Citrix just named former Microsoft executive Kirill Tatarinov its new CEO and President. It also increased the size of its corporate board to 11 and appointed Tatarinov a director of the company.
The move comes six months from the retirement of longtime Citrix CEO Mark Templeton — a move attributed to pressure from activist hedge fund Elliott Management.
Elliott Management, which owns 7.1 percent of Citrix’s stock, sent an open letter to Citrix’s board of directors last June that claimed the company was inefficient and lacked focus. The group has been pressuring Citrix to boost profit margins and shareholder value — in much the same way it pressured EMC, which has now been sold to Dell.
But Tatarinov didn't come cheap. His three-year compensation package, in addition to a minimum $1 million a year base salary, includes annual incentive compensation of 125 percent to 200 times his base salary.
It also includes initial equity awards with an aggregate value of $24 million, according to the Form 8-K Citrix filed yesterday with the US Securities and Exchange Commission.
The employment agreement, effective next Monday, described the initial equity awards as "a material inducement to the executive’s accepting employment" with Fort Lauderdale, Fla.-based Citrix.
Founded in 1989, Citrix is a provider of virtualization, networking and cloud services that "enable new ways to work better," the company maintains.
What Tatarinov Offers
Tatarinov, 51, was president of the Microsoft Business Solutions Division of Microsoft from July 2007 through July 2015. Before that position, he was corporate vice president of Microsoft's management and solutions division for five years.
At Microsoft, according to a Citrix press release, Tatarinov, “doubled revenue, increased profitability, led the division’s transformation to the cloud, and managed the global partner ecosystem.”
Tatarinov also held several positions at BMC Software from 1994 through 2002, including senior vice president and chief technology officer, vice president of corporate and business development, and vice president, Patrol Products. He joined BMC Software in connection with its acquisition of Patrol Software Pty. Ltd., where he served as head of research and development, chief architect and co-founder.
Citrix has been under pressure by activist investor Elliott Management to boost profit margins and shareholder value. Elliott Management applied similar pressure to EMC which has now been sold to Dell.
In a statement, Tatarinov called Citrix "an iconic company with a world-class brand, innovative products, and a large installed base, including 99 percent of the Global 500." He also noted that it was a "key enabler of digital business."
Tatarinov added that he was "honored to join Citrix" — an honor we have to conclude was influenced at least partially by that $24 million equity offer.
Tatarinov's appointment comes at an interesting time for the End-User Computing (EUC) unit at VMware (Dell will soon become its majority shareholder), which is working hard to oust Citrix from its leadership role in the space that they share.
Sanjay Poonen, the general manager of End User Computing at VMware, congratulated Tatarinov on his new role at Citrix with a tweet: