Gretchen Zech
Senior Vice President, Chief Governance, Sustainability, and Human Resources Officer at 
ARROW ELECTRONICS
ARROW ELECTRONICSExecutive
About Gretchen Zech
Gretchen K. Zech is Senior Vice President, Chief Governance, Sustainability, and Human Resources Officer at Arrow Electronics (ARW), appointed in February 2022 after serving as Senior Vice President and Chief Human Resources Officer for more than five years . She is one of Arrow’s Named Executive Officers (NEOs) in 2024 . Company performance context: 2024 sales were $27.9B, gross profit $3.3B, operating income $769M, and diluted EPS $7.29 ; 2023 sales were $33.1B (down 11% vs 2022), gross profit $4.1B (down 14%), operating income $1.5B (down 29%), and diluted EPS $15.84 (down 27%) . Arrow’s 2024 say‑on‑pay support was 97.1% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arrow Electronics, Inc. | SVP, Chief Governance, Sustainability, and Human Resources Officer | Feb 2022–Present | Oversees governance, sustainability, and global HR strategy; executive liaison to Corporate Governance Committee processes . |
| Arrow Electronics, Inc. | SVP & Chief Human Resources Officer | More than five years (prior to Feb 2022) | Led global human capital strategy and executive compensation program support . |
Fixed Compensation
Multi-year compensation summary (SEC-reported):
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 658,333 | 675,000 | 675,000 |
| Stock Awards (grant-date fair value) | 1,500,092 | 1,500,030 | 1,500,084 |
| Non-Equity Incentive (annual cash) | 1,133,334 | 459,068 | 475,740 |
| Change in Pension Value & NQDC Earnings | — | 971,404 | 509,483 |
| All Other Compensation | 14,400 | 16,700 | 17,300 |
| Total | 3,306,159 | 3,622,202 | 3,177,607 |
Base salary level (committee disclosure):
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 675,000 | 675,000 |
Annual cash incentive target:
| Metric | 2023 | 2024 |
|---|---|---|
| Target Annual Cash Incentive ($) | 675,000 | 675,000 |
All other compensation detail (2024):
| Component | 2024 ($) |
|---|---|
| Other | 3,500 |
| 401(k) Company Contribution | 13,800 |
| Total All Other Compensation | 17,300 |
Performance Compensation
Annual Cash Incentive structure and 2024 results:
| Element | Weight | Threshold | Target | Maximum | Actual (2024) | Payout as % of Target |
|---|---|---|---|---|---|---|
| Absolute EPS | 70% | $9.08 | $12.10 | $15.13 | $10.83 | 68.54% |
| Global Components Strategic % Growth | 7.5% | 0.75 pp | 1.0 pp | 1.0 pp | Below Threshold | 0% |
| ECS Strategic % Growth | 7.5% | 0.75 pp | 1.0 pp | 1.0 pp | Above Target | 100% |
| Opex Savings | 15% | $86.25M | $115.00M | $115.00M | $115.00M | 100% |
| Total Strategic Goals Payout | 30% | — | — | — | — | 75% |
| Total Award Payout | 100% | — | — | — | — | 70.48% |
2024 annual incentive payout (individual):
| Metric | 2024 |
|---|---|
| Payout ($) | 475,740 |
Long-Term Incentive (LTIP) design:
| Instrument | Weight | Performance Metrics | Vesting / Gates |
|---|---|---|---|
| PSUs | 50% | 60% three-year Relative EPS growth vs Peer Group; 40% three-year average ROIC – WACC | Three-year cliff; payout 0–185% subject to positive non-GAAP net income in grant year . |
| RSUs | 50% | Stock price performance (time-based) | Four equal annual installments; subject to positive non-GAAP net income in grant year . |
LTIP grants (counts):
| Instrument | 2023 | 2024 |
|---|---|---|
| PSUs (#) | 6,031 | 6,517 |
| RSUs (#) | 6,031 | 6,517 |
Maximum PSUs potential (by grant year):
| Grant Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Max PSUs (#) | 10,865 | 11,157 | 12,056 |
PSU performance outcome (2012–2024 cycle measured 2022–2024):
- 2022 grants vested at 80% of target in Feb 2025 (Relative EPS growth ranked 10th among peers → 0% weighted result; average ROIC exceeded WACC by 4.73% → 80% weighted result) .
