all of whom are corporate officers with broad-ranging responsibilities across the entire
enterprise or for multiple operating and/or corporate support functions, consist of the achievement of a combination of the following metrics: Earnings Before Interest, Taxes, Depreciation and
Amortization (“EBITDA”), Free Cash Flow, and Return On Invested Capital (“ROIC”) targets, along with individual performance objectives. The performance measures we used to determine annual cash incentive bonuses for Messrs. Engel
and Parks and Messes. Lazzaris and Windrow, the relative weightings of such measures and the related payout as a percentage of opportunity are reflected in the table below. For Mr. Hibbard, the relative weightings were 50% EBITDA, 25% Free Cash
Flow, and 25% Individual Performance.
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Performance Measure
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Weighting
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Percent
Achievement
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Payout Percent of
Maximum Opportunity
(1)
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Earnings Before Interest Taxes Depreciation
and Amortization
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25%
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< 85%
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0%
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85% to 100%
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Up to 50%
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>100% to 115%
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Between 50% and 100%
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Free Cash Flow
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25%
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< 85%
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0%
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85% to 100%
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Up to 50%
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>100% to 115%
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Between 50% and 100%
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Return on Invested Capital
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25%
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< 85%
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0%
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85% to 100%
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Up to 50%
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>100% to 115%
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Between 50% and 100%
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Individual Performance
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25%
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<25%
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0%
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25% to 100%
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Up to 100%
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Total (as a percent of Opportunity)
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100%
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0% to 100%
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(1)
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Amounts interpolated, as appropriate.
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WESCO International, Inc. - 2016 Proxy Statement
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Compensation Discussion and Analysis
For 2015, the payout for the EBITDA and ROIC components was $0, since the actual achievement of EBITDA of $439 million and
ROIC of 7.7% was below the threshold percentage of 85% as shown on the prior page. The Free Cash Flow component represented an achievement level of 105%, based on Free Cash Flow of $261 million for 2015. The Committee reviewed and made a qualitative
assessment of individual performance and accomplishments as described below. With respect to the NEOs other than himself, the Chief Executive Officer makes recommendations to the Committee for the Committee’s consideration.
Based on Mr. Engel’s base salary of $950,000 for three months of the year and $975,000 for nine months of the year and a maximum incentive payout percentage
opportunity of 248%, his maximum bonus opportunity was $2,402,500. His actual bonus was $800,000, based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of
Mr. Engel’s performance regarding strategy execution, organizational development and talent management, investor and corporate relations, progress on One WESCO initiatives, LEAN leadership and execution, and Board and overall leadership.
Based on Mr. Parks’ base salary of $460,000 for three months of the year and $500,000 for nine months of the year and a maximum incentive payout percentage
opportunity of 150%, his maximum bonus opportunity was $735,000. His actual bonus was $275,000, based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of
Mr. Parks’ performance regarding strengthening the capital structure, financial reporting and management, LEAN administrative applications, enterprise risk management, control compliance, information technology, talent management, and
financial leadership.
Based on Mr. Hibbard’s salary and maximum incentive payout percentage opportunity of 100%, his maximum bonus opportunity was
$301,250. His actual bonus was $125,000
based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of Mr. Hibbard’s performance regarding
accounts payable effectiveness, business development support, employee engagement, LEAN administrative applications and Oracle support.
Based on
Ms. Lazzaris’ base salary of $400,000 for three months of the year and $425,000 for nine months of the year and a maximum incentive payout percentage opportunity of 120%, her maximum bonus opportunity was $502,500. Her actual bonus was
$188,000, based on the financial components described on the prior page and an individual performance component based on the Committee’s assessment of Ms. Lazzaris’ performance regarding legal and contracts, talent management,
supporting business growth while managing cost and productivity, enterprise risk management, and legal department leadership.
Based on Ms. Windrow’s base
salary of $385,000 for three months of the year and $400,000 for nine months of the year and a maximum incentive payout percentage opportunity of 120%, her maximum bonus opportunity was $475,500. Her actual bonus was $175,000, based on the financial
components described on the prior page and an individual performance component based on the Committee’s assessment of Ms. Windrow’s performance regarding development of the human resources function, leading various talent management
initiatives, diversity and inclusion strategy and compensation and benefits strategy.
We retain the right to increase or decrease performance objectives or to make
discretionary adjustments to annual incentive awards to reflect acquisitions, changes in responsibility, external changes, or changes in business conditions that have a material impact on the fairness of the previously established performance
factors.
Long-Term Incentives
The purpose of long-term incentives is to carefully align compensation with stockholder value creation. Executing the
business strategy necessarily requires tradeoffs of short and long-term performance. Accordingly, our incentives are designed to encourage and reward both short and long-term performance. We believe that the optimal method to deliver long-term
incentives is through stock appreciation rights (SARs), restricted stock units (RSUs), and performance shares. We use RSUs to strengthen the retention qualities of our equity program and to be consistent with prevailing market practices. The mix of
these equity awards, however, is geared toward motivating and rewarding management for achieving stockholder value creation. Performance share awards for the NEOs represent 30% of the total value (at target) of each NEO’s equity award, and SARs
and RSUs represent 50% and 20% of the total value, respectively. SARs have no value unless the Company stock price increases. Performance shares will be forfeited if total shareholder return
and other targets are not met. Performance shares awarded in 2013 for the three-year performance period ended December 31, 2015 were forfeited because the Company did not meet the threshold
levels of the performance goals, which is consistent with our pay for performance methodology.
Our philosophy is to grant equity-based long-term incentives having an
economic value (based on the Company’s standard stock award assumptions for accounting purposes) which generally approximates the 50th percentile of grants by companies in our comparator group. We believe this target allows us to attract,
motivate and retain the executive talent necessary to develop and execute our business strategy. Notwithstanding this objective, the Company’s target long-term incentives for the NEOs were generally below the 50th percentile of the comparator
group for 2015.
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WESCO International, Inc. - 2016 Proxy Statement
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Compensation Discussion and Analysis
Performance share awards are based on two equally-weighted performance measures of relative total shareholder return and
the three-year average net income growth rate achieved by the Company during the three-year performance period. The award vests in the form of a number of shares of the Company’s common stock. The number of performance shares actually earned,
if any, will depend on the attainment of certain levels (threshold, target, maximum) of the performance measures and may range from one-half the target amount of performance shares (at the threshold performance level) up to two times the target
amount of performance shares (at the maximum performance level). In the event of a Change in Control (as defined in the Company’s Long-Term Incentive Plan), the performance shares will vest at the target level. Our SARs vest ratably over three
years, and our RSUs cliff vest after three years. Our SARs settle in stock upon exercise.
In 2015, we granted 394,000 SARs, 81,000 RSUs and 55,400 performance shares in the aggregate to all award recipients. The
awards were approximately equal to 1% of the weighted average outstanding stock of the Company. With respect to the NEOs other than himself, the Chief Executive Officer makes grant recommendations based on each individual executive’s expected
long-term contributions to the value creation of the Company and consideration of market data. The Chief Executive Officer’s recommendations and Meridian’s analysis are considered in making grant determinations. With respect to
the Chief Executive Officer, the Compensation Committee determines (without the input of the Chief Executive Officer) the amount of his grant. In 2015, we granted performance shares, SAR and RSU awards to approximately 154 employees.
