ARROW ELECTRONICS INC (ARW)
Sector: Information Technology
2026 Annual Meeting Analysis
ARROW ELECTRONICS INC · Meeting: May 12, 2026
Directors FOR
8
Directors AGAINST
0
Say on Pay
FOR
Auditor
AGAINST
Director Elections
Election of Eight Directors
Serving as Interim CEO since September 2025 (less than 24 months), he is exempt from the TSR trigger under the new-director/new-role exemption; no overboarding, attendance, or independence concerns apply to his executive director seat.
Arrow's 3-year price return of +20.7% is in the strong-positive band, where the peer-group underperformance threshold is 65pp; the actual gap of -68.4pp exceeds that threshold, triggering a review, but the 5-year peer gap of -47.6pp does not exceed the 65pp threshold applicable to the strong-positive 5-year TSR band, so the 5-year mitigant downgrades the vote from AGAINST to FOR; Gunby holds one outside board seat (FTI Consulting) and meets attendance requirements.
Director since 2024, well within the 24-month new-director exemption from the TSR trigger; no overboarding or attendance concerns.
Director since 2024, well within the 24-month new-director exemption from the TSR trigger; no overboarding or attendance concerns.
Arrow's 3-year price return of +20.7% is in the strong-positive band requiring a 65pp peer gap to trigger a No vote; the actual gap of -68.4pp barely exceeds this threshold, but the 5-year peer gap of -47.6pp does not exceed the 65pp 5-year threshold, so the 5-year mitigant applies and the vote is FOR; holds no outside public company board seats and meets attendance requirements.
Arrow's 3-year TSR underperformance vs. the peer group (-68.4pp) barely exceeds the 65pp strong-positive-band threshold, but the 5-year peer gap of -47.6pp does not exceed the applicable 5-year threshold, so the 5-year mitigant downgrades the vote to FOR; Lowe holds one outside public company board seat (EMCOR) and chairs the Audit Committee with confirmed financial expertise.
Director since 2023 (approximately 2.5 years), just beyond the 24-month exemption but covering less than the full 3-year underperformance period; the 5-year peer gap of -47.6pp does not exceed the applicable 5-year threshold, so the 5-year mitigant applies and the vote is FOR; holds one outside board seat (Zebra Technologies) and meets attendance requirements.
Arrow's 3-year peer underperformance of -68.4pp exceeds the 65pp strong-positive-band threshold for a director with tenure since 2020, but the 5-year peer gap of -47.6pp does not exceed the applicable 5-year threshold, so the 5-year mitigant downgrades the vote from AGAINST to FOR; holds no outside public company board seats and meets attendance requirements.
All eight director nominees receive a FOR vote. Arrow's 3-year total return of +20.7% falls in the strong-positive band, which requires a 65pp shortfall versus the peer group median to trigger a No vote; the actual 3-year gap of -68.4pp marginally exceeds that threshold for longer-tenured directors, but the 5-year peer-group gap of -47.6pp does not exceed the same 65pp threshold, so the 5-year mitigant applies across the board and downgrades all potential AGAINST votes to FOR. Newer directors (Chen, Hayford) are fully exempt under the 24-month rule, and the Interim CEO (Austen) is exempt given his role began in September 2025.
Say on Pay
✓ FORCEO
William F. Austen
Total Comp
$4,347,295
Prior Support
98%%
The Interim CEO's total reported compensation of approximately $4.35M reflects a unique, time-limited arrangement (base salary of $1.2M plus a one-year RSU grant of $3.6M) designed to fill a temporary leadership gap, and is well within reasonable benchmarks for a large-cap technology company CEO in a transition role. The overall compensation program is heavily weighted toward variable, performance-based pay (85% at-risk for NEOs on average), uses meaningful multi-year performance metrics including relative earnings-per-share growth, return on invested capital versus cost of capital, and newly introduced relative total shareholder return tied to the S&P 400 MidCap Index, and the company maintains robust Dodd-Frank and misconduct clawback policies. With 98% shareholder support in 2025 and no material structural concerns flagged by our pay-mix or pay-for-performance screens, a FOR vote is appropriate.
Auditor Ratification
✗ AGAINSTAuditor
Ernst & Young LLP
Tenure
49 yrs
Audit Fees
$14,162,165
Non-Audit Fees
$1,311,719
Ernst & Young has audited Arrow for more than 49 years, far exceeding the 25-year tenure threshold that triggers a No vote under our policy. Although the non-audit fee ratio is well within acceptable limits (non-audit fees of approximately $1.31M represent about 9.3% of audit fees of $14.16M), the extremely long auditor relationship raises meaningful concerns about independence and whether EY can still challenge management with fresh professional skepticism. The proxy does disclose the 49-year relationship and cites institutional knowledge and competitive fees as rationale, but this does not constitute a specific and compelling case for continued engagement of the type required to override the tenure trigger.
Stockholder Proposals
3 proposals submitted by shareholders
Proposal 4
Amend Restated Certificate of Incorporation to Remove Supermajority Voting Provisions (Proposals 4a and 4b)
This is a board-sponsored charter amendment that directly responds to a majority shareholder vote at the 2025 annual meeting calling for elimination of supermajority voting requirements. Removing supermajority provisions is a mainstream governance improvement that makes it easier for ordinary shareholders to approve or reject important corporate changes, reducing management entrenchment. Supporting this amendment clearly improves shareholder rights relative to the current baseline.
Proposal 5
Arrow Proposal to Provide Shareholders with the Ability to Call a Special Shareholder Meeting at a 25% Ownership Threshold
This board-sponsored proposal grants shareholders a meaningful new right — the ability to call a special meeting — where none currently exists. A 25% ownership threshold is broadly considered market-standard practice among large U.S. public companies and appropriately prevents a very small group of shareholders from forcing disruptive or costly special meetings for narrow purposes. Providing this right represents a genuine governance improvement for Arrow shareholders.
Proposal 6
Shareholder Proposal to Provide Shareholders with the Ability to Call a Special Shareholder Meeting at a 10% Ownership Threshold
Arrow is simultaneously providing shareholders with the right to call special meetings at a 25% threshold, which already grants the core governance right being requested. A 10% threshold would allow a very small minority of shareholders — potentially including short-term or special-interest holders — to force special meetings at any time and for any purpose, imposing significant cost and management distraction on the broader shareholder base. Since voting FOR Proposal 5 already secures a meaningful special meeting right, voting FOR this competing proposal at the lower threshold is unnecessary and risks governance disruption that would not serve most long-term shareholders.
Overall Assessment
Arrow's 2026 ballot contains six substantive proposals; the only departure from the board's recommendations is a vote AGAINST auditor ratification, driven solely by Ernst & Young's 49-year tenure with the company — far exceeding the 25-year threshold in our policy — which raises legitimate concerns about auditor independence. All eight director nominees receive a FOR vote after applying the 5-year TSR mitigant, which offsets the marginally triggered 3-year peer-underperformance screen, and the Say on Pay proposal earns a FOR given the interim CEO's unique compensation structure, the program's strong performance-based design, and 98% shareholder support in the prior year.
Compensation Peer Group
9 companies disclosed in 2026 proxy filing