Rajesh Agrawal
ARROW ELECTRONICSAbout Rajesh Agrawal
Senior Vice President and Chief Financial Officer (CFO) of Arrow Electronics since September 6, 2022; previously EVP & CFO of The Western Union Company (2014–2022). He holds an MBA from Columbia University and a BS in engineering from GMI/Kettering University, and was age 57 at appointment; he also serves on the board of Beazley PLC (Audit & Risk and Remuneration Committees) . Company performance during 2024 reflected cyclical headwinds: sales $27.9B, gross profit $3.3B, operating income $769M, and diluted EPS $7.29, with ~$250M of buybacks, as management emphasized structural margin work in Components and focus in ECS .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Arrow Electronics | SVP, Chief Financial Officer (Principal Financial Officer) | 2022–present | Finance leadership through industry correction; supports cost discipline and capital allocation priorities . |
| The Western Union Company | EVP & Chief Financial Officer | 2014–2022 | Led finance; also intermittently led M&A strategy and global operations . |
| Deluxe; General Mills; Chrysler; General Motors | Various senior finance/business roles | n/a (prior to 2014) | Progressive finance and operating roles across blue-chip companies . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Beazley PLC | Director; Audit & Risk Committee; Remuneration Committee | Current | Public company board and committee service . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base salary ($) | 700,000 | 700,000 |
| Target annual bonus ($) | 700,000 | 700,000 |
| Actual annual bonus paid ($) | 476,070 | 493,360 |
Additional 2022 new-hire terms: $700,000 base salary; $700,000 annual incentive target; sign-on RSU award $4,000,000 vesting in four equal annual installments; eligibility for severance and change-in-control programs from Oct 1, 2022 .
Performance Compensation
Annual Incentive (2024 design and outcomes)
| Metric | Weight | Target/Threshold/Max | Actual result | Payout as % of target |
|---|---|---|---|---|
| Absolute EPS (non-GAAP) | 70% | Threshold $9.08; Target $12.10; Max $15.13 | $10.83 | 68.54% |
| Strategic Goals (GC growth; ECS growth; Opex savings) | 30% | GC growth: 0.75–1.0 pp; ECS growth: 0.75–1.0 pp; Opex savings: $86.25M–$115M | GC below threshold; ECS above target; Opex at target | 75% |
| Total formulaic payout | — | — | — | 70.48% (committee approved) |
Resulting non-equity incentive compensation for Agrawal in 2024: $493,360 .
Long-Term Incentive Program (LTIP) – structure
- Mix: 50% PSUs; 50% RSUs; annual grants .
- PSU metrics: 60% three-year Relative EPS Growth vs peer group; 40% three-year average ROIC minus WACC; 0–185% payout; positive net income threshold; settlement in shares at 3 years .
- RSUs: time-based, vest 25% annually over four years (subject to positive net income in grant year) .
2024 LTIP grants to Agrawal: 9,558 PSUs (target) and 9,558 RSUs (grant-date fair values ~$1.10M each) .
PSU vesting outcome for 2022 cycle (1/1/2022–12/31/2024): Relative EPS Growth ranked 10th (weighted 0%); average ROIC–WACC 4.73% (weighted 80%); overall payout 80% (approved Feb 2025) .
Equity Ownership & Alignment
- Beneficial ownership: 15,129 shares (<1% of outstanding); includes 12,569 shares held jointly with spouse .
- Executive ownership guidelines: CEO 5x salary; other NEOs 3x salary; all NEOs currently meet requirements .
- Anti-hedging/anti-pledging: Hedging and pledging of company securities prohibited; trades require preclearance and are confined to open windows or 10b5-1 plans .
- Stock vested and options exercised (2024): 12,301 shares vested for Agrawal (value $1,506,204); no options exercised .
Outstanding equity awards at FY-end 2024 (Agrawal)
| Award type | Grant date | Units outstanding | Market value at 12/31/24 ($) |
|---|---|---|---|
| RSUs | 09/14/2022 | 20,178 | 2,282,535 |
| RSUs | 02/15/2023 | 6,634 | 750,438 |
| RSUs | 02/21/2024 | 9,558 | 1,081,201 |
| PSUs (unearned) | 02/15/2023 | 8,845 | 1,000,546 |
| PSUs (unearned) | 02/21/2024 | 9,558 | 1,081,201 |
Notes: Agrawal has no outstanding stock options in the FY2024 table . Shares outstanding at record date: 51,867,253 .
