Kenneth D. Tuchman
TTEC HoldingsAbout Kenneth D. Tuchman
Founder of TTEC (1982) and long‑tenured Chairman (since 1994) and CEO (1994–1999; resumed 2001), Tuchman is a controlling shareholder with 58.3% of the common stock as of March 31, 2025 . Age 65; current board role lists Executive Committee Chair; education not disclosed in the latest proxies . Company performance under his leadership has been mixed recently: 2024 revenue declined 10.4% YoY to ~$2.21B with a GAAP operating loss and negative operating cash flow, while the company’s cumulative TSR from 12/31/2019 to 2024 was $15 on $100 invested versus $157 for the selected peer group, underscoring underperformance through 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TTEC | Chairman of the Board | 1994–present | Founder/strategic leader; controls 58.3% of common stock . |
| TTEC | Chief Executive Officer | 1994–1999; 2001–present | Led transformation toward integrated CX technology and services . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tuchman Family Foundation | Director | Not disclosed | Philanthropic governance; relationship disclosure for board bio . |
| Denver Center for the Performing Arts | Director | Not disclosed | Community/cultural governance role . |
Fixed Compensation
| Year | Base Salary ($) | Bonus ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|
| 2024 | 1 | – | 63,535 | CEO takes $1 salary; perqs include auto ($33,952), exec health/dental/vision ($27,824), life insurance premiums ($1,758) . |
| 2023 | 1 | – | 100,150 | Includes aircraft usage $37,595 and tax gross‑up $13,027; auto $33,952; exec health/dental/vision $27,415 . |
| 2022 | 1 | – | 69,682 | CEO continues $1 salary arrangement since 2012 . |
CEO does not participate in annual cash bonus or equity programs under his employment agreement, at his request .
Performance Compensation
CEO participation: none (no annual incentive, no equity awards) .
Company incentive design and recent funding outcomes (context for pay‑for‑performance):
| Plan Year (Paid) | Metric | Weight | Target | Actual | Payout/Funding |
|---|---|---|---|---|---|
| 2024 (paid 2025) | Pre‑Bonus Adjusted EBITDA | 40% | $292M | $205.5M (FX‑adj) | $2.2M pool . |
| 2024 (paid 2025) | Revenue | 40% | $2,395M | $2,213.6M (FX‑adj) | $2.2M pool . |
| 2024 (paid 2025) | Management Business Objectives (MBOs) | 20% | N/A | Partial | $2.7M pool . |
| 2023 (paid 2024) | Pre‑Bonus Adjusted Operating Income | 100% | $249.6M | $165.1M (FX‑adj) | Minimum $8.0M pool . |
Notes:
- NEO weighting puts 45% on EBITDA, 45% on Revenue, 10% on MBOs for 2024 cash plan; CEO excluded .
- 2024 LTIP features company and segment revenue/Adj. EBITDA hurdles for 2026 measurement, with 0–150% payout range; CEO excluded .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 27,853,207 shares; 58.3% of outstanding as of March 31, 2025 . |
| Ownership breakdown | 6,526,401 direct; 14,766,806 via a limited liability partnership controlled by Tuchman; 6,550,000 via a revocable trust; 10,000 held by spouse (shared power) . |
| Vested/unvested awards | CEO shows no outstanding equity awards in the “Outstanding Equity Awards” table; does not receive annual equity grants . |
| Hedging/pledging | Company prohibits hedging and pledging; exception permits CEO (as controlling stockholder) to pledge with prior Board approval, provided the pledge is not a material portion of holdings . |
| Stock ownership guidelines | CEO and segment CEOs expected to hold 4x base salary; CFO 3x; others 1–2.5x (CEO materially exceeds via 58.3% stake) . |
| Deferred compensation | CEO aggregate balance $4.74M (2024) and $4.03M (2023); 2024 aggregate earnings $705,813; 2023 aggregate earnings $672,575 . |
| Related‑party transactions | Company expensed $600,000 (2024) and $1,000,000 (2023) to Avion, LLC and Airmax LLC (aircraft services); CEO is indirect 100% beneficial owner of both; $36,000 payable outstanding as of Dec 31, 2024 . |
| Potential insider supply (vesting) | 2024 special retention RSUs for other NEOs vest in equal installments in 2025 and 2026; CEO had none . |
Employment Terms
| Term | Summary |
|---|---|
| Agreement | Employment agreement since 2001 . |
| Base salary & incentives | Entitled under agreement, but at his request salary is $1 and he does not participate in cash or equity incentives . |
| Benefits | CEO and family eligible for company benefits at company expense . |
| Life insurance | $4,000,000 term policy; premiums paid by company; policy owned by CEO; may continue post‑employment if CEO pays premiums . |
| Severance | 24 months of base pay upon termination without cause or for “good reason” (practical cash value limited given $1 base) . |
| Change‑in‑control (CIC) | Agreement provides for accelerated vesting of all unvested equity (to the extent applicable and not superseded by specific grant terms) . |
| Non‑disparagement | Mutual non‑disparagement; $200,000 liquidated damages for breach . |
Board Governance (dual‑role considerations)
- CEO is also Chairman; the Board cites benefits given his founder status and 58.3% ownership; the Board has not appointed a lead independent director, citing small board size and direct access to the CEO .
- TTEC is a “controlled company” under NASDAQ rules but elects not to use governance exemptions; a majority of directors are independent and key committees are fully independent .
- Committee roles: CEO/Chairman serves as Executive Committee Chair; not on Audit, Compensation, Nominating/Governance, or Security & Technology Committees .
