Patricia Gallup
About Patricia Gallup
Patricia Gallup, age 71, is PC Connection’s co‑founder, Board Chair since September 1994, and Chief Administrative Officer since August 2011; she previously served as CEO from 1990–2001 and 2002–2012 and has been an executive officer since 1982 . CNXN’s recent performance metrics that drove 2024 pay decisions included company TSR (value of initial $100 investment: 146.02), net income of $87.1 million, and SG&A as a percentage of billings of 10.54% . Her 2024 compensation reflected these results via cash performance awards tied to net income and SG&A targets .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PC Connection, Inc. | Chief Administrative Officer | Aug 2011–present | Oversight of administrative functions; alignment of executive incentives to net income and SG&A efficiency |
| PC Connection, Inc. | Chair of the Board | Sept 1994–present | Governance leadership for a controlled company; oversight of compensation and capital allocation via Board processes |
| PC Connection, Inc. | Chief Executive Officer | 1990–2001; Sept 2002–Aug 2012 | Led growth and profitability initiatives; set foundation for subsequent incentive design |
| PC Connection, Inc. | Executive Officer | 1982–present | Co‑founder; sustained strategic and operational stewardship |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed in proxy | — | — | No external public company directorships disclosed for Ms. Gallup in 2025 proxy |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (USD) | $327,000 | $327,000 | $327,000 |
| Target Cash Award (% of base) | 75% (CAO target) | 75% (CAO target) | 75% (CAO target) |
| Bonus (USD) | — | — | $1,472 |
| All Other Compensation (USD) | $119,150 (incl. $110,000 director fees) | $119,900 (incl. $110,000 director fees) | $120,350 (incl. $110,000 director fees) |
Performance Compensation
| Metric (2024 Cash Performance Awards) | Weighting | Target | Actual | Payout Factor | Payout to Gallup |
|---|---|---|---|---|---|
| Net Income | 60% | $90.0 million | $87.1 million | 96% of target for factor | Included in 72% of base total payout ($235,440) |
| SG&A % of Billings | 40% | 10.14% | 10.54% | 96% of target for factor | Included in 72% of base total payout ($235,440) |
| Equity Awards (Time-based RSUs) | Grant Date | Shares | Vesting Schedule | Grant-date Fair Value |
|---|---|---|---|---|
| RSUs (Employee award) | Mar 14, 2024 | 20,000 | 4 equal annual installments of 5,000, first vest Mar 14, 2025 | $1,284,600 |
| Stock Awards Vested in 2024 | Shares | Value Realized |
|---|---|---|
| RSUs vested (Board service) | 1,750 | $128,803 |
Notes:
- Annual cash awards could reach up to 170% of base if goals were exceeded; no payout below 90% achievement thresholds (net income < $81 million and SG&A > 11.15%) .
- CNXN currently grants RSUs; no stock options were outstanding under the 2020 plan as of March 17, 2025 .
Equity Ownership & Alignment
| Ownership Measure (as of Mar 17, 2025) | Amount | % of Outstanding | Detail |
|---|---|---|---|
| Total Beneficial Ownership | 13,782,533 shares | 53.3% | Based on 25,874,511 shares outstanding |
| Trustee-related holdings | David Hall Trust 2003: 6,879,962; Abbott Brook Trust: 2,000,000; Estate of David M. Hall: 162,093; North Branch Trust: 275,000 (disclaimed); Spouse: 15,133 (disclaimed) | — | As sole trustee, Ms. Gallup may be deemed to beneficially own certain trust holdings; shared voting/disposition powers as noted |
| Voting Power | Sole: 4,450,345; Shared: 9,332,188 | — | — |
| Disposition Power | Sole: 4,450,345; Shared: 9,332,188 | — | — |
| Unvested RSUs at 12/31/2024 | 1,500; 1,250; 20,000 | — | Board RSUs: Feb 2018 and Dec 2021 grants; Employee RSUs: Mar 2024 grant |
| Market Value of Unvested RSUs | $103,905; $86,588; $1,385,400 | — | Valued at $69.27 per share at 12/31/2024 |
| Ownership Guidelines | None for executives | — | — |
| Hedging/Pledging | Hedging and derivative transactions prohibited by Insider Trading Policy; awards under plan cannot be pledged/encumbered; no specific share pledging disclosures noted |
Employment Terms
| Term | Detail |
|---|---|
| Agreement Date | Employment agreement entered January 1998; initial base salary $300,000; adjusted to $327,000 as of April 2013; eligible for cash performance awards/benefits subject to Committee/Board approval |
| Severance | No specific severance benefits disclosed for Ms. Gallup in the proxy |
| Change-of-Control Economics | Upon Acquisition/Reorganization events, Board may accelerate vesting of unvested equity; estimated realizable value $1,575,893 at $69.27/share; no specific cash change-of-control compensation |
| Non‑Compete/Non‑Solicit | Not disclosed for Ms. Gallup (agreements with CEO/CFO include 24‑month terms) |
| Clawback | Awards subject to company clawback policy now or adopted in future |
| Anti‑Hedging/Derivatives | Prohibits short sales, derivatives, and hedging transactions in company securities |
Board Governance
- Service history and roles: Chair of the Board since 1994; Chief Administrative Officer; prior CEO; co‑founder; director since inception .
