UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
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Notice of Annual Meeting of
Stockholders and Proxy Statement
2016
Thursday, May 26, 2016
2:00 P.M. Eastern Time
Sheraton Pittsburgh Hotel at Station Square
300 West Station Square Drive
Pittsburgh, PA 15219
WESCO INTERNATIONAL, INC.
225 West Station Square Drive, Suite 700
Pittsburgh, Pennsylvania 15219-1122
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
Date And Time: | Thursday, May 26, 2016 at 2:00 p.m., E.D.T. | |
Place: | Sheraton Pittsburgh Hotel at Station Square 300 West Station Square Drive Pittsburgh, PA 15219 | |
Record Date: | March 31, 2016 | |
Dear Fellow Stockholders:
I am pleased to invite you to attend our 2016 Annual Meeting of Stockholders. It will be held on May 26, 2016, at the Sheraton Pittsburgh Hotel at Station Square, 300 West Station Square Drive, Pittsburgh, Pennsylvania. Details regarding the items of business to be conducted at the Annual Meeting are described in the accompanying Proxy Statement:
1. | Elect five Directors for a one-year term expiring in 2017. |
2. | Approve, on an advisory basis, the Companys executive compensation. |
3. | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016. |
4. | Transact any other business properly brought before the Annual Meeting. |
Voting can be completed in one of four ways:
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returning the proxy card by mail | online at www.proxyvote.com | |||||
refer to the phone number on your voting card | or attending the meeting to vote in person |
We are sending a Notice of Internet Availability of Proxy Materials to you on or about April 8, 2016. Stockholders of record at the close of business on March 31, 2016 will be entitled to vote at our Annual Meeting or any adjournments or postponements of the meeting. You have a choice of voting in person, over the Internet, by telephone, or by requesting a paper copy of the proxy materials and a proxy card and then executing and returning the proxy card. In order to assure a quorum, please vote over the Internet or by telephone, or request a paper copy of a proxy card and then complete, sign, date and return the proxy card, whether or not you plan to attend the meeting.
Thank you for your ongoing support of WESCO.
By order of the Board of Directors,
John J. Engel
Chairman, President and Chief Executive Officer
PROXY STATEMENT TABLE OF CONTENTS
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ITEM 2 APPROVE, ON AN ADVISORY BASIS, THE COMPANYS EXECUTIVE COMPENSATION |
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17 | ||||
26 |
27 | 32 | |||||||||||
28 | 33 | |||||||||||
29 | 35 | |||||||||||
30 | 36 | |||||||||||
31 | 37 | |||||||||||
31 |
38 |
39 | 39 |
ITEM 3 RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
40 | |||
41 |
WESCO International, Inc. - 2016 Proxy Statement | | i |
INTERNET ACCESS TO THIS PROXY STATEMENT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 26, 2016
The 2016 Proxy Statement and 2015 Annual Report of WESCO International, Inc. are available to review at: www.proxydocs.com/wcc.
We are pleased to continue to take advantage of the Securities and Exchange Commission (the SEC) rule that permits companies to furnish proxy materials to stockholders over the Internet. On or about April 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.
ii | | WESCO International, Inc. - 2016 Proxy Statement |
WESCO International, Inc. - 2016 Proxy Statement | | iii |
PROXY SOLICITATION AND VOTING INFORMATION
WESCO International, Inc. - 2016 Proxy Statement | | 1 |
Election of Directors
ITEM 1 PROPOSAL TO VOTE FOR ELECTION OF DIRECTORS
The following Director Nominees have been nominated for election to our Board (with a term expiring at the 2017 Annual Meeting of Stockholders): Sandra Beach Lin, John J. Engel, James J. OBrien, Steven A. Raymund, and Lynn M. Utter.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
EACH OF THE DIRECTOR NOMINEES.
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 Companys 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 Companys Director retirement age policy. Mr. Tarrs 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.
Name | Age | Director Since |
Audit | Compensation | Executive | Nominating and Governance |
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Sandra Beach Lin |
58 | 2002 | Member | Member | Chair | |||||||||||||||||||
John J. Engel |
54 | 2008 | Member | |||||||||||||||||||||
Bobby J. Griffin |
67 | 2014 | Member | Member | ||||||||||||||||||||
John K. Morgan |
61 | 2008 | Chair | Member | ||||||||||||||||||||
James J. OBrien |
61 | 2016 | Member | Member | ||||||||||||||||||||
Steven A. Raymund |
60 | 2006 | Chair | Member | ||||||||||||||||||||
James L. Singleton(1) |
60 | 1998 | Member | Chair | Member | |||||||||||||||||||
Lynn M. Utter |
53 | 2006 | Member | Member |
(1) | Lead Director |
2 | | WESCO International, Inc. - 2016 Proxy Statement |
Election of Directors
NOMINEE DIRECTORS TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2017
SANDRA BEACH LIN
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Sandra Beach Lin served as Chief Executive Officer of Calisolar, Inc., a solar silicon company, a position she held during 2010 and 2011, until her retirement at the end of 2011. She served as Executive Vice President, then as Corporate Executive Vice President, of Celanese Corporation, a global hybrid chemical company from 2007 until 2010. Previously, she served as Group Vice President of Avery Dennison Corporation and President of Alcoa Closure Systems International, Inc. Ms. Beach Lin serves as a Director of American Electric Power, PolyOne Corporation and Interface Biologics. Ms. Beach Lin is also a member of the National Association of Corporate Directors Nominating and Governance Committee Chair Advisory Council. |
Qualifications: Among Ms. Beach Lins experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Beach Lin: has extensive experience as a senior executive in operational roles, including serving as a Chief Executive Officer; has extensive experience managing global businesses in multiple industries; is experienced in various corporate governance matters and serves as a director of other public company boards; and has extensive experience with LEAN/Six Sigma.