- Attendance: 10 board meetings in 2024; each director attended at least 80% of assigned meetings .
- Special Committee governance: A Special Committee of independent directors is overseeing the CEO’s unsolicited take‑private proposal at $6.85/share with MFW protections, including majority‑of‑the‑minority approval .
Director Compensation (employee director)
- Employee directors receive no additional compensation for Board service (i.e., CEO receives none) .
Compensation Committee, Peer Group, and Say‑on‑Pay
- Compensation consultant: Meridian Compensation Partners serves as independent advisor to the Compensation Committee .
- Peer groups: 2023 peer set includes 8x8, Concentrix, Genpact, TELUS International, etc.; 2024 updates added Maximus and Perficient .
- CEO pay positioning: Actual TDC of $1 places CEO “<25th percentile” versus market benchmarks (by design) .
- Say‑on‑Pay: 99% support at 2023 annual meeting; advisory frequency vote favored triennial (71%) .
Company Performance Context (5‑yr and recent)
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenue ($) | 1,949.2M* | 2,273.1M* | 2,443.7M* | 2,462.8M* | 2,207.6M* |
| EBITDA ($) | 293.9M* | 330.3M* | 301.2M* | 240.7M* | 180.3M* |
Values marked with * retrieved from S&P Global.
Additional disclosed performance highlights:
- 2024: Revenue $2.21B (−10.4% YoY), loss from operations $(173.5)M (−7.9% margin), non‑GAAP income from operations $136.5M (6.2% margin), operating cash flow $(58.8)M, diluted EPS $(6.74) .
- 2023: Revenue $2.463B; non‑GAAP income from operations $200.4M (8.1% margin); operating cash flow $144.8M; diluted EPS $0.18 .
- Pay‑versus‑Performance TSR: $100 invested on 12/31/2019 was $15 for TTEC in 2024 vs $157 for peer group .
Compensation Structure Analysis (signals)
- Heavy alignment via ownership: CEO’s $1 salary and zero variable pay shifts incentives to equity value; 58.3% stake creates strong long‑term alignment but also control concentration .
- Metric rigor but low payouts: 2024 incentive pool funded at minimum for financial metrics (revenue and pre‑bonus adj. EBITDA), reflecting challenging operating performance .
- LTIP recalibration: 2024 LTIP reduced upside to 150% (from 200%) given industry uncertainty; retention RSUs reallocated to mitigate executive flight risk (vest in 2025/2026) .
- Clawback: NASDAQ‑compliant recoupment policy is in place .
Risk Indicators & Red Flags
- Dual‑role and control risk: CEO as Chair without a lead independent director; the board cites mitigating practices but structural governance risk remains .
- Take‑private conflict: CEO’s 2024 proposal to acquire outstanding shares at $6.85 introduced potential conflicts; Special Committee and majority‑of‑minority framework applied .
- Pledging allowance: Policy prohibits pledging except allows CEO to pledge a non‑material portion with Board approval (no amounts disclosed) .
- Related‑party transactions: Recurrent aircraft services via entities 100% beneficially owned by CEO ($600k in 2024; $1.0M in 2023) .
- Liquidity and covenant oversight: Audit Committee highlighted liquidity risk and credit facility covenant management in 2024 .
Vesting Schedules and Insider Supply (pressure)
- CEO: no scheduled equity vesting (no awards outstanding) .
- Other NEOs: 2024 retention RSUs vest 50% in 2025 and 50% in 2026 (Wagers, Seybold, McLean), creating potential supply in those windows .
- Standard RSU programs: 2024 annual RSUs vest in three equal installments; 2023 annual RSUs (where granted) typically in four installments; LTIPs generally cliff‑vest after the 3‑year measurement .
Board Service and Independence
- Committees (2024): Audit (independent; chair Conley), Compensation (independent; chair Bahl), Nominating & Governance (independent; chair Frerichs), Security & Technology (independent; chair Singh‑Bushell until Sep 2024, then Anenen), Executive (Chair: Tuchman) .
- Independence mix: 6 of 7 directors independent post‑September 2024 .
- Lead Independent Director: Not appointed .
Say‑on‑Pay and Shareholder Feedback
- 2023 SOP: 99% approval; frequency vote triennial (71% for every three years); next SOP expected in 2026 .
Employment & Contracts (retention/transition highlights)
- CEO agreement provides minimal cash severance (24 months base at $1) but robust benefits treatment and legacy CIC vesting language; mutual non‑disparagement with $200k liquidated damages .
- Broader NEO severance/CIC terms (double‑trigger, multiples, benefits continuation) are in place, but CEO stands apart by opting out of variable pay and equity .
Investment Implications
- Alignment vs control: The $1 salary, no bonus/equity, and 58.3% stake align CEO with long‑term equity value, but the same control heightens governance and minority‑holder risk—especially given dual Chair/CEO and permitted pledging .
- Catalyst and process risk: The 9/30/24 take‑private proposal (with Special Committee oversight and MFW protections) represents a potential strategic outcome, but financing and majority‑of‑the‑minority approval are gating factors .
- Execution risk: Weak 2024 results (revenue decline, operating loss, negative operating cash flow) led to minimal incentive funding, reduced LTIP upside, and added retention RSUs—signaling near‑term operational and retention challenges .
- Related‑party optics: Recurring aircraft service payments to CEO‑owned entities add governance friction points for some investors .
- TSR underperformance: PvP disclosure shows significant multi‑year TSR lag versus peers through 2024, underscoring the need for strategic improvement or structural change (including a possible transaction) .