UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

TECH DATA CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

April 25, 2019

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 25, 2019

To the Shareholders of Tech Data Corporation:

Notice is hereby given that the Annual Meeting of Shareholders (“Annual Meeting”) will be held on June 5, 2019, at 1:30 p.m. Eastern Daylight Time, Corporate Center Three at International Plaza, 4221 W. Boy Scout Boulevard, Suite 140, Tampa, FL 33607, for the following purposes:

Shareholders of record at the close of business on March 28, 2019 are the only shareholders entitled to notice of and to vote at the Annual Meeting.

By order of the Board of Directors,

Wayne O. Hanewicz

Corporate Vice President, Secretary

IMPORTANT: Whether you expect to attend the meeting or not, we urge you to vote your shares either online, by telephone, or by mail. If you are voting by mail, please request a proxy, sign, date, and return the proxy in the prepaid envelope within the timelines stated herein. If you attend the meeting, you may vote your shares in person if they are held in your name and not in the name of a broker, even though you have previously signed and returned your proxy. See the accompanying Proxy Statement for further information.

TECH DATA CORPORATION

2019 Proxy Statement

TABLE OF CONTENTS

TECH DATA CORPORATION

5350 Tech Data Drive

Clearwater, Florida 33760

PROXY STATEMENT

The accompanying proxy is solicited by the Board of Directors (the “Board”) of Tech Data Corporation (the “Company”) for the Annual Meeting of Shareholders (the “Annual Meeting”) to be held on June 5, 2019, at 1:30 p.m. Eastern Daylight Time, or any postponement or adjournment thereof. This Proxy Statement contains important information for you to consider when deciding how to vote on matters brought before the Annual Meeting. Your vote at the Annual Meeting is important to us. The GENERAL INFORMATION section below provides details on how to vote your shares.

GENERAL INFORMATION

Who can vote?

You can vote your shares if our records show that you owned the shares on March 28, 2019. Each outstanding share of common stock is entitled to one vote. There were 36,904,970 outstanding shares of common stock entitled to vote as of March 28, 2019.

Notice of Electronic Availability of Proxy Statement and Annual Report

Pursuant to the e-proxy rules and regulations adopted by the Securities and Exchange Commission (“SEC”), we have elected to provide access to our proxy materials online. On or about April 25, 2019, we mailed to our shareholders a notice (the “E-Proxy Notice”) containing instructions on how to access our 2019 Proxy Statement and Annual Report (the “Proxy Materials”) and on how you may submit your proxy online. If you would like to receive a printed copy of our Proxy Materials, you should follow the instructions for requesting Proxy Materials included in the E-Proxy Notice. These materials will be available free of charge and will be sent to you within three business days of your request.

Important Notice Regarding Availability of Proxy Materials: The Proxy Materials and the proxy are available at www.proxyvote.com. Enter the 12-digit control number located on the E-Proxy Notice.

How do I vote?

If you are a shareholder of record or are holding a proxy for a shareholder of record, you may vote in person at the Annual Meeting. At your request, we will give you a ballot.

If you do not wish to vote in person or if you will not be attending the Annual Meeting, you may vote by proxy. You can vote by proxy online by following the instructions provided in the E-Proxy Notice, or if you receive paper copies of the Proxy Materials by mail, you can vote online, by telephone, or by mail by following the instructions on the proxy card enclosed in your paper copy of the Proxy Statement. You may vote by proxy even if you plan to attend the Annual Meeting. Please note that listening to the Annual Meeting via the webcast does not constitute attendance and you will not be permitted to cast your vote through the webcast.

You can utilize these methods to vote:

Online. You may vote online at www.proxyvote.com by following the instructions provided in the E-Proxy Notice or by following the instructions on the proxy card. You will need the control number contained on your E-Proxy Notice or proxy card in order to vote online. Voting online has the same effect as voting by mail or telephone. Online voting will be available until 11:59 p.m. Eastern Daylight Time on June 4, 2019.

By telephone. You may vote by telephone at 1-800-690-6903. You will need the control number contained on your E-Proxy Notice or proxy card in order to vote by telephone. Telephone voting will be available until 11:59 p.m. Eastern Daylight Time on June 4, 2019.

By mail. If you received a paper copy of the Proxy Materials, you may vote by signing and dating each proxy card you received and returning it to us in the prepaid envelope provided or you may return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. A mailed proxy card must be received on or before June 4, 2019.

Can I change my vote after I have voted?

You may revoke your proxy and change your vote at any time before the final vote at the meeting. You may vote again on a later date online or by telephone, by signing and returning a new proxy card with a later date, or by attending the meeting and voting in person. Only your latest online, telephone, or written proxy submitted prior to the meeting will be counted. You may revoke your proxy at any time before the meeting by (i) notifying the Company’s Secretary in writing or (ii) delivering a later-dated proxy online, by telephone, or in writing. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the meeting or specifically request in writing that your prior proxy be revoked. Any written notice revoking a proxy should be sent to Wayne O. Hanewicz, Secretary, Tech Data Corporation, 5350 Tech Data Drive, Clearwater, Florida 33760.

How do I vote shares that are held by my broker?

If you have shares held by a broker or other nominee, you may instruct your broker or other nominee how to vote your shares by following instructions that the broker or nominee provides to you. Most brokers offer voting online, by telephone, and by mail.

How will my broker vote if I do not provide instructions?

If your shares are held by a broker, the broker will ask you how you want your shares to be voted. If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two things can happen, depending on the type of proposal. For the proposal to ratify the selection of the independent registered public accounting firm for fiscal 2020, the broker may vote your shares in its discretion. For all the other proposals, if you do not provide the broker with instructions on how to vote, then the broker does not have discretion to vote.

How do I vote in person?

If you are a shareholder of record, you may vote your shares in person at the Annual Meeting. However, we encourage you to vote online, by telephone, or by proxy even if you plan to attend the Annual Meeting.

What will be voted on at the meeting?

The business to be voted on at this year’s Annual Meeting is:

How many votes are required for the approval of each item?

For determining a quorum—A quorum must be present for the transaction of business. A quorum is present if the holders of a majority of the outstanding shares of common stock entitled to vote are present in person or represented by proxy. Even if you or your broker do not vote your shares on a proposal, such non-votes will count as shares present for purposes of determining the presence or absence of a quorum for the transaction of business. Similarly, abstentions are also counted for determining if a quorum is present.

To elect directors—In an uncontested election, an affirmative vote of a majority of the votes cast is required to elect a director; provided that, if the number of nominees for director exceeds the number of directors to be elected, directors will be elected by a plurality of votes cast. Shares represented by proxies given to the Company will be voted in accordance with the specifications marked thereon, and, if no specification is made, will be voted “FOR” all nominees in accordance with the recommendation of the Board. If you indicate “ABSTAIN” for a particular nominee on your proxy card, your vote will not count either “FOR” or “AGAINST” the nominee and will therefore have no effect on the outcome. Broker non-votes will not count as votes cast and will also have no effect on the outcome.

To ratify the selection of the independent registered public accounting firm for fiscal 2020—An affirmative vote of a majority of the votes cast is required to ratify the selection of the independent registered public accounting firm for fiscal 2020. Shares represented by proxies given to the Company will be voted in accordance with the specifications marked thereon, and, if no specification is made, will be voted “FOR” the ratification of the selection of the independent registered public accounting firm in accordance with the recommendation of the Board. Abstentions will not count as votes cast and will have no effect on the outcome.

To approve, on an advisory basis, named executive officer compensation for fiscal 2019—An affirmative vote of a majority of the votes cast is required to indicate approval, on an advisory basis, of the compensation of the named executive officers for fiscal 2019. Shares represented by proxies given to the Company will be voted in accordance with the specifications marked thereon, and, if no specification is made, will be voted “FOR” the approval of such compensation in accordance with the recommendation of the Board. Abstentions and broker non-votes will not count as votes cast and will have no effect on the outcome.

What if other matters come up at the meeting?

The matters described in this Proxy Statement are the only matters we know will be voted on at the Annual Meeting. Any other matters properly presented will be voted on by the shareholders in

attendance at the Annual Meeting or proxy holders in their discretion. Please see the SUBMISSION OF SHAREHOLDER PROPOSALS section for the requirements related to the submission of shareholder proposals.

BENEFICIAL OWNERSHIP

Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days from the record date. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. In general, “beneficial ownership” also includes those shares a director, director nominee, or executive officer has the power to vote or transfer, and options that are exercisable currently or that become exercisable within 60 days from the record date.

The table below sets forth certain information regarding the beneficial ownership of the Company’s common stock as of March 28, 2019, by: (i) the Company’s directors and director nominees; (ii) the Company’s named executive officers (“NEOs”); (iii) such directors and all executive officers as a group; and (iv) each person known by the Company to own beneficially more than 5% of the shares of the Company’s common stock.

