Gajen Kandiah
About Gajen Kandiah
Gajen Kandiah is the Chief Executive Officer of Rackspace Technology, appointed effective September 3, 2025, and simultaneously elected to the company’s Board of Directors; he is 58 years old . He brings depth across services, infrastructure, software, and AI, having served as President and COO of Hitachi Digital, CEO of Hitachi Vantara, and previously helping grow Cognizant’s business from $368 million to over $16 billion during his 16-year tenure . Rackspace’s strategy under his leadership focuses on governed multicloud operations for AI and data workloads across private, public, and sovereign clouds with hyperscalers and regional partners . Recent TSR, revenue growth, and EBITDA growth during his tenure are not yet disclosed; the CEO transition occurred in September 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hitachi Digital (Hitachi Rail group) | President & COO | Feb 2023 – Apr 2025 | Integrated AI across industrial and enterprise portfolios, orchestrating digital capabilities across Hitachi group companies . |
| Hitachi Digital Services | Executive Chairman | Oct 2023 – Apr 2025 | Oversight of digital services strategy and execution within Hitachi’s portfolio . |
| Hitachi Cyber | Chairman | Jan 2024 – Apr 2025 | Governance leadership for cybersecurity operations . |
| Hitachi Vantara | Chief Executive Officer | Jul 2020 – Oct 2023 | Led digital infrastructure, software, and services business transformation . |
| Cognizant | President, Digital Business & Engineering | Oct 2015 – Jun 2019 | Built and scaled industry BPO and digital engineering; part of a 16-year tenure growing cognizant from $368M to over $16B . |
External Roles
| Organization | Role | Notes |
|---|---|---|
| PNO Group | Chairman of the Board | Listed in Employment Agreement Exhibit A . |
| Area9 Lyceum | Member, Board of Directors | Listed in Employment Agreement Exhibit A . |
| Kost Capital | Investor and Advisor | Listed in Employment Agreement Exhibit A . |
| Recognize (private equity) | Investor | Listed in Employment Agreement Exhibit A . |
| Multiple private company boards | Director | General disclosure in 8-K . |
Fixed Compensation
| Component | Terms | Details |
|---|---|---|
| Base Salary | $1,000,000 | Annual base salary; eligible for future increases per ordinary cycles . |
| Annual Bonus Target | 150% of salary | Eligible under Rackspace cash bonus program; for 2025, receives no less than Target Bonus pro‑rated from start date . |
| Annual Equity (from 2026) | 600,000 share units | Structure determined by Board; not in form of stock options; up to 50% performance‑based; 2026 award pro‑rated based on Effective Date . |
| Inducement Equity (2025) | 4,000,000 RSUs | Vest in equal annual installments on each anniversary of Effective Date over 4 years, subject to continued employment . |
| Inducement Stock Options (2025) | 6,000,000 options | Vest annually over 4 years; strike price at Fair Market Value on grant; subject to continued employment . |
| PTO | Minimum 4 weeks | Subject to company policies . |
| Benefits | Executive benefits | Eligible for plans available to senior executives per Employee Handbook . |
| Expense Reimbursement | Standard business expenses | Reimbursed per policy; company will pay up to $15,000 in legal fees for agreement review/negotiation . |
Performance Compensation
| Incentive | Metric/Structure | Weighting/Target | Payout Mechanics | Vesting |
|---|---|---|---|---|
| Annual Corporate Bonus | Company’s cash bonus program | Target = 150% of base salary (pro‑rated at least to Target in 2025) | Determined by Board/Comp Committee; for 2025 guaranteed pro‑rated Target minimum | Paid per program calendar; employment through payment date required (subject to Section 9) . |
| Inducement RSUs (2025) | Time-based | N/A | N/A | 25% annually on each Sep 3 anniversary from 2026–2029, subject to continued employment . |
| Inducement Options (2025) | Time-based; exercise price = FMV | N/A | N/A | 25% annually on each Sep 3 anniversary from 2026–2029, subject to continued employment . |
| Annual Equity (from 2026) | Share units; up to 50% performance‑based; no options | N/A | N/A | Granted annually; 2026 pro‑rated; form and vesting determined by Board/Comp Committee . |
| Company ACIP (context) | Revenue, Non‑GAAP Operating Profit, Cash Flow from Operations | 30% / 50% / 20% | Historical framework used for NEOs in Fiscal 2024; actual payout certification at 48.5% with discretionary adjustments; used to inform structure, not specific to Kandiah’s 2025 plan . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Equity Awards Granted (Inducement) | 4,000,000 RSUs plus 6,000,000 options; options at FMV, both vesting equally over 4 years . |
