WESCO INTERNATIONAL, INC. 225 West Station Square Drive, Suite 700 Pittsburgh, Pennsylvania 15219-1122

Notice of 2021 Annual Meeting of Stockholders

 

When:		Thursday, May 27, 2021 at 2:00 p.m., E.D.T.
Where:		This year’s Annual Meeting of Stockholders will be conducted exclusively as a virtual meeting via live audio webcast. You are invited to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/WCC2021, where you will be able to listen to the meeting live, submit questions and vote online.   To join the meeting, you will need the 12-digit control number received with your Notice Regarding the Availability of Proxy Materials (‘‘Notice’’). When accessing our Annual Meeting, please allow ample time for online check-in, which will begin at 1:45 p.m., E.D.T., on Thursday, May 27, 2021.
Record Date:		April 1, 2021

Dear Fellow Stockholders:

I am pleased to invite you to attend our 2021 Annual Meeting of Stockholders. It will be held via live audio webcast on May 27, 2021. Details regarding the items of business to be conducted at the Annual Meeting are described in the accompanying Proxy Statement:

 

1.	Elect nine Directors for a one-year term expiring in 2022.

 

2.	Approve, on an advisory basis, the compensation of the Company’s named executive officers.

 

3.	Approve the WESCO International, Inc. 2021 Omnibus Incentive Plan.

 

4.	Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021.

 

5.	Transact any other business properly brought before the Annual Meeting.

 

Voting can be completed in one of four ways:
returning the proxy card by mail		refer to the phone number on your voting card		online at www.proxyvote.com		online during the open poll section of the meeting

We are sending a Notice of Internet Availability of Proxy Materials to you on or about April 12, 2021. Stockholders of record at the close of business on April 1, 2021 will be entitled to vote at our Annual Meeting or any adjournments or postponements of the meeting. You have a choice of voting online during the open poll section of the meeting, over the Internet, by telephone, or by requesting a paper copy of the proxy materials and a proxy card and then executing and returning the proxy card. In order to assure a quorum, please vote over the Internet or by telephone, or request a paper copy of a proxy card and then complete, sign, date and return the proxy card, whether or not you plan to attend the meeting.

Thank you for your ongoing support of WESCO.

By order of the Board of Directors,

 

John J. Engel

Chairman, President and Chief Executive Officer

Table of Contents

 

 

PROXY STATEMENT TABLE OF CONTENTS

 

INTERNET ACCESS TO THIS PROXY STATEMENT			1
QUESTIONS AND ANSWERS			1
PROXY SOLICITATION AND VOTING INFORMATION			3
ITEM  1 – PROPOSAL TO VOTE FOR ELECTION OF DIRECTORS			6
BOARD OF DIRECTORS			6
EXECUTIVE OFFICERS			11
CORPORATE GOVERNANCE			13
BOARD AND COMMITTEE MEETINGS			23
SECURITY OWNERSHIP			24
TRANSACTIONS WITH RELATED PERSONS			26
ITEM  2 – APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS			27
COMPENSATION DISCUSSION AND ANALYSIS			28
COMPENSATION COMMITTEE REPORT			44

Table – Summary Compensation Table			45							Table – Nonqualified Deferred Compensation			51
Table – All Other Compensation			46							Table – Potential Payments Upon Termination: Engel			52
Table – Grants of Plan-Based Awards for 2020			47							Table – Potential Payments Upon Termination: Schulz			54
Table – Outstanding Equity Awards at Year-End			48							Table – Potential Payments Upon Termination: Lazzaris			54
Table – Equity Awards Vesting Schedule			50							Table – Potential Payments Upon Termination: Squires			54
Table – Option Exercises and Stock Vested			51							Table – Potential Payments Upon Termination: Dosch			54

PAY RATIO			56
DIRECTOR COMPENSATION			57

Table – Director Compensation for 2020			58							Table – Director Outstanding Equity Awards at Year-End			58

ITEM  3 – APPROVE THE WESCO INTERNATIONAL, INC. 2021 OMNIBUS INCENTIVE PLAN			59
ITEM  4 – RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			67
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			68
APPENDIX A – WESCO INTERNATIONAL, INC. 2021 OMNIBUS INCENTIVE PLAN			A-1

INTERNET ACCESS TO THIS PROXY STATEMENT

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 27, 2021

The 2021 Proxy Statement and 2020 Annual Report of WESCO International, Inc. (“WESCO” or the “Company”) are available to review at: www.proxydocs.com/wcc. A copy of our Form 10-K is available upon request, without charge. Any request should be directed to our Corporate Secretary at the Company’s headquarters office at 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania 15219-1122.

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 12, 2021, 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

 

 

1.	Why is the Annual Meeting online only? How do I attend the Annual Meeting?

Our Annual Meeting will be exclusively conducted via live audio webcast, a format designed to improve stockholder access, save WESCO and its stockholders time and money and, during the current global pandemic, ensure the safety of our participants. In addition to online attendance, our meeting format provides stockholders with the opportunity to hear all portions of the official meeting, submit written questions during the meeting, and vote online during the open poll section of the meeting.

You may attend the meeting webcast by visiting www.virtualshareholdermeeting.com/WCC2021. You will need the 12-digit control number received with your Notice Regarding the Availability of Proxy Materials. Please allow ample time for online check-in, which will begin at 1:45 p.m., E.D.T., on May 27, 2021. If a bank, brokerage firm, or other nominee holds your shares, you should contact that organization for additional information.

 

2.	How can I ask questions during the Annual Meeting?

The virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meeting so they can ask questions of our board of directors or management. During the Annual Meeting, we will answer questions submitted during the Annual Meeting and address those asked in advance, to the extent relevant to the business of the Annual Meeting, as time permits. Stockholder questions may be submitted in the field provided in the web portal at or before the time that matters are brought before the Annual Meeting for consideration.

 

3.	What can I do if I need technical assistance during the Annual Meeting?

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Shareholder Meeting log in page.

 

4.	Who is entitled to vote at the Annual Meeting?

If you held shares of WESCO Common Stock at the close of business on April 1, 2021, 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 online during the open poll section of the meeting. The Board of Directors requests your proxy so that your shares will count toward a quorum and be voted at the meeting.

 

5.	What matters are scheduled to be presented?

Proposal 1—Elect nine Director nominees for a one-year term expiring at the 2022 Annual Meeting of Stockholders.

Proposal 2—Approve, on an advisory basis, the compensation of the Company’s named executive officers.

Proposal 3—Approve the WESCO International, Inc. 2021 Omnibus Incentive Plan.

Proposal 4—Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021.

Action may be taken at the Annual Meeting with respect to any other business that properly comes before the meeting, and the proxy holders have the right to and will vote in accordance with their judgment on any additional business.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  1

QUESTIONS AND ANSWERS

 

 

6.	How do I cast my vote?

There are four different ways you may cast your vote. You may vote by:

 

•

Internet, at the address provided on the Notice;

 

•

telephone, using the toll-free number listed on the Notice;

 

•

following the instructions on the Notice to request a paper copy of the proxy card and proxy materials and then marking, signing, dating and returning each proxy card in the postage-paid envelope provided; or

 

•

attending the virtual Annual Meeting and voting your shares online during the open poll section of the meeting at www.virtualshareholdermeeting.com/WCC2021.

The deadline for voting by Internet or telephone is 11:59 p.m., E.D.T., on Wednesday, May 26, 2021.

 

7.	What if I don’t indicate my voting choices?

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 compensation of the Company’s named executive officers, “FOR” the approval of the WESCO International, Inc. 2021 Omnibus Incentive Plan, 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, 2021.

 

8.	How do I revoke or change my vote?

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:

 

•

notifying the Corporate Secretary at the Company’s headquarters office;

 

•

sending another proxy dated later than your prior proxy either by Internet, telephone or mail; or

 

•

attending the virtual Annual Meeting and voting online during the open poll section of the meeting.

 

9.	What does it mean if I receive more than one Notice?

If your shares are registered differently and are in more than one account (for example, some shares may be registered directly in your name and some may be held in the Company’s 401(k) Retirement Savings Plan), you may receive more than one Notice from the Company or a broker, bank or other nominee account with respect to your shares held in “street name”. Please carefully follow the instructions on each Notice you receive and vote all of the proxy requests to ensure that all your shares are voted.

 

10.	May I attend and vote my shares during the Annual Meeting?

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 online during the Annual Meeting.

Shares registered directly in your name with our transfer agent, Computershare, may be voted online during the Annual Meeting.

 

11.	Who will count the votes?

Representatives of Broadridge will tabulate the votes, and there will be a duly appointed inspector of election who will certify his or her examination of the list of stockholders, the number of shares held and outstanding as of the record date, and the necessary quorum for transaction of the business for this meeting. These persons will count the votes at the Annual Meeting.

 

12.	May I elect to receive a paper copy of proxy materials in the future?

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.

 

2  |		WESCO International, Inc. - 2021 Proxy Statement

PROXY SOLICITATION AND VOTING INFORMATION

 

 

PROXY SOLICITATION AND VOTING INFORMATION

 

Holders of our Common Stock at the close of business on the record date of April 1, 2021 may vote at our Annual Meeting. On the record date, 50,180,007 shares of our Common Stock were outstanding. A list of stockholders entitled to vote will be available for inspection by any stockholder of record for any legally valid purpose during ordinary business hours for 10 days prior to the Annual Meeting at the Company’s principal executive offices. In addition, the stockholder list will be available to any stockholder for examination online during the Annual Meeting.

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 Innisfree M&A Incorporated, 501 Madison Avenue, 20^th Floor, New York, NY 10022 to assist us in the solicitation of proxies, and we expect to pay Innisfree M&A Incorporated approximately $20,000 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, whether online or by valid 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 receiving voting instructions from the beneficial owner of the shares, nominee holders may only vote on proposals that are considered routine matters. The only matter being proposed for stockholder vote at the 2021 Annual Meeting that is considered a routine matter is the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021. Accordingly, without voting instructions from the beneficial owner of the shares, nominee holders will not have discretionary authority to vote the shares at the Annual Meeting on the election of Directors, or on the proposals to approve, on an advisory basis, the compensation of the Company’s named executive officers and to approve the WESCO International, Inc. 2021 Omnibus Incentive Plan. 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 approval of the WESCO International, Inc. 2021 Omnibus Incentive Plan, the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021, 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.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  3

2020 Highlights

 

 

2020 was an extraordinary year of transformation for WESCO. In January 2020, we signed a definitive agreement to acquire Anixter International Inc. (“Anixter”), a publicly-traded company of approximately the same size as WESCO. In the midst of an extremely challenging COVID-19 environment, we successfully completed the transaction in late June 2020. We worked to integrate the two companies during the balance of 2020 for the benefit of our stockholders, customers, suppliers, employees and the communities in which we operate.

