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Outsider takes Tech Data reins

Robert M. Dutkowsky fit the search criteria with experience in information technology and computer product distribution.

By KRIS HUNDLEY
Published September 14, 2006


Tech Data Corp., the Tampa Bay area's largest public company, on Wednesday named a company outsider and a veteran technology executive experienced in financial turnarounds and global operations to succeed its longtime chief executive.

Robert M. Dutkowsky, 51, will take over the top job at the Clearwater computer products reseller on Oct. 2. He will succeed Steven A. Raymund, 50, who has led Tech Data since 1986, and who declared in April that the company had "lost the passion" and was in need of an overhaul of its corporate culture.

For the past 2½ years, Dutkowsky has headed Egenera Inc., a Marlboro, Mass., company that sells computer server hardware and software to large enterprise users such as Credit Suisse and the U.S. Census Bureau. Earlier in his career, Dutkowsky spent 20 years with IBM, where he rose to executive positions in worldwide sales and marketing.

Raymund, who will remain Tech Data's chairman, announced plans to step aside in January. Since then, the company, which had sales of $20.5-billion for the fiscal year ended Jan. 31, has stumbled. For the three months ending July 31, Tech Data reported a loss of $155.5-million or $2.81 a share on sales of $4.9-billion, the second-largest quarterly loss in its history. The company blamed weak sales in Europe, the Middle East and Africa, as well as repercussions of a management restructuring overseas.

Tech Data's search committee had what Raymund called the company's recent "frustrating" performance in mind when it went looking for a new chief executive. Top of the list of criteria were people experienced in information technology, who understood how computer products are distributed, and had worked both in large companies and globally. On Dutkowsky's resume is a two-year stint managing the Asia Pacific market for IBM, as well as two years as president and chief executive of J.D. Edwards & Co. Inc., which had a large European market for its software.

"We were also interested in someone with execution ability, operational talent and savvy," Raymund said. "These were all skills Bob has acquired."

In a phone interview Wednesday, Dutkowsky said he sharpened his turnaround skills at GenRad Inc., a maker of electronic automatic test equipment which he headed starting in 2000, and J.D. Edwards, where he took over the top job in January 2002.

"Both were distressed companies which had been leaders in their industry and lost their way," Dutkowsky said. "I turned them from companies that were losing money to making money, from shrinking to growing, so I have pretty deep experience level at that. And Tech Data is in the best shape of all those companies. It just needs to stay on track on the basics and hone the execution on some recovery programs."

Dutkowsky also guided GenRad through its merger with Teradyne and then oversaw the integration of J.D. Edwards with PeopleSoft in 2004. But Tech Data's incoming chief warned against assuming his new company will be taking a similar path.

"I'm joining Tech Data to help energize the company, make it grow and create shareholder value," he said. "I want to make it be the company customers want to do business with, vendors want to supply product through and where the best employees in the industry want to work."

Dutkowsky, who joins a company where many of the senior management have come up through the ranks, said he understands the importance of making the most of what he called "the magical first 100 days."

"This will be the fourth company I've joined as CEO," he said. "Which is not to say I know how to run the play perfectly, but there's really a very small, well-defined group of people you need to talk to."

Dutkowsky is a native of Endicott, N.Y., who graduated in 1977 with a degree in labor and industrial relations from Cornell University, where he was captain of the baseball team. Raymund cited that role as contributing to Dutkowsky's managerial style.

"He likes to work with a team, has a passion for winning and is respectful of others," Raymund said. "We were looking for a cultural fit and not everybody we talked to necessarily demonstrated those qualities."

Susan Davis, vice president of marketing at Egenera, said Dutkowsky quickly adapted to the culture of that company, which was being run at the time by its founder.

"You have natural concerns about an outsider, but Bob took time to understand what was working and what was not, then he did a great job of setting direction and getting the consensus of folks to work with him," she said.

"Bob has a way about him that puts people at ease so you tell him how you really feel," said Davis, a Yankee fan who often traded barbs with Dutkowsky, a diehard Red Sox fan.

Dutkowsky and his wife Lorraine have two grown children; they plan to move to the Tampa Bay area within the next few weeks from their home in the Boston area.

According to SEC filings, Tech Data will provide Dutkowsky both relocation benefits and help selling his home. Dutkowsky's annual salary will be $900,000, plus a guaranteed bonus of $900,000 in both 2007 and 2008. The new CEO also receives 40,000 restricted stock units, vesting over three years, and 300,000 maximum value stock settled stock appreciation rights, vesting over four years, with a maximum value of $20 per unit or $6-million.

Last year Raymund, who joined the company in 1981, earned a $1-million salary plus $891,000 bonus. According to Tech Data's filing in May, Raymund also owned about 4.7 percent of the company, which his father founded in 1974.

Dutkowsky was chosen as CEO over Tech Data's internal candidates that included Nestor Ortiz, president of worldwide operations.

On Wednesday, Raymund acknowledged mixed emotions about his own departure from day-to-day operations of the company. With both of his children now graduated from high school, Raymund said he and his wife have been planning the transition for years and he was not in a position to delay the move when the company's earnings began to falter.

"I feel like I'm handing off to someone who is eminently capable of assuming responsibility for the company," Raymund said. "But emotionally I'll miss the relationships, the involvement with a team of really smart men and women. I just want to look back on my life and say I did something besides run Tech Data."

Times researcher Angie Drobnic Holan contributed to this report. Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

Robert M. Dutkowsky

Title: chief executive, Tech Data Corp. effective Oct. 2

Age: 51

Former jobs: Chairman, CEO, Egenera Inc., Marlboro, Mass., 2004 to present; CEO, J.D. Edwards & Co., Denver, Colo., 2002-2004; Chairman, CEO, GenRad, Inc., Westford, Mass., 2000-2002; Executive vice president, EMC Corp., Hopkinton, Mass, 1997-2000; Sales, marketing, management positions, IBM, 1977-1997; Education: Cornell University, B.S. labor and industrial relations, 1977

[Last modified September 17, 2006, 13:16:11]


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