Tech Data 2013 Annual Report Download - page 111

Table of Contents
Report of the Compensation Committee
The Compensation Committee (the “Committee”)
has reviewed the Compensation Discussion and Analysis section and discussed that analysis with
management. Based upon this review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and
Analysis section be included in the Company’s Fiscal 2013 10-K.
Compensation Committee:
Kathleen Misunas, Chair
Thomas I. Morgan
David M. Upton
The report of the Compensation Committee shall not be deemed to be filed with the SEC, except to the extent that the Company specifically
incorporates this information by reference into a document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act.
Compensation Discussion and Analysis
In this section, we review the objectives and elements of the Company’s executive compensation program and discuss and analyze the fiscal 2013
compensation decisions for (i) our CEO, (ii) our CFO, and (iii) each of our three other most highly compensated executive officers (our Named
Executive Officers or “NEOs”):
The Company’s fiscal year is from February 1 through January 31, and therefore this report covers the time period from February 1, 2012 through
January 31, 2013. The NEOs for fiscal 2013 are the same as for fiscal 2012 except that Mr. Tonnison is an NEO for fiscal 2013 and Mr. Joseph B.
Trepani is no longer an NEO. Mr. Wright resigned from the Company effective August 2, 2013.
Executive Summary
Fiscal 2013 was a dynamic and challenging year for the Company. Net sales, and net income attributable to the Company’s shareholders on a non-
GAAP basis, decreased. Net sales for fiscal 2013 were $25.4 billion, a decrease of 1.1% from $25.6 billion for fiscal 2012. On a GAAP basis, net
income attributable to the Company’s shareholders decreased to $176.3 million, or $4.50 per diluted share for fiscal 2013, from $190.8 million, or
$4.30 per diluted share for fiscal 2012. On a non-GAAP basis, net income attributable to the Company’s shareholders also decreased. The results
for fiscal 2013 include a net benefit of approximately $25.1 million, or $0.64 per diluted share, for the release of a deferred tax valuation allowance
related to a European jurisdiction, a value added tax assessment and interest expense, net of tax, of $33.8 million, or $0.86 per diluted share, in
relation to an assessment, penalties and interest for various VAT matters in one of the Company's subsidiaries in Spain, and acquisition-related
intangible assets amortization expense, net of tax, of $12.6 million, or $0.32 per share. Excluding these items, non-
GAAP net income attributable to
the Company’s shareholders in fiscal 2013 was $197.5 million, or $5.04 per diluted share. Excluding the $19.2 million charge for the loss on
disposal of subsidiaries, net of tax, and acquisition-related intangible assets amortization expense, net of tax, of $10.5 million, non-GAAP net
income attributable to the Company’s shareholders for fiscal 2012 was $220.5 million, or $4.97 per share. The Company believes that its
compensation philosophy and program play an important role in its ability to meet these challenges and to continue to deliver results to its
shareholders. For a reconciliation between GAAP and non-GAAP net income attributable to the Company’s shareholders, see Part II, Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Quality leadership, long-term value, achievement of financial results versus plan, and responsible cost management provide the core of our
executive compensation program and philosophy. Even though our industry, the stock market and the economy may fluctuate, we seek to reward
effective leadership in a consistent manner with our strategy and the long-term financial success of the Company. The Company’s executive
compensation program is designed to attract and retain quality leaders. We recognize that a sound compensation program is one of the basic
elements enabling us to recruit and retain strong leadership and that having the right leadership in an effective organization structure can directly
and significantly enhance shareholder value. Our executive compensation program also reinforces our historic commitment to keeping firm control
of our costs. Although we are a Fortune 200 company based on our sales, we generate very narrow profit margins. We closely monitor our selling,
general, and administrative expenses, which includes compensation expense. In the challenging environment in which we operate, executive
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• Robert M. Dutkowsky -
Chief Executive Officer
• Jeffery P. Howells - Executive Vice President and
Chief Financial Officer
•
Néstor Cano
-
President, Europe
• Murray N. Wright -
President, the Americas
• John A. Tonnison -
Executive Vice President and Chief Information Officer