This transformational combination doubled the Company’s size in terms of revenue and number of employees:

June 2020 – Transformational Combination with Anixter

 

 

As a result of the combination of WESCO and Anixter, the Company now employs nearly 18,000 people, maintains relationships with approximately 30,000 suppliers, and serves more than 125,000 customers worldwide. With nearly 1,500,000 products, end-to-end supply chain services, and extensive digital capabilities, WESCO provides innovative solutions to meet current customer needs across commercial and industrial businesses, contractors, government agencies, institutions, telecommunications providers, and utilities. WESCO’s innovative value-added solutions include supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting and labeling, limited assembly of products and installation enhancement. WESCO has approximately 800 branches, warehouses and sales offices with operations in more than 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and multi-national corporations.

The strategic rationale for combining the companies was compelling and is expected to drive value creation primarily through:

 

•

Scale benefit with enhanced geographic footprint

 

•

Broader and more diversified product and services portfolio, and more diverse end-market customers

 

•

Delivery of substantial cost synergies and incremental revenue from cross-selling products

 

•

Opportunities to drive efficiencies and invest in digital solutions to better partner with our suppliers and customers.

 

4  |		WESCO International, Inc. - 2021 Proxy Statement

2020 Highlights

 

 

As part of the integration, the Company was organized around three strategic business units:

 

 

This remarkable combination represents a tremendous value creation opportunity, bringing together two outstanding businesses, and marks the start of a new era for WESCO.

At WESCO, we believe that we can do great things when we come together with a shared mission, vision, and values that bring out the best in us individually and collectively.

 

 

 

 

		WESCO International, Inc. - 2021 Proxy Statement		|  5

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 2022 Annual Meeting of Stockholders): John J. Engel, Matthew J. Espe, Bobby J. Griffin, John K. Morgan, Steven A. Raymund, James L. Singleton, Easwaran Sundaram, Laura K. Thompson, and Lynn M. Utter.

 

BOARD OF DIRECTORS

The Board is composed of nine directors as of the filing date of this Proxy Statement. The current Director Nominees are to be elected at the Annual Meeting for a one-year term expiring in 2022, subject to earlier retirement, resignation or removal.

The following is the complete list of individuals who comprise our Board of Directors and Board Committees.

 

Name		Age		Director Since		Audit		Compensation		Executive		Nominating and   Governance
John J. Engel		59		2008
Matthew J. Espe		62		2016
Bobby J. Griffin		72		2014
John K. Morgan		66		2008
Steven A. Raymund		65		2006
James L. Singleton(1)		65		1998
Easwaran Sundaram		50		2018
Laura K. Thompson		56		2019
Lynn M. Utter		58		2006

 

(1)	Lead Director

 

Chair

 

Member

 

6  |		WESCO International, Inc. - 2021 Proxy Statement

Election of Directors

 

 

DIRECTORS

The following information is provided regarding our Directors as of April 1, 2021.

DIRECTOR COMPOSITION

 

 

DIRECTOR SKILLS, EXPERIENCE, AND BACKGROUND

The Board regularly reviews the skills, experience, and background that it believes are desirable to be represented on the Board and, in conjunction with the Board’s refreshment process described herein, has evaluated these skills and qualifications to align with the Company’s strategic vision, business and operations. The following is a description of some of these skills, experience and backgrounds, along with the percentage of our Directors that bring such skills and qualifications to the Board.

 

 

 

		WESCO International, Inc. - 2021 Proxy Statement		|  7

Election of Directors

 

 

Board composition is assessed to achieve the appropriate mix of skills and experiences so that the Board, taken as a whole, is well-situated to fulfill the needs of the Company and its stockholders. Also, it is considered particularly beneficial that 100% of Board members have strategic leadership, senior management leadership, and operational expertise, as well as international experience and public company board service.

NOMINEE DIRECTORS TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2022

 

JOHN J. ENGEL

 

		John J. Engel has served as Chairman of the Board of Directors since 2011 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. 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 and a diverse range of businesses. He is experienced in strategic planning, risk oversight and managing complex operational and financial matters.

 

MATTHEW J. ESPE

 

		Matthew J. Espe is an Operating Partner at Advent International, a private equity investment firm, a position he has held since November 2017, and he currently serves as chairman for two privately-held portfolio companies. From February 2017 to November 2017, he served as the Chief Executive Officer of Radial, Inc., a multinational e-commerce company. Previously, Mr. Espe served as Chief Executive Officer and President of Armstrong World Industries, Inc., a global producer of flooring products and ceiling systems, a position he held from 2010 to March 2016. Previously, Mr. Espe served as Chairman and Chief Executive Officer of Ricoh Americas from 2008 to 2010 and Chairman and Chief Executive Officer of IKON Office Solutions, Inc. from 2002 to 2008. Mr. Espe began his career at General Electric Company, and he was with GE for more than 20 years, most recently as President and Chief Executive Officer of GE Lighting. Mr. Espe is also a member of the Board of Directors at Realogy Holdings Corp. and Foundation Building Materials, Inc.

Qualifications: Among Mr. Espe’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Espe has considerable experience as a Chief Executive Officer of a Fortune 500 company, and he brings significant management experience and knowledge to the Board of Directors in the areas of finance, accounting, international business operations, risk oversight and corporate governance. He also brings significant experience gained from service on the board of directors of other public companies.

 

BOBBY J. GRIFFIN

 

		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, at which time he retired. Beginning in 1986, Mr. Griffin served in various other management positions with Ryder System, Inc., including as Executive Vice President, International Operations from 2003 to March 2005 and Executive Vice President, Global Supply Chain Operations from 2001 to 2003. Prior to Ryder System, Inc., Mr. Griffin was an executive at ATE Management and Service Company, Inc., which was acquired by Ryder System, Inc. in 1986. He also serves as a director of Atlas Air Worldwide Holdings, Inc., Hanesbrands Inc. and United Rentals, Inc.

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.

 

8  |		WESCO International, Inc. - 2021 Proxy Statement

Election of Directors

 

 

JOHN K. MORGAN

 

		John K. Morgan served as the Chairman, President and Chief Executive Officer of Zep Inc., a specialty chemicals company, from 2007 until his retirement in June 2015. From July 2007 to October 2007, he served as Executive Vice President of Acuity Brands and President and Chief Executive Officer of Acuity Specialty Products, just prior to its spinoff from Acuity Brands, Inc. From 2005 to July 2007, he served as President and Chief Executive Officer of Acuity Brands Lighting. He also served Acuity Brands as President and Chief Development Officer from 2004 to 2005, as Senior Executive Vice President and Chief Operating Officer from 2002 to 2004, and as Executive Vice President from 2001 to 2002. He previously served as a director of LSI Industries Inc.

Qualifications: Among Mr. Morgan’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Morgan has experience as a Chief Executive Officer with broad expertise in senior executive and operating leadership roles, including extensive experience in and knowledge of the industry in which the Company operates.

 

STEVEN A. RAYMUND

 

		Steven A. Raymund began his employment with Tech Data Corporation, a distributor of information technology products, in 1981. From 1986 until his retirement in 2006, he served as its Chief Executive Officer, and from 1991 to June 2017, he served as its Chairman of the Board of Directors. Mr. Raymund also serves as a director of Jabil, Inc. and as a member of the Board of Advisors for the Moffitt Cancer Center; the Board of Trustees of All Children’s Hospital, Inc.; and the Board of Trustees of the University of Oregon Foundation.

Qualifications: Among Mr. Raymund’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Raymund has considerable experience as a Chief Executive Officer of a Fortune 500 company in a global distribution business, has supply chain expertise, has broad experience as a public company board member in various industries, and is an audit committee financial expert.

 

JAMES L. SINGLETON

 

		James L. Singleton is Chairman and Chief Executive Officer of Cürex Group Holdings, LLC, an institutional foreign exchange execution services and data analytics provider, and has held that position since May 2014. From 2010 to May 2014, he served as the Vice Chairman of Cürex Group Holdings, LLC. From 1994 to 2005, he served as the President of The Cypress Group LLC, a private equity firm of which he was a co-founder. Prior to founding Cypress, he served as a Managing Director in the Merchant Banking Group at Lehman Brothers. In addition, Mr. Singleton previously served as a director of ClubCorp, Inc., Danka Business Systems PLC and William Scotsman International, Inc.

Qualifications: Among Mr. Singleton’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors, Mr. Singleton is a Chief Executive Officer and has extensive expertise in the capital markets, mergers and acquisitions, and knowledge of the Company, its industry, business and history.

 

EASWARAN SUNDARAM

 

		Easwaran Sundaram serves as an Operating Executive at Tailwind Capital, a mid-market private equity firm focused on industrial and technology portfolios. He served as the Executive Vice President and Chief Digital & Technology Officer of JetBlue Airways Corporation from 2012 until his retirement in February 2021 and was a founding member and oversight officer of JetBlue Technology Ventures, a wholly owned subsidiary of JetBlue Airways that incubates, invests in and partners with early stage startups. Previously, he was Senior Vice President of Global Supply Chain and Chief Information Officer at Pall Corporation and served in a senior supply chain management role at PSS World Medical – McKesson Corporation. Mr. Sundaram serves as a director of SolarWinds Corporation and a director of SITA, a private global information technology company providing services to the air transport industry.

Qualifications: Among Mr. Sundaram’s experience, qualifications, attributes and skills for which he is considered a valuable member of the Board of Directors are his leadership experience as a technology executive of a Fortune 500 company and his expertise in digital tools and applications, cybersecurity and global supply chain management.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  9

Election of Directors

 

 

LAURA K. THOMPSON

 

		Laura K. Thompson served as Executive Vice President of The Goodyear Tire & Rubber Company until her retirement in March 2019, and from 2013 to 2018 she served as Executive Vice President and Chief Financial Officer. She has over 35 years of international business and finance experience, including as Vice President of Business Development and Vice President of Finance and Director of Investor Relations. Ms. Thompson is also a Director of Parker Hannifin Corporation and Titan International, Inc.

Qualifications: Among Ms. Thompson’s experience, qualifications, attributes and skills for which she is considered a valuable member of the Board of Directors are her financial expertise and her global executive leadership experience in finance, operations and business development at a Fortune 200 company. In addition, Ms. Thompson is an audit committee financial expert.