BENEFICIAL OWNERSHIP TABLE

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

During fiscal 2019, the executive officers and directors of the Company filed timely reports with the SEC relating to transactions involving equity securities of the Company beneficially owned by them. The Company has relied on the written representation of its executive officers and directors and copies of the reports they have filed with the SEC in providing this information.

CORPORATE GOVERNANCE MATTERS

BOARD OF DIRECTORS

The Board oversees the Company’s management in its conduct of the business. The Board holds regularly scheduled meetings at least quarterly and otherwise as appropriate to consider corporate decisions requiring its attention and action. The Board has four committees, the Audit Committee, Compensation Committee, Governance and Nominating Committee and CyberTech Committee (the “Committees”), the principal responsibilities of which are described below. Each of the Committees meets regularly and has a written charter. Representatives from the Company’s legal department regularly provide updates on legal and regulatory matters to the Board and Committees.

The Board has made an affirmative determination that Charles E. Adair, Karen M. Dahut, Harry J. Harczak, Jr., Bridgette P. Heller, Kathleen Misunas, Thomas I. Morgan, Patrick G. Sayer, and Savio W. Tung are independent within the meaning of applicable law and the NASDAQ Stock Market (“NASDAQ”) listing requirements. In making this determination, the Board considered that a company for which Ms. Heller’s sister-in-law serves as President, purchased products at fair market value and on an arms’ length basis from the Company during the Company’s 2019 fiscal year. There were no other relationships between any director and the Company that required review in connection with the Board’s independence determination. Each member of each of the Audit, Compensation and Governance and Nominating Committees is independent within the meaning of applicable law and the NASDAQ listing requirements.

The Board has adopted Corporate Governance Principles that are available on the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com. Additionally, the Company has adopted a code of business conduct and ethics for directors, officers (including the principal executive officer, principal financial officer, and principal accounting officer), and employees, known as the Code of Conduct, which is available on the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com.

During fiscal 2019, the Board held nine regularly scheduled meetings and one additional special meeting, for a total of ten meetings. All members of the Board attended 75% or more of the total number of meetings of the Board and all Committees on which he or she served. All directors were present at the 2018 Annual Meeting of Shareholders that was held on June 6, 2018. It is the policy of the Company for the Board members to attend the Annual Meeting, when possible in person, or by telephone or videoconference.

The current members of the Board are as follows:

The following provides biographical information about the ten nominees, for election to the Board at the 2019 Annual Meeting as well as their qualifications and skills:

Mr. Adair is a financial expert whose accounting background, service on numerous boards and executive and financial roles in the pharmaceutical distribution industry position him well to understand and provide significant value related to finance, management, operations, governance and risk. Mr. Adair’s years of service on public company boards provide Mr. Adair with additional perspectives from which to view the governance and oversight of the Company’s operations and the Board’s activities. Mr. Adair has the in-depth knowledge of the business and affairs of the Company and the appropriate judgment and leadership skills to be well suited to serve as the Company’s Lead Independent Director.

Ms. Dahut has valuable knowledge in the areas of technology, cybersecurity and government. Ms. Dahut’s extensive expertise in the strategic implementation of technology consulting and service provides the Board essential insight and knowledge related to the various elements of the sale and use of technology. Ms. Dahut’s qualifications include her military service and leadership experience in next-generation technologies, cybersecurity, data analytics, finance, government contracting, management and risk.

Mr. Dutkowsky served as Chief Executive Officer (“CEO”) of the Company for over a decade. Mr. Dutkowsky’s broad global business, industry and operational experiences bring considerable value to the Company’s Board as Mr. Dutkowsky is skilled at viewing the technology industry from a variety of perspectives. The experiences and skills Mr. Dutkowsky developed as a senior executive at one of the leading technology companies in the world and as the Chair and CEO of other technology and software businesses allow Mr. Dutkowsky to provide value related to finance, management, operations and risk. The skills and experiences Mr. Dutkowsky gained over his long and successful tenure as the Company’s CEO will continue to provide the Board with valuable insights as a Director and Executive Chairman.

Mr. Harczak is a financial expert with extensive financial and operational knowledge providing the Board with an essential perspective on the needs of a technology distribution customer and the Company’s corporate strategy. Mr. Harczak was an audit partner at PricewaterhouseCoopers auditing public and private companies and the Chief Financial Officer (“CFO”) and senior executive for one of the largest IT resellers in the Americas. Mr. Harczak has substantial executive and financial experience within the IT distribution channel allowing Mr. Harczak to provide significant value related to finance, management, operations and risk.

Ms. Heller has a strong background in marketing and the managing of a multi-national workforce. Ms. Heller’s unique in-depth knowledge around consumers and what drives sales contributes strongly to the Board’s ability to identify market demands and trends. Ms. Heller’s qualifications include significant experience in senior leadership positions at large global companies, allowing Ms. Heller to provide substantial value related to international operations, marketing, finance, management, people-centered development and risk.

Mr. Hume led the Company’s regional operations as Chief Operating Officer (“COO”) from 2016 until Mr. Hume was appointed CEO of the Company in June 2018. The experiences and skills Mr. Hume developed as a senior executive at one of the world’s leading technology companies bring considerable value related to finance, marketing, management, global business transformation, operations, risk and strategy. As the CEO, Mr. Hume’s direct participation on the Board is essential to the effective implementation of corporate strategy, governance oversight and to the Company and Board’s direction.

Ms. Misunas has held executive management positions in global distribution and product automation businesses, including in the roles of CEO, president and chief information officer. Given the importance of the Company’s engagement with customers through various enterprise systems and e-commerce initiatives and the importance of the security of our IT systems, Ms. Misunas’s experience and expertise in this area is of significant value to the Company. Additionally, Ms. Misunas’s background in scaling businesses has provided human resource expertise, as well as compensation and benefits knowledge to the Company. Ms. Misunas’s skills and experiences related to management, operations, people-centered development and risk provide significant value to the Board.

Mr. Morgan brings to the Board a deep understanding of the global challenges and opportunities faced by low-margin complex distribution models who operate in a dynamic market. Mr. Morgan’s significant business experiences, holding CEO and other senior executive officer positions at distributors of various products, including IT products, and physical and digital content and value added services contributes strongly to the Board’s activities. Mr. Morgan’s leadership roles in different distribution markets provide substantial value to the Company related to management, international operations and risk.

Mr. Sayer has a deep understanding of financial markets and is well suited to assist the Board in its global investments and merger and acquisition decisions. Mr. Sayer’s extensive international business and finance experience allow Mr. Sayer to provide value related to finance and international operations, with a focus on European markets. Mr. Sayer brings insight related to transactional success and the delivery of performance that will attract investment.

Mr. Tung has significant global financial expertise in the areas of investments, mergers and acquisitions and capital planning which brings a valuable perspective to the Board. Mr. Tung’s extensive Asian international business and financial experience allow Mr. Tung to provide value related to finance, international operations, and capital markets, with a focus on the economic forces and trends influencing the Company around the world.

QUALIFICATIONS AND EXPERIENCE OF DIRECTOR NOMINEES

The Governance and Nominating Committee has led an initiative to develop a matrix identifying key director skills, to evaluate the extent to which the members of the Board possess those skills, and to highlight the skills most critical to support the Company’s strategy. The Company’s strategy consists of four pillars: invest in next generation technologies, strengthen our end-to-end portfolio, transform the Company digitally, and optimize our global footprint. We summarize this strategy as “moving to higher value.” Below is a table that lists six critical skills to support the pillars of the Company’s strategy, the number of directors who possess such skills, and the pillars of the strategy to which each skill relates.

This high-level summary is not intended to be an exhaustive list of each of our director nominee’s skills or contributions to the Board. Further information on each director nominee, including some of their specific experience, qualifications, attributes or skills is set forth in the biographies on pages 8 to 12 of this Proxy Statement.

Invest in Next-Generation Technologies		Strengthen Our End-to-End Portfolio		Transform Tech Data Digitally		Optimize our global footprint

OUT OF 10 DIRECTOR NOMINEES

BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT

The Company’s Executive Chairman of the Board presides at all meetings of the Board and of the shareholders. The Executive Chairman also manages the relationships between the Board and the Company’s management and shareholders. Currently, the Company’s Executive Chairman is Robert M. Dutkowsky.

