John J. Engel
WESCO INTERNATIONALAbout John J. Engel
John J. Engel, 63, has served as Chairman since 2011 and President & Chief Executive Officer since 2009, and has been a director since 2008 . His background spans senior operating leadership roles at Gateway, PerkinElmer, AlliedSignal and General Electric, with deep expertise in strategic planning, capital markets, risk oversight, human capital management, and ESG matters; he also serves as a director of United States Steel Corporation and is a member of the Business Roundtable and the Business Council . Under his leadership in 2024, Wesco generated record free cash flow of more than $1 billion, executed $425 million of buybacks, reduced net debt by $431 million, and raised the dividend 10%, while the 2024 say‑on‑pay vote received approximately 97% approval . Wesco’s executive pay program ties annual incentives to EBITDA and Free Cash Flow, and performance shares to 3‑year Net Income Growth and RONA Growth, reinforcing pay‑for‑performance alignment .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Gateway, Inc. | Senior Vice President and General Manager | Not disclosed | Senior operating leadership in technology, driving strategy and execution |
| Perkin Elmer, Inc. | Executive Vice President and Senior Vice President | Not disclosed | Executive experience across global industrial businesses |
| Allied Signal, Inc. | Vice President and General Manager | Not disclosed | P&L and operational leadership in diversified industrials |
| General Electric Company | Engineering, manufacturing, general management positions | Not disclosed | Foundation in operations and manufacturing excellence |
External Roles
| Organization | Role | Committee roles / notes | Years |
|---|---|---|---|
| United States Steel Corporation | Director | Chair of Governance & Sustainability; previously Chair of Audit | Not disclosed |
| National Association of Manufacturers | Board of Directors | Board member | Not disclosed |
| Business Roundtable | Member | Member | Not disclosed |
| Business Council | Member | Member | Not disclosed |
Board service at Wesco: Engel is Chairman of the Board and a member of the Executive Committee; the Board operates with an independent Lead Director (Singleton) and all key committees (Audit, Compensation, Nominating & Governance) are fully independent and meet in executive session, providing oversight balance to the combined CEO/Chair role .
Fixed Compensation
Multi‑year compensation summary and fixed pay components:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $1,255,000 | $1,313,600 | $1,338,200 |
| Stock Awards ($) | $5,249,992 | $5,850,079 | $6,299,956 |
| Option Awards ($) | $1,749,980 | $1,950,003 | $2,099,969 |
| Non‑Equity Incentive Plan Comp ($) | $2,823,750 | $997,515 | $1,487,310 |
| All Other Compensation ($) | $83,557 | $220,465 | $232,828 |
| Total Compensation ($) | $11,162,279 | $10,331,662 | $11,458,263 |
Additional fixed pay details:
- Base salary increased from $1,324,800 to $1,378,000 effective April 1, 2024 .
- Target annual bonus opportunity: 150% of salary for Engel (0–200% payout range) .
Performance Compensation
Short‑Term Incentive Program (2024) — Corporate metrics and payout:
| Metric (weight) | Target ($USD Thousands) | Actual ($USD Thousands) | Payout as % of Target | Vesting / payment timing |
|---|---|---|---|---|
| EBITDA (75%) | $1,724,000 | $1,466,100 | 62.5% | Annual cash; paid following year |
| Free Cash Flow (25%) | $700,000 | $1,045,200 | 200.0% | Annual cash; paid following year |
| Total STIP (pre CEO reduction) | — | — | — | — |
| CEO discretionary alignment reduction | — | — | −25% applied to executives including CEO | Applied to 2024 payouts |
| Engel 2024 STIP payout ($) | Target $2,047,050 | Actual $1,487,310 | — | Paid in 2025 per SEC rules |
Long‑Term Incentive Program (2024 grants) — structure and vesting:
| Instrument | 2024 Grant Detail | Vesting schedule | Economics |
|---|---|---|---|
| Performance Share Units (PSUs) | 27,619 target PSUs (grant date 3/1/2024) | 3‑year performance period 1/1/2024–12/31/2026 | Metrics: Net Income Growth (50%), RONA Growth (50%); payout 0.5x–2.0x target; vests at target upon change in control |
| Stock Options | 29,146 options @ $152.07 strike (exp. 3/1/2034) | Vest ratably over 3 years starting 3/1/2025 | Grant date fair value $2,099,969 |
| Restricted Stock Units (RSUs) | 13,809 RSUs (grant date 3/1/2024) | Vest 1/3 on 3/1/2025, 3/1/2026, 3/1/2027 | Grant date fair value $2,099,935 |
PSU outcomes (2012–2024 cycle performance measured 2022–2024):
- Net Income Growth 3‑yr average 13.2% → 2.0x (max) payout; RONA Growth −175 bps → 0.0x payout; Engel earned 29,217 shares for the 2022 grant (including dividend equivalents) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 843,453 shares; approximately 1.7% of outstanding |
| Options/SARs near‑term exercisable | 393,380 SARs/options exercisable or settleable within 60 days of March 27 (see note) |
| Ownership guidelines | CEO requirement 5x salary; all NEOs subject to guidelines |
