STOCK-BASED COMPENSATION (Notes)

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Wesco’s stock-based compensation awards consist 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 is determined by the grant-date closing price of Wesco’s common stock. The fair value of performance-based awards with performance conditions is determined by a Monte Carlo simulation as well as the grant-date closing price of Wesco’s common stock. The forfeiture assumption is based on Wesco’s historical participant behavior that is reviewed on at least an annual basis. 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 units awarded under the WESCO International, Inc. 2021 Omnibus Incentive Plan, which was adopted on May 27, 2021, typically 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, as described below. Outstanding awards would vest upon the consummation of a change in control transaction, with performance-based awards vesting at the greater of the target level or actual.

Prior to the 2025 awards, performance-based awards were typically 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. The 2025 performance-based awards are based on two equally-weighted performance measures: the growth rate of Wesco’s earnings per share and return on net assets, both of which are measured on an annual basis as well as on a three-year cumulative basis, with each of the three years and the three-year cumulative measurement equally-weighted. The 2025 performance-based awards also include a relative Total Stockholder Return (“TSR”) modifier that impacts the number of shares earned based on the Company's TSR over the performance period in relation to the TSR of the companies comprising the S&P MidCap 400 Index. 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. The fair value of the relative TSR modifier as of the March 1, 2025 grant date was measured using a Monte Carlo simulation.

During the three months ended March 31, 2025 and 2024, Wesco granted the following stock options, restricted stock units, and performance-based awards at the following weighted-average fair values:


	Three Months Ended
		March 31, 2025		March 31, 2024
Stock options granted		84,476		85,425
Weighted-average fair value		$	76.59	$	72.05

Restricted stock units granted		215,603		202,299
Weighted-average fair value		$	179.83	$	152.10

Performance-based awards granted		72,302		192,995
Weighted-average fair value		$	191.72	$	108.72

The fair values of stock options, as disclosed in the table above, were estimated using the following weighted-average assumptions in the respective periods:


	Three Months Ended
		March 31, 2025		March 31, 2024
Risk free interest rate		4.1	%	4.2	%
Expected life (in years)		5		5
Expected volatility		47	%	55	%
Expected dividend yield		1.01	%	1.09	%

The risk-free interest rate is based on the U.S. Treasury Daily Yield Curve rate as of the grant date. The expected life is based on historical exercise experience, 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, and the expected dividend yield is based on the calculated yield on the Company’s common stock at date of grant using the current fiscal year projected dividend distribution rate.

The following table sets forth a summary of stock options and related information for the three months ended March 31, 2025:


	Awards	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In years)	Aggregate Intrinsic Value (In millions)
Outstanding at December 31, 2024	234,814	$	147.08
Granted	84,476	180.47
Exercised	—	—
Forfeited	—	—
Outstanding at March 31, 2025	319,290	$	155.91	8.4	$	3.1
Exercisable at March 31, 2025	154,402	$	141.91	7.6	$	2.8

The following table sets forth a summary of stock-settled stock appreciation rights and related information for the three months ended March 31, 2025:


	Awards	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In years)	Aggregate Intrinsic Value (In millions)
Outstanding at December 31, 2024	699,044	$	58.90
Granted	—	—
Exercised	(21,909)	50.99
Forfeited	—	—
Outstanding at March 31, 2025	677,135	$	59.16	4.0	$	65.1
Exercisable at March 31, 2025	677,135	$	59.16	4.0	$	65.1

For the three months ended March 31, 2025, the aggregate intrinsic value of stock-settled stock appreciation rights exercised during such period was $2.9 million.

The following table sets forth a summary of restricted stock units and related information for the three months ended March 31, 2025:


	Awards	Weighted- Average Fair Value
Unvested at December 31, 2024	427,570	$	149.84
Granted	215,603	179.83
Vested	(166,239)	146.04
Forfeited	(915)	179.29
Unvested at March 31, 2025	476,019	$	164.56

The following table sets forth a summary of performance-based awards and related information for the three months ended March 31, 2025:


	Awards	Weighted- Average Fair Value
Unvested at December 31, 2024	214,517	$	147.19
Granted	72,302	191.72
Vested	(75,189)	122.09
Forfeited	—	—
Unvested at March 31, 2025	211,630	$	171.32

Wesco recognized $10.2 million and $10.1 million of non-cash stock-based compensation expense for the three months ended March 31, 2025 and 2024, respectively, which is included in selling, general and administrative expenses for such periods. As of March 31, 2025, there was $98.8 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements for all awards previously made, which is expected to be recognized as follows:


For the year ending December 31,	(In millions)
Remaining 2025	$	35.3
2026	37.2
2027	22.8
2028	3.5