- Committee structure: Compensation Committee chaired by Barbara Duckett; Audit Committee chaired by Jack Ferguson; Vice Chair/Secretary Jay Bothwick also chairs Corporate Development Committee (CDC) .
- Controlled company: CNXN notes its controlled company status in governance communications; Board has not implemented a stockholder communication process due primarily to controlled company status .
- Dual-role implications: Ms. Gallup’s combined executive officer role (CAO) and Board Chair, together with majority beneficial ownership, concentrate influence; compensation decisions for executives are overseen by a Compensation Committee of two independent directors with Board approval .
Director Compensation
- Structure: Annual Board retainer $75,000; additional $20,000 for independent directors; Board Chair $35,000; Vice Chair $45,000; Audit Chair $10,000; Compensation Chair $5,000; CDC Chair $50,000 per active quarter; CDC members $10,000 per active quarter .
- Ms. Gallup’s director fees: $110,000 included in “All Other Compensation” each of 2022–2024 .
- RSU awards to directors: 2,500 RSUs in 2024 vesting ratably over four years beginning March 14, 2025; grant-date fair value $160,575 per independent director; aggregate outstanding director stock awards disclosed per director .
Multi‑Year Compensation Summary (NEO Table Extract – Gallup)
| Component (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $327,000 | $327,000 | $327,000 |
| Bonus | — | — | $1,472 |
| Stock Awards (ASC 718) | $278,604 | — | $1,284,600 |
| Non‑Equity Incentive Plan Compensation | $122,625 | $122,625 | $235,440 |
| All Other Compensation | $119,150 | $119,900 | $120,350 |
| Total | $724,754 | $569,525 | $1,968,862 |
Compensation Structure Analysis
- Mix shift: 2024 includes a large time‑based RSU grant (20,000 shares) for Ms. Gallup, increasing equity’s share of pay versus 2023 when no stock awards were granted to her .
- Performance linkage: Cash awards tied to company‑wide net income (60%) and SG&A % of billings (40%) with payout multipliers from 0.5 to 1.7; 2024 under‑target performance yielded 72% of base for Gallup .
- Options/RSUs: CNXN currently grants RSUs and reports no options outstanding under the 2020 plan as of March 17, 2025; repricing of options/SARs is prohibited without stockholder approval .
- Peer benchmarking: Compensation program benchmarked using Pearl Meyer & Partners data across a defined peer set; base salaries targeted near median; Committee assessed consultant independence per SEC/Nasdaq standards .
Say‑on‑Pay & Shareholder Feedback
- Stockholders approved executive compensation on an advisory basis at the 2022 Annual Meeting; Committee noted affirmative vote when determining subsequent compensation .
- Frequency: Proxy recommends “3 years” for future executive compensation advisory vote frequency .
Risk Indicators & Red Flags
- Controlled company status and dual role (Board Chair + executive officer) can raise independence considerations; mitigated by independent Compensation Committee oversight .
- No executive equity ownership guidelines; potential alignment gap relative to best practices, though Ms. Gallup’s majority ownership materially aligns her long‑term incentives with shareholder outcomes .
- Anti‑hedging policy in place; clawback acceptance required for awards .
- Change‑of‑control economics for Ms. Gallup limited to equity acceleration; no cash severance .
Employment & Contracts (Specifics)
| Clause | Terms |
|---|---|
| Base salary provision | Initial $300,000 (1998); $327,000 as of April 2013 |
| Cash incentive eligibility | Eligible for cash performance awards per Board/Committee approval |
| Change‑of‑control | Equity acceleration upon Acquisition/Reorganization events; estimated $1,575,893 value at $69.27/share; no cash CoC payment |
| Other | No disclosed non‑compete/non‑solicit terms for Ms. Gallup; clawback acceptance; anti‑hedging restrictions |
Investment Implications
- Alignment: Ms. Gallup’s 53.3% beneficial ownership strongly aligns with long‑term shareholder value; absence of executive ownership guidelines is less relevant given her controlling stake and anti‑hedging restrictions .
- Near‑term selling pressure: RSU vesting cadence (5,000 shares annually from the 2024 grant plus smaller board‑related tranches) creates predictable supply; 2024 RSU vesting for her was modest (1,750 shares; $128,803 value) .
- Pay‑for‑performance: 2024 cash awards paid below target due to under‑target net income and SG&A efficiency, indicating discipline around performance gates; equity remains time‑based rather than PSU‑linked .
- Governance: Dual role and controlled company status centralize decision rights; independent committee oversight, anti‑repricing restrictions, and clawback acceptance partially mitigate governance risk for minority shareholders .