FREMONT, CA – TD SYNNEX Corp (NYSE:SNX), a global distributor and solutions aggregator for the IT ecosystem, announced today several key executive changes and compensation adjustments, as detailed in a recent SEC filing.
Effective September 1, 2024, Patrick Zammit will ascend to the role of President and Chief Executive Officer of TD SYNNEX, succeeding Richard Hume, who will retire but continue to serve on the Board of Directors. This transition was previously disclosed in a June 20, 2024, SEC filing.
In recognition of Hume's leadership since the merger of SYNNEX Corporation and Tech Data (NASDAQ:TECD_old) Corporation on September 1, 2021, the Compensation Committee has revised certain aspects of his retirement compensation. Adjustments include the full vesting of Hume's restricted stock unit and stock option awards by his retirement date, with the performance of the company assumed at target level for performance-based awards. Additionally, Hume's stock option exercise period will extend to three years post-retirement. He will also receive a prorated fiscal year 2024 Management Incentive Plan bonus of approximately $1.897 million, alongside a special bonus of $1.5 million.
Michael Urban, the former President of the Americas for TD SYNNEX, who had announced his decision to resign effective July 1, 2024, will also receive a prorated fiscal year 2024 Management Incentive Plan bonus of approximately $704,000. Urban's severance package, effective July 9, 2024, includes a 24-month salary continuation, a lump sum of $27,000, the accelerated vesting of outstanding stock awards, and 18 months of health benefits, contingent upon his adherence to customary release of claims and restrictive covenants benefiting the company.
These executive compensation decisions, as outlined in the 8-K filing, are part of TD SYNNEX's ongoing leadership and organizational adjustments following the merger. The company's filing provides a detailed account of these agreements, reflecting the organization's commitment to a structured leadership transition and recognition of its executives' contributions.
In other recent news, TD Synnex has been in the spotlight with several key developments. RBC Capital has upgraded TD Synnex's stock rating from Sector Perform to Outperform, citing expectations of solid growth in its Advanced Solutions segment and a promising margin expansion outlook for fiscal year 2025. This upgrade was influenced by the anticipation of data center builds, cloud deployments, and increased demand for AI-powered PCs.
In contrast, BofA Securities revised its price target for TD Synnex to $132 from the previous $135, maintaining a Buy rating. This adjustment followed the company's Q2 revenue disclosure, which represented approximately 72% of its billings.
TD Synnex reported a 3% year-on-year growth in gross billings for the second quarter of fiscal 2024, reaching $19.3 billion. Despite a 4% decline in net revenue, the company saw an improvement in gross margins. The company's CEO, Rich Hume, announced his retirement, with COO Patrick Zammit appointed as his successor.
The company returned over $520 million to shareholders in the first half of the fiscal year and anticipates a free cash flow of approximately $1.2 billion for the fiscal year. For the third quarter, TD Synnex has guided billings to be between $18.9 billion and $20.1 billion, reflecting a 5% year-over-year increase. These are recent developments, with TD Synnex expecting growth in the latter half of the fiscal year, driven by the upcoming PC market refresh and investments in AI.
InvestingPro Insights
As TD SYNNEX Corp (NYSE:SNX) navigates executive transitions and compensation adjustments, investors may be interested in the company's financial health and market performance. According to InvestingPro data, TD SYNNEX has a market capitalization of $9.81 billion and a P/E ratio of 16.1, suggesting a moderate valuation in the market. Its revenue for the last twelve months as of Q2 2024 stands at $56.29 billion, despite a slight downturn of 7.4% in revenue growth during the same period. The company's gross profit margin is currently at 7.06%, which may reflect the competitive challenges in the Electronic Equipment, Instruments & Components industry.
An InvestingPro Tip highlights that management has been aggressively buying back shares, which could be a sign of confidence in the company's prospects. Additionally, TD SYNNEX has raised its dividend for 3 consecutive years and maintained dividend payments for 11 consecutive years, pointing to a commitment to returning value to shareholders. With these factors in mind, investors looking for further insights and additional InvestingPro Tips can explore the full suite of analytics and forecasts available on InvestingPro, specifically tailored for TD SYNNEX at https://www.investing.com/pro/SNX. There are 13 additional tips listed, which could help in making a more informed investment decision. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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