On June 6, 2018, Richard T. Hume became the Company’s CEO and a member of the Board. Mr. Dutkowsky remained on the Board as Executive Chairman. As Executive Chairman, Mr. Dutkowsky’s duties include those of Executive Chairman plus the following additional duties as an employee: (i) provide advice and counsel to the CEO on a regular basis; (ii) at the request and direction of the CEO, engage in critical vendor and customer relationships and community involvement; and (iii) at the request and direction of the CEO or the Board, be involved in specified special projects. In addition to an Executive Chairman, the Board has a lead independent director designated by the Governance and Nominating Committee, which is comprised solely of independent directors. Charles E. Adair was the lead independent director for fiscal 2019. The lead independent director chairs the meetings of the independent directors and is responsible for consolidating and expressing the views of the independent directors to the Board. The lead director’s other functions include: (i) serves as a liaison between the Executive Chairman and the independent directors, (ii) discusses and agrees upon the nature and type of information to be sent to the Board, (iii) approves meeting schedules to assure that there is sufficient time for discussion of all agenda items, (iv) has the authority to call meetings of the independent directors, and (v) if requested by major shareholders, ensures that he or she is available for consultation and direct communication.

The Board’s leadership structure allows the Board to benefit from the leadership and direct participation of the Company’s current CEO and, its long-standing former CEO as well. At the same time, the leadership structure provides for a strong lead independent director with defined duties and responsibilities to facilitate the ability of the independent directors to provide independent and cohesive oversight and guidance.

The Board as a whole is responsible for Company risk oversight. Some of this oversight is exercised through the Board’s Committees, which report on their deliberations to the Board. The Board and its Committees solicit and receive reports from management on current and potential risks that are identified by either management or the Board. Areas of focus include competitive, economic, operational, financial, accounting, legal, regulatory, and compliance risks. The areas of risk overseen by the Board and its committees are summarized below. Each Committee meets with key management personnel and outside advisors.

AUDIT COMMITTEE

The Audit Committee assists the Board in fulfilling its oversight responsibilities for the reliability and integrity of financial reports and other financial information, compliance with legal and regulatory requirements, and with the Company’s systems of disclosure controls and internal controls over accounting and financial reporting and the audit process. The Audit Committee performs these functions by serving as an independent and objective party to monitor the financial reporting process and the disclosure and internal control systems. The Audit Committee has the authority and responsibility to select, oversee the performance of, and replace the independent accounting firm, and to oversee the activities and select or replace the provider of the internal audit function. The Audit Committee provides an open channel of communication between the independent accounting firm, management, internal audit, and the Board; reviews accounting and auditing issues identified by the independent accounting firm and by management in order to assess their potential impact on the Company; reviews reports from the Disclosure Committee, which is a committee of management; reviews reports and oversees the investigation of concerns regarding accounting, internal control, or auditing matters; and establishes procedures to receive complaints regarding the ethics of employees and Board members. To review the complete statement of duties and responsibilities of the Audit Committee, please see the Audit Committee Charter posted on the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com.

The Audit Committee has a policy requiring pre-approval of all services to be provided by the Company’s independent accounting firm and will not approve prohibited non-audit services. See further discussion of the Company’s policy under POLICY ON PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN PROPOSAL NO. 2—RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2020.

The members of the Audit Committee are Harry J. Harczak, Jr. (Chair), Charles E. Adair, Karen M. Dahut and Bridgette P. Heller. The Board has determined that Charles E. Adair and Harry J. Harczak, Jr. are “audit committee financial experts” as defined by Item 407(d)(5) of Regulation S-K under the Securities Exchange Act of 1934 (the “Exchange Act”). All members of the Audit Committee are independent as defined by applicable law and the listing requirements of NASDAQ. The Audit Committee met nine times during fiscal 2019.

COMPENSATION COMMITTEE

The Compensation Committee is responsible for establishing the strategy for compensation, equity incentives, and benefits of the executive officers of the Company. The Committee recommends to the Board the annual compensation, equity grants, and benefits of the Executive Chairman and of the CEO. The Committee approves the executives’ compensation programs and plans, including the methodologies for setting salaries and cash incentives, as well as equity-based incentive plans and other benefits, and determines the salary and other compensation of all executive officers of the Company other than the CEO. The Committee also administers the 2018 Equity Incentive Plan of Tech Data Corporation (the “Equity Plan”) and the Company’s Executive Incentive Bonus Plan (the “Bonus Plan”). Succession plans for the CEO’s direct reports and the regional presidents are reviewed by this Committee. The Committee reviews and discusses with management the Compensation Discussion and Analysis (the “CD&A”) prepared for inclusion in the Company’s Annual Report on Form 10-K and Proxy Statement and, based on such review, determines whether to recommend that the CD&A be included in the Annual Report on Form 10-K and the Proxy Statement. The Committee also prepares the Compensation Committee Report furnished with the Company’s Proxy Statement each year. The Committee’s processes and procedures for the consideration and determination of executive compensation, including the role of executive officers of the Company in making recommendations to the Committee regarding executive compensation and the role of compensation consultants in assisting the Committee in its functions, are described below in the COMPENSATION DISCUSSION AND ANALYSIS section. To review the complete statement of duties and responsibilities of this Committee, see the Compensation Committee Charter posted on the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com.

The members of the Compensation Committee are Thomas I. Morgan (Chair), Kathleen Misunas, Patrick G. Sayer and Savio W. Tung. All members are independent as defined by applicable law and the listing requirements of NASDAQ, “Non-Employee Directors” within the meaning of the Rule 16b-3 under the Exchange Act, and “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code (the “Code”). During fiscal 2019, the Compensation Committee held five regularly scheduled meetings and two additional special meetings, for a total of seven meetings.

Compensation Committee Interlocks and Insider Participation

During fiscal 2019, none of the members of the Compensation Committee were, and none currently are, an employee or officer of the Company or had any relationship requiring disclosure under Items 404 or 407 of Regulation S-K under the Exchange Act. In addition, during fiscal 2019, none of the Company’s executive officers has served as a member of the Board or compensation committee of any other entity that has or has had one or more of its executive officers serving as a member of the Company’s Board or Compensation Committee.

GOVERNANCE AND NOMINATING COMMITTEE

The Governance and Nominating Committee assists the Board in ensuring that the Board is appropriately organized and qualified to meet its fiduciary duties to the Company and its shareholders. The Committee develops and recommends the Company’s Corporate Governance Principles to the Board, and assists in determining if the Board and committee members are qualified to serve in their assigned capacities. This Committee establishes policies for the identification, evaluation, and selection of director nominees, the structure and operations of the committees, shareholder communication with the Board, and Board member attendance at the Annual Meeting. The Committee establishes policies for Board and Board member evaluation, including assessments for each director and a separate evaluation for the Executive Chairman, every two years, using an external evaluator. The Committee reviews the continuing education program for Board members and oversees ESG matters. To review the complete statement of duties and responsibilities of this Committee, see the Governance and Nominating Committee Charter available in the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com.

The members of the Governance and Nominating Committee are Charles E. Adair (Chair), Bridgette P. Heller, Thomas I. Morgan and Savio W. Tung. All Governance and Nominating Committee members are independent as defined by Rule 5605(a)(2) of the listing requirements of NASDAQ. During fiscal 2019, the Governance and Nominating Committee held five regularly scheduled meetings and one additional special meeting, for a total of six meetings.

CYBERTECH COMMITTEE

The CyberTech Committee assists the Board in overseeing the plans and accountability of management regarding the Company’s IT strategy and landscape and cybersecurity preparedness, assessing the adequacy of strategy, resources and funding necessary to sustain and advance successful IT programs and the cybersecurity environment at the Company. The Committee further provides advice and recommendations related to enhancing existing and developing future IT strategy and development, cybersecurity, and data privacy initiatives at the Company. The Committee reviews the Company’s overall IT strategy and development, cybersecurity plan and information protection management strategy and related risks. The Committee reviews reports from the Company on IT and cyber risks and future plans of the Company related to the security and storage of Company data and the establishment and maintenance of IT and cybersecurity controls and processes. To review the complete statement of duties and responsibilities of this Committee, see the CyberTech Charter available in the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com.

The members of the CyberTech Committee are Kathleen Misunas (Chair), Harry J. Harczak, Jr., Karen M. Dahut and Patrick G. Sayer. The CyberTech Committee met four times during fiscal 2019.

EXECUTIVE SESSIONS

The Board holds an executive session at each quarterly board meeting and may hold such sessions during special meetings. Executive sessions of the Board are attended only by the independent directors and such other attendees as they may request. The executive sessions of the Board are led by the lead independent director.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

As we fulfill the Company’s overall purpose of continuously satisfying the world’s ever-evolving demand for technology, we also remain committed to being a responsible corporate citizen. Our commitment to ESG matters contribute to our designation as one of Fortune magazine’s “World’s Most Admired Companies” for 10 consecutive years. The programs described below are consistent with our shared values of Integrity, Excellence, Accountability, Collaboration and Inclusion.

