8-KLeadership ChangesCorporate ChangesExhibits & Filings

W.W. GRAINGER, INC. 8-K Report, Executive Changes (Aug 8, 2016)

Filed August 8, 2016For Securities:GWW

Summary

W.W. Grainger, Inc. (GWW) filed an 8-K on August 8, 2016, to announce a significant leadership transition and related corporate governance changes. Effective October 1, 2016, Donald G. Macpherson will assume the role of Chief Executive Officer (CEO), succeeding James T. Ryan, who will continue to serve as Chairman of the Board. This transition is noteworthy as Mr. Macpherson is an internal promotion with extensive experience within the company, having most recently served as Chief Operating Officer. In conjunction with his CEO appointment, Mr. Macpherson will also join the Board of Directors, increasing its size to 11 members. His executive compensation will include a performance-vested restricted stock unit (PRSU) award valued at $2 million, contingent on the company's average return on invested capital over a seven-year performance period. Additionally, the company's bylaws were amended to reflect a more flexible designation of corporate offices, aligning with the new leadership structure.

Key Highlights

  • 1Donald G. Macpherson appointed as new Chief Executive Officer (CEO), effective October 1, 2016.
  • 2James T. Ryan will transition from CEO to Chairman of the Board.
  • 3Donald G. Macpherson, formerly COO, has been with the company in various leadership roles since 2008.
  • 4The Board of Directors size will increase to 11 members, with Mr. Macpherson joining the Board effective October 1, 2016.
  • 5Mr. Macpherson is eligible for a $2 million performance-vested restricted stock unit (PRSU) award, tied to a seven-year average return on invested capital performance target.
  • 6Company bylaws amended to allow for flexible designation of corporate offices, including the Chief Operating Officer position.

Frequently Asked Questions

Donald G. Macpherson has been appointed as the new Chief Executive Officer (CEO) of W.W. Grainger, Inc., effective October 1, 2016. He will succeed James T. Ryan, who will remain as Chairman of the Board.

Mr. Macpherson has a long tenure with W.W. Grainger, Inc., most recently serving as Chief Operating Officer since August 1, 2015. Prior to that, he held various senior leadership positions in global supply chain, corporate strategy, and international operations since 2008.

In connection with his appointment as CEO, Mr. Macpherson will receive an award of performance-vested restricted stock units (PRSUs) with an initial value of $2 million. The number of PRSUs will be determined by dividing $2 million by the company's stock price on September 30, 2016. These PRSUs are subject to a seven-year cliff vesting period based on the company's average return on invested capital.

Yes, the Board of Directors' size has been expanded to 11 members. Donald G. Macpherson will be elected to the Board effective October 1, 2016, in conjunction with his appointment as CEO. He is expected to stand for re-election at the 2017 annual shareholder meeting.