JOHN J. ENGEL
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John J. Engel was elected as Chairman at the 2011 Annual Meeting and has served as our President and Chief Executive Officer since 2009. Previously Mr. Engel served as our Senior Vice President and Chief Operating Officer from 2004 to 2009. Before joining WESCO in 2004, Mr. Engel served as Senior Vice President and General Manager of Gateway, Inc.; Executive Vice President and Senior Vice President of Perkin Elmer, Inc.; and Vice President and General Manager of Allied Signal, Inc. Mr. Engel also held various engineering, manufacturing and general management positions at General Electric Company. Mr. Engel also serves as a director of United States Steel Corporation, is a member of the Business Roundtable and the Business Council, and is a member of the Board of Directors of the National Association of Manufacturers. |
Qualifications: Among Mr. Engels experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Engel is the Companys Chairman and Chief Executive Officer, previously served as its Chief Operating Officer and has extensive experience as a senior executive and operating leader in various global industries.
JAMES J. OBRIEN
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James J. OBrien 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 Ashlands President and Chief Operating Officer. Mr. OBrien 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. OBrien serves as a member of the Deans Advisory Council for the Fisher Graduate College of Business at The Ohio State University. |
Qualifications: Among Mr. OBriens experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. OBrien 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.
STEVEN A. RAYMUND
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Steven A. Raymund began his employment with Tech Data Corporation, a distributor of information technology products, in 1981. From 1986 until his retirement in 2006, he served as its Chief Executive Officer. Since 1991, he has served as Tech Datas Chairman of the Board of Directors. Mr. Raymund also serves as a director of Jabil, Inc. and as a member of the Board of Advisors for the Moffitt Cancer Center; the Board of Trustees of All Childrens Hospital, Inc.; The Board of Trustees of the University of Oregon Foundation; and the Board of Directors for Gulf Coast Jewish Family and Community Services. |
Qualifications: Among Mr. Raymunds experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Raymund has considerable experience as a Chief Executive Officer of a Fortune 500 company in a global distribution business, has supply chain expertise, has broad experience as a public company board member in various industries, and is an audit committee financial expert.
WESCO International, Inc. - 2016 Proxy Statement | | 3 |
Election of Directors
LYNN M. UTTER
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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. |
Qualifications: Among Ms. Utters experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors, Ms. Utter has executive leadership experience in key operating roles, 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
ROBERT J. TARR, JR.
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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. |
Qualifications: Among Mr. Tarrs 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.
4 | | WESCO International, Inc. - 2016 Proxy Statement |
Board of Directors
CLASS III DIRECTORS PRESENT TERM EXPIRES IN 2017
JOHN K. MORGAN
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John K. Morgan served as the Chairman, President and Chief Executive Officer of Zep Inc., a specialty chemicals company, from 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. |
Qualifications: Among Mr. Morgans experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Morgan has experience as a Chief Executive Officer with broad expertise in senior executive and operating leadership roles, including extensive experience in and knowledge of the industry in which the Company operates.
JAMES L. SINGLETON
|
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. |
Qualifications: Among Mr. Singletons experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Singleton is a Chief Executive Officer and has extensive expertise in the capital markets, mergers and acquisitions, and knowledge of the Company, its industry, business and history.
BOBBY J. GRIFFIN
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Bobby J. Griffin served as President, International Operations of Ryder System, Inc., a global provider of commercial transportation, logistics, and supply chain management solutions, from 2005 to 2007. Beginning in 1986, Mr. Griffin served in various other management positions with Ryder System, Inc., including as Executive Vice President, International Operations from 2003 to March 2005 and Executive Vice President, Global Supply Chain Operations from 2001 to 2003. Prior to Ryder System, Inc., Mr. Griffin was an executive at ATE Management and Service Company, Inc., which was acquired by Ryder System, Inc. in 1986. He also serves as a director of Hanesbrands Inc. and United Rentals, Inc. and served as a director of Horizon Lines, Inc. from May 2010 until April 2012. |
Qualifications: Among Mr. Griffins experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Griffin has served as a senior executive in multiple industries, has supply chain expertise, has extensive international business experience, and experience as a public company board member.
WESCO International, Inc. - 2016 Proxy Statement | | 5 |
Executive Officers
Our executive officers and their respective ages and positions as of April 8, 2016, are set forth below.
Name | Age | Position | ||||
John J. Engel |
54 | Chairman, President and Chief Executive Officer | ||||
Timothy A. Hibbard |
59 | Vice President and Corporate Controller | ||||
Diane E. Lazzaris |
49 | Senior Vice President and General Counsel | ||||
Kenneth S. Parks |
52 | Senior Vice President and Chief Financial Officer | ||||
Kimberly G. Windrow |
58 | Senior Vice President and Chief Human Resources Officer |
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 Kennametals 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 Dicks 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.
6 | | WESCO International, Inc. - 2016 Proxy Statement |
Corporate Governance
Corporate Governance Guidelines
Director Independence
Director Qualifications and Director Diversity
WESCO International, Inc. - 2016 Proxy Statement | | 7 |
Corporate Governance
Board and Committee Evaluations
Compensation Committee Interlocks
Executive Sessions and Lead Director
Board Leadership Structure
8 | | WESCO International, Inc. - 2016 Proxy Statement |
Corporate Governance
Communications with Directors
Director Nominating Procedures
WESCO International, Inc. - 2016 Proxy Statement | | 9 |
Corporate Governance
Director Resignation Policy
Boards Role in Oversight of Risk Management
Stockholder Proposals for 2017 Annual Meeting
10 | | WESCO International, Inc. - 2016 Proxy Statement |
Board and Committee Meetings
Executive Committee
Nominating and Governance Committee
Audit Committee
WESCO International, Inc. - 2016 Proxy Statement | | 11 |
Board and Committee Meetings
Compensation Committee
12 | | WESCO International, Inc. - 2016 Proxy Statement |
Security Ownership
The following table sets forth the beneficial ownership of the Companys 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.