Environmental

We recognize that a healthy environment and safe workplaces are critical to our business, strategy, society, and people. We address environmental issues in an integrated manner to encompass protection of the environment as well as colleague health and safety. The environmental, health and safety (“EHS”) systems, processes and tools in place across our footprint enable us to meet or exceed governmental and industry requirements. We are also committed to continuous improvement in our performance. Notable Environmental/EHS highlights include:

Social

The Company is proud to be recognized as a great place to work, a leader in the promotion and practice of diversity and inclusion, and an involved, positive member of the local communities where we live and work. We take a holistic approach to our social strategy, striving to create a culture where talented people want to come to work, develop their careers, become leaders, and make a difference for all our stakeholders and communities. Notable social highlights include:

Governance

We are committed to maintaining a strong corporate governance program that complies with all requirements, reflects best practices and continues to evolve as new expectations and opportunities emerge. Notable governance highlights include:

RELATED PERSON TRANSACTIONS

Management and the Audit Committee of the Board review all potential related person transactions. The Audit Committee is mandated by its charter to review and determine whether to approve related person transactions and has adopted a policy for such review. Management and the Audit Committee look to the rules of NASDAQ and of the SEC to determine what transactions may be considered to be of concern and apply these rules as the standard to determine whether a transaction or relationship would be permitted. Potential transactions or circumstances that may qualify as a related person transaction are reported to the Disclosure Committee of the Company and reviewed by the Audit Committee. The Audit Committee may approve, disapprove, or ratify a transaction and may issue conditions to ensure the transaction is conducted in a fair manner, consistent with the best interests of the Company and its shareholders.

Detailed questions are posed annually to the executive officers of the Company and to all members of the Board that require disclosure of any relationship or transaction that may be a related person transaction. These questionnaire responses are reviewed by management and disclosures are analyzed and reported to the entire Board. Potential issues are investigated. Related person transactions, if any, would be reviewed by the Board with respect to the independence of the Board member.

During fiscal 2019, the Company reviewed two related person transactions requiring disclosure under Item 404(a) of Regulation S-K under the Exchange Act. During fiscal 2019, a company for which Ms. Heller’s sister-in-law serves as President purchased products at an aggregate purchase price of approximately $925,000 from the Company. Ms. Heller’s sister-in-law is Sheryl Heller and the name of the company is Twin Peaks Geeks, Inc. The Board determined that these transactions did not impair Ms. Heller’s independence. During fiscal 2019, iPass, Inc., a company for which Mr. Hume’s sister-in-law, Patricia Hume, served as Chief Operating Officer, purchased products or services at an aggregate purchase price of approximately $321,000 from the Company. The Twin Peaks Geeks, Inc. and iPass, Inc. purchases were made at fair market value and on an arms’ length basis.

On June 6, 2018, Richard T. Hume was promoted from COO to CEO and was elected to the Board. Mr. Hume’s compensation for fiscal 2019 is disclosed in the SUMMARY COMPENSATION TABLE. Also on that date, Mr. Dutkowsky, the Company’s prior CEO, became Executive Chairman of the Board and continued as an employee. Mr. Dutkowsky’s CEO compensation for fiscal 2019 is disclosed in the SUMMARY COMPENSATION TABLE and his Executive Chairman and related employee compensation is disclosed in the FISCAL 2019 BOARD OF DIRECTORS COMPENSATION TABLE. The independent members of the Board approved the compensation for Mr. Hume and Mr. Dutkowsky.

DIRECTOR ELECTIONS AND COMPENSATION

CANDIDATES FOR THE BOARD AND SHAREHOLDER RECOMMENDATIONS

The Governance and Nominating Committee will consider director candidates recommended by our shareholders, other Board members, and executives. The recommendation and evaluation process for candidates recommended by shareholders does not differ from the process followed for other candidates. Shareholders wishing to recommend a candidate should do so by submitting the recommendation in writing to the Chair of the Governance and Nominating Committee or to the Company’s CEO at 5350 Tech Data Drive, Clearwater, Florida 33760. Any recommendation submitted must include a resume, personal references, and background information as well as the name and contact information of the recommending shareholder. Florida law requires that all candidates must be at least 18 years of age to qualify. All qualified candidates will be considered for nomination in accordance with the provisions of the Company’s Corporate Governance Principles that are available in the Corporate Governance section of the Investor Relations area of our website at http://investor.techdata.com and such other criteria as may be established by the Governance and Nominating Committee at the time an open position on the Board is being considered to be filled.

At a minimum, candidates for a position on the Company’s Board should have qualities including but not limited to: (i) high ethical standards; (ii) sound integrity; (iii) an inquisitive nature; (iv) a strong commitment to make decisions and take actions guarding the long-term interests of shareholders; (v) seasoned judgment; (vi) a record of outstanding skills and accomplishments in their personal careers; and (vii) the ability and desire to communicate and participate actively in board and committee sessions. The Company’s Corporate Governance Principles continue to focus on the Board’s commitment to seek in its members a broad range of diverse backgrounds, experiences and skills including: business analysis; international; gender, racial, ethnic and cultural diversity; strategic planning; marketing; management of financial reporting and internal controls; corporate financings; acquisitions and divestitures; information technology; global business trend assessment; and other backgrounds, experiences and skills relevant to the Company’s business. The Committee implements its consideration of such diversity as part of a variety of weighted factors in evaluating Board nominees and assesses the effectiveness of its nomination process based on the potential nominees that result in light of existing Board membership and identified strategic needs.

PROPOSAL NO. 1—ELECTION OF DIRECTORS

The Company currently has ten directors who serve on the Board. At the 2019 Annual Meeting, all ten of our current directors will stand for election, for a total of ten (10) nominees.

All directors are to hold office for annual terms or until their successors have been elected and qualified or as otherwise provided in the Company’s Bylaws. In the event any nominee is unable to serve, the persons designated as proxies may cast votes for other persons as substitute nominees. The Board has no reason to believe that any of the nominees named below will be unavailable, or if elected, will decline to serve.

The section titled CORPORATE GOVERNANCE MATTERS of this Proxy Statement contains more information about the leadership skills and other experiences that caused the Governance and Nominating Committee and the Board to determine that these nominees should serve as directors of the Company.

Director Nominees

DIRECTORS COMPENSATION

It is the Board’s policy that compensation for the Executive Chairman and independent directors should be a mix of cash and equity-based compensation. The Executive Chairman and independent directors receive a base annual retainer fee, plus reimbursement for reasonable out-of-pocket expenses. In addition to the base annual retainer fee, each Committee chair receives an annual chair retainer and the members of each Committee receive a Committee membership retainer.

The annual retainer amounts for fiscal 2019 are set forth in the following table:

In addition to the annual retainer, a special meeting attendance fee of $1,500 per meeting (of 50 minutes or more in length) may be paid if there are significantly more special meetings than the regularly scheduled Board or Committee meetings.

With respect to equity-based compensation, the Executive Chairman and independent directors receive equity incentives generally consistent with the philosophy for granting equity incentives to executive officers; i.e., to enable the Executive Chairman and non-employee directors to acquire and increase their proprietary interest in the long-term success of the Company, thus providing them with economic incentives linked to the Company’s financial performance and providing shareholder value. Stock options (other than incentive stock options), stock appreciation rights, restricted stock and other stock-based awards may be awarded under the Equity Plan based upon the recommendation of the Compensation Committee and approval of the Board. The Board may consider such factors as affordability of the awards to the Company, alignment with shareholder interests, and the retention and recruitment of effective directors. Consistent with prior years, the fiscal 2019 annual equity grant was in the form of restricted stock units (“RSUs”).

The Company’s Corporate Governance Principles include Board-approved director stock ownership guidelines. All directors are required to accumulate shares of Company stock through direct purchases or retention of equity incentives, equal in value to a multiple of the base annual retainer (the “Stock Ownership Requirement”). Both unvested and vested RSUs are included for purposes of determining a Director’s attainment of the applicable target accumulations. In fiscal 2019, the Stock Ownership Requirement for the Executive Chairman and independent Directors was five times the base annual retainer. The Stock Ownership Requirement changed in June 2018 and now must be met no later than the fifth anniversary of a director’s initial election or appointment. Until the Stock Ownership Requirement is met, a director must retain 100% of the net shares generated, after tax, upon the vesting or net settlement of RSUs and 50% of the net shares generated, after tax, upon the vesting, settlement or exercise as applicable of any other equity incentive awards.