The performance share, SAR and RSU grants to our NEOs in 2015 were as follows:
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|
|
|
|
|
|
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|
NEO
|
|
Performance Share
Opportunity
(reflects number of
shares that
could
be earned at target)
(1)
|
|
|
SAR
Awards
|
|
|
RSU
Awards
|
|
|
Grant Date
|
|
|
Grant
Price
|
|
|
SARs
Expiration
Date
|
|
|
RSU Cliff -
Vesting Date
|
|
|
Engel
|
|
|
18,120
|
|
|
|
96,865
|
|
|
|
12,078
|
|
|
|
2/17/2015
|
|
|
$
|
69.54
|
(2)
|
|
|
2/17/2025
|
|
|
|
2018
|
|
|
Parks
|
|
|
4,962
|
|
|
|
26,521
|
|
|
|
3,307
|
|
|
|
2/17/2015
|
|
|
$
|
69.54
|
(2)
|
|
|
2/17/2025
|
|
|
|
2018
|
|
|
Hibbard
|
|
|
1,014
|
|
|
|
5,419
|
|
|
|
676
|
|
|
|
2/17/2015
|
|
|
$
|
69.54
|
(2)
|
|
|
2/17/2025
|
|
|
|
2018
|
|
|
Lazzaris
|
|
|
2,480
|
|
|
|
13,262
|
|
|
|
1,654
|
|
|
|
2/17/2015
|
|
|
$
|
69.54
|
(2)
|
|
|
2/17/2025
|
|
|
|
2018
|
|
|
Windrow
|
|
|
2,330
|
|
|
|
12,453
|
|
|
|
1,553
|
|
|
|
2/17/2015
|
|
|
$
|
69.54
|
(2)
|
|
|
2/17/2025
|
|
|
|
2018
|
|
|
Van Oss
(3)
|
|
|
6,472
|
|
|
|
34,595
|
|
|
|
4,313
|
|
|
|
2/17/2015
|
|
|
$
|
69.54
|
(2)
|
|
|
2/17/2025
|
|
|
|
2018
|
|
|
(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 17, 2015 grant date in accordance with Compensation Committee
action on February 17, 2015.
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(3)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
|
Our Insider Trading Policy prohibits our Directors and NEOs from engaging in hedging transactions involving Company
securities and from pledging Company securities as collateral for loans.
Performance Shares awarded in 2013 for the three-year performance period ended
December 31, 2015 (the “2013
Performance Shares”) were forfeited because the performance goals were not met. Performance was measured over a three-year cycle and used two performance goals, relative Total Shareholder
Return (TSR) and three-year average Net Income Growth, with each goal weighted 50% of the target performance share award.
Retirement Savings
Our Company maintains a 401(k) Retirement Savings Plan for all eligible employees, including the NEOs. In 2015, the Company
matched employee contributions at a rate of $0.50 per $1.00 of contributions up to 6% of eligible compensation. The Company made a discretionary payment in 2015 for the plan year ended in December 2014, which was capped at $2,000 per person.
We also maintain an unfunded nonqualified deferred compensation plan for a select group of qualifying management or highly compensated employees, including the NEOs.
Participants may defer a portion of their salary and are eligible for a Company match at a rate of $0.50 per $1.00 up to 6% of eligible compensation less any Company match paid under the 401(k) plan. Earnings are credited to employees’ accounts
based
on their deemed investment selections from offered investment funds. Notwithstanding any provision of the Deferred Compensation Plan or benefit election made by any participant deemed to be a key
employee, benefits payable under the Deferred Compensation Plan will not commence until at least six months after the key employee’s separation from employment. See the “Nonqualified Deferred Compensation” table on page 32 for more
information regarding the NEOs’ benefits under the Deferred Compensation Plan.
Our Company does not have a defined benefit or supplemental retirement plan or
any plans providing for post-retirement health benefits for our NEOs.
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WESCO International, Inc. - 2016 Proxy Statement
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| 23
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Compensation Discussion and Analysis
Health and Welfare Benefits
We provide health benefits to full-time employees, including the NEOs, who meet the eligibility requirements. Employees pay
a portion of the cost of healthcare on an increasing scale correlated to higher annual incomes. Accordingly, the NEOs’ percentage share of the cost of benefit coverage under our plan is higher than other employees. Our health and welfare
benefits
are evaluated periodically by external benefits consultants to assess plan performance and costs and to ensure that benefit levels approximate the median value provided to employees of peer
companies. As a risk management measure, we also offer executive physicals involving diagnostic testing.
Perquisites
During 2015, the Company provided a limited number of perquisites to the NEOs. They primarily consist of a vehicle
allowance, club memberships and spousal travel to certain business functions. The Compensation Committee determined that it is in the Company’s best interest to continue providing
these perquisites in order to offer a competitive pay package. The Company does not provide tax gross-ups on executive-only perquisites. See the “All Other Compensation” table on page
28 for more information regarding the perquisites given to our NEOs.
Clawback Provisions
We have adopted a “clawback” policy to provide for recovery of incentive compensation, if any, in excess of what
would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results
and also to provide for clawback of incentive compensation in the event of misconduct by an executive officer or former executive officer.
OTHER COMPENSATION AND
EMPLOYMENT ARRANGEMENTS
Stock Ownership Guidelines and Holding Periods for Executive Officers
Our Board has adopted stock ownership guidelines for certain executive officers. For the NEOs, the ownership guidelines are
as follows:
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•
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|
Chief Executive Officer – five times annual base salary;
|
|
•
|
|
Chief Financial Officer – three times annual base salary; and
|
|
•
|
|
Chief Human Resources Officer, General Counsel and Vice President and Corporate Controller – two times annual base salary.
|
These officers are expected to acquire their initial ownership positions within five years of their appointment and to hold
those ownership positions during their service as executives of the Company. Until the stock ownership guidelines are met, an officer must hold a minimum of 50% of the pre-tax value realized at the exercise or vesting of equity awards. All of our
NEOs have acquired or are acquiring equity in accordance with the guidelines. See “Security Ownership” on page 13 for more information on their ownership positions. See also “Director Compensation” on page 38 for information
about Stock Ownership Guidelines for Directors.
Chief Executive Officer Compensation
Mr. Engel’s compensation is higher than the compensation of other NEOs due to the broad scope of his
responsibilities as Chief Executive Officer, including executive leadership in the development, articulation and promotion of the Company’s vision, goals and values, the development and execution of the Company’s long-term strategy and
annual operating and financial plans, the development and motivation of the senior management team, ensuring the recruitment, training
and development of the required human resources to meet the needs of the Company, and overall service as the principal spokesperson for the Company in communicating with stockholders,
employees, customers, suppliers, and our Board and Board committees. During the year, Mr. Engel’s target total compensation for 2015 (the total of salary, target annual cash incentive and long-term incentives) was below the 50
th
percentile of the Company’s comparator group.
Employment, Severance, Change in Control or Other
Arrangements
Mr. Engel has a 2009 Employment Agreement that provides for, among other things, an initial annual base salary of
$725,000
with a target bonus of not less than 100% of base salary, as may be adjusted in the Compensation Committee’s discretion.
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24 |
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WESCO International, Inc. - 2016 Proxy Statement
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|
Compensation Discussion and Analysis
Mr. Engel also receives long-term equity-based incentives under the Company’s Long-Term Incentive Plan as
determined by the Committee. In the event that prior to a change in control Mr. Engel’s employment is terminated by the Company without cause or by Mr. Engel for good reason, he will be entitled to receive monthly cash payments for 24
months in an amount equal to his monthly base salary as of the termination date, a lump sum cash amount equal to his target annual incentive opportunity for the year in which he was terminated and accelerated vesting of all stock-based awards,
exercisable for up to 18 months, except for performance based awards where operational or performance criteria have not been met. If such termination occurs within two years after a change in control, Mr. Engel will instead be entitled to
receive (i) a lump sum cash payment equal to two times the sum of his annual base salary and his annual target incentive opportunity as of the termination date, (ii) a gross-up payment to offset certain excise taxes, if any,
(iii) prorated incentive compensation for the year in which he was terminated and (iv) accelerated vesting of all stock-based awards, exercisable for up to 18 months, except for performance-based awards where operational or
performance criteria have not been met. As disclosed previously, other than the pre-existing employment agreement with Mr. Engel, the Company has no other agreements with executive officers providing for excise tax gross-ups with respect to
payments contingent upon a change in control. In addition, the Company committed that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon
a change in control and, indeed, has not entered into any such agreements. See “Potential Payments Upon Termination” on page 33 for additional information. The 2009 employment agreement has a term of three years and thereafter is subject
to one-year automatic extensions. Mr. Engel is subject to confidentiality obligations during the term of his employment and for five years thereafter. He is bound by restrictive covenants in the form of non-competition and non-solicitation of
employees and customers during the term of his employment and for a period of two years thereafter.
Consistent with the terms of his prior employment agreement and
pursuant to a Release Agreement dated October 8, 2015 (the “Release”) and as previously disclosed on the Form 8-K filed by the Company on October 9, 2015 and as set forth on Exhibit 10.3 to the Company’s Quarterly Report on
Form 10-Q for its quarter ended September 30, 2015. Mr. Stephen A. Van Oss, former Senior Vice President and Chief Operating Officer is entitled to receive the following severance benefits: (i) an amount equal to $56,250
payable in each of the first 24 months following December 2015; (ii) an amount equal to $607,500 payable at the end of 2015; (iii) full vesting of his SARs and RSUs (except Performance Share Awards were unvested and forfeited); and
(iv) for a period of 24 months after December 2015, coverage with health, dental and vision benefits subject to his payment of a portion of the monthly premiums for such coverage. Under the terms of the Release, Mr. Van Oss agreed to a
general release of
claims with respect to the Company and to non-competition, non-solicitation, non-disparagement, and confidentiality provisions.
Mr. Parks would be entitled to receive a severance payment equal to one year’s base salary plus pro rata bonus if he is terminated by the Company without cause,
or he terminates his employment for good reason, as described on page 35. Mr. Parks is bound by restrictive covenants in the form of non-competition and non-solicitation of employees during the term of his employment and for a period of one
year thereafter.
Under the 2006 Severance Plan described below, Mr. Hibbard would be eligible to receive eleven weeks of severance if he is terminated by the
Company without cause. Mr. Hibbard is bound by restrictive covenants in the form of noncompetition and non-solicitation of employees during the term of his employment and for a period of one year thereafter. His employment is not subject to an
employment agreement or term sheet with the Company.
Ms. Lazzaris would be entitled to receive a severance payment equal to one year’s base salary plus pro
rata bonus if she is terminated by the Company without cause, if she terminates her employment for good reason, or if her employment is terminated within one year following a change in control of the Company (other than for cause), as described on
page 36.
Ms. Windrow would be entitled to receive a severance payment equal to one year’s base salary plus pro rata bonus if she is terminated by the
Company without cause, or she terminates her employment for good reason, as described on page 37. Ms. Windrow is bound by restrictive covenants in the form of non-competition and non-solicitation of employees during the term of her employment
and for a period of one year thereafter.
The Company’s LTIP provides that SAR and RSU awards would vest upon consummation of a Change in Control transaction,
and our performance share award agreements provide that performance share awards would vest at the target level upon consummation of a Change in Control transaction. The payments to the NEOs upon consummation of a Change in Control transaction for
accelerated vesting of equity awards are set forth in the first column of each table on pages 33 to 37.
During 2006, our Board adopted the WESCO Distribution, Inc.
2006 Severance Plan which provides severance benefits to all eligible employees, not limited to executives. In accordance with the WESCO Distribution, Inc. 2006 Severance Plan, in the event of an involuntary termination without cause, an eligible
employee would receive severance payments of up to 52 weeks of base pay based on the employee’s completed years of service.
As set forth on an exhibit to the
Company’s Form 10-K filed on February 22, 2016, the Company has entered into indemnification agreements with Messrs. Engel and Parks and Messes. Lazzaris and Windrow providing for: indemnification for indemnifiable claims and losses;
advancement of expenses; and D&O liability insurance.
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WESCO International, Inc. - 2016 Proxy Statement
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| 25
|
Compensation Discussion and Analysis
Compensation Practices and Risk
On an annual basis, the Committee reviews the potential for risk regarding our compensation program design, including
incentive compensation. The Committee has reviewed the Company’s compensation programs for employees generally and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the
Company. The Committee believes that the design of the Company’s annual cash and long-term equity incentives provides an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long-term
stockholder value creation and does not encourage the taking of short-term risks at the expense of long-term results. As
previously noted above, the Company also maintains stock ownership guidelines and has adopted a clawback policy that applies to incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive
officers in the event that the Company is required to restate financial results and also to provide for clawback of incentive compensation in the event of misconduct by an executive officer or former executive officer.
Deductibility of Executive Compensation
We consider the anticipated accounting and tax treatment to the Company and our executive officers when reviewing executive
compensation and our compensation programs, and generally intend for compensation paid to its executive officers to be within the limits of, or exempt from, the deductibility limits of Section 162(m) of the Internal Revenue Code. However, the
Company reserves the right to pay compensation that is not deductible and a portion of the executive officers’ compensation paid in 2015 was not deductible. The deductibility of some types of compensation payments can depend upon the timing of
an executive’s vesting or exercise of previously granted rights or termination of employment.
Code Section 162(m) generally imposes a $1 million limit on
the amount that a public company may deduct for compensation
paid to the Company’s CEO and certain other highly compensated executive officers (together, the “covered employees”). This limitation does not apply to compensation
that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s or the Company’s performance meets
pre-established
objective goals based on stockholder-approved performance criteria).
An annual incentive pool is established
and approved based on achievement of certain performance conditions from which RSUs and annual incentive plan awards are paid to covered employees, and then negative discretion is applied to this pool to decrease (but not increase) the amount
of any award payable from the pool to covered employees.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management
and, based on that review and those discussions, it recommended to the Board of Directors that the foregoing Compensation Discussion and Analysis be included in our Proxy Statement, and incorporated by reference in our Annual Report on Form 10-K for
the year ended December 31, 2015.
Respectfully Submitted:
T
HE
C
OMPENSATION
C
OMMITTEE
John K.