Name | Shares Beneficially Owned(1) |
Percent Owned Beneficially(2) |
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EdgePoint Investment Group Inc. 150 Bloor Street West Suite 500 Toronto, Ontario M5S 2X9 |
6,762,532 | (3) | 16% | |||||
FMR LLC 245 Summer Street Boston, MA 02210 |
6,319,640 | (4) | 15% | |||||
Boston Partners One Beacon Street 30th Floor Boston, MA 02108 |
4,263,863 | (5) | 10.1% | |||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 |
2,765,780 | (6) | 6.6% | |||||
Invesco Ltd. 1555 Peachtree Street NE Suite 1800 Atlanta, GA 30309 |
2,114,309 | (7) | 5% | |||||
John J. Engel |
791,910 | (8) | 1.8% | |||||
Sandra Beach Lin |
35,156 | (8) | * | |||||
Bobby J. Griffin |
1,471 | (8) | * | |||||
John K. Morgan |
38,488 | (8) | * | |||||
James J. OBrien |
1,550 | (8) | * | |||||
Steven A. Raymund(9) |
36,352 | (8) | * | |||||
James L. Singleton(10) |
52,236 | (8) | * | |||||
Robert J. Tarr, Jr. |
75,106 | (8) | * | |||||
Lynn M. Utter |
41,739 | (8) | * | |||||
Timothy A. Hibbard |
38,420 | (8) | * | |||||
Diane E. Lazzaris |
61,615 | (8) | * | |||||
Kenneth S. Parks |
45,895 | (8) | * | |||||
Kimberly G. Windrow |
54,872 | (8) | * | |||||
Stephen A. Van Oss(11) |
617,437 | (8) | 1.4% | |||||
All 13 executive officers and Directors as a group |
1,274,810 | (8) | 3% |
* | Indicates ownership of less than 1% of the Common Stock. |
(1) | The beneficial ownership of Directors set forth in the foregoing table includes shares of Common Stock payable to any such Director following the Directors termination of Board service with respect to portions of annual fees deferred under the Companys Deferred Compensation Plan for Non-Employee Directors, even though such shares are not deemed currently to be beneficially owned by the Directors pursuant to Rule 13d-3, as follows: Ms. Beach Lin, 12,487; Mr. Griffin, 1,471; Mr. Morgan, 8,804; Mr. OBrien, 0; Mr. Raymund, 8,368; Mr. Singleton, 9,551; Mr. Tarr, 24,242; and Ms. Utter, 12,491. |
WESCO International, Inc. - 2016 Proxy Statement | | 13 |
Transactions with Related Persons
(2) | Based on the number of shares outstanding on the record date. |
(3) | This information is based solely upon a Schedule 13G/A filed by 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. |
(4) | 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. |
(5) | 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. |
(6) | 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. |
(7) | 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. |
(8) | 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. OBrien, 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. |
(9) | Includes 5,242 shares of Common Stock beneficially owned indirectly through a trust which is controlled by Mr. Raymund. |
(10) | Includes 5,000 shares of Common Stock beneficially owned indirectly through a trust. Mr. Singleton exercises shared voting and investment power over such shares. |
(11) | 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). |
Section 16(a) Beneficial Ownership Reporting Compliance
TRANSACTIONS WITH RELATED PERSONS
14 | | WESCO International, Inc. - 2016 Proxy Statement |
Item 2 Approve, on an Advisory Basis, the Companys Executive Compensation
ITEM 2 APPROVE, ON AN ADVISORY BASIS, THE COMPANYS EXECUTIVE COMPENSATION
This year, the Company is seeking that the stockholders approve the compensation of the Companys named executive officers (commonly referred to as say-on-pay) as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding named executive officer compensation and the narrative description accompanying such disclosure. As initially approved by our stockholders at the annual meeting of stockholders in 2011, and consistent with the Boards recommendation, we are submitting this proposal on an annual basis. This vote is advisory only, meaning it is non-binding on the Company; however, the Board and Compensation Committee will review and carefully consider the results when evaluating future compensation decisions.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF THE COMPANYS 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 Companys compensation program and practices reflect a pay-for-performance philosophy designed to align our compensation program and practices with our stockholders long-term interests.
Compensation Structure: Elements of our program include the following:
| Our program is straightforward and comprises three main elements: (1) base salaries; (2) annual cash incentive bonuses; and (3) long-term incentive awards. The annual cash incentive and long-term incentive components of our compensation program reflect the pay-for-performance philosophy that underscores the Companys overall compensation strategy, as a significant portion of total named executive officer compensation is at-risk; |
| In our 2015 advisory vote on executive compensation, the Companys 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 Committees decisions on compensation structure; |
| Annual cash incentive bonuses are paid upon the achievement of a set of measurable Company financial performance metrics and individual performance objectives; |
| Our long-term incentive awards consist of performance shares, stock appreciation rights and restricted stock units, the value of which depends on the value of the Companys stock, thus encouraging achievement of long-term value creation benefiting all stockholders; |
| 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; |
| 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; |
| Our Company uses perquisites on a very limited basis, we do not provide Supplemental Executive Retirement Plans (SERP) benefits to our named executive officers, and we do not provide tax gross-ups on executive-only perquisites; |
| The Company has committed that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control and, indeed, has not entered into any such agreements (the Company has one pre-existing employment contract entered into prior to 2010 that includes excise tax gross-ups under certain change in control circumstances); |
| We have stock ownership guidelines for officers and Directors, and until the stock ownership guidelines are met, an officer or Director must hold a minimum of 50% of the pre-tax value realized at the exercise or vesting of equity awards; |
| Our officers and Directors are prohibited from engaging in hedging transactions involving our stock and from pledging shares as security for loans; |
| Equity award agreements with our employees (including our named executive officers) include confidentiality and other covenants protecting our business interests and provide for forfeiture of the awards or benefits received under them if the covenants are violated; |
| We have a clawback policy to provide for recovery of incentive compensation, if any, in excess of what would have been paid to our executive officers or former executive officers in the event that the Company is required to restate financial results and also to provide for clawback of incentive compensation in the event of misconduct by an executive officer or former executive officer; |
WESCO International, Inc. - 2016 Proxy Statement | | 15 |
Item 2 Approve, On An Advisory Basis, The Companys Executive Compensation
| The Compensation Committee annually reviews the potential for risk regarding our compensation program design, including incentive compensation; and |
| We believe that there is an effective level of corporate governance over our compensation programs, as all of our Compensation Committee members are independent according to the independence standards of the NYSE and SEC, and the Compensation Committee retains an independent compensation consultant to conduct annual reviews of executive compensation and advise on best practices. |
The Board endorses the Companys executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of the Companys named executive officers as disclosed pursuant to Item 402 of SEC Regulation S-K, including as described under the Compensation Discussion and Analysis section, as well as the accompanying compensation tables and the related narrative disclosure, in the Companys 2016 Proxy Statement.
