Eric Nowak
ARROW ELECTRONICSAbout Eric C. Nowak
Eric C. Nowak is President, Global Enterprise Computing Solutions (ECS) at Arrow Electronics (ARW), appointed effective April 2, 2024 after over 19 years at the company and a decade leading ECS across EMEA & ANZ since 2014 . His cash compensation is paid in euros given employment in France . Arrow’s incentive design ties executive pay to Absolute EPS (annual, 70%) and strategic goals (30%), and to three-year Relative EPS growth (60%) and ROIC minus WACC (40%) in PSUs, with strong shareholder support (97.1% say‑on‑pay in 2024) and clawbacks, anti‑hedging and anti‑pledging policies . Company performance in 2024: $27.9B sales, $3.3B gross profit, $769M operating income, diluted EPS $7.29, and ~$250M share repurchases (≈2M shares), framing the backdrop for incentive outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arrow Electronics | President, Global ECS | 2024–present | Led ECS as strategic growth metric exceeded target in 2024 annual incentive framework |
| Arrow Electronics | President, EMEA & ANZ ECS | 2014–2024 | Ran ECS across EMEA & ANZ; foundation for elevation to global ECS leadership |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary (USD) | $424,992 | $591,708 | +39% on promotion to President, Global ECS (paid in EUR; FX assumption $1.0404/€ for 2024) |
| Annual Cash Incentive Target (USD) | $331,162 | $554,862 | +68% on promotion (paid in EUR; FX $1.0404/€ for 2024) |
| Actual Annual Cash Incentive Paid (USD) | — | $452,344 (corp: $299,410; EMEA ECS portion: $152,934) | Corporate payout reflects 70.48% aggregate; EMEA ECS portion achieved 117.60% prorated |
Performance Compensation
2024 Annual Cash Incentive Structure and Outcomes (Company-level formula affecting Nowak)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Absolute EPS (USD) | 70% | $9.08 | $12.10 | $15.13 | $10.83 | 68.54% |
| Global Components Strategic % Growth | 7.5% | 0.75 pp | 1.00 pp | — | Below Threshold | 0% |
| ECS Strategic % Growth | 7.5% | 0.75 pp | 1.00 pp | — | Above Target | 100% |
| Opex Savings | 15% | $86.25M | $115.00M | — | $115.00M | 100% |
| Total Strategic Goals Payout | 30% | — | — | — | — | 75% |
| Overall Award Payout | — | — | — | — | — | 70.48% |
Notes:
- Nowak’s promotion mid‑year resulted in a prorated dual target: corporate and prior EMEA ECS plan; the EMEA ECS portion paid 117.60% prorated, adding $152,934 to his total .
LTIP Design and 2024 Grants
- LTIP mix: 50% PSUs (3‑year Relative EPS growth 60%; 3‑year average ROIC minus WACC 40%; net income threshold >0), 50% time‑vested RSUs (4 equal annual tranches; net income threshold >0) .
- 2024 LTIP Target Value: $2,000,000 (vs. $700,000 in 2023; +186% on promotion/market adjustment) .
| Grant Date | PSUs (Threshold/Target/Max) | RSUs (Shares) | Grant Date Fair Value (USD) |
|---|---|---|---|
| Feb 21, 2024 | 608 / 3,041 / 5,626 | 3,042 | $349,989 (PSUs) ; $350,104 (RSUs) |
| May 7, 2024 | 236 / 1,181 / 2,185 | 1,181 | $150,011 (PSUs) ; $150,011 (RSUs) |
| Sep 17, 2024 | 772 / 3,858 / 7,137 | 3,858 | $500,035 (PSUs) ; $500,035 (RSUs) |
Aggregate 2024 LTIP allocation summary:
- Shares granted: PSUs 8,080; RSUs 8,081 .
- PSU performance cohort (2024–2026) uses a nine‑company peer group: Avnet, CDW, Celestica, Flex, HPE, HP Inc., Jabil, TD SYNNEX, Wesco .
Historical PSU vesting signal:
- 2022 PSU cycle (2022–2024) vested at 80% of target (Relative EPS rank tenth → 0% weighted; ROIC–WACC +4.73% → 80% weighted) .
