Katherine Sanderson
Chief Human Resources Officer and Executive Vice President, Coworker Success at CDW
Executive
About Katherine Sanderson
Katherine E. Sanderson is Chief Human Resources Officer and Executive Vice President, Coworker Success at CDW, joining in September 2024; age and education are not disclosed in CDW’s proxy. Her first cycle at CDW coincided with a tough 2024 payout year (0% SMIP) as non‑GAAP operating income of $1,950.9M fell below threshold, while long‑term incentives emphasize adjusted EPS and adjusted FCF performance for 2024–2026 . Company context: 2024 net sales were $21.0B (GAAP) with non‑GAAP operating income of ~$1.9B, and the 2024 pay‑versus‑performance table shows a $100 TSR value of $129.08 for 2024; adjusted EPS used for CAP was $9.59 .
Past Roles
- Not disclosed in the 2025 CDW proxy or related filings reviewed .
External Roles
- Not disclosed in the 2025 CDW proxy or related filings reviewed .
Fixed Compensation
| Item | 2024 Value | Notes |
|---|---|---|
| Base salary level (annual) | $500,000 | Approved 2024 base salary for Sanderson . |
| Salary paid in 2024 | $125,000 | Prorated due to September 2024 start . |
| SMIP target (2024) | $600,000 | Target bonus opportunity for 2024 . |
| 2024 SMIP payout | $0 | Company performance below threshold; all NEOs received 0% . |
| Sign‑on cash bonus | $200,000 | Subject to 1‑year repayment if resignation or termination for cause . |
| Relocation/commuting payment | $250,000 | Pro‑rata repayment if resignation/termination for cause within 2 years . |
| 2024 bonus replacement (paid 2025) | $600,000 | Recognized forfeiture of prior employer bonus and progress since joining . |
Performance Compensation
Short‑Term Incentive (SMIP) Design and 2024 Outcome
| Metric | Target/Curve | Result | Payout |
|---|---|---|---|
| Non‑GAAP Operating Income | Target: $2,105.1M; Threshold: $1,957.8M (25%/15% payout grow/constant); Max: $2,315.6M (200%/180%); market share governor applies | $1,950.9M (below threshold) | 0% for all NEOs |
| Market share growth (governor) | Reduces payouts if market share does not grow | Not applicable (below threshold) | 0% |
Long‑Term Incentive (PSU framework for 2024–2026)
| Metric | Weighting | Performance Period | Payout Range | Notes |
|---|---|---|---|---|
| Adjusted EPS | 50% | 2024–2026 | 0–200% (25% threshold if one goal meets threshold) | Calculated on constant currency; adjusted for specified items . |
| Adjusted FCF | 50% | 2024–2026 | 0–200% (25% threshold if one goal meets threshold) | Defined as CFO less capex with certain financing adjustments . |
Equity Grants (2024 awards to Sanderson)
| Grant Type | Grant Date | Threshold (#) | Target (#) | Max (#) | Exercise Price | Vesting | Grant Date FV ($) |
|---|---|---|---|---|---|---|---|
| Annual LTI PSUs | 9/16/2024 | 1,152 | 4,606 | 9,212 | — | Cliff vest 12/31/2026, perf‑based | 1,019,999 |
| Annual LTI Stock Options | 9/16/2024 | — | 5,048 (options) | — | $221.45 | 1/3 annually; 10‑yr term; exp. 9/16/2034 | 339,983 |
| Annual LTI RSUs | 9/16/2024 | — | 1,535 | — | — | 1/3 annually | 339,926 |
| Sign‑on PSUs | 9/16/2024 | 847 | 3,387 | 6,774 | — | Cliff vest 12/31/2026 (service condition waived if terminated without cause; perf remains) | 750,051 |
| Buy‑out PSUs | 9/16/2024 | 791 | 3,161 | 6,322 | — | Cliff vest 12/31/2026 (service waived if terminated without cause; perf remains) | 700,003 |
| Buy‑out RSUs | 9/16/2024 | — | 15,805 | — | — | Six‑month installments through 3/16/2026 | 3,500,017 |
Equity Ownership & Alignment
- Beneficial ownership (as of March 1, 2025 record date): 5,286 shares/units; less than 1% of outstanding .
- Stock ownership guidelines: Other Executive Officers must hold 3x salary; executives must retain 50% of after‑tax shares until compliant; all continuing NEOs were in compliance as of record date .
- Hedging/pledging: Prohibited for executive officers; insider trading policy prohibits hedging/pledging/short sales .
Outstanding awards at 12/31/2024 (Sanderson)
| Instrument | Unexercised Options – Exercisable (#) | Unexercised Options – Unexercisable (#) | Exercise Price | Expiration | Unvested RSUs (#) | Market Value of Unvested RSUs ($) | Unearned PSUs (Target) (#) | Market/Payout Value ($) |
|---|---|---|---|---|---|---|---|---|
| 2024 Options | — | 5,048 | 221.45 | 9/16/2034 | — | — | — | — |
| LTI RSUs (9/16/24) | — | — | — | — | 1,540 | 268,084 | — | — |
| Buy‑out RSUs (9/16/24) | — | — | — | — | 15,860 | 2,760,306 | — | — |
| PSUs (2024–2026) | — | — | — | — | — | — | 11,193 | 1,948,019 |
Note: No option exercises or stock vesting reported for Sanderson in 2024 (joined September 2024) .