The following table summarizes the compensation paid to or earned by the Executive Chairman and independent directors during fiscal 2019:

FISCAL 2019 BOARD OF DIRECTORS COMPENSATION TABLE

INDEPENDENT ACCOUNTING FIRM AND AUDIT MATTERS

REPORT OF THE AUDIT COMMITTEE

Audit Committee Role

Management is responsible for the Company’s internal controls and the financial reporting process. The independent accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing reports thereon. The Audit Committee’s responsibility is to monitor these processes. The Audit Committee meets with management, the internal audit group, and the independent accounting firm to facilitate communication. The Audit Committee has the authority and available funding to investigate any matters within the scope of its responsibilities and to retain such outside counsel, experts, and other advisors as it determines appropriate to assist it in the conduct of any such investigation. In addition, the Committee appoints the Company’s independent accounting firm and pre-approves all audit and non-audit services to be performed by the independent accounting firm.

In this context, the Audit Committee has discussed with the Company’s independent accounting firm the overall scope and plans for the independent audit. The Audit Committee reviewed and discussed the audited financial statements with management and the independent accounting firm. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Discussions about the Company’s audited financial statements included the independent accounting firm’s judgments about the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Audit Committee also discussed with the independent accounting firm the other matters required to be discussed by PCAOB Auditing Standard No. 16 (Communications with Audit Committees). The Audit Committee reviewed the scope and results of the testing of internal controls with management, the internal audit group and the independent accounting firm. Management’s report and the independent accounting firm’s report and attestation on internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act were reviewed and discussed by the Audit Committee with management and the independent accounting firm.

Independence of Accounting Firm

The Company’s independent accounting firm provided to the Audit Committee the written disclosures and the letter required by Rule 3526 of the PCAOB, and the Committee discussed the independent accounting firm’s independence with management and the independent accounting firm. In addition, the Committee considered whether the non-audit services provided by the independent accounting firm could impair its independence and concluded that such services would not.

Recommendation

Based on: (i) the Audit Committee’s discussion with management and the independent accounting firm; (ii) the Audit Committee’s review of the representations of management; and (iii) the report of the independent accounting firm to the Audit Committee, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019 (the “Fiscal 2019 10-K”) filed with the SEC.

AUDIT COMMITTEE:

Harry J. Harczak, Jr., Chair

Charles E. Adair

Karen M. Dahut

Bridgette P. Heller

The report of the Audit 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.

PROPOSAL NO. 2—RATIFICATION OF SELECTION OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2020

The Audit Committee selected Ernst & Young LLP (“Ernst & Young”) to serve as our independent registered public accounting firm (“independent accounting firm”) for fiscal 2020. In selecting the independent accounting firm, the Audit Committee considers the firm’s independence; the quality, responsiveness, and expertise of the engagement team; the firm’s experience, leadership, structure, and compliance and ethics programs; the record of the firm in regulatory, litigation, and accounting matters; the firm’s financial strength; the performance on prior audits and engagements; and the appropriateness of the fees charged. Ernst & Young has been engaged as the Company’s independent accounting firm beginning with fiscal 2001. The Audit Committee has decided to submit its selection of Ernst & Young as our independent accounting firm to our shareholders for ratification as a matter of good corporate practice, although this is not required in our Bylaws or otherwise. If the selection of Ernst & Young is not ratified, it will be considered a direction for the Audit Committee to review its future selection of our independent accounting firm. The Audit Committee retains the discretion to select a different independent accounting firm if it determines that such a change would be in the best interest of the Company and our shareholders.

The Audit Committee pre-approves and reviews audit and non-audit services performed by Ernst & Young as well as the fees charged by Ernst & Young for such services. In its pre-approval and review of non-audit service fees, the Audit Committee considers, among other factors, the possible effect of the performance of such services on the accounting firm’s independence. To avoid potential conflicts of interest in maintaining auditor independence, the law prohibits a publicly traded company from obtaining certain non-audit services from its independent accounting firm. We have not obtained any prohibited services from Ernst & Young. For additional information and details concerning the Audit Committee and its activities with Ernst & Young, see REPORT OF THE AUDIT COMMITTEE.

Representatives of Ernst & Young are expected to be present at the Annual Meeting, with the opportunity to make a statement should they desire to do so, and will be available to respond to appropriate questions from shareholders.

Independent Accounting Firm Fees

The following table shows all fees for professional services provided by Ernst & Young for fiscal 2019 and 2018.

Policy on Pre-Approval of Audit and Non-Audit Services of the Independent Registered Public Accounting Firm

The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent accounting firm. Pre-approval is generally provided for up to one year, is detailed as to the particular service or category of services and is subject to a specific budget. Management is required to seek pre-approval of services that will exceed the budget or for services that are not detailed in an existing pre-approval. The Chair of the Audit Committee is delegated the authority to pre-approve certain services between regularly scheduled meetings, capped at a value of $500,000, with ratification by the Audit Committee at the next regularly scheduled meeting. Management reports quarterly to the Audit Committee regarding the extent of services provided by the independent accounting firm in accordance with this pre-approval, and the fees for the services performed to date. During fiscal 2019, all services were approved by the Audit Committee in accordance with this policy.

COMPENSATION

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee (the “Committee”) has reviewed the COMPENSATION DISCUSSION AND ANALYSIS section and discussed that analysis with management and the Committee’s independent compensation consultant. Based upon this review and discussion, the Committee recommended to the Board that the COMPENSATION DISCUSSION AND ANALYSIS section be included in the Company’s Fiscal 2019 10-K and Proxy Statement.

Compensation Committee:

Thomas I. Morgan, Chair

Kathleen Misunas

Patrick G. Sayer

Savio W. Tung

The report of the Compensation Committee does not constitute soliciting material and will not be deemed to be filed or incorporated by reference into any other filing by the Company under 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 2019 compensation decisions for (i) our current and former CEO, (ii) our CFO and (iii) each of our three other most highly compensated executive officers who were employed as of the last day of fiscal 2019 (collectively, our NEOs):

The Company’s fiscal year is from February 1 through January 31, and therefore this report covers the time period from February 1, 2018 through January 31, 2019. Mr. Dutkowsky, Mr. Hume, Mr. Dannewitz, Mr. Vetter and Mr. Zammit were NEOs for fiscal 2018 and remain NEOs in fiscal 2019. Mr. Quaglia was an NEO in fiscal 2017. Effective June 6, 2018, Mr. Hume became the Company’s CEO and Mr.  Dutkowsky became the Company’s Executive Chairman.

Executive Summary

Fiscal 2019 was a year of strategic progress as we further defined and executed our move to higher value through our strategy of:

This translates to delivering higher-value solution offerings to our channel partners; providing our colleagues with rewarding opportunities; and creating value for our shareholders through an enhanced financial profile with emphasis on growing operating income and delivering a return on invested capital (“ROIC”) above our weighted average cost of capital.

Our colleagues delivered a strong finish to a record fiscal year for the Company. Worldwide sales grew 11 percent to more than $37 billion, and our operating income, EPS, and ROIC showed strong improvement. Among our company’s most notable achievements during fiscal 2019 was completion of our major integration efforts and the attainment of the synergies we committed to when we announced the acquisition of Avnet, Inc.’s Technology Solutions business (the “TS Acquisition”) in fiscal 2017.

During fiscal 2019, the Company continued to emphasize pay-for-performance. At the same time, we continued to optimize our core businesses, maintained disciplined cost controls, and accelerated our capabilities in next generation technologies. Our focus on these areas allowed the Company to:

The achievement of our primary business priorities and financial objectives help align the Company’s performance with the long-term interests of our shareholders. Successful execution is measured and rewarded in our compensation plan in the selection of our performance measures for the Company’s Bonus Plan and performance-based restricted stock units (“PRSUs”). The performance measures for our NEOs under the Company’s annual Bonus Plan are earnings per share (“EPS”), ROIC, regional profitability measured in dollars or euros, and regional profitability as a percentage of sales. The payout percentages for these performance measures varied in fiscal 2019 from 77.5% to 165%. The performance measure for our PRSUs remains worldwide cumulative operating income measured over a three-year period, and the payout for the PRSUs vesting in 2019 was at the maximum attainment of 150%. For detail regarding the Bonus Plan and PRSU performance targets, attainment levels, and payouts, see the PHILOSOPHY, PRACTICE AND DETERMINATION OF COMPENSATION FOR FISCAL 2019 – ANNUAL BONUS and FISCAL 2019 BONUS PAYOUT AMOUNTS ($) BY PERFORMANCE MEASURE – EQUITY AWARDS sections below.

Other key compensation-related actions in fiscal 2019 were:

The Company implemented a Recoupment Policy allowing it to require repayment of certain performance based compensation in the event of a financial restatement caused by a covered executive’s misconduct. All executive officers are subject to the Recoupment Policy.

