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.
- 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
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.
Moving on...https://t.co/U3CJrtdz5c— Vishal Sikka (@vsikka) August 18, 2017
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.