16 | | WESCO International, Inc. - 2016 Proxy Statement |
Compensation Discussion and Analysis
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
Introduction
WESCO International, Inc. - 2016 Proxy Statement | | 17 |
Compensation Discussion and Analysis
Compensation Philosophy
Compensation Approach
Compensation Assessment
18 | | WESCO International, Inc. - 2016 Proxy Statement |
Compensation Discussion and Analysis
Our 2015 compensation mix for our CEO reflects our emphasis on performance-based elements as follows:
Summary
COMPENSATION SETTING PROCESS
WESCO International, Inc. - 2016 Proxy Statement | | 19 |
Compensation Discussion and Analysis
USE OF COMPENSATION CONSULTANTS
COMPENSATION COMPARATOR GROUP
COMPENSATION COMPARATOR GROUP | ||||||||
Andersen Corporation | Cameron International Corporation |
Ingredion Inc. | Rockwell Automation | W.W. Grainger, Inc. | ||||
Anixter International, Inc. | Darden Restaurants, Inc. | Kohler Company | Ross Stores, Inc. | Waste Management, Inc. | ||||
Applied Industrial Technologies |
Dover Corporation | Lennox International, Inc. | Ryder System, Inc. | Watsco, Inc. | ||||
AutoZone, Inc. | Ecolab | MSC Industrial Direct Co., Inc. |
Schneider National, Inc. | |||||
Avis Budget Group | Essendant, Inc.1 | NCR Corporation | Sonoco Products Company | |||||
Belk, Inc. | Fastenal Company | NewPage Corporation | Spartan Stores, Inc. | |||||
Big Lots, Inc. | FMC Technologies | Packaging Corporation of America2 | The Bon-Ton Stores, Inc. | |||||
BorgWarner | Hubbell Incorporated | Pitney Bowes, Inc. | The Pantry, Inc. | |||||
Brinker International, Inc. | Hy-Vee, Inc. | Praxair, Inc. | Vulcan Materials Company |
1 | United Stationers, Inc. changed its name to Essendant, Inc. |
2 | Boise, Inc. was acquired by Packaging Corporation of America which was added to the group. |
20 | | WESCO International, Inc. - 2016 Proxy Statement |
Compensation Discussion and Analysis
Role of 2015 Advisory Vote on Executive Compensation in the Compensation Setting Process
ELEMENTS OF COMPENSATION
Base Salaries
Short-Term Incentives
Performance Measure | Weighting | Percent Achievement |
Payout Percent of Maximum Opportunity(1) | |||
Earnings Before Interest Taxes Depreciation
|
25%
|
< 85% | 0% | |||
85% to 100% | Up to 50% | |||||
>100% to 115% | Between 50% and 100% | |||||
Free Cash Flow
|
25%
|
< 85% | 0% | |||
85% to 100% | Up to 50% | |||||
>100% to 115% | Between 50% and 100% | |||||
Return on Invested Capital
|
25%
|
< 85% | 0% | |||
85% to 100% | Up to 50% | |||||
>100% to 115% | Between 50% and 100% | |||||
Individual Performance
|
25%
|
<25% | 0% | |||
25% to 100% | Up to 100% | |||||
Total (as a percent of Opportunity) |
100% | 0% to 100% |
(1) | Amounts interpolated, as appropriate. |
WESCO International, Inc. - 2016 Proxy Statement | | 21 |
Compensation Discussion and Analysis
Long-Term Incentives
22 | | WESCO International, Inc. - 2016 Proxy Statement |
Compensation Discussion and Analysis
NEO |
Performance Share (reflects number of shares that
could |
SAR Awards |
RSU Awards |
Grant Date | Grant Price |
SARs Expiration Date |
RSU Cliff - Vesting Date |
|||||||||||||||||||||
Engel |
18,120 | 96,865 | 12,078 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Parks |
4,962 | 26,521 | 3,307 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Hibbard |
1,014 | 5,419 | 676 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Lazzaris |
2,480 | 13,262 | 1,654 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Windrow |
2,330 | 12,453 | 1,553 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 | |||||||||||||||||||
Van Oss(3) |
6,472 | 34,595 | 4,313 | 2/17/2015 | $ | 69.54 | (2) | 2/17/2025 | 2018 |
(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. |
(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). |
Retirement Savings
WESCO International, Inc. - 2016 Proxy Statement | | 23 |
Compensation Discussion and Analysis
Health and Welfare Benefits
Perquisites
Clawback Provisions
OTHER COMPENSATION AND EMPLOYMENT ARRANGEMENTS
Stock Ownership Guidelines and Holding Periods for Executive Officers
Chief Executive Officer Compensation
Employment, Severance, Change in Control or Other Arrangements
24 | | WESCO International, Inc. - 2016 Proxy Statement |
Compensation Discussion and Analysis
WESCO International, Inc. - 2016 Proxy Statement | | 25 |
Compensation Discussion and Analysis
Compensation Practices and Risk
Deductibility of Executive Compensation
26 | | WESCO International, Inc. - 2016 Proxy Statement |
Compensation Tables
COMPENSATION TABLES
Name and Principal Position | Year | Salary | Option Awards(1) |
Stock Awards(2) |
Non-Equity Incentive Plan Compensation(3) |
All Other Compensation(4) |
Total | |||||||||||||||||||||
John J. Engel, |
2015 | $ | 950,000 | (6) | $ | 2,100,033 | $ | 2,073,514 | $ | 800,000 | $ | 90,558 | $ | 6,014,105 | ||||||||||||||
Chairman, President |