 

LYNN M. UTTER

 

		Lynn M. Utter served as an Operating Partner of Atlas Holdings LLC, a private investment firm, until her retirement in June 2020, and from July 2018 to May 2020, she was the firm’s Chief Talent Officer. From April 2016 to June 2018, she served as Chief Executive Officer of First Source LLC, a packager and distributor of national branded, unbranded and private label confectionery products, nuts, snacks, specialty foods and natural products sold to retailers throughout the United States. She previously served as the President and Chief Operating Officer of Knoll Office, a designer and manufacturer of office furniture products, from 2012 to April 2015. She served as President and Chief Operating Officer of Knoll North America from 2008 to 2012. From 1997 to 2008, she served as Chief Strategy Officer and in a number of other senior operating and strategic planning positions for Coors Brewing Company. From 1986 to 1996, Ms. Utter worked at Frito Lay and Strategic Planning Associates, LLC. Ms. Utter serves as a director of Lincoln Financial Group, Vista Outdoor Inc. and NextEra Energy, Inc., and as a director of private equity backed Merchant Metals.

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, 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.

 

10  |		WESCO International, Inc. - 2021 Proxy Statement

Executive Officers

 

 

EXECUTIVE OFFICERS

 

Our executive officers and their respective ages and positions as of April 1, 2021, are set forth below.

 

Name		Age		Position
John J. Engel		59		Chairman, President and Chief Executive Officer
James F. Cameron		55		Executive Vice President and General Manager, Utility and Broadband Solutions (UBS)
Theodore A. Dosch		61		Executive Vice President, Strategy and Chief Transformation Officer
William C. Geary, II		50		Executive Vice President and General Manager, Communications & Security Solutions (CSS)
Akash Khurana		47		Executive Vice President and Chief Information and Digital Officer
Diane E. Lazzaris		54		Executive Vice President, General Counsel and Corporate Secretary
Hemant Porwal		47		Executive Vice President Supply Chain and Operations
David S. Schulz		55		Executive Vice President and Chief Financial Officer
Nelson J. Squires III		59		Executive Vice President and General Manager, Electrical and Electronics Solutions (EES)
Christine A. Wolf		60		Executive Vice President and Chief Human Resources Officer

John J. Engel has served as Chairman of the Board of Directors since May 2011 and as our President and Chief Executive Officer since 2009. Previously, Mr. Engel served as our Senior Vice President and Chief Operating Officer from 2004 to 2009. Before joining WESCO in 2004, Mr. Engel served as Senior Vice President and General Manager of Gateway, Inc., Executive Vice President and Senior Vice President of Perkin Elmer, Inc., Vice President and General Manager of Allied Signal, Inc., and also held various engineering, manufacturing and general management positions at General Electric Company.

James F. Cameron has served as our Executive Vice President and General Manager of the Utility and Broadband Solutions (UBS) strategic business unit since June 2020. From January 2014 to June 2020 he was Vice President and General Manager of the Utility and Broadband Group, and from 2011 to 2013 he was Regional Vice President of our Utility business. Prior to joining WESCO in 2011, Mr. Cameron served as Senior Vice President of the Utility Group, and Vice President of Marketing & Operations with Irby, a Sonepar Company. Earlier in his career, Mr. Cameron held various positions with Hubbell Power Systems, Thomas & Betts and ABB Power T&D Company.

Theodore A. Dosch has served as our Executive Vice President, Strategy and Chief Transformation Officer since June 2020. Prior to the Anixter acquisition in 2020, Mr. Dosch served as the Executive Vice President—Finance and Chief Financial Officer of Anixter International Inc. from July 2011 to June 2020 after serving as its Senior Vice President—Global Finance from January 2009 to July 2011. Previously, Mr. Dosch served as CFO—North America and Vice President—Maytag Integration at Whirlpool Corporation from 2006 to 2008; and held a variety of financial related roles at Whirlpool since 1986.

William C. Geary, II has served as our Executive Vice President and General Manager of the Communications & Security Solutions (CSS) strategic business unit since June 2020. Prior to the Anixter acquisition in 2020, Mr. Geary served as Executive Vice President—Network & Security Solutions of Anixter International Inc. from July 2017 to June 2020 and Senior Vice President—Global Markets—Network & Security Solutions from January 2017 to June 2017. Previously, Mr. Geary held a variety of senior management roles at Accu-Tech Corporation, a wholly-owned subsidiary of Anixter.

Akash Khurana has served as our Executive Vice President and Chief Information and Digital Officer since joining the Company in November 2020. Before joining WESCO, Mr. Khurana served as Chief Information Officer and Chief Data Officer of Global information at of McDermott International, Ltd. from March 2015 to November 2020. Previously, he served as Senior Director of Global Product Lines and Regional P&Ls at Baker Hughes and held a variety of leadership roles at GE Healthcare and Power & Water Divisions.

Diane E. Lazzaris has served as our Executive Vice President and General Counsel since June 2020 and also as Corporate Secretary since February 2021. From 2014 to June 2020 she served as Senior Vice President and General Counsel, and from 2010 to December 2013 she served as our Vice President, Legal Affairs. From 2008 to 2010, Ms. Lazzaris served as Senior Vice President – Legal, General Counsel and Corporate Secretary of Dick’s Sporting Goods, Inc. From 1994 to 2008, she held various corporate counsel positions at Alcoa Inc., including Group Counsel to a group of global businesses.

Hemant Porwal has served as our Executive Vice President Supply Chain and Operations division since June 2020, and from January 2015 to June 2020 as Vice President of Global Supply Chain and Operations. Before joining WESCO, Mr. Porwal served as Vice President at Sears Holding Corporation, leading their global procurement function since 2011, and at PepsiCo where he held roles with increasing responsibility in Operations, Supply Chain, Procurement and Finance.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  11

Executive Officers

 

 

David S. Schulz has served as our Executive Vice President and Chief Financial Officer since June 2020, and from October 2016 to June 2020, he served as Senior Vice President and Chief Financial Officer. Prior to joining WESCO, Mr. Schulz served as Senior Vice President and Chief Operating Officer of Armstrong Flooring, Inc. from April 2016 to October 2016 and from November 2013 to March 2016, he served as Senior Vice President and Chief Financial Officer of Armstrong World Industries, Inc. and as Vice President, Finance of the Armstrong Building Products division from 2011 to November 2013. Prior to joining Armstrong World Industries in 2011, he held various financial leadership roles with Procter & Gamble and The J.M. Smucker Company. Mr. Schulz began his career as an officer in the United States Marine Corps.

Nelson J. Squires III has served as our Executive Vice President and General Manager of the Electrical and Electronics Solutions (EES) strategic business unit since June 2020, and from October 2019 to June 2020 he served as our Senior Executive Vice President and Chief Operating Officer. From January 2018 to September 2019 he served as Group Vice President and General Manager of WESCO Canada/International/WIS and as Group Vice President and General Manager of WESCO Canada from August 2015 to January 2018. From 2010 to July 2015, he was Vice President and General Manager, North America Merchant Gases and President, Air Products Canada of Air Products and Chemicals, Inc. He has also served in regional and general management positions, as director of investor relations, and in various sales positions at Air Products. Earlier in his career, he was a captain in the United States Army.

Christine A. Wolf has served as our Executive Vice President and Chief Human Resources Officer since June 2020, and from June 2018 to June 2020 as Senior Vice President and Chief Human Resources Officer. Before joining WESCO from 2011 to June 2018, Ms. Wolf served as the Chief Human Resources Officer of Orbital ATK, Inc. until its acquisition by Northrop Grumman. From 2008 to 2011, she served as the Chief Human Resources Officer of Fannie Mae and from 2004 to 2008 she served as Chief Human Resources Officer of E*Trade Financial Corporation. Prior to that, she held various positions in human resources with companies in a variety of industries.

 

12  |		WESCO International, Inc. - 2021 Proxy Statement

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 http://wesco.investorroom.com/corporategovernance.

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 2021, the independence of each Director was reviewed, applying applicable 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: Mr. Espe, Mr. Griffin, Mr. Morgan, Mr. Raymund, Mr. Singleton, Mr. Sundaram, Ms. Thompson and Ms. Utter.

Director Qualifications and 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 7 to 10.

The Nominating and Governance Committee considers various factors in determining whether to recommend a candidate for nomination as a Director, including an individual’s aptitude for independent analysis, level of integrity, personal and professional ethics, soundness of business judgment, relevant experience, and ability and willingness to commit sufficient time to Board activities. The Nominating and Governance Committee consults with the Board to determine the most appropriate combination of characteristics, skills and experiences for the Board as a whole with the objective of having a Board whose members have diverse backgrounds and experiences. The Nominating and Governance Committee considers candidates diverse in gender, ethnic background, geographic origin, age and professional experience and evaluates each individual in the context of the individual’s potential contribution to the Board as a whole to best promote the success of the Company’s business, represent stockholder interests through the exercise of sound judgment, and allow the Board to benefit from the group’s diversity of background, experience and thought. The Board values inclusion and diversity, and as of April 1, 2021, 44% of our Directors were diverse in terms of gender or ethnicity. Diversity is also an emphasis in our Board recruiting efforts.

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, operational and strategy expertise, financial expertise, capital markets expertise, sales or marketing expertise, supply chain or industry experience, mergers and acquisitions experience, international experience, and technology and

 

		WESCO International, Inc. - 2021 Proxy Statement		|  13

Corporate Governance

 

 

cybersecurity experience, among others. These processes are designed to ensure a high-functioning and well-composed Board of independent and capable directors with relevant experience.

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 Refreshment, Tenure and Diversity

The Board is committed to ongoing Board refreshment. The Board considers a balanced Board in terms of overall average Director tenure, comprising newer Directors as well as those who have longer experience with the Company, to benefit the Company and its stockholders by providing fresh perspectives, experience and stability. During the past five years, the Board has recruited three new Directors as part of its refreshment process. Currently, 37.5% of our independent Directors have a tenure of five years or less. In order to develop a balanced Board, we have a robust Director recruitment process that includes utilizing the assistance of a nationally recognized recruiting firm to identify and recruit potential candidates for our Board of Directors based on attributes outlined on a skills matrix that was developed by the Nominating and Governance Committee. For each recruiting engagement, the Nominating and Governance Committee, working with the independent recruiting firm and including input from the Board, develops specifications for each director position, which are used to identify and recruit director candidates. We emphasize diversity as part of our recruiting efforts and require diverse slates of candidates for each position. The Board has four of its nine members (44%) who are diverse in terms of gender, race or ethnicity, and the Board has a goal to be 50% or more diverse. We believe that our use of an independent recruiting firm expands the pool of candidates and further improves our diversity efforts.