Employment Terms
| Term | Provision | Source |
|---|---|---|
| Offer letter (Aug 2024) | Provided base, SMIP target, LTI target, Compensation Protection Agreement eligibility . | |
| Sign‑on cash | $200,000; 1‑year repayment if resignation or termination for cause . | |
| Commuting/relocation | $250,000; pro‑rata repayment if resignation/termination for cause within 2 years; standard relocation benefits . | |
| Bonus replacement | $600,000 paid early 2025 replacing forfeited 2024 bonus at prior employer . | |
| LTI mix | 60% PSUs, 20% options, 20% RSUs for 2024 program . | |
| Buy‑out equity | RSUs vest in 6‑month installments through 3/16/2026; buy‑out and sign‑on PSUs align to 2024–2026 PSU terms; service‑based vesting waived if terminated without cause (PSUs remain perf‑based) . | |
| Clawback | Nasdaq/Dodd‑Frank compliant recoupment for restatements; award‑level clawbacks for restrictive covenant breaches . | |
| Hedging/pledging | Prohibited under insider trading policy . | |
| Ownership guideline | 3x salary for “Other Executive Officers”; retain 50% after‑tax shares until met; all continuing NEOs compliant as of record date . | |
| Compensation Protection Agreement | 3‑year fixed term scheduled to expire 1/1/2026; no 280G tax gross‑ups; robust restrictive covenants . |
Potential payments upon termination (as of 12/31/2024 assumptions)
| Scenario | Severance ($) | Equity Acceleration Value ($) | Welfare ($) | Outplacement ($) | Aggregate ($) |
|---|---|---|---|---|---|
| Qualifying termination (absent CIC) | 1,000,000 | 3,903,898 (sign‑on/buy‑out equity; PSUs at target) | 8,791 | 30,000 | 4,942,689 |
| Qualifying termination following CIC (double‑trigger) | 2,200,000 | 4,976,410 (target for performance equity) | 8,791 | 30,000 | 7,215,201 |
Key terms (summary): For qualifying terminations, two times base salary plus two times SMIP (based on actual performance, or 3‑year average post‑CIC), pro‑rated SMIP for year of termination, two years of health benefits (or cash equivalent), and up to $30,000 outplacement; subject to release; excise tax cut‑back if beneficial .
Compensation Structure Analysis
- Increased performance orientation: In 2024 CDW shifted NEO LTI mix to 60% PSUs (from 50%), reduced options to 20% and added RSUs at 20%, heightening pay‑for‑performance through a larger PSU component and maintaining at‑risk equity mix .
- Short‑term rigor: 2024 SMIP used non‑GAAP operating income with a market share governor; no payouts were made due to below‑threshold performance ($1,950.9M vs $1,957.8M threshold) .
- Replacement and buy‑out awards: Sanderson’s package included sign‑on and buy‑out PSUs/RSUs to replace forfeited awards and support retention; service‑based vesting on these is waived if terminated without cause (PSUs still require performance) .
- Governance safeguards: Clawback policy (Dodd‑Frank), double‑trigger CIC vesting, prohibition on hedging/pledging, no 280G tax gross‑ups, and no option repricing without shareholder approval .
Compensation Committee, Peer Group, and Say‑on‑Pay
- Compensation Committee: Sanjay Mehrotra (Chair), Lynda M. Clarizio, Anthony R. Foxx, Joseph R. Swedish; uses independent consultant FW Cook (no conflicts) .
- 2024 compensation peer group included Accenture, Arrow, Avnet, CGI, Cognizant, DXC, Flex, Genuine Parts, Henry Schein, HPE, Insight, Jabil, LKQ, TD SYNNEX, W.W. Grainger, WESCO; revised for 2025 by removing DXC and Best Buy, adding IBM .
- Say‑on‑pay: 91% approval in 2024; average ~96% since IPO .
Investment Implications
- Near‑term vesting and supply: Sanderson’s sizable buy‑out RSU (15,805) vests in six‑month installments through March 16, 2026; annual RSUs vest on 9/16/25, 9/16/26, 9/16/27; options vest 1/3 annually; PSUs cliff on 12/31/26. These dates create periodic gross supply but are partly mitigated by a 50% post‑tax holding requirement until ownership guidelines are met and a policy prohibiting hedging/pledging .
- Alignment vs. retention: Heavy PSU weighting (plus sign‑on and buy‑out performance equity) ties upside to adjusted EPS/FCF over 2024–2026 (0–200% payout). Service‑based vesting waivers on sign‑on/buy‑out equity if terminated without cause provide downside protection for the executive but keep PSUs performance‑contingent—supporting retention with performance alignment .
- Cash comp discipline: Base set at $500k with 2024 SMIP target $600k; no SMIP paid for 2024 performance; one‑time cash elements (sign‑on, commuting, bonus replacement) affect first‑year optics but are standard for mid‑career leadership transitions .
- Change‑in‑control economics: Double‑trigger severance of ~$2.2M plus equity acceleration at target underscores standard market protection without tax gross‑ups—neutral to modestly shareholder‑friendly .