Steve Milligan, 49, to Become CEO of WD

Western Digital Corp. announced that Stephen D. Milligan will become CEO of the company on January 2, 2013, succeeding John F. Coyne, who is retiring on that same date.

Milligan, 49, is currently president of Western Digital and will retain the title of president when he becomes CEO. Following Coyne’s retirement, Milligan will be appointed to the board of directors.

"We are grateful to John Coyne for his many years of dedication and strong leadership," said Tom Pardun, chairman of the board. "He and his team have strategically positioned the company at the center of the storage industry, as a consistently profitable market and technology leader well positioned to address the tremendous opportunities in the changing digital world."

"We are fortunate to have another accomplished and experienced leader in Steve Milligan, ready to lead the company at this exciting time," continued Pardun. "We believe Steve’s vision and demonstrated leadership skills will serve our customers, employees and shareholders well in the years ahead. The strong working relationship between John and Steve will provide for an orderly transition in the months ahead."

Coyne, 63, has served as CEO of Western Digital since January 2007 and spent the vast majority of a distinguished career in the electronics industry with Western Digital, joining the company in 1983. Under his leadership, Western Digital became the world’s largest maker of hard drives, through a relentless focus on the quality and reliability of its products, product portfolio expansion to capture evolving market trends, efficiency in its manufacturing operations and asset management, and excellence in its customer and supply chain relationships. In the last six years, Western Digital has grown its revenue three fold, been consistently profitable, generated significant cash and completed several successful strategic transactions including the recent acquisition of Hitachi Global Storage Technologies, formerly the hard drive division of Hitachi Ltd.

Milligan rejoined Western Digital earlier this year as president as a result of the HGST acquisition. He had served as HGST’s president from March 2009 to December 2009 and as its president and CEO from December 2009 until Western Digital’s acquisition of HGST in March 2012. From 2007 to 2009, he served as HGST’s CFO. From 2004 to 2007, Milligan served as chief financial officer of Western Digital. Previously, he held a variety of financial and accounting roles at Dell and Price Waterhouse.

Under his leadership, HGST initiated a significant transformation of its business to focus on market-driven leadership, sustainable growth, operational excellence, and financial discipline. These initiatives helped HGST improve its operational performance and achieve profitability prior to its acquisition by Western Digital.

Before launching his career in business, Milligan was a long-time resident of Columbus, OH, and graduated from the Ohio State University.

In connection with Milligan’s appointment, the company and Milligan entered into an amendment and restatement of his existing employment agreement.

Under the Milligan Employment Agreement, he is entitled to an annual base salary of $1 million effective January 2, 2013, and he will have an annual target bonus under the company’s Incentive Compensation Plan equal to 150% of his base salary effective with the performance period under the ICP covering the second half of fiscal 2013. Milligan also continues to participate as a ‘Tier I’ participant in the company’s Executive Severance Plan and in the company’s Amended and Restated Change of Control Severance Plan.

Milligan’s annual long-term incentive awards for fiscal 2013 were also granted on September 6, 2012 in connection with the amendment and restatement of his employment agreement.

These awards consist of the following:

• 83,652 performance shares covering performance over a cumulative two-year period consisting of fiscal years 2013 and 2014. The performance metrics for these performance shares are to be determined by the Compensation Committee of the company’s Board of Directors.
• 41,826 restricted stock units vesting, subject to his continued employment, on the third anniversary of the date of grant.
• 98,618 stock options with a per-share exercise price equal to the closing market price of a share of the company’s common stock on the grant date and a maximum term of seven years. The stock options are scheduled to vest, subject to Milligan’s continued employment, 25% on the first anniversary of the date of grant and 6.25% at the end of each three-month period thereafter until the stock option is fully vested on the fourth anniversary of the date of grant.

In May 2012, Milligan was granted a performance-based stock unit award with a ‘target’ payout of 50,050 shares of company common stock, with 50% of the award subject to performance metrics to be established by the Compensation Committee with respect to fiscal 2013 and 50% of the award subject to performance metrics to be established by the Compensation Committee with respect to fiscal 2014, and the actual number of shares payable with respect to the award to range from 0% to 200% of the target number of shares based on actual performance over those two fiscal years.

The Milligan Employment Agreement provides that Milligan will be granted an additional performance-based stock unit award at the first regularly scheduled meeting of the Compensation Committee after January 2, 2013. The target number of shares subject to the award will be determined by the Compensation Committee at that time so that the target number of shares subject to the award on the grant date will have a value of $2 million. The award will otherwise be on the same terms and conditions as Milligan’s May 2012 performance-based stock unit award.