2014 | $ | 942,500 | $ | 1,950,007 | $ | 1,967,812 | $ | 800,000 | $ | 96,508 | $ | 5,756,827 | |||||||||||||||
and CEO |
2013 | $ | 892,500 | $ | 1,800,002 | $ | 1,890,491 | (7) | $ | 1,000,000 | $ | 202,287 | $ | 5,785,280 | ||||||||||||||
Kenneth S. Parks, |
2015 | $ | 480,385 | (6) | $ | 574,975 | $ | 567,782 | $ | 275,000 | $ | 22,183 | $ | 1,920,325 | ||||||||||||||
SVP and CFO |
2014 | $ | 445,000 | $ | 500,034 | $ | 504,551 | $ | 250,000 | $ | 18,777 | $ | 1,718,362 | |||||||||||||||
2013 | $ | 380,000 | $ | 485,553 | $ | 420,105 | (7) | $ | 225,000 | $ | 26,143 | $ | 1,536,801 | |||||||||||||||
Timothy A. Hibbard, |
2015 | $ | 295,385 | (6) | $ | 117,484 | $ | 116,042 | $ | 125,000 | $ | 23,191 | $ | 677,102 | ||||||||||||||
VP and Corporate Controller |
||||||||||||||||||||||||||||
Diane E. Lazzaris, |
2015 | $ | 410,577 | (6) | $ | 287,520 | $ | 283,858 | $ | 188,000 | $ | 26,773 | $ | 1,196,728 | ||||||||||||||
SVP and GC |
2014 | $ | 390,000 | $ | 262,500 | $ | 264,936 | $ | 150,000 | $ | 23,952 | $ | 1,091,388 | |||||||||||||||
2013 | $ | 350,000 | $ | 237,481 | $ | 249,462 | (7) | $ | 205,000 | $ | 44,939 | $ | 1,086,882 | |||||||||||||||
Kimberly G. Windrow, |
2015 | $ | 380,865 | (6) | $ | 269,981 | $ | 266,622 | $ | 175,000 | $ | 30,189 | $ | 1,122,657 | ||||||||||||||
SVP and CHRO |
2014 | $ | 376,250 | $ | 250,002 | $ | 252,275 | $ | 150,000 | $ | 29,390 | $ | 1,057,917 | |||||||||||||||
2013 | $ | 345,000 | $ | 224,949 | $ | 236,352 | (7) | $ | 200,000 | $ | 61,319 | $ | 1,067,620 | |||||||||||||||
Stephen A. Van Oss, (5) |
2015 | $ | 662,019 | (6) | $ | 750,020 | $ | 740,540 | | $ | 665,900 | $ | 2,818,479 | |||||||||||||||
Former SVP and COO |
2014 | $ | 668,750 | $ | 875,006 | $ | 883,006 | $ | 375,000 | $ | 56,098 | $ | 2,857,860 | |||||||||||||||
2013 | $ | 645,000 | $ | 874,952 | $ | 919,030 | (7) | $ | 290,250 | $ | 129,138 | $ | 2,858,370 |
(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 individuals stated base salary because during 2015 the Company had a cost-savings program of mandatory unpaid leaves of absence in which individuals took a weeks leave of absence. Individuals also had the option to take an additional week of unpaid leave on a voluntary basis. |
(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
The following table describes each component of the All Other Compensation column for 2015 in the Summary Compensation Table. The most significant component of this table is Company payments or contributions to employee retirement savings programs. These payments are further analyzed in the table contained in footnote (4) and include payments that are also presented and discussed there.
NEO | Year | Other Benefits(1) |
Auto Allowance(2) |
Tax Payments(3) |
Payments Retirement |
Total | ||||||||||||||||||
Engel |
2015 | $ | 24,058 | $ | 12,000 | | $ | 54,500 | $ | 90,558 | ||||||||||||||
Parks |
2015 | $ | 233 | $ | 12,000 | | $ | 9,950 | $ | 22,183 | ||||||||||||||
Hibbard |
2015 | $ | 179 | $ | 9,000 | | $ | 14,012 | $ | 23,191 | ||||||||||||||
Lazzaris |
2015 | $ | 189 | $ | 12,000 | | $ | 14,584 | $ | 26,773 | ||||||||||||||
Windrow |
2015 | $ | 263 | $ | 12,000 | | $ | 17,926 | $ | 30,189 | ||||||||||||||
Van Oss(5) |
2015 | $ | 620,789 | $ | 12,000 | | $ | 33,111 | $ | 665,900 |
(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 Companys 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 Stock That |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (1) |
Equity Not Vested |
|||||||||||||||||||||||||||
Engel |
7/01/2006 | 37,500 | | $ | 69.00 | 7/01/2016 | | | | | ||||||||||||||||||||||||||
7/01/2007 | 45,000 | | $ | 60.45 | 7/01/2017 | | | | | |||||||||||||||||||||||||||
7/01/2008 | 75,000 | | $ | 40.04 | 7/01/2018 | | | | | |||||||||||||||||||||||||||
7/01/2009 | 150,673 | | $ | 25.37 | 7/01/2019 | | | | | |||||||||||||||||||||||||||
7/01/2010 | 125,597 | | $ | 33.05 | 7/01/2020 | | | | | |||||||||||||||||||||||||||
2/16/2011 | 77,323 | | $ | 60.05 | 2/16/2021 | | | | | |||||||||||||||||||||||||||
2/16/2012 | 55,396 | | $ | 64.33 | 2/16/2022 | | | | | |||||||||||||||||||||||||||
2/21/2013 | 38,302 | 19,151 | $ | 72.15 | 2/21/2023 | 9,978 | $ | 435,839 | | | ||||||||||||||||||||||||||
2/18/2014 | 21,201 | 42,400 | $ | 85.35 | 2/18/2024 | 9,139 | $ | 399,191 | 13,708 | $ | 598,765 | |||||||||||||||||||||||||
2/17/2015 | | 96,865 | $ | 69.54 | 2/17/2025 | 12,078 | $ | 527,567 | 18,120 | $ | 791,481 | |||||||||||||||||||||||||
Total: |
625,992 | 158,416 | 31,195 | $ | 1,362,597 | 31,828 | $ | 1,390,246 | ||||||||||||||||||||||||||||
Parks |
6/08/2012 | 7,500 | | $ | 58.04 | 6/08/2022 | | | | | ||||||||||||||||||||||||||
2/21/2013 | 8,511 | 4,256 | $ | 72.15 | 2/21/2023 | 2,218 | $ | 96,882 | | | ||||||||||||||||||||||||||
6/03/2013 | 1,800 | 900 | $ | 74.00 | 6/03/2023 | | | | | |||||||||||||||||||||||||||
2/18/2014 | 5,437 | 10,872 | $ | 85.35 | 2/18/2024 | 2,342 | $ | 102,298 | 3,516 | $ | 153,579 | |||||||||||||||||||||||||