 

14  |		WESCO International, Inc. - 2021 Proxy Statement

Corporate Governance

 

 

Board, Committee and Director Evaluations

The Board has established a robust self-evaluation process for the Board, its Committees and individual Directors. Each year, our Board and Committees conduct evaluations to assess their effectiveness and adherence to the Corporate Governance Guidelines and Committee charters, and to identify opportunities to improve Board and Committee performance. As part of that process, we also conduct individual Director evaluations at least every other year, including peer assessments. As described below, the Board engages an independent corporate governance professional to conduct interviews with each Director as part of this process.

 

Under the leadership of our Lead Director, Mr. Singleton, the Nominating and Governance Committee oversees our annual evaluation process focused on three components: (1) the Board, (2) Board Committees and (3) individual Directors. For the past three years, as part of its continuous improvement efforts, the Board enhanced its evaluation process by engaging an independent third party who is experienced in corporate governance matters. He interviewed each Director to obtain his or her assessment of the effectiveness of the Board and its Committees, including identifying any opportunities the Board can focus on to enhance effectiveness. In addition, the Board conducted a peer review process in 2020 in which the third party sought input regarding the performance of each individual Director, which the Lead Director provided to each Director in an individual session.

 

 

 

 

Director Continuing Education

As part of our efforts designed to ensure a continuing high-performance Board, Directors participate in continuing education on current topics and developments. We bring outside experts into the Board room to review current topics and developments in their areas of expertise, and Directors regularly attend outside education sessions on relevant topics. Education topics include corporate governance, compensation, financial matters, economic developments, emerging technology and trends, risk management, cybersecurity, diversity and inclusion, ESG matters and others.

Compensation Committee Interlocks

None of our executive officers serves as an executive officer of, or as a member of, the compensation committee of any public company that has an executive officer, director or other designee serving as a member of our Board. No member of our Compensation Committee has been an executive officer of the Company.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  15

Corporate Governance

 

 

Executive Sessions and Lead Director Responsibility

During 2020, the non-management members of our Board met in executive session at each regularly scheduled Board of Directors’ meeting. Our Directors generally hold executive sessions at both the beginning and end of each Board meeting. As Lead Director, 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 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 serves as the Board’s independent Lead Director and presides over executive sessions of the Board. The non-management members of our Board meet in executive session at each regularly scheduled Board meeting. The Audit, Compensation, and Nominating and Governance Committees are all chaired by and comprised solely of independent Directors in accordance with independence standards of the NYSE, and thus oversight of key matters is entrusted to the independent Directors. Each of these Committees also meets in executive session without members of management present. The responsibilities of the Lead Director include the following:

 

•

Presides at all meetings of the Board at which the Chairman is not present, including meetings of independent Directors held in Executive Session;

 

•

Has the authority to call meetings of the independent Directors;

 

•

Leads the Board evaluation program;

 

•

Evaluates, along with the members of the Compensation Committee and the full Board, the CEO’s performance, and meets with the CEO to discuss the Board’s evaluation;

 

•

Serves as a liaison between the Chairman/CEO and the independent Directors;

 

•

Consults with the Chairman/CEO on and approves agendas and schedules for Board meetings to ensure there is sufficient time for discussion of agenda items;

 

•

Advises the Chairman/CEO on the Board’s informational requirements and approves information sent to the Board, as appropriate;

 

•

Consults with the Chair of the Nominating and Governance Committee and the Chairman regarding recommended appointments of Committee members, including Committee chairs; and

 

•

Facilitates communication between the Board and senior management.

The Lead Director assures that appropriate independence is brought to bear on important Board and governance matters. In addition, there is strong leadership vested in and exercised by the independent Committee chairs, and each Director may request inclusion of specific items on the agendas for Board and Committee meetings.

Considering all of the above, the Board believes that a combined Chairman and Chief Executive Officer, together with the Lead Director, is an appropriate Board leadership structure and is in the best interests of the Company and its stockholders at this time.

Communications with Directors

Our Board has established a process by which stockholders and other interested parties may communicate with the Board, our Board Committees, and/or individual Directors by 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 http://wesco.investorroom.com/contact-our-board.

Our Vice President of Internal Audit will review all of these communications on a timely basis and will forward appropriate communications (i.e., other than solicitations, invitations, advertisements, or similar communications) to the relevant Board members on a timely basis.

 

16  |		WESCO International, Inc. - 2021 Proxy Statement

Corporate Governance

 

 

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: Vice President of Internal Audit.

Our Board members routinely attend our Annual Meeting of Stockholders. This provides you with additional opportunities to communicate with our Board. All of our Board members were present at our 2020 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:

 

•

The name and address of the proposed candidate;

 

•

The proposed candidate’s resume or a listing of his or her qualifications to be a Director on our Board;

 

•

A description of what would make the proposed candidate a good addition to our Board;

 

•

A description of any relationship that could affect the proposed candidate’s ability to qualify as an independent Director, including identifying all other public or private company board and committee memberships;

 

•

A confirmation of the proposed candidate’s willingness to serve as a Director if selected by our Nominating and Governance Committee;

 

•

Any information about the proposed candidate that, under the federal proxy rules, would be required to be included in our Proxy Statement if the proposed candidate were a nominee or otherwise is required to be provided pursuant to our Amended and Restated By-Laws; and

 

•

The name of the stockholder submitting the proposed candidate, together with information as to the number of shares owned and the length of time of ownership.

To allow for timely consideration, recommendations must be received not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. In addition, the Company may request additional information regarding any proposed candidates. A stockholder who wishes to nominate a person for election as a Director must provide written notice to the Corporate Secretary of the Company at the address below in accordance with the procedures specified in Section 2.15 of our By-Laws. In general, to be timely, the written notice must be received by our Corporate Secretary not less than 90 days prior to the first anniversary of the date of our most recent Annual Meeting. The notice must provide certain information required by the By-Laws, including (a) biographical and share ownership information of the stockholder (and certain affiliates), (b) descriptions of any material interests of the stockholder (and certain affiliates) in the nomination and any arrangements between the stockholder (and certain affiliates) and another person or entity with respect to the nomination, (c) certain biographical, employment and specific qualifications information of each nominee, and (d) a brief description of any arrangement or understanding between each individual proposed as a nominee and any other person pursuant to which the individual was selected as a nominee.

Notices of Director recommendations or Director nominations, including the information described above, should be sent to: WESCO International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122, Attention: Corporate Secretary.

Director Resignation Policy

The Board has adopted a resignation policy under which any Director who does not receive a majority of votes cast for his or her re-election is expected to offer his or her resignation for the Board’s consideration.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  17

Corporate Governance

 

 

Stockholder Engagement

We seek to engage with current and prospective investors throughout the year in order to review our financial performance, business model and strategic initiatives, so that management and the Board can better understand stockholder perspectives. We also utilize these discussions to assess emerging issues that may help shape our practices and enhance our corporate disclosures, including in the areas of environmental, social and governance (ESG) issues, executive compensation and capital deployment strategies. We strive for a collaborative approach with our stockholders and value the variety of perspectives that we hear in our discussions with them.

 

 

Board’s Role in Oversight of Risk Management

Management is responsible for risk management, and the Board’s role is to oversee management’s efforts in this area. As part of their regular meetings and deliberations, the Board and its Committees review and discuss matters of significance regarding operational, financial and other risks that are relevant to the Company’s business. Strategic risks and operating risks are monitored by the Board through discussions regarding the Company’s strategic and operating plans and regular reviews of the Company’s operating performance. 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.

 

18  |		WESCO International, Inc. - 2021 Proxy Statement

Corporate Governance

 

 

Our board has tasked designated standing committees with oversight of certain categories of risk management. The risk oversight focus areas of the committees are:

 

 

The Audit Committee (comprised 100% of independent members) 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, and the Audit Committee is also responsible for oversight of cybersecurity risk. The Compensation Committee (comprised 100% of independent members) 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. The Nominating and Governance Committee, which is comprised of 100% independent directors, is responsible for oversight of significant environmental, social and governance (“ESG”) matters that are relevant to the Company.

To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes. As part of its oversight of cybersecurity risk, the Audit Committee meets at least quarterly with the Company’s Chief Information Security Officer, the Chief Information and Digital Officer, and other senior leaders to receive updates on cybersecurity risks and threats, the status of initiatives to strengthen the Company’s information security systems and management’s assessments of the Company’s security program. The Board and its committees request and receive regular reports from management on cybersecurity topics. The Company has developed and conducts mandatory information security training programs for all employees and maintains cyber liability insurance policies.

Environmental, Social and Governance Matters

The Board is committed to supporting the Company’s efforts to conduct its business in a principled, transparent, and accountable manner. The Board believes that its effective oversight of ESG matters is central to its risk oversight function. The Nominating and Governance Committee is responsible for oversight of significant ESG matters. In 2020, the Company continued to focus on enhancing its ESG program across the combined company.

Commitment to Environmental Sustainability. WESCO has published a comprehensive Global Reporting Initiative Sustainability Report every other year, and Anixter had published annual reports based on the United Nations Global Compact. As part of the integration with Anixter, WESCO is in the process of harmonizing the companies’ approach to ESG reporting. WESCO’s most recent report may be accessed on our website, www.wesco.com/Responsibility, under Sustainability, and Anixter’s may be accessed at www.anixter.com/ResponsibilityReport. The approach that each company has taken has many similarities, with emphasis on matters relating to human rights, labor, health, safety, security and sustainability, among others. We expect to publish our first

 

		WESCO International, Inc. - 2021 Proxy Statement		|  19

Corporate Governance

 

 

consolidated sustainability report in 2021, based on the GRI framework, with cross-references to relevant Sustainability Accounting Standards Board (SASB) principles.

We are committed to maintaining an ethical, safe, and environmentally sustainable culture. We promote energy efficiency and waste reduction for ourselves and our customers. Our businesses are focused on making our customers operations more efficient and environmentally friendly. We help our customers make progress in lighting efficiency, energy management, renewable energy and green procurement. We support utilities as they meet their renewable portfolio standards initiative (solar and wind generation projects); our lighting renovation and retrofit businesses are focused on introducing energy efficiency in offices, schools, high rise buildings and manufacturing plants and our automation solutions reduce waste for industrial customers. We also set targets to reduce our energy footprint and resource consumption.

We continue to invest in new and emerging technologies and expand our capabilities in order to meet growing demands in these areas:

 

•

Energy efficiency: We provide some of the most efficient products on the market, including LED lighting and energy-efficient power systems.

 

•

Energy management: We offer a suite of smart building solutions that help manage a facility’s environmental impact, including advanced building automation equipment and HVAC controls.

 

•

Renewable energy: We provide turnkey renewable energy solutions ranging from large-scale photovoltaic projects to customized solar, wind, and energy solutions.

