Peter Arvan
POOLAbout Peter Arvan
Peter D. Arvan (age 59) is President, Chief Executive Officer, and a director of Pool Corporation, serving as CEO since January 2019 and director since 2019. He holds a Bachelor of Professional Studies in Business Administration from SUNY Utica, cum laude . Under his leadership, 2024 revenue was $5.3B (-4% YoY), operating income $617.2M (-17%), and diluted EPS $11.30 (-15%), while operating cash flow was nearly $660M; the company repurchased ~843K shares (2.2% of 2023 YE shares), raised the dividend, and reduced total debt by $103M . Long-term TSR CAGRs as of 12/31/2024: 1Y -13.3%, 3Y -14.5%, 5Y 11.1%, 10Y 19.2% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pool Corporation | President & Chief Executive Officer | 2019–present | Led through industry normalization post-COVID; emphasized cash flow, footprint expansion, and digital ecosystem (POOL360) . |
| Pool Corporation | Executive Vice President; Chief Operating Officer | 2017–2019 | Senior operating leadership preceding CEO appointment . |
| Roofing Supply Group | Chief Executive Officer | 2013–2015 | CEO of national building materials distributor . |
| GE/SABIC Polymershapes | President | 2004–2013 | Led distribution operations, strategic and operating expertise . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed for Mr. Arvan . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 560,000 | 800,000 | 875,000 |
| Year-over-Year Base Salary Change | — | +42.9% (derived from 560k→800k) | +9.4% |
Notes:
- 2024 base salary increases were approved to better align with peer market medians; CEO’s increase was +9.4% .
Performance Compensation
Annual Incentive Plan (AIP) – Structure and 2024 Outcome
- Target opportunity: 125% of base salary; maximum 200% of target .
- Financial metrics and weights (CEO): Operating Income (64%), Operating Cash Flow (16%), Other Specific Business Objectives (20%) .
- Operating income threshold/target/max vs. actual and payout; operating cash flow threshold/target/max vs. actual and payout:
| Performance Metric | Threshold | Target | Maximum | Actual | Payout % of Target |
|---|---|---|---|---|---|
| Operating Income (in $MM) | 676.0 | 795.0 | 839.0 | 617.2 | 0% |
| Operating Cash Flow (% of Net Income, adjusted) | 80% | 90% | 100% | 136.0% | 200% |
- AIP payout (CEO): 70% of target = $765,625 .
- Additional 5% of base salary earned for adjusted operating cash flow >100% of net income (cap remains 200% of target) .
- CEO “Other Specific Business Objectives” payout at 170% of target for that component ($371,875) .
| CEO Annual Incentive Detail (2024) | Target as % of Salary | Target $ | Achievement | Award Earned |
|---|---|---|---|---|
| Annual Cash Incentive | 125% | 1,093,750 | 70.0% of target | 765,625 |
Long-Term Incentives (LTI)
- 2024 LTI mix: 50% time-based restricted stock (RS), 50% performance-based restricted stock (PSUs); all NEOs elected 100% RS for the time-based portion .
- Time-based RS vesting: 50% at 3 years, 50% at 5 years .
- Performance-based RS metric: 3-year adjusted diluted EPS CAGR; vest 0–200% at 3 years; 5%/10%/15% CAGR corresponds to 50%/100%/200% payout .
- Expectation: 2023 and 2024 EPS-based awards are currently not expected to vest .
| 2024 Equity Grants (CEO) | Grant Date | Time-based (Fair Value $ / # Shares) | Performance-based Target (Fair Value $ / # Shares) | Vesting |
|---|---|---|---|---|
| RS and PSUs | 02/28/2024 | $1,750,037 / 4,452 | $1,750,037 / 4,452 (threshold 2,226; max 8,904) | RS: 50% at 3 yrs, 50% at 5 yrs; PSUs: 3-year cliff, EPS CAGR 0–200% |
Realized Equity in 2024
| Equity Vested (2024) | Shares Vested | Value Realized ($) |
|---|---|---|
| CEO | 13,000 | 5,083,780 |
Equity Ownership & Alignment
- Beneficial ownership (CEO): 91,385 shares (<1% of shares outstanding; beneficial ownership includes unvested restricted stock) .
