Despite a challenging year in terms of demand, we were able to achieve a record gross margin of 18.2% of net sales for the year ended December
31, 2023. This was driven by a 26% year over year growth in cloud gross profit and an 8% year over year growth in Insight core services gross profit. Additionally, we generated record cash flows from operating activities of $620 million and achieved diluted earnings per share of $7.55 and record Adjusted* diluted earnings per share of $9.69 for the year.
We are incredibly proud of our execution and the progress we made on our journey towards becoming the leading solutions integrator. The addition of Amdaris and SADA in 2023 strengthens our cloud and services portfolio.
▪ Net sales decreased 12% year to year to $9.2 billion.
▪ Gross profit increased 2% year over year to $1.7 billion.
▪ Gross
margin expanded 250 basis points to 18.2%.
▪ Earnings from operations increased 1% year over year to $420 million and non-GAAP Adjusted* earnings from operations increased 5% year over year to $492 million.
▪ Diluted earnings per share decreased 1% year to year to $7.55 and non-GAAP Adjusted* diluted earnings per share increased 6% year over year to $9.69.
* See Appendix A for a reconciliation of each non-GAAP Adjusted financial measure to the most directly comparable GAAP measure and a discussion of why we believe these non-GAAP measures are useful.
Dear Fellow Stockholder,
On behalf of our Board of Directors, I’m pleased to invite you to Insight’s
2024 Annual Meeting of Stockholders. The meeting will be held on Tuesday, May 21, 2024, at 8:30 a.m. MST, at our global headquarters located at 2701 E. Insight Way, Chandler, Arizona85286. The attached Notice of Annual Meeting of Stockholders and Proxy Statement will serve as your guide to the business to be conducted at the meeting.
For more information on Insight and to take advantage of the many stockholder resources and tools available, we encourage you to visit our Investor Relations website
at http://investor.insight.com.
Your vote is very important. Whether or not you plan to attend the Annual Meeting, we urge you to vote via the Internet, by telephone or by signing and returning a proxy card. Please vote as soon as possible so that your shares will be represented at the meeting.
Thank you for your trust in Insight and your investment in our business.
We are pleased to invite you to the Insight Enterprises, Inc. 2024 Annual Meeting of Stockholders (the “Annual Meeting”).
Items of Business:
1.To elect ten directors for a term expiring at the 2025 Annual Meeting of Stockholders (or until their respective successors have been duly elected and qualified);
2.To approve, on an advisory basis, named executive officer compensation;
3.To ratify KPMG LLP as the Company’s independent registered public accounting firm for the year ending December
31, 2024; and
4.To consider any other business that may properly come before the Annual Meeting or any adjournments or postponements of the meeting.
Record Date:
Holders of our common stock at the close of business on March 27, 2024, are entitled to notice of, and to vote at, the Annual Meeting.
How to Vote:
Your vote is important to us. Please see “Voting Information” on page 1 for instructions on how to vote your shares.
These proxy materials are first being distributed on or about April 10, 2024.
Senior Vice President, General Counsel and Secretary
ImportantNoticeRegarding Availability of Proxy Materials
for the Annual Meeting to be Held on May 21, 2024: The proxy materials relating to our 2024 Annual Meeting (notice, proxy statement, proxy card and annual report) are available at www.proxypush.com/nsit.
You are entitled to vote at the Annual Meeting if you were a stockholder of Insight Enterprises, Inc. (the “Company” or “Insight”) as of the close of business on March 27, 2024, the record date for the Annual Meeting.
Participate
in the Future of Insight – Vote Today
Please cast your vote as soon as possible on all the proposals listed below to ensure that your shares are represented.
Even if you plan to attend our Annual Meeting in person, please read this proxy statement with care and vote right away as described below. For stockholders of record, have your notice and proxy card in hand and follow the instructions. If you hold your shares through a broker, bank or other nominee, you will receive voting instructions from your broker, bank or other nominee, including whether telephone or Internet options are available.
proxy card and return it in the postage-paid envelope provided.
Voting at the Annual Meeting
You may vote in person at the Annual Meeting, which will be held on Tuesday, May 21, 2024, at 8:30 a.m. MST, at the Insight global headquarters, 2701 E. Insight Way, Chandler, Arizona85286.
If you hold your shares through a broker, bank or other nominee and would like to vote in person at the Annual Meeting, you must first obtain a legal proxy issued in your name from the institution that holds your shares.
Frequently Asked Questions
We provide answers to many frequently asked questions about the meeting and voting under “Frequently Asked Questions Concerning the Annual Meeting” beginning on page 80 of this proxy statement.
This summary highlights information contained elsewhere. This summary does not contain all of the information that you should consider, and you should carefully read the entire proxy statement and our Annual Report for the year ended December 31, 2023, before voting at the Annual Meeting. Measures used in this proxy statement that are not based on U.S. generally accepted accounting principles (“GAAP”) are defined and reconciled to the most directly comparable GAAP measure in Appendix A.
Business Overview
Today, every business is a technology business. We help our clients accelerate their digital journey to modernize
their businesses and maximize the value of technology. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 35 years of broad information technology (“IT”) expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways.
Building upon the strong foundation of our traditional technology business, we bring innovative and scalable solutions — a combination of services and product — that accelerate transformation and produce meaningful results for our clients. Our strategy is focused
on putting clients first, delivering differentiation, championing our culture and driving profitable growth.
We are organized in three geographic operating segments:
In 2023, we achieved a record gross margin driven by cloud gross profit and Insight core services gross profit. We also generated record cash flows from operating activities and record Adjusted diluted earnings per share for the year. The Company focused on improving our product mix with the expansion of our higher margin services offerings and through strategic acquisitions. We believe investments we have made in our solution areas of expertise over the last several years, as well as the investments in our sales and technical talent, have positioned us well to execute on our business goals and serve our clients’ needs. For the full year 2023, we delivered the
following consolidated financial results:
•Net sales declined 12% to $9.2 billion
•Gross profit growth of 2% to $1.7 billion
•Gross margin expansion of approximately 250 basis points to 18.2%
•Earnings from operations (“EFO”) growth of 1% to $420 million, and non-GAAP Adjusted* EFO growth of 5% to $492 million
•Diluted earnings per share (“EPS”) declined 1% to $7.55, and non-GAAP Adjusted* diluted EPS growth of 6% to $9.69
•Non-GAAP Adjusted* return on invested capital (“ROIC”) from EFO of 14.73% and from Adjusted* EFO of 17.27%(1)
(1)Calculated
using a 26.0% tax rate.
* See Appendix A for a reconciliation of each non-GAAP Adjusted financial measure to the most directly comparable GAAP measure and a discussion of why we believe these non-GAAP measures are useful.
The following chart shows how a $100 investment in the
Company’s common stock on December 31, 2018, would have grown to $435 on December 31, 2023. The chart also shows Insight’s performance versus the NASDAQ US Benchmark TR Index (Market Index) ($100 investment would have grown to $203) and the NASDAQ US Benchmark Computer Hardware TR Index (Industry Index) ($100 investment would have grown to $482) over the same period, with dividends reinvested.
For further details about our performance in 2023, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
•Independent Board. Our Board of Directors is comprised entirely of independent directors, other than Joyce A. Mullen, who also serves as our President and Chief Executive Officer.
•Independent Chair of the Board and Presiding Director. Timothy A. Crown serves as our independent Chair of the Board and Anthony A. Ibargüen serves as our Presiding Director, whose primary responsibility is to fill in for the Chair if Mr. Crown is unable to serve.
•Independent Board Committees. All members of our Audit, Compensation and
Nominating and Governance Committees are independent directors.
Our executive compensation program is focused on driving profitability growth and stockholder value creation. The Compensation Committee seeks to foster these objectives through a compensation system that focuses on variable, performance-based incentives that create a balanced focus on our short-term and long-term strategic and financial goals. As shown in the chart below, in 2023, approximately 85% of the target total direct compensation of our President and Chief Executive Officer (CEO), Joyce A. Mullen, was variable and/or “at-risk” and earned only if performance goals are met.
Our executive compensation practices include the following, each of which the Compensation Committee believes reinforces our executive compensation objectives:
Our Executive Compensation Practices
✓
Emphasis on at-risk compensation, with significant percentage delivered in
the form of variable compensation
✓
Long-term performance objectives aligned with the creation of stockholder value
✓
Compensation Committee consists of independent directors only
✓
Annual review of our compensation-related risk profile
✓
Market comparison of executive compensation against relevant peer group information
✓
Use
of an independent compensation consultant reporting directly to the Compensation Committee and providing services only at the committee’s discretion
✓
Robust stock ownership guidelines
✓
Clawback policy
✓
We do not provide excessive executive perquisites
✓
We do not provide excessive severance benefits
✓
We
do not offer tax gross-ups for changes in control, except for one legacy arrangement granted years ago
✓
We prohibit repricing of underwater stock options under our long-term incentive plan without stockholder approval
✓
We prohibit hedging or short sales of our securities, and we prohibit pledging of our securities except in limited circumstances with pre-approval
Extensive information regarding our executive compensation programs in place for 2023 can be found under the heading “Compensation Discussion and Analysis.”
CORPORATE
GOVERNANCE
To provide a framework for effective corporate governance, our Board of Directors (the “Board of Directors” or “Board”) has adopted Corporate Governance Guidelines. These guidelines outline the operating principles of our Board of Directors, and the composition and working processes of our Board and its committees. The Nominating and Governance Committee periodically reviews our Corporate Governance Guidelines and developments in corporate governance, and recommends proposed updates and changes to the Board for approval.
Our Corporate Governance Guidelines, along with other corporate governance documents, such as Board committee charters and our Code of Ethics and Business Practices, are available on our website at http://investor.insight.com/corporate-governance.
Independence
of Our Board of Directors
Under our Corporate Governance Guidelines and the listing standards of NASDAQ, a majority of our Board members must be independent. The Board of Directors annually determines whether each of our directors is independent. In determining independence, the Board follows the independence criteria set forth in the NASDAQ listing standards and considers all relevant facts and circumstances.
Under the NASDAQ independence criteria, a director cannot be considered independent if he or she
has one of the relationships specifically enumerated in the NASDAQ listing standards. In addition, the Board must affirmatively determine that a director does not have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has affirmatively determined that each of our current directors is independent under the applicable listing standards of NASDAQ, other than our President and Chief Executive Officer, Joyce A. Mullen.
Board of Directors Leadership Structure
Timothy A. Crown serves as the Chair of our Board of Directors and Joyce A.
Mullen serves as our President and Chief Executive Officer. The Board believes that separating the roles of Chair of the Board and Chief Executive Officer, along with the use of regular executive sessions of the independent directors, provides appropriate oversight of the Company’s strategic direction. Anthony A. Ibargüen serves as the Presiding Director of the Board. His responsibilities are to participate as a member of the Executive Committee; to recommend agenda items for Board meetings; and to fill in when the Chair of the Board is unavailable.
Board Assessment
The
Board engages in a robust self-evaluation process designed to elicit improvement in the effectiveness of the Board, its committees, and the individual directors. For the last several years, on an annual basis, the Company’s outside counsel has distributed a self-assessment questionnaire, which was followed by an interview with each director. After compiling the results, the recommendations provided by the directors were reviewed with the Chair of the Board and the Chairs of each committee. The Chairs of the committees use the recommendations to identify areas of potential improvements for their respective committees and the Chair of the Board and the Chair of the Nominating and Governance Committee provide feedback to each individual director.
Corporate
Social Responsibility
In 2023, the Company furthered its commitment to corporate social responsibility through environmental, social and governance (“ESG”) initiatives that reflect areas of greatest relevance to Insight. These initiatives include operating with integrity, fostering employee capabilities, promoting diversity and inclusion in the workforce, data security, supporting our local communities, and minimizing our environmental impact. The Company has signed the United Nations Global Compact and supports its principles of human rights, anti-discrimination, environmental responsibility, and anti-corruption. The Board is responsible for overseeing the
Company’s ESG program, priorities, and initiatives and utilizes each of the committees for various aspects of the Company’s overall ESG program. In recognition of our commitment to sustainability, the Company was ranked 48th on Barron’s 2024 list of “100 Most Sustainable U.S. Companies”. In compiling the list, Barron’s analyzed the 1,000 largest publicly-traded companies and evaluated them across more than 230 ESG performance indicators including human capital management, data security, community engagement and the environment. As of the beginning of 2024, Insight is also one of only a few Fortune 500 companies led by an all-female CEO and CFO team. The Company also has a female Chief Marketing Officer, Chief
Accounting Officer and Chief Human Resource Officer.
Key areas of focus for the Company’s ESG program include:
•Business Ethics and Compliance
•Data Security
•Human Capital Development and Workforce Diversity and Inclusion
•Reducing
our Environmental Impact
•Community Involvement
ESG Highlights
Business Ethics and Compliance
The
Company maintains a Global Code of Ethics and Business Practices, Human Rights Policy and Global Anti-Bribery and Anti-Corruption Policy to guide employee and director conduct to foster a culture of ethics, integrity, and compliance with the law. These policies are periodically reviewed and approved by our senior management and the Board.
We require annual and recurring ethics and compliance training for employees across all levels, and we work to ensure that all employees understand what is expected of them in their day-to-day role. We also maintain an Ethics Hotline for confidential reporting of suspected violations.
Data
Security
The Company maintains a Global Data Privacy Program and Global Information Security Program, managed by a dedicated Chief Information Security Officer (“CISO”), as part of its information security strategy, both of which involve best practices, current tools, and policies and procedures designed to keep company, employee, and customer information confidential and secure.
Our program is regularly evaluated by internal and external experts with the results of those reviews reported to senior management
and the Board of Directors. We also collaborate with thought leaders in cybersecurity including with key vendors, clients, business partners, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and improve the effectiveness of our information security policies and procedures.
The CISO and Company management reports regularly (at least twice annually) to the full Board or Audit Committee on cybersecurity and information security matters.
We require quarterly cybersecurity compliance training for employees across all levels and regularly educate employees about cybersecurity defenses.
Human Capital Development and Workforce Diversity and Inclusion
We
foster a culture that encourages leadership development and encourages employees to excel individually and deliver value to clients.
We seek to be an employer of choice and have been recognized as a “Great Place to Work” and “Best Place to Work” in multiple locations in North America, Europe and Australia. In 2023, Fortune placed us #20 on its top 25 “World’s Best Workplaces” list and we were named to Forbes “World’s Best Employers” list.
The Company annually conducts employee pulse surveys to track employee engagement and satisfaction and employs equal employment opportunity hiring practices, polices and management of employees.
We are committed to creating a diverse workforce that provides equal opportunity regardless of
race, gender, religion, national origin, sexual orientation or disability, among other categories, and fosters respect, appreciation and acceptance of all people.
The Company has established programs designed to build long-term relationships with businesses and suppliers owned by women, members of disadvantaged minority groups, military veterans, and other historically disadvantaged groups.
We expanded our diversity initiatives to ensure women and minorities are considered for leadership roles. We also support many diverse employee resource groups, and maintain recruiting programs for diverse teammates.
We earned a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index and were designated as one of Fortune’s “100 Best Workplaces
for Diversity.”
The Company maintains an anti-harassment policy that prohibits hostility or aversion towards individuals in protected categories, and prohibits sexual harassment in any form. It is periodically reviewed and approved by senior management and the Board.
The Company is a participant in the United Nations Global Compact and committed to policies and practices that avert human trafficking, eliminate modern slavery and other human rights violations.
We provide recurring training and education for employees across all levels regarding our policies.
We are committed to reducing
our impact on the environment. The Company’s Environmental Policy, among other things, considers the energy consumption and environmental impact of real estate as we occupy new spaces. The policy is periodically reviewed and approved by senior management and the Board.
The Company evaluates Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions calculations each year to determine a baseline for further reducing its already low GHG emission levels. In 2022, the Company’s Scope 1 and Scope 2 GHG emissions were under 15,000 metric tons. For 2023, the Company’s
Scope 1 and Scope 2 GHG emissions totaled approximately 13,500 metric tons. The Company is evaluating its Scope 3 GHG emissions and plans to continue to evaluate Scope 1 and Scope 2 GHG emissions on an annual basis.
Our global headquarters building features an eco-friendly design, including solar panels and energy efficient HVAC and lighting systems. The building has been LEED Gold certified by the U.S. Green Building Council.
We are engaged in assisting customers with hardware lifecycle and asset disposal services saving the equivalent of millions of pounds of electronic
waste.
Community Involvement
We
provide employees two paid days off per year to volunteer their time to philanthropic and volunteer causes that improve our communities throughout the world.
The Company and employees annually contribute significant funds to Ronald McDonald House charities, the Make-A-Wish Foundation, the United Way, and the Boys & Girls Clubs of the Valley (AZ).
Employees contribute significant funds to charitable causes throughout the world.
The Company and its employees support the Insight In It Together Foundation, which (i) provides financial assistance and
other resources to employees and their families in times of special need and (ii) supports community organizations providing technology to support educational opportunities for under-privileged children.
The Company annually reports on some of its ESG activities in the Insight Enterprises Corporate Citizenship Report, which is available on our website
at http://investor.insight.com. The Company does not make political contributions.
Under
our Corporate Governance Guidelines, our directors are expected to attend meetings of the Board and applicable committees and the annual meeting of stockholders.
In 2023, the Board held eight meetings, including regularly scheduled and special meetings. In 2023, each of the directors attended at least 75% of the aggregate of all meetings of the Board and the meetings of the committees on which he or she served (during the periods for which he or she served on the Board and such committees). In addition, all of the then serving directors attended our 2023 Annual Meeting of Stockholders.
Board Committees
Our
Board has four committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee and the Executive Committee. Our Board has adopted charters for each of these committees, which are available on our website at http://investor.insight.com/corporate-governance/documents-and-charters/default.aspx. Under the committees’ charters, the committees report regularly to the Board. Additional information on each of these committees is set forth below.
Audit
Committee
Chair:Linda M. Breard
Other Members of the Committee: Richard E. Allen,Alexander L. Baum, Kathleen S. Pushor, Girish Rishi
Meetings Held in 2023: 9
Primary
Responsibilities:
Our Audit Committee is responsible for, among other things: (1) appointing, compensating, retaining, evaluating, overseeing and terminating our independent registered public accounting firm; (2) discussing with our independent registered public accounting firm its independence; (3) reviewing with our independent registered public accounting firm the scope and results of the firm’s audit; (4) approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; (5) overseeing the Company’s accounting and financial reporting process and discussing with management and our independent
registered public accounting firm the interim and annual financial statements that we file with the U.S. Securities and Exchange Commission (“SEC”); (6) reviewing and monitoring our accounting principles, accounting policies and financial and accounting controls; (7) establishing procedures for the confidential and anonymous submission of concerns regarding questionable accounting or auditing matters; (8) reviewing and approving or ratifying related party transactions; and (9) overseeing our internal audit function.
Independence:
Each member of
the Audit Committee meets the audit committee independence requirements of NASDAQ and the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Board has designated each of Richard E. Allen and Linda M. Breard as an “audit committee financial expert.” Each member of the Audit Committee is financially literate, knowledgeable and qualified to review financial statements.
Other Members of the Committee:Bruce W. Armstrong, Alexander L. Baum, Linda M. Breard, Catherine Courage, Anthony
A. Ibargüen
Meetings Held in 2023: 6
Primary Responsibilities:
Our Compensation Committee is responsible for, among other things: (1) reviewing and approving the compensation of our chief executive officer and other executive officers; (2) administering our stock plans and other incentive compensation
plans; (3) periodically reviewing and recommending to the Board any changes to our incentive compensation and equity-based plans; (4) delegating authority to directors or executive officers to grant equity awards to eligible employees; (5) appointing, compensating, retaining, evaluating and overseeing outside compensation consultants, experts and other advisors; (6) reviewing trends in executive compensation; and (7) reviewing talent management and succession planning for senior executives, including internal succession candidates for the chief executive officer.
Independence:
Each
member of the Compensation Committee meets the compensation committee independence requirements of NASDAQ and the rules under the Exchange Act, and meets the non-employee director requirements of Rule 16b-3 under the Exchange Act.
Other Members of the Committee:Catherine Courage,Anthony A. Ibargüen, Kathleen S. Pushor, Girish Rishi
Meetings Held in 2023: 5
Primary Responsibilities:
Our
Nominating and Governance Committee is responsible for, among other things: (1) identifying individuals qualified to become members of our Board of Directors, consistent with criteria approved by our Board; (2) overseeing the organization of our Board to discharge the Board’s duties and responsibilities properly and efficiently; (3) reviewing developments in and making recommendations regarding corporate governance matters; (4) developing and recommending to our Board a set of corporate governance guidelines and principles applicable to us; (5) managing the Board’s self-evaluation process; (6) coordinating the process for chief executive officer succession, especially involving external candidates; and (7) retaining, compensating and terminating any director search firms or other advisors.