Morgan,
Chairman
Sandra Beach Lin
Bobby J. Griffin
James L. Singleton
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26 |
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WESCO International, Inc. - 2016 Proxy Statement
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Compensation Tables
COMPENSATION TABLES
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Name and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Option
Awards
(1)
|
|
|
Stock
Awards
(2)
|
|
|
Non-Equity
Incentive Plan
Compensation
(3)
|
|
|
All Other
Compensation
(4)
|
|
|
Total
|
|
|
John J. Engel,
|
|
|
2015
|
|
|
$
|
950,000
|
(6)
|
|
$
|
2,100,033
|
|
|
$
|
2,073,514
|
|
|
$
|
800,000
|
|
|
$
|
90,558
|
|
|
$
|
6,014,105
|
|
|
Chairman, President
|
|
|
2014
|
|
|
$
|
942,500
|
|
|
$
|
1,950,007
|
|
|
$
|
1,967,812
|
|
|
$
|
800,000
|
|
|
$
|
96,508
|
|
|
$
|
5,756,827
|
|
|
and CEO
|
|
|
2013
|
|
|
$
|
892,500
|
|
|
$
|
1,800,002
|
|
|
$
|
1,890,491
|
(7)
|
|
$
|
1,000,000
|
|
|
$
|
202,287
|
|
|
$
|
5,785,280
|
|
|
Kenneth S. Parks,
|
|
|
2015
|
|
|
$
|
480,385
|
(6)
|
|
$
|
574,975
|
|
|
$
|
567,782
|
|
|
$
|
275,000
|
|
|
$
|
22,183
|
|
|
$
|
1,920,325
|
|
|
SVP and CFO
|
|
|
2014
|
|
|
$
|
445,000
|
|
|
$
|
500,034
|
|
|
$
|
504,551
|
|
|
$
|
250,000
|
|
|
$
|
18,777
|
|
|
$
|
1,718,362
|
|
|
|
|
|
2013
|
|
|
$
|
380,000
|
|
|
$
|
485,553
|
|
|
$
|
420,105
|
(7)
|
|
$
|
225,000
|
|
|
$
|
26,143
|
|
|
$
|
1,536,801
|
|
|
Timothy A. Hibbard,
|
|
|
2015
|
|
|
$
|
295,385
|
(6)
|
|
$
|
117,484
|
|
|
$
|
116,042
|
|
|
$
|
125,000
|
|
|
$
|
23,191
|
|
|
$
|
677,102
|
|
|
VP and Corporate Controller
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diane E. Lazzaris,
|
|
|
2015
|
|
|
$
|
410,577
|
(6)
|
|
$
|
287,520
|
|
|
$
|
283,858
|
|
|
$
|
188,000
|
|
|
$
|
26,773
|
|
|
$
|
1,196,728
|
|
|
SVP and GC
|
|
|
2014
|
|
|
$
|
390,000
|
|
|
$
|
262,500
|
|
|
$
|
264,936
|
|
|
$
|
150,000
|
|
|
$
|
23,952
|
|
|
$
|
1,091,388
|
|
|
|
|
|
2013
|
|
|
$
|
350,000
|
|
|
$
|
237,481
|
|
|
$
|
249,462
|
(7)
|
|
$
|
205,000
|
|
|
$
|
44,939
|
|
|
$
|
1,086,882
|
|
|
Kimberly G. Windrow,
|
|
|
2015
|
|
|
$
|
380,865
|
(6)
|
|
$
|
269,981
|
|
|
$
|
266,622
|
|
|
$
|
175,000
|
|
|
$
|
30,189
|
|
|
$
|
1,122,657
|
|
|
SVP and CHRO
|
|
|
2014
|
|
|
$
|
376,250
|
|
|
$
|
250,002
|
|
|
$
|
252,275
|
|
|
$
|
150,000
|
|
|
$
|
29,390
|
|
|
$
|
1,057,917
|
|
|
|
|
|
2013
|
|
|
$
|
345,000
|
|
|
$
|
224,949
|
|
|
$
|
236,352
|
(7)
|
|
$
|
200,000
|
|
|
$
|
61,319
|
|
|
$
|
1,067,620
|
|
|
Stephen A. Van Oss,
(5)
|
|
|
2015
|
|
|
$
|
662,019
|
(6)
|
|
$
|
750,020
|
|
|
$
|
740,540
|
|
|
|
—
|
|
|
$
|
665,900
|
|
|
$
|
2,818,479
|
|
|
Former SVP and COO
|
|
|
2014
|
|
|
$
|
668,750
|
|
|
$
|
875,006
|
|
|
$
|
883,006
|
|
|
$
|
375,000
|
|
|
$
|
56,098
|
|
|
$
|
2,857,860
|
|
|
|
|
|
2013
|
|
|
$
|
645,000
|
|
|
$
|
874,952
|
|
|
$
|
919,030
|
(7)
|
|
$
|
290,250
|
|
|
$
|
129,138
|
|
|
$
|
2,858,370
|
|
|
(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 60 to 62 of our financial statements for the year ended December 31, 2015 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 $2,467,219; Mr. Parks
$675,626; Mr. Hibbard $138,066; Ms. Lazzaris $337,677; and Ms. Windrow $317,253. 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 60 to 62 of our financial statements for the year ended December 31, 2015 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 28 for additional information.
|
|
(5)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
|
|
(6)
|
Amounts shown are less than the individual’s stated base salary because during 2015 the Company had a cost-savings program of mandatory unpaid leaves of absence in which individuals took a week’s leave of
absence. Individual’s also had the option to take an additional week of unpaid leave on a voluntary basis.
|
|
(7)
|
Performance shares awarded in 2013 for the three-year performance period ended December 31, 2015 were forfeited, which represents approximately 60% of this amount.
|
|
|
|
|
|
|
|
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
| 27
|
Compensation Tables
All Other Compensation
The following table describes each component of the All Other Compensation column for 2015 in the Summary Compensation Table. The most significant component of this table
is Company payments or contributions to employee retirement savings programs. These payments are further analyzed in the table contained in footnote (4) and include payments that are also presented and discussed there.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Year
|
|
|
Other
Benefits
(1)
|
|
|
Auto
Allowance
(2)
|
|
|
Tax
Payments
(3)
|
|
|
Payments
Relating to
Employee
Retirement
Savings
Programs
(4)
|
|
|
Total
|
|
|
Engel
|
|
|
2015
|
|
|
$
|
24,058
|
|
|
$
|
12,000
|
|
|
|
—
|
|
|
$
|
54,500
|
|
|
$
|
90,558
|
|
|
Parks
|
|
|
2015
|
|
|
$
|
233
|
|
|
$
|
12,000
|
|
|
|
—
|
|
|
$
|
9,950
|
|
|
$
|
22,183
|
|
|
Hibbard
|
|
|
2015
|
|
|
$
|
179
|
|
|
$
|
9,000
|
|
|
|
—
|
|
|
$
|
14,012
|
|
|
$
|
23,191
|
|
|
Lazzaris
|
|
|
2015
|
|
|
$
|
189
|
|
|
$
|
12,000
|
|
|
|
—
|
|
|
$
|
14,584
|
|
|
$
|
26,773
|
|
|
Windrow
|
|
|
2015
|
|
|
$
|
263
|
|
|
$
|
12,000
|
|
|
|
—
|
|
|
$
|
17,926
|
|
|
$
|
30,189
|
|
|
Van
Oss
(5)
|
|
|
2015
|
|
|
$
|
620,789
|
|
|
$
|
12,000
|
|
|
|
—
|
|
|
$
|
33,111
|
|
|
$
|
665,900
|
|
|
(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 include s club dues of $20,212 and imputed income for spousal travel.
The amount for Mr. Van Oss represents a severance payment of $607,500 as further described on page 25, club dues and imputed income for spousal travel.
