XML 26 R14.htm IDEA: XBRL DOCUMENT
v3.22.1

EMPLOYEE BENEFIT PLANS (Notes) | 3 Months Ended
--- | ---
Mar. 31, 2022
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | 8. EMPLOYEE BENEFIT PLANS Defined Contribution Plans Wesco Distribution sponsors a defined contribution retirement savings plan for the majority of its U.S. employees (the "WESCO Distribution, Inc. Retirement Savings Plan"). Effective January 1, 2022, the defined contribution plan covering all of Anixter Inc.'s non-union U.S. employees (the "Anixter Inc. Employee Savings Plan") was merged with and into the WESCO Distribution, Inc. Retirement Savings Plan (the "U.S. Defined Contribution Plan Merger"). On December 31, 2021, participant account balances were transferred from the Anixter Inc. Employee Savings Plan to the WESCO Distribution, Inc. Retirement Savings Plan. In connection with the U.S. Defined Contribution Plan Merger, the WESCO Distribution, Inc. Retirement Savings Plan was amended to change the employer matching contribution at an amount equal to 100% of a participant's eligible elective deferrals up to 3% of the participant's eligible compensation and 50% of the next 4% of eligible compensation, and to eliminate discretionary employer contributions. WESCO Distribution Canada LP, a wholly-owned subsidiary of the Company, sponsors a defined contribution plan covering the current full-time employees of WESCO Distribution Canada LP and part-time employees meeting certain requirements for continuous service, earnings and minimum hours of employment (the "Wesco Canadian Defined Contribution Plan"). Effective January 1, 2022, the defined contribution plan for certain employees of Anixter Canada Inc. and Anixter Power Solutions Canada Inc. (the "Anixter Canadian Defined Contribution Plan") was merged with and into an amended Wesco Canadian Defined Contribution Plan. During the three months ended March 31, 2022, participant account balances were transferred from the Anixter Canadian Defined Contribution Plan to the amended Wesco Canadian Defined Contribution Plan. The amended Wesco Canadian Defined Contribution Plan provides a core employer contribution of 3% of a participant's eligible compensation, plus a matching contribution equal to 50% of a participant's elective contributions up to 4% of eligible compensation (for a maximum total employer contribution equal to 5%). The amended Wesco Canadian Defined Contribution Plan also requires employees of EECOL Electric Corp. hired on or after January 1, 2022 to join this Canadian defined contribution plan, and permits enrollment for those not participating in the defined benefit plan described below. Wesco incurred charges of $18.1 million and $16.6 million for the three months ended March 31, 2022 and 2021, respectively, for all defined contribution plans. Deferred Compensation Plans Wesco Distribution sponsors a non-qualified deferred compensation plan (the "Wesco Deferred Compensation Plan") that permits select employees to make pre-tax deferrals of salary and bonus. Employees have the option to transfer balances allocated to their accounts in the Wesco Deferred Compensation Plan into any of the available investment options. The Wesco Deferred Compensation Plan is an unfunded plan. As of March 31, 2022 and December 31, 2021, the Company's obligation under the Wesco Deferred Compensation Plan was $20.9 million, which was included in other noncurrent liabilities in the Condensed Consolidated Balance Sheet. Defined Benefit Plans Wesco sponsors a contributory defined benefit plan covering substantially all Canadian employees of EECOL Electric Corp., a wholly-owned subsidiary of the Company (the "EECOL Plan") and a Supplemental Executive Retirement Plan for certain executives of EECOL Electric Corp. (the "EECOL SERP"). Anixter Inc. sponsors the Anixter Inc. Pension Plan, which was closed to entrants first hired or rehired on or after July 1, 2015, and various defined benefit pension plans covering employees of foreign subsidiaries in Canada and Europe (together with the "EECOL Plan" and "EECOL SERP", the "Foreign