Richard Marano
ARROW ELECTRONICSAbout Richard Marano
Richard J. Marano, age 60, is President, Global Components at Arrow Electronics (appointed August 2023). He previously led the Americas Components business (President, Americas Components since January 2020; prior roles include VP, Sales, Americas Components) . Company performance in 2024: sales $27.9B, gross profit $3.3B, operating income $769M, diluted EPS $7.29 . Pay-versus-performance shows Arrow’s 5-year value of $100 invested at $133 vs $213 for the peer group in 2024, underscoring TSR headwinds during the latest cycle . Within 2024 annual incentives, Global Components’ strategic growth metric finished below threshold (see “Performance Compensation”) .
Past Roles
| Organization | Role | Years | Notes/Strategic Scope |
|---|---|---|---|
| Arrow Electronics | President, Global Components | Aug 2023–present | Promoted to lead the global components segment |
| Arrow Electronics | President, Americas Components | Jan 2020–Aug 2023 | Led Americas components business |
| Arrow Electronics | VP, Sales, Americas Components | >5 years prior to 2020 | Senior sales leadership for Americas components |
External Roles
No external public-company directorships disclosed for Marano in Arrow’s executive officer profiles and proxy materials reviewed .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $462,500 | $500,000 |
| Target Annual Cash Incentive ($) | $386,538 | $500,000 |
| Actual Annual Cash Incentive Paid ($) | — | $352,400 |
| All Other Compensation ($) | — | $13,924 (incl. $13,800 401(k) contribution; $124 other) |
| Summary Compensation Total ($) | — | $2,066,367 |
Notes:
- No base salary increase for 2024 NEOs generally; Marano’s 2024 base reflects his October 2023 promotion .
Performance Compensation
2024 Annual Cash Incentive — Plan Design and Outcome
| Component | Weight | Target/Threshold/Max | 2024 Actual | Payout as % of Target |
|---|---|---|---|---|
| Absolute EPS | 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 T/M: 1.0pp; ECS growth T/M: 1.0pp; Opex Savings T/M: $115M | GC: Below threshold; ECS: Above target; Opex: At target | 75.00% |
| Blended Outcome | 100% | — | — | 70.48% |
| Marano’s Payout ($) | — | Target $500,000 | — | $352,400 |
- Strategic result detail: Global Components strategic growth metric scored below threshold; ECS exceeded target; Opex Savings met target .
Long-Term Incentives (LTIP)
Design (applies to 2024 NEO grants):
- PSUs (50%): 3-year performance (2024–2026) on 60% Relative EPS growth vs peer group and 40% 3-year average ROIC minus 3-year WACC; positive net income in grant year required for vesting; payout range 0–185% .
- RSUs (50%): vest 25% annually over four years, subject to positive net income in grant year .
Marano’s 2024 LTIP Grants (grant date 2/21/2024):
| Award | Shares/Units | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|
| PSUs (Target) | 5,213 | $599,964 | 3-year perf. ending 12/31/2026; payout 0–185% if metrics met |
| RSUs | 5,214 | $600,079 | 25% per year over 4 years from grant date |
Multi-year context:
- 2024 LTIP target value increased to $1,200,000 (from $600,000 in 2023) following his promotion .
- Maximum potential PSUs for Marano: 2022: 3,983; 2023: 4,462; 2024: 9,644 .
- 2022 PSU cohort paid out at 80% of target company-wide (Relative EPS ranked 10th among peers → 0%; ROIC−WACC 4.73% → 80%) .
