Ken Arnold

About Ken Arnold

Ken E. Arnold is Senior Vice President and Chief People Officer (CPO) at Avnet, serving in the role since February 2019; he also oversees corporate marketing and communications. He was age 59 in 2023, 60 in 2024, and 61 in 2025, reflecting 16+ years in HR leadership at Avnet and ~6+ years as CPO by FY2025 . Company performance relevant to incentive metrics: FY2024 sales were $23,757.1M vs. $22,200.8M in FY2025 (-6.6%), with adjusted EPS down from $5.34 to $3.44, and adjusted operating margin contracting 98 bps YoY (context for incentive outcomes) .

Past Roles

Fixed Compensation

Notes:

• FY2024 increases in actuarial pension values included $40,980 (qualified) and $56,487 (nonqualified) for Arnold .
• Perquisites are limited (auto program and annual physicals among others); no above‑market returns on deferred comp .

Performance Compensation

Annual cash incentive (design, targets, outcomes)

• Metrics and weighting: 80% financial (Adjusted Operating Income $ 40%; Return on Working Capital 40%; Relative Market Share 20%); 20% non‑financial individual goals (talent/engagement themes) .
• Target bonus opportunity (CPO): 75% of base salary each year; target dollars shown below .
• Payout results: FY2023 payout range ~139.62%–141.02% of target for NEOs; FY2024 total payout 52% of target; FY2025 total payout 72% of target .

FY2024 goal attainment detail (company‑wide): Adjusted OI$ 0% payout (70.72% attainment), ROWC 0% payout (69.35% attainment), Relative Market Share 200% payout (achieved) .

Long‑term incentives (design, grants, vesting)

• Mix and performance metrics: 50% RSUs (time‑based), 50% PSUs with ROIC>WACC (50%) and relative EPS growth (50%); rTSR modifier ±10% .
• Vesting schedules: Options vest 25% annually over 4 years; RSUs vest 25% on first business day in January following grant and on each of the next three anniversaries; PSUs earned each fiscal‑year tranche and vest/are delivered at end of year‑3 performance period .
• Option awards: No options granted in FY2023 or FY2024 (company‑wide); FY2025 shows no option awards for Arnold in the SCT .

PSU achievement example (FY2023 tranche, first year of 2023–2025 cycle):

• Company payout factor 144.57%: ROIC>WACC 200% (50% weight), relative EPS growth 114.29% (50% weight), rTSR modifier 0.92x .
• Arnold earned 5,201 PSUs vs. 3,598 target for FY2023 tranche; vesting/delivery occurred at end of FY2025 .

Option exercises and stock vested (realized value)

Equity Ownership & Alignment

Beneficial ownership (point‑in‑time)

• Stock ownership guidelines: 1x base salary for other executive officers (CFO/GC 3x; CEO 5x); executives must retain 50% of net shares until meeting guideline; executives in compliance as of July 1, 2023 and June 29, 2024 .
• Hedging/pledging: Company prohibits hedging; pledging prohibited without advance approval; no exceptions approved in last fiscal year(s) . 2023 proxy notes no pledges by directors and officers .

Outstanding equity awards (Arnold)

As of Jun 29, 2024 (illustrative current mix):

• RSUs not vested (# / $): 2,524 / 129,961; 5,398 / 277,943; 8,997 / 463,256 .
• PSUs unearned (# / $ assumes target for remaining tranches): 10,302 / 530,450; 9,669 / 497,857 .
• Options (exercisable / unexercisable): 25,203 / 8,401 at $29.85; 15,540 / 15,540 at $39.62; plus fully exercisable tranches including 12,404 at $39.72 and 7,908 at $44.12 .

As of Jun 28, 2025 (latest):

• RSUs not vested (# / $): 2,699 / 142,129; 5,998 / 315,855; 9,276 / 488,474 .
• PSUs unearned (# / $ assumes target for remaining tranches): 5,670 / 298,582; 8,245 / 434,182 .
• Options (exercisable / unexercisable): 33,604 / — at $29.85; 23,310 / 7,770 at $39.62; plus 12,404 and 7,908 fully exercisable legacy grants .

Employment Terms

• Employment agreement: If terminated without cause, lump‑sum severance equals base annual salary plus target annual bonus (applies to Arnold) .
• Change of control (double‑trigger): If actually or constructively terminated within 24 months of a CoC, cash severance equals 2.99x (base salary + target bonus) plus acceleration of unvested equity; no excise tax gross‑ups; Section 409A compliant .
• Clawback/recoupment: Company maintains a recoupment policy; does not reimburse or indemnify for recouped incentive comp .
• Retirement eligibility under equity plans requires signing a non‑compete; retirement definition also includes age/service hurdles .

Potential payouts (illustrative, per proxy tables; dollar values include cash elements and specified benefit components):

Equity settlements in termination/CoC scenarios are detailed in the proxy by instrument and scenario (RSUs, PSUs, options); see tables for exact values by scenario and year .

Investment Implications

• Pay-for-performance alignment: Arnold’s annual cash incentive is 75% of salary with multi-metric financial goals (OI$, ROWC, relative share) and individual goals; long-term incentives are 50% PSUs tied to ROIC>WACC and relative EPS with rTSR modifier, reinforcing return discipline and peer-relative performance . FY2024 total payout was 52% amid weaker profitability/ROWC, while FY2025 rebounded to 72% as non-financial goals hit 200% (talent/engagement execution), suggesting balanced incentive sensitivity to operating conditions and strategic HR outcomes .
• Vesting and potential selling pressure: RSUs vest on the first business day in January, and PSUs for 2023–2025 vested at FY2025 year-end; Arnold realized 18,017 shares/$946,019 in FY2025 (RSUs: 11,314/$591,497; PSUs: 6,703/$354,522), which can create concentrated liquidity windows around January and fiscal year-end .
• Ownership alignment and risk controls: Beneficial ownership increased from 103,958 (2023) to 149,982 (2025) shares/options; executive ownership guidelines (1x salary) in place and met; hedging is prohibited and pledging restricted with no exceptions, mitigating misalignment/leveraging risks .
• Retention and CoC economics: Without-cause severance equals salary+target bonus; CoC double-trigger at 2.99x plus equity acceleration offers material retention during strategic change while avoiding single-trigger windfalls and excise tax gross-ups, balancing retention with governance .

Key watch items: sustained underperformance on OI$/ROWC would curb cash payouts; PSU outcomes will track ROIC>WACC and relative EPS (with rTSR), creating sensitivity to cycle and execution. Equity vesting calendars (January and fiscal year-end) may influence periodic Form 4 activity and supply into the float .