The Company continued to increase the proportion of PRSUs granted to executive officers as a percentage of total overall compensation. See the FISCAL 2019 BONUS PAYOUT AMOUNTS ($) BY PERFORMANCE MEASURE – EQUITY AWARDS section below.

The Company engaged in shareholder outreach to gather more information about our shareholders’ perspectives on compensation related issues, and after these discussions is disclosing more details about our annual Bonus Plan performance targets. See the SHAREHOLDER APPROVAL OF OUR PROGRAM section below.

What We Do and What We Do Not Do

Our compensation program is constructed in conformity with prevailing governance standards. The following are some of the key compensation practices we follow to drive performance, as well as some practices we avoid because we do not believe they promote our long-term goals.

Shareholder Approval of our Program

At the Company’s most recent Annual Meeting held on June 6, 2018, the Company submitted its executive compensation program to an advisory vote of its shareholders (also known as the “say on pay vote”). This advisory vote received support from approximately 74% of the total votes cast at the annual meeting, a decline from the previous year’s approval rate of 96%.

The Company pays careful attention to shareholder feedback including the say on pay vote. Based on the decline in shareholder approval, the Company engaged in outreach efforts with its major shareholders regarding its compensation program. The Company requested meetings with ten of its largest shareholders holding over 50% of the Company’s shares, in addition to Glass Lewis and Institutional Shareholder Services (“ISS”). Four such shareholders, plus Glass Lewis and ISS, met with a Company management team consisting of the CEO, Chief Human Resources Officer, Corporate Vice President, Investor Relations and the Corporate Secretary. Six shareholders declined the meeting or

did not respond. In these engagement meetings, there was an expressed desire for the Company to disclose more specific details of its Bonus Plan performance targets. See PHILOSOPHY, PRACTICE AND DETERMINATION OF COMPENSATION FOR FISCAL 2019 – ANNUAL BONUS. The Company is disclosing its fiscal 2019 Bonus Plan performance targets in this Proxy Statement. In addition, there were questions regarding several one-time payments and equity grants made to NEOs in connection with the TS Acquisition. The management team explained that these one-time payments and grants were made in connection with a transformative transaction for the Company, and were not routine practice, even in circumstances where smaller or more routine acquisitions are made. The Company notes that there were no such one-time grants or payments in fiscal 2019.

Elements of Compensation

Principal Compensation Elements

Our compensation program is comprised of three fundamental elements that correspond to the various aspects of an executive’s responsibilities: base salary, annual cash incentive bonus and long-term equity awards (in aggregate, “target total direct compensation”). Our Company operates on a very low cost model, therefore compensation must be managed within strict financial constraints. Our compensation levels are based upon affordability related to the Company’s annual operating plan (the “AOP”). The types and sizes of equity awards are influenced by associated costs to the Company in relation to the AOP.

The following table describes each of our compensation elements and the role it plays in promoting our compensation program goals, including rationale and philosophy related to those goals and elements:

Other Compensation Elements

We provide our NEOs with basic health and welfare benefits that are generally the same as those made available to other salaried employees located in the same jurisdiction. The table below highlights certain other compensation components we offer and as a general matter, certain components we have decided not to offer our NEOs consistent with our cost-sensitive approach to compensation. In connection with the TS Acquisition, the Company agreed to continue certain legacy benefits provided to Mr. Zammit, that the Company otherwise does not provide to its U.S. NEOs.

Oversight of the Compensation Program

The Company’s executive compensation program is administered and overseen by the Committee with assistance from the CEO, Chief Human Resources Officer and other officers, as appropriate. The Committee selects and retains an independent compensation consultant who reports directly to the Committee to assist it in the performance of its duties. The following table identifies the roles and responsibilities of the Committee and Management in the oversight of the Company’s executive compensation program:

Most of the year’s significant compensation decisions (those pertaining to the setting of base salaries, bonus targets and equity award percentages) are typically made at the meetings of the Committee and the Board that follow the end of the prior fiscal year. In reaching its decisions regarding pay levels, the Committee does not aim to mirror any other particular company’s compensation levels. Nonetheless, the Committee does consider other companies’ practices that might be pertinent to a

distributor with narrow profit margins and to the fact that we operate in multiple geographic locations with differing regulatory obligations and market considerations.

The Committee selects and engages an independent compensation consulting firm and authorizes its work. Reports and advice from the consultant may be requested by and shared between the Committee, the Board, and management. The Committee’s charter requires it to evaluate compensation consultant and advisor independence and conflicts of interest pursuant to applicable law and listing standards. Our compensation consultant for fiscal 2019 was Exequity LLP (“Exequity”). In December 2018, the Committee evaluated and confirmed Exequity’s independence using the factors set forth in NASDAQ Rule 5605(d)(3)(D).

Philosophy, Practice and Determination of Compensation for Fiscal 2019

Overall, our compensation program balances incentives to perform with competitive pay taking into account our low margin operating environment. The Committee considers all pay elements in setting the total compensation opportunity for each NEO. The Committee believes the balance between elements should vary for each NEO reflecting the differences in their roles and geographic location, the impact each NEO has on Company results, balance in the external market, our cost-conscious pay philosophy and internal pay equity. For example, the CEO’s allocation is structured to balance short-term performance and long-term growth in shareholder value. The allocation of compensation value for the other NEOs also stresses achievement of annual business goals, but ties a reasonable amount to the long-term creation of shareholder value. The value of the total compensation package for each of our NEOs is informed by the median pay level for similarly positioned executives at other companies in our peer group and general industry community.

Pay-for-performance is an important element of the Company’s compensation philosophy, and we adhere to the pay-for-performance objective in the administration of our executive compensation program. NEO annual target bonuses range from 85% to 120% of base salary and actual bonus payments are directly tied to performance against pre-established performance targets derived from our AOP. Common merit increases to base salary tend to be modest, but are made after considering several factors, including individual and Company performance. Our annual equity awards are defined as a percentage of base salary plus target bonus, but the ultimate value of those awards is a function of share price for RSUs and achievement of long-term financial objectives for PRSUs, which ensures that pay-for-performance is reflected in the structure of our equity awards as well.

Base Salary

The Committee’s practice is to set base salary that, when combined with the annual cash bonus opportunity, will attract and retain high quality executive talent. The Company’s strong consideration for controlling costs is achieved partially by its philosophy of conservatively setting compensation targets within the range of peer and general industry group norms.

In March of fiscal 2019, the Committee decided not to increase base compensation for five of the six NEOs, and instead increased their total compensation in the form of additional equity. See PHILOSOPHY, PRACTICE AND DETERMINATION OF COMPENSATION FOR FISCAL 2019 – ANNUAL BONUS and FISCAL 2019 BONUS PAYOUT AMOUNTS ($) BY PERFORMANCE MEASURE – EQUITY AWARDS. Mr. Vetter received a 4.6% base salary increase to better align his total compensation to market and for exceptional performance. In addition, Mr. Hume’s base salary was increased in June 2018, in connection with his promotion to CEO.

Annual Bonus

Annual cash bonus opportunities are an important feature of our pay-for-performance compensation practices and are governed by our Bonus Plan. The target bonus amount for each NEO is defined as a percentage of base salary that varies with the level of responsibility attendant to each NEO role. In fiscal 2019, the Committee increased the target bonus percentage for Mr. Quaglia from 85% to 100% to better align with market levels and his internal peers, and increased Mr. Hume’s percentage from 110% to 120% when he became CEO in June 2018. The following table shows target bonus opportunities for all NEOs in fiscal 2019 as a percentage of base salary:

Each NEO’s bonus opportunity ties to the achievement of specified performance measures. These performance measures and their associated performance targets are developed and set in connection with our AOP and directly determine the amount of annual bonus paid. All of our NEOs have the performance measures of EPS and ROIC, with ROIC being determined on a global basis for our NEOs with global responsibility and on a regional basis for those NEOs with a regional responsibility. EPS targets are designed to reflect the Company’s emphasis on achieving profitable growth. ROIC targets above the Company’s WACC are designed to reflect both improved profitability and effective capital allocation. In addition, for our NEOs with regional responsibility, regional profitability measured in euros or dollars, and regional profitability as a percentage of sales, are designed to reflect the Company’s emphasis on achieving profitable growth. We believe that collectively these performance measures encourage both profitable growth and capital efficiency, plus create long-term value for our shareholders.

Payment of the bonus is conditioned on achievement of performance targets that are specified in advance for each NEO. The selected performance measures and weightings for fiscal 2019 were:

Deceleration & Acceleration of Cash Incentive Bonus Payments

The target bonus amount is subject to acceleration or deceleration depending upon the level of achievement for each performance measure. For fiscal 2019, the deceleration and acceleration ranges set for the performance measures were:

To incent achievement and overachievement of the performance targets, the Committee approved a bonus acceleration table such that 100% achievement would result in 100% payout and 101% achievement would result in 125% payout.