|
|
(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
|
|
|
2015
|
|
|
$
|
7,950
|
|
|
$
|
44,550
|
|
|
$
|
2,000
|
|
|
|
—
|
|
|
$
|
54,500
|
|
|
Parks
|
|
|
2015
|
|
|
$
|
7,950
|
|
|
|
—
|
|
|
$
|
2,000
|
|
|
|
—
|
|
|
$
|
9,950
|
|
|
Hibbard
|
|
|
2015
|
|
|
$
|
7,950
|
|
|
$
|
4,062
|
|
|
$
|
2,000
|
|
|
|
—
|
|
|
$
|
14,012
|
|
|
Lazzaris
|
|
|
2015
|
|
|
$
|
7,950
|
|
|
$
|
4,634
|
|
|
$
|
2,000
|
|
|
|
—
|
|
|
$
|
14,584
|
|
|
Windrow
|
|
|
2015
|
|
|
$
|
7,950
|
|
|
$
|
7,976
|
|
|
$
|
2,000
|
|
|
|
—
|
|
|
$
|
17,926
|
|
|
Van Oss
|
|
|
2015
|
|
|
$
|
7,950
|
|
|
$
|
23,161
|
|
|
$
|
2,000
|
|
|
|
—
|
|
|
$
|
33,111
|
|
|
(5)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
|
|
|
|
|
|
|
|
28 |
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
|
Compensation Tables
Grants of Plan-based Awards for 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible
Payouts Under Non-Equity
Incentive Plan Awards
(1)
|
|
|
Estimated Future
Payouts Under Equity
Incentive Plan
Awards
(2)
|
|
|
All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)
(3)
|
|
|
All Other
Stock
Awards:
Number of
Securities
Underlying
Stock
Units
(#)
(4)
|
|
|
Exercise
or Base
Price of
Option
Awards
($/SH)
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards
(5)
|
|
|
Name
|
|
Grant
Date
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
|
|
Engel
|
|
|
2/17/15
|
|
|
|
|
|
|
|
|
|
|
|
9,060
|
|
|
|
18,120
|
|
|
|
36,240
|
|
|
|
96,865
|
|
|
|
12,078
|
|
|
$
|
69.54
|
(6)
|
|
$
|
4,173,547
|
|
|
|
|
|
|
|
$
|
1,201,250
|
|
|
$
|
2,402,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parks
|
|
|
2/17/15
|
|
|
|
|
|
|
|
|
|
|
|
2,481
|
|
|
|
4,962
|
|
|
|
9,924
|
|
|
|
26,521
|
|
|
|
3,307
|
|
|
$
|
69.54
|
(6)
|
|
$
|
1,142,757
|
|
|
|
|
|
|
|
$
|
367,500
|
|
|
$
|
735,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hibbard
|
|
|
2/17/15
|
|
|
|
|
|
|
|
|
|
|
|
507
|
|
|
|
1,014
|
|
|
|
2,028
|
|
|
|
5,419
|
|
|
|
676
|
|
|
$
|
69.54
|
(6)
|
|
$
|
233,526
|
|
|
|
|
|
|
|
$
|
150,625
|
|
|
$
|
301,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lazzaris
|
|
|
2/17/15
|
|
|
|
|
|
|
|
|
|
|
|
1,240
|
|
|
|
2,480
|
|
|
|
4,960
|
|
|
|
13,262
|
|
|
|
1,654
|
|
|
$
|
69.54
|
(6)
|
|
$
|
571,378
|
|
|
|
|
|
|
|
$
|
251,250
|
|
|
$
|
502,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Windrow
|
|
|
2/17/15
|
|
|
|
|
|
|
|
|
|
|
|
1,165
|
|
|
|
2,330
|
|
|
|
4,660
|
|
|
|
12,453
|
|
|
|
1,553
|
|
|
$
|
69.54
|
(6)
|
|
$
|
536,603
|
|
|
|
|
|
|
|
$
|
237,750
|
|
|
$
|
475,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Van Oss
(7)
|
|
|
2/17/15
|
|
|
|
|
|
|
|
|
|
|
|
3,236
|
|
|
|
6,472
|
|
|
|
12,944
|
|
|
|
34,595
|
|
|
|
4,313
|
|
|
$
|
69.54
|
(6)
|
|
$
|
1,490,559
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents possible annual incentive cash awards that could have been earned in 2015 at “target” and “maximum” levels of performance. Amounts actually received by the NEOs under the annual incentive
plans for 2015 performance are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 27. For further information about the annual incentive plans, please see the related discussion
beginning on page 21.
|
|
(2)
|
Represents possible performance share awards granted in 2015 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 of relative total shareholder return and the three-year average net income growth rate achieved by the Company during the three-year performance period ending
December 31, 2017. For further information about the long-term incentive performance share awards, see discussion beginning on page 22.
|
|
(3)
|
Represents the number of SARs granted in 2015 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 2015 to the NEOs. The RSUs will cliff vest on the anniversary date in 2018.
|
|
(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 Company’s financial statements in
the Annual Report on Form 10-K for the year ended December 31, 2015.
|
|
(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 17, 2015, in accordance with Committee action on the grant
date indicated.
|
|
(7)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
|
|
|
|
|
|
|
|
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
| 29
|
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
Vested
|
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
(1)
|
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of
Unearned
Shares, Units
or Other Rights
That Have
Not Vested
|
|
|
Engel
|
|
|
7/01/2006
|
|
|
|
37,500
|
|
|
|
—
|
|
|
$
|
69.00
|
|
|
|
7/01/2016
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2007
|
|
|
|
45,000
|
|
|
|
—
|
|
|
$
|
60.45
|
|
|
|
7/01/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2008
|
|
|
|
75,000
|
|
|
|
—
|
|
|
$
|
40.04
|
|
|
|
7/01/2018
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2009
|
|
|
|
150,673
|
|
|
|
—
|
|
|
$
|
25.37
|
|
|
|
7/01/2019
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2010
|
|
|
|
125,597
|
|
|
|
—
|
|
|
$
|
33.05
|
|
|
|
7/01/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2011
|
|
|
|
77,323
|
|
|
|
—
|
|
|
$
|
60.05
|
|
|
|
2/16/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2012
|
|
|
|
55,396
|
|
|
|
—
|
|
|
$
|
64.33
|
|
|
|
2/16/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/21/2013
|
|
|
|
38,302
|
|
|
|
19,151
|
|
|
$
|
72.15
|
|
|
|
2/21/2023
|
|
|
|
9,978
|
|
|
$
|
435,839
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/18/2014
|
|
|
|
21,201
|
|
|
|
42,400
|
|
|
$
|
85.35
|
|
|
|
2/18/2024
|
|
|
|
9,139
|
|
|
$
|
399,191
|
|
|
|
13,708
|
|
|
$
|
598,765
|
|
|
|
|
|
2/17/2015
|
|
|
|
—
|
|
|
|
96,865
|
|
|
$
|
69.54
|
|
|
|
2/17/2025
|
|
|
|
12,078
|
|
|
$
|
527,567
|
|
|
|
18,120
|
|
|
$
|
791,481
|
|
|
Total:
|
|
|
|
|
|
|
625,992
|
|
|
|
158,416
|
|
|
|
|
|
|
|
|
|
|
|
31,195
|
|
|
$
|
1,362,597
|
|
|
|
31,828
|
|
|
$
|
1,390,246
|
|
|
Parks
|
|
|
6/08/2012
|
|
|
|
7,500
|
|
|
|
—
|
|
|
$
|
58.04
|
|
|
|
6/08/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/21/2013
|
|
|
|
8,511
|
|
|
|
4,256
|
|
|
$
|
72.15
|
|
|
|
2/21/2023
|
|
|
|
2,218
|
|
|
$
|
96,882
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
6/03/2013
|
|
|
|
1,800
|
|
|
|
900
|
|
|
$
|
74.00
|
|
|
|
6/03/2023
