Max Chan

About Max Chan

Leng Jin (Max) Chan, age 53, is Senior Vice President and Chief Information Officer at Avnet, serving as CIO since 2019 and as SVP since 2021; he joined Avnet in 2013 and previously led IT roles in the company’s Asia business and global supply chain IT functions . Avnet’s FY2025 performance environment was challenging (Sales -6.6% YoY to $22.2B; Adjusted Operating Income -30.7%; Adjusted EPS -35.6%), which translated to below-target incentive outcomes, including a 72% of target annual cash bonus payout for NEOs and 0% earned on FY2025 PSU tranches, signaling pay-for-performance alignment . As CIO, Chan manages the company’s data security and privacy program oversight for the Board’s Technology and Risk Committee, including enterprise controls and cybersecurity training initiatives . Shareholder support for Avnet’s executive compensation program remained strong (97.83% “say-on-pay” approval in 2024), underscoring governance alignment .

Past Roles

External Roles

• No public company directorships or external board roles for Chan are disclosed in the executive officer bios in the proxy .

Fixed Compensation

Multi-year summary compensation (Max Chan):

• FY2025 year-end base salary: $550,000; unchanged from FY2024 .
• Perquisites include automobile program and annual physical exams; none for Chan exceeded disclosure thresholds in FY2025 .

Performance Compensation

Annual Cash Incentive (FY2025 design and outcome)

• Chan’s FY2025 target bonus opportunity: $440,000 (80% of base salary); actual payout: $316,800 (72% of target) .

Long-Term Incentive Plan (LTIP) – FY2025 grants and structure

PSU performance (FY2025 tranche results):

• FY2024 PSU (second tranche) earned 0% for FY2025; cumulative earned for FY2024 grant first two tranches totals 1,044 PSUs for Chan, which bank until the third tranche performance period end (June 27, 2026) .
• No stock options were granted in the fiscal years covered by the Summary Compensation Table; however, legacy options remain outstanding (see Ownership section) .

Vesting schedules (plan-wide):

• Stock options: 25% annually over 4 years; 10-year term typical .
• RSUs: 25% on first business day of January following grant (“commencement date”), and on the 1st, 2nd, 3rd anniversaries of that date .
• PSUs: Earned annually by tranche; all earned PSUs vest and are issued at the end of year 3 .

Equity Ownership & Alignment

Beneficial ownership

• Footnote: Chan’s ownership includes 20,479 RSUs earned but not yet vested and 1,044 PSUs earned but not yet vested .

Outstanding equity awards at FY-end (June 28, 2025)

Option exercises and stock vested in FY2025:

Alignment policies and status:

• Anti-hedging and anti-pledging: Directors and executive officers are prohibited from hedging; pledging or margin accounts require advance approval; no exceptions approved in the last fiscal year .
• Stock ownership guidelines: Other executive officers must hold 1x base salary; until met, must retain at least 50% of net shares upon vesting/exercise; as of June 28, 2025, all NEOs were in compliance .

Employment Terms

Severance and change-of-control economics (estimated at 6/28/2025):

Key terms:

• Change of Control payout equals 2.99x (base salary + target bonus); double trigger within 24 months (actual or constructive termination) .
• Equity acceleration under CoC: unvested options accelerate per plan; equity awards accelerate and deliver upon CoC termination .
• No excise tax gross-up under CoC agreements .
• Clawback: incentive-based compensation is subject to recoupment for restatements and specified misconduct; the 2025 Plan incorporates the clawback policy by reference .
• “Retirement” (for stock plan purposes) requires age/service thresholds and a signed non-compete .

Pension and nonqualified plans (present value at FY-end 2025):

• Pension Plan (cash balance): $129,220; Restoration Plan: $120,970 (years credited: 8.9) .

Compensation Peer Group

• FY2025 benchmarking peer group (change: Seagate replaced by Hewlett Packard Enterprise): Arrow Electronics; Celestica; CDW; Flex; Genuine Parts; Hewlett Packard Enterprise; Insight Enterprises; Jabil; Sanmina; TD SYNNEX; TE Connectivity; W.W. Grainger; WESCO International; Western Digital .
• Committee uses market data with the median as a guide, balanced by role, experience, and performance; independent consultant (Meridian) engaged with no conflicts .

Say-on-Pay & Shareholder Feedback

• Say-on-pay approval at the 2024 annual meeting: approximately 97.83% of votes cast supported the program .
• The company performs regular shareholder outreach; no feedback in 2025 led to material compensation program changes .

Investment Implications

• Pay tightly tracks performance: FY2025 cash incentive paid at 72% of target and FY2025 PSU tranche earned 0%, consistent with softer operating results; this reduces windfall risk and signals alignment with shareholders .
• Near-term vesting and realized gains: Chan exercised 9,226 options and had 10,748 shares vest in FY2025; combined with unvested RSUs/PSUs scheduled on a defined cadence, this can create periodic, predictable selling windows and potential supply near vest dates, though anti-hedging/pledging rules mitigate alignment concerns .
• Retention risk is moderate to low: Competitive target LTIP ($850k for FY2025), robust CoC protections (2.99x multiple, double trigger), and pension/restoration balances provide retention incentives during transitions .
• Alignment and governance positive: Compliance with ownership guidelines, strict anti-hedging/pledging, clawback policy, no option repricing, and no CoC tax gross-ups, plus strong say-on-pay, point to shareholder-friendly practices that lower governance risk .
• Execution focus: As CIO, Chan oversees cybersecurity and data protection programs subject to Board oversight; in a mixed macro and electronics cycle backdrop, continued operational discipline and security posture remain critical to value creation and risk management .