2/17/2015 | | 26,521 | $ | 69.54 | 2/17/2025 | 3,307 | $ | 144,449 | 4,962 | $ | 216,740 | |||||||||||||||||||||||||
Total: |
23,248 | 42,549 | 7,867 | $ | 343,629 | 8,478 | $ | 370,319 | ||||||||||||||||||||||||||||
Hibbard |
4/24/2007 | 3,200 | | $ | 62.08 | 4/24/2017 | | | | | ||||||||||||||||||||||||||
7/01/2007 | 6,000 | | $ | 60.45 | 7/01/2017 | | | | | |||||||||||||||||||||||||||
7/01/2008 | 10,000 | | $ | 40.04 | 7/01/2018 | | | | | |||||||||||||||||||||||||||
2/16/2011 | 5,056 | | $ | 60.05 | 2/16/2021 | | | | | |||||||||||||||||||||||||||
2/16/2012 | 3,575 | | $ | 64.33 | 2/16/2022 | | | | | |||||||||||||||||||||||||||
2/21/2013 | 2,128 | 1,064 | $ | 72.15 | 2/21/2023 | 554 | $ | 24,199 | ||||||||||||||||||||||||||||
2/18/2014 | 1,224 | 2,446 | $ | 85.35 | 2/18/2024 | 526 | $ | 22,976 | 792 | $ | 34,595 | |||||||||||||||||||||||||
2/17/2015 | | 5,419 | $ | 69.54 | 2/17/2025 | 676 | $ | 29,528 | 1,014 | $ | 44,292 | |||||||||||||||||||||||||
Total: |
31,183 | 8,929 | 1,756 | $ | 76,703 | 1,806 | $ | 78,887 | ||||||||||||||||||||||||||||
Lazzaris |
5/14/2010 | 4,000 | | $ | 37.90 | 5/14/2020 | | | | | ||||||||||||||||||||||||||
7/01/2010 | 15,017 | | $ | 33.05 | 7/01/2020 | | | | | |||||||||||||||||||||||||||
2/16/2011 | 9,665 | | $ | 60.05 | 2/16/2021 | | | | | |||||||||||||||||||||||||||
2/16/2012 | 6,700 | | $ | 64.33 | 2/16/2022 | | | | | |||||||||||||||||||||||||||
2/21/2013 | 5,053 | 2,527 | $ | 72.15 | 2/21/2023 | 1,316 | $ | 57,483 | | | ||||||||||||||||||||||||||
2/18/2014 | 2,854 | 5,706 | $ | 85.35 | 2/18/2024 | 1,230 | $ | 53,726 | 1,846 | $ | 80,633 | |||||||||||||||||||||||||
2/17/2015 | | 13,262 | $ | 69.54 | 2/17/2025 | 1,654 | $ | 72,247 | 2,480 | $ | 108,326 | |||||||||||||||||||||||||
Total: |
43,289 | 21,495 | 4,200 | $ | 183,456 | 4,326 | $ | 188,959 | ||||||||||||||||||||||||||||
Windrow |
9/27/2010 | 3,850 | | $ | 39.26 | 9/27/2020 | | | | | ||||||||||||||||||||||||||
9/28/2010 | 7,500 | | $ | 40.20 | 9/28/2020 | | | | | |||||||||||||||||||||||||||
2/16/2011 | 7,435 | | $ | 60.05 | 2/16/2021 | | | | | |||||||||||||||||||||||||||
5/13/2011 | 2,800 | | $ | 54.84 | 5/13/2021 | | | | | |||||||||||||||||||||||||||
2/16/2012 | 6,700 | | $ | 64.33 | 2/16/2022 | | | | | |||||||||||||||||||||||||||
2/21/2013 | 4,787 | 2,393 | $ | 72.15 | 2/21/2023 | 1,247 | $ | 54,468 | | | ||||||||||||||||||||||||||
2/18/2014 | 2,718 | 5,436 | $ | 85.35 | 2/18/2024 | 1,171 | $ | 51,149 | 1,758 | $ | 76,789 | |||||||||||||||||||||||||
2/17/2015 | | 12,453 | $ | 69.54 | 2/17/2025 | 1,553 | $ | 67,835 | 2,330 | $ | 101,774 | |||||||||||||||||||||||||
Total: |
35,790 | 20,282 | 3,971 | $ | 173,452 | 4,088 | $ | 178,563 | ||||||||||||||||||||||||||||
Van Oss(2) |
7/01/2006 | 37,500 | | $ | 69.00 | 7/01/2016 | | | | | ||||||||||||||||||||||||||
7/01/2007 | 45,000 | | $ | 60.45 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
7/01/2008 | 75,000 | | $ | 40.04 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
7/01/2009 | 107,623 | | $ | 25.37 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
7/01/2010 | 81,911 | | $ | 33.05 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
2/16/2011 | 44,610 | | $ | 60.05 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
2/16/2012 | 29,486 | | $ | 64.33 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
2/21/2013 | 27,927 | | $ | 72.15 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
2/18/2014 | 28,539 | | $ | 85.35 | 6/30/2017 | | | | | |||||||||||||||||||||||||||
2/17/2015 | 34,595 | | $ | 69.54 | 6/30/2017 | | | 1,798 | $ | 78,536 | ||||||||||||||||||||||||||
Total: |
512,191 | | | | 1,798 | $ | 78,536 |
(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 Companys 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 Companys common stock. | |
Under the generally applicable terms of the Companys 1999 Long-Term Incentive Plan, amended and approved by our Board and stockholders and restated effective May 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 |
Number of Shares (#)(3)(4) |
Value Realized on Vesting ($) |
||||||||||||
Engel |
75,000 | $ | 2,936,250 | 22,939 | $ | 1,582,264 | ||||||||||
Parks |
| | | | ||||||||||||
Hibbard |
| | 1,479 | $ | 102,016 | |||||||||||
Lazzaris |
| | 2,775 | $ | 191,412 | |||||||||||
Windrow |
| | 2,775 | $ | 191,412 | |||||||||||
Van Oss(5) |
75,000 | $ | 2,936,250 | 25,471 | (6) | $ | 1,421,398 |
(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 Companys 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 in Last FY(1) |
Company in Last FY(2) |
Aggregate Earnings in Last FY(3) |
Aggregate Distributions |
Aggregate Balance at Last FYE(4) |
||||||||||||||||||
Engel |
2015 | $ | 105,000 | $ | 44,550 | ($ | 27,826 | ) | | $ | 2,066,828 | |||||||||||||
Parks |
2015 | | | | | | ||||||||||||||||||
Hibbard |
2015 | $ | 126,346 | $ | 4,062 | $ | 19,138 | | $ | 856,976 | ||||||||||||||
Lazzaris |
2015 | $ | 16,817 | $ | 4,634 | $ | 439 | | $ | 119,434 | ||||||||||||||