- Unvested equity subject to double-trigger acceleration on CoC with qualifying termination (12/31/2024): 51,842 shares valued at $17,675,011 (at $340.94/sh) .
- Approximate vested/owned vs. unvested mix (12/31/2024): ~39,543 vested/owned (derived: 91,385 – 51,842; inputs cited) vs. 51,842 unvested .
- Options: No stock options outstanding for CEO as of 12/31/2024 .
- Stock ownership guidelines: CEO 5x base salary; all NEOs and directors are in compliance .
- Anti-hedging and anti-pledging: Hedging/monetization and pledging prohibited by policy; executive officers and directors are prohibited from pledging Company stock .
| Ownership Snapshot (as of 12/31/2024 unless noted) | Quantity | Notes |
|---|---|---|
| Beneficially owned shares | 91,385 | Includes unvested RS (with voting rights) . |
| Unvested shares (potentially accelerate on double-trigger CoC) | 51,842 | Value $17,675,011 at $340.94/sh |
| Options outstanding | 0 | — |
| 2024 vested shares (supply event) | 13,000 | Realized value $5,083,780 |
| Pledged shares | 0 (prohibited) | — |
Vesting pipeline and potential selling pressure:
- Time-based RS: 50% vests at 3 years and 50% at 5 years from grant dates (e.g., 2/28/2027 and 2/28/2029 for 2024 RS) .
- PSUs: 3-year cliff, but 2023/2024 cycles are currently not expected to vest, reducing near-term PSU-driven supply .
Employment Terms
- Employment agreement (CEO): If terminated by the Company other than for cause, receives 12 months of base salary; non-compete for two years following termination .
- Change-of-control: No cash “golden parachute”; equity has “double-trigger” acceleration upon qualifying termination within two years of a change of control (unvested RS/PSUs vest; performance conditions waived) .
- Severance table (if terminated without cause): CEO $875,000 (12 months base salary) .
- Clawback: Enhanced policy adopted Oct 2023 to comply with SEC/Nasdaq; recovery of erroneously awarded incentive-based compensation after a restatement .
- Perquisites: Company vehicle and waived medical/dental premiums; executive health program with related tax gross-ups included in “All Other Compensation” .
| Potential Acceleration/Severance (as of 12/31/2024) | Amount |
|---|---|
| Value of unvested equity that would vest on CoC+qualifying termination | $17,675,011 |
| Cash severance (termination without cause) | $875,000 |
Compensation Structure vs. Performance
- Design emphasizes performance: Majority of target pay at risk via AIP and LTI; caps in variable plans; double-trigger CoC equity vesting; clawback in place .
- 2024 outcomes reflect moderation in industry demand: AIP paid 70% of target for CEO; operating income metric paid 0% while operating cash flow paid 200% due to strong cash conversion; specific objectives paid 170% for CEO .
- PSU rigor: 2023 and 2024 EPS-CAGR PSUs are currently not expected to vest, reinforcing pay-for-performance alignment .
- Say-on-pay support: 93.8% approval in 2024 (97.3% in 2023) .
Board Governance (Director Service and Dual-Role Considerations)
- Role: Employee director since 2019; not independent .
- Board leadership: Independent Chairman (John E. Stokely); separation of Chair and CEO since 2001; independent directors meet in executive session at each Board and committee meeting .
- Committee roles: All committees composed entirely of independent directors; CEO is not on committees .
- Board/committee attendance: Board held 7 meetings in 2024; each director attended ≥75% of Board/committee meetings on which they served .
Committee structure and 2024 composition (all independent):
- Audit (Chair: James Hope); Compensation (Chair: Martha Gervasi); Nominating & Corporate Governance (Chair: David Whalen); Strategic Planning (Chair: Debra Oler) .
Dual-role implications:
- Potential CEO-director concentration is mitigated by independent Chair, fully independent committees, and regular executive sessions of independent directors .
Director Compensation Policy (for governance benchmarking)
- Non-employee director cash retainer $85,000; committee chair/member retainers as specified; annual equity grant $125,000; no meeting fees .
- Not applicable to the CEO as an employee director .
