Infosys, after weeks of senior- level exits, on Thursday finally announced appointment of Vishal Sikka as the new Managing Director and CEO. Sikka will be the first outsider to take control of the country's second largest software provider. Along with, the company also announced that that both, NR Narayana Murthy and his son Rohan Murthy, would step down from their respective posts four years ahead of their tenure.
Reacting to the new appointment, stock prices of Infosys on Bombay Stock Exchange reported a gap up opening and touched an intraday high of Rs 3,298 per share. However towards the session end, company's share closed at Rs 3,166.60 per share, down by 0.38 per cent.
Sikka, 47, who was previously Executive Board Member of German IT giant SAP, will replace S D Shibulal, one of the seven engineers who founded Infosys in 1981, from August 1, Infosys said in a statement.
Along with Murthy, who upon return from retirement in June last year wanted five years as Chairman to turn around the sagging fortunes of Infosys, Executive Vice Chairman S Gopalakrishnan will also step down on June 14.
Since his return, Infosys had seen 11 top-level exits including CFO V Balakrishnan, Global Manufacturing Head Ashok Vemuri and President BG Srinivas. Murthy will be replaced veteran banker K V Kamath as non-executive Chairman of the Infosys board.
In the statement, the company added that the Chairman's office would be dissolved and Rohan Murthy, who was brought in by his father as his Executive Assistant last year, would leave the company on Saturday, when the annual shareholders meeting is held in Bangalore.
Meanwhile, Narayana Murthy will be designated Chairman Emeritus from October 11, the day Kamath will assume the role of Non-Executive Chairman. Sikka, who quit SAP in May, comes in after four straight years of narrowing margins at Infosys.
A Stanford University computer science Ph.D. Graduate, Sikka oversaw the development of new products, including a platform for quickly analysing large databases, as chief technology officer at SAP, the world's largest maker of business-management software.
Welcoming Sikka, who was selected from among four contenders, Murthy said, “Vishal is a wonderful leader and technology visionary. I come from a teaching family where the highest chair is given to an intellectual. Sikka is a true intellectual. He has obtained a doctorate from Stanford University, which highlights his brilliance.”
Sikka is also credited with the turnaround at SAP with HANA, an in-memory data platform that can be deployed both on-premise or in the cloud. “I am honoured to lead Infosys. 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 said.
Apart from the appointment of Sikka, Infosys also elevated UB Pravin Rao from his current position as President and Whole-time Director to as Chief Operating Officer with effect from June 14.
Infosys also informed that Srinath Batni, a Whole-time Director, would step down from the board on July 31. The company promoted 12 leaders to the position of Executive Vice President with additional responsibilities.
Analysts feel Sikka's appointment may bring down the curtain on a year of suspense, which saw 11 senior executives quitting Infosys after Murthy was brought back from retirement in June last year to head the company and put it back on a high-growth trajectory.
“The key thing is that uncertainty has ended. The first few months of Murthy's comeback were spent unravelling the product strategy and handling these exits,” said Gartner Vice-President & Regional Director India Partha Iyengar .
“I can't say for sure but the wrath of departures brought in a sense of urgency in announcing the next CEO. It is probably the best news in a long time,” he said. Angel Broking's VP Research Sarabjit Kour Nangra said the entry of the CEO is the much-awaited news as the company has been searching for a chief while facing the exodus of key employees.