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/18/2014
|
|
|
|
5,437
|
|
|
|
10,872
|
|
|
$
|
85.35
|
|
|
|
2/18/2024
|
|
|
|
2,342
|
|
|
$
|
102,298
|
|
|
|
3,516
|
|
|
$
|
153,579
|
|
|
|
|
|
2/17/2015
|
|
|
|
—
|
|
|
|
26,521
|
|
|
$
|
69.54
|
|
|
|
2/17/2025
|
|
|
|
3,307
|
|
|
$
|
144,449
|
|
|
|
4,962
|
|
|
$
|
216,740
|
|
|
Total:
|
|
|
|
|
|
|
23,248
|
|
|
|
42,549
|
|
|
|
|
|
|
|
|
|
|
|
7,867
|
|
|
$
|
343,629
|
|
|
|
8,478
|
|
|
$
|
370,319
|
|
|
Hibbard
|
|
|
4/24/2007
|
|
|
|
3,200
|
|
|
|
—
|
|
|
$
|
62.08
|
|
|
|
4/24/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2007
|
|
|
|
6,000
|
|
|
|
—
|
|
|
$
|
60.45
|
|
|
|
7/01/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2008
|
|
|
|
10,000
|
|
|
|
—
|
|
|
$
|
40.04
|
|
|
|
7/01/2018
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2011
|
|
|
|
5,056
|
|
|
|
—
|
|
|
$
|
60.05
|
|
|
|
2/16/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2012
|
|
|
|
3,575
|
|
|
|
—
|
|
|
$
|
64.33
|
|
|
|
2/16/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/21/2013
|
|
|
|
2,128
|
|
|
|
1,064
|
|
|
$
|
72.15
|
|
|
|
2/21/2023
|
|
|
|
554
|
|
|
$
|
24,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2014
|
|
|
|
1,224
|
|
|
|
2,446
|
|
|
$
|
85.35
|
|
|
|
2/18/2024
|
|
|
|
526
|
|
|
$
|
22,976
|
|
|
|
792
|
|
|
$
|
34,595
|
|
|
|
|
|
2/17/2015
|
|
|
|
—
|
|
|
|
5,419
|
|
|
$
|
69.54
|
|
|
|
2/17/2025
|
|
|
|
676
|
|
|
$
|
29,528
|
|
|
|
1,014
|
|
|
$
|
44,292
|
|
|
Total:
|
|
|
|
|
|
|
31,183
|
|
|
|
8,929
|
|
|
|
|
|
|
|
|
|
|
|
1,756
|
|
|
$
|
76,703
|
|
|
|
1,806
|
|
|
$
|
78,887
|
|
|
Lazzaris
|
|
|
5/14/2010
|
|
|
|
4,000
|
|
|
|
—
|
|
|
$
|
37.90
|
|
|
|
5/14/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2010
|
|
|
|
15,017
|
|
|
|
—
|
|
|
$
|
33.05
|
|
|
|
7/01/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2011
|
|
|
|
9,665
|
|
|
|
—
|
|
|
$
|
60.05
|
|
|
|
2/16/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2012
|
|
|
|
6,700
|
|
|
|
—
|
|
|
$
|
64.33
|
|
|
|
2/16/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/21/2013
|
|
|
|
5,053
|
|
|
|
2,527
|
|
|
$
|
72.15
|
|
|
|
2/21/2023
|
|
|
|
1,316
|
|
|
$
|
57,483
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/18/2014
|
|
|
|
2,854
|
|
|
|
5,706
|
|
|
$
|
85.35
|
|
|
|
2/18/2024
|
|
|
|
1,230
|
|
|
$
|
53,726
|
|
|
|
1,846
|
|
|
$
|
80,633
|
|
|
|
|
|
2/17/2015
|
|
|
|
—
|
|
|
|
13,262
|
|
|
$
|
69.54
|
|
|
|
2/17/2025
|
|
|
|
1,654
|
|
|
$
|
72,247
|
|
|
|
2,480
|
|
|
$
|
108,326
|
|
|
Total:
|
|
|
|
|
|
|
43,289
|
|
|
|
21,495
|
|
|
|
|
|
|
|
|
|
|
|
4,200
|
|
|
$
|
183,456
|
|
|
|
4,326
|
|
|
$
|
188,959
|
|
|
Windrow
|
|
|
9/27/2010
|
|
|
|
3,850
|
|
|
|
—
|
|
|
$
|
39.26
|
|
|
|
9/27/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
9/28/2010
|
|
|
|
7,500
|
|
|
|
—
|
|
|
$
|
40.20
|
|
|
|
9/28/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2011
|
|
|
|
7,435
|
|
|
|
—
|
|
|
$
|
60.05
|
|
|
|
2/16/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
5/13/2011
|
|
|
|
2,800
|
|
|
|
—
|
|
|
$
|
54.84
|
|
|
|
5/13/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2012
|
|
|
|
6,700
|
|
|
|
—
|
|
|
$
|
64.33
|
|
|
|
2/16/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/21/2013
|
|
|
|
4,787
|
|
|
|
2,393
|
|
|
$
|
72.15
|
|
|
|
2/21/2023
|
|
|
|
1,247
|
|
|
$
|
54,468
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/18/2014
|
|
|
|
2,718
|
|
|
|
5,436
|
|
|
$
|
85.35
|
|
|
|
2/18/2024
|
|
|
|
1,171
|
|
|
$
|
51,149
|
|
|
|
1,758
|
|
|
$
|
76,789
|
|
|
|
|
|
2/17/2015
|
|
|
|
—
|
|
|
|
12,453
|
|
|
$
|
69.54
|
|
|
|
2/17/2025
|
|
|
|
1,553
|
|
|
$
|
67,835
|
|
|
|
2,330
|
|
|
$
|
101,774
|
|
|
Total:
|
|
|
|
|
|
|
35,790
|
|
|
|
20,282
|
|
|
|
|
|
|
|
|
|
|
|
3,971
|
|
|
$
|
173,452
|
|
|
|
4,088
|
|
|
$
|
178,563
|
|
|
Van Oss
(2)
|
|
|
7/01/2006
|
|
|
|
37,500
|
|
|
|
—
|
|
|
$
|
69.00
|
|
|
|
7/01/2016
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2007
|
|
|
|
45,000
|
|
|
|
—
|
|
|
$
|
60.45
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2008
|
|
|
|
75,000
|
|
|
|
—
|
|
|
$
|
40.04
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2009
|
|
|
|
107,623
|
|
|
|
—
|
|
|
$
|
25.37
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7/01/2010
|
|
|
|
81,911
|
|
|
|
—
|
|
|
$
|
33.05
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2011
|
|
|
|
44,610
|
|
|
|
—
|
|
|
$
|
60.05
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/16/2012
|
|
|
|
29,486
|
|
|
|
—
|
|
|
$
|
64.33
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/21/2013
|
|
|
|
27,927
|
|
|
|
—
|
|
|
$
|
72.15
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/18/2014
|
|
|
|
28,539
|
|
|
|
—
|
|
|
$
|
85.35
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2/17/2015
|
|
|
|
34,595
|
|
|
|
—
|
|
|
$
|
69.54
|
|
|
|
6/30/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,798
|
|
|
$
|
78,536
|
|
|
Total:
|
|
|
|
|
|
|
512,191
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,798
|
|
|
$
|
78,536
|
|
|
(1)
|
The amounts included in the table above reflect target payouts for performance shares as the current results for 2014 and 2015 are below target. The final amounts will be interpolated based on actual final results.
|
|
(2)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
|
|
|
|
|
|
|
|
30 |
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
|
Compensation Tables
Equity Awards Vesting Schedule
|
|
|
|
|
Grant Date
|
|
Vesting Schedule
|
|
2/21/2013
|
|
SARs: Time-based vesting in 1/3 increments on February 21, 2014; February 21, 2015; and February 21,
2016.
RSUs: Cliff vest on February 21, 2016.
Performance shares: based on two equally-weighted performance measures of relative total shareholder
return and the three-year average net income growth rate achieved by the Company during the three-year performance period ending December 31, 2015. Because the Company did not meet the threshold achievement levels, these awards were
forfeited.
|
|
6/3/2013
|
|
SARs: Time-based vesting in 1/3 increments on June 3, 2014; June 3, 2015; and June 3, 2016.
|
|
2/18/2014
|
|
SARs: Time-based vesting in 1/3 increments on February 18, 2015; February 18, 2016; and February 18,
2017.
RSUs: Cliff vest on February 18, 2017.