Employment Terms
| Provision | Severance Policy (no cause) | Change-in-Control (CIC) Retention Agreement (double-trigger, within 24 months post-CIC) |
|---|---|---|
| Cash severance | 18 months of base salary and annual cash incentive (prorated as applicable) paid per normal schedule | Lump sum: 2x (CEO 3x) the sum of base salary and target annual cash incentive (greater of CIC date vs termination date) |
| Annual bonus | Pro-rata bonus for year of termination based on actual performance; severance-period bonus based on actual performance but 0% credit for strategic goals | Pro-rata bonus for year of termination based on actual performance |
| Equity treatment | Continues to vest during severance period; forfeiture of any portion not vested by end of period | Immediate vesting of all unvested equity awards |
| Health benefits | Continuation through severance period; up to $50,000 outplacement ($75,000 CEO) | Continuation for up to 24 months (36 months CEO) |
| Restrictive covenants | Required release; non-compete and non-solicit for period equal to severance period | As per CIC agreement; excise tax cutback if economically favorable; no golden parachute tax gross-up (company-wide policy) |
| SERP | SERP continues per plan; present value at 12/31/24: $800,668; 2.25 years credited service | SERP benefits payable at age 60 (if CIC qualifying termination and age thresholds met) |
Sign-on award (2022): $4,000,000 RSUs vesting in four equal annual tranches; base $700,000; target bonus $700,000; effective Sept 6, 2022; CIC/severance eligibility effective Oct 1, 2022 .
Financial Context (ARW consolidated)
| Metric (USD) | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues | $34,477,018,000* | $37,124,422,000* | $33,107,120,000* | $27,923,324,000* |
| EBITDA | $1,750,935,000* | $2,262,159,000* | $1,643,657,000* | $1,119,023,000* |
| Net Income (IS) | $1,108,197,000* | $1,426,884,000* | $903,505,000* | $392,074,000* |
*Values retrieved from S&P Global (GetFinancials).
Compensation Structure Analysis
- Cash vs equity mix: For Agrawal, base salary remained $700k in 2023–2024, with stock awards of ~$2.2M annually and non-equity incentive moving from $476k (2023) to $493k (2024) amid below-target EPS results, indicating variable pay sensitivity to performance .
- Metric design and stringency: Annual plan weighted 70% to Absolute EPS with explicit threshold/target/max and strategic goals at 30% (growth in each segment and opex savings); committee retained negative discretion and approved 70.48% payout for 2024 .
- Long-term focus: PSUs tied to relative EPS vs peers and ROIC–WACC; 2022 cycle paid at 80% (ROIC–WACC outperformance offset by weak relative EPS growth), reinforcing capital efficiency emphasis .
- Governance: Clawbacks (Dodd-Frank and misconduct), anti-hedging/anti-pledging, no option repricing, no golden parachute tax gross-ups; ownership guidelines met .
Say‑on‑Pay, Peer Group, and Shareholder Feedback
- Say-on-pay approval: 97.1% at 2024 annual meeting .
- PSU peer group (for relative EPS): Avnet, CDW, Celestica, Flex, HPE, HP Inc., Jabil, TD SYNNEX, Wesco International .
- Shareholder engagement: Off‑season outreach to holders representing ~74% of shares; feedback supportive of compensation structure .
Risk Indicators & Red Flags
- Pledging/hedging: Prohibited (mitigates alignment risk) .
- Clawbacks: Both restatement-based and misconduct-based recovery in place .
- Change-in-control: Double-trigger required; excise tax cutback provision rather than gross-up .
- Insider activity: 2024 shows vesting of 12,301 shares and no option exercises for Agrawal; no pledging; specific Form 4 sales not indicated in proxy tables .
Expertise & Qualifications
- Finance leadership (public-company CFO since 2014), M&A strategy and operational oversight at Western Union; board-level risk and remuneration oversight at Beazley; MBA (Columbia), BS Engineering (Kettering). These credibly support CFO responsibilities in a global distribution/solutions enterprise .
Investment Implications
- Pay-for-performance alignment: 2024 below-target EPS drove sub‑target annual bonus (70.48% payout), while long-term PSUs partially paid (80% for 2022 cycle) on ROIC–WACC strength despite weak relative EPS, indicating balanced incentives that reward capital efficiency even in cyclical downturns .
- Retention and selling pressure: Significant unvested RSUs/PSUs outstanding (e.g., ~20.2k 2022 RSUs plus 2023–2024 grants) create retention hooks; absence of pledging and strong ownership guidelines reduce misalignment risk .
- Change-in-control economics: Double-trigger with 2x cash multiple and full equity vesting could be meaningful in a transaction, but absence of gross-ups and presence of cutback and clawbacks temper governance concerns .
- Context: Company-level revenue and EBITDA have contracted through the cycle (2022–2024); the compensation framework appears calibrated to cyclicality, limiting windfalls and emphasizing efficiency—supportive for investors seeking disciplined capital stewardship through downturns (S&P Global financials).