Plans"). The majority of the Anixter defined benefit pension plans are non-contributory, and with the exception of the U.S. and Canada, cover substantially all full-time employees in their respective countries. Retirement benefits are provided based on compensation as defined in each of the plan agreements. The Anixter Inc. Pension Plan is funded as required by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Service. With the exception of the EECOL SERP, which is an unfunded plan, the Foreign Plans are funded as required by applicable foreign laws. During the fourth quarter of 2021, the Company adopted certain plan amendments to: (i) freeze the benefits provided under the Anixter Inc. Pension Plan effective December 31, 2021, (ii) close participation in the EECOL Plan effective December 31, 2021, and (iii) freeze the benefit accruals under the Pension Plan for Employees of Anixter Canada Inc., the EECOL Plan and the EECOL SERP effective December 31, 2023. The Company expects to contribute approximately $10.8 million to its Foreign Plans in 2022, of which approximately $3.2 million was contributed during the three months ended March 31, 2022. The Company does not expect to make a contribution to its domestic qualified pension plan in 2022 due to its overfunded status. The following table sets forth the components of net periodic pension (benefit) cost for the Company's defined benefit plans:
| Three Months Ended
(In thousands) | March 31, 2022 |  | March 31, 2021 |  | March 31, 2022 |  | March 31, 2021 |  | March 31, 2022 |  | March 31, 2021
| Domestic Plans |  | Foreign Plans |  | Total
Service cost | $ | — |  |  | $ | 764 |  |  | $ | 2,155 |  |  | $ | 3,224 |  |  | $ | 2,155 |  |  | $ | 3,988 |
Interest cost | 2,083 |  |  | 2,137 |  |  | 2,311 |  |  | 2,446 |  |  | 4,394 |  |  | 4,583 |
Expected return on plan assets | (3,497) |  |  | (4,501) |  |  | (4,277) |  |  | (4,256) |  |  | (7,774) |  |  | (8,757) |
Recognized actuarial gain(1) | — |  |  | — |  |  | (185) |  |  | 102 |  |  | (185) |  |  | 102 |
Net periodic pension (benefit) cost | $ | (1,414) |  |  | $ | (1,600) |  |  | $ | 4 |  |  | $ | 1,516 |  |  | $ | (1,410) |  |  | $ | (84) |
(1) For the three months ended March 31, 2022 and 2021, no material amounts were reclassified from accumulated other comprehensive income into net income. The service cost of $2.2 million and $4.0 million for the three months ended March 31, 2022 and 2021, respectively, is reported as a component of selling, general and administrative expenses. The other components of net periodic pension (benefit) cost totaling net benefits of $3.6 million and $4.1 million for the three months ended March 31, 2022 and 2021, respectively, are presented as components of other non-operating income ("other expense (income), net"). Other Benefits Prior to its acquisition by Wesco on June 22, 2020, Anixter granted restricted stock units in the ordinary course of business to its employees and directors. These awards, for which vesting did not accelerate solely as a result of the Company's merger with Anixter, were converted into cash-only settled Wesco phantom stock units, which vest ratably over a 3-year period. As of March 31, 2022 and December 31, 2021, the estimated fair value of these awards was $11.3 million and $22.7 million, respectively. As of March 31, 2022, the Company's liability for these awards was $7.9 million, of which $5.5 million was included in accrued payroll and benefit costs and $2.4 million was a component of other noncurrent liabilities in the Condensed Consolidated Balance Sheet. As of December 31, 2021, the Company's liability for these awards was $17.3 million, of which $10.9 million was included in accrued payroll and benefit costs and $6.4 million was a component of other noncurrent liabilities in the Condensed Consolidated Balance Sheet. The Company recognized compensation expense associated with these awards of $0.2 million and $5.7 million for the three months ended March 31, 2022 and 2021, respectively, which is reported as a component of selling, general and administrative expenses.