Independence:
Each
member of the Nominating and Governance Committee meets the nominating and corporate governance committee independence requirements of NASDAQ.
Executive Committee
Chair: Timothy A. Crown
Other Members of the Committee:Anthony A. Ibargüen, Joyce A. Mullen
Meetings
Held in 2023: None
Primary Responsibilities:
Our Executive Committee meets, at the request of the Chair, to exercise the powers and authority of the Board during intervals between meetings of the Board. The Executive Committee shall not exercise: (1) powers delegated to other committees of the Board; and (2) powers that may not be delegated to a committee under Delaware General Corporation law, including amending the
Company’s Amended and Restated Bylaws or approving a merger of the Company.
Our Board of Directors oversees the Company’s strategy. On an annual basis, the Board reviews and approves the Company’s strategic plan and is involved in the Company’s strategic planning process throughout its development. In 2020, the Board was involved in evaluating the results of a study by an outside consultant that recommended changes in the Company’s go-to-market approach. During 2021, the Board was involved in evaluating the results of studies by outside consultants that addressed improvements in the
Company’s e-commerce capabilities. In 2022, the Board oversaw the engagement of an outside consultant that assisted management in evaluating the strengths and weaknesses of the Company, key trends in the industry, and opportunities for future growth of the Company. Throughout the past several years, the Board has been regularly involved in addressing matters of strategic importance, including evaluating and prioritizing acquisition targets, strategic partnerships, and the strategies adopted by the Company to address industry trends and opportunities.
Board
of Directors Role in Risk Oversight
Enterprise Risk Management Program
Our Board of Directors oversees our Enterprise Risk Management Program (the “ERM Program”), which is designed to drive the identification, analysis, discussion and reporting of risks to the enterprise. The ERM Program encourages constructive dialog at the management and Board levels to proactively identify and manage enterprise risks. Under the ERM Program, which the Company continues to refine, management develops a comprehensive report of enterprise risks by conducting regular assessments of the business and supporting functions, including assessments of strategic, operational, financial reporting, and legal and compliance risks, and helps to ensure appropriate response strategies are in place. As part
of the Company’s ERM Program, the Company focuses on cybersecurity defenses including best practices for tools, policies, procedures, and training.
Enterprise risks are considered in business decision making and as part of our overall business strategy. Our management team, including our executive officers, is primarily responsible for managing the risks associated with the operations and business of the Company. Senior management provides updates to the Audit Committee of the Board at least twice a year on matters covered by the ERM Program, and reports to the full Board on any identified high priority enterprise risks.
Compensation
Risk Assessment
We annually conduct an assessment of the risks associated with our compensation practices and policies. In 2023, we determined that the risks arising from such policies and practices are not reasonably likely to have a material adverse effect on the Company. In conducting the assessment, we undertook a review of our compensation philosophies, our compensation governance structure and the design and oversight of our various compensation programs. Overall, we believe that our programs include an appropriate mix of fixed and variable features, and short-term and long-term incentives with compensation-based goals aligning with corporate goals. Centralized oversight ensures compensation programs align with the Company’s compensation philosophies
and objectives, and, along with other factors, mitigates the possibility such programs would encourage excessive risk-taking.
We have adopted a Code of Ethics and Business Practices, which
is applicable to all of our teammates, including our Chief Executive Officer, our Chief Financial Officer (principal financial officer), our Chief Accounting Officer (principal accounting officer), and our Board members. If we make any substantive amendments to the Code of Ethics and Business Practices or grant any waiver from a provision of the code to our Chief Executive Officer, our Chief Financial Officer (principal financial officer) or our Chief Accounting officer (principal accounting officer), we will disclose the nature of such amendment or waiver on our website at http://investor.insight.com or in a Current Report on Form 8-K within four business days of such amendment or waiver. A copy of this code is available on our website
at http://investor.insight.com/corporate-governance/documents-and-charters/default.aspx.
Hedging, Short Sales and Pledging Policies
Our Policy on Insider Trading, which applies to all teammates, Board members and consultants, includes policies on hedging, short sales and pledging of our securities. Our policy prohibits hedging transactions involving Company securities and it also prohibits short sales or other speculative transactions involving our securities. In addition,
it prohibits holding Company securities in a margin account or pledging Company securities as collateral for a loan except in limited circumstances with pre-approval from our Compliance Officer. Pre-approval will only be granted when such person clearly demonstrates the financial capacity to repay the loan without resort to any pledged securities.
Communications with the Board of Directors
Stockholders who would like to communicate with the Board of Directors or its committees may do so by writing to them via the Company’s Corporate Secretary by mail at Insight
Enterprises, Inc., 2701 E. Insight Way, Chandler, Arizona85286. Correspondence may be addressed to the collective Board of Directors or to any of its individual members or committees at the election of the sender. Any such communication is promptly distributed to the director or directors named therein unless such communication is considered, either presumptively or in the reasonable judgment of the Company’s Corporate Secretary, to be improper for submission to the intended recipient or recipients. Examples of communications that would presumptively be deemed improper for submission include, without limitation, solicitations,
communications that raise grievances that are personal to the sender, communications that relate to the pricing of the Company’s products or services, communications that do not relate directly or indirectly to the Company and communications that are frivolous in nature.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee during 2023 were Mr. Allen (Chair), Mses. Breard and Courage, and Messrs. Armstrong, Baum, and Ibargüen. No member
of the Compensation Committee was at any time during 2023 or at any other time an officer or employee of Insight, and no member had any relationship with Insight requiring disclosure. No executive officer of Insight has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board or the Compensation Committee of Insight during 2023.
We have a written policy regarding the approval and/or ratification of related party transactions. The policy is administered by our Audit Committee and applies to any transaction or series of transactions in which the Company is a participant, the amount involved exceeds or is expected to exceed $120,000 in any calendar year and any related person has a direct or indirect interest. For purposes of the policy, “related persons” consist of the Company’s directors and executive officers, any stockholder beneficially owning more than 5% of the Company’s
common stock, and immediate family members of any such persons.
Under the policy, the Audit Committee will review all applicable related party transactions for approval, ratification or other action unless the transaction falls within the following categories of pre-approved transactions:
•employment of an executive officer if compensation is otherwise subject to disclosure requirements or approved by the Compensation Committee;
•director compensation subject to disclosure requirements;
•in the ordinary course of business, sales to or purchases from another company where a related party is employed or a director if the aggregate amount involved does not exceed the greater of $1 million or 2% of the other company’s total
annual revenues (for sales) or $50,000 (for purchases);
•any charitable contribution, grant or endowment where the related party is employed or a director if the aggregate amount involved does not exceed the lesser of $10,000 or 2% of the charitable organization’s annual receipts;
•any transaction where the related party’s interest arises solely from the ownership of common stock and all holders of common stock received the same benefit on a pro rata basis;
•any transaction with a related party involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority; and
•any
transaction with a related party involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.
We generally believe these transactions are not significant to investors because they comply with the Company’s standard policies and procedures or are otherwise subject to review. Any related party transaction requiring individual review will only be approved if the Audit Committee determines that such transaction will not impair the involved person’s service to, and exercise of judgment on behalf of, the Company, or otherwise create a conflict of interest that would be detrimental to the
Company.
We also require that each executive officer, director and director nominee complete an annual questionnaire and report all transactions with us in which such persons (and their immediate family members) had or will have a direct or indirect material interest (except for directors’ fees). Management reviews responses to the questionnaires and, if any such transactions are disclosed, they are reviewed by the Audit Committee. The types of transactions that have been reviewed in the past typically include the purchase from, and sale of products and services to, companies for which our directors serve as executive officers or directors, including purchases of marketing services for the Company’s use and products for resale to clients.
No related person had any direct or indirect material interest in any transaction with us required to be disclosed since the commencement of the 2023 fiscal year.
No Stockholder Rights Plan
The Company does not maintain a stockholder rights plan (commonly referred to as a poison pill).
Upon the recommendation of the Nominating and Governance Committee, the Board has nominated the ten directors for election to new terms expiring at the 2025 Annual Meeting of Stockholders, subject to the election and qualification of their successors.
Director Nomination Process
The Board of Directors is responsible
for nominating individuals for election to the Board and for filling vacancies on the Board that may occur between annual meetings of stockholders. The Nominating and Governance Committee is responsible for identifying and screening potential candidates and recommending qualified candidates to the Board for nomination. Third-party search firms may be, and have been retained to identify individuals that meet the criteria of the Nominating and Governance Committee.
The Nominating and Governance Committee will consider director candidates recommended by stockholders in the same manner in which it evaluates candidates it identified, if such recommendations are properly submitted to the Company. Stockholders wishing to recommend nominees for election to the Board should submit their recommendations in writing to our Corporate Secretary by mail at
Insight Enterprises, Inc., 2701 E. Insight Way, Chandler, Arizona85286. See “Other Business – Stockholder Proposals and Director Nominations for the 2025 Annual Meeting” for additional information.
Director Qualifications
In selecting director candidates, the Nominating and Governance Committee and the Board of Directors consider the qualifications and skills of the candidates
individually and the composition of the Board as a whole. Under our Corporate Governance Guidelines, the Nominating and Governance Committee and the Board review the following for each candidate, among other qualifications deemed appropriate, when considering the suitability of candidates for nomination as director:
•Principal employment, occupation or association involving an active leadership role
•Qualifications, attributes, skills and/or experience relevant to the Company’s business
•Ability to bring diversity to the Board, including a mix of career experience and viewpoints
•Other time commitments, including
the number of other boards on which the potential candidate may serve
•Independence and absence of conflicts of interest as determined by the Board’s standards and policies, the listing standards of NASDAQ and other applicable laws, regulations and rules
•Financial literacy and expertise
•Personal qualities, including strength of character, maturity of thought process and judgment, values and ability to work in a collegial manner
The following board diversity matrix reports the diversity statistics for the Company’s Board as of March 31, 2023 and 2024, in accordance with Nasdaq Rule 5606. Each of the categories listed in the board diversity matrix has the meaning provided in Nasdaq Rule 5605(f).
Total
Number of Directors
10
Female
Male
Part I: Gender Identity
Directors
4
6
Part II: Demographic Background
Asian
—
1
Hispanic or Latinx
—
1
White
4
4
2024 Nominees
for Election to the Board of Directors
Each of the ten director nominees listed below is currently a director of the Company. Each also has been determined by the Board to be independent, other than our President and Chief Executive Officer, Joyce A. Mullen.
The following biographies describe the business experience of each director nominee. Following the biographical information for each director nominee, we have listed the specific experience and qualifications of that nominee that strengthen the Board’s collective qualifications, skills and experience.
If elected, each of the director nominees is expected to serve for a term expiring at the Annual Meeting of Stockholders in 2025, subject to the election and qualification of his
or her successor. The Board expects that each of the nominees will be available for election as a director. However, if by reason of an unexpected occurrence one or more of the nominees is not available for election, the persons named in the form of proxy have advised that they will vote for such substitute nominees as the Board may nominate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES FOR ELECTION AS DIRECTORS.
Joyce A. Mullen
Director
of Insight Since: 2022
President and Chief Executive Officer of Insight
Other Public Company Directorships: The Toro
Age: 62
Company
Ms. Mullen was elected as President and Chief Executive Officer and a director of Insight effective January 1, 2022. Ms. Mullen joined Insight in
October 2020 as our President of the North America Region. Prior to joining Insight, Ms. Mullen spent 21 years of her career at Dell Technologies in a variety of sales, service delivery, and IT solutions roles most recently serving as President, Global Channel, Embedded & Edge Solutions and previously as Senior Vice President and General Manager, Global OEM and IOT Solutions from February 2015 to November 2017. Ms. Mullen is a member of the board of directors of The Toro Company, a publicly-held company that designs, manufactures, and markets lawn mowers, snow blowers, and irrigation system supplies for commercial and residential, agricultural, and public sector uses.
Experience
and Qualifications of Particular Relevance to Insight
Ms. Mullen’s knowledge of our business, based on over 20 years of industry experience, her connections with industry leaders, and her extensive management experience, make her a valuable contributor to the Board. In addition, as our President and Chief Executive Officer, the Board believes it is appropriate for her to be a member of our Board.
Timothy A. Crown
Director of Insight Since: 1994
Chair
of the Board, Independent Director
Age: 60
Mr. Crown has served as a director since 1994 and assumed the position of Chair of the Board in November 2004. Mr. Crown has been a non-employee director since 2004. Mr. Crown, a co-founder of the Company, stepped down from the position of President and Chief Executive Officer in November 2004, positions he had held since January 2000 and October 2003, respectively. Mr. Crown is also an officer and director of various
private companies, including companies in which he has made investments.
Experience and Qualifications of Particular Relevance to Insight
The Board believes Mr. Crown’s experience as a co-founder of the Company gives him a unique perspective on the Company’s opportunities, operations and challenges, and on the industry in which we operate. Mr. Crown’s experience in co-founding over 20 companies in the public, private and not-for-profit sectors also brings to our Board a focus on innovation and managing growth in rapidly changing environments.
Mr.
Allen has served as a director since January 2012 and is one of the Audit Committee’s designated financial experts. Mr. Allen also serves as Chair of the Compensation Committee. Mr. Allen served at J.D. Edwards & Company, a cross-industry enterprise resource planning software solutions company, from 1985 to 2004, most recently as Executive Vice President, Finance and Administration, and served as a member of its board from 1992 to 2004. Prior to each of the following companies being acquired, he also served on the board of directors of RightNow Technologies, Inc., a publicly-held cloud-based customer relationship management business to consumer solutions provider, from 2004 until January 2012, and HireRight, Inc., a publicly-held provider of comprehensive employee background checks, from 2007 to 2009. He was the chair of the audit committee and a member of the compensation committee at both RightNow and HireRight. Mr. Allen served on the board and served as the audit
committee chair for several privately-held companies that are cloud-based solutions and software providers. Since 2004, he served on the board of ten other public and private companies. Mr. Allen began his business career as a certified public accountant with Coopers & Lybrand in the audit division, where he last served as a Senior Auditor.
Experience and Qualifications of Particular Relevance to Insight
The Board believes that Mr. Allen’s over 40 years of finance, accounting, business operations and board experience, including his experience with cloud-based businesses, audit committees and compensation committees, brings corporate governance and financial and industry expertise to our Board.
Bruce
W. Armstrong
Director of Insight Since: 2016
Independent Director
Age: 62
Mr. Armstrong has served as a director since March 2016. Mr. Armstrong also serves as Chair of the Nominating and Governance Committee. Mr. Armstrong has over 25 years of experience developing, marketing, selling, and investing in
technology, with an emphasis in data warehousing and analytic applications. Since 2015, Mr. Armstrong has served as an Operating Partner at Khosla Ventures, a venture capital firm, working with enterprise technology portfolio companies. Prior to that, Mr. Armstrong was the President and Chief Executive Officer of PivotLink, a leading provider of SaaS BI applications, from 2011 to 2014; Chairman and Chief Executive Officer of Kickfire, a pioneer in next-generation data warehouse appliances focused on the open source MySQL database market, from 2008 to 2010; and President and Chief Executive Officer of publicly-traded KNOVA Software, a leading provider of search and analytic applications for unstructured data, from 2002 to 2007.
Experience and Qualifications of Particular Relevance to Insight
The Board believes that Mr. Armstrong’s extensive experience as an executive of several technology companies and his strong background in Big Data and Analytics, next generation databases, data mining and the Internet of Things, along with his service on the boards of a variety of publicly-held and private companies, bring industry expertise and governance experience to our Board.
Alexander
L. Baum
Director of Insight Since: 2022
Independent Director
Age: 38
Mr. Baum was appointed as a director in February 2022 in connection with the Company entering into a Nomination and Cooperation
Agreement with ValueAct Capital. Mr. Baum is a Partner of ValueAct Capital, one of Insight’s largest stockholders. He joined ValueAct in 2012 and has worked on several ValueAct IT and technology industry investments including Nintendo Co. LTD, Microsoft Corporation, and Adobe, Inc., among others. He has a B.A. in physics from Pomona College and is a CFA charterholder.
Experience and Qualifications of Particular Relevance to Insight
The Board believes that Mr. Baum’s deep experience in IT industry strategy and investment expertise will assist our Board as Insight continues its transformation to become an industry leading solutions integrator.
Linda
M. Breard
Director of Insight Since: 2018
Independent Director
Other Public Company Directorships: PotlatchDeltic Corporation, Paylocity Holding Corporation
Age: 54
Ms. Breard has served as a director since February
2018 and is one of the Audit Committee’s designated financial experts. Ms. Breard also serves as Chair of the Audit Committee. Ms. Breard is a certified public accountant and currently serves on the Board of Directors for PotlatchDeltic Corporation, a publicly-held forest products company, where she is Chair of the audit committee and a member of the compensation committee. Ms. Breard also currently serves on the Board of Directors for Paylocity Holding Corporation, a publicly-held and leading provider of cloud-based HCM and payroll software solutions, where she is a member of the audit committee. From February 2017 to July 2017, she served as the Executive Vice President and Chief Financial Officer of Kaiser Permanente of Washington, which provides health insurance and medical care. Prior to that, from February 2016 to January 2017, Ms. Breard was the Executive Vice President and Chief Financial Officer of Group Health
Cooperative, a health maintenance organization. From 2006 to 2016, she held various positions including Senior Vice President and Chief Financial Officer of Quantum Corporation, a leading data storage company. Prior to that, from 1998 to 2006, she served in a variety of roles for Advanced Digital Information Corporation, a publicly-traded technology company, last serving as Vice President, Global Accounting and Finance, and worked six years in public accounting before that.
Experience and Qualifications of Particular Relevance to Insight
The
Board believes that Ms. Breard’s extensive background in finance, business operations and accounting, along with her audit committee service on the boards of other public companies, brings financial expertise and governance experience to our Board.
Catherine Courage
Director of Insight Since: 2016
Independent
Director
Age: 49
Ms. Courage has served as a director since January 2016. Since October 2016, Ms. Courage has served as Vice President of Experience for Ads and Commerce and is now Vice President of Experience for Consumer Products at Google, a technology company specializing in Internet-related services and products. Prior to joining Google, Ms. Courage was Senior Vice President, Customer Experience for DocuSign, Inc., a digital transaction management cloud software
company, from June 2015 to September 2016. Prior to that, she served as Senior Vice President, Customer Experience at Citrix from March 2009 to May 2015. Before that, she spent nine years in similar roles with Salesforce.com and Oracle.
Experience and Qualifications of Particular Relevance to Insight
The Board believes that Ms. Courage’s work in brand design and customer experience and her extensive experience with leading information technology companies, are an asset to our Board, as we engage with our clients in the evolving digitally-driven marketplace.
Anthony
A. Ibargüen
Director of Insight Since: 2008
Independent Director
Age: 65
Mr. Ibargüen has served as a director since July 2008, and from September to December 2009, he served as our interim President and Chief Executive Officer. He has served as Chief Executive Officer of Quench USA, Inc., since October
2010. He previously served as Chief Executive Officer and member of the Board of Directors of AquaVenture Holdings LLC, which was a New York Stock Exchange listed multinational provider of water purification and treatment services and technologies, until its sale to Culligan International in March 2020. In 2018, Mr. Ibargüen was elected to serve on the Board of Directors of the Federal Reserve Bank of Philadelphia, where he is Chairman and a member of the executive and nominating and governance committees. From 2004 to 2008, he was Chief Executive Officer of Alliance Consulting Group, a privately-held IT consulting firm, and prior to that, Mr. Ibargüen was in leadership roles at several IT industry companies, including as President and member of the Board of Directors of Tech Data Corporation, a Fortune 500 global technology distribution company.
Experience and Qualifications of Particular Relevance to Insight
The
Board believes that Mr. Ibargüen’s over 25 years of experience in the IT industry and extensive knowledge of global enterprise management, finance, product distribution, value-added services and capital markets brings valuable perspective to our Board.
Ms. Pushor has served as a director since September 2005. Ms. Pushor has operated an independent consulting practice since June 2009. From 2006 through June 2009, she served as President and Chief Executive Officer of the Greater Phoenix
Chamber of Commerce. From 2003 to 2005, Ms. Pushor served as Chief Executive Officer of the Arizona Lottery. From 1999 to 2002, Ms. Pushor operated an independent consulting practice in the technology distribution sector. During the period from 1998 to 2005, Ms. Pushor was a member of the board of directors of Zones, Inc., a direct marketer of IT products.
Experience and Qualifications of Particular Relevance to Insight
The Board believes that Ms. Pushor’s industry knowledge and perspective, experience as a public company director and leadership experience from her many years as a Chief Executive Officer in the public sector bring valuable insights to our Board.
