Ingram Micro President Is Stepping Down, Days After Tianjin Tianhai Acquisition Announcement
Just six days after Ingram Micro announced plans to become part of Hainan, China-based HNA Group, the distributor revealed in a filing that its second in command will leave his post.
Paul Read will step down Friday as president and chief operating officer of the Irvine, Calif.-based company after 29 months on the job, according to a document filed Tuesday with the U.S. Securities and Exchange Commission (SEC). Read will remain employed by Ingram Micro until September to assist with the transition, the filing stated. Read was not immediately available for comment.
"When Paul came to Ingram [in September 2013], he was looking at succession planning," Damon Wright, Ingram Micro's executive director of investor relations, told CRN. "With this deal now and HNA wanting [CEO Alain Monie] to lead the company for some time, it made Paul reevaluate what his future was at Ingram."
Wright emphasized that Ingram Micro is not under any pressure to cut executive head count or payroll from Tianjin Tianhai, which Feb. 17 disclosed plans to acquire the distributor for $6 billion. HNA is Tianjin Tianhai’s largest stockholder.
"This was Paul's decision based on Paul's career objectives," Wright said. "This was not HNA coming in and making changes to the management team."
Wright said he doesn't see any reason for additional executives to leave Ingram Micro, adding that partners have no reason to be worried.
"Executives recognize there's a fantastic opportunity with Ingram Micro," Wright said.
But Wright acknowledged that individual leaders will make their own decisions about their post-HNA future with Ingram Micro based on their own career paths and trajectories.
Wright said the company doesn't currently have a plan in place for replacing Read, who in his role has been responsible for Ingram Micro's worldwide IT distribution business and the associated logistics support organizations. The distributor's regional leaders, including U.S. chief exec Paul Bay, have reported to Read, while Read has reported directly to Monie.
Even after officially relinquishing his title Friday, Read will be available to serve in whatever role Monie needs until September, said Wright, who declined to say whether conversations about Read's departure began before or after the HNA deal was announced.
Dave DeCamillis said he's never interacted with Read in the eight years he's been with Denver-based Ingram Micro partner Platte River Networks, so he doesn’t anticipate the departure will have much of an impact on his business.
"If it was Paul Bay, it would be different," DeCamillis said. "I'd be surprised to see any major shakeup that affects me or the partners in the next six to 12 months."
While DeCamillis said he hopes and expects that his company won't be harmed by the acquisition, he acknowledged that the company's overall leadership structure might change as it's folded into HNA.
"You would think that it would make sense that they would do some type of consolidation, so yeah, I think it [could] happen," DeCamillis said.
Guy Baroan, president of Elmwood Park, N.J.-based Baroan Technologies, has met Read once or twice and said he came away very impressed with him. Still, Baroan said Read's involvement is more on the back end and at higher levels of the operation, while Paul Bay is more involved in the direction and drive of Ingram Micro's partner community in the United States.
"For us, it would be more troubling if Paul Bay were to be leaving," Baroan said.
Bay told CRN on Friday that he will be remaining with Ingram Micro and continuing to lead the U.S. and Export businesses.
Read will continue to receive his base salary (which was $747,115 in 2014), benefits and equity award vesting until he leaves the company in September.
If Read signs a general release and departs within six months of a change in who controls Ingram Micro, he will be eligible to receive a severance payment equal to twice his salary and target bonus (which was $180,000 in 2013 and 2014), a prorated 2016 bonus, one year's worth of health insurance coverage payments, outplacement services and accelerated vesting of outstanding equity awards.
Ingram Micro’s stock was up 0.1 percent in after-hours trading Tuesday, to $35.75 per share, more than 8 percent below Tianjin Tianhai's offering price of $38.90 per share. Read's departure was announced after the market closed.