Windrow |
2015 | $ | 31,852 | $ | 7,976 | ($ | 5,000 | ) | | $ | 217,038 | |||||||||||||
Van Oss(5) |
2015 | $ | 452,308 | $ | 23,161 | ($ | 21,964 | ) | | $ | 6,744,553 |
(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 participants deferral account and Company contribution account since the last valuation date for each investment vehicle selected by the participant. Investment vehicles available to participants are a subset of those offered in the 401(k) plan and notably do not include Company stock. |
(4) | Based upon years of service to the Company, 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. Engels employment with the Company could potentially terminate. A description of the compensation benefits due Mr. Engel in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 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 Companys 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. Engels base salary, excluding any reduction that occurs in connection with an across-the-board reduction of the salaries of the entire senior management team; (b) a relocation of Mr. Engels primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) any material reduction in Mr. Engels offices, 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. Engels Change in Control benefits are double-triggered (other than equity awards which vest on a Change in Control), meaning that he will receive these payments only if (i) there is a Change in Control and (ii) Mr. Engels employment is terminated within two years following a Change in Control without Cause or by Mr. Engel for Good Reason, in which case Mr. Engel will be entitled to receive: |
| Two times annual base salary. |
| Two times the annual target bonus opportunity. |
| Prorated annual incentive compensation for the portion of the fiscal year employed, if earned. |
| Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
| Additional gross-up premium sufficient to reimburse the executive for excise taxes, if any, payable as a result of termination payments plus any income taxes on the reimbursement payment itself. Other than the pre-existing employment agreement with Mr. Engel, the Company has no other agreement with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control. In addition, the Company committed that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-ups with respect to payments contingent upon a change in control and, indeed, has not entered into any such agreements. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination |
| Monthly base salary continuation for 24 months. |
| An amount equal to the executives annual target bonus opportunity. |
| Full vesting of outstanding stock options, SARs, and RSUs. |
| Coverage for health, dental, and vision benefits for 24 months provided executive pays employee portion of premiums. |
WESCO International, Inc. - 2016 Proxy Statement | | 33 |
Potential Payments Upon Termination
(3) | Death |
| Any accrued and earned but unpaid bonus. |
| Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target. |
(4) | Disability |
| Full vesting of outstanding stock options, SARs, and RSUs. Vesting of performance shares at target. |
(5) | 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 employees job responsibilities or failure to timely and adequately perform employees duties; or (c) material breach of any manual or written policy, code or procedure of the Company.
Change in Control has the meaning given to such term in the Companys Long-Term Incentive Plan, which means (a) the 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-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(3) | Accelerated 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. |
(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 employees job responsibilities or failure to timely and adequately perform employees duties; or (c) material breach of any manual or written policy, code or procedure of the Company.
Change in Control has the meaning given to such term in the Companys Long-Term Incentive Plan, which means (a) the 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-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination or Termination Within One Year Following Change of Control of the Company (Other than for Cause) |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(3) | Accelerated 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. |
(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. Windrows employment with the Company could potentially terminate. A description of the compensation benefits due Ms. Windrow in each scenario is provided. In each case, the date of the termination is assumed to be December 31, 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 employees job responsibilities or failure to timely and adequately perform employees duties; or (c) material breach of any manual or written policy, code or procedure of the Company.
