DXC Technology grants major equity awards to top executives

DXC Technology Co (NYSE:DXC), a prominent player in the IT Services industry with a market capitalization of $2.99 billion, has announced the grant of significant one-time equity awards to its top executives, as disclosed in a recent SEC filing. The Board of Directors, following the Compensation Committee’s recommendation, approved the awards for Chief Executive Officer Raul Fernandez and Chief Financial Officer Robert Del Bene on May 13, 2025. According to InvestingPro analysis, DXC appears undervalued at its current price of $16.56, suggesting potential upside opportunity for investors.

The equity awards, set to be granted on May 16, 2025, comprise 85% performance-based restricted stock units (PSUs) and 15% service-based restricted stock units (RSUs) under the company’s 2017 Omnibus Incentive Plan. These awards aim to retain the executives’ leadership over the next three years, aligning their interests with shareholders. While DXC has not been profitable over the last twelve months, InvestingPro data indicates that analysts expect the company to return to profitability this year, with a strong free cash flow yield supporting its financial position.

The PSUs will vest based on the company’s achievement of cumulative free cash flow and revenue targets over a three-year period, with an additional modifier based on relative total shareholder return. The RSUs will vest in three equal annual installments, contingent on continued employment.

The Board determined that the equity award for CEO Fernandez would have an aggregate target value at grant of $44,850,000, while CFO Del Bene’s award would be valued at $20,640,000. These awards are intended to replace the annual equity awards for the next three fiscal years. The company’s EBITDA stands at $1.395 billion, with management demonstrating commitment to shareholder value through aggressive share buybacks. For deeper insights into DXC’s financial health and valuation metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

In the event of a Change in Control, the PSUs will vest based on performance up to that point, with targets prorated. For terminations due to death or disability, the awards will vest at 100% of the target amount. If terminated without cause or for good reason, a prorated number of RSUs and PSUs may vest based on performance.

The Board also approved an amendment and restatement of the Plan, setting a limit on Stock Awards to no more than 3.5 million shares of common stock per fiscal year. Additionally, CEO Fernandez’s employment agreement was amended, extending the term to March 31, 2028, with an increased annual base salary and bonus opportunity.

The SEC filing provides detailed information on the equity awards and the amended and restated Plan, reflecting DXC Technology’s commitment to executive retention and performance alignment with shareholder interests. The company’s strategy emphasizes long-term success and value creation, as evident from the structure and objectives of these awards. Trading at a low revenue valuation multiple, DXC shows promising potential, with InvestingPro identifying 8 additional key investment tips for this stock, available to subscribers.

In other recent news, DXC Technology announced the introduction of a new service, DXC Complete with SAP and Microsoft (NASDAQ:MSFT), aimed at accelerating SAP modernization on Microsoft Azure. This service offers a unified approach for enterprises to adopt SAP’s RISE and GROW journeys, integrating SAP Business AI solutions with Azure’s capabilities. It features flexible pricing models and a single contract to simplify transitions to cloud environments like SAP S/4HANA Cloud. Additionally, DXC Technology named William Pieroni as the Global Strategy and Growth Leader for its Insurance Software (ETR:SOWGn) & Business Process Services division, focusing on strategy development and growth acceleration. In another leadership update, Sandeep Bhanote has been appointed as the Financial Services Industry Leader, tasked with driving innovation and competitive differentiation through AI technology. Anders Lange has also joined as Chief Procurement Officer to enhance procurement processes, particularly through AI integration. Lastly, T.R. Newcomb has been appointed as Chief Revenue Officer, with a focus on unifying DXC’s salesforce and improving client engagement. These developments reflect DXC Technology’s ongoing efforts to enhance its service offerings and leadership team.

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