Stock vested and realized (2024):
| Metric | 2024 |
|---|---|
| Shares vested (#) | 14,072 |
| Value realized ($) | 1,620,814 |
Equity Ownership & Alignment
Beneficial ownership and guidelines:
| Item | Detail |
|---|---|
| Shares owned (as of Mar 10, 2025) | 71,221; noted as less than 1% of outstanding . |
| Executive stock ownership guidelines | CEO 5x base salary; other NEOs 3x base salary; all NEOs meet requirements as of Record Date . |
| Anti-hedging / anti-pledging | Company prohibits speculative trading, hedging on derivatives, and pledging of Company stock . |
Unvested RSUs (as of Dec 31, 2024):
| Grant Date | Unvested RSUs (#) | Market Value ($) |
|---|---|---|
| 02/16/2022 | 5,873 | 664,354 |
| 02/15/2023 | 6,031 | 682,227 |
| 02/21/2024 | 6,517 | 737,203 |
Outstanding stock options (selected current awards):
| Grant Date | Options Exercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|
| 02/19/2020 | 15,785 | 79.22 | 02/19/2030 |
| 02/19/2019 | 14,331 | 81.05 | 02/16/2029 |
| 02/20/2018 | 10,810 | 81.95 | 02/18/2028 |
| 02/21/2017 | 2,936 | 73.86 | 02/19/2027 |
Employment Terms
Severance policy and CIC economics (Gretchen K. Zech; amounts shown at 12/31/2024):
| Component | Death ($) | Disability ($) | Termination Without Cause or Resignation for Good Reason ($) | Change in Control Termination ($) | Retirement ($) |
|---|---|---|---|---|---|
| Severance Payment | — | — | 1,012,500 | 2,700,000 | — |
| Prorated Annual Cash Incentive | 675,000 | 675,000 | 675,000 | 675,000 | — |
| Annual Cash Incentive (Severance) | — | — | 708,750 | — | — |
| PSUs (equity awards) | 2,083,784 | 2,083,784 | 1,346,580 | 2,083,784 | — |
| RSUs (equity awards) | 1,753,473 | 1,753,473 | 1,214,456 | 1,753,473 | — |
| Management Insurance Benefit | 5,400,000 | — | — | — | — |
| Welfare Benefits Continuation | — | 7,426 | 22,588 | 30,117 | — |
| Outplacement Services | — | — | 50,000 | — | — |
| SERP (Supplemental Executive Retirement Plan) | — | 3,163,871 | — | 4,447,355 | — |
| Total | 9,912,257 | 7,683,554 | 5,029,874 | 11,689,729 | — |
Additional terms and governance:
- Good Reason eligibility: As of Dec 31, 2024, only Ms. Zech was eligible to receive payments upon resignation for “good reason” outside of a CIC; others limited to termination without “cause” .
- CIC Retention Agreement: Benefits are “double‑trigger” (requires termination without cause or resignation for good reason within 24 months after a change in control) including 2x base salary plus 2x target bonus (3x for CEO), prorated annual incentive, immediate vesting of all unvested equity, and continued medical coverage (up to 24 months; 36 months for CEO) .
- 280G excise tax cutback: Payments reduced if it increases after‑tax amount vs paying excise taxes .
- SERP: Credited service 13.08 years; present value of accumulated benefit $4,489,350 as of Dec 31, 2024 .
- Clawbacks: Dodd‑Frank‑compliant clawback for restatements and a misconduct‑trigger incentive compensation clawback for senior leaders; no indemnification for clawback losses .
- Anti‑hedging/anti‑pledging: Prohibited .
Investment Implications
- Alignment and pay mix: Strong performance linkage via 70% EPS and 30% strategic goals for annual incentives plus three‑year PSUs focused on Relative EPS and ROIC–WACC; 2024 annual payout was 70.48%, below target amid industry headwinds, showing downside sensitivity .
- Equity cadence and potential supply: Ongoing RSU vesting in equal annual tranches and PSU cycles (with gates) support retention; 2024 vesting realized $1.62M on 14,072 shares, which may create periodic liquidity events to monitor around vest dates .
- Ownership and alignment safeguards: Ms. Zech owns 71,221 shares (less than 1%); executives are subject to 3x salary ownership requirements, clawbacks, and anti‑pledging/hedging, mitigating misalignment risks .
- Change‑in‑control severance: Double‑trigger CIC multiple (2x base+bonus), immediate equity vesting, and medical continuation enhance retention but create defined payout exposure; note presence of 280G cutback provision .
- Long‑term performance execution: 2022 PSU cycle paid 80% (ROIC–WACC achieved, Relative EPS lagged peers), indicating balanced operational capital efficiency but peer‑relative EPS pressure—an area to watch for subsequent cycles .
- Shareholder sentiment: 2024 say‑on‑pay received 97.1% approval, suggesting investor acceptance of program design and outcomes .