Performance shares: based on two equally-weighted performance measures of relative total shareholder
return and the three-year average net income growth rate achieved by the Company during the three-year performance period ending December 31, 2016. The award vests in the form of a number of shares of the Company’s common stock.
|
|
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 of relative total shareholder
return and the three-year average net income growth rate achieved by the Company during the three-year performance period ending December 31, 2017. The award vests in the form of a number of shares of the Company’s common stock.
|
|
Under the generally applicable terms of the Company’s 1999 Long-Term Incentive Plan, amended and approved by our Board and stockholders and restated effective May 30, 2013, 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.
|
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
Name
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
|
Value Realized
on Exercise
($)
(1)(2)
|
|
|
Number of Shares
Acquired on Vesting
(#)
(3)(4)
|
|
|
Value Realized
on Vesting
($)
|
|
|
Engel
|
|
|
75,000
|
|
|
$
|
2,936,250
|
|
|
|
22,939
|
|
|
$
|
1,582,264
|
|
|
Parks
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Hibbard
|
|
|
—
|
|
|
|
—
|
|
|
|
1,479
|
|
|
$
|
102,016
|
|
|
Lazzaris
|
|
|
—
|
|
|
|
—
|
|
|
|
2,775
|
|
|
$
|
191,412
|
|
|
Windrow
|
|
|
—
|
|
|
|
—
|
|
|
|
2,775
|
|
|
$
|
191,412
|
|
|
Van Oss
(5)
|
|
|
75,000
|
|
|
$
|
2,936,250
|
|
|
|
25,471
|
(6)
|
|
$
|
1,421,398
|
|
|
(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 17, 2015.
|
|
(4)
|
Represents shares acquired upon settlement of performance shares granted in 2012 under the Company’s long-term incentive plan. Each performance share represented a contingent right to receive one share of Common
Stock if the Company achieved specified performance goals during the three-years ended December 31, 2015.
|
|
(5)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year,
disclosure is provided pursuant to Regulation S-K Item 402(a)(3)(iv).
|
|
(6)
|
Of the number of shares acquired on vesting for Mr. Van Oss, 4,313 will not be distributed until 7/1/2016.
|
|
|
|
|
|
|
|
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
| 31
|
Compensation Tables
Nonqualified Deferred Compensation
The table below provides information on the nonqualified deferred compensation of the NEOs in 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
|
Executive
Contribution
in Last FY
(1)
|
|
|
Company
Contributions
in Last FY
(2)
|
|
|
Aggregate
Earnings
in Last FY
(3)
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
Aggregate
Balance
at Last FYE
(4)
|
|
|
Engel
|
|
|
2015
|
|
|
$
|
105,000
|
|
|
$
|
44,550
|
|
|
($
|
27,826
|
)
|
|
|
—
|
|
|
$
|
2,066,828
|
|
|
Parks
|
|
|
2015
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Hibbard
|
|
|
2015
|
|
|
$
|
126,346
|
|
|
$
|
4,062
|
|
|
$
|
19,138
|
|
|
|
—
|
|
|
$
|
856,976
|
|
|
Lazzaris
|
|
|
2015
|
|
|
$
|
16,817
|
|
|
$
|
4,634
|
|
|
$
|
439
|
|
|
|
—
|
|
|
$
|
119,434
|
|
|
Windrow
|
|
|
2015
|
|
|
$
|
31,852
|
|
|
$
|
7,976
|
|
|
($
|
5,000
|
)
|
|
|
—
|
|
|
$
|
217,038
|
|
|
Van Oss
(5)
|
|
|
2015
|
|
|
$
|
452,308
|
|
|
$
|
23,161
|
|
|
($
|
21,964
|
)
|
|
|
—
|
|
|
$
|
6,744,553
|
|
|
(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 27.
|
|
(3)
|
Reflects investment returns or earnings (losses) calculated by applying the investment return rate at the valuation date to the average balance of the participant’s deferral account and Company contribution account
since the last valuation date for each investment vehicle selected by the participant. Investment vehicles available to participants are a subset of those offered in the 401(k) plan and notably do not include Company stock.
|
|
(4)
|
Based upon years of service to the Company, Messrs. Engel, Hibbard, and Van Oss and Messes. Lazzaris and Windrow are each fully vested in the aggregate balance of their respective accounts at last year-end.
Mr. Parks did not participate in the Deferred Compensation Plan.
|
|
(5)
|
Mr. Van Oss is the former Senior Vice President and Chief Operating Officer, and although he was not serving as an executive officer at the end of the year, disclosure is provided pursuant to Regulation S-K
Item 402(a)(3)(iv).
|
|
|
|
|
|
|
|
32 |
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
|
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MR. ENGEL
Each of the following potential scenarios
represents circumstances under which Mr. Engel’s employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Engel in each scenario is provided. In each case, the date of the termination
is assumed to be December 31, 2015. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Mr. Engel upon separation from the Company is governed by his Amended
and Restated Employment Agreement dated September 1, 2009. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
“Cause” means (a) a material breach of the employment agreement by Mr. Engel; (b) engaging in a felony or conduct which is in the good faith
judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers, or stockholders; (c) failure to timely and adequately perform his duties under the
employment agreement; or (d) material breach of any manual or written policy, code or procedure of the Company.
“Change in Control” has the meaning
given to such term in the Company’s Long-Term Incentive Plan, which means (a) the acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or
consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an
entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a) a
reduction in Mr. Engel’s base salary, excluding any reduction that occurs in connection with an across-the-board reduction of the salaries of the entire senior management team; (b) a relocation of Mr. Engel’s primary place
of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) any material reduction in Mr. Engel’s offices, 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
|
|
$
|
5,168,000
|
|
|
$
|
3,159,000
|
|
|
$
|
800,000
|
|
|
|
—
|
|
|
Accelerated Options & SARs
(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Accelerated RSUs
(6)
|
|
$
|
1,362,598
|
|
|
$
|
1,362,598
|
|
|
$
|
1,362,598
|
|
|
$
|
1,362,598
|
|
|
Accelerated Performance Shares
(7)
|
|
$
|
1,390,246
|
|
|
|
—
|
|
|
$
|
1,390,246
|
|
|
$
|
1,390,246
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits
|
|
$
|
15,079
|
|
|
$
|
15,079
|
|
|
|
—
|
|
|
|
—
|
|
|
280G Tax Gross-Up
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total:
|
|
$
|
7,935,923
|
|
|
$
|
4,536,677
|
|
|
$
|
3,552,844
|
|
|
$
|
2,752,844
|
|
|
(1)
|
Termination after Change in Control
|
|
|
Mr. Engel’s Change in Control benefits are double-triggered (other than equity awards which vest on a Change in Control), meaning that he will receive these payments only if (i) there is a Change in
Control and (ii) Mr. Engel’s employment is terminated within two years following a Change in Control without Cause or by Mr. Engel for Good Reason, in which case Mr. Engel will be entitled to receive:
|
|
|
•
|
|
Two times annual base salary.
|
|
|
•
|
|
Two times the annual target bonus opportunity.
|
|
|
•
|
|
Prorated annual incentive compensation for the portion of the fiscal year employed, if earned.
|
|
|
•
|
|
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target.
|
|
|
•
|
|
Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums.
|
|
|
•
|
|
Additional gross-up premium sufficient to reimburse the executive for excise taxes, if any, payable as a result of termination payments plus any income taxes on the reimbursement payment itself. Other than the
pre-existing employment agreement with Mr. Engel, the Company has no other agreement with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control. In addition, the Company committed
that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control and, indeed, has not entered into any such agreements.
|
|
(2)
|
Involuntary Not for Cause or Executive for Good Reason Termination
|
|
|
•
|
|
Monthly base salary continuation for 24 months.
|
|
|
•
|
|
An amount equal to the executive’s annual target bonus opportunity.
|
|
|
•
|
|
Full vesting of outstanding stock options, SARs, and RSUs.
|
|
|
•
|
|
Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums.
|
|
|
|
|
|
|
|
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
| 33
|
Potential Payments Upon Termination
|
|
•
|
|
Any accrued and earned but unpaid bonus.
|
|
|
•
|
|
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target.
|
|
|
•
|
|
Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target.
|
|
(5)
|
Accelerated Options & SARs
|
|
|
The closing price of WESCO common stock on December 31, 2015 was $43.68. The amount shown is the excess, if any, of the December 31, 2015 closing price over the exercise price multiplied by the number of SARs.
|
|
(6)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of RSUs.
|
|
(7)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of Performance Shares at target.
|
|
|
|
|
|
|
|
34 |
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
|
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MR. PARKS
Each of the following potential scenarios
represents circumstances under which Mr. Parks’ employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Parks in each scenario is provided. In each case, the date of the termination
is assumed to be December 31, 2015. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Mr. Parks upon separation from the Company is governed by a term sheet
dated May 31, 2012. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
“Cause” means
(a) engaging in a felony or engaging in conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers or stockholders;
(b) inability to meet the expectations of employee’s job responsibilities or failure to timely and adequately perform employee’s duties; or (c) material breach of any manual or written policy, code or procedure of the Company.
