Tech Data fills CEO vacancy with controversial choice

Tech Data has elected an executive with no previous experience of working for an IT distributor as its new CEO. Bob Dutkowsky, who has joined the global wholesale giant from utility computing company Egenera, will get his first taste of the cut-throat broadline distribution sector when he officially begins his post on October 2nd.

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By  Andrew Seymour Published  September 14, 2006

Tech Data has elected an executive with no previous experience of working for an IT distributor as its new CEO. Bob Dutkowsky, who has joined the global wholesale giant from utility computing company Egenera, will get his first taste of the cut-throat broadline distribution sector when he officially begins his post on October 2nd. Dutkowsky’s appointment ends an exhaustive nine-month search for a successor to long-serving CEO and chairman Steve Raymund, who announced his intention to split the two roles back in January. Tech Data claims a search committee formed by its board of directors reviewed a number of highly qualified candidates, although clearly those with a distribution background did not do enough to impress. Dutkowsky, however, boasts extensive understanding of the vendor landscape and is comfortable with all the thrills and spills that a top dog role entails having led Egenera as its chairman, president and CEO for the past two years. Prior to tenures at EMC, GenRad and J.D. Edwards, he also enjoyed a monster 20-year stint at IBM – one of Tech Data’s largest partners – including an assignment working directly for former Big Blue boss Lou Gerstner. According to an SEC filing made by Tech Data yesterday, Dutkowsky will be richly rewarded if he succeeds in delivering results. He is set to earn a base rate of US$900,000 a year plus a shed load of equity benefits and an opportunity to earn incentive compensation under the firm’s Executive Incentive Bonus Plan. “Bob possesses a highly successful track record in driving sales growth and leading companies through periods of change and development. His sales expertise, business acumen and leadership ability in the areas of distribution and product development are an enormous addition to our company,” commented Raymund. “I am very pleased that Bob is joining Tech Data, and in speaking on behalf of our entire organisation, we look forward to his contributions as we work to grow our company and deliver improved returns to our shareholders.” Dutkowsky added: “I am excited to be a part of an extremely dynamic and successful organisation. Steve and the talented management at Tech Data have built an industry leading IT distribution company with an extensive global reach, an exceptional team of employees and highly focused operating fundamentals. I look forward to working with the entire team at Tech Data, the customers and business partners, as we further Tech Data's position as an industry leader worldwide.” Tech Data will be hoping that Dutkowsky can work some of his magic on the company’s struggling EMEA operation. In its most recent set of quarterly accounts for the three months to the end of July 2006, the company plunged to a worldwide loss of US$155m. That figure included a non-cash charge of US$136m for goodwill impairment as a result of its performance in EMEA and other costs associated to the regional restructuring programme it is pursuing. “The second quarter proved challenging, as difficult market conditions in EMEA coupled with distractions from our restructuring initiatives slowed our progress in delivering improved profitability,” said Raymund at the time of the results.

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