The Company’s fiscal 2019 Bonus Plan targets, attainments, over/under achievement percentage and payout percentage for our NEOs are:

The above performance targets are tied directly to the Company’s financial results in relation to the AOP for fiscal 2019. The Committee certified the above achievement levels after the completion of fiscal 2019.

Performance targets and achievement levels for purposes of the Bonus Plan were calculated using non-GAAP measures as described more fully below:

For EPS, we started with net income and weighted average shares outstanding on a GAAP basis. We then made adjustments to exclude the impact of certain items, including the related income tax effects. The most significant adjustments related to: (i) acquisition, integration and restructuring expenses, (ii) goodwill impairment, (iii) gains associated with certain legal settlements, (iv) a gain on disposal of a subsidiary, (v) acquisition-related intangible assets amortization expense, (vi) a benefit of

approximately $25 million related to the collection of an accounts receivable balance previously considered uncollectible, (vii) the impact of the transition tax related to the enactment of the U.S. Tax Cuts and Jobs Act, (viii) changes in deferred tax valuation allowances, (ix) an income tax benefit from an acquisition settlement and (x) the impact of share repurchases.

The ROIC performance measure is a non-GAAP metric and for fiscal 2019 was calculated as follows:

(Adjusted Operating Income or Contribution Margin / Gross Sales Billed * (1—AOP Estimated Tax Rate for Year)) divided by (Gross Cash Days / 365)

For purposes of calculating this metric, Gross Cash Days are defined as days of sales outstanding in accounts receivable excluding the impacts of accounts receivable purchase agreements plus days of supply on hand in inventory, less days of purchases outstanding in accounts payable. Gross cash days are calculated using gross sales billed and gross cost of products sold.

Adjusted operating income is used in the calculation of worldwide ROIC and represents worldwide operating income on a GAAP basis, adjusted for the exclusion of stock compensation expense and the impact of certain items. The most significant adjustments related to the following: (i) acquisition, integration and restructuring expenses, (ii) goodwill impairment, (iii) gains associated with certain legal settlements, (iv) a gain on disposal of a subsidiary, (v) acquisition-related intangible assets amortization expense, (vi) a benefit of approximately $25 million related to the collection of an accounts receivable balance previously considered uncollectible, (vii) tax indemnifications and (viii) the impact of the Company’s deferred compensation plan (the “Deferred Compensation Plan”).

Contribution margin is a regional performance measure and represents regional operating income on a GAAP basis, adjusted for the exclusion of certain allocated costs, stock compensation expense and the impact of certain items. The most significant adjustments related to the following: (i) acquisition, integration and restructuring expenses, (ii) gains associated with certain legal settlements, (iii) a gain on disposal of a subsidiary, (iv) acquisition-related intangible assets amortization expense, (v) a benefit of approximately $25 million related to the collection of an accounts receivable balance previously considered uncollectible, and (vi) tax indemnifications.

Contribution margin percentage is a regional performance measure and represents contribution margin (as defined above) divided by gross sales billed.

The following table shows how much of the total bonus payment for each NEO was attributable to the performance measures applicable to that NEO.

Fiscal 2019 Bonus Payout Amounts ($) by Performance Measure

Equity Awards

The Committee grants equity incentives to our NEOs under our shareholder-approved Equity Plan. Equity incentives are designed to create a mutuality of interest with shareholders by motivating executives to manage the Company’s business so that the shareholders’ investment will grow in value over time. We subject the awards to customary vesting conditions to provide retention incentives to motivate employees to remain with the Company. This retention function is critical because the Company, due to cost considerations, does not maintain a defined benefit pension plan and does not provide other post-retirement medical or life insurance benefits for NEOs.

Equity incentives are granted at the fair market value on the date of grant and are typically granted annually at our March Board and Committee meetings. The Committee may, however, also consider awarding additional equity incentives at any scheduled Committee meeting during the year as it determines necessary to enhance retention, motivate our NEOs, reward exceptional performance, or otherwise address unusual circumstances. Equity incentives for new hires and promotions are generally made at the regularly scheduled quarterly Committee meeting following the quarter in which the hire or promotion occurred.

The decision of what type of equity to grant and the value of the award is based upon an evaluation of the Company’s AOP, the desirability of long-term service from the executive officer, the perceived value to the executive, the dilutive effect to the shareholders, the effect of the accounting rules on expensing the award, peer group and general industry practices, and the number of equity incentive awards issued to other executive officers in the Company with approximately the same responsibility as the executive officer at issue. The value of the annual equity incentive award is set as a percentage of target total cash compensation.

The Company has used a variety of equity award vehicles over the years depending on the circumstances but, beginning in March 2016, has granted a combination of time-based RSUs and PRSUs that vest based on the achievement of specified performance measures. The Committee considers a variety of factors in making its decision on the type and mix of equity awards, including: (i) various other types of equity awards, and the affordability and perceived value to recipients of such

equity awards; (ii) the equity award practices of peer group and general industry companies; (iii) the impact of the Company’s use of time-based RSUs and PRSUs on executive and Company performance; and (iv) the desire to further align incentives for the executives with the long-term performance of the Company and with long-term shareholder value.

The RSUs and PRSUs accomplish complementary objectives. The RSUs generally vest over three years, with 25% vesting on each of the first two grant date anniversaries and 50% vesting on the third grant date anniversary. Back-loading the vesting schedule provides extra retention incentives beyond that of simple pro-rata vesting. In addition, the time-based vesting element of RSUs enables executives to focus on long-term goals. The PRSUs, which have a three-year performance period and a performance measure of worldwide cumulative operating income, also motivate the achievement of long-term goals and promote retention. The Committee set a deceleration and acceleration schedule for the PRSUs pursuant to which (i) 100% achievement of the three-year performance target results in the vesting of 110% of the grant, (ii) less than 70% achievement results in 0% vesting, and (iii) greater than 110% achievement results in the vesting of 150% of the grant. The Committee sets the deceleration and acceleration schedule to incent achievement and overachievement of the performance target in the PRSUs.

All the RSUs and PRSUs granted to NEOs contain a double trigger change in control provision, which means that if an acquirer or successor in a change in control assumes or continues the awards, vesting of the awards will accelerate in connection with the change in control only if the grantee has a qualifying termination of employment following the change in control. All the RSUs and PRSUs granted to NEOs are also subject to customary retirement provisions. See the POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL– RETIREMENT section below.

The size of the fiscal 2019 annual equity grant as a percentage of target total cash compensation (“Equity Grant %”) for each NEO was determined by the Committee based upon the effectiveness of each NEO’s performance in the prior year, as well as an analysis of target total cash and direct compensation compared to the peer group. In lieu of base salary increases, the Committee increased the annual Equity Grant % for each NEO in the following amounts: Mr. Dutkowsky by 12 percentage points, Mr. Hume by 23 percentage points, Mr. Dannewitz by 8 percentage points, Mr. Vetter by 8 percentage points, and Mr. Zammit by 13 percentage points. Mr. Hume’s increase consisted of an additional 15 percentage points in RSUs and 8 percentage points in PRSUs. The increases for all the other NEOs were solely in the form of PRSUs. The increases in PRSUs for all of our NEOs were done to further incentivize long-term pay-for-performance, increase the percentage of equity grants that are performance based, and to better align the equity grant percentage and total direct compensation amounts of our NEOs with the market. The approved Equity Grant % for each NEO broken down by RSUs and PRSUs is:

The first grant of PRSUs made in March 2016 vested after the expiration of their three-year performance period on January 31, 2019. The performance measure, performance target, attainment ($), attainment (%), and payout (%) are as follows:

The above performance target ties directly to the Company’s financial results in relation to the Company’s 3-year AOP for fiscal 2017 to fiscal 2019. The Committee certified the above attainment after the completion of fiscal 2019 and the applicable acceleration or deceleration based upon that over/under achievement.

The performance target and attainment were calculated using the non-GAAP measure of worldwide cumulative operating income, as defined in the PRSU grant agreement. We started with worldwide cumulative operating income on a GAAP basis, adjusted for the add-back of stock compensation expense. We then made adjustments to exclude the impact of certain items. The most significant adjustments related to the following: (i) acquisition, integration and restructuring expenses, (ii) goodwill impairment, (iii) gains associated with certain legal settlements, (iv) a gain on disposal of a subsidiary, and (v) the impact of the Company’s Deferred Compensation Plan.

Perquisites

The Company provides minimal perquisites and does not consider them to be a significant component of its compensation package.

