Infosys CEO and Managing Director Vishal Sikka resigned from his position on Friday. However, he is not leaving the company. Sikka has now been appointed as the Executive Vice Chairman for Infosys, at least until the company finds a permanent CEO. For now though the tech giant has appointed U B Pravin Rao appointed as interim MD and CEO of Infosys. In his resignation speech, Sikka says, “I feel proud of our progress and achievements.”
A statement issued by the Infosys board hinted that Sikka resigned due to his ongoing tussle with the company co-founder Narayan Murthy. The board statement reads, “In his notice of resignation to the board, Dr Sikka reiterated his belief in the great potential of Infosys, but cited among his reasons for leaving a continuous stream of distractions and disruptions over the recent months and quarters, increasingly personal and negative as of late, as preventing management’s ability to accelerate the company’s transformation.”
“The board understands and acknowledges Dr Sikka’s reasons for resignation, and regrets his decision. In particular, the board is profoundly distressed by the unfounded personal attacks on the members of our management team that were made in the anonymous letters and have surfaced in recent months,” noted the statement.
Sikka, in his resignation letter too, cited personal and malicious attacks as his reason for resignation. “Over the last many months and quarters, we have allbeen besieged by false, baseless, malicious and increasingly personal attacks. Allegations that have been repeatedly proven false and baseless by multiple, independent investigations. But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support in this great transformation. This continuous drumbeat of distractions and negativity over the last several months/quarters, inhibits our ability to make positive change and stay focused on value creation,” said Sikka.
Official statement from Infosys was, however, much muted. It said that Sikka is now appointed executive vice chairman effective today (August 18), 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 also look after the strategic initiatives. “Sikka will continue to focus on strategic initiatives, key customer relationships and technology development. He will report to the Company’s Board. UB Pravin Rao has been appointed Interim Chief Executive Officer and Managing Director reporting to Sikka under the overall supervision and control of the Company’s Board,” said Infosys.
Narayan Murthy vs Vishal Sikka
Although such things are not said openly in resignation letters or company statements, it is no secret that Sikka has resigned due to his ongoing tussle with Infosys co-founder Narayan N Murthy. For several months now, Murthy is raising reportedly is saying that there were serious issues with Infosys corporate governance under Sikka. The big issues reportedly relate to the high salaries of senior executives, including Sikka, particularly at a time when there is slowdown in IT sector and people are losing jobs. At the same time the camp led by Murthy has also alleged some questionable hiring made at Infosys while Sikka was CEO.
“Providing huge severance pay (with 100 per cent variable) to some departing employees while giving only 80 per cent variable for employees in the company is one such example. Such payments raise doubts whether the company is using such payments as hush money to hide something,” Murthy told a news daily a few months ago.
Sikka had earlier termed this talk of corporate governance gossip. “Let us keep a sharp focus on the execution of our strategy. Let us not get distracted by media speculation that is designed to stir up gossip or rehash old rumours or speculate on the unknowns, around visas, or anything that questions our commitment to governance, integrity and values,” Sikka reportedly wrote in his letter to employees a few months ago.
But from resignation today it is clear that issues continued to fester. Hours ahead of Sikka’s resignation came a news report in MInt newspaper on Friday. This was probably the last straw. Murthy reportedly recently wrote an email to advisors in which he doubted the ability of Sikka. He reportedly wrote, “All that I hear from at least three independent directors, including Mr Ravi Venkatesan (co-chairman), are complaints about Dr Sikka. They have told me umpteen times that Dr Sikka is not a CEO material but CTO material. This is the view of at least three members of the board, and not my view since I have not seen him operate from the vantage point of an Infosys board member,” Murthy said in the email. It looks like that finally Sikka had no option but to resign.
Source: India Today