| Compliance status | CEO ownership ≈ 96x base salary (well above requirement) |
| Hedging/pledging | Prohibited for Section 16 directors and officers; short sales and options trading prohibited; no pledging or margin accounts allowed for Section 16 insiders |
| Director pay for employees | Employee directors (like Engel) receive no additional director compensation |
Employment Terms
| Provision | Key terms |
|---|---|
| Employment agreement | 2009 agreement; base salary and target bonus ≥100% of salary; LTIs per Committee |
| Term and renewal | Initial 3‑year term; auto‑renewal in 1‑year extensions |
| Severance (pre‑CIC) | If terminated without cause/for good reason prior to change in control: 24 months of base salary (monthly), lump‑sum target bonus for year of termination, accelerated vesting of stock awards (performance‑based awards where criteria not met excluded), options exercisable up to 18 months |
| Severance (post‑CIC) | If terminated within 2 years after change in control: lump sum 2x salary+target bonus, excise tax gross‑up, prorated incentive for year of termination, accelerated vesting; options exercisable up to 18 months |
| CIC Plan participation | Engel does not participate in CIC Plan; other NEOs receive 2x salary+target bonus, 2x employer healthcare cost, $25k outplacement, with cutback to avoid 280G excise tax if favorable |
| Restrictive covenants | Confidentiality during employment and for 5 years thereafter; non‑compete and non‑solicit for 2 years post‑employment |
| Clawbacks | Mandatory SEC/NYSE‑compliant clawback adopted Oct 2, 2023; additional misconduct clawback applies |
| Perquisites and benefits | Limited perqs; club dues and business‑related spousal travel disclosed; 401(k) match and nonqualified deferred plan restorative contribution; no defined benefit plan |
Board Governance
- Board leadership: Combined CEO/Chairman (Engel) with independent Lead Director (Singleton) who presides over executive sessions, sets agendas with CEO, leads evaluations, and acts as liaison; all Audit, Compensation, and Nominating & Governance Committees are fully independent and meet in executive session without management .
- Committee participation: Engel is Chairman of the Board and a member of the Executive Committee .
- Board attendance: Each director attended ≥75% of Board and applicable Committee meetings in 2024 .
- Director independence: Board annually affirms independence; nine directors are independent; Engel is not listed among independent directors .
Compensation Structure Analysis
- Balanced program with three elements (salary, STIP, LTIP) and capped incentive payouts (2x); strong stockholder support (≈97% in 2024) .
- STIP metrics and outcomes show discipline: EBITDA below target and FCF above max; CEO recommended a 25% payout reduction across executives for alignment with broader management results, approved by the Committee .
- LTIP emphasizes performance shares (50%) plus options (25%) and RSUs (25%), with PSU metrics tied to 3‑year Net Income Growth and RONA Growth; 2022 PSU results paid only on Net Income Growth (RONA below threshold), reinforcing outcome‑based pay .
- Peer group and consultant: Meridian engaged; 26‑company peer group (e.g., Eaton, Parker‑Hannifin, Grainger, TD SYNNEX, Quanta, etc.) used with regression for size adjustments .
Performance & Track Record
- 2024 execution: record >$1 billion free cash flow, $425 million buybacks, net debt reduced by $431 million, 10% dividend increase, and progress on digital transformation initiatives .
- Pay vs. Performance alignment: program links incentives to EBITDA and FCF annually and to multi‑year Net Income and RONA; 2022–2024 PSU payout reflected strong NI growth but RONA underperformance, moderating realized equity .
Investment Implications
- Alignment: CEO ownership (~96x salary) combined with prohibitions on hedging/pledging and robust ownership guidelines indicates strong skin‑in‑the‑game and lower structural selling pressure from risk‑management behaviors .
- Retention and continuity: Material unvested RSUs and options vesting through 2027 plus ongoing PSU cycles and a 2009 agreement with 24‑month salary continuation pre‑CIC and 2x cash severance post‑CIC reduce near‑term departure risk; restrictive covenants (2‑year non‑compete/non‑solicit) further protect continuity .
- Governance: Combined CEO/Chair role is mitigated by an empowered Lead Director and fully independent committees operating in executive sessions; investors should monitor continued Board refreshment and evaluation rigor to sustain oversight balance .
- Red flags: Legacy excise tax gross‑up in Engel’s 2009 agreement is shareholder‑unfriendly, though the company committed not to add gross‑ups in new or materially amended agreements and has not done so; RONA underperformance in PSU outcomes highlights execution focus on asset efficiency .
- Pay discipline and signaling: 25% STIP payout reduction recommended by CEO despite a strong FCF beat signals conservative compensation governance; share repurchases and dividend increase reflect capital‑return confidence under Engel’s strategy .