Girish
Rishi
Director of Insight Since: 2017
Independent Director
Age: 54
Mr. Rishi has served as a director since December 2017. Since April 2022, Mr. Rishi has served as Chief Executive Officer of Cognite LLC, a global SaaS company that helps drive digital transformation
for asset-heavy industrial clients. Prior to that, from January 2017 until February 2021, Mr. Rishi served as Chief Executive Officer of Blue Yonder, a provider of supply chain management software and consulting services. Previous to that, he worked at Tyco International, a security system company, where he was responsible for the firm’s global retail solutions business and North America building automation business from May 2015 to December 2016. He was a member of the Board of Directors of Digi International, Inc., a provider of machine-to-machine connectivity products and services, from June 2013 to January 2018. Previously, from October 2014 to May 2015, Mr. Rishi served as Senior Vice President, Enterprise at Zebra Technologies, which provides data capture and identification solutions. Prior to joining Zebra, he was Senior Vice President, Enterprise Solutions for Motorola Solutions, Inc., a leading provider of communications solutions that help businesses operate
more efficiently. Prior to that, he served in a variety of roles for Motorola Solutions from 2005 to 2013, including Corporate Vice President, Enterprise Mobile Computing. From 2003 to 2004, Mr. Rishi was Senior Vice President, Marketing and Strategy at Matrics, Inc., a radio frequency identification company. From 1995 to 2003, he held positions of increasing responsibility at Symbol Technologies, a manufacturer and supplier of mobile data capture and delivery equipment, where he eventually led the Europe, Middle East and Africa region.
Experience and Qualifications of Particular Relevance to Insight
The Board believes that Mr. Rishi’s industry experience and knowledge, as well as his leadership experience as a Chief Executive Officer and prior experience as a public company board member, brings valuable perspective to our Board.
During 2023, the Compensation Committee asked Meridian Compensation Partners, LLC (the “Compensation Consultant”) to provide an assessment of the competitiveness of the Board’s director compensation program against market practices. After reviewing the analysis of the Compensation Consultant, the Compensation Committee approved for 2024 a $15,000 retainer for Audit Committee members, a $10,000 retainer for Compensation Committee
members, a $5,000 retainer for Nominating and Governance Committee members and an increase to the retainer for directors by $5,000, an increase to the retainer for the Chair of the Board by $50,000 and an increase to the annual restricted stock unit (“RSU”) grant by $45,000. The 2024 changes to the cash retainers and RSU grant are intended to further align our program with market and best practices, and the Company’s evolving business model. The Board last conducted a similar assessment of its director compensation program in 2021. No changes were made for 2023.
The table below sets forth the elements of our 2023 and 2024 annual compensation program for our non-employee directors.
Annual
Compensation Elements
2023
Amount
2024
Amount
Board Retainer
$
85,000
$
90,000
Chair of the Board Retainer
$
100,000
$
150,000
Audit Committee Chair Retainer
$
30,000
$
30,000
Compensation
Committee Chair Retainer
$
20,000
$
20,000
Nominating and Governance Committee Chair Retainer
$
15,000
$
15,000
Audit Committee Member Retainer
$
—
$
15,000
Compensation
Committee Member Retainer
$
—
$
10,000
Nominating and Governance Committee Member Retainer
$
—
$
5,000
Annual Stock Unit Grant Value
$
155,000
$
200,000
All
retainers are paid quarterly in advance and, if applicable, are prorated based upon Board or chair service during the calendar year. Joyce A. Mullen, our President and Chief Executive Officer, does not receive compensation for her Board service. As of March 2024, Alexander Baum has waived all rights to receive any future grants of equity awards for his Board service, including the annual RSU grant under the director compensation program.
The annual RSU grant vests ratably over three years on the anniversary of the grant date and entitles the director to receive shares of our common stock upon vesting. In the year of appointment to the Board, a director receives a prorated portion of the annual RSU grant value based upon the number of days between appointment and the vesting date of the most recent annual grant to incumbent directors, which prorated award vests over three years on the anniversary of the grant date. RSU awards
to non-employee directors fully vest upon retirement, subject to certain conditions.
The Board believes that, to more closely align the interests of our non-employee directors with the interests of the
Company’s other stockholders, each non-employee director should maintain a minimum level of ownership in the Company’s common stock. The Compensation Committee is responsible for periodically reviewing the stock ownership guidelines for non-employee directors and making recommendations to the Board as to any changes.
Beginning in 2022, our guidelines require each non-employee director to hold shares equal to at least five times the amount of the annual retainer to be achieved over a five-year transition period. As of December 31, 2023, all non-employee directors had attained their required ownership level.
2023 Director
Compensation Table
The table below sets forth information concerning compensation of the Company’s non-employee directors in 2023.
Name
Fees Earned
or Paid in Cash
($)
Stock
Awards
($)(1)(2)
Total
($)
Richard
E. Allen
105,000
155,034
260,034
Bruce W. Armstrong
100,000
155,034
255,034
Alexander L. Baum
85,000
155,034 (3)
240,034
Linda M. Breard
115,000
155,034
270,034
Catherine
Courage
85,000
155,034
240,034
Timothy A. Crown
185,000
155,034
340,034
Anthony A. Ibargüen
85,000
155,034
240,034
Kathleen S. Pushor
85,000
155,034
240,034
Girish
Rishi
85,000
155,034
240,034
(1)These amounts reflect the grant date fair value of the service-based RSU awards granted to our directors. On May 17, 2023, each non-employee director was granted RSUs with a grant date fair value equal to $155,034, calculated at the closing price of the Company’s common stock on the date of its 2023 Annual Meeting of Stockholders ($127.60 per share).
(2)As of December 31, 2023, the aggregate number
of outstanding and unvested stock awards held by each non-employee director was as follows:
(3)This
amount reflects the aggregate grant date fair value of the service-based RSU awards granted to Alexander Baum, for the benefit of the limited partners of ValueAct Capital Master Fund L.P., on May 17, 2023, along with the other non-employee directors, as referenced in Note (1) above. On March 26, 2024, Mr. Baum and ValueAct Capital entered into a Waiver of Director Equity Awards, whereby each agreed to voluntarily forfeit all unvested RSU awards as of March 26, 2024, and waived all rights to receive any future equity awards for Mr. Baum’s Board service, including the annual service-based RSU awards under the director compensation program.
The cost of certain perquisites and other personal benefits are not included because in the aggregate they did not exceed, in the case of any
non-employee director, $10,000.
The following table shows information regarding
the beneficial ownership of our common stock by:
•each member of our Board of Directors, each director nominee and each of our Named Executive Officers (or “NEOs”) (as defined in the Compensation Discussion and Analysis section of this proxy statement);
•all members of our Board and our executive officers as a group; and
•each person or group who is known by us to own beneficially more than 5% of our common stock.
Except as otherwise indicated, all stockholdings are as of March 15, 2024, and the percentage of beneficial ownership is based on 32,540,759 shares of common stock outstanding as of March 15, 2024.
Unless
otherwise indicated, the address for each holder listed below is c/o Insight Enterprises, Inc., 2701 E. Insight Way, Chandler, Arizona85286.
Certain Beneficial Owners, Directors and Executive Officers
Shares
of Common Stock
Beneficially Owned(1)
Name
Number of Shares
Percent
BlackRock, Inc.
4,827,941
(2)
14.84
%
FMR LLC
4,754,886
(3)
14.61
%
ValueAct
Capital Master Fund, L.P.
4,511,630
(4)
13.86
%
The Vanguard Group
3,858,782
(5)
11.86
%
Capital World Investors
1,682,004
(6)
5.17
%
Glynis A. Bryan
98,358
*
Timothy
A. Crown
89,386
*
Joyce A. Mullen
50,807
*
Richard E. Allen
30,647
*
Samuel C. Cowley
23,009
*
Anthony
A. Ibargüen
18,414
*
Catherine Courage
12,767
*
Bruce W. Armstrong
11,389
*
Girish Rishi
9,783
*
Linda M. Breard
9,357
*
Dee
Burger
8,414
*
Adrian Gregory
6,197
*
Kathleen S. Pushor
5,800
*
Alexander L. Baum
733
(4)
*
All directors and executive
officers as a group (18 persons)
(1)Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to securities. In accordance with SEC rules, a person is deemed to own beneficially any shares that such person has the right to acquire within
60 days of the date of determination of beneficial ownership. Shares of common stock subject to options currently exercisable or exercisable within 60 days of March 15, 2024, and shares of restricted stock that vest within 60 days of March 15, 2024, are deemed to be outstanding and beneficially owned by the person and any group of which that person is a member, but are not deemed outstanding for the purpose of computing the percentage of beneficial ownership for any other person. Except as indicated by footnote, and subject to community property laws where applicable, to our knowledge the persons or entities named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
(2)Share data based on information in an amendment to
a Schedule 13G filed on January 22, 2024, with the SEC by BlackRock, Inc. As of December 31, 2023, the Schedule 13G/A indicates that BlackRock, Inc. had sole voting power with respect to 4,743,852 shares and sole dispositive power with respect to 4,827,941 shares. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY10001. The amendment to Schedule 13G discloses that iShares Core S&P Small-Cap ETF has an interest that is more than five percent of the total outstanding common stock of the Company.
(3)Share
data based on information in an amendment to a Schedule 13G filed on February 9, 2024, with the SEC by FMR LLC. As of December 31, 2023, the Schedule 13G/A indicates that FMR LLC had sole voting power with respect to 4,753,261 shares and sole dispositive power with respect to 4,754,886 shares. The address of FMR LLC is 245 Summer Street, Boston, MA02210.
(4)Share data based on information in a Schedule 13F filed on February 14, 2024, with the SEC by ValueAct Holdings, L.P. (“ValueAct
Capital”) (and various affiliates, including ValueAct Capital Master Fund, L.P.). As of December 31, 2023, the Schedule 13F indicates that ValueAct Capital had sole voting and sole dispositive power with respect to 4,511,630 shares. Mr. Baum disclaims beneficial ownership of these shares. The address of ValueAct Capital is One Letterman Drive, Building D, Fourth Floor, San Francisco, CA94129.
(5)Share data based on information in an amendment to a Schedule 13G filed on February 13, 2024, with the SEC by The Vanguard Group.
As of December 31, 2023, the Schedule 13G/A indicates that The Vanguard Group had no shares with sole voting power, shared voting power with respect to 55,133 shares, sole dispositive power with respect to 3,772,127 shares and shared dispositive power with respect to 86,655 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA19355.
(6)Share data based on information in a Schedule 13G filed on February 9, 2024, with the SEC by Capital World Investors. As of December
31, 2023, the Schedule 13G indicates that Capital World Investors had sole voting power with respect to 1,682,004 shares and sole dispositive power with respect to 1,682,004 shares. The address of Capital World Investors is 333 South Hope Street, 55th Floor, Los Angeles, California90071.
Section 16(a) Reports
Our directors, executive officers, and owners of more than 10% of our common stock must file
reports with the SEC under Section 16(a) of the Exchange Act regarding their ownership of and transactions in our common stock and securities related to our common stock. Based solely upon a review of these reports filed electronically with the SEC, we believe that all reports required to be filed by our directors, executive officers and holders of more than 10% of our common stock pursuant to Section 16(a) of the Exchange Act during 2023 were filed on a timely basis.
PROPOSAL
2 – Advisory Vote to Approve Named Executive Officer Compensation
Stockholders have an opportunity to cast an advisory vote to approve the compensation of our Named Executive Officers, as disclosed in this proxy statement, pursuant to Section 14A of the Exchange Act (commonly referred to as a “say-on-pay” vote). Accordingly, we are asking stockholders to approve, on a non-binding basis, the following advisory resolution at the Annual Meeting:
RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.
Although the
vote is non-binding, we value feedback from our stockholders on compensation and other important matters. The Board of Directors and the Compensation Committee will consider the voting results when making future compensation decisions. At our 2023 Annual Meeting of Stockholders, approximately 98% of the votes cast by our stockholders approved the compensation of our Named Executive Officers as disclosed in the 2023 proxy statement.
As advised by our stockholders at the 2023 Annual Meeting of Stockholders (commonly referred to as a “say-on-frequency” vote) and approved by our Board, the say-on-pay vote has been held annually. The next say-on-frequency vote will occur in 2029; however, we expect to hold the say-on-pay vote on an annual basis for the foreseeable future.
In deciding how to vote on this proposal, we encourage you to review the Compensation Discussion and Analysis
and 2023 Executive Compensation sections of this proxy statement for a detailed description of our executive compensation program. As described in the Compensation Discussion and Analysis, the Compensation Committee has designed our compensation program with the objective of rewarding achievement of specific financial, strategic and tactical goals by the Company and individual executives that align the interests of management with the interests of our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL, ON AN ADVISORY BASIS, OF THE RESOLUTION SET FORTH ABOVE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
The Compensation Discussion and Analysis (our “CD&A”) provides an overview of our executive compensation program for 2023 and our executive compensation philosophies and objectives.
Our Named Executive Officers consist of our President and Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated executive officers. For 2023, our Named Executive Officers were:
Name
Title
Joyce
A. Mullen
President and Chief Executive Officer
Glynis A. Bryan
Chief Financial Officer
Daniel (Dee) Burger
President, North America
Adrian Gregory
President, EMEA
Samuel C. Cowley
Senior Vice President, General Counsel and Secretary
This CD&A is divided into three sections:
Overview
•2023
Business Highlights
•Our Executive Compensation Program
•Our Executive Compensation Practices
•2023 Say-on-Pay Vote
What We Pay and Why
•Compensation Philosophy
•Factors Considered in Compensation Deliberations
•2023 Executive Compensation Decisions
•Base Salary
•Annual
Cash Incentive Awards
•Long-Term Equity-Based Incentive Program
•2024 Executive Compensation Program
•Other Elements of Our Executive Compensation Program
•Alignment of Senior Management Team to Drive Performance
How We Make Executive Compensation Decisions
•Role of the Board, Compensation Committee and our Executive Officers
•Guidance from the Compensation Committee’s Independent Compensation Consultant
In
2023, the Company expanded gross margins to a record level. This was driven by a net increase in product margin and expansion in margins for sales of cloud solutions and Insight core services. We also generated record cash flows from operating activities and record Adjusted diluted earnings per share for the year. The Company continued its focus on driving improvements in our hardware and services gross margins, improving our cost structure, strengthening our cloud and services portfolio through strategic acquisitions, and investing in our people and technical infrastructure. We believe our focus positions us well to execute on our business goals and serve our clients’ needs as market conditions improve.
For the full
year 2023, we delivered the following consolidated financial results:
•Net sales declined 12% to $9.2 billion
•Gross profit grew 2% to $1.7 billion
•Gross margin expanded approximately 250 basis points to 18.2%
•EFO grew 1% to $420 million, and non-GAAP Adjusted* EFO grew 5% to $492 million
•Diluted EPS declined 1% to $7.55, and non-GAAP Adjusted* diluted EPS grew 6% to $9.69
•Non-GAAP Adjusted* ROIC from EFO of 14.73% and from Adjusted* EFO of 17.27%(1)
(1)Calculated using
a 26.0% tax rate.
* See Appendix A for a reconciliation of each non-GAAP Adjusted financial measure to the most directly comparable GAAP measure and a discussion of why we believe these non-GAAP measures are useful.
The following chart shows how a $100 investment in the
Company’s common stock on December 31, 2018, would have grown to $435 on December 31, 2023. The chart also shows Insight’s performance versus the NASDAQ US Benchmark TR Index (Market Index) ($100 investment would have grown to $203) and the NASDAQ US Benchmark Computer Hardware TR Index (Industry Index) ($100 investment would have grown to $482) over the same period, with dividends reinvested.
For further details about our performance in 2023, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Our executive compensation program objectives and philosophy are designed to align the interests of our executive officers with those of our stockholders and with the market. The table below outlines the principal elements of the Company’s 2023 executive compensation program (the “2023 Executive Compensation Program”):
Pay
Element
Salary
Annual Cash
Incentive Awards
Performance-Based RSUs
Service-Based RSUs
Who Receives
All Named Executive Officers
When
Granted
Annually
Form of Delivery
Cash
Equity
Type of Performance
Short-term emphasis (fixed)
Short-term
emphasis (variable)
Long-term emphasis (variable and at-risk)
Long-term emphasis (variable with stock price)
Performance Period
Annual
1 year
50% have a 1 year performance period with earned shares vesting ratably over 3 years, and the other 50% have a 3 year performance period with cliff vesting
Vesting over 3 years
How
Payout Is Determined
Compensation Committee determination
Based upon formula established by Compensation Committee
Based upon formulas established by Compensation Committee
The following charts illustrate the pay for performance design of our 2023 Executive Compensation Program. For 2023, approximately 85% of the annual target total direct compensation of our President and Chief
Executive Officer was variable and/or at-risk and approximately 73% of the target total direct compensation of our other Named Executive Officers was variable and/or at-risk:
Our Executive Compensation Practices
The Compensation Committee reviews the Company’s executive compensation program on an ongoing basis to evaluate whether it is aligned with stockholder
interests and that it supports the Company’s executive compensation philosophies and objectives. Our executive compensation practices include the following, each of which the Compensation Committee believes reinforces our executive compensation objectives:
Our Executive Compensation Practices
✓
Emphasis on performance-based (“at-risk”) compensation, with significant percentage delivered in the form of variable compensation
✓
Long-term
performance objectives aligned with the creation of stockholder value
✓
Compensation Committee consists of independent directors only
✓
Annual review of our compensation-related risk profile
✓
Market comparison of executive compensation against relevant peer group information
✓
Use of an independent compensation consultant reporting directly to the Compensation Committee and providing services only at the committee’s discretion
✓
Robust
stock ownership guidelines
✓
Clawback policy
✓
We do not provide excessive executive perquisites
✓
We do not provide excessive severance benefits
✓
We do not offer tax gross-ups for changes in control, except for one legacy arrangement granted years ago
✓
We prohibit repricing of underwater stock options under our long-term incentive plan without stockholder approval
✓
We
prohibit hedging or short sales of our securities, and we prohibit pledging of our securities except in limited circumstances with pre-approval
As noted above, in its executive compensation review process, the Compensation
Committee considers whether the Company’s executive compensation program is aligned with the interests of the Company’s stockholders. In that respect, as part of its review of the Company’s executive compensation program, the Compensation Committee considered the approval by approximately 98% of the votes cast for the Company’s say-on-pay proposal at our 2023 Annual Meeting of Stockholders. The Compensation Committee determined that the Company’s executive compensation philosophies and objectives and compensation elements continued to be appropriate
and did not make any changes to the Company’s executive compensation program in response to the 2023 say-on-pay vote.
Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:
•Provide compensation and benefit levels that will attract, retain, motivate and reward a highly-talented executive team while maintaining responsible cost management;
•Establish a direct link between our financial and operational results and
achievement of strategic objectives and the compensation of our executive officers; and
•Align the interests and objectives of our executive officers with those of our stockholders by linking the long-term incentive compensation opportunities to stockholder value creation and executive officers’ cash incentives to our annual performance.
Factors Considered in Compensation Deliberations
The Compensation Committee does not use a single method or measure in setting or approving the target total direct compensation opportunities or each individual compensation element for our executive
officers. Additionally, the Compensation Committee does not weigh any one factor of pay components in comparison to the other factors. The factors below, which the Compensation Committee considers when selecting and setting the amount of compensation for each of our executive officers, including our President and Chief Executive Officer and our other Named Executive Officers, provide a framework for its compensation decision-making:
•Our executive compensation program objectives;
•Our performance against the financial and operational goals and objectives established by the Compensation Committee and our Board;
•Each individual executive officer’s qualifications, knowledge, skills, experience and tenure relative to other similarly-situated executives at the companies
in our compensation peer group;
•The scope of each executive officer’s role and responsibilities compared to other similarly situated executives at the companies in our compensation peer group;
•The prior performance of each individual executive officer, based on an assessment of his or her contributions to our overall performance and ability to lead his or her business unit or function and work as part of a team;
•The potential of each executive officer to contribute to our long-term financial, operational and strategic objectives;
•The amount of compensation relative to that of our other executive officers;
•Our financial performance
relative to our peers;
•The compensation practices of our compensation peer group and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data;
•In the case of long-term incentive compensation, the value of any outstanding vested and unvested equity awards held by each of our executive officers, including the equity awards and other long-term compensation opportunities granted to each executive officer in prior years; and
•The recommendations provided by our President and Chief Executive Officer regarding the compensation of our executive officers (other than the CEO), as described below.
