Good morning, and welcome to CDW's 2026 Annual Meeting of Stockholders. I'm Chris Leahy, Chair, President, and Chief Executive Officer of the company, and I will be chairing this meeting. Before we call the meeting to order, I want to recognize and thank our almost 15,000 CDW coworkers around the world. Their unwavering commitment, expertise, and focus on our customers continue to be a powerful competitive advantage. We entered the year with strong momentum, and we are operating from a position of strength as we support more than 250,000 customers through an increasingly complex and rapidly evolving technology landscape. We have a resilient business model, a trusted partner ecosystem, and deep technical expertise, positioning us to help customers move forward with clarity, speed, and confidence, whether they are modernizing infrastructure, advancing security, optimizing investments, or unlocking real value from AI.
At CDW, our role is simple and enduring: to make technology work so people can do great things. It is now shortly after 7:30 A.M. Central Standard Time on May 21st, and this meeting is officially called to order, and the polls are open. An agenda for the meeting with the rules relating to the conduct of the meeting is posted on the web portal. We will conduct the business portion of our meeting first, and we will take stockholder comments and questions after the meeting has adjourned. If you are a stockholder and would like to vote your shares at the meeting, you can vote by clicking on the Voting button on the web portal and following the instructions there. If you have already sent in your proxy, there is no need to vote unless you wish to change your vote.
Stockholders may submit comments or questions through the designated field in the web portal. To vote or submit comments or questions, you must be logged into the meeting as a validated stockholder. I will now introduce the other members of the board of directors. Virginia Addicott, James Bell, Lynda Clarizio, Anthony Foxx, Kelly Grier, Marc Jones, David Nelms, Joe Swedish. Thank you all for your service to CDW. Donna Zarcone and Sanjay Mehrotra are not standing for re-election today, and on behalf of the board, thank you, Donna and Sanjay, for your service to CDW. Next, I would like to introduce the representatives from Ernst & Young, our independent registered public accounting firm, Sarah Miller and Laura Klein. They are available to respond to stockholder questions during the question and answer session after the meeting has adjourned.
I would also like to introduce Rick Kulevich, Chief Legal Officer, Executive Vice President, Risk and Compliance, and Corporate Secretary of the company, who will act as Secretary of the meeting. Rick will now give the Secretary's report.
Thank you, Chris. An affidavit has been filed with me certifying that our notice and proxy materials for today's meeting have been duly given to our stockholders of record at the close of business on March 25th, 2026. Anna Hagberg-Cito of Broadridge, serving as our Inspector of Election, has taken the oath of the Inspector of Election and has confirmed that a majority of the shares entitled to vote at this meeting are present in person or represented by proxy. Therefore, a quorum is present for purposes of conducting the official business of this meeting, and this meeting is properly convened.
Thank you, Rick. There are five items of business on the agenda for today's meeting. Please refer to the proxy statement for a complete description of these items. The first item of business is the election of nine directors. The individuals nominated are Virginia Addicott, James Bell, Lynda Clarizio, Anthony Foxx, Kelly Grier, Marc Jones, Chris Leahy, David Nelms, and Joe Swedish. These nine individuals are current directors. The company has not received notice of any other nominations by a stockholder in accordance with the requirements set out in our bylaws. The second item of business is to approve on an advisory basis named executive officer compensation. The third item of business is to ratify the selection of Ernst & Young LLP as the company's independent registered public accounting firm for the year ending December 31st, 2026.
The fourth item of business is to approve an amendment to the company's certificate of incorporation to permit stockholder action by written consent. The fifth item of business, if properly presented, is a stockholder proposal regarding independent board chair requirements. Operator, if Mr. Chevedden or his authorized representative is present, please open their line.
Mr. Chevedden, your line is open.
Hello, this is John Chevedden, proposal five, independent Board Chairman. Shareholders request the Board of Directors adopt an enduring policy amending the governing documents, including the corporate governance guidelines, to include that two separate people hold the office of the Chairman and the office of the CEO as soon as possible. The Chairman of the Board shall be the independent director. A lead director shall not be a substitute for an independent board chairman. The Board shall have the discretion to select the interim chairman of the Board, who is not an independent director, to serve while the Board is required to seek an independent chairman of the Board on an accelerated basis. An independent board chairman at all times improves corporate governance by bringing impartiality, objective oversight, and external expertise to board decisions, mitigating conflicts of interest, enhancing transparency, and boosting shareholder confidence.
This detached perspective allows the chairman to focus on shareholder interest, strengthen management accountability, and provide critical checks and balances, ultimately contributing to long-term sustainability and credibility. It is of interest. Also to give CDW shareholders the right to act by written consent won 51% at the 2025 CDW Annual Meeting. An independent board chairman could help CDW deal with the decline of CDW stock price. CDW stock price was at $263 in 2024 and at only $106 now, despite a robust stock market. An independent board chairman can also help CDW deal with CDW's experienced a 60 basis points year-over-year gross margin decline in Q1 2026. Analysts point to disappointing historical revenue growth and slim forecasted projections compared to the broader business services sector. Uncertainties around geopolitical trade tensions, potential tariff changes, and prolonged federal government budgetary disruptions are causing corporate clients to delay large-scale tech investments. Please vote yes.
Independent board chairman, proposal five.
Thank you for presenting your proposal. Operator, please close the participants' line. The board of directors has reviewed this proposal and recommends that stockholders vote against it for the reasons stated in our proxy statement. Please refer to our proxy statement for the board's views on this proposal. It is now 7:37 P.M. We will now close the polls. Rick will now report on the preliminary voting results for the five items of the business identified on the agenda.
The preliminary count from the Inspector of Election shows that each of the nominated directors has been elected. Stockholders have approved, on an advisory basis, the named executive officer compensation. Stockholders have ratified the selection of Ernst & Young LLP as the company's independent registered accounting firm for 2026. Stockholders have approved an amendment to the company's certificate of incorporation to permit stockholder action by written consent, and the stockholder proposal regarding requiring an independent board chair was not approved. The final report of the Inspector of Election containing the exact number of votes on each proposal will be filed with the minutes of this meeting and disclosed in a Form 8-K filing within four days, which will also be available on CDW's website.
Thank you, Rick. Since there is no further business to come before this meeting, I hereby adjourn the meeting and will respond to stockholder comments and questions. Rick, have we received any questions?
Yes, Chris, we've received one question, which I'll read. Please advise, the CDW response to customers are currently prioritizing heavy server and storage spending to support AI inferencing. This shifts the mix away from higher-margin software, SaaS, and cloud services, causing overall gross margins to compress. Please advise the CDW response to uncertainty in IT spending, exacerbated by public sector federal funding dynamics and potential tariff changes, forcing customers to delay larger enterprise refresh cycles.
Thank you for the question. Indeed, this quarter, we did see an uptick in interest in hardware and infrastructure, given the accelerated speed with which our customers are all now adopting AI. The benefit of our model and the diversity of our end markets, along with the broad portfolio that we bring to bear, is that whatever customers need in whatever cycle they're in across the full spectrum of hardware, software, services and solutions, and across the full life cycle of services, CDW is able to service them. We fully expect software and services to pick up in the back half of the year. We would expect to see our margins recover in the back half of the year. Thank you for the question.
Chris, there are no further stockholder comments or questions.
Thank you. The meeting is now closed.
Thank you all for joining. You may now disconnect.