Change in Control has the meaning given to such term in the Companys Long-Term Incentive Plan, which means (a) the 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. Windrows base salary, excluding any reduction that occurs in connection with an across the board reduction of the salaries of the senior management team; (b) a relocation of primary place of employment to a location more than 50 miles from Pittsburgh, Pennsylvania; or (c) a change in the authority, duties or responsibilities that materially and adversely affect Ms. Windrows 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-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs and RSUs. Vesting of performance shares at target. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(2) | Involuntary Not for Cause or Executive for Good Reason Termination |
| Payment equal to one-years base salary. |
| Prorated annual incentive payment for portion of year worked. |
| Full vesting of SARs granted in accordance with purchase of WESCO stock. |
| Coverage for health, dental, and vision benefits for 12 months provided executive pays employee portion of premiums. |
(3) | Accelerated 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. |
(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 |
Director Compensation
Compensation
Stock Ownership Guidelines
38 | | WESCO International, Inc. - 2016 Proxy Statement |
Director Compensation
DIRECTOR COMPENSATION FOR 2015
Name | Fees Earned or Paid in |
Stock Awards(2)(3) |
Other(4) | Total | ||||||||||||
Beach Lin |
$ | 100,000 | $ | 99,999 | | $ | 199,999 | |||||||||
Griffin |
$ | 90,000 | $ | 99,999 | | $ | 189,999 | |||||||||
Morgan |
$ | 103,750 | $ | 99,999 | | $ | 203,749 | |||||||||
Raymund |
$ | 103,750 | $ | 99,999 | | $ | 203,749 | |||||||||
Singleton |
$ | 107,917 | $ | 99,999 | | $ | 207,916 | |||||||||
Tarr |
$ | 101,250 | $ | 99,999 | | $ | 201,249 | |||||||||
Utter |
$ | 95,000 | $ | 99,999 | | $ | 194,999 | |||||||||
Vareschi |
$ | 45,810 | $ | 49,999 | $ | 10,000 | $ | 105,809 |
(1) | Represents the amount of the Directors annual retainer, for which Mr. Singleton received $53,958 in cash during 2015. The Directors Fees for Messrs. Griffin, and Raymund and Ms. Utter were deferred into the Companys Deferred Compensation Plan for Non-Employee Directors. Mr. Vareschi elected to receive 600 shares of Common Stock in lieu of cash. |
(2) | Amounts represent the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718, of RSUs. On February 17, 2015, each Director was awarded 1,438 RSUs with a grant date fair value of $69.54 per RSU, which was the closing price of our Common Stock on February 17, 2015, subject to proration based on service. These RSU awards are subject to time-based vesting criteria. The assumptions used in calculating these amounts are set forth in Note 12 to our financial statements for the year ended December 31, 2015, which is located on pages 60 to 62 of our Annual Report on Form 10-K. |
(3) | All the RSU awards were granted under the WESCO International, Inc. 1999 Long-Term Incentive Plan, as amended and approved by our Board and stockholders. See the Director Outstanding Equity Awards at the Year-End table below for more information regarding the equity awards held by Directors as of December 31, 2015. |
(4) | The Company made a charitable contribution in honor of Mr. Vareschis retirement. |
DIRECTOR OUTSTANDING EQUITY AWARDS AT YEAR-END
Name | Number of Securities Underlying Unexercised Equity Awards Exercisable |
Number of Shares of Stock That |
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Beach Lin |
14,708 | 3,927 | ||||||
Griffin |
| 2,049 | ||||||
Morgan |
16,742 | 3,927 | ||||||
Raymund |
22,742 | 3,927 | ||||||
Singleton |
22,742 | 3,927 | ||||||
Tarr |
2,500 | 3,927 | ||||||
Utter |
22,742 | 3,927 |
WESCO International, Inc. - 2016 Proxy Statement | | 39 |
Item 3 Ratify The Appointment of Independent Registered Public Accounting Firm
ITEM 3 RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2016.
40 | | WESCO International, Inc. - 2016 Proxy Statement |
Item 3 Ratify The Appointment of Independent Registered Public Accounting Firm
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
WESCO International, Inc. - 2016 Proxy Statement | | 41 |
Item 3 Ratify The Appointment of Independent Registered Public Accounting Firm
42 | | WESCO International, Inc. - 2016 Proxy Statement |
WESCO INTERNATIONAL, INC.
Suite 700
225 West Station Square Drive
Pittsburgh, PA 15219-1122
Phone: 412-454-2200
www.wesco.com
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
For All |
Withhold All |
For All Except |
To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. | |||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following: | ||||||||||||||||||||||||||
1. Elect five Directors for a one-year term expiring in 2017. |
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Nominees
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01 Sandra Beach Lin 02 John J. Engel 03 James J. OBrien 04 Steven A. Raymund 05 Lynn M. Utter | ||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals 2 and 3. |
For | Against | Abstain | |||||||||||||||||||||||
2. Approve, on an advisory basis, the Companys executive compensation. |
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3. Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016. |
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NOTE: Transact any other business properly brought before the Annual Meeting. |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. |
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Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and the Annual Report are available at www.proxyvote.com
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WESCO INTERNATIONAL, INC. This proxy is solicited by the Board of Directors. Annual Meeting of Stockholders May 26, 2016 at 2:00 P.M., Eastern Time
The undersigned hereby appoints Kenneth S. Parks, Diane E. Lazzaris, and Samantha L. ODonoghue, and each of them, as Proxies with full power of substitution, to represent the undersigned and to vote all the shares of Common Stock of WESCO International, Inc., which the undersigned would be entitled to vote if personally present and voting at the Annual Meeting of Stockholders to be held at the Sheraton Pittsburgh Hotel at Station Square, 300 West Station Square Drive, Pittsburgh, PA 15219 on May 26, 2016, at 2:00 p.m., Eastern Daylight Time, or any adjournment or postponement thereof, upon all matters properly coming before the meeting.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made on any particular matter, this proxy will be voted in accordance with the Board of Directors recommendations on any such matter.
Continued and to be signed on reverse side
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