 

•

Sustainable MRO: We help businesses meet green procurement goals by offering a broad range of sustainable tools, safety equipment, and miscellaneous consumables.

 

20  |		WESCO International, Inc. - 2021 Proxy Statement

Corporate Governance

 

 

We are also committed to improving sustainability within our own operations. For a number of years, we have reduced our environmental footprint through programs that help us improve energy conservation, waste reduction, and fleet efficiency.

 

 

Our commitment to sustainability includes supporting the 10 principles of the United Nations Global Compact, which we joined in 2017.

Commitment to Inclusion and Diversity. We strongly believe that our people and our high-performance culture are our greatest assets. The merger of WESCO and Anixter nearly doubled our pro forma revenue, and significantly increased our employee headcount and global footprint, including the number of countries in which we operate. We are committed to continuously improving and leveraging our diverse and talented workforce in pursuing the Company’s vision to be the best tech-enabled supply chain solutions provider in the world. We take great pride in our diverse and talented workforce and are committed to becoming the employer of choice for diverse talent in our industry. Our Compensation Committee and Board are updated routinely by management on our diversity and inclusion programs and engage in regular discussions on matters such as workplace culture, talent development, inclusion and diversity, and workforce risk.

We recruit, hire, train and promote people in all positions and work to ensure that all personnel actions are administered without regard to an employee’s race, color, religion, ethnicity, gender or sexual orientation. We continually seek to recruit diverse candidates and increase our representation of women and ethnic minorities, particularly in middle and senior management roles.

The goals of WESCO’s Inclusion and Diversity program are to:

 

•

leverage the unique experiences and perspectives of our talented workforce to support WESCO’s mission,

 

•

further engage employees and build an inclusive culture,

 

•

recruit and develop talent that bring new perspectives and thought processes to WESCO,

 

		WESCO International, Inc. - 2021 Proxy Statement		|  21

Corporate Governance

 

 

•

increase representation of suppliers that are owned and operated by teams with diverse backgrounds, and

 

•

support the communities in which we operate.

WESCO has established an Inclusion & Diversity Council comprised of members of our senior management to lead the formation of four Business Resource Groups (“BRGs”) that will support four identity groups – women, BIPOC (Black, Indigenous, and People of Color), LGBTQ+, and veterans of the armed forces. These BRGs foster a sense of community and inclusion, provide opportunities to network, support advancement opportunities within the organization, and assist with recruiting. The BRGs are global and open to all employees regardless of any aspect of their personal identity.

In early 2021, we were honored to be recognized by Forbes as one of the World’s Best Employers and one of America’s Best Employers for Women. In the 2020 ranking, WESCO was #312 out of 700 companies recognized as the World’s Best Employers and #42 out of 300 companies recognized as America’s Best Employers for Women. Forbes and Statista surveyed 75,000 Americans, including 45,000 women, working for businesses that employ more than 1,000 workers.

Commitment to Human Rights. At WESCO, the way in which we conduct business is as important as the products and services that we provide. Our Human Rights policy includes protections relating to:

 

•

Inclusion, Diversity and Non-Discrimination

 

•

Harassment Prohibition

 

•

Child or Forced Labor Prohibition

 

•

Working Hours, Wages, and Benefits

 

•

Safety and Workplace Conditions

Commitment to Safety. Safety is a core value of WESCO and we do not tolerate violations of established safety protocol. We are committed to reducing or eliminating health and safety risks through dedicated programs, leadership commitment, and employee involvement. We seek to achieve continuous improvement in the safety of our facilities and industry-leading injury rates. In response to the COVID-19 pandemic, we implemented significant operating changes to ensure a safe operating environment for our employees, and to protect the communities in which we operate. As an essential business, substantially all of our distribution facilities remained open and we implemented additional safety measures for employees doing critical on-site work and required all other employees to work remotely.

Prohibition on Hedging and Pledging

The Company’s Insider Trading Policy prohibits Section 16 Directors and Officers from engaging in any hedging transactions that involve WESCO securities. WESCO believes that this ensures a strong alignment of the interests of Directors and Officers with our stockholders. The policy also prohibits all Officers, Directors, Designated Insiders and employees from selling short (including short sales “against the box”) or from trading, writing, or purchasing “put” or “call” options on WESCO securities, including options and SARs. Section 16 Directors and Officers also are prohibited from holding securities of WESCO in a margin account and from using shares as collateral and pledging them as security for a loan. Designated Insiders and employee stockholders are not prohibited from using WESCO securities as collateral to secure a bona fide loan.

Stockholder Proposals for 2022 Annual Meeting

If you wish to have a stockholder proposal included in the Company’s proxy soliciting materials for the 2022 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 13, 2021. For any other business to be properly brought before the 2022 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 2021 Annual Meeting, or between January 27, 2022 and February 28, 2022. We may be required to include certain limited information concerning any such proposal in our Proxy Statement so that proxies solicited for the 2022 Annual Meeting may confer discretionary authority to vote on that matter. Any stockholder proposals should be addressed to our Corporate Secretary, WESCO International, Inc., 225 West Station Square Drive, Suite 700, Pittsburgh, Pennsylvania, 15219-1122.

 

22  |		WESCO International, Inc. - 2021 Proxy Statement

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 http://wesco.investorroom.com/guidelines-charters-and-policies.

The full Board held twelve meetings in 2020. The Board met more frequently in 2020 due to the merger with Anixter International Inc. Each Director attended 75% or more of the aggregate number of meetings of the full Board held in 2020 and the total number of meetings held by all Committees of the Board on which he or she served.

Executive Committee

During 2020, the Executive Committee consisted of Messrs. Engel, Griffin, 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 2020.

Nominating and Governance Committee

All of the members of our Nominating and Governance Committee are required to be, and were determined by our Board to be, independent under the independence standards of the NYSE. During 2020, the Nominating and Governance Committee consisted of Messrs. Griffin, Espe, and Singleton and Ms. Utter, with Mr. Griffin serving as Chair of the Nominating and Governance Committee. 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. The Nominating and Governance Committee is responsible for oversight of significant ESG matters. Our Nominating and Governance Committee held four meetings in 2020.

Audit Committee

All of the members of our Audit Committee are required to be, and were determined by our Board to be, independent Directors according to the independence standards of the SEC and the NYSE. During 2020, the Audit Committee consisted of Messrs. Raymund and Sundaram and Messes. Thompson and Utter, with Mr. Raymund serving as Chair of the Audit Committee. Our Board has determined that Mr. Raymund and Messes. Thompson and Utter are Audit Committee Financial Experts, as defined under applicable SEC regulations. Our Audit Committee is responsible, among other things, for: (a) appointing the independent registered public accounting firm to perform an integrated audit of our financial statements and to perform services related to the audit; (b) reviewing the scope and results of the audit with the independent registered public accounting firm; (c) reviewing with management our quarterly and year-end operating results; (d) considering the adequacy of our internal accounting and control procedures; (e) reviewing the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; (f) providing oversight for cybersecurity risks; and (g) reviewing any non-audit services to be performed by the independent registered public accounting firm and the potential effect on the registered public accounting firm’s independence. Our Audit Committee held eight meetings in 2020.

Compensation Committee

All of the members of our Compensation Committee are required to be, and were at all times, independent Directors according to the independence standards of the SEC and the NYSE (including the enhanced independence requirements for Compensation Committee members). During 2020, the Compensation Committee consisted of Messrs. Morgan, Espe, Griffin 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 seven meetings in 2020.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  23

Security Ownership

 

 

SECURITY OWNERSHIP

 

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth the number of shares of Company’s common stock beneficially owned as of April 1, 2021 by each Director or nominee for Director of the Company, the named executive officers in the Summary Compensation Table and by all Directors and executive officers as a group. Unless otherwise indicated, the holders of all shares shown in the table have sole voting and investment power with respect to such shares. In determining the number and percentage of shares beneficially owned by each person, shares that may be acquired by such person pursuant to options or convertible stock exercisable or convertible within 60 days of April 1, 2021, 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.

 

Name		Shares Beneficially Owned					Percent     Owned     Beneficially(1)
John J. Engel				849,068	(2)				2	%
Matthew J. Espe				15,711	(3)				*
Bobby J. Griffin				23,419	(3)				*
John K. Morgan				38,304	(3)				*
Steven A. Raymund(4)				57,352	(3)				*
James L. Singleton(5)				44,277	(3)				*
Easwaran Sundaram				12,616	(3)				*
Laura K. Thompson				5,606					*
Lynn M. Utter				38,810	(3)				*
Diane E. Lazzaris				111,494	(2)				*
David S. Schulz				107,416	(2)				*
Nelson J. Squires, III(6)				64,106	(2)				*
Theodore A. Dosch				45,306					*
All 18 Directors and executive officers as a group				1,504,346	(2)				3	%

 

*	Indicates ownership of less than 1% of the Common Stock.

 

(1)	Based on the number of shares outstanding on the record date.

 

(2)

Includes the following shares of Common Stock not currently owned, but subject to SARs which were outstanding on April 1, 2021 and may be exercised or settled within 60 days thereafter: Mr. Engel, 667,746; Ms. Lazzaris, 92,236; Mr. Schulz, 73,173; Mr. Squires, 47,644; and all Directors and executive officers as a group, 1,149,521.

 

(3)

Includes shares of Common Stock payable to any such Director following the Director’s termination of Board service with respect to portions of annual fees deferred under the Company’s Deferred Compensation Plan for Non-Employee Directors, and restricted stock units subject to an election to defer even though such shares are not deemed currently to be beneficially owned by the Directors pursuant to Rule 13d-3, as follows: Mr. Espe, 9,317; Mr. Griffin, 19,287; Mr. Morgan, 16,122; Mr. Raymund, 18,354; Mr. Singleton, 14,866; Mr. Sundaram, 4,220; and Ms. Utter, 28,714.

 

(4)	Includes 17,009 shares of Common Stock beneficially owned indirectly through a trust which is controlled by Mr. Raymund.

 

(5)	Includes 5,000 shares of Common Stock held by an irrevocable trust. Mr. Singleton disclaims beneficial ownership and does not have voting or dispositive power over such shares.

 

(6)	Includes 2,445 shares of Common Stock beneficially owned indirectly by Mr. Squires and his spouse.

DELINQUENT SECTION 16(A) REPORTS

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, 2020, all such filings were made within the required time periods, based on the Company’s review of forms filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, and written representations received from such persons.

 

24  |		WESCO International, Inc. - 2021 Proxy Statement

Security Ownership

 

 

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of the Company’s Common Stock as of April 1, 2021, by each person or group known by the Company to beneficially own five percent or more of the outstanding shares of the Company’s Common Stock.