| Potential Ownership vs Shares Outstanding | If fully vested/exercised, 10,000,000 shares versus 237,388,710 outstanding as of Apr 22, 2025 ≈ 4.21% potential on an as‑converted basis; not current beneficial ownership . |
| Vested vs Unvested | All inducement awards initially unvested; vest annually on Effective Date anniversaries over four years . |
| Hedging/Pledging | Prohibited: no short sales; no options/derivatives; no margin or pledging; no hedging transactions for directors, officers, employees . |
| Stock Ownership Guidelines (executives) | CEO must hold 5x base salary; five years to comply; counts Common Stock and time‑based RSUs . |
| ESPP Eligibility | Employees may purchase at 85% of FMV at period start/end via payroll deductions; purchase windows May/Nov; applies company‑wide . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Effective Date | September 3, 2025 . |
| Initial Term and Renewal | 1‑year term; auto‑renew annually unless either party gives at least 45 days’ prior written non‑renewal notice . |
| Reporting | Reports solely and directly to the Board (other than Board service itself) . |
| Non‑Competition | 12 months post‑employment; global scope across Competitive IT Services; allows passive ≤5% public equity ownership; carve‑out for work with Apollo‑controlled entities . |
| Non‑Solicit Employees | 18 months post‑employment; limitations focused on employees with direct working relationships . |
| Non‑Solicit Customers/Suppliers | 18 months post‑employment; limitations focused on direct contacts . |
| Confidentiality | Broad confidentiality; carve‑outs for legal disclosures; survive termination . |
| Dispute Resolution | Injunctive relief; binding arbitration in San Antonio, TX under AAA National Rules for Employment Disputes; class/collective waiver; company pays arbitrator and filing fees; fee‑shift protection for CIC severance enforcement if prevailing on a material issue . |
| Governing Law | Federal ERISA “top hat” plan; otherwise Delaware law, and Texas law for Sections 4–7; MA carve‑outs for covenants if resident . |
| Indemnification/D&O | Company to enter indemnification agreement consistent with the form filed as an exhibit to 10‑K; D&O coverage on a basis no less favorable than other directors/senior executives . |
| IP Assignment | All inventions and IP created during employment belong exclusively to the company . |
| Litigation Cooperation | Reasonable cooperation for 3 years post‑employment; hourly compensation for >5 hours (except court testimony); reasonable expenses reimbursed . |
| Clawback | Subject to company clawback policy (SOX 304 and Dodd‑Frank 954/Nasdaq‑compliant) . |
| 409A | Extensive compliance provisions for timing, specified employee six‑month delay, and installment treatment . |
Severance and Change‑in‑Control Economics
| Scenario | Cash Multiple (Base + Target Bonus) | Bonus Treatment | COBRA | Equity Treatment |
|---|---|---|---|---|
| Qualifying Termination outside CIC; within first year | 1.0x total (paid over 12 months; 60‑day initial delay as needed) | Pro‑rata actual bonus; personal/subjective assumed 100% | 12 months lump sum premium equivalent on day 60 | No acceleration before First Anniversary; after First Anniversary, full acceleration of Inducement Awards . |
| Qualifying Termination outside CIC; after First Anniversary | 1.5x total (paid over 18 months; 60‑day initial delay as needed) | Pro‑rata actual bonus | 18 months lump sum premium equivalent on day 60 | Full acceleration of Inducement Awards . |
| CIC Termination within CIC Period | 1.0x total; if after First Anniversary, 2.0x total; lump sum if Section 409A CIC; otherwise paid over 24 months with 60‑day delay | Pro‑rata Target Bonus (lump sum on day 60) | 12 months lump sum; if after First Anniversary, 18 months | Accelerated vesting of all outstanding equity; performance awards vest at greater of target or determinable actual performance through CIC . |
| CIC with awards not assumed/substituted | N/A | N/A | N/A | Immediate vesting at or before CIC; performance awards measured at target if period incomplete . |
| 280G/4999 Treatment | Cut‑back to Safe Harbor if after‑tax value of full payments is less than after‑tax value at 2.99x base amount; sequencing rules favor Q&A‑24 treatment . |
Notes:
- “Qualifying Termination” includes termination without Cause, non‑renewal by Company (other than for Cause), or resignation for Good Reason .