Alignment of Senior Management Team to Drive Performance
Our financial performance goals are designed to drive profitable growth and stockholder value creation by aligning members of senior management around common financial performance goals. To drive performance against these goals, when communicating the goals to the senior management team, the Company includes extensive communications on what members of senior management, together with their teams, can do to impact achievement of these goals. We believe this understanding of the link between individual/team performance
and the achievement of the Company’s financial performance goals helps the entire organization focus on those actions that have the greatest potential to drive profitable growth and stockholder value creation.
2023 Executive Compensation Decisions
Consistent with our pay-for-performance philosophy and executive compensation program objectives, in determining the 2023 adjustments to executive compensation levels and the mix of compensation elements for each Named Executive Officer, the Compensation Committee and our President and Chief Executive
Officer (in making recommendations regarding Named Executive Officer compensation other than her own) considered the factors noted above in the section “Factors Considered in Compensation Deliberations,” including each Named Executive Officer’s prior performance against financial and operational goals, Company performance relative to our peers, the compensation levels paid to other executive officers at the Company, the competitive market data for similarly situated executive officers to provide a perspective on external practices, and input from the Compensation Consultant.
Base Salary
The
Compensation Committee generally sets base salaries for executives, including our Named Executive Officers, at competitive levels for executives in similar positions commensurate with their skills, experience, qualifications and marketability. The 2023 base salary for Ms. Mullen is discussed below under “Chief Executive Officer Compensation.” The 2023 base salaries for Ms. Bryan and Mr. Burger each increased by 4%, and Mr. Cowley’s base salary increased by 6%. Mr. Gregory joined the Company on January 2, 2023. All adjustments were based on the factors noted above in the section “Factors Considered in Compensation Deliberations.”
The table below sets forth the 2023 base salary level for each of our Named Executive Officers:
Named
Executive Officer
2023 Base Salary
Joyce A. Mullen
$
925,000
Glynis A. Bryan
$
676,000
Dee Burger
$
650,000
Adrian Gregory
$
559,000
(1)
Samuel
C. Cowley
$
530,000
(1) While Mr. Gregory’s base salary of £450,000is shown in U.S. dollars (rounded to the nearest thousand) for presentation in this proxy statement, Mr. Gregory is paid in British pounds. Consistent with the presentation in the Summary Compensation Table, Mr. Gregory’s 2023 salary was computed by multiplying the average exchange rate for the quarters ended March 31, June 30, September 30, and December 31, 2023, respectively, by the compensation earned during the quarter. This results in an assumed exchange rate of $1.2432 per British pound.
We provide our senior management with short-term incentive compensation through our annual cash incentive program, the 2023 cash incentive plan. Short-term compensation under the 2023 cash incentive plan represents a significant portion of each Named Executive Officer’s target total cash compensation opportunity in a given year. As discussed in more detail below, payouts under the cash incentive plan resulted from the attainment of various performance goals that were specific to the Named Executive Officer’s geographic or functional responsibilities.
2023 Cash Incentive Plan
For
2023, the Compensation Committee provided an incentive plan for certain management level teammates, including our Named Executive Officers. Consistent with 2022, the 2023 target cash incentive compensation amounts are calculated as a percentage of base salary. The percentages are generally consistent with those utilized in 2022.
Under the 2023 cash incentive plan, defined financial objectives were established for our Named Executive Officers, and the percentages of total cash incentive compensation to be tied to each of the specified financial objectives were quantified as follows:
Named
Executive Officer
EFO
Core
Services GP
Growth
Cloud GP
Growth
Joyce A. Mullen
50%
(IEI)
25%
(IEI)
25%
(IEI)
Glynis A. Bryan
50%
(IEI)
25%
(IEI)
25%
(IEI)
Dee
Burger
50%
(INA)
25%
(INA)
25%
(INA)
Adrian Gregory
50%
(EMEA)
25%
(EMEA)
25%
(EMEA)
Samuel C. Cowley
50%
(IEI)
25%
(IEI)
25%
(IEI)
For
purposes of our 2023 cash incentive plan:
•Insight Enterprises, Inc. and subsidiaries (“IEI”) EFO was calculated on a consolidated non-GAAP Adjusted basis, with non-GAAP Adjusted IEI EFO being defined as the Company’s actual 2023 consolidated earnings from operations, excluding certain items, specified and approved in advance by the Compensation Committee, that were not considered to be part of ongoing business (the “EFO exclusions”). Insight North America (“INA”) EFO was calculated on a non-GAAP Adjusted basis, with non-GAAP Adjusted INA EFO being defined as the actual 2023 earnings from operations from the Company’s North
America operating segment, excluding the relevant EFO exclusions. Insight Europe, the Middle East and Africa (“EMEA”) EFO was calculated on a non-GAAP Adjusted basis, with non-GAAP Adjusted EMEA EFO being defined as the actual 2023 EFO from the Company’s EMEA operating segment, excluding the relevant EFO exclusions, on a constant currency basis.
•“IEI Core Services GP Growth” was based on the change in the Company’s actual 2023 consolidated gross profit from Insight Core services sales compared to 2022. Insight Core services consists of services Insight delivers and manages. “INA Core Services GP Growth” was based on the change in actual 2023 gross profit from services sales from the
Company’s INA operating segment compared to 2022. “EMEA Core Services GP Growth” was based on the change in actual 2023 gross profit from services sales from the Company’s EMEA operating segment compared to 2022, on a constant currency basis.
•“IEI Cloud GP Growth” was based on the change in the Company’s actual 2023 consolidated gross profit from cloud
sales compared to 2022. “INA Cloud GP Growth” was based on the change in actual 2023 gross profit from cloud sales from the Company’s North America operating segment compared to 2022. “EMEA Cloud GP Growth” was based on the change in actual 2023 gross profit from cloud sales from the Company’s EMEA operating segment compared to 2022, on a constant currency basis.
The 2023 cash incentive plan required that the Company, or the relevant segment of the Company for which the executive has management responsibility, depending on the executive’s position, achieve a threshold percentage
of the budgeted amount for the particular performance measure for any payment to be made to an executive with respect to that performance measure. Therefore, it was possible that a Named Executive Officer would have different levels of achievement for each of his or her separate performance measures, and perhaps receive no payment at all, depending on performance against the goal for each performance measure. The levels of performance were set in conjunction with the Company’s overall annual budget and were considered to be challenging, but achievable, given the uncertain economic environment and the tactical and strategic plans that were developed for 2023. Where actual results fell between specified performance levels, payments were calculated based on linear interpolation.
For the 2023 consolidated IEI EFO, INA EFO and EMEA EFO performance
measures set forth above, the threshold to receive any cash incentive was 80% of the respective budgeted EFO amount, which would result in a payout of 50% of the target cash incentive award opportunity allocated to that measure. Below 80% attainment, no payout would be received by the executive. The maximum each executive could earn, 200% of target, would result from attainment at or above 120% of the respective budgeted EFO amount.
The budgeted target, actual financial attainment and payout levels related to EFO performance measures for the 2023 cash incentive plan were as follows:
Financial Objective
Target
Actual
%
Payout
IEI EFO (non-GAAP Adjusted)
$512.4 million
$492.1 million
90.0%
INA EFO (non-GAAP Adjusted)
$441.2 million
$424.4 million
90.5%
EMEA EFO (non-GAAP Adjusted)
$49.6 million
$43.2 million
68.0%
For
the 2023 Core Services GP Growth performance measures set forth above, the thresholds to receive any cash incentive were IEI Core Services GP Growth of 0.2% compared to 2022, INA Core Services GP Growth of 0.3% compared to 2022, and EMEA Core Services GP Growth of 2.4% compared to 2022, which would result in a payout of 25% of targeted cash incentive compensation for the respective performance measure. Below these attainment thresholds, no payout would be received by the executive. The maximum each executive could earn, 200% of target, would result from IEI Core Services GP Growth of 25.3% compared to 2022, INA Core Services GP Growth of 24.9% compared to 2022 and EMEA Core Services GP Growth of 36.5% compared to 2022.
The budgeted target, actual financial attainment and payout levels related to the Core Services GP Growth performance measures for the 2023 cash incentive plan were as follows:
Financial
Objective
Target
Actual
% Payout
IEI Core Services GP Growth
16.0% increase
8.1% increase
62.0%
INA Core Services GP Growth
15.6% increase
5.7% increase
51.9%
EMEA Core Services GP Growth
26.4% increase
17.4%
increase
71.6%
For the 2023 Cloud GP Growth performance measures set forth above, the thresholds to receive any cash incentive were IEI Cloud GP Growth of 0.3% compared to 2022, INA Cloud GP Growth of 0.3% compared to 2022 and EMEA Cloud GP Growth of 0.1% compared to 2022, which would result in a payout of 25% of the target cash incentive award opportunity allocated to the
respective performance measure. Below these attainment thresholds, no payout would
be received by the executive. The maximum each executive could earn, 200% of target, would result from IEI Cloud GP Growth of 25.4% compared to 2022, INA Cloud GP Growth of 28.7% compared to 2022 and EMEA Cloud GP Growth of 25.8% compared to 2022.
The budgeted target, actual financial attainment and payout levels related to the Cloud GP Growth performance measures for the 2023 cash incentive plan were as follows:
Financial Objective
Target
Actual
% Payout
IEI
Cloud GP Growth
14.0% increase
26.1% increase
200.0%
INA Cloud GP Growth
17.0% increase
33.0% increase
200.0%
EMEA Cloud GP Growth
14.4% increase
12.5% increase
95.9%
2023 Cash Incentive Plan Payouts
The table below sets forth the 2023
target annual cash incentive award opportunities and the actual payouts to each of our Named Executive Officers based upon 2023 performance:
Named Executive Officer
Percentage of
Base Salary
at Target
Bonus
Target
Actual
Payout (1)
Joyce
A. Mullen
150%
$
1,387,500
$
1,533,188
Glynis A. Bryan
100%
$
676,000
$
746,980
Dee Burger
100%
$
650,000
$
703,300
Adrian
Gregory (2)
100%
$
571,000
$
433,000
Samuel C. Cowley
75%
$
397,500
$
439,238
(1)Based on actual versus target attainment, weighted across required financial objectives.
(2)
While Mr. Gregory’s 2023 target and earned cash incentive compensation is shown in U.S. dollars (rounded to the nearest thousand) for presentation in this proxy statement, Mr. Gregory is paid in British pounds. The target and earned cash incentive compensation was £450,000 and £341,550, respectively. Consistent with the presentation in the Summary Compensation Table in this proxy statement, Mr. Gregory’s actual 2023 earned cash incentive compensation payout was determined by multiplying the British pounds paid by the exchange rate applicable on the date paid of $1.2679 per British pound.
Under our long-term equity-based incentive program, the Compensation Committee has the authority to award various forms of long-term incentive compensation grants, including stock options, RSUs and performance-based awards. The Compensation Committee’s objectives for the 2023 long-term equity-based incentive awards were to:
•Focus executives on key performance metrics aligned with long-term stockholder value creation and the Company’s
long-term strategic plan;
•Establish a direct link between compensation and the achievement of longer-term financial and strategic objectives;
•Facilitate increased equity ownership by our executives; and
•Retain the services of our executives through multi-year vesting requirements.
For 2023, the annual long-term equity-based incentive compensation opportunities for our Named Executive Officers were granted in the form of performance-based RSUs and service-based RSUs, with the following key features to drive Company performance and align with stockholder interests:
Performance-Based
RSUs
•60% of target long-term incentive opportunity of which:
◦50% determined by measuring non-GAAP Adjusted ROIC performance goals, and
◦50% determined by rTSR, i.e., the Company’s relative TSR performance ranked on a percentile basis compared to companies defined in a custom peer group (“rTSR Comparator Companies”)
RSUs Based on ROIC:
•One-year performance period (2023) with 0-200% payout curve (threshold payout of 12.5%)
•Earned shares vest ratably over three
years on the anniversary of the grant date based upon attainment of ROIC performance goals, calculated as described below
RSUs Based on rTSR:
•Three-year performance period with 0-200% payout curve (threshold payout of 50%) with cliff vesting
•Earned shares vest upon certification of final percentile attainment
Service-Based RSUs
•40% of target long-term incentive opportunity
•Value based on stock price at vesting
•Vest ratably over three
years
Performance-based RSUs are earned only if the applicable pre-established financial goals are achieved. ROIC performance-based RSUs are based 100% on ROIC achievement. Earned ROIC performance-based RSUs are subject to a two-year vesting requirement, following the one-year performance period, for a total ratable vesting period of three years from grant. The rTSR performance-based RSUs will be earned, in whole, in part or not at all, based on the Company’s TSR compared to the rTSR Comparator Companies at the end of the three-year performance period, with immediate vesting at that point. To encourage over achievement of performance targets, significant upside potential exists related to the number of performance-based RSUs ultimately earned. The number of performance-based RSUs ultimately earned varies based on the
achievement levels of financial performance, with greater numbers of shares awarded for higher levels of financial performance. If the Company’s financial performance does not meet or exceed the pre-established threshold for the applicable period, no performance-based RSUs are earned.
To encourage retention, service-based RSU awards vest over a three-year vesting period. The Compensation Committee believes that the 60/40 weighting between performance-based and service-based RSUs
has demonstrated its value to stockholders over many years.
To provide a consistent long-term focus for our long-term equity-based incentive compensation and to continue to align the interests of our management and stockholders, the Compensation Committee makes annual grants of equity-based awards to our executives early in the year in connection with the annual budgeting process. Also, early in the year, the Compensation Committee approves the annual RSU program grants for management.
For 2023, the Compensation Committee determined the target value of the equity-based awards for our executive officers, including our President and Chief Executive Officer, in part based on a competitive market benchmarking analysis described in more detail in the section below labeled “How We Make Executive Compensation Decisions.” Based on these studies, the Compensation Committee believes
that the equity-based incentive compensation plan, including the use of performance based RSUs, and the target level of awards granted to each executive, is competitive with market practice, and the 60/40 weighting between performance-based and service-based RSUs continues to reward our executives for performance and promotes retention of the Company’s executives.
The approved dollar value of target equity-based incentive compensation amounts for the Named Executive Officers is below. Ms. Mullen’s target for 2023 is further discussed below under “Chief Executive Officer Compensation.”
Named Executive Officer
2023 Target
Joyce
A. Mullen
$
6,400,000
Glynis A. Bryan
$
2,800,000
Dee Burger
$
1,600,000
Adrian Gregory (1)
$
700,000
Samuel C. Cowley
$
1,600,000
(1)
This excludes Mr. Gregory’s welcome grant of service-based RSU awards in the amount of $1.3 million.
2023 Annual Equity-Based Incentive Plan
The 2023 RSU awards for executive officers which are 40% service-based and 60% performance-based, were approved on February 8, 2023. The service-based RSUs vest in three equal annual installments beginning on February 20, 2024. Half of the performance-based grants, if earned, vest in three equal annual installments beginning on February 20, 2024, and the number of RSUs to be issued, if any, will vary depending on the Company’s ROIC
for the fiscal year ending December 31, 2023, on a consolidated non-GAAP Adjusted basis, with non-GAAP Adjusted ROIC and invested capital being defined consistently with the computation methodology used by financial analysts that evaluate the Company. If the Company achieved less than 90% of its 2023 non-GAAP Adjusted ROIC target range, no RSUs would be issued or if the Company achieved greater than 111% of its 2023 non-GAAP Adjusted ROIC target range, 200% of the target number of RSUs would be issued. The non-GAAP Adjusted ROIC target range was set in conjunction with the Company’s overall
annual budget and was considered to be challenging, but achievable, given the tactical and strategic plans that had been developed for 2023. Because the Company closed the SADA and Amdaris acquisitions in 2023, the Company achieved the predetermined strategic objectives specified by the Compensation Committee that overrode actual non-GAAP Adjusted ROIC performance. As a result, the RSUs were awarded at target.The other half of the performance-based grants, if earned, are based on achievement of rTSR over a three-year measurement period from January 1, 2023, to December 31, 2025, with earned awards cliff vesting upon certification of the level of attainment
by the Compensation Committee in accordance with the following payout scale:
Company’s TSR Percentile Rank vs. rTSR Comparator Companies
rTSR
Performance
Multiplier (3)
Maximum
≥ 80th percentile
200%
Target
55th percentile
100%
Threshold
30th percentile
50%
Below Threshold
< 30th percentile
—%
(1) Payout
percentages will be determined based on straight line interpolation for performance between threshold and target and between target and maximum. There will be no payout for performance below the threshold.
(2) To determine the Company’s applicable percentile ranking for the performance period, TSRs are calculated for the Company and each rTSR Comparator Company. The entities are arranged by their respective TSRs (highest to lowest) and the Company is ranked by percentile among the rTSR Comparator Companies.
(3) The number of rTSR performance award grants earned and vested are
determined by multiplying the target award by the rTSR Performance Multiplier achieved at the end of the performance period.
2023 Ambition Plan
In 2022, the Company embarked on an ambitious plan (the “Ambition Plan”) to become the industry leading solutions integrator. Our North America ambition can be described as follows:
Services Business Model
Portfolio
Optimization
Sales Transformation
Market-leading Profitability
An efficient and effective services model that utilizes our teammates’ expertise to serve our highest-priority clients
A focused and intentional portfolio of services and solutions that allows us to deliver long-term value to our clients and to Insight
A sales model that drives our top line with our technology and solutions clients while coordinating contributions from multiple teammates in a team selling environment.
An economic structure that empowers our teams to make effective decisions with full context while ensuring Insight benefits from the value we generate for our clients and
partners.
Management’s more specific goals for the Ambition Plan are to (a) accelerate attainment of North America EFO Margin in 2024, (b) focus the executive team on transforming the Company’s business model to become the leading solutions integrator, and (c) increase stockholder value.
In order to incentivize and motivate key leaders to align with the Ambition Plan goals, on March 13, 2023, the Compensation Committee approved a one-time equity incentive award grant to eligible executives (the “Ambition Plan Grant”). The Ambition Plan Grant is in addition to grants under the Company’s annual equity-based incentive program. The performance
period for attainment of the Ambition Grant is two years beginning on January 1, 2023, and ending on December 31, 2024. The grant will vest, in whole, in part or not at all, based on the level of attainment of performance goals as determined and certified by the Compensation Committee following the performance period. Upon certification, 50% of the grant will vest on March 15, 2025, two years following the grant date of March 15, 2023, and the remaining 50% will vest on March 15, 2026. If the performance goals are achieved and certified by the Compensation Committee, a multiplier will be applied to the Ambition Plan Grant awarded based on the
Company’s stock price performance, which will be assessed by comparing the Company’s cumulative two-year absolute total shareholder return (“aTSR”) attainment versus the targets set forth below. Failure to meet the TSR goals would result in forfeiture of the Ambition Plan Grant for Named Executive Officers.
The TSR targets and multipliers for the Ambition Plan Grant are as follows*:
Cumulative
2-year TSR
Multiplier
69.0% and above
300.0%
32.0%
100.0%
10.0%
10.0%
Less than 10.0%
—%
* Payouts between performance levels will be determined based on straight line interpolation.
2023 Equity Awards
The following table sets forth the number
of service-based, performance-based and Ambition Plan-based awards granted to our Named Executive Officers under the 2023 annual equity-based incentive plan and the Ambition Plan Grant:
RSUs Awarded
Named Executive Officer
One-Time
Ambition Grants
Service-
Based
RSUs
Awarded
(40%)(1)
Target
Total
Number of
Performance-
Based RSUs
(60%)(2)
rTSR Award @Target (30%)
Non-GAAP Adjusted ROIC Award @Target (30%)
2023
Actual
Non-GAAP
Adjusted
ROIC
2023
Actual
ROIC
Award
Level(3)
2023
ROIC-
Based
RSUs
Earned
(#)
Joyce A. Mullen
17,623
12,259
18,388
9,194
9,194
17.27
%
100.0
%
9,194
Glynis
A.
Bryan
7,710
5,364
8,044
4,022
4,022
17.27
%
100.0
%
4,022
Dee
Burger
4,406
3,065
4,598
2,299
2,299
17.27
%
100.0
%
2,299
Adrian
Gregory
735
1,839
2,758
1,379
1,379
17.27
%
100.0
%
1,379
Samuel C. Cowley
4,406
3,065
4,598
2,299
2,299
17.27
%
100.0
%
2,299
(1)This
excludes Mr. Gregory’s welcome grant of service-based RSU awards in the amount of $1.3 million.
(2)Target was based on the Company achieving (i) its non-GAAP Adjusted ROIC target range for 2023 of 17.15% - 17.40%, and (ii) its target rTSR percentile rank of 55th versus its rTSR Comparator Companies over a three-year measurement period with the awards earned and vested after three years.
(3)During 2023, by completing the Amdaris and SADA acquisitions, the Company achieved the predetermined strategic objectives specified by the Compensation
Committee that overrode actual non-GAAP Adjusted ROIC performance. As a result, the RSUs were awarded at target.
On December 8, 2022, the Compensation Committee approved the grant of service-based RSU awards in the amount of $1,300,000 to Mr. Gregory in connection with the start of his employment with the Company on January 2, 2023. The grant vests ratably over two years beginning on the grant date of February 15, 2023.
The design of the 2024 executive compensation program is similar to the 2023 Executive Compensation Program; however, it also includes an Ambition Plan for eligible executives in EMEA.
On February 12, 2024, the Compensation Committee approved a one-time equity incentive grant to eligible EMEA executives in connection with management’s goals to accelerate attainment of the initial Ambition Plan goals, for EMEA (the “EMEA Ambition Plan”). The general design, description, goals and purpose of the EMEA Ambition Plan are similar to the Ambition Plan in North America, except the EMEA Ambition Plan will not have a multiplier for overall target
TSR attainment.
The performance period for grants under the EMEA Ambition Plan will be two years, starting March 15, 2024. For eligible executives, 50% of the grant will be eligible to vest on March 15, 2026. The remaining 50% will be eligible to vest on March 15, 2027.
2024 Base Salary
The base salaries for 2024 for the Named Executive Officers increased consistent with the recommendations of the Compensation Consultant after analyzing peer and industry data. Accordingly, base salaries increased for Ms. Mullen (8%), Ms. Bryan (3%), Mr. Burger (3%), Mr. Gregory (3%) and Mr. Cowley (4%).
The table below sets
forth the 2024 and 2023 annual base salary level for each of our Named Executive Officers:
Named Executive Officer
2024 Base Salary
2023 Base Salary
Joyce A. Mullen
$
1,000,000
$
925,000
Glynis A.
Bryan
$
696,000
$
676,000
Dee Burger
$
670,000
$
650,000
Adrian Gregory (1)
$
576,000
$
559,000
Samuel
C. Cowley
$
550,000
$
530,000
(1) While Mr. Gregory’s 2024 and 2023 base salaries of £463,500 and £450,000, respectively, are shown in U.S. dollars (rounded to the nearest thousand) for presentation in this proxy statement, Mr. Gregory is paid in British pounds. Consistent with the presentation in the Summary Compensation Table in this proxy statement, Mr. Gregory’s 2023 salary was computed by multiplying the average exchange rate for the quarters ended March 31, June 30. September 30, and December 31, 2023, respectively, by the compensation earned during the quarter. This results in an assumed exchange
rate of $1.2432 per British pound.
For 2024, the Compensation Committee provided an incentive plan for certain management level teammates, including our Named Executive Officers. Consistent with 2023, the 2024 target cash incentive compensation amounts are calculated as a percentage of base salary.
The following are the target percentages of base salary for our Named Executive Officers under the 2024 Cash Incentive Plan:
Named
Executive Officer
Percentage of
Base Salary
at Target
Joyce A. Mullen
150
%
Glynis A. Bryan
100
%
Dee Burger
100
%
Adrian Gregory
100
%
Samuel
C. Cowley
90
%
Under the 2024 cash incentive plan, defined financial objectives were established for our Named Executive Officers, and the percentages of total cash incentive compensation to be tied to each of the specified financial objectives were quantified as follows:
Named Executive Officer
EFO
Core Services GP
Growth
Cloud GP Growth
Joyce A. Mullen
50% (IEI)
25% (IEI)
25% (IEI)
Glynis A. Bryan
50%
(IEI)
25%
(IEI)
25%
(IEI)
Dee Burger
50% (INA)
25% (INA)
25% (INA)
Adrian
Gregory
50%
(EMEA)
25%
(EMEA)
25%
(EMEA)
Samuel C. Cowley
50%
(IEI)
25%
(IEI)
25%
(IEI)
The following considerations were reflected in our 2024
cash incentive plan:
•The 2024 cash incentive plan again includes performance measures for IEI EFO, INA EFO and EMEA EFO calculated consistent with 2023 (see “2023 Cash Incentive Plan” under “Annual Cash Incentive Awards” above).
•Reflecting the continued focus of the Company on the strategic objective of driving growth in the higher margin services business, the 2024 cash incentive plan incorporates a performance measure for growth in Core Services GP for all Named Executive Officers, with IEI Core Services GP Growth, INA Core Services GP Growth and EMEA Core Services GP calculated consistent with 2023 (see “2023 Cash Incentive Plan” under “Annual Cash Incentive Awards” above).
•Reflecting
the continued focus of the Company on emerging technology trends and the Company’s strategic objective of accelerating business performance with the cloud, the 2024 cash incentive plan incorporates a performance measure for growth in Cloud GP for all Named Executive Officers, with IEI Cloud GP Growth, INA Cloud GP Growth and EMEA Cloud GP Growth calculated consistent with 2023 (see “2023 Cash Incentive Plan” under “Annual Cash Incentive Awards” above).
For 2024, below are the approved dollar value targets for the annual equity-based incentive compensation for each of the Named Executive Officers based on the evaluation of market data provided by the Compensation Consultant as well as the other factors noted above in the section “Factors Considered in Compensation Deliberations.”
Named Executive Officer
2024 Target
Joyce A. Mullen
$
6,500,000
Glynis
A. Bryan
$
1,900,000
Dee Burger
$
1,150,000
Adrian Gregory
$
700,000
Samuel C. Cowley
$
1,150,000
The 2024 equity-based awards for Named Executive Officers are 40% service-based and 60% performance-based and were approved on February 12,
2024. The service-based RSUs will vest in three equal annual installments beginning on February 20, 2025. The performance-based grants earned based on Non-GAAP Adjusted ROIC will vest in three equal annual installments beginning on February 20, 2025. The performance-based grants earned based on rTSR will cliff vest upon certification of the level of attainment by the Compensation Committee after January 1, 2027. Vesting for the rTSR grants does not occur until after performance has been determined and certified by the Compensation Committee within 60 days following the end of the 3-year performance period. The Compensation Committee also approved a change in the grant date for rTSR performance-based awards to January 1, 2024 from February
20, 2024 in order to align the grant date with the start of the performance period.
The Company’s Adjusted ROIC for the fiscal year ending December 31, 2024, is calculated on a basis consistent with how it was calculated for 2023. If the Company achieves below 90% of its 2024 non-GAAP Adjusted ROIC target range, no RSUs will be issued or if the Company achieves greater than 112% of its 2024 non-GAAP Adjusted ROIC target range, 200% of the target number of RSUs will be issued. The non-GAAP Adjusted ROIC target range was set in conjunction with the
Company’s overall annual budget and was considered to be challenging, but achievable, given the tactical and strategic plans that were developed for 2024.
The Company’s rTSR compares Insight’s 3-year cumulative stockholder return (i.e., change in stock price plus dividends which are assumed to be reinvested) versus each company in the 2024 rTSR peer group. The peer group is a custom group of 28 distribution and technology companies. The performance period is January 1, 2024, through December 31, 2026. For purposes of the rTSR calculation, the beginning and ending stock prices are each calculated based on the 20 trading days prior to the beginning and ending dates of the performance period. The table below sets forth the award payout schedule
for our Named Executive Officers under the rTSR metric.
Percentile Rank
Percentage of Payout at Target(1)
≥ 80th percentile
200%
55th percentile
100%
30th percentile
50%
< 30th percentile
—
(1)
The payout percentage of target rTSR awards earned between award levels interpolates linearly with the Company’s rTSR percentile rank among the defined peer group.
On February 12, 2024, the Compensation Committee also approved certain changes to the 2024 equity-based award grants applicable to Glynis Bryan. The vesting for service-based RSUs and the Non-GAAP Adjusted ROIC performance-based grants was reduced from three to two equal annual
installments
beginning on February 20, 2025, and vesting for her rTSR performance-based grants was reduced to two-year cliff vesting on January 1, 2026. The performance period for the rTSR grants was also reduced to two years (from January 1, 2024 to December 31, 2025), with vesting occurring only after performance has been determined and certified by the Compensation Committee.
In determining the amount of equity-based incentive compensation for 2024, the Compensation Committee considered its goal to provide retention value for senior executives through stock price improvement, which the Compensation Committee believes aligns the interests of management and the stockholders. Based on the Compensation
Committee’s review of the Compensation Consultant’s analysis of the competitiveness of the Company’s compensation levels, including its equity-based award levels, the Compensation Committee’s review of the Company’s 2024 budget, and in connection with implementation of the Company’s strategic plan, the Compensation Committee awarded service-based and performance-based RSUs, as described above to each of our Named Executive Officers.
Chief Executive Officer Compensation
The Compensation Committee determines compensation for the President and Chief Executive Officer using the same criteria it uses for other executives, placing relatively
less emphasis on base salary and, instead, creating greater opportunities for performance-based short-term and long-term incentive compensation (cash and equity, respectively).
The Compensation Committee approved a 9% increase in the 2023 base salary for Ms. Mullen, raising her base salary to $925,000. Ms. Mullen’s target annual cash incentive award opportunity is reflected as a percentage of base salary, which remained consistent at 150%, resulting in Ms. Mullen’s 2023 target annual cash incentive award also increasing approximately 9% to $1,387,500. The dollar value of 2023 target equity-based compensation awards approved by the Compensation Committee for Ms. Mullen increased 113% from 2022 to $6,400,000. As a result, Ms. Mullen’s target total direct compensation opportunity for 2023 was $8,712,500 (compared to $5,125,000 in 2022). Ms. Mullen’s actual annual direct compensation earned for 2023 was $8,858,311, or approximately
102% of the total target.
Other Elements of Our Executive Compensation Program
Severance Arrangements and Change in Control Provisions
Severance and change in control provisions are designed to facilitate the Company’s ability to attract and retain executives as the Company competes for talented employees in a marketplace where such protections are commonly offered. Severance benefits are designed to provide benefits
to ease an executive’s transition following an employment termination by the Company due to changes in the Company’s employment needs. Change in control benefits are intended to encourage executives to remain focused on the Company’s business in the event of rumored or actual fundamental corporate changes. The Company applies double-trigger equity vesting acceleration in the event of a change-in-control. Both severance and change in control benefits are often a critical part of an executive’s initial compensation package, and key executives may not have accepted our offers of employment if we had not provided market-level severance
and change in control benefits. See further detail under the section entitled “Employment Agreements, Severance and Change in Control Provisions.”
Other Benefits
Our Named Executive Officers participate in benefit plans generally available to all of our teammates, including medical, health, life insurance and disability plans. Our Named Executive Officers are also eligible to participate in the Company’s 401(k) plan and receive Company matching contributions, to the extent made by the Company, which are generally available to our
U.S. teammates. These benefits are part of our broad-based total compensation programs offered in the geography in which each of the executives resides.
We provide our executive officers with relatively limited perquisites, and we believe they are reasonable and in the best interests of the Company. We promote wellness initiatives in our employee health insurance plans and make premium payments for long-term disability insurance for all of our Named Executive Officers in the United States. The costs of perquisites and other personal benefits provided to our Named Executive Officers during 2023 are included in the Summary Compensation Table in this proxy statement and identified in the
footnotes thereto.
Clawback Policy
The Compensation Committee adopted an incentive compensation recovery, or “clawback,” policy, effective October 2, 2023, that permits the Company, under certain circumstances, to recover incentive compensation received by an executive officer in the event of an accounting restatement that exceeds the amount of incentive compensation that would have been received had it been determined based on restated amounts. The Company’s clawback policy fully aligns with the requirements of the NASDAQ listing standards and supersedes and replaces the Company’s
prior clawback policy.
Stock Ownership Guidelines
The Compensation Committee believes that, in order to more closely align the interests of our executive officers with the interests of the Company’s other stockholders, all executives should maintain a minimum level of equity interests in the Company’s common stock. The Compensation Committee amended its stock ownership guidelines in February 2023 to require ownership of five times base salary for our President and Chief Executive Officer and three times base salary for our other executive officers to be achieved over a five-year transition period. Failure to meet or show sustained progress toward meeting the stock ownership guidelines may result in a reduction of
future long-term incentive grants and may result in a requirement to retain some or all of the shares of common stock attained through Company grants of equity until the stock ownership guidelines are attained. As of December 31, 2023, all Named Executive Officers (other than Mr. Gregory, who joined the Company effective January 2, 2023) had attained their previously required ownership level.
Hedging, Short Sales and Pledging Policies
Our executive officers are prohibited from hedging and short sales transactions with respect to our securities. In addition, our executive officers are prohibited from pledging our securities except in limited circumstances with pre-approval. As of December
31, 2023, none of our executive officers had pledged our securities. For a further description of these policies, see “Corporate Governance — Hedging, Short Sales and Pledging Policies.”
Tax Considerations
For our 2023 tax year, Section 162(m) (“162(m)”) of the Internal Revenue Code (“IRC”) generally prohibits a public company from taking an income tax deduction for compensation over $1 million paid to the principal executive officer, the principal financial officer and any one of the three highest paid executive officers as of the close of the applicable taxable year. Although the tax benefits associated with performance-based compensation programs previously allowed under 162(m) generally have been eliminated, the Compensation Committee believes that a pay-for-performance model incentivizes our executive officers to achieve objectives that are aligned to
the creation of stockholder value, irrespective of tax deductibility.
The Compensation Committee believes that our executive compensation program should reward actions and behaviors that drive profitable growth and stockholder value creation. The Compensation Committee seeks to foster these objectives through a compensation system that focuses heavily on variable,
at-risk performance-based incentives that create a balanced focus on our short-term and long-term strategic and financial goals. The Compensation Committee’s objective is to implement an executive compensation program that drives above-market results and that is built upon our long-standing executive compensation philosophies and objectives, as described in “Compensation Philosophy” and outlined below, which we believe are key contributors to our success:
Profitable Growth and Stockholder Value Creation
✓
✓
✓
Attract
and Retain Talent.
Executive compensation should be market-competitive in order to attract, retain and motivate talent with a performance- and service-driven mindset.
Pay for Performance.
A significant percentage of an executive’s compensation should be at-risk and directly aligned with Company performance, with a balance between short-term and long-term incentives.
Align with Stockholder Interests.
Executives’ interests should be aligned with stockholder interests through Insight equity ownership.
Role
of the Board, Compensation Committee and Our Named Executive Officers
The Compensation Committee is responsible for determining the annual cash compensation of our President and Chief Executive Officer and each of our other Named Executive Officers. In the case of the 2023 long-term equity-based incentives, the Compensation Committee was responsible for recommending to the Board for approval the targeted grant levels for each of our Named Executive Officers. Based on the recommendations of the Compensation Committee, the Board approved the 2023 long-term equity-based incentive awards. In setting or recommending, as applicable, the compensation of our President and Chief Executive Officer, the Compensation Committee considers its review of the President and Chief Executive Officer’s performance. In setting or recommending, as applicable, the compensation of our other Named Executive Officers, the Compensation
Committee considers the President and Chief Executive Officer’s review of each executive officer’s performance and her recommendations with respect to their compensation. The Compensation Committee’s responsibilities regarding executive compensation are further described in the “Corporate Governance” section of this proxy statement.
Guidance from the Compensation Committee’s Independent Compensation Consultant
The Compensation Consultant provides executive compensation consulting services to the Compensation Committee. The Compensation Committee engaged the Compensation Consultant to review the
Company’s executive compensation program for 2023 and 2024.
The Compensation Consultant provided services in connection with the development of the 2023 executive compensation plan, including a review of multiple comparison groups’ compensation data, awards under our long-term equity-based incentive program, the setting of performance goals in our variable incentive plans, and trends in executive compensation, as well as analysis of
the competitiveness of the President and Chief
Executive Officer’s compensation. The Compensation Consultant also provided an assessment of the competitiveness of the Board’s compensation program against market (see “Director Compensation” elsewhere in this proxy statement for additional information). The Compensation Consultant is retained by and reports to the Compensation Committee and, at the request of the Compensation Committee, participates in committee meetings. The Compensation Committee reviewed the independence of the Compensation Consultant under NASDAQ and SEC rules and concluded that the work of the Compensation Consultant has not raised any conflict of interest.
Comparison Peer Groups
To
obtain a broad view of competitive practices among industry peers and competitors for executive talent, the Compensation Committee annually reviews market data from multiple peer groups of companies as well as general industry survey data to obtain a broad view of competitive practices among industry peers and competitors for executive talent. As described above, the Compensation Committee has asked the Compensation Consultant to advise the Compensation Committee on all matters related to executive compensation. During 2023, the Compensation Consultant provided a competitive analysis of the compensation of the Company’s most senior executives, including the Company’s Named Executive Officers.
The Compensation Consultant
advised the Compensation Committee on a wide range of issues, including, without limitation, competitive market data at the time of hire and at the time of promotions for specific positions. The Compensation Consultant’s 2023 study also measured the competitiveness of the Company’s compensation relative to its business transformation to a technology solutions company. For its analysis, the Compensation Consultant used a single peer group of 21 technology companies to better align with the Company’s evolving business model (the “comparison group”), as summarized below. The non-technology broad industry peer group used in prior years as a comparison peer group was removed. The comparison group was approved by the Compensation Committee based upon management’s and the Compensation Committee’s review
of competitors and relevant industry comparisons, and on the advice of the Compensation Consultant.
The primary characteristics of the comparison group were:
Peer Group Characteristics
✓
A smaller group of companies that we consider to be our primary competitors, particularly with respect to competition for talent, customers or suppliers (the “Technology Solutions Peer Group”). The Technology Solutions Peer Group, which comparison group was used to assess compensation levels for the President and Chief Executive Officer and Chief Financial Officer, includes publicly-traded companies providing
technology solutions, including hardware, software and services.
✓
In addition, a broader database to provide a reference point where the Technology Solutions Peer Group might not provide adequate comparisons (the “Broad Market Database”). The Broad Market Database was used to assess compensation levels for all of the Company’s most senior executives, including the Company’s Named Executive Officers, and includes publicly-traded companies from a group of cross-industry companies (excluding companies from financial,
insurance and energy industries).
Peer Companies - 2024 Executive Pay Levels
The Compensation Committee used the Compensation Consultant’s December 2023 Executive Compensation Benchmarking Review, which included a review of multiple comparison groups and other relevant sources of information, such as existing pay levels and other publicly available information (e.g., Equilar, AON, and data sourced from proxy statements) (the “2023 study”) about trends in executive compensation, in setting compensation for 2024. Additionally, the
Compensation Consultant advised the Compensation Committee regarding executive compensation programs and provided advice on trends in compensation.
The 2023 study measured the competitiveness of the Company’s compensation relative to the Technology Solutions Peer Group. The companies included in the Technology Solutions Peer Group in the 2023 study were as follows:
Technology Solutions Peer Group
Arrow Electronics,
Inc.
Gen Digital Inc.
Avnet, Inc.
Hewlett Packard Enterprise
Belden Inc.
Jabil Inc.
Benchmark Electronics, Inc.
Kyndryl Holdings, Inc.
CDW Corporation
NCR Voyix Corporation
Cognizant Technology Solutions
PC Connection, Inc.
CommScope Holding Company, Inc.
Rackspace
Technology, Inc.
DXC Technology Company
Sanmina Corporation
EPAM Systems, Inc.
ScanSource, Inc.
ePlus Inc
WESCO International, Inc.
Flex Ltd.
The companies included in the Technology Solutions Peer Group in the 2023 study are all publicly-traded companies with revenues of less than $35 billion. The median revenue of this comparison group in 2023 was $9.0 billion, and the median market cap was $4.1 billion.
Peer
Companies - 2023 Executive Pay Levels
In setting compensation levels for Named Executive Officers for 2023, the Company reviewed the analysis from the Compensation Consultant’s December 2022 Executive Compensation Benchmarking Review, which also included other relevant sources of information, such as existing pay levels and other publicly available information (e.g., Equilar, AON, and data sourced from proxy statements and Form 8-K filings) (the “2022 study”). The Technology Distribution Peer Group and Broad Industry Peer Group used for the 2022 study were as follows:
Technology Distribution Peer Group
Arrow
Electronics, Inc.
NCR Voyix Corporation
Avnet, Inc.
PC Connection, Inc.
Belden Inc.
Sanmina Corporation
CDW Corporation
ScanSource, Inc.
CommScope Holding Company, Inc.
Rackspace Technology, Inc.
ePlus Inc.
WESCO International, Inc.
Jabil Inc.
The
companies included in the Technology Distribution Peer Group in the 2022 study were all publicly-traded companies with revenues of less than $38 billion. The median revenue of this comparison group in 2022 was $8.5 billion, and the median market cap was $3.6 billion.
The companies included in the Broad Industry Peer Group comparison group in the compensation consultant’s 2022 study were all of the companies in the Technology Distribution Peer Group plus the following:
Broad
Industry Peer Group
Applied Industrial Technologies, Inc.
Patterson Companies, Inc.
Diebold Nixdorf, Incorporated
Rush Enterprises, Inc.
Genuine Parts Company
SpartanNash Company
GMS Inc.
United Natural Foods, Inc.
Henry Schein, Inc.
Univar Solutions Inc.
MRC Global Inc.
Watsco,
Inc.
MSC Industrial Direct Co., Inc.
W.W. Grainger, Inc.
The companies included in the Broad Industry Peer Group in the 2022 study were all publicly-traded companies with revenues from $3.3 billion to $29.0 billion. The median revenue of this comparison group in 2022 was $7.7 billion, and the median market cap was $3.5 billion.
Our Compensation Committee has reviewed and discussed the section entitled “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K with our management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the section entitled “Compensation Discussion and Analysis” be included in the proxy statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2023.
Respectfully submitted by the Compensation Committee of the Board of Directors.
Richard
E. Allen, Chair
Bruce W. Armstrong
Alexander L. Baum
Linda M. Breard
Catherine Courage
Anthony Ibargüen
Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, that incorporate future filings, including this proxy statement, in whole or in part, the foregoing Compensation Committee Report does not constitute soliciting material and shall not be deemed
filed or incorporated by reference into any such filings.
The following table provides information regarding the compensation earned by our Named Executive Officers for the fiscal years ended December 31, 2023, 2022 and 2021.
Name And Principal Position
Year
Salary
($)
Bonus(6)
($)
Stock
Awards(1)
($)
Non-Equity
Incentive Plan
Compensation(2)
($)
All
Other
Compensation(3)
($)
Total ($)
Joyce A. Mullen,
President and Chief Executive Officer(4)
2023
925,000
8,218,464
1,533,188
17,070
10,693,722
2022
850,000
—
3,258,530
2,093,550
15,570
6,217,650
2021
600,000
—
2,000,121
676,800
7,525
3,284,446
Glynis
A. Bryan, Chief Financial Officer
2023
676,000
3,595,529
746,980
16,214
5,034,723
2022
650,000
—
1,955,245
1,067,300
15,964
3,688,509
2021
612,000
—
1,500,102
744,804
6,814
2,863,720
Dee
Burger,
President, Insight
North America
2023
650,000
250,000
2,054,867
703,300
15,551
3,673,718
2022
417,500
250,000
3,086,558
746,490
9,328
4,509,876
Adrian
Gregory,
President,
EMEA(5)
2023
559,000
1,058,630
2,151,222
433,000
14,257
4,216,109
Samuel
C. Cowley, Senior Vice President, General Counsel and Secretary
2023
530,000
2,054,867
439,238
16,882
3,040,987
2022
500,000
—
977,673
574,700
16,132
2,068,505
2021
433,400
—
600,033
342,920
12,507
1,388,860
(1)These
amounts reflect the grant date fair value of the equity-incentive awards granted to our Named Executive Officers computed in accordance with FASB ASC Topic 718. The incentive awards are granted in the form of services-based RSUs and performance-based RSUs.
For 2023 awards granted in the form of service-based RSUs and performance-based RSUs subject to ROIC, the grant date fair value was calculated based on the closing price of the Company’s common stock on February 17, 2023 of $130.52 per share multiplied by the number of shares subject to the RSU awards.For 2023 awards granted in the form of performance-based RSUs subject to rTSR, the grant date fair value was computed on the probable outcome of the performance conditions based on a Monte Carlo
simulation and the grant date estimate of compensation cost to be recognized over the performance period which was 157.9% of target or $206.08 per share for the February awards granted. With respect to the performance-based RSUs subject to rTSR, they are subject to market conditions as defined under FASB ASC Topic 718 and are not subject to performance conditions as defined under FASB ASC Topic 818 and therefore, they have no maximum grant date fair values that differ from the grant date fair values. For the 2023 performance-based awards subject to ROIC, the value in the table represents target level of achievement, which is considered the probable outcome. The maximum award attainable was 200% of the target number of shares subject to the RSU awards. For Ms. Mullen, Ms. Bryan, Mr. Burger, Mr. Gregory and Mr. Cowley, the maximum value of RSUs on the grant date (performance-based and service-based) assuming the maximum achievement at the highest level of performance
was $18,360,602, $8,032,563, $4,590,670, $2,909,320, and $4,590,670, respectively. As discussed in the CD&A section of this proxy
statement, the actual award level for performance-based RSUs subject to ROIC for all Named Executive Officers for 2023 was 100% of the target number.
For 2022 awards granted in the form of service-based RSUs and performance-based RSUs subject to ROIC, the grant date fair value was calculated based on the closing price of the
Company’s common stock on February 15, 2022 of $97.25, on February 18, 2022, of $99.84, and on June 15, 2022, of $93.75, respectively, per share multiplied by the number of shares subject to the RSU awards. For 2022 awards granted in the form of performance-based RSUs subject to rTSR, the grant date fair value was computed on the probable outcome of the performance conditions based on a Monte Carlo simulation and the grant date estimate of compensation cost to be recognized over the performance period which was 134.4% of target or $134.23 per share for the February awards granted and 128.8% of target or $120.77 per share for the June awards granted. With respect to the performance-based RSUs subject to rTSR, they are subject to market conditions as defined under FASB ASC Topic 718 and are not subject to performance
conditions as defined under FASB ASC Topic 818 and therefore, they have no maximum grant date fair values that differ from the grant date fair values. For the 2022 performance-based awards subject to ROIC, the value in the table represents target level of achievement, which is considered the probable outcome. The maximum award attainable was 200% of the target number of shares subject to the RSU awards. For Ms. Mullen, Ms. Bryan, Mr. Burger, Mr. Morgado, and Mr. Cowley, the maximum value of RSUs on the grant date (performance-based and service-based) assuming the maximum achievement at the highest level of performance was $4,008,528, $2,405,324, $3,386,558, $1,701,968, and $1,202,712, respectively. As discussed in the CD&A section of this proxy statement, the actual award level for performance-based RSUs subject to ROIC for all Named Executive Officers for 2022 was 112.5% of the target number.
For 2021 awards, the grant
date fair value was calculated based on the closing price of the Company’s common stock on February 19, 2021, of $83.57 and on November 10, 2021, of $104.76, respectively, per share multiplied by the number of shares subject to the RSU awards. For the 2021 awards that were subject to performance conditions, the maximum award attainable was 200% of the target number of shares subject to the RSU awards. For Ms. Joyce, Ms. Bryan, and Mr. Cowley, the maximum value of RSUs on the grant date (performance-based and service-based) assuming the maximum achievement at the highest level of performance was $2,600,075, $2,100,134, and $960,052, respectively. The actual award level for performance-based RSUs for all Named Executive Officers for 2021 was 87.5% of the target number.
For
all three years for which grant date fair value is presented in the table above, no estimate of forfeitures is included in these amounts, nor were any actual forfeitures included in these amounts.
(2)Non-Equity Incentive Plan Compensation represents bonuses earned by Named Executive Officers under the 2023, 2022 and 2021 annual cash incentive plans, respectively. The cash incentive plan compensation for 2023 was paid to the Named Executive Officers prior to March 27, 2024.
(3)All Other Compensation for 2023 represents payments to:
•Ms. Mullen for expenses incurred related to matching contributions to her 401(k), a discretionary contribution to her health savings account and premium payments made on her behalf for long-term
disability insurance. We consider premium payments for long-term disability insurance, which did not exceed $10,000, to be a perquisite.
•Ms. Bryan for expenses incurred related to matching contributions to her 401(k) and premium payments made on her behalf for long-term disability insurance. We consider premium payments for long-term disability insurance, which did not exceed $10,000, to be a perquisite.
•Mr. Burger for expenses incurred related to matching contributions to his 401(k) and premium payments made on his behalf for long-term disability insurance. We consider premium payments for long-term disability insurance, which did not exceed $10,000, to be a perquisite.
•Mr. Gregory for expenses incurred related to matching contributions to his 401(k), a discretionary
contribution to his health savings account and premium payments made on his behalf for long-term disability insurance. We consider premium payments for long-term disability insurance, which did not exceed $10,000, and expenses relating to the use by Mr. Gregory of his car to be perquisites.
•Mr. Cowley for expenses incurred related to matching contributions to his 401(k), a discretionary contribution to his health savings account and premium payments made on his behalf for long-term disability insurance. We consider premium payments for long-term disability insurance, which did not exceed $10,000, to be a perquisite.
(4)Ms. Mullen was elected as President and Chief Executive Officer of the Company effective January
1, 2022.
(5)Mr. Gregory joined the Company as President, EMEA effective January 2, 2023. Mr. Gregory is a resident of the United Kingdom and was paid in British pounds. The salary and all other compensation amounts included in the table above were determined by multiplying the average exchange rates applicable for the quarters ended March 31, June 30, September 30, and December
31, 2023 respectively, by the compensation earned during the quarter. This results in an assumed exchange rate of $1.2432 per British pound. The non-equity incentive plan compensation amount included in the table above was determined by multiplying the British pounds paid by the exchange rate applicable on the date paid of $1.2679 per British pound.
(6)Reflects one-time signing bonuses as follows: (i) Mr. Burger was entitled to a one-time signing bonus of $500,000, $250,000 of which was payable in 2022 and $250,000 of which was payable in 2023, and (ii) Mr. Gregory was entitled to a one-time signing bonus of £800,000 payable in 2023.
The following table provides information regarding each plan-based award granted to our Named Executive Officers in 2023 under the 2023 cash incentive plan and under the Company’s 2020 Omnibus Plan.
Estimated
Payouts
Under Non-Equity Incentive
Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive Plan
Awards(2)
All Other
Stock
Awards:
Number of
Shares of Stock
(#)
Grant Date
Fair Value of
Stock Awards(3)
($)
Name
Grant
Date
Approval
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Joyce
A.
520,313
1,387,500
2,775,000
—
—
—
—
—
Mullen(4)
2/20/2023
2/8/2023
—
—
—
1,149
9,194
18,388
—
1,200,001
2/20/2023
2/8/2023
—
—
—
4,597
9,194
18,388
—
1,894,700
3/15/2023
3/13/2023
—
—
—
1,762
17,623
52,869
—
3,523,719
2/20/2023
2/8/2023
—
—
—
—
—
—
12,259
1,600,045
Glynis
A.
253,500
676,000
1,352,000
—
—
—
—
—
Bryan
2/20/2023
2/8/2023
—
—
—
504
4,022
8,044
—
524,951
2/20/2023
2/8/2023
—
—
—
2,011
4,022
8,044
—
828,854
3/15/2023
3/13/2023
—
—
—
771
7,710
23,130
—
1,541,615
2/20/2023
2/8/2023
—
—
—
—
—
—
5,364
700,109
Dee
243,750
650,000
1,300,000
—
—
—
—
—
Burger
2/20/2023
2/8/2023
—
—
—
288
2,299
4,598
—
300,065
2/20/2023
2/8/2023
—
—
—
1,150
2,299
4,598
—
473,778
3/15/2023
3/13/2023
—
—
—
441
4,406
13,218
—
880,980
2/20/2023
2/8/2023
—
—
—
—
—
—
3,065
400,044
Adrian
214,125
571,000
1,142,000
—
—
—
—
—
Gregory(5)
2/20/2023
2/8/2023
—
—
—
173
1,379
2,758
—
179,987
2/20/2023
2/8/2023
—
—
—
690
1,379
2,758
—
284,184
3/15/2023
3/13/2023
—
—
—
74
735
2,205
—
146,963
2/15/2023
2/8/2023
—
—
—
10,248
1,300,061
2/20/2023
2/8/2023
1,839
240,026
Samuel
C.
149,063
397,500
795,000
—
—
—
—
—
Cowley
2/20/2023
2/8/2023
—
—
—
288
2,299
4,598
—
300,065
2/20/2023
2/8/2023
—
—
—
1,150
2,299
4,598
—
473,778
3/15/2023
3/13/2023
—
—
—
441
4,406
13,218
—
880,980
2/20/2023
2/8/2023
—
—
—
—
—
—
3,065
400,044
(1)Represents
awards under the 2023 cash incentive plan discussed under the heading “2023 Cash Incentive Plan” of the CD&A section in this proxy statement. Threshold represents the amount that would have been payable had the minimum level of achievement for each defined performance measure been achieved. It is possible for the award to be zero if performance falls below the threshold levels. The maximum estimated future payouts under non-equity incentive plan awards was computed as 200% of the target cash incentive compensation component that was based exclusively on the specific financial objectives for each Named Executive Officer. Actual amounts are reflected in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column, and there are no future payouts related to these awards.
(2)Pursuant to the 2023 equity-based incentive compensation program, grants of service-based and performance-based
RSUs to our Named Executive Officers were made on February 20, 2023, and March 15, 2023, as applicable. For the February 20, 2023 awards that were subject to performance conditions, the maximum award attainable was 200% of the target number of RSU awards. Threshold represents the amount of RSUs that would have been granted had the minimum level of achievement for the defined performance measure been achieved. It is possible for the award to be zero if performance falls below the threshold level. The actual award level for 2023 performance-based RSUs subject to ROIC was 100% of the target number of RSUs. The actual award level for the 2023 performance-based RSUs subject to rTSR will be determined as of December 31, 2025.
For the March 15, 2023 awards that were subject to performance conditions, the maximum award attainable was 300% of the target number of RSU awards. Threshold represents the amount of RSUs that would have been granted had the minimum level of achievement for the defined performance measure been achieved. It is possible for the award to be zero if performance falls below the threshold level.
(3)For the 2023 performance-based RSUs subject to ROIC, the grant date fair value of the annual plan-based awards was calculated based on the closing price of the Company’s common stock on February
17, 2023 of $130.52 per share multiplied by the target number of performance-based RSUs, as the target was considered to be the probable outcome as of the grant date. The actual award level for 2023 was 100% of the target number of performance-based RSUs. For the 2023 performance-based RSUs subject to rTSR, the grant date fair value was computed in accordance with FASB ASC Topic 718. For the 2023 performance-based RSUs subject to Adjusted EFO, Adjusted EFO Margin and aTSR, the grant date fair value was computed in accordance with FASB ASC Topic 718. For the 2023 awards that did not have performance conditions and all other stock awards granted in 2023, the grant date fair value for the awards was calculated based on the closing price of the Company’s common stock on February 15, 2023 of $126.86 and February
17, 2023 of $130.52, respectively, per share multiplied by the number of service-based RSUs granted, as applicable. The grant date fair values of stock awards are also reflected in the Summary Compensation Table.
(4)Ms. Mullen was elected as President and Chief Executive Officer of the Company effective January 1, 2022.
2023 Outstanding
Equity Awards at Fiscal Year-End Table
The following table summarizes outstanding equity awards held by each Named Executive Officer on December 31, 2023.
Stock Awards
Name
Total Number of Shares or Units of Stock that are Earned but
have Not Vested
(#)(1)
Total
Market Value of Shares that are Earned but have
Not Vested
($)(2)
Total Number of Unearned Performance-based Shares
that Have Not Vested
(#)(1)
Total Market Value of Unearned Performance-based Shares that Have Not Vested
($)(2)
Joyce A. Mullen
45,528
8,067,106
34,329
6,082,756
Glynis
A. Bryan
26,846
4,756,843
16,240
2,877,566
Dee Burger
21,274
3,769,540
9,905
1,755,067
Adrian Gregory
13,466
2,386,041
2,114
374,580
Samuel
C. Cowley
13,519
2,395,432
8,959
1,587,445
(1)Under various service-based equity incentive compensation programs, our Named Executive Officers have received varying levels of grants of (i) service-based RSUs that vest ratably over two or three years, (ii) performance-based RSUs based on ROIC with a one-year performance period, with earned shares that vest ratably over three years, (iii) performance-based RSUs based on rTSR with a three-year performance period with cliff vesting for earned shares, and (iv) Ambition Plan-based RSUs based on Adjusted EFO, Adjusted EFO Margin and aTSR, that vest ratably over two years following completion of the performance
period and certification of performance by the Compensation Committee.
Pursuant to the 2023 equity-based incentive compensation program, grants of service-based and performance-based RSUs to our Named Executive Officers were made in February 2023. For the 2023 performance-based awards subject to ROIC, the number of actual performance-based RSUs ultimately awarded was at 100% of the target. As of December 31, 2023, the RSUs effectively became service-based RSUs, vesting ratably over the three years following the grant date. For 2023 performance-based awards subject to rTSR, the performance measure set for these shares was based on the Company’s rTSR performance over the period January 1, 2023 through December
31, 2025, compared to the rTSR Comparator Companies.
Pursuant to the 2022 equity-based incentive compensation program, grants of service-based and performance-based RSUs to our Named Executive Officers were made in February and June 2022. For the 2022 performance-based awards subject to ROIC, the number of actual performance-based RSUs ultimately awarded was 112.5% of the target, as actual Adjusted ROIC exceeded the target for the fiscal year ended December 31, 2022. As of December
31, 2022, the RSUs effectively became service-based RSUs, vesting ratably over the three years following the grant date. For 2022 performance-based awards subject to rTSR, the performance measure set for these shares was based on the Company’s rTSR performance over the period January 1, 2022 through December 31, 2024, compared to the rTSR Comparator Companies.
Pursuant to the 2021 equity-based incentive compensation program, grants of service-based and performance-based RSUs to our Named Executive Officers were made in February and November 2021. For the 2021 awards that were subject to performance conditions, the number of actual performance-based RSUs ultimately awarded was 87.5% of the target, as actual Adjusted ROIC was below target
for the fiscal year ended December 31, 2021. As of December 31, 2021, the RSUs effectively became service-based RSUs, vesting ratably over the three years following the grant date.
The following table shows the dates on which the outstanding stock awards vest, subject to continued employment through the vest date and subject to final performance attainment.
Name
02/24
06/24
11/24
01/25
02/25
03/25
06/25
11/25
01/26
02/26
03/26
Joyce
A. Mullen
19,103
—
2,386
7,512
14,503
8,812
—
2,386
9,194
7,150
8,811
Glynis A. Bryan
13,313
—
1,193
4,508
8,019
3,855
—
1,193
4,022
3,128
3,855
Dee
Burger
1,789
13,289
—
3,200
1,788
2,203
2,621
—
2,299
1,787
2,203
Adrian Gregory
6,197
—
—
—
6,197
368
—
—
1,379
1,072
367
Samuel
C. Cowley
7,380
—
—
2,254
4,352
2,203
—
—
2,299
1,787
2,203
(2)Represents the value based upon the number of
shares awarded multiplied by the closing price on December 29, 2023 stock (December 31, 2023 was not a trading day) of $177.19 per share.
2023 Stock Vested Table
The following table sets forth information with respect to shares of Company common stock acquired through vesting of RSUs and the number of shares acquired and value realized on vesting by the Named Executive Officers during 2023. There were no outstanding stock options in 2023.
Stock
Awards
Name
Number of Shares Acquired on Vesting (#)(1)
Value Realized on
Vesting ($)(1)
Joyce A. Mullen
28,944
4,005,294
Glynis A. Bryan
21,351
2,802,707
Dee Burger
13,290
1,918,412
Adrian
Gregory
—
—
Samuel Cowley
9,006
1,175,463
(1)During 2023, the stock awards (all RSUs) that vested for the Named Executive Officers in the United States were net-share settled such that the Company withheld shares with value equivalent to the Named Executive Officer’s minimum statutory tax obligation for the applicable income and other employment taxes and remitted cash to the appropriate taxing authorities. The amounts in the table represent
the gross number of shares and value realized on vesting for each of the Named Executive Officers. The net number of shares acquired by Ms. Mullen, Ms. Bryan, Mr. Burger, and Mr. Cowley on vesting was 17,981, 13,238, 7,198, and 6,190, respectively. Mr. Gregory’s shares did not vest in 2023.
Pursuant
to SEC rules, we are required to disclose the ratio of our median employee’s annual total compensation to the annual total compensation of our President and Chief Executive Officer for 2023. We calculated the total compensation for both using the same methodology. The 2023 annual total compensation for the President and Chief Executive Officer and our median employee were $10,693,722 and $63,140, respectively. The ratio of annual total compensation for our President and Chief Executive Officer to that of our median employee was 169.4 to 1.
In determining the median employee for 2023, we referred to our worldwide payroll rosters of employees on December 31, 2023, which included information on base wages, bonuses, and commissions. The payroll rosters totaled to 14,437 employees, consisting of 6,865 U.S. employees and 7,572 non-U.S. employees. In accordance with the “de
minimis” exemption adjustment permitted under SEC rules, employees from the following countries, comprising less than 5% ofthe total population of employees, were excluded from the population, based on management’s judgment:Austria (19 employees), Belgium (39 employees), China (48 employees), Hong Kong (29 employees), Ireland (5 employees), Italy (94 employees), New Zealand (25 employees), Singapore (22 employees), Spain (151 employees), Sweden (29 employees), and Switzerland (3 employees). Furthermore, as permitted under SEC rules, an additional 1,728 employees who became employees of the Company as a result of the acquisitions of Amdaris and SADA in 2023 were excluded. After giving effect to such exemptions, the total number of employees consisted of 6,407 U.S. employees
and 5,838 non-U.S. employees. Foreign compensation was converted to U.S. dollars at the average exchange rate over the 12 month period. Compensation amounts for employees newly hired during 2023 were annualized based on actual pay in 2023.