 

Name		Shares Beneficially Owned				Percent Owned Beneficially
Leonard Green & Partners, L.P. 11111 Santa Monica Blvd. Ste 2000 Los Angeles, CA 90025			5,700,000	(1)			11.4%
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355			4,312,774	(2)			8.6%
BlackRock, Inc. 55 East 52nd Street New York, NY 10055			3,549,045	(3)			7.1%
Dimensional Fund Advisors, L.P. Building One 6300 BeeCave Road Austin, TX 78746			3,003,507	(4)			6.0%

 

(1)

This information is based solely upon a Schedule 13G/A filed by Leonard Green & Partners, L.P. (“Leonard Green”) with the Securities and Exchange Commission on July 14, 2020. Leonard Green is the beneficial owner of 5,700,000 shares and has shared voting power over 5,700,000 shares and shared dispositive power over 5,700,000 shares.

 

(2)

This information is based solely upon a Schedule 13G/A filed by The Vanguard Group (“Vanguard”) with the Securities and Exchange Commission on February 8, 2021 Vanguard is the beneficial owner of 4,312,774 shares and has shared voting power over 48,889 shares, sole dispositive power over 4,222,629 shares and shared dispositive power over 90,145 shares.

 

(3)

This information is based solely upon a Schedule 13G filed by BlackRock, Inc. (“BlackRock”) with the Securities and Exchange Commission on February 1, 2021. BlackRock is the beneficial owner of 3,549,045 shares and has sole power to vote 3,442,624 shares, and sole dispositive power over 3,549,045 shares.

 

(4)

This information is based solely upon a Schedule 13G/A filed by Dimensional Fund Advisors LP (“Dimensional”) with the Securities and Exchange Commission on February 16, 2021. Dimensional is the beneficial owner of 3,003,507 shares and has sole power to vote 2,942,639 shares, and sole dispositive power over 3,003,507 shares.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  25

Transactions with Related Persons

 

 

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 and there were no disclosed transactions for 2020.

 

26  |		WESCO International, Inc. - 2021 Proxy Statement

Item 2 – Approve, on an Advisory Basis, the Compensation of the Company’s Named Executive Officers

 

 

ITEM 2 — APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

 

This year, the Company is seeking that the stockholders approve the compensation of the Company’s named executive officers (commonly referred to as “say-on-pay”) as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding named executive officer compensation and the narrative description accompanying such disclosure. As approved by our stockholders at the annual meeting of stockholders in 2017 regarding the frequency of the advisory vote, and consistent with the Board’s recommendation, we are submitting this proposal on an annual basis. This vote is advisory only, meaning it is non-binding on the Company; however, the Board and Compensation Committee will review and carefully consider the results when evaluating future compensation decisions.

 

 

OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”

APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.

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 2021 Proxy Statement.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  27

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 2020 year that are applicable to our Named Executive Officers (“NEOs”):

 

John J. Engel		Chairman, President and Chief Executive Officer
David S. Schulz		Executive Vice President and Chief Financial Officer
Diane E. Lazzaris		Executive Vice President, General Counsel and Corporate Secretary
Nelson J. Squires III		Executive Vice President and General Manager, Electrical and Electronics Solutions (EES)
Theodore A. Dosch		Executive Vice President, Strategy and Chief Transformation Officer

EXECUTIVE SUMMARY

2020 was a transformational year for WESCO. In January 2020, we signed a definitive agreement to acquire Anixter, which was a publicly-traded company approximately the same size as WESCO, and we successfully completed the transaction in June 2020. This transformational combination doubled the company’s size in terms of revenue and number of employees:

 

 

The transaction was completed in the midst of the extremely challenging COVID-19 pandemic, including financing the transaction, obtaining regulatory approvals, and integrating the two equally-sized businesses. Due to the COVID-19 pandemic, our executive officers and Board took decisive cost control actions, including a 25% reduction in the base salaries of our executive officers (including Messrs. Engel, Schulz and Squires and Ms. Lazzaris) and the Board’s cash compensation from May 1 to September 30, 2020. During the year, WESCO’s stock price experienced significant volatility, starting 2020 at $59.39 per share, declining to a 52-week low of $13.52 per share on March 18, and ending 2020 at $78.50, a 32% increase for the year. As of April 1, 2021, the closing price was $87.04 per share.

As part of the integration, the company formed three strategic business units. With the objective of creating a world class company, the executive and senior management teams for the Company and each of the strategic business units were selected using a robust evaluation and interview process, with the assistance of a global human resources consulting firm. As a result, some of the key personnel are from legacy WESCO, some from legacy Anixter, and some are external new hires. As part of this process, the Committee solicited the input of its independent compensation consultant, Meridian Compensation Partners, LLC, regarding compensation structure and the development of a new peer group considering the significantly increased size and scope of the combined business.

 

28  |		WESCO International, Inc. - 2021 Proxy Statement

Compensation Discussion and Analysis

 

 

Key elements of our executive compensation program include the following:

 

ELEMENT		DESCRIPTION
Stockholder Support		We received the support of over 93% of stockholder votes in favor of our say-on-pay proposal in 2020. The overall structure of our compensation program, which was based on significant stockholder engagement, has remained consistent.
Straightforward Program		Our program is straightforward and comprises three elements: (1) Base Salary; (2) Short-Term Incentive Program (STIP); and (3) Long-Term Incentive Program (LTIP).
Pay for Performance		Our performance metrics are linked to our strategy and demonstrate our pay for performance philosophy that aligns compensation with performance.
Balanced Mix of Incentives		We have a balanced mix of short- and long-term incentives, using a blend of performance metrics.
Challenging Incentive Award Goals		We set challenging short- and long-term incentive award goals.
Reasonable Compensation Levels		Total compensation is targeted at the median of our peer group, and the levels of compensation are reasonable.
Limited Perquisites		We have limited use of perquisites.
No Tax Gross-Ups on Executive-Only Perquisites		We do not provide tax gross-ups on executive-only perquisites.
Independent Committee and Consultant		Our Compensation Committee is 100% independent and utilizes an independent compensation consultant.
Stock Ownership Guidelines		We have robust stock ownership guidelines for our NEOs.
No Hedging or Pledging		NEOs are prohibited from hedging or pledging our stock.
Clawback Policy		We have a clawback policy that applies to financial restatement and also events of misconduct.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  29

Compensation Discussion and Analysis

 

 

Pay for Performance

Our compensation program uses the following performance metrics:

 

Performance Metrics				Why It’s Included		How It’s Used
Short-Term Incentive Program (STIP)		Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)		Encompasses sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability, all of which are central to the Company’s strategy and the creation of long-term stockholder value.		Based on the annual operating plan reviewed and approved by the Board each December, these metrics are used for STIP targets in the following year.
		Free Cash Flow		Relates directly to the Company’s operating performance, including the effective management of working capital, which is especially relevant for a distributor. Strong free cash flow is a hallmark of our business and important to our investors.
Long-Term Incentive Program (LTIP)		Net Income Growth / EPS Growth		Linked to strategy to drive profitable revenue and earnings growth; encompasses sales growth, margin improvement and cost control.		These metrics are measured over a three-year period and represent an appropriate mix of a growth metric and a return metric, both of which are relevant to our business and strategy. We believe that the combination of earnings growth and effective asset management drives value for a distribution business.
		Return on Net Assets (RONA) Growth		Important operating metric for a distributor like us, since it focuses on improving profitability and the efficient use of operating assets (working capital, property, buildings and equipment) to create value for our stockholders.

2020 Performance Highlights

2020 performance highlights include:

 

•

Transformational Combination - Completed the WESCO/Anixter transaction, in less than six months from signing to closing, despite a challenging and tumultuous COVID-19 environment

 

•

Sales Growth - Net sales of $12.3 billion, up 48% due to the Anixter transaction

 

•

Increased Stock Price - Total stockholder return of 32% for 2020, despite a volatile and challenging year in the midst of a pandemic

 

•

Strong Free Cash Flow - Free cash flow increased from $180 million in 2019 to $586 million in 2020 ($250 million for the legacy WESCO business)

 

•

Leadership Talent - Strengthened our talent base, including the formation of new executive and senior management teams, consisting of leaders from both legacy WESCO and legacy Anixter, as well as new talent from external hires

 

30  |		WESCO International, Inc. - 2021 Proxy Statement

Compensation Discussion and Analysis

 

 

SAY-ON-PAY – STOCKHOLDER ENGAGEMENT AND BOARD RESPONSIVENESS

In 2020, the Company’s advisory vote on executive compensation received the approval of over 93% of the shares voted. The Compensation Committee considered these results and, based on our strategic objectives, the close alignment of the compensation program with stockholder interests and the strong support of stockholders, determined not to make any significant changes to our overall compensation structure, other than the 25% temporary salary reductions from May 1 to September 30 relating to the pandemic. Accordingly, the Compensation Committee decided to follow the same fundamental policies and procedures described above in setting compensation for 2020.

Compensation Philosophy, Approach and Pay Elements

We have a straightforward and transparent compensation program that is linked to our strategy and the drivers of long-term stockholder value. It is based on our pay-for-performance methodology and we use operating performance metrics that are important to our business. To be successful, we need to attract and retain executives and employees who are talented and motivated to grow long-term stockholder value.

There are three central elements to our executive total compensation:

 

(1)	base salary – cash-based;

(2)	short-term incentives – cash-based, and based on the annual operating plan approved by the Board; and

(3)	long-term incentives – stock-based, and based on three-year performance periods, linked to growth and return metrics and whose value depends on the increase in the company’s stock price over the long term, thus further aligning the executive’s interests with stockholders’ interests.

Structuring a balanced, fair and properly-crafted compensation program for our executive leaders is essential to promote our high-performance culture and contribute to our success. Our compensation philosophy begins with the recognition that our success depends on the talent of our people. To encourage high level performance of our leaders we have constructed a compensation plan that rewards the behavior of our executives in pursuit of the following three broad goals.

The first of our philosophical tenets is to attract and retain an excellent management team, because a high performing team is critical to our success as a company. Developing and strengthening our corporate relationships with our customers and suppliers over the long-term enables our business to grow profitably. Also important is the consistency of leadership in support of our corporate mission and sustaining our high-performance culture.

The second philosophical goal of our compensation planning is to enable WESCO to recruit strong leaders as we grow our business and expand our product and service offerings. We were able to recruit our NEOs because of our culture and compensation packages that aligned their performance with our strategy of creating value. Our approach in aligning our compensation plans to our strategy has been an important reason for our recruiting successes.