STOCK-BASED COMPENSATION | Wesco’s stock-based employee compensation awards are comprised of stock options, stock-settled stock appreciation rights, restricted stock units and performance-based awards. Compensation cost for all stock-based awards is measured at fair value on the date of grant and compensation cost is recognized, net of estimated forfeitures, over the service period for awards expected to vest. The fair value of stock options and stock-settled stock appreciation rights is determined using the Black-Scholes model. The fair value of restricted stock units and performance-based awards with performance conditions is determined by the grant- date closing price of Wesco’s common stock. The forfeiture assumption is based on Wesco’s historical employee behavior that is reviewed on an annual basis. No dividends are assumed. For stock options and stock-settled stock appreciation rights that are exercised, and for restricted stock units and performance-based awards that vest, shares are issued out of Wesco's outstanding common stock. Stock options and stock-settled stock appreciation rights vest ratably over a three-year period and terminate on the tenth anniversary of the grant date unless terminated sooner under certain conditions. Restricted stock unit awards granted in February 2020 and prior vest based on a minimum time period of three years. The special award described below vests in tranches. Restricted stock units awarded in 2022 and 2021 vest ratably over a three-year period on each of the first, second and third anniversaries of the grant date. Vesting of performance-based awards is based on a three-year performance period, and the number of shares earned, if any, depends on the attainment of certain performance levels. Outstanding awards would vest upon the consummation of a change in control transaction and performance-based awards would vest at the target level. On July 2, 2020, a special award of restricted stock units was granted to certain officers of the Company. These awards vest in tranches of 30% on each of the first and second anniversaries of the grant date and 40% on the third anniversary of the grant date, subject, in each case, to continued employment through the applicable anniversary date. Performance-based awards granted in 2022, 2021 and 2020 are based on two equally-weighted performance measures: the three-year average growth rate of Wesco's net income attributable to common stockholders and the three-year cumulative return on net assets. During the three months ended March 31, 2022 and 2021, Wesco granted the following stock options, stock-settled stock appreciation rights, restricted stock units and performance-based awards at the following weighted-average fair values:
|  |  | Three Months Ended
|  |  |  |  | March 31, 2022 |  | March 31, 2021
Stock options granted |  |  |  |  | 89,550 |  |  | — |
Weighted-average fair value |  |  |  |  | $ | 57.26 |  |  | $ | — |
Stock-settled stock appreciation rights granted |  |  |  |  | — |  |  | 136,194 |
Weighted-average fair value |  |  |  |  | $ | — |  |  | $ | 33.05 |
Restricted stock units granted |  |  |  |  | 224,946 |  |  | 300,722 |
Weighted-average fair value |  |  |  |  | $ | 122.11 |  |  | $ | 76.89 |
Performance-based awards granted |  |  |  |  | 83,991 |  |  | 119,792 |
Weighted-average fair value |  |  |  |  | $ | 122.09 |  |  | $ | 76.50 |
The fair value of stock options and stock-settled stock appreciation rights, as disclosed in the table above, was estimated using the following weighted-average assumptions in the respective periods:
|  |  | Three Months Ended
|  |  |  |  | March 31, 2022 |  | March 31, 2021
Risk free interest rate |  |  |  |  | 1.9 | % |  | 0.8 | %
Expected life (in years) |  |  |  |  | 7 |  | 7
Expected volatility |  |  |  |  | 43 | % |  | 41 | %
The risk-free interest rate is based on the U.S. Treasury Daily Yield Curve as of the grant date. The expected life is based on historical exercise experience and the expected volatility is based on the volatility of the Company's daily stock price over the expected life preceding the grant date of the award. The following table sets forth a summary of stock options for the three months ended March 31, 2022:
| Awards |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (In years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2021 | — |  |  | $ | — |  |  |  |  |
Granted | 89,550 |  |  | 122.09 |  |  |  |  |
Exercised | — |  |  | — |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Outstanding at March 31, 2022 | 89,550 |  |  | $ | 122.09 |  |  | 9.9 |  | $ | 731,176 |
Exercisable at March 31, 2022 | — |  |  | $ | — |  |  | 0 |  | $ | — |
The following table sets forth a summary of stock-settled stock appreciation rights for the three months ended March 31, 2022:
| Awards |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (In years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2021 | 1,370,388 |  |  | $ | 62.09 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Exercised | (37,411) |  |  | 66.32 |  |  |  |  |
Forfeited | (1,386) |  |  | 76.80 |  |  |  |  |