As
required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our President and CEO and to our non-CEO Named Executive Officers and certain financial performance of the Company. Compensation actually paid, as determined under SEC requirements, does not reflect the actual amount of compensation earned by or paid to our Named Executive Officers during a covered year. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the
Company’s performance, refer to the Compensation Discussion and Analysis.
i
Value
of Initial Fixed $100 Investment Based On:
Year
Summary
Compensation
Table for CEO($)(1)
Compensation
Actually Paid
to CEO(1)(3) ($)
Average
Summary
Compensation
Table Total for
Non-CEO Named Executive Officers
($)(2)
Average
Compensation
Actually Paid
to Other Named Executive Officers(2)(3) ($)
Cumulative
TSR ($)
Peer Group Cumulative TSR(4)
($)
Net Earnings ($, in thousands)
Company Selected Measure -
Adjusted
Non-GAAP
ROIC(5)
2023
i10,693,722
i21,050,619
i3,991,384
i7,306,108
i252.08
i154.93
i281,309
i17.27
%
2022
i6,217,650
i5,877,012
i3,233,865
i3,191,053
i142.65
i122.55
i280,608
i15.94
%
2021
i6,638,325
i10,466,880
i2,212,425
i3,158,776
i151.66
i152.67
i219,345
i14.01
%
2020
i7,402,139
i8,896,986
i2,438,357
i2,744,670
i108.25
i121.27
i172,640
i12.59
%
/
ii1./iJoyce
A. Mullen served as our CEO in 2023 and 2022 and iiKenneth T. Lamneck/ was our CEO in 2021 and 2020. /
2.For 2023, our non-CEO Named Executive Officers were Glynis A. Bryan, Dee Burger, Adrian Gregory, and Samuel C. Cowley. For 2022, our non-CEO Named Executive Officers
were Glynis A. Bryan, Dee Burger, James Morgado and Samuel C. Cowley. For 2021, our non-CEO Named Executive Officers were Glynis A. Bryan, Joyce A. Mullen, Emma de Sousa and Samuel C. Cowley. For 2020, our non-CEO Named Executive Officers were Glynis A. Bryan, Joyce A. Mullen, Wolfgang Ebermann and Samuel C. Cowley.
3.iiFor
each of 2023, 2022, 2021 and 2020, the values included in this column for the compensation actually paid to our CEO and the average compensation actually paid to our non-CEO Named Executive Officers have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the CEO or other Named Executive Officers. These amounts reflect the Summary Compensation Table Total with certain adjustments in accordance with Item 402(v) of Regulation S-K as described in the tables below./
CEO
Kenneth
T. Lamneck
Kenneth T. Lamneck
Joyce A. Mullen
Joyce A. Mullen
Year
2020
2021
2022
2023
Summary Compensation Table Total for CEO
$
i7,402,139
$
i6,638,325
$
i6,217,650
$
i10,693,722
Equity
values reported in SCT
(i3,750,011)
(i3,750,037)
(i3,258,530)
(i8,218,464)
Fair
value of equity compensation granted in current year - value at year end
i5,568,342
i4,424,646
i3,259,344
i14,035,476
Awards
made in prior fiscal years that were unvested at the end of the current fiscal year, add/subtract change in fair value from end of prior fiscal year to end of current fiscal year
i525,631
i2,555,090
(i187,001)
i3,436,806
Awards
made in prior fiscal years that vested during current fiscal year, add/subtract change in fair value from end of prior fiscal year to vesting date
Fair
value of equity compensation granted in current year - value at year end
i1,694,772
i1,251,910
i1,957,516
i4,074,844
Awards
made in prior fiscal years that were unvested at the end of the current fiscal year, add/subtract change in fair value from end of prior fiscal year to end of current fiscal year
i125,750
i596,432
(i55,134)
i1,323,977
Awards
made in prior fiscal years that vested during current fiscal year, add/subtract change in fair value from end of prior fiscal year to vesting date
(i176,671)
i210,592
(i52,348)
i380,024
Average
Compensation Actually Paid to Non-CEO NEOs
$
i2,744,670
$
i3,158,776
$
i3,191,053
$
i7,306,108
4.iThe
Peer Group TSR set forth in this table utilizes an industry benchmark index, the Nasdaq US Benchmark Computer Hardware TR Index, which we also utilize in the stock performance graph required by Item 201(e) of SEC Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2023.
5.iPlease see Appendix A for iAdjusted
Non-GAAP ROIC from Adjusted consolidated EFO calculation. In 2021 and 2020, the Adjusted Non-GAAP EFO used in the Adjusted Non-GAAP ROIC calculation did not exclude amortization of intangible assets of $i32.0 million and $i37.5 million,
respectively./
Description
of Relationship Between CEO and Non-CEO Named Executive Officers Compensation Actually Paid and Insight TSR
The following chart sets forth the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our non-CEO Named Executive Officers, and the Company’s cumulative TSR over the four most recently completed fiscal years. The following chart also sets forth a comparison of the Company’s cumulative TSR and cumulative Peer Group TSR.
/i
Description
of Relationship Between CEO and Non-CEO Named Executive Officers Compensation Actually Paid and Net Earnings
The following chart sets forth the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our non-CEO Named Executive Officers and our Net Earnings during the four most recently completed fiscal years.
Description of Relationship Between CEO and Non-CEO Named Executive Officers Compensation Actually Paid and Adjusted Non-GAAP ROIC
The following chart sets forth the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our non-CEO Named Executive Officers, and the Company selected financial measure - Adjusted Non-GAAP ROIC over
the four most recently completed fiscal years.
Tabular List
The following table presents the financial performance measures that the Company considers having been the most important in linking compensation actually paid to our CEO and non-CEO Named Executive Officers during 2023 to Company performance.
i
Performance
Measures
iAdjusted Non-GAAP ROIC from Adjusted Non-GAAP EFO
iAdjusted Non-GAAP EFO
iCloud and Core Services GP growth
/
Employment
Agreements, Severance and Change in Control Provisions
Our employment agreements with our executive officers and our incentive compensation plans reflect our compensation philosophy. The employment agreements for our Named Executive Officers provide for continually renewing terms (one year for Messrs. Burger, Gregory, and Cowley and Ms. Mullen and two years for Ms. Bryan). All change in control benefits are “double trigger” (which means that they are triggered by two events, a change in control of the Company plus a triggering termination under the change of control agreement), including stock awards under the terms of the 2020 Omnibus Plan. Additionally, beginning with grants to all employees in February 2015, upon termination of service by reason of death, any portion of service-based RSUs and, after the completion
of the performance period for all performance-based awards, any portion of performance-based awards remaining unvested on that date, which would have vested through the first anniversary of the date of death become fully exercisable and vested effective immediately prior to the employee’s death.
The Company’s employment agreements with its Named Executive Officers are intended to comply with or fit within an exception to Section 409A of the IRC. The material terms of the employment
agreements with our Named Executive Officers that were in effect during 2023 are as follows:
(ii)A severance payment upon termination of employment “without cause” or termination by Ms. Mullen for “good reason,” as those terms are defined in the agreement, payable upon termination in equal installments over a period of 24 months in accordance with the Company’s regular pay practices, equal to two times her annual base salary, plus two times the annual cash incentive bonus for the immediately preceding fiscal year, plus a prorated cash incentive bonus for the year in which the termination takes
place for any cash incentive compensation plan with annual objectives, and continued eligibility to participate in health or other insurance benefit plans of the Company for a period of up to 18 months following the date of termination.
(iii)A severance payment following a “change in control” of the Company if Ms. Mullen terminates her employment for “good reason,” or the Company terminates her employment “without cause,” as those terms are defined in the agreement, prior to the expiration of 24 months after the change in control occurs, equal to 2.5 times her highest annual base salary in effect during the term of the agreement
plus 2.5 times her annual cash incentive bonus during the immediately preceding fiscal year, plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives, payable upon termination in a single lump sum, vesting of all equity-based awards, and continued eligibility to participate in health or other insurance benefit plans of the Company for a period of up to 18 months following the date of termination. In the event that payments made following a “change in control” would trigger an excise tax under the IRC, the payments are to be reduced to the highest amount that would not trigger that excise tax, except that the limitation would not apply if the difference between the calculated amount (without applying the cap) and the reduced amount (after applying the cap) is greater than 25%.
(iv)In
the event of Ms. Mullen’s termination as a result of “disability,” as such term is defined in the agreement, or death, she or her estate, as the case may be, will be entitled to a lump sum payment equal to 90 days of her base salary payable within 30 days of termination plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives, payable the time other bonuses are payable.
(v)The agreement also provides for non-disclosure by Ms. Mullen of our confidential information and includes covenants by her not to compete with Insight or solicit its employees, suppliers or customers for a period of 12 months following termination of employment.
The table below summarizes the potential payments and benefits to Ms. Mullen upon the occurrence of certain triggering events assuming a hypothetical effective date of termination of December 31, 2023:
Triggering Event
Severance
Cash Payout for Equity-Based
Compensation
Awards
(1)
Benefits
Total
Termination Without Cause or for Good Reason as defined in the employment agreement
$
7,570,288
$
—
$
37,601
$
7,607,889
Change in Control – Involuntary Termination
9,079,563
14,149,862
37,601
23,267,026
Change
in Control – Without Termination (2)
—
—
—
—
Disability
1,764,438
4,276,658
—
6,041,096
Death
1,764,438
11,058,959
—
12,823,397
(1)The
value of equity-based compensation awards is based on the closing price of the Company’s common stock on December 29, 2023 stock (December 31, 2023 was not a trading day) of $177.19 per share.
(2)Upon a change in control without termination, an acceleration of Ms. Mullen's equity-based compensation awards vesting occurs only upon authorization from our Board on the basis that their value will be materially impaired following the change in control.
(ii)A severance payment upon termination of employment “without cause” or termination by Ms. Bryan for “good reason,” as those terms are defined in the agreement, payable upon termination, equal to two times her annual base salary, plus one times the annual cash incentive bonus during one of the two immediately preceding fiscal years that would produce the higher award, plus a prorated portion of any current quarterly or annual cash incentive bonus, plus benefits continuation until the earlier of (a) 24 months or (b) the day on which she is eligible to receive substantially
similar benefits without being required to pay any premiums with respect to such benefits.
(iii)A severance payment following a “change in control” of the Company if Ms. Bryan terminates her employment for “good reason,” or the Company terminates her employment “without cause,” as those terms are defined in the agreement, prior to the expiration of 24 months after the change in control occurs, equal to two times her highest annual base salary in effect during the term of the agreement plus two times the higher annual cash incentive bonus during one of the two immediately preceding fiscal years which would produce the higher award, plus a prorated portion of any current quarterly or annual cash incentive bonus, plus
benefits continuation through the earlier of (a) 42 months following termination or (b) the date on which she is eligible to receive substantially similar benefits without being required to pay any premiums with respect to such benefits. All payments made following a “change in control” are to be grossed-up for Ms. Bryan’s excise taxes if the payment exceeds prescribed limits.
(iv)In the event of Ms. Bryan’s termination as a result of “disability,” as such term is defined in the agreement, or death, she or her estate, as the case may be, will be entitled to a lump sum payment equal to 90 days of her base salary plus a prorated portion of any cash incentive compensation earned for the quarter in which the agreement is terminated, plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives.
(v)The
agreement also provides for non-disclosure by Ms. Bryan of our confidential information and includes covenants by her not to compete with Insight or solicit its employees, suppliers or customers for a period of two years following termination of employment.
The table below summarizes the potential payments and benefits to Ms. Bryan upon the occurrence of certain triggering events assuming a hypothetical effective date of termination of December 31, 2023:
Triggering Event
Severance
Cash
Payout for Equity-Based
Compensation
Awards (1)
Benefits
Total
Termination Without Cause or for Good Reason as defined in the employment agreement
$
3,166,280
$
—
$
21,374
$
3,187,654
Change
in Control – Involuntary Termination
4,233,580
7,634,408
37,405
11,905,393
Change in Control – Without Termination (2)
—
—
—
—
Disability
915,980
1,871,126
—
2,787,106
Death
915,980
5,601,507
—
6,517,487
(1)The
value of equity-based compensation awards is based on the closing price of the Company’s common stock on December 29, 2023 stock (December 31, 2023 was not a trading day) of $177.19 per share.
(2)Upon a change in control without termination, an acceleration of Ms. Bryan's equity-based compensation awards vesting occurs only upon authorization from our Board on the basis that their value will be materially impaired following the change in control.
(ii)A severance payment upon termination of employment “without cause” or termination by Mr. Burger for “good reason,” as those terms are defined in the agreement, payable upon termination in equal installments over a period of 12 months in accordance with the Company’s regular pay practices, equal to one times his annual base salary, plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives, and continued eligibility to participate in health or other insurance benefit plans of the
Company for a period of up to 12 months following the date of termination.
(iii)A severance payment following a “change in control” of the Company if Mr. Burger terminates his employment for “good reason,” or the Company terminates his employment “without cause,” as those terms are defined in the agreement, prior to the expiration of 12 months after the change in control occurs, equal to one times his highest annual base salary in effect during the term of the agreement, plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives, payable upon termination in a single lump sum, vesting of all equity-based awards, and continued
eligibility to participate in health or other insurance benefit plans of the Company for a period of up to 12 months following the date of termination. In the event that payments made following a “change in control” would trigger an excise tax under the IRC, the payments are to be reduced to the highest amount that would not trigger that excise tax, except that the limitation would not apply if the difference between the calculated amount (without applying the cap) and the reduced amount (after applying the cap) is greater than 25%.
(iv)In the event of Mr. Burger’s termination as a result of “disability,” as such term is defined in the agreement, or death, he or his estate, as the case may be, will be entitled to a lump sum payment equal to 90 days of his base salary payable within 30 days of termination
plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives, payable within 60 days following the end of the year in which the termination occurred.
(v)The agreement also provides for non-disclosure by Mr. Burger of our confidential information and includes covenants by him not to compete with Insight or solicit its employees, suppliers or customers for a period of 12 months following termination of employment.
The table below summarizes the potential payments and benefits to Mr. Burger upon the occurrence of certain triggering events assuming a hypothetical effective date of termination of December 31, 2023:
Triggering
Event
Severance
Cash Payout for Equity-Based
Compensation
Awards (1)
Benefits
Total
Termination Without Cause or for Good Reason as defined in the employment agreement
$
1,353,300
$
—
$
22,051
$
1,375,351
Change
in Control – Involuntary Termination
1,264,407
5,524,607
22,051
6,811,065
Change in Control – Without Termination (2)
—
—
—
—
Disability
865,800
1,069,164
—
1,934,964
Death
865,800
4,673,563
—
5,539,363
(1)The
value of equity-based compensation awards is based on the closing price of the Company’s common stock on December 29, 2023 stock (December 31, 2023 was not a trading day) of $177.19 per share.
(2)Upon a change in control without termination, an acceleration of Mr. Burger's equity-based compensation awards vesting occurs only upon authorization from our Board
on the basis that their value will be materially impaired following the change in control.
(ii)The employment agreement may be terminated with a notice period of 12 months, during which period Mr. Gregory will continue to be an employee and receive all of the benefits due under the employment agreement.
(iii)The Company’s right to terminate Mr. Gregory’s employment with immediate effect without notice for a compelling reason is not restricted by provision (ii).
(iv)The
agreement also provides for non-disclosure by Mr. Gregory of our confidential information and includes covenants by him not to compete with Insight or solicit its employees or customers for a period of 12 months following termination of employment.
The table below summarizes the potential payments and benefits to Mr. Gregory upon the occurrence of certain triggering events assuming a hypothetical effective date of termination of December 31, 2023:
Triggering Event
Severance
(2)
Cash Payout for Equity-Based
Compensation
Awards (1)
Benefits
Total
Termination Without Cause
$
573,000
$
—
$
—
$
573,000
Change
in Control – Involuntary Termination
573,000
2,760,620
—
3,333,620
Change in Control – Without Termination (3)
—
—
—
—
Death
—
2,532,754
—
2,532,754
Disability
—
2,532,754
—
2,532,754
(1)The
value of equity-based compensation awards is based on the closing price of the Company’s common stock on December 29, 2023 stock (December 31, 2023 was not a trading day) of $177.19 per share.
(2)Mr. Gregory is entitled to base salary as severance upon the Company’s election to terminate his employment in lieu of service. While Mr. Gregory’s base salary of £450,000is shown in U.S. dollars (rounded to the nearest thousand) for presentation in this proxy statement, Mr. Gregory is paid in British pounds. Mr. Gregory’s salary was computed by multiplying the British pounds paid by the exchange
rate applicable on the assumed date of termination of $1.2733 per British pound.
(3)Upon a change in control without termination, an acceleration of Mr. Gregory's equity-based compensation awards vesting occurs only upon authorization from our Board on the basis that their value will be materially impaired following the change in control.
(ii)A severance payment upon termination of employment “without cause” or termination by Mr. Cowley for “good reason,” as those terms are defined in the agreement, payable upon termination, equal to one times his annual base salary, plus one times the annual cash incentive bonus during the immediately preceding fiscal year, plus a prorated portion of any current quarterly or annual cash incentive bonus.
(iii)A severance payment following a “change in control” of the Company if Mr. Cowley terminates his employment for “good reason,” or the Company terminates his employment “without cause,” as those terms are defined in the
agreement, prior to the expiration of 12 months after the change in control occurs, equal to one times his highest annual base salary in effect during the term of the agreement plus one times his annual cash incentive bonus during the immediately preceding fiscal year, plus a prorated portion of any current quarterly or annual cash incentive bonus. In the event that payments made following a “change in control” would trigger an excise tax under the IRC, the payments are to be reduced to the highest amount that would not trigger that excise tax, except that the limitation would not apply if the difference between the calculated amount (without applying the cap) and the reduced amount (after applying the cap) is greater than 25%.
(iv)In the event of Mr. Cowley’s termination as a result of “disability,” as such term is defined in the agreement, or death, he or his estate, as the case may
be, will be entitled to a lump sum payment equal to 90 days of his base salary plus a prorated portion of any cash incentive compensation earned for the quarter in which the agreement is terminated, plus a prorated cash incentive bonus for the year in which the termination takes place for any cash incentive compensation plan with annual objectives.
(v)The agreement also provides for non-disclosure by Mr. Cowley of our confidential information and includes covenants by him not to compete with Insight or solicit its employees, suppliers or customers for a period of 12 months following termination of employment.
The table below summarizes the potential payments and benefits to Mr. Cowley upon the occurrence of certain triggering events assuming a hypothetical effective date of termination of December 31, 2023:
Triggering
Event
Severance
Cash Payout for Equity-Based
Compensation
Awards (1)
Benefits
Total
Termination Without Cause or for Good Reason as defined in the employment agreement
$
1,543,938
$
—
$
—
$
1,543,938
Change
in Control – Involuntary Termination
1,543,938
3,982,877
—
5,526,815
Change in Control – Without Termination (2)
—
—
—
—
Disability
571,738
1,069,164
—
1,640,902
Death
571,738
2,933,380
—
3,505,118
(1)The
value of equity-based compensation awards is based on the closing price of the Company’s common stock on December 29, 2023 stock (December 31, 2023 was not a trading day) of $177.19 per share.
(2)Upon a change in control without termination, an acceleration of Mr. Cowley's equity-based compensation awards vesting occurs only upon authorization from our Board on the basis that their value will be materially impaired following the change in control.
The following table provides information as of December 31, 2023 regarding the number of shares of our common stock that may be issued under our equity compensation plans, which have been approved by our stockholders.
Plan Category
Number
of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
(a)
Weighted-
Average Exercise
Price of
Outstanding
Options,
Warrants and
Rights
(b)
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans
(Excluding
Securities Reflected
in Column (a))
(c)
Equity compensation plans approved by security holders
653,902
(1)
—
3,725,445
(2)
Equity compensation plans not approved by security holders
—
—
—
Total
653,902
(3)
—
3,725,445
(3)
(1)Represents
the number of underlying shares of common stock at the target award level associated with outstanding RSUs under approved plans. For outstanding performance-based RSUs, if the maximum award levels are achieved, the number of securities to be issued upon exercise of the outstanding rights would be 825,306, and 1,804,041 securities would remain available for future issuance. The RSUs are excluded from the calculation of the weighted average exercise price because they have no exercise price associated with them.