Performance & Track Record
| Metric | 2024 | Trend/Notes |
|---|---|---|
| Net Sales | $5.3B (-4% YoY) | 4th consecutive year >$5B . |
| Operating Income | $617.2M (-17% YoY) | Cost discipline amid macro headwinds . |
| Diluted EPS | $11.30 (-15% YoY); Adjusted $11.07 | Adjusts for ASU 2016-09 tax benefit . |
| Operating Cash Flow | Nearly $660M | Strong cash conversion, inventory reduction [$76.2M] . |
| Capital Returns | $483.4M to shareholders (dividends + buybacks); ~843K shares repurchased | Authorization increased to $600M in May 2024 . |
| Debt | Total debt reduced by $103M | — |
| TSR CAGRs | 1Y -13.3%; 3Y -14.5%; 5Y 11.1%; 10Y 19.2% | Relative underperformance short term vs. S&P 500 . |
Compensation Committee and Peer Group
- Independent Compensation Committee; periodically engages independent consultant (Meridian) .
- 2024 peer group (14 distribution/related companies) includes Core & Main, Boise Cascade, SiteOne, Fastenal, Watsco, etc.; pay targeted near market median with pay-for-performance tilt .
Risks, Red Flags, and Other Governance Controls
- Hedging/pledging prohibited; share ownership guidelines enforced and in compliance .
- Clawback policy compliant with SEC/Nasdaq; double-trigger CoC equity .
- No related-party transactions in 2024 .
- Minor tax gross-ups associated with executive health program included in “All Other Compensation” .
- No change-of-control cash severance; CEO severance is 1x salary (conservative vs. market) .
Equity Ownership & Compensation Tables
CEO – Summary Compensation (Reported)
| Component ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 560,000 | 800,000 | 875,000 |
| Stock Awards | 3,000,163 | 3,500,355 | 3,500,074 |
| Non-Equity Incentive Plan (AIP + SPIP) | 2,152,355 | 1,728,760 | 765,625 |
| All Other Compensation | 134,179 | 74,373 | 138,714 |
| Total | 5,846,697 | 6,103,488 | 5,279,413 |
CEO – 2024 AIP Structure and Payout
| Item | Value |
|---|---|
| Target as % of Salary | 125% |
| Target $ | $1,093,750 |
| Achievement | 70.0% of target |
| Award Earned | $765,625 |
| Weights (Operating Income / Operating Cash Flow / Other Objectives) | 64.0% / 16.0% / 20.0% |
| Operating Income Actual vs. Target | $617.2M vs. $795.0M; 0% payout |
| Operating Cash Flow Actual vs. Max | 136.0% of NI vs. 100%; 200% payout |
| Other Objectives Payout (CEO) | 170% of target; $371,875 |
CEO – 2024 Equity Grants
| Grant Date | Time-based RS (Value / #) | Performance-based RS Target (Value / #) | PSU Threshold/Max (#) | Key Terms |
|---|---|---|---|---|
| 02/28/2024 | $1,750,037 / 4,452 | $1,750,037 / 4,452 | 2,226 / 8,904 | RS: 50% at 3 & 5 yrs; PSUs: 3-yr EPS CAGR, 0–200% |
Say-on-Pay & Shareholder Feedback
- Say-on-pay approval: 93.8% in 2024; 97.3% in 2023; committee considers results in setting compensation .
Investment Implications
- Pay-for-performance alignment improving: 2024 AIP paid below target (0% on operating income), and PSUs from 2023/2024 are currently not expected to vest—reducing near-term insider selling pressure from performance shares and aligning outcomes with fundamentals .
- Retention risk appears manageable: CEO cash severance is modest at 1x salary and non-compete is 2 years, but significant unvested equity (51,842 shares; $17.7M value at YE) and ownership guidelines create strong retention and alignment levers .
- Governance mitigates dual-role concerns: Independent Chair, fully independent committees, executive sessions at each meeting, anti-hedge/pledge policy, and clawback reduce governance and compensation risk .
- Watch trading windows/timing: 2024 saw 13,000 shares vest for the CEO; upcoming RS cliffs (e.g., Feb 2027 and Feb 2029 for 2024 grants) are potential supply events—PSU non-vesting expectation tempers this .
- Performance context: Short-term TSR underperformed, reflecting industry normalization; however, long-horizon TSR remains strong. Emphasis on cash generation (AIP weighting and outperformance on OCF) suggests continued discipline in working capital and returns of capital—key for equity holders in cyclical demand phases .