SAP’s product brain Sikka to reboot Infy
Jun 12 2014 , Chennai
Murthy, son, Shibulal, Kris, Bathi to step down
Sikka, 47, will be the first external, non-founder chief executive in the company’s 33-year history. He will be inducted as a whole-time director on the board and appointed CEO and MD from June 14. He will take over from SD Shibulal on August 1. The annou-ncement came days ahead of the annual general me-eting on Saturday.
“Humbled to lead Infosys, an iconic pioneer in IT. Looking forward to learn and work with Infoscions and global clients on breakthrough innovation,” Sikka tweeted after the announcement.
Shares of Infosys jumped 3 per cent in Mumbai trading after Thursday’s announcement but ended 0.38 per cent lower from the previous day’s closing at Rs 3,166.60.
With this change of guard, executive chairman NR Narayana Murthy and vice-chairman S Gopalakrishnan — popularly known as Kris Gopalakrishnan — will step down from their roles this Saturday.
However, they will continue as non-executive chairman and non-executive vice-chairman, respectively, on the board till October 10 to facilitate a smooth transition. Murthy’s son Rohan Murthy, whose appointment as executive assistant was co-terminus with the executive chairman, will also leave the company on June 14.
KV Kamath, the former MD and CEO and current non-executive chairman of ICICI Bank and lead independent director at Infosys, will become the non-executive chairman of Infosys from October 11. Narayana Murthy will be designated as chairman emeritus in recognition of his service to the company.
The board has also elevated UB Pravin Rao, president and whole-time director, as chief operating officer, with effect from June 14. Srinath Batni, a whole-time director of the company, will step down from the board on July 31. As many as 12 senior leaders in the company have been elevated as executive vice-presidents with additional responsibilities reporting to the CEO and COO.
The changes will completely overhaul the existing management team in the company, which has seen a major organisational revamp since Narayana Murthy’s return as executive chairman last year. Murthy had come back from retirement in June 2013 to put the company on a high-growth trajectory after it had begun to lose market share. He had first retired in April, 2011.
This January, the company’s board had adopted a two-president governance structure and appointed BG Srinivas and UB Pravin Rao as presidents to SD Shibulal with effect from January 3, which eventually led to the elimination of the executive council from April. Narayana Murthy was at the top of that organisational chart as executive chairman followed by Shibulal, with both Srinivas and Pravin Rao reporting to him.
Srinivas, who was also a board member, left the company on May 28. With Pravin Rao now elevated as COO, the two-president structure stands dismantled. The company on Thursday announced that the executive chairman’s office too would be dissolved from Saturday.
“I look forward to working with and learning from the talented Infoscions around the world. Computing technology is reshaping every industry across every walk of life. We, at Infosys have a unique opportunity to deliver breakthrough solutions that will bring greater value to our clients, employees, investors and other stakeholders,” Sikka later said in a statement.
Shares of Infosys are down 9.15 per cent year to date, compared with a 2.18 per cent drop in the industry benchmark BSE IT index and a whooping 21 per cent gain in the broader marker benchmark, Sensex.
The underperformance of the Infosys stock has been attributed largely to the rupee appreciation, a weak earnings guidance from the management and several senior-level exits. Senior vice-president Prasad Thirukutam, who resigned on June 5, was the latest and 12th senior executive to leave the company since Narayana Murthy’s return as executive chairman. However, the scrip has gained 4.23 per cent since the latest exit.
Aniruddha Bhosale, a research analyst at Deutsche Bank, said Sikka’s appointment was a positive development for Infosys. “Given his experience with products and innovation at SAP, he will command the respect of Infosys’ leadership team and employees,” he said.