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 performance measures are not met, they may receive little or no bonus. In terms of long-term incentives, we believe that the opportunity to participate in the growth in value of our share price links pay to performance. We provide equity incentives to align management’s interests with those of stockholders, and we maintain robust stock ownership guidelines to instill that mindset.

Based on our objectives, we believe it is appropriate that we target our three compensation elements at the median of the peer group. The Company’s target total cash compensation and long-term incentives for the NEOs have been generally at or below the median of the peer group.

We assess the effectiveness of our compensation programs regularly and use the services of an internationally recognized independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), which provides us with research information and data. Meridian serves as a resource to our 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 compensation. All of our Committee members are independent, as defined by applicable regulations.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  31

Compensation Discussion and Analysis

 

 

 

 

 

32  |		WESCO International, Inc. - 2021 Proxy Statement

Compensation Discussion and Analysis

 

 

COMPENSATION SETTING PROCESS

Our Board has delegated to the Committee, composed entirely of individuals who are independent Directors under the independence standards of the NYSE and SEC, including the enhanced independence requirements for compensation committee members, the responsibility of administering executive compensation and benefit programs, policies and practices. The Committee may also delegate certain matters to a subcommittee in its discretion. The performance of the management team is reviewed relative to performance measures, and compensation levels for our NEOs are reviewed and approved on an annual basis.

Our compensation setting process for NEOs consists of the following steps:

 

•

Consider the Company’s financial performance;

 

•

Review external market data;

 

•

Consider stockholder feedback on say-on-pay and compensation topics;

 

•

Confirm the reasonableness of total compensation awards as well as the reasonableness of each component of compensation when compared to peer companies;

 

•

Assess overall Company performance in relation to our objectives, competition and industry circumstances;

 

•

Assess individual performance, changes in duties and responsibilities, and strategic and operational accomplishments;

 

•

Adjust base salaries, as appropriate, based on job performance, leadership, tenure, experience, and other factors, including market data relative to our peer companies;

 

•

Evaluate and determine annual and long-term incentive award opportunities for each NEO;

 

•

Make awards under our long-term incentive plan that reflect recent performance and an assessment of the future impact each NEO can have on the long-term success of the Company;

 

•

Review the metrics and goals of the annual incentive plan as well as the performance share plan; and

 

•

Apply consistent practices from year to year for annual cash incentive award payments based on an evaluation of pre-established operating and financial performance factors.

As previously noted, the Committee also engages an independent compensation consultant to assist in reviewing the Company’s compensation practices, to provide market comparison information, and to make recommendations.

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 appropriate peer group, prepare a market analysis of target total compensation for the NEOs based on comparable and similarly-sized (by revenue) companies, and furnish its input regarding the compensation and incentives of the Chief Executive Officer and other executives. In addition, the Committee has sought the recommendation of the Chief Executive Officer regarding the other NEOs relative to compensation adjustments and individual performance objectives he believes would be appropriate to achieve the Company’s strategic and operational goals. Our Committee meets in person or telephonically at least five times each year, and our 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.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  33

Compensation Discussion and Analysis

 

 

COMPENSATION PEER GROUP

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. The Committee reviews analyses of compensation paid by companies in our peer group through the use of marketplace compensation profiles prepared by Meridian, the Committee’s independent compensation consultant. The compensation peer group that we used in 2020 was constructed using the following selection of criteria: business similarities and relevant industries, including distribution, logistics, transportation, companies with diffuse operations and/or general industry, and revenue size. In conjunction with Meridian, the Committee reviews the composition of our peer group at least annually.

Because of the merger with Anixter that doubled the size of the Company, the Committee engaged our independent compensation consultant to determine a new peer group. The peer group comprises 29 companies, with median revenue comparable to WESCO based on the pro forma revenue of the combined organization. It is not feasible or appropriate to construct a peer group of only distributor competitors, as many of our competitors are smaller and/or privately-held companies, in the case of local competitors, or larger non-U.S. based companies, in the case of global competitors. We believe that revenue size is an important component, since the scope and scale of a key management role depends on revenue size of the organization. The compensation consultant selected companies, using data available in the Equilar database, and excluded companies demonstrably variant to WESCO (e.g., agriculture, financial services, healthcare, etc.). Companies with similar characteristics (e.g., operating margins, moderate capital intensity, and mid-level/comparable stock price volatility) were included.

We chose a large number of similarly sized companies because we believe that they are representative of the companies against whom we compete to recruit and retain talent. This approach has proven successful, as the last executive officers that we hired came from large corporations that were not direct competitors of ours and not in the distribution industry. We also believe that a large pool of comparable companies is better than choosing a 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.

The compensation peer group beginning in June 2020 was comprised of the following companies:

 

2020 COMPENSATION PEER GROUP
AECOM		Cummins Inc.*		Jabil Inc.		United natural Foods, Inc.
Arrow Electronics, Inc.		Eaton Corporation plc*		Johnson Controls International plc		United Rentals, Inc.
Avis Budget Group, Inc.		Flex Ltd.*		Lithia Motors, Inc.*		Univar Solutions Inc.*
Avnet, Inc.*		Fluor Corporation		Patterson Companies, Inc.*		W.W. Grainger, Inc.
CarMax, Inc.		HD Supply Holdings, Inc.		Quanta Services, Inc.*		WestRock Company
CDW Corp.*		Henry Schein, Inc.*		Stanley Black & Decker, Inc.*
CommScope Holding Company, Inc.*		Insight Enterprises, Inc.		TE Connectivity Ltd.
Corning Incorporated*		International Paper Company*		Trane Technologies Plc

 

*

Denotes companies newly added to the 2020 Compensation Peer Group. The following companies were removed from the 2020 Compensation Peer Group: Air Products and Chemicals, Inc., Asbury Automotive Group, Inc., AutoNation, Inc., AutoZone, Inc., Dover Corporation, EchoStar Corporation, EMCOR Group, Inc., Fortune Brands Home & Security Inc., GMS Inc., Harsco Corporation, HNI Corporation, Jacobs Engineering Group Inc., Lennox International Inc., Masco Corporation, MRC Global Inc., MSC Industrial Direct Co., Inc., Plexus Corp., Ryder System, Inc., Sanmina Corporation, SPX Corp., Steelcase, Inc., The Andersons, Inc. and Vulcan Materials Company.

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 peer 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.

 

34  |		WESCO International, Inc. - 2021 Proxy Statement

Compensation Discussion and Analysis

 

 

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 peer 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 peer group generally based on the 50^th percentile of base salaries for comparable positions.

In 2020, the Committee performed its annual assessment of base salaries in February (other than for Mr. Dosch, who joined the Company in June 2020), prior to the environment changing significantly due to the global pandemic and prior to completion of the Anixter acquisition. Because of the pandemic, however, planned base salary changes were put on hold and instead the Board instituted a 25% base salary reduction for those NEOs, commencing May 1 until September 30. Concurrent with completion of the Anixter transaction in late June 2020, the Committee reviewed compensation market data, based on analysis prepared by the independent compensation consultant, using the new peer group (as described on page 34). The Committee determined a new base salary for the following NEOs based on that analysis (in lieu of the amounts it had determined as part of its normal annual review in February), but it delayed the implementation of that change until after the 25% COVID-19 salary reductions had been lifted:

 

NEO		Annual Base Salary Beginning of 2020(1)		Annual Base Salary     Effective October 1, 2020
Engel		$1,040,000		$1,100,000
Schulz		$600,000		$650,000
Lazzaris		$485,000		$510,000
Squires		$550,000		$600,000

(1) The amount of this annual base salary for Messrs. Engel, Schulz and Squires and Ms. Lazzaris was reduced by 25% due to COVID-19 related cost savings during the period from May 1 to September 30.

Mr. Dosch’s base salary upon joining the Company on June 22, 2020 was $625,000, which was reviewed by the Committee based on analysis prepared by the independent compensation consultant using the Company’s new peer group.

In determining adjustments to base salaries, the Committee considers prevailing economic conditions, base salaries of recent additions to management, performance assessments, changes in duties and responsibilities, Company performance, comparable salary practices of companies within our peer group, the recommendation of Mr. Engel (in the case of the other NEOs), and any other factors the Committee deems relevant.

Short-Term Incentives

Our practice is to award cash incentive bonuses for achievement of performance measures linked to our strategy. Target short-term incentives are designed to provide compensation opportunities generally approximating the 50^th percentile of the peer group and are reviewed on an annual basis.

Annually, the Company’s performance criteria and financial and operational targets are reviewed and approved by the Committee for the upcoming year. For purposes of the 2020 annual incentive programs, the performance measures for our NEOs (other than Mr. Dosch, who joined the Company from Anixter in June 2020) consist of the achievement of a combination of the following metrics: Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) and Free Cash Flow.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  35

Compensation Discussion and Analysis

 

 

We believe that EBITDA is an appropriate performance measure because it relates directly to the Company’s sales growth (including organic sales growth), operating margin performance (including gross margin and cost management) and profitability. We believe that Free Cash Flow is an appropriate performance measure because it relates directly to the company’s operating performance, including the management of working capital. We believe that the combination of earnings growth and effective asset management drives value for a distribution business.

 

Performance Measure		Weighting		Percent Achievement		Payout Percent of Target Opportunity(1)
Earnings Before Interest Taxes Depreciation and Amortization		75%		< 80%		0%
				80% to 100%		25% up to 100%
				>100% to 120%		Between 100% and 200%
Free Cash Flow		25%		< 80%		0%
				80% to 100%		25% up to 100%
				>100% to 120%		Between 100% and 200%
Total (as a percent of Target Opportunity)		100%				0% to 200%

 

(1)	Amounts interpolated, as appropriate.

For 2020, the performance goals (at threshold, target and maximum levels) and the actual achievement of each of the financial components is included in the chart below:

 

		Performance Goals
Performance Measure		Threshold				Target				Maximum				Actual Results
Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)		$	349,920			$	437,400			$	524,880				$369,256(1)
Payment as % of Target			25%				100%				200%				41.6%
Free Cash Flow		$	173,600			$	217,000			$	260,400				$250,030(2)
Payment as % of Target			25%				100%				200%				176.1%

 

(1)	EBITDA s Income from Operations, less Depreciation and Amortization, based on the EBITDA of the legacy WESCO business for 2020 the full year, excluding the effects of the Anixter merger.

 

(2)	Free Cash Flow is based on the Free Cash from Operations, less Capital Expenditures, Flow of the legacy WESCO business for 2020, excluding the effects of the Anixter merger.