Equity Ownership & Alignment
Beneficial Ownership
| Shares Outstanding (Record Date) | Nowak – Currently Owned | Nowak – Acquirable within 60 Days | Total Beneficial | Ownership % |
|---|---|---|---|---|
| 51,867,253 | 45,199 | 296 | 45,495 | ~0.09% (derived from ) |
Outstanding and Unvested Awards (Dec 31, 2024 snapshot)
| Award Type | Grant Date | Shares/Units | Exercise Price | Expiration | Market/Payout Value |
|---|---|---|---|---|---|
| Stock Options (Exercisable) | Feb 19, 2019 | 7,166 | $81.05 | Feb 16, 2029 | — |
| Stock Options (Exercisable) | Feb 19, 2020 | 7,891 | $79.22 | Feb 19, 2030 | — |
| RSUs (Unvested) | Feb 17, 2021 | 763 | — | — | $86,311 |
| RSUs (Unvested) | Feb 16, 2022 | 1,370 | — | — | $154,974 |
| PSUs (Unearned) | Feb 16, 2022 | 3,916 | — | — | $442,978 |
| RSUs (Unvested) | Feb 15, 2023 | 2,111 | — | — | $238,796 |
| RSUs (Unvested) | Feb 21, 2024 | 3,042 | — | — | $344,111 |
Vesting policies:
- RSUs vest in four equal annual installments starting on the first anniversary of grant (subject to positive net income in grant year) .
- PSUs vest after three years based on Relative EPS growth and ROIC–WACC (subject to positive net income in grant year; no payout if ROIC–WACC < 0, unless Committee discretion) .
Stock ownership guidelines and trading policies:
- Executive stock ownership requirement: 3x base salary for other NEOs (CEO 5x); 100% of net shares retained annually until in compliance; RSUs count; options and unvested PSUs do not; all NEOs meet guidelines as of Record Date .
- Anti‑hedging and anti‑pledging policy applies to directors and executives; prohibits hedging, short‑term trading, options/short sales, and pledging/margin accounts .
2024 realized equity value:
- Stock awards vested: 6,936 shares; value realized $799,027 (no options exercised in 2024) .
Employment Terms
Severance Policy and Change‑in‑Control Economics (Nowak)
General severance features:
- If terminated without cause: salary continuation for 18 months; annual cash incentive paid based on actual performance with strategic goals assumed at 0%; equity vesting continues per schedules; French employment limits U.S. medical/outplacement benefits .
- Change‑in‑control termination (double‑trigger): lump‑sum cash payment equal to two times target total cash compensation; prorated annual incentive based on actual results; immediate vesting of all unvested equity; U.S. medical continuation inapplicable to Nowak (France‑based) .
Scenario‑specific 12/31/2024 estimated payouts:
| Scenario | Severance Payment (USD) | Prorated Annual Incentive | Severance Annual Incentive | Equity – PSUs | Equity – RSUs | Total |
|---|---|---|---|---|---|---|
| Death | — | $728,256 | — | $1,542,391 | $1,837,182 | $4,107,829 |
| Disability | — | $728,256 | — | $1,542,391 | $1,837,182 | $4,107,829 |
| Resignation for Good Reason | $1,092,384 | $728,256 | $764,669 | $1,542,391 | $1,837,182 | $5,964,882 |
| Change‑in‑Control Termination | $2,913,024 | $728,256 | — | $1,542,391 | $1,837,182 | $7,020,853 |
| Retirement | — | — | — | $1,542,391 | $1,837,182 | $3,379,573 |
Other employment plan elements:
- SERP: Not eligible; France‑based .
- Clawbacks: Dodd‑Frank restatement clawback (Big R/little r), plus broader misconduct clawback for executives and senior management .
Investment Implications
- Pay‑for‑performance alignment: Incentives heavily tied to EPS and capital efficiency; 2024 payout below target (70.48%) on EPS miss and mixed strategic goal results; 2022 PSU cohort vested at 80% on strong ROIC–WACC but weak Relative EPS, reinforcing balanced long‑term metrics .
- Retention risk and selling pressure: Significant unvested RSU/PSU holdings across 2021–2024 grants and no 2024 option exercises suggest continued alignment and limited forced selling; RSUs vest through 2028 and PSUs through 2026, supporting retention .
- Governance and protections: Anti‑hedging/pledging reduce misalignment; stock ownership guidelines (3x salary) and widespread NEO compliance bolster skin‑in‑the‑game; robust clawbacks reduce downside governance risk .
- Change‑in‑control economics: Double‑trigger acceleration and 2x cash multiple create potential overhang in M&A, but consistent with market practice; immediate vesting of equity under CIC could be dilutive in a transaction .
- Performance backdrop for ECS: ECS strategic growth metric achieved above target in 2024 annual plan while Global Components underperformed; as Nowak stabilized ECS post‑promotion, the structure rewards execution in higher‑growth segments (hybrid cloud, cybersecurity, AI‑related DC infrastructure) highlighted by management .