3D Systems Signs CEO on $23 Million Mega Contract

Vyomesh Joshi is the new CEO of 3D Systems and he could be set to earn more than $23.3 Million over three years if he can turn this troubled firm around.

The six-month search for a new CEO ended on April 1 (no joke…) with Joshi's appointment. It's a return to business for the 62-year-old former Vice President of HP's imaging and printer group, who effectively retired in 2012 after 32 years with the technology giant. He doubled the company's printing profits after 11 years at the helm of that division, which means he comes with a solid track record.

Vyomesh Joshi, former Hewlett-Packard Vice President of imaging and printing group, makes a point during the Reuters Technology Summit in San Francisco, California

Vyomesh Joshi, former Hewlett-Packard Vice President of imaging and printing group

3D Systems faces tough times

It took an amazing package to tempt him back into business and take over at South Carolina-based 3D Systems. The company that has endured some tough times of late thanks to rising costs, an acquisition-based strategy that involved buying 50 smaller firms in the space of four years, quality issues and a 72% decline in its stock value in 2015.

Employees put the boot in, too, with a series of scathing Glassdoor reviews that made the business press. So the problems run deep.

The company has solid products now, there is something to build on, at least.

Turning this ship around will take time and work

It is still going to take an experienced hand at the tiller to turn this ship around, though. On the flip side, if Joshi achieves anything then it could be seen as an improvement. If he does well, the rewards will be immense.

His convoluted deal was revealed in an SEC filing. Obviously there's a lot going on in terms of bonuses, as his basic pay if $925,000 a year. A simple cash bonus of another $925,000 is just the start, as then it gets into the stock options. For these to make a significant difference to his life then Joshi will have to have a major impact on the company's stock price, so there are clear incentives to make major changes to the business.

The stock options get complex

Joshi gets the option to buy 250,000 at $15.85 and sell at $30 if the stock trades at more than $30 for more than 90 days. This comes with a $3.5 million valuation on its own and he also gets 50,000 restricted common stock options that vest if the shares go above $30.

That is worth $1.45 million and a further 25,000 that vest if the stock price goes above $40. He gets a further 150,000 restricted shares that will be worth $5.85 million if the shares breach the $40 barrier, too.

Reichental got even more

Now this would represent a massive turnaround for the company. Even if he achieves it, Joshi won't bank as much as former CEO Avi Reichental, who was paid $24.5 million in his last three years at the helm. 3D Systems have learned some valuable lessons, at least, and have tied Joshi's package to performance rather than simply his time at the helm.

There are concerns about this package, as it could incentivise him to chase short-term gains to unlock the bonuses. He could, for instance, embark on an aggressive cost-cutting scheme that boosts the share price in the short-term, but leaves the company in poor shape for the future. His 32-year stint at HP suggests he does understand the long game, though, and Joshi is not one of those quick fix CEOs that jumps between jobs.

First things first

This is all speculation, anyway, and Joshi simply has to get 3D Systems' house in order first, which will inevitably mean streamlining the business and dealing with the fallout of the acquisition strategy.

Once that is done, he can focus on growth and with 3D Systems starting from such a lowly position then surely the only way is up for this embattled company.

We will be watching with interest!


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