Vishal Sikka Resigns As Infosys CEO And MD Citing Personal Attacks, Shares Tank
- Infosys has appointed COO UB Pravin Rao as interim MD and CEO
- Infosys shares plunged as much as 7% after the development
- Dr Sikka cited "personal" attacks as one of the reasons for resigning
Vishal Sikka has resigned as managing director and CEO of
Infosys, citing "personal attacks" on him as one of the reasons for
his sudden decision. The company's board accepted his resignation with
immediate effect and has appointed chief operating officer UB Pravin Rao as
interim managing director and CEO. The sudden move came amid growing acrimony
between the company's board and its founders led by NR Narayana Murthy. Infosys
shares plunged over13 per cent today after the announcement. Infosys in a
statement said Mr Murthy's "continuous assault" is the primary reason
Dr Sikka resigned despite enjoying strong support of the board.
Dr Sikka, 50, said the attacks had hit morale at the
company, which has been trying to keep pace with rapid changes in the industry.
"For days, indeed weeks, this decision has weighed on me. It is clear to
me that despite our successes over the last three years, and the powerful seeds
of innovation that we have sown, I cannot carry out my job as CEO and continue
to create value, while also constantly defending against unrelenting,
baseless/malicious and increasingly personal attacks," Dr Sikka, who took
over three years ago, wrote on his blog.
Infosys founders, including Narayana Murthy, have in recent
months criticised the company's leadership over executive pay packages and for
what they called lapses in corporate governance, which Infosys board has
strongly denied. In an email to some of his advisers last week, Mr Murthy had
reportedly said that he had been told by at least three independent directors
of the company that Vishal Sikka was less CEO material and more chief technology
officer (CTO) material. He also criticised the Infosys board for not upholding
governance standards and for not creating checks and balances required in any
well-run company, the newspaper Mint had reported.
In reference to Mr Murthy's comment, Infosys co-chairman
Ravi Venkatesan at a press conference said that Dr Sikka is not only a
"phenomenal technical guy" but also has "blossomed into a
high-performing CEO".
Infosys board also said Mr Murthy's "letter contains
factual inaccuracies, already-disproved rumours, and statements extracted out
of context from his conversations with board members. The board, Infosys, has
been engaged in a dialogue with the founder to resolve his concerns over the
course of a year, trying earnestly to find feasible solutions within the
boundaries of law and without compromising its independence. "These
dialogues have unfortunately not been successful," it said.
Meanwhile, Infosys founder Narayana Murthy, singled out by
the board of the software giant for the abrupt resignation of CEO Vishal Sikka,
today said he is "anguished" by the allegations and is not seeking
money, position for children or power." The 70-year-old reiterated that
his chief concern has been "the deteriorating standard of corporate governance".
Dr Sikka will remain with Infosys as executive
vice-chairman, the company said and will hold office until the new permanent
chief executive officer and managing director takes charge, which should be no
later than March 31, 2018. He will receive an annual salary of $1 during his
tenure as executive vice chairman.
Dr Sikka's resignation comes a day ahead of a board meeting
that could green light a major share buyback. In April, Infosys said it would
return up to Rs. 13,000 crore to shareholders in the fiscal year ending March
2018. Infosys co-chairman R. Seshasayee said Vishal Sikka's resignation won't
impact share buyback plans.
