Robert H. Connors
About Robert H. Connors
President and CEO of Gexpro Services (a principal operating company of Distribution Solutions Group, Inc.) under an employment agreement dated December 30, 2019; serves as a Named Executive Officer of DSGR focused on operating company performance and value creation . In 2024, Gexpro Services exceeded its Adjusted EBITDA target (106.6% payout on that metric), met strategic synergy goals, but trailed targets on net sales and working capital; Connors’ 2024 AIP paid 58.8% of target ($120,501) on a 50% of salary target bonus . At the consolidated level, DSGR delivered revenue of $1.80B (+14.9% YoY), Adjusted EBITDA of $175.3M, and a 9.0% stock price increase in 2024, framing the context in which Gexpro operated .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gexpro Services | President & CEO | Since Dec 30, 2019 (employment agreement date) | 2024 Gexpro Adjusted EBITDA above target (106.6% payout); strategic synergy plan met |
Fixed Compensation
| Item | 2024 Value | Notes |
|---|---|---|
| Base Salary | $440,000 | Effective Sep 2, 2024 |
| Target Bonus % | 50% of base | AIP target amount: $205,000 |
| Actual AIP Payout | $120,501 (58.8% of target) | Paid in 2025 per plan timing |
| Discretionary Bonus | $20,500 | Paid in 2025 for 2024 efforts |
Performance Compensation
| Metric (Gexpro Services AIP) | Weight | 2024 Target | 2024 Actual | Payout % | Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA | 25% | $55.020M | $56.476M | 106.6% | Above target |
| Adjusted Net Sales | 20% | $445.300M | $438.902M | 85.7% | Below target |
| Working Capital (% sales) | 20% | 27.9% | 29.90% | — (not earned) | Above (worse than) target |
| DSG Equity Value (EV appreciation) | 20% | 25.0% | 4.9% | — (not earned) | Company-defined EV metric |
| Strategic Synergies | 15% | $5.7M | $5.7M | 100.0% | Met budgeted initiatives |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 20,000 shares |
| Ownership as % of Outstanding | ~0.04% (20,000 ÷ 46,570,343 shares outstanding) |
| Company Equity Awards Outstanding | None (no outstanding Company options/RSUs as of 12/31/2024) |
| Vested vs. Unvested (Company) | Not applicable (no Company awards outstanding) |
| Management-Entity Equity | Pre-merger equity in Gexpro Services Stockholder (HW3 affiliate); time-based vesting satisfied; performance-based vesting tied to liquidity event/MOIC hurdles not yet satisfied; any payouts borne by the stockholder entity, not DSGR shareholders |
| Hedging/Pledging | Company prohibits hedging by executives; proxy does not disclose a pledging policy or any pledges for executives |
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Employment agreement dated Dec 30, 2019, as President & CEO of Gexpro Services |
| Status | At-will |
| Base Salary in Agreement | $400,000 per annum (subject to increases) |
| Current Base (2024) | $440,000 (effective Sep 2, 2024) |
| Severance – Without Cause / Good Reason | 1x current base salary; health plan coverage for 1 year at executive/beneficiaries’ cost |
| CIC Treatment | Termination after a CIC yields 1x base salary; no separate AIP/CIC multiple shown for Connors in 12/31/2024 scenario |
| Restrictive Covenants | Non-compete during employment and for 12 months post-termination |
Compensation Structure Analysis
- Pay mix emphasizes annual cash metrics over DSGR equity: Connors is not a participant in the Company LTIP; his long-term incentives are via pre-merger management equity in Gexpro Services Stockholder, with value realized only upon achieving MOIC hurdles at a liquidity event and not funded by DSGR shareholders .
- 2024 AIP mechanics focused on operating performance: weights across Adjusted EBITDA, Adjusted Net Sales, Working Capital, DSG enterprise value, plus a synergy bucket for Gexpro; Connors’ net AIP payout was 58.8% of target reflecting mixed performance and synergy delivery .
- External benchmarking: Company analysis shows Connors’ Total Cash Compensation (base plus 3-year average AIP) at $557.5k versus OPG CEO median of $933.3k and 75th percentile $1,312.4k; TDC not reported given no Company LTIP participation .
- Governance guardrails: Company maintains clawback (Rule 10D-1 compliant) and anti-hedging policies; no tax gross-ups on CIC; CIC benefits generally require a double trigger .
Performance & Track Record
- Operating performance under Connors (Gexpro Services, 2024): Exceeded Adjusted EBITDA plan (106.6% payout), met strategic synergy initiatives, but fell short on net sales and working capital targets .
- Company context (2024): DSGR revenue $1.80B (+14.9% YoY), Adjusted EBITDA $175.3M, stock price +9.0% during 2024; organic revenue declined 2.6% amid acquisition-driven growth, framing tougher sales/working capital environment at operating companies .
Say‑on‑Pay & Shareholder Feedback
- Say-on-pay approval was 99.96% at the May 23, 2024 annual meeting, indicating strong investor support for the Company’s overall executive compensation framework .
Related Party/Alignment Considerations
- Affiliates of LKCM and J. Bryan King held majority interests in the Gexpro Services Stockholder pre-merger; Connors held a direct/indirect equity interest in that stockholder entity, aligning him economically with multi-year value creation; any management-entity payouts are not funded by DSGR .
Investment Implications
- Alignment and retention: Connors’ lack of Company equity awards reduces near-term Company share-selling pressure; his long-term upside is tied to a private management-entity award that vests upon liquidity/MOIC outcomes, reinforcing multi-year value creation but dependent on a transaction timing outside public markets .
- Incentive focus: 2024 AIP results show operational execution strength on EBITDA and synergy delivery but pressure on sales and working capital; continued AIP weighting toward these drivers should keep attention on margin discipline and cash conversion .
- Downside protection modest: Severance at 1x salary and at-will status suggests limited “golden parachute” risk at the operating company level; governance policies (clawback, anti-hedging, no CIC gross-ups) are shareholder-friendly .
- Benchmarking: Below-median cash pay vs peers and no Company LTIP participation could pose retention considerations if market conditions tighten; however, the management-entity equity provides separate long-term incentives that may offset near-term Company equity grants .