Outstanding at March 31, 2022 | 1,331,591 |  |  | $ | 61.95 |  |  | 6.0 |  | $ | 90,797 |
Exercisable at March 31, 2022 | 1,155,912 |  |  | $ | 61.73 |  |  | 5.6 |  | $ | 79,079 |
For the three months ended March 31, 2022, the aggregate intrinsic value of stock-settled stock appreciation rights exercised during such period was $2.4 million. The following table sets forth a summary of time-based restricted stock units for the three months ended March 31, 2022:
| Awards |  | Weighted- Average Fair Value
Unvested at December 31, 2021 | 974,162 |  |  | $ | 53.48 |
Granted | 224,946 |  |  | 122.11 |
Vested | (232,276) |  |  | 64.01 |
Forfeited | (1,092) |  |  | 106.05 |
Unvested at March 31, 2022 | 965,740 |  |  | $ | 66.87 |
The following table sets forth a summary of performance-based awards for the three months ended March 31, 2022:
| Awards |  | Weighted- Average Fair Value
Unvested at December 31, 2021 | 380,819 |  |  | $ | 59.23 |
Granted | 83,991 |  |  | 122.09 |
Vested | (115,394) |  |  | 54.64 |
Forfeited | (1,790) |  |  | 76.80 |
Unvested at March 31, 2022 | 347,626 |  |  | $ | 73.16 |
Vesting of the 347,626 shares of performance-based awards in the table above is dependent upon the achievement of certain performance targets, including half that are dependent upon the three-year average growth rate of Wesco's net income attributable to common stockholders and the other half that are based upon the three-year cumulative return on net assets. These awards are accounted for as awards with performance conditions; compensation cost is recognized over the performance period based upon Wesco's determination of whether it is probable that the performance targets will be achieved. Wesco recognized $8.9 million and $6.0 million of non-cash stock-based compensation expense for the three months ended March 31, 2022 and 2021, respectively, which is included in selling, general and administrative expenses. As of March 31, 2022, there was $78.2 million of total unrecognized compensation expense related to non-vested stock-based compensation arrangements for all awards previously made of which approximately $30.6 million is expected to be recognized over the remainder of 2022, $30.5 million in 2023, $15.3 million in 2024 and $1.8 million in 2025.
Compensation Related Costs, General | Other Benefits Prior to its acquisition by Wesco on June 22, 2020, Anixter granted restricted stock units in the ordinary course of business to its employees and directors. These awards, for which vesting did not accelerate solely as a result of the Company's merger with Anixter, were converted into cash-only settled Wesco phantom stock units, which vest ratably over a 3-year period. As of March 31, 2022 and December 31, 2021, the estimated fair value of these awards was $11.3 million and $22.7 million, respectively. As of March 31, 2022, the Company's liability for these awards was $7.9 million, of which $5.5 million was included in accrued payroll and benefit costs and $2.4 million was a component of other noncurrent liabilities in the Condensed Consolidated Balance Sheet. As of December 31, 2021, the Company's liability for these awards was $17.3 million, of which $10.9 million was included in accrued payroll and benefit costs and $6.4 million was a component of other noncurrent liabilities in the Condensed Consolidated Balance Sheet. The Company recognized compensation expense associated with these awards of $0.2 million and $5.7 million for the three months ended March 31, 2022 and 2021, respectively, which is reported as a component of selling, general and administrative expenses.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for compensation costs, including compensated absences accruals, compensated absences liability, deferred compensation arrangements and income statement compensation items. Deferred compensation arrangements may include a description of an arrangement with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain amounts at designated future dates, usually including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares (units) issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI https://asc.fasb.org/topic&trid=2127225 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -SubTopic 10 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6409950&loc=d3e20396-108366 + Details
Name: | us-gaap_CompensationRelatedCostsGeneralTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a)(1) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 55 -Paragraph 17 -URI https://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section S99 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(i) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (o) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (p) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI https://asc.fasb.org/topic&trid=2235017 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 3 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (q) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(1) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(2) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration