8-K: Distribution Solutions Group Appoints Former Global Industrial CEO Barry Litwin to Lead TestEquity Subsidiary

Distribution Solutions Group, Inc. announced the appointment of Barry Litwin, former CEO of Global Industrial Company, as the new Chief Executive Officer of its TestEquity subsidiary, effective July 14, 2025.

Summary

• Distribution Solutions Group, Inc. (DSG) appointed Barry Litwin as Chief Executive Officer of its subsidiary, TestEquity LLC, effective July 14, 2025.
• Mr. Litwin previously served as CEO of Global Industrial Company, a $1.4 billion public company, from 2019 to 2024.
• His compensation package includes an annual base salary of $850,000.
• He is eligible for a performance-based annual bonus ranging from 0% to 150% of his base salary, with a target of 100%, for calendar years after 2025.
• Mr. Litwin will receive a prorated cash signing bonus for his 2025 employment period, equal to his target bonus amount.
• An equity signing bonus of 70,000 restricted stock units (RSUs) of DSG will be granted, vesting 25% on the date of grant and 25% on each anniversary thereafter.
• He will also receive nonqualified stock options: 100,000 at $35/share, 70,000 at $45/share, 50,000 at $55/share, and 50,000 at $70/share, vesting 20% per year on each anniversary of the grant date.
• Both cash and equity signing bonuses are subject to clawback if employment terminates within 18 months due to termination for Cause or resignation without Good Reason.
• Russ Frazee, the outgoing CEO of TestEquity, will transition to an advisory role.

Sentiment

Score: 8

Explanation: The appointment of Barry Litwin, a highly experienced executive from a significant industrial distribution company, is a positive strategic move for TestEquity and DSG. His background aligns well with stated goals for growth and digital transformation. The structured compensation and smooth transition with the outgoing CEO also contribute to a positive outlook.

Positives

• Appointment of Barry Litwin, a proven executive with a track record of transformational leadership in industrial distribution and multi-unit industries.
• Mr. Litwin's extensive experience in driving businesses with modern multi-channel, go-to-market strategies, particularly in markets overlapping with TestEquity.
• His proven track record of building growth platforms through strong process discipline.
• The outgoing CEO, Russ Frazee, will remain in an advisory role to ensure a smooth leadership transition.
• TestEquity is described as a market leader with unparalleled value-added capabilities, positioning it for significant value unlocking.

Risks

• Clawback provisions for the cash signing bonus and equity signing bonus (RSUs) if Mr. Litwin's employment terminates within his initial 18-month period due to termination by the Company for Cause or resignation by Mr. Litwin without Good Reason.
• General risks associated with integrating the business of DSG with other combined or future combined companies, and that certain assumptions with respect to such business or transactions could prove inaccurate.
• Risks discussed in DSG's other SEC filings (Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K).

Future Outlook

Barry Litwin's focus as CEO of TestEquity will be on accelerating commercial growth, transforming the digital channel, expanding the reach of managed services, and delivering a differentiated customer experience. He aims to foster a highly engaged, performance-driven culture to position TestEquity as the trusted partner of choice for design engineers, technicians, and manufacturers.

Management Comments

• "We are elated Barry is joining the DSG leadership team. We have known Barry for some time, and we experienced firsthand his ability to unlock value and drive execution in multiple situations." J. Bryan King, DSG's Chairman and Chief Executive Officer.
• "Barry is a seasoned strategic and operational leader skilled at transforming complex businesses, recruiting talent, and driving organizational effectiveness." J. Bryan King, DSG's Chairman and Chief Executive Officer.
• "In addition to his success leading a respected industrial distributor, Barry has extensive experience driving businesses with modern multi-channel, go-to-market strategies, and notably in many overlapping markets that TestEquity serves." J. Bryan King, DSG's Chairman and Chief Executive Officer.
• "The Board and I want to thank Russ Frazee for his leadership and expertise during his seven-year tenure at TestEquity as the COO and then CEO. Russ has become a good friend to all of us, was a cultural leader, and together with our team was instrumental in more than doubling the size of TestEquity, working through integration of acquisitions and implementing processes and structures that enabled this business unit to continue to scale." J. Bryan King, DSG's Chairman and Chief Executive Officer.
• "I am excited to lead TestEquity as Chief Executive Officer through its next phase of growth." Barry Litwin.
• "After working closely with the LKCM Headwater team and conducting a deep dive into understanding DSG and specifically the TestEquity business, and how well positioned it is as a market leader with an unparalleled complement of value-added capabilities, I see a clear path to facilitate unlocking significant value as its CEO." Barry Litwin.

Industry Context

This appointment reflects a strategic move by Distribution Solutions Group to bring in seasoned leadership with a strong background in multi-channel industrial distribution and MRO products. Barry Litwin's experience at Global Industrial Company, a significant player in the industrial sector, suggests a focus on leveraging digital transformation and strategic growth initiatives within the specialized test and measurement solutions market that TestEquity serves. This aligns with broader industry trends emphasizing digital sales channels, supply chain optimization, and value-added services in the distribution sector.

Comparison to Industry Standards

• Barry Litwin's previous role as CEO of Global Industrial Company, a $1.4 billion public company, positions him as an executive with experience managing a large-scale industrial distributor. This suggests TestEquity is bringing in leadership comparable to larger industry players.
• The compensation package, including a high base salary ($850,000), significant performance-based bonuses (up to 150% of base), and substantial equity grants (70,000 RSUs and 270,000 stock options with various strike prices), appears competitive for a CEO of a key subsidiary within a publicly traded specialty distribution group.
• The inclusion of clawback provisions for signing bonuses and equity is a common corporate governance practice, aligning with industry standards for executive compensation to mitigate risk in case of early termination for cause or resignation without good reason.
• The non-compete and non-solicit clauses (12 and 18 months respectively) are standard for executive employment agreements in competitive industries like distribution, aiming to protect proprietary information and talent.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential positive impact due to the appointment of an experienced leader expected to drive growth and unlock value at TestEquity, a key subsidiary. The significant equity component of the CEO's compensation aligns his interests with shareholder value creation.
• Employees: Leadership change at TestEquity may lead to new strategic directions and cultural shifts. The focus on "building collaborative, high-performing teams" and "foster a highly engaged, performance-driven culture" suggests potential positive impacts on employee morale and development.
• Customers: The new CEO's stated focus on "accelerating commercial growth, transforming our digital channel, expanding the reach of our managed services, and delivering a differentiated customer experience" indicates potential improvements in service and product offerings.
• Suppliers: No direct impact mentioned, but strategic shifts could influence supplier relationships over time.
• Creditors: No direct impact mentioned.

Next Steps

• Barry Litwin will commence his role as CEO of TestEquity LLC on July 14, 2025.
• The Board will hold its first regularly scheduled meeting following the Effective Date to formally grant Mr. Litwin's equity awards.
• Mr. Litwin will focus on accelerating commercial growth, transforming the digital channel, expanding managed services, and enhancing customer experience at TestEquity.

Key Dates

Keywords

CEO appointment, TestEquity, Distribution Solutions Group, DSGR, Executive compensation, Restricted Stock Units, Stock Options, Industrial distribution, Test and measurement, Corporate governance, Leadership change