- CIC Period is 90 days before through 24 months after CIC; CIC definition modifies ownership threshold to 50% .
Board Governance
- Dual role: Kandiah serves as CEO and was elected as a director upon employment; he is not the Chairman .
- Independence: Employee directors are not independent under Nasdaq/SEC definitions; Rackspace is a “controlled company” under Nasdaq due to Apollo’s >50% ownership and avails itself of certain independence exemptions for majority of board and committee composition .
- Current board leadership: Independent Chairman Jeffrey Benjamin; Lead Director Shashank Samant; CEO and Chair roles are separate; board revisits leadership structure periodically .
- Committee membership for Kandiah: Not disclosed; employee directors typically do not serve on audit/compensation committees; committee rosters as of April 30, 2025 list Audit (Benjamin chair, Gross, Scott), Compensation (Garber chair, Benjamin, Sobel), N&CG (Sobel chair, Benjamin, Garber), Executive (Benjamin chair, Maletira, Sobel) .
- Executive sessions: Non‑management directors meet in executive session regularly .
- Director compensation: Employee directors do not receive additional director fees; non‑employee director policy enumerated separately .
Director Compensation (for reference; Kandiah is an employee director)
| Element | Amount/Policy |
|---|---|
| Annual Cash Retainer | $100,000 for non‑employee directors . |
| Annual RSU Retainer | $200,000; shares determined by VWAP over 30 trading days; pro‑rated for mid‑year appointments . |
| Committee Chair/Member Fees | Audit Chair $30k; Comp Chair $20k; N&CG Chair $15k; Executive Chair $20k; Member fees: Audit $20k; Comp $15k; N&CG $15k; Executive $10k . |
| Chair of Board Retainers | If CEO not Chair: Equity $50k + Cash $70k . |
| Ownership Guidelines | Directors must attain and maintain $350,000 in company stock within 4 years (applicable to non‑employee directors) . |
Other Directorships & Interlocks
- Apollo’s influence: Apollo beneficially owned ~54.6% of voting power as of the Record Date; Apollo can control outcomes of director elections and Say‑on‑Pay votes; Apollo Board Nominees include Benjamin, Garber, Mahidhar, Sobel .
- Kandiah’s private company board service: As above (PNO Group, Area9 Lyceum, Kost Capital, Recognize) .
Compensation Structure Analysis
- Mix of cash vs equity: High at‑risk equity via large inducement RSUs and options; annual equity beginning 2026 avoids options and includes up to 50% performance‑based share units, indicating a shift toward RSU/PSU mix over options for ongoing grants .
- Guaranteed compensation: 2025 pro‑rated bonus guaranteed at no less than Target mitigates transition risk and signals board support during onboarding .
- Performance metrics: While Kandiah’s specific annual bonus metrics were not disclosed, Rackspace historically used Revenue, Non‑GAAP Operating Profit, and Cash Flow From Operations in the ACIP framework for NEOs (30%/50%/20%), indicating emphasis on growth, profitability, and cash generation .