Severance Plan

The Severance Plan provides our U.S.-based NEOs with base salary and a pro-rata portion of certain incentive compensation over a specified period if the Company terminates an NEO’s employment without cause. Mr. Zammit is based in Europe and does not participate in the Severance Plan as the terms of his potential separation from the Company are subject to his Manager’s Agreement (Mr. Zammit’s Manager’s Agreement, as amended, is included as Exhibits 10-24 and 10-25 to our Form 10-K for the fiscal year ended January 31, 2019) and local law in Europe. Please see POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL for a more complete discussion of the Severance Plan.

Change in Control Severance Policy

The Company’s Change in Control Severance Policy (“CIC Policy”) is based on the determination that it would be in the best interests of the Company and its shareholders to secure the continued services, dedication and objectivity of certain key employees of the Company in the event of any threat or occurrence of a qualifying change in control of the Company under the CIC Policy. The current participants in the CIC Policy are the Company’s executive officers, including the active NEOs, with the exception of Mr. Zammit. The CIC Policy provides for double trigger severance benefits and a participant will be entitled to benefits under the CIC Policy only in the event that (i) there is a qualifying change in control of the Company, and (ii) the participant’s employment with the Company is

terminated by the Company without Cause or by the participant for Good Reason within 24 months after the effective date of the Change in Control (as these terms are defined in the CIC Policy). The CIC Policy does not provide for any gross-ups to any of our NEOs for the excise tax or so-called “parachute payments” in connection with a change in control. In the event of a change in control, the provisions of Mr. Zammit’s termination would be determined in accordance with his Manager’s Agreement and applicable laws in Europe where he resides. Please see POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL for a more complete discussion of the CIC Policy.

Equity Ownership Guidelines

Our active NEOs are required to accumulate and retain shares of Company stock, through owned shares or retention of stock awards, equal in value to a multiple of their base salary. The target accumulations are six times base salary for the CEO and three times base salary for Mr. Dannewitz, Mr. Quaglia, Mr. Vetter and Mr. Zammit. Mr. Hume’s target accumulation increased from three times base salary to six when he became CEO. Until the ownership target is met, these executive officers are required to retain 50% of all of the net shares generated, after tax, from any exercise or settlement of equity incentive awards. Both unvested and vested RSUs are included for purposes of determining an NEO’s attainment of the applicable target accumulations. Unvested PRSUs are excluded.

Recoupment (Clawback) Policy

In fiscal 2019, the Company implemented a Recoupment Policy allowing it to require repayment of certain performance based compensation in the event of a financial misstatement caused by a covered executive’s misconduct. All executive officers are subject to the Recoupment Policy.

IRS Code Section 162(m)

Beginning in 2018, Section 162(m) of the Code limits the federal income tax deduction for annual individual compensation to $1 million for the NEOs, subject to a transition rule for written binding contracts in effect on November 2, 2017 and not materially modified after that date. In the past, Section 162(m)’s deduction limit included an exception for “performance-based” compensation. The Company’s compensation programs were generally designed to enable the Company to grant awards that could qualify for this performance-based exception. To accomplish this, the Company previously asked shareholders to approve equity and incentive compensation plans that included limitations and other provisions required to be included under Section 162(m). Now that the performance-based compensation exception is no longer available, the Company will no longer include Section 162(m)-related limitations or provisions or request shareholder approval for this purpose, and may not generally attempt to meet the requirements previously included in our plans related to the exception. To the extent it deems practical, the Company intends to comply with the transition rule for November 2, 2017, for written binding contracts, if available, as long as the Committee determines that to be in the Company’s best interest.

Benchmarking

The Committee regularly assesses the appropriateness of total compensation opportunities for our NEOs by comparing them to prevailing practices at our peer group companies, measuring them against a survey of practices across a broader community of general industry organizations of similar size and nature, and by soliciting guidance from the independent compensation consultant and input from management.

Peer Group—The peer group is chosen annually from among our operating competitors, other members of the IT industry, distributors as well as companies that share our operating characteristics (similar operating income percentages, low operating margins, and global operations), and companies with whom we compete for employee talent. The peer group selected for fiscal 2019 consisted of the following 13 companies (the “Peer Group”):

Based on publicly available information, revenue for these companies ranged from $7.62 billion (25^th percentile) to $19.06 billion (75^th percentile), with the 50^th percentile at $13.98 billion. Operating income margins ranged from 2.7 percent (25^th percentile) to 4.5 percent (75^th percentile), with the 50^th percentile at 3.0 percent. The Committee also considers an analysis performed by Exequity that adjusts Peer Group company compensation levels to predict what those compensation levels would be if the Peer Group companies generated the Company’s revenues and operating income margin.

Survey Group—The Committee also considered pay data from a general industry group of companies representing a cross-section of manufacturing and services industries. This group’s reported revenue was between $22.82 billion and $76.45 billion and the median revenue was $36.80 billion. Information about the compensation practices for this group was prepared by the Committee’s independent compensation consultant and considered by management and the Committee. Management and the Committee believe it is important to evaluate data from the broader industry group in addition to the Peer Group because it allows for the consideration of data from companies that may have characteristics (such as higher profit margins) different from the Company but that nonetheless compete with the Company for the same employee talent.

Employment Agreements with NEOs

The Company has employment agreements with Mr. Dutkowsky, Mr. Hume and Mr. Zammit. Mr. Dutkowsky and Mr. Hume’s employment agreements are described below. Mr. Zammit’s Manager’s Agreement was assumed, with certain modifications, by the Company in connection with the TS Acquisition. Mr. Zammit’s Manager’s Agreement sets out his position, obligations, base salary, bonus entitlement, reimbursement for Mr. Zammit’s annual contribution to a French retirement insurance program, participation in a supplemental retirement and life insurance arrangement in Belgium, terms of his agreement not to compete, separation benefits as well as other terms of employment. Mr. Zammit’s Manager’s Agreement, as amended, is included as Exhibits 10-24 and 10-25 to our Form 10-K for the fiscal year ended January 31, 2019. Please see POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL for a more complete discussion of Mr. Zammit’s separation benefits under his Manager’s Agreement.

CEO Compensation and Adjustments in Connection with CEO Transition

Effective June 6, 2018, Mr. Hume was promoted from COO to CEO. In connection with this promotion, his base salary increased by $217,500 and his target bonus percentage increased from 110% to 120%

of base salary. His target annual equity grant percentage of 143% of base salary and target bonus did not change from the amounts approved for him in March 2018 (see FISCAL 2019 BONUS PAYOUT AMOUNTS ($) BY PERFORMANCE MEASURE – EQUITY AWARDS above). However, Mr. Hume received an equity grant based on the incremental increase in his base salary and target bonus as CEO to maintain his overall equity grant percentage. The Committee established his compensation as CEO after considering CEO market pay data reflecting prevailing practices within the Company’s peer group at the 25^th percentile from its independent consultant, and the internal business needs and priorities of the Company. The Committee determined that the 25^th percentile was an appropriate benchmark for these purposes based on a number of factors, including that this is Mr. Hume’s first CEO position. A summary of the most significant provisions of Mr. Hume’s CEO employment agreement include: the right to be nominated for election as a member of the Board, the right to reject compensation that would trigger Code Section 280G excise tax, an obligation of confidentiality and not-to-compete owed to the Company, setting the severance plan benefits period at 24 months, a definition of what constitutes “gross misconduct,” and a right to severance for a good cause termination by Mr. Hume, including the election to terminate within a 30-day period six months following a change in control of the Company. The full Employment Agreement is included as Exhibit 10-26 to our Form 10-K for the year ended January 31, 2019.

Mr. Dutkowsky served as CEO through June 6, 2018, when he became Executive Chairman. As CEO, Mr. Dutkowsky’s Employment Agreement remained unchanged from prior years and contained the following significant provisions: the right to be nominated for election as a member of the Board, the right to reject compensation that would trigger Code Section 280G excise tax, an obligation of confidentiality and not-to-compete owed to the Company, setting the severance plan benefits period at 24 months, a definition of what constitutes “gross misconduct,” and a right to severance for a good cause termination by Mr. Dutkowsky, including the election to terminate within a 30-day period six months following a change in control of the Company. This full Employment Agreement is included as Exhibit 10-AAnn to our Form 10-Q for the quarter ended October 31, 2006.

As Executive Chairman, Mr. Dutkowsky has an employment agreement that sets out his position, base salary, obligations of confidentiality and not-to-compete owed to the Company, termination benefits as well as other terms of employment. Mr. Dutkowsky’s Executive Chairman employment agreement is included as Exhibit 10-27 to our Form 10-K for the year ended January 31, 2019.

The following table presents information concerning compensation paid to or earned by our NEOs:

SUMMARY COMPENSATION TABLE