“Change in Control” has the meaning given to such term in the Company’s Long-Term Incentive Plan, which means (a) the acquisition by any entity
not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the
liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a) a reduction in Mr. Parks base salary, excluding any reduction that occurs in connection with an across the board reduction of
the salaries of the senior management team; (b) a relocation of primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) a change in the authority, duties or responsibilities that materially and
adversely affect Mr. Parks’ role in the organization.
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and Payments Upon Termination
|
|
Termination
After Change
in Control
(1)
|
|
|
Involuntary Not
for Cause or Good
Reason Termination
(2)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
Base Salary and Incentive
|
|
$
|
775,000
|
|
|
$
|
775,000
|
|
|
Accelerated SARs
(3)
|
|
|
—
|
|
|
|
—
|
|
|
Restricted Stock Units
(4)
|
|
$
|
343,630
|
|
|
|
—
|
|
|
Performance Shares
(5)
|
|
$
|
370,319
|
|
|
|
—
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
Medical Benefits
|
|
$
|
4,697
|
|
|
$
|
4,697
|
|
|
Total:
|
|
$
|
1,493,646
|
|
|
$
|
779,697
|
|
|
(1)
|
Termination After Change in Control
|
|
|
•
|
|
Payment equal to one-year’s 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-year’s 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.
|
|
|
The closing price of WESCO common stock on December 31, 2015 was $43.68. The amount shown is the excess, if any, of the December 31, 2015 closing price over the exercise price multiplied by the number of SARs.
|
|
(4)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of RSUs.
|
|
(5)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of performance shares at target.
|
|
|
|
|
|
|
|
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
| 35
|
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MS. LAZZARIS
Each of the following potential scenarios represents
circumstances under which Ms. Lazzaris’ employment with the Company could potentially terminate. A description of the compensation benefits due Ms. Lazzaris in each scenario is provided. In each case, the date of the termination is
assumed to be December 31, 2015. The amounts described in the table below will change based on the assumed termination date. The determination of compensation due to Ms. Lazzaris upon separation from the Company is governed by a term sheet
dated January 15, 2010. Payment of severance benefits in the event of a termination without cause is subject to the execution of a release.
“Cause”
means (a) engaging in a felony or engaging in conduct which is in the good faith judgment of the Board, applying reasonable standards of personal and professional conduct, injurious to the Company, its customers, employees, suppliers or
stockholders; (b) inability to meet the expectations of employee’s job responsibilities or failure to timely and adequately perform employee’s duties; or (c) material breach of any manual or written policy, code or procedure of
the Company.
“Change in Control” has the meaning given to such term in the Company’s Long-Term Incentive Plan, which means (a) the acquisition by
any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or consolidation of the Company resulting in Company stockholders having less than 70% of the combined voting power;
(c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an entity unrelated to the Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a) a reduction in Ms. Lazzaris’ base salary, excluding any reduction that occurs in connection with an across the board
reduction of the salaries of the senior management team; (b) a relocation of primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) a change in the authority, duties or responsibilities that
materially and adversely affect Ms. Lazzaris’ role in the organization.
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and Payments Upon Termination
|
|
Termination
After Change
in Control
(1)
|
|
|
Involuntary Not
for Cause or Good
Reason Termination
(2)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
Base Salary and Incentive
|
|
$
|
613,000
|
|
|
$
|
613,000
|
|
|
Accelerated SARs
(3)
|
|
|
—
|
|
|
|
—
|
|
|
Restricted Stock Units
(4)
|
|
$
|
183,456
|
|
|
|
—
|
|
|
Performance Shares
(5)
|
|
$
|
188,959
|
|
|
|
—
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
Medical Benefits
|
|
$
|
7,540
|
|
|
$
|
7,540
|
|
|
Total:
|
|
$
|
992,955
|
|
|
$
|
620,540
|
|
|
(1)
|
Termination After Change in Control
|
|
|
•
|
|
Payment equal to one-year’s 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-year’s 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.
|
|
|
The closing price of WESCO common stock on December 31, 2015 was $43.68. The amount shown is the excess, if any, of the December 31, 2015 closing price over the exercise price multiplied by the number of SARs.
|
|
(4)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of RSUs.
|
|
(5)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of performance shares at target.
|
|
|
|
|
|
|
|
36 |
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
|
Potential Payments Upon Termination
POTENTIAL PAYMENTS UPON TERMINATION: MS.
WINDROW
Each of the following potential scenarios
represents circumstances under which Ms. Windrow’s 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, 2015. 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 employee’s job responsibilities or failure to timely and adequately perform employee’s
duties; or (c) material breach of any manual or written policy, code or procedure of the Company.
“Change in Control” has the meaning given to such
term in the Company’s Long-Term Incentive Plan, which means (a) the acquisition by any entity not affiliated with the Company of 30% or more of the outstanding voting securities of the Company; (b) a merger or consolidation of the
Company resulting in Company stockholders having less than 70% of the combined voting power; (c) the liquidation or dissolution of the Company; (d) the sale of substantially all of the assets of the Company to an entity unrelated to the
Company; or (e) during any two year period, a majority change of duly elected Directors.
“Good Reason” means (a) a reduction in
Ms. Windrow’s base salary, excluding any reduction that occurs in connection with an across the board reduction of the salaries of the senior management team; (b) a relocation of primary place of employment to a location more than 50
miles from Pittsburgh, Pennsylvania; or (c) a change in the authority, duties or responsibilities that materially and adversely affect Ms. Windrow’s role in the organization.
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and Payments Upon Termination
|
|
Termination
After Change
in Control
(1)
|
|
|
Involuntary Not
for Cause or Good
Reason Termination
(2)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
Base Salary and Incentive
|
|
$
|
550,000
|
|
|
$
|
550,000
|
|
|
Accelerated SARs
(3)
|
|
|
—
|
|
|
|
—
|
|
|
Restricted Stock Units
(4)
|
|
$
|
173,452
|
|
|
|
—
|
|
|
Performance Shares
(5)
|
|
$
|
178,563
|
|
|
|
—
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
Medical Benefits
|
|
$
|
2,472
|
|
|
$
|
2,472
|
|
|
Total:
|
|
$
|
904,487
|
|
|
$
|
552,472
|
|
|
(1)
|
Termination After Change in Control
|
|
|
•
|
|
Payment equal to one-year’s 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-year’s 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.
|
|
|
The closing price of WESCO common stock on December 31, 2015 was $43.68. The amount shown is the excess, if any, of the December 31, 2015 closing price over the exercise price multiplied by the number of SARs.
|
|
(4)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of RSUs.
|
|
(5)
|
Represents the closing stock price on December 31, 2015 multiplied by the number of performance shares at target.
|
|
|
|
|
|
|
|
|
|
WESCO International, Inc. - 2016 Proxy Statement
|
|
| 37
|