- Clawback and compliance: Subject to clawback; prohibition on hedging/pledging enhances alignment and reduces misalignment risk .
- Tax gross‑ups: No excise tax gross‑up; 280G “cut‑back” applies to keep after‑tax value optimized under Safe Harbor .
Risk Indicators & Red Flags
- Controlled company governance: Independence exemptions may elevate governance risk; however, independent Chair and regular executive sessions partially mitigate .
- CIC acceleration: Full acceleration of outstanding equity and performance awards at target or determinable actual upon CIC termination may incentivize deal‑aligned outcomes; investors should monitor CIC‑related events for potential equity overhang .
- Non‑compete/non‑solicit: Robust global 12‑month non‑compete and 18‑month non‑solicits reduce near‑term competitive departure risk .
- Hedging/pledging: Explicit prohibitions reduce alignment concerns often associated with executive hedging/pledging .
- Related parties: No related‑party transactions requiring disclosure with Kandiah; no family relationships or selection arrangements disclosed .
Compensation Peer Group (Benchmarking)
| Peer Group (as of Aug 2024 review) | Selection Criteria | Usage |
|---|---|---|
| Akamai, Conduent, CSG Systems, EPAM, GoDaddy, NetApp, Okta, PTC, Pure Storage, Teradata, TTEC, Twilio, Unisys, Verisign | Similar/related industry; revenue 0.33x–3x of Rackspace . | Input to base salary, bonus targets, and LTI award sizing; validate alignment of program design and mix to performance and market norms . |
Target Percentile Philosophy: Strive toward market median in aggregate while applying discretion for role criticality, expertise, and retention needs .
Independent Compensation Consultant: Korn Ferry advised on executive and director compensation and peer selection; Compensation Committee determined Korn Ferry independence; no other services provided to the company .
Say‑on‑Pay & Shareholder Feedback
- The 2024 Say‑on‑Pay vote received 84.5% support among shares present and entitled to vote, which the Compensation Committee interpreted as affirmation of its approach .
- Apollo’s majority ownership (~54.6% voting power as of Apr 22, 2025) materially influences shareholder vote outcomes, including Say‑on‑Pay .
Expertise & Qualifications
- Recognized operator across services, infrastructure, software, and AI; led digital infrastructure and platforms at Hitachi Vantara and AI integration at Hitachi Digital; scaled digital engineering businesses at Cognizant .
- Strategic priorities at Rackspace include accelerating cloud management and private AI product innovation, deepening hyperscaler and ecosystem partnerships, and driving execution across sales, delivery, and operations .
Investment Implications
- Retention and alignment: A sizable, four‑year inducement package (4M RSUs + 6M options) combined with global non‑compete/non‑solicit covenants suggests low near‑term departure risk and strong equity alignment; annual equity from 2026 shifts to RSU/PSU, reducing reliance on options and potentially lowering risk profile .
- Vesting calendar and potential selling pressure: Annual time‑based vesting on each Sep 3 anniversary will create periodic supply; monitor insider filings around vest dates for selling pressure signals; options strike at FMV could concentrate exercise behavior if the stock appreciates materially .
- CIC optionality: Accelerated vesting (including performance awards at target/actual) and cash severance up to 2x total under CIC termination can make corporate actions a catalyst for equity realization; investors should watch governance dynamics given controlled company status .
- Governance quality: Independent Chair and established committee structure mitigate some controlled company concerns; prohibitions on hedging and pledging and clawback policy further support pay‑for‑performance integrity .
- Execution risk: Kandiah’s background aligns with Rackspace’s AI‑first multicloud strategy; near‑term performance linkage to bonus isn’t disclosed specifically for him, but company’s historical ACIP metrics emphasize revenue, non‑GAAP profitability, and cash flow—investors should monitor quarterly results for alignment with incentive frameworks .