(2)Includes 1,975,445 shares of common stock remaining available for issuance under the 2020 Omnibus Plan and 1,750,000 shares of common stock available for future issuance under the Company’s Employee Stock Purchase Plan.
(3)Subsequent to December
31, 2023, the Company’s annual grant of equity-based awards to certain employees were made on January 1, 2024 and February 20, 2024, shares of common stock were purchased by employees under the Company’s Employee Stock Purchase Plan in the offering period beginning on February 18, 2024, and the Company granted equity-based awards to certain employees on March 15, 2024, pursuant to the EMEA Ambition Incentive Plan. As such, the Company
determined to supplement the table above with the information below. The following table sets forth certain information as of March 15, 2024 regarding the number of shares of our common stock that may be issued under our equity compensation plans, all of which were approved by security holders.
Number of Securities
to be Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
Number of Securities
Remaining Available for
Future
Issuance under
Equity Compensation
Plans
631,421
3,602,279
Employee Stock Purchase Plan
The Employee Stock Purchase Plan (the “ESPP”) is a broadly-based stock purchase plan in which any eligible employee may elect to participate by authorizing the Company
to make payroll
deductions in a designated percentage to pay the price of an option. In no event will the ESPP permit an employee to purchase common stock with a fair market value in excess of $25,000 in any calendar year. The first purchase under the ESPP was made on February 16, 2024, in accordance with the ESPP.
There are four three-month offering periods in each calendar year beginning on February 18, May 18, August 18, and November
18, respectively. Purchases under the ESPP are made on the last trading day of each offering period. Unless otherwise determined by the Compensation Committee, the purchase price of shares offered under the ESPP is an amount equal to 95% of the fair market value of the common stock on the date of purchase. The ESPP is designed to comply with Section 423 of the IRC, and thus is eligible for the favorable tax treatment afforded by Section 423.
PROPOSAL
3 – Ratification of Independent Registered Public Accounting Firm
The Board of Directors and the Audit Committee recommend that the stockholders ratify the selection of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the year ending December 31, 2024. The Audit Committee approved the selection of KPMG as the Company’s independent registered public accounting firm for 2024. KPMG is currently the Company’s independent registered public accounting firm.
Although the
Company is not required to seek stockholder approval or ratification of this appointment, the Board believes that doing so is consistent with good corporate governance practices. If the appointment is not ratified, the Audit Committee will explore the reasons for stockholder rejection and will reconsider the appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and our stockholders.
We have been advised that a representative of KPMG will attend the Annual Meeting. Such representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond
to appropriate questions.
THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND A VOTE FOR RATIFICATION OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024.
The Company maintains an independent Audit Committee that operates under a written charter adopted by the Board of Directors. Each member of the Audit Committee is independent as defined in the listing standards of NASDAQ and under SEC rules and each of Mr. Allen and Ms. Breard has been designated as an “audit committee financial expert” by the Board of Directors.
Management has the responsibility for the Company’s financial statements and overall financial reporting process, including the Company’s internal controls. Management also is responsible for reporting on the effectiveness of the
Company’s internal controls over financial reporting. The Company’s independent registered public accounting firm, KPMG, has the responsibility to conduct an independent audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and to issue an opinion on whether or not the financial statements present fairly, in all material respects, the financial position of the Company and the results of its operations and its cash flows in conformity with U.S. generally accepted accounting principles. KPMG is also responsible for issuing an attestation report on the effectiveness of the Company’s internal controls over financial reporting based upon its audit.
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent auditors retained to audit our financial statements. The Audit Committee is responsible for the audit fee negotiations associated with our retention of KPMG. The members of the Audit Committee and the Board believe that the continued retention of KPMG to serve as our independent auditor is in our and our stockholders’ best interest. KPMG has served as our independent registered public accounting firm since 1990.
The Audit Committee’s responsibility is to monitor and oversee these processes. As part of its oversight responsibilities, the Audit Committee meets with the Company’s Chief Financial Officer, Chief Accounting Officer, General Counsel, Vice President of Internal Audit and KPMG (with and without management present)
to discuss the adequacy and effectiveness of the Company’s internal controls and the quality of the financial reporting process.
Prior to the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, with the SEC, the Audit Committee:
•Reviewed and discussed with management the Company’s audited consolidated financial statements included in the Form 10-K and considered management’s view that the financial statements present fairly, in all material respects, the
Company’s financial condition and results of operations.
•Reviewed and discussed with management and KPMG the effectiveness of the Company’s internal controls over financial reporting, including management’s report and KPMG’s attestation report on that topic.
•Discussed with KPMG the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.
•Received the required written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence. Based upon these communications, the Audit Committee discussed with KPMG its independence from the
Company. In considering the independence of KPMG, the Audit Committee took into consideration the amount and nature of the fees paid to the firm for non-audit services, as described below.
In reliance on the review and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2023, for filing with the SEC.
Respectfully submitted by the Audit Committee of the Board of Directors.
Linda M. Breard, Chair
Richard E. Allen
Alexander L. Baum
Kathleen S. Pushor
Girish Rishi
Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities
Act or the Exchange Act that incorporate future filings, including this proxy statement, in whole or in part, the foregoing Audit Committee Report does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any such filings.
Independent
Registered Public Accounting Firm Fees and Independence
The Audit Committee reviews and approves the external auditor’s engagement and audit plan, including fees, scope, staffing and timing of work. In addition, the Audit Committee Charter limits the types of non-audit services that may be provided by the independent auditors. Any permitted non-audit services to be performed by the independent auditors must be pre-approved by the Audit Committee after the committee is advised of the nature of the engagement and particular services to be provided. The Audit Committee pre-approved audit fees and all permitted non-audit services of the independent auditor in 2023. Responsibility for this pre-approval may be delegated to one or more members of the Audit Committee; all such approvals, however, must be disclosed to the Audit Committee at its next regularly scheduled meeting. The Audit Committee may not delegate
authority for pre-approvals to management.
The following table presents fees paid or accrued for the audit of the Company’s annual consolidated financial statements and all other professional services rendered by KPMG for the years ended December 31, 2023 and 2022.
KPMG Fees
Years Ended December 31
2023
2022
Audit
fees
$
3,605,000
$
3,441,000
Audit-related fees
$
670,000
$
—
Tax fees
$
50,000
$
10,000
All other fees
$
13,000
$
67,500
Total
fees
$
4,338,000
$
3,518,500
Audit Fees. Consists principally of fees for professional services rendered for the audits of our consolidated financial statements, reviews of our consolidated financial statements included in our quarterly reports on Form 10-Q and statutory audits for foreign subsidiaries.
Audit Related Fees. Consists principally of fees for services relating to due diligence assistance in connection with an acquisition.
Tax Fees. Consists principally
of fees for services relating to tax compliance and tax planning and advice, including assistance with tax audits.
All Other Fees. Consists principally of fees for access to continuing professional education tools.
The Audit Committee determined that the provision of services by KPMG described in the preceding paragraphs is compatible with maintaining KPMG’s independence. All permissible non-audit services provided by KPMG in 2023 described in the table above were pre-approved by the Audit Committee. In addition, no audit engagement hours were spent by people other than KPMG’s employees, KPMG member firms located outside the United States and other third-party service providers operating under KPMG’s supervision.
FREQUENTLY ASKED QUESTIONS CONCERNING THE ANNUAL MEETING
Why did I receive these proxy materials?
These proxy materials are first being distributed on or about April 10, 2024, to stockholders of the Company in connection with the solicitation by our Board of Directors of proxies to be voted at the Annual Meeting of Stockholders on May 21, 2024, at 8:30 a.m. MST, at Insight Enterprises, Inc., 2701 E. Insight Way Chandler,
Arizona, 85286, and any postponement or adjournment thereof. This proxy statement describes the matters on which you, as a stockholder of the Company, are entitled to vote. It also includes information that we are required to provide to you under SEC rules and that is designed to assist you in voting your shares.
What is the purpose of the Annual Meeting?
At the Annual Meeting of Stockholders, stockholders will be asked to vote (1) to elect the ten director nominees named in this proxy statement for a term expiring at the 2025 Annual Meeting of Stockholders (or until their respective successors have been duly elected and qualified), (2) to approve, on an advisory basis, the compensation
of our Named Executive Officers, and (3) to ratify the appointment of the Company’s independent registered public accounting firm for the year ended December 31, 2024. See the sections entitled “Proposal 1—Election of Directors,”“Proposal 2—Advisory Vote to Approve Named Executive Officer Compensation” and “Proposal 3—Ratification of Independent Registered Public Accounting Firm.” The Board of Directors does not know of any matters to be brought before the meeting other than as set forth in the Notice of Annual Meeting of Stockholders (the “Notice”).
Who can attend the Annual Meeting?
Only holders of
our common stock as of the close of business on the record date, which was March 27, 2024, or their duly appointed proxies, may attend the Annual Meeting. If you hold your shares through a broker, bank or other nominee, you will be required to show the notice or voting instructions form you received from your broker, bank or other nominee or a copy of a statement (such as a brokerage statement) from your broker, bank or other nominee reflecting your stock ownership as of March 27, 2024, in order to be admitted to the Annual Meeting. All attendees must bring a government-issued photo ID to gain admission to the Annual Meeting. Please note that recording devices, photographic equipment, large bags and packages will not be permitted in the meeting room.
Who
is entitled to vote at the Annual Meeting?
Holders of our common stock as of the close of business on the record date, which was March 27, 2024, are entitled to notice of, and to vote at, the Annual Meeting. As of March 27, 2024, there were 32,542,015 shares of our common stockoutstanding and entitled to vote at the Annual Meeting, with each share entitled to one vote.
How do I vote at the Annual Meeting?
Stockholders of record can vote in one of four ways:
•By telephone—You
may use the toll-free telephone number shown on your proxy card;
•Via the Internet—You may visit the Internet website indicated on your proxy card and follow the on-screen instructions;
•By mail—You may date, sign and promptly return your proxy card by mail in a postage prepaid envelope; or
•In
person—You may deliver a completed proxy card at the meeting or vote in person.
Voting instructions for stockholders of record (including instructions for both telephonic and Internet voting) are provided under the heading “Voting Information” of this proxy statement and on the proxy card. The telephone and Internet voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions and to confirm that stockholders’ instructions have been recorded properly. A control number, located on the proxy card, will identify stockholders and allow them to submit their proxies and confirm that their voting instructions have been properly recorded. Costs associated with telephone and electronic access, such as usage charges from telephone companies and Internet access providers, must be borne by the stockholder. If you submit your proxy by telephone or via
the Internet, it will not be necessary to return your proxy card. The deadline for voting by telephone or via the Internet is 11:59 p.m. ET on Monday, May 20, 2024.
If your shares are held through a broker, bank or other nominee, please follow the voting instructions on the form you receive from such institution. In such situations, the availability of telephone and Internet voting will depend on your institution’s voting procedures. If you wish to vote in person at the Annual Meeting, you must first obtain a legal proxy issued in your name from the institution that holds your shares.
What if I do not vote or do not indicate how my shares should be voted on my proxy card?
If
a stockholder of record does not return a signed proxy card or submit a proxy by telephone or via the Internet and does not attend the meeting and vote in person, his or her shares will not be voted. Shares of our common stock represented by properly executed proxies received by us or proxies submitted by telephone or via the Internet, which are not revoked, will be voted at the meeting in accordance with the instructions contained therein.
If you submit a properly completed proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Board of Directors recommends on such proposal.
What if my shares of the Company’s common stock
are held for me by a broker?
If you are the beneficial owner of shares held for you by a broker, your broker must vote those shares in accordance with your instructions. A “broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or other nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.
•Non-Discretionary Items. The election of directors (Proposal 1) and the advisory vote to approve Named Executive Officer compensation (Proposal 2) may not be voted on by your broker if it has not received voting instructions.
•Discretionary Items. The ratification
of KPMG LLP as the Company’s independent registered public accounting firm (Proposal 3) is a discretionary item. Generally, brokers that do not receive voting instructions from beneficial owners may vote on this proposal in their discretion.
How can I change my votes or revoke my proxy after I have voted?
Any proxy signed
and returned by a stockholder or submitted by telephone or via the Internet may be revoked or changed at any time before it is exercised at the Annual Meeting or any adjournments or postponements thereof by:
•Mailing written notice of revocation or change to our Corporate Secretary at Insight Enterprises, Inc., 2701 E. Insight Way, Chandler, Arizona85286;
•Delivering a later-dated proxy (either in writing, by telephone or via the Internet); or
•Voting in person at the meeting.
Attendance
at the meeting will not, in and of itself, constitute revocation of a proxy.
Will my votes be publicly disclosed?
No. As a matter of policy, stockholder proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed and are available only to the inspector of election and certain employees, who are obligated to keep such information confidential.
Who will count the votes?
A representative of the Company will serve as the inspector of election
for the Annual Meeting and will count the votes.
What if other matters come up during the Annual Meeting?
If any other matters properly come before the meeting, including a question of adjourning or postponing the meeting, the persons named in the proxies or their substitutes acting thereunder will have discretion to vote on such matters in accordance with their best judgment.
What constitutes a quorum at the Annual Meeting?
The presence at the Annual Meeting of Stockholders, in person or represented by proxy, of the holders of a majority in voting power
of the outstanding capital stock entitled to vote at the Annual Meeting is required to constitute a quorum to transact business at the Annual Meeting. Abstentions and broker non-votes will be counted toward the establishment of a quorum.
How many votes are required to approve each matter to be considered at the Annual Meeting?
Proposal 1: Election of director nominees named in this proxy statement. Each of the ten nominees for director will be elected upon the affirmative vote of the majority of votes cast with respect to the director’s election, which means the number of votes cast “for” a director nominee must exceed the number of votes cast “against” that director nominee. Any incumbent director nominee who is not elected
by a majority of votes cast must tender his or her resignation to the Board, and the Nominating and Governance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. In such a situation, the Board will act on the Nominating and Governance Committee’s recommendation and publicly disclose its decision and the rationale behind its decision within 90 days from the date of the certification of the election results. In the event of a contested election, director nominees who receive the most votes for the number of seats up for election will be elected. Broker non-votes and abstentions will have no effect on the proposal.
Proposal
2: Advisory vote to approve named executive officer compensation. The affirmative vote of the holders of a majority of the shares entitled to vote on the proposal, present in person or represented by proxy at the meeting is required to approve, on an advisory, non-binding basis, the compensation paid to our Named Executive Officers. Abstentions will be counted as present and entitled to vote on the proposal and will therefore have the effect of a vote against the proposal. Broker non-votes will not be counted as present and entitled to vote on the proposal and will therefore have no effect on the outcome of the proposal.
Proposal 3: Ratification of KPMG LLP as the Company’s independent registered public accounting firm. The affirmative vote of the holders of a majority of the shares entitled to
vote on the proposal, present in person or represented by proxy at the meeting is required to ratify KPMG LLP as the Company’s independent registered public accounting firm for 2024. Abstentions will be counted as present and entitled to vote on the proposal and will therefore have the effect of a vote against the proposal. Because brokers can vote on this proposal in their discretion without instructions from beneficial stockholders, there is not expected to be any broker non-votes on this proposal.
Who pays to prepare, mail and solicit the proxies?
We will bear the costs of solicitation of proxies for the Annual Meeting of Stockholders, including preparation, assembly, printing
and mailing of the Notice, this proxy statement, the Annual Report for the year ended December 31, 2023, the proxy card and any additional information furnished to stockholders. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding any solicitation materials to such beneficial owners. Proxies may be solicited in person or by mail, telephone or electronic transmission on our behalf by our directors, officers or employees. However, we do not reimburse or pay additional compensation to our own directors, officers or other employees for soliciting proxies. In addition, we have retained Okapi Partners LLP to assist us in the distribution and solicitation of proxies. We estimate that we will pay Okapi Partners LLP approximately $12,000, plus reimbursement of out-of-pocket expenses, for its services.
The Board of Directors has no knowledge of any other matter to be submitted at the Annual Meeting. If any other matter shall properly come before the Annual Meeting, including a question of adjourning or postponing the meeting, the persons named in the proxy card or their substitutes acting thereunder will have discretionary authority to vote the shares thereby represented in accordance with their best judgment.
Annual Report on Form 10-K
A
copy of our Annual Report on Form 10-K for the year ended December 31, 2023 is being furnished to stockholders concurrently herewith. Insight will mail without charge, upon written request, another copy of our Annual Report on Form 10-K for the year ended December 31, 2023, including the consolidated financial statements and list of exhibits, and any particular exhibit specifically requested. Requests should be addressed to our Corporate Secretary at 2701 E. Insight Way, Chandler, Arizona85286. Our Annual Report is also available at http://investor.insight.com/financial-reports/annual-reports.
Householding
Company
stockholders who share an address may receive only one copy of this proxy statement and the Annual Report from their bank, broker or other nominee, unless contrary instructions are received. We will deliver promptly a separate copy of this proxy statement and Annual Report to any stockholder who resides at a shared address and to which a single copy of the documents was delivered, if the stockholder makes a request by contacting our Corporate Secretary at 2701 E. Insight Way, Chandler, Arizona85286, or by telephone at (480) 333-3000. If you wish to receive separate copies of this proxy statement and the Annual Report
in the future, or if you are receiving multiple copies and would like to receive a single copy for your household, you should contact your broker, bank or other nominee.
Stockholder Proposals and Director Nominations for the 2025 Annual Meeting
Proposals that stockholders wish to submit for inclusion in our proxy statement for our 2025 Annual Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must be received by our Corporate Secretary at Insight Enterprises, Inc., One Insight Way, Chandler, Arizona85286 no later than December 11, 2024. Any stockholder proposal submitted for inclusion must be eligible for inclusion in our proxy statement in accordance with the rules and regulations promulgated by the SEC.
With respect to proposals submitted by a stockholder for consideration at our 2025 Annual Meeting but not for inclusion in our proxy statement for such annual meeting, timely notice of any stockholder proposal must be received by us at the above address in accordance with our Amended and Restated Bylaws no earlier than February 20, 2025 nor later than March 22, 2025. With respect to stockholders wishing
to recommend nominees for election to the Board at our 2025 Annual Meeting, timely notice of any director nomination must be received by us at the above address in accordance with our Amended and Restated Bylaws no earlier than February 20, 2025, nor later than March 22, 2025. Such notices must contain the information required by our Amended and Restated Bylaws.
In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information
required by Rule 14a-19 under the Exchange Act postmarked or transmitted electronically no later than March 22, 2025.
Please refer to our Amended and Restated Bylaws for additional information and requirements regarding stockholder proposals and director nominations. We will not consider any proposal or nomination that is not timely or otherwise does not meet our Amended and Restated Bylaws’
and the SEC’s requirements for submitting a proposal or nomination, as applicable. We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal or nomination that does not comply with these and any other applicable requirements.
This proxy statement contains “forward-looking statements”
as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve substantial risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include, but are not limited to, statements made in the Compensation Discussion and Analysis section of this proxy statement regarding the benefits and anticipated results of our compensation programs and the Compensation Committee’s plans and intentions relating thereto, as well as statements regarding our business strategy and our strategic initiatives. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise,
except as may be required by law. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those mentioned under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (accompanying this proxy statement), and in any of our subsequent filings with the SEC.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON May 21, 2024
It is important that your proxy be returned promptly, whether by mail, by telephone or via the Internet. The proxy may be revoked at any time by you before it is exercised as described in this proxy statement. If you attend the meeting in person, you may withdraw any proxy (including a telephonic or Internet proxy) and vote your own shares as described in this proxy statement.
Computed as GAAP consolidated EFO, net of tax (using an assumed tax rate of 26%) of $109.1 million, $107.6 million, $86.3 million, and $70.6 million for the year ended December 31, 2023, 2022, 2021 and 2020, respectively, divided by invested capital
****
Computed as non-GAAP Adjusted consolidated EFO, net of tax divided
by invested capital
USE OF NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures (referred to in this proxy statement as Adjusted EFO, Adjusted Diluted EPS and Adjusted ROIC) exclude the items noted above. Other consists of severance and restructuring expenses, certain executive recruitment and hiring related expenses, transformation costs, data center service outage related expenses, net of recoveries and certain acquisition and integration-related expenses, as applicable. The Company excludes these items when internally evaluating its results of operations. These non-GAAP measures are used by management to evaluate financial performance against budgeted amounts, to calculate incentive compensation, to assist in forecasting future performance and to compare the
Company’s results to those of the Company’s competitors. The Company believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency, facilitate comparisons to prior periods and the Company’s competitors’ results and assist in forecasting performance for future periods. These non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
A-2
Dates Referenced Herein and Documents Incorporated by Reference