Each December, the Board reviews the Company’s annual operating plan, including these measures. Targets for the coming year’s Short-Term Incentives are consistent with the Board-approved annual operating plan, based on achievement levels as set forth in the table above. Additionally, the annual operating plan forms the basis of expectations that are provided to stockholders, in the form of sales and profitability expectations, as well as Free Cash Flow generation. Thus, management’s Short-Term Incentive Plan is aligned with stockholder interests and expectations communicated to stockholders. After review, the Committee determined not to adjust or reset the performance goals for 2020, despite the negative and unexpected impact of the COVID-19 pandemic on the Company’s business performance.

With respect to the NEOs other than himself, the Chief Executive Officer makes recommendations to the Committee for the Committee’s consideration. The Committee’s review of the Chief Executive Officer’s bonus is conducted with only independent Directors, with the assistance of the independent compensation consultant, present.

 

36  |		WESCO International, Inc. - 2021 Proxy Statement

Compensation Discussion and Analysis

 

 

Each NEO’s 2020 short-term incentive was calculated as follows based on the performance metrics and actual achievement levels described above:

 

NEO		2020 Salary(1)				Target Incentive %				Target Incentive $				Component		Component Weighting				Payout
Engel		$	1,071,560				143%			$	1,533,396			EBITDA Free Cash Flow			75% 25%			Below target EBITDA (41.6%) Above target FCF (176.1%)		$	478,420 675,078
																				Total		$	1,153,497
Schulz		$	626,300				91%			$	569,420			EBITDA Free Cash Flow			75% 25%			Below target EBITDA (41.6%) Above target FCF (176.1%)		$	177,659 250,687
																				Total		$	428,346
Lazzaris		$	498,150				73%			$	362,118			EBITDA Free Cash Flow			75% 25%			Below target EBITDA (41.6%) Above target FCF (176.1%)		$	112,981 159,422
																				Total		$	272,403
Squires		$	576,300				85%			$	492,600			EBITDA Free Cash Flow			75% 25%			Below target EBITDA (41.6%) Above target FCF (176.1%)		$	153,691 216,867
																				Total		$	370,558
Dosch(2)		$	654,423				97%			$	632,110			Operating Profit – Anixter ROTC – Anixter Personal			38% 37% 25%			Below target Op Profit (80.0%) Above target ROTC (132.0%) Above target Personal (116.0%)		$	192,161 308,723 183,312
																				Total		$	684,196

 

(1)	The prorated salaries used for purposes of calculating short-term incentives exclude the temporary salary reductions for May through September 2020, and reflects salary increases effective June 22, 2020.

 

(2)

Mr. Dosch joined the Company on June 22, 2020 upon consummation of the Anixter transaction. Consistent with legacy Anixter’s past practice, Mr. Dosch’s annual cash incentive award for 2020 was based on achievement of the following performance goals (with the relative weightings): (i) worldwide operating profit of the legacy Anixter business for 2020, excluding the effects of the merger (38%), (ii) worldwide rate of return on tangible capital of the legacy Anixter business for 2020, excluding the effects of the merger (37%), and (iii) the achievement of certain personal objectives (25%). The actual percentage of the target incentive paid to Mr. Dosch in 2020 with respect to each of the above components are as follows: 80% for worldwide operating profit; 132% for worldwide rate of return on tangible capital; and 116% for personal objectives. All amounts are based on the legacy Anixter business, not including the legacy WESCO business. Mr. Dosch will participate in WESCO’s standard annual incentive plan commencing in 2021.

Long-Term Incentives

The purpose of long-term incentives is to carefully align compensation with stockholder value creation, and thus long-term incentives comprise the centerpiece of executive compensation and a significant majority of our NEOs total compensation opportunity.

Structure of Long-Term Incentives

Based on feedback from investors as part of our prior say-on-pay outreach, we increased the weighting of performance shares commencing in 2019 from 30% to 50%. Our Long-Term Incentives for our NEOs are structured as follows:

 

Long-Term Incentives		Weighting
Performance Shares		50%
Stock Appreciation Rights		25%
Restricted Stock Units		25%

 

		WESCO International, Inc. - 2021 Proxy Statement		|  37

Compensation Discussion and Analysis

 

 

Performance Shares

Our performance shares are designed to reward our NEOs for drivers of long-term value that are tied to our strategy and increased stockholder value over the long-term. We use three-year performance periods for each grant, and performance shares for the three- year period 2018-2020 were based on two equally weighted performance metrics: (1) Earnings Per Share (EPS) Growth; and (2) Return on Net Assets (RONA) Growth.

The EPS Growth rate is equal to the three-year average growth rate of the Company’s fully diluted earnings per share, excluding specific items that are not indicative of ongoing results. We believe that EPS Growth is related directly to our strategy to drive profitable revenue and earnings growth and that enduring stock price performance reflects the effective execution of a long-term strategic plan. This performance metric encompasses sales growth, margin improvement and cost control, which are important operational aspects of our business and strategy. RONA Growth measures the three-year cumulative return on net assets growth versus the base year. We believe that RONA Growth is an appropriate and important measure of performance for a distributor like us, since it focuses on improving profitability and the efficient use of operating assets (working capital, property, buildings and equipment) to create value for our stockholders. Performance share awards vest in the form of a number of shares of the Company’s common stock. The number of performance shares actually earned, if any, depends 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 vest at the target level.

Consistent with our pay-for performance philosophy, the threshold, target and maximum performance goals for the performance shares awarded in 2018 for the three-year performance period ended December 31, 2020 (the “2018 Performance Shares”) and the actual achievement and payout levels are as shown below:

 

Performance Goals

Actual Results

Performance Measure

Threshold

Target

Maximum

Actual Payout

EPS Growth (3-year average growth rate)

0%

5%

10%

5.7%

Payment as % of Target

0.5 x

1.0 x

2.0 x

1.13x

RONA Growth (3-year cumulative RONA versus the base year, in basis points (bps))

0 bps

50 bps

100 bps

(163 bps)

Payment as % of Target

0.5 x

1.0 x

2.0 x

0

Based on the actual results and performance goals above, the shares earned by the NEOs are calculated as follows:

 

NEO		Target Award of 2018 Performance Shares(1)		Component		Component Weighting		Payout
Engel		21,974		EPS Growth RONA Growth		50% 50%		Above target (1.13) Below threshold (0)			12,415   —
								Total			12,415
Schulz		6,688		EPS Growth RONA Growth		50% 50%		Above target (1.13) Below threshold (0)			3,779   —
								Total			3,779
Lazzaris		3,106		EPA Growth RONA Growth		50% 50%		Above target (1.13) Below threshold (0)			1,755   —
								Total			1,755
Squires		2,866		EPA Growth RONA Growth		50% 50%		Above target (1.13) Below threshold (0)			1,619   —
								Total			1,619

⁽¹⁾ Mr. Dosch did not receive 2018 performance shares as he joined the Company in June 2020.

In accordance with the Company’s pay-for-performance philosophy, the realized pay was less than the fair value of the awards at time of grant. As detailed above, half of the performance shares granted in 2018 based on RONA Growth had no payout and were forfeited. Each year the Committee reviews the performance targets and metrics for the upcoming grant. The current structure of our performance shares award program, including performance metrics, reflects changes made in prior years in response to shareholder feedback. In 2020, the Committee followed a consistent approach from the prior year and did not make any fundamental changes to the structure of the program.

 

38  |		WESCO International, Inc. - 2021 Proxy Statement

Compensation Discussion and Analysis

 

 

Stock Appreciation Rights

We use Stock Appreciation Rights (SARs) to both motivate and align management’s incentives with long-term stockholder value. We believe that management should have a substantial stake in the success of the Company and that enduring stock price growth reflects the effectiveness of management in executing a long-term strategic plan, not just the passage of time. Our SARs settle in Company common stock upon exercise, and they vest ratably over three years.

Restricted Stock Units

Fundamentally, Restricted Stock Units (RSUs) are meant to balance the need for long-term retention of key executive talent while aligning realizable value with changes in stockholder wealth. Restricted stock is common in the marketplace and therefore is an important component of a competitive compensation opportunity. It is, however, intentionally only a modest portion of our NEOs’ total long-term incentive compensation. Our philosophy is to grant equity-based long-term incentives having an economic value which generally approximates the 50th percentile of grants by companies in our peer group. We believe this target allows us to attract, motivate and retain the executive talent necessary to develop and execute our business strategy. Our RSUs either cliff vest after three years or vest over a three-year period.

In 2020, we provided a one-time award of RSUs to each of the NEOs to recognize his or her individual efforts in connection with the completion of the merger of Anixter, a strategically significant and transformational initiative for the Company, and to promote their retention.

The performance share, SAR and RSU grants to our NEOs in 2020 were as follows:

 

NEO		Performance Share Opportunity (reflects number of shares that could be earned at  target)(1)				SAR Awards				RSU Awards(4)				Grant Date				Grant Price				SARs Expiration Date				RSU - Vesting Date
Engel			53,291				92,893				26,645				2/13/2020			$	48.32	(2)			2/13/2030				2023
			—				—				124,301				7/2/2020			$	32.18	(3)			—				(4)
Schulz			15,780				27,507				7,890				2/13/2020			$	48.32	(2)			2/13/2030				2023
			—				—				62,150				7/2/2020			$	32.18	(3)			—				(4)
Lazzaris			7,036				12,266				3,518				2/13/2020			$	48.32	(2)			2/13/2030				2023
			—				—				31,075				7/2/2020			$	32.18	(3)			—				(4)
Squires			12,417				21,645				6,209				2/13/2020			$	48.32	(2)			2/13/2030				2023
			—				—				46,613				7/2/2020			$	32.18	(3)			—				(4)
Dosch			—				—				43,505				7/2/2020			$	32.18	(3)			—				(4)

 

(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 13, 2020 grant date in accordance with Committee action on February 13, 2020.

 

(3)	Represents the exercise price for the RSUs at issuance price, which was the closing price of our Company stock on the July 2, 2020 grant date in accordance with Committee action on June 21, 2020.

 

(4)

The RSU awards to each of the NEOs on July 2, 2020, represent a one-time award to recognize the efforts of these NEOs in connection with the completion of the merger of Anixter and to promote their retention. These awards vest in increments of 30% on each of the first and second anniversaries of the grant date and 40% on the third anniversary of the grant date, subject, in each case, to continued employment through the applicable anniversary date.

The Company’s target long-term incentives for the NEOs’ annual grants were generally at the 50th percentile of the peer group for 2020.

In 2020, we granted 262,091 SARs, 150,354 performance shares, and 656,717 RSUs in the aggregate to all award recipients. The awards were approximately equal to 2.3% 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 Committee determines (without the input of the Chief Executive Officer) the amount of his grant. In 2020, we granted performance shares, SAR and RSU awards to approximately 190 employees.

 

		WESCO International, Inc. - 2021 Proxy Statement		|  39