Equity Ownership & Alignment
Beneficial Ownership and Stock Ownership Guidelines
| Item | Detail |
|---|---|
| Beneficially Owned Shares | 9,325 shares (<1% of outstanding) |
| Executive Ownership Guideline | 3x base salary for non-CEO NEOs; all NEOs meet requirements as of record date |
| Hedging/Pledging | Company policy prohibits hedging and pledging of Arrow securities by executives |
Outstanding Equity (12/31/2024)
Stock options:
| Grant Date | Exercisable | Unexercisable | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 02/19/2019 | 551 | — | 81.05 | 02/16/2029 |
| 02/19/2020 | 2,732 | — | 79.22 | 02/19/2030 |
Unvested RSUs:
| Grant Date | Unvested RSUs (#) | Market Value ($) at 12/31/2024 |
|---|---|---|
| 02/17/2021 | 587 | $66,401 |
| 02/16/2022 | 1,076 | $121,717 |
| 02/15/2023 | 1,809 | $204,634 |
| 02/21/2024 | 5,214 | $589,808 |
Unearned PSUs (open performance cycles):
| Grant Date | Unearned PSUs (#) | Payout Value ($) at 12/31/2024 |
|---|---|---|
| 02/16/2022 | 2,153 | $243,547 |
| 02/15/2023 | 2,412 | $272,845 |
| 02/21/2024 | 5,213 | $589,695 |
Employment Terms
Severance (policy-based; no individual employment contract):
- Involuntary termination without cause: pro-rata annual cash incentive for year of termination; 18 months of base salary and annual incentive (paid per normal cycles); healthcare continuation during severance; outplacement up to $50,000; duty to mitigate; equity scheduled to vest during the 18-month severance period continues; remaining unvested forfeited .
- Non-compete and non-solicit covenants apply for the severance period (18 months) .
Change in Control (double trigger, within 24 months post-CIC):
- Cash: 2x (base salary + target annual cash incentive) for non-CEO NEOs; pro-rata annual cash incentive for year of termination; healthcare continuation up to 24 months; immediate vesting of all unvested equity; excise-tax “best net” cutback applies .
- 409A-compliant payment timing provisions apply .
Potential Payouts (Marano; if event occurred 12/31/2024):
| Scenario | Total ($) | Components (select) |
|---|---|---|
| Death | $6,588,647 | Prorated annual incentive; immediate equity vesting; $4,000,000 management insurance benefit; welfare benefits |
| Disability | $2,597,001 | Prorated annual incentive; immediate equity vesting; limited welfare benefits |
| Termination without Cause / for Good Reason | $2,986,360 | Severance pay $750,000; prorated annual incentive $500,000; severance-period annual incentive $525,000; equity vesting during severance; welfare and outplacement |
| CIC Termination (double trigger) | $4,622,526 | Lump sum 2x cash comp; prorated annual incentive; immediate vesting of all unvested equity; healthcare continuation |
Clawbacks:
- Dodd-Frank clawback (executive officers) for 3 prior fiscal years upon Big R or little r restatements; no indemnification permitted .
- Additional incentive compensation clawback for executives not covered by Dodd-Frank policy .
Investment Implications
- Pay-for-performance calibration: 2024 annual bonus paid at 70.48% of target on EPS and strategic goals, with Global Components growth below threshold—aligns variable pay with segment headwinds and may temper near-term cash comp sensitivity to any recovery in Components .
- Equity alignment and retention: Larger 2024 LTIP target ($1.2M) and sizable unvested RSUs/PSUs (notably 2024 grants) create multi-year retention hooks; RSUs vest annually and PSUs depend on 3-year EPS vs peers and ROIC–WACC, directly linking realized pay to execution and capital discipline .
- Ownership/pledging risk: Beneficial ownership of 9,325 shares (<1%) and 3x-salary ownership guidelines met; anti-hedging/anti-pledging policy reduces alignment risk from collateralized positions .
- Transition and downside protection: Policy-based severance and double-trigger CIC benefits (2x cash comp; immediate equity vesting in CIC) mitigate retention risk during strategic shifts but can elevate separation costs; clawbacks provide recourse on restatements .
- Performance context: 2024 company results (EPS $7.29; sales $27.9B) amid inventory correction and mixed segment performance, and 5-year TSR lag vs peer group ($100 → $133 vs $213) frame execution risk and the difficulty of meeting above-peer PSU hurdles in the current cycle .
Shareholder sentiment remains supportive (97.1% 2024 say-on-pay approval), suggesting the program structure—including EPS/ROIC-linked incentives and ownership rules—is viewed as aligned with value creation despite cyclical pressures .