The Board of Directors of Infosys announced this morning that they have accepted the resignation of CEO Vishal Sikka.

GadgetsNow & Agencies | Updated: Aug 18, 2017, 09.44AM IST
Vishal Sikka has been appointed as the executive vice-chairman.
Vishal Sikka has been appointed as the executive vice-chairman.


Infosys said its board of directors has accepted the resignation of Vishal Sikka as the managing director and CEO with immediate effect.

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.

The company said that succession plan for appointment of new managing director and chief executive officer has been operationalised by board and the search for same has commenced.



Vishal Sikka has been appointed as the executive vice-chairman.


7 biggest issues causing tussle between Infosys and the company's founders

7 biggest issues causing tussle between Infosys and the company's founders

Infosys co-founder NR Narayana Murthy's statement to the media saying that he is "distressed" by what is happening at Infosys has brought the ongoing spat between the company's founders and management out in the open. According to insiders, the trouble has been brewing for past many months between the founders, who own some 13% stake in the company, and Infosys management led by CEO Vishal Sikka. Former SAP CTO Sikka happens to be the first non-promoter CEO of the country's second-largest IT company. Here's a look at 7 issues that are behind the current tussle at Infosys.

CEO Vishal Sikka’s salary

One big flashpoint is said to be CEO Vishal Sikka's salary. In fiscal year 2016-17, Sikka's compensation saw a sharp increase to $11 million, from $7.08 million in 2016. Infosys says that the cash component of the salary has actually come down for Sikka with most of it in restricted stock units (RSUs) against extremely steep targets. Sources close to Sikka say that he actually gets less cash now than when he was chief technology officer at German software major SAP. Infosys founders one big concern has been the 55% increase in CEO compensation that appears particularly large when average salary hikes have hovered in the single-digits of 6% to 8% at the company.

Severance package for former CFO Rajiv Bansal

High severance packages to departing top executives, such as CFO Rajiv Bansal and legal counsel David Kennedy, too has been an issue of friction. Founders claim that no explanation has been goven for the high severance package of Rs 173.8 million (24 month’s pay) announced for former CFO Rajiv Bansal. The untimely exit of David Kennedy and his compensation package too has been a thorny issue.

Appointment of Punita Kumar Sinha as an independent director

Some promoters are said to be upset over the appointment of Punita Kumar Sinha, an investment banker and wife of Union minister Jayant Sinha, as an independent director. Infosys co-founder NR Narayana Murthy abstained from voting on her appointment. While emphasizing that he had great respect for her as a professional, he grounded his objection in the fact in that the entire history of Infosys, it had never invited the spouse of any active politician to the board. Sikka and the board's argument to this was that she was eminently qualified -- having been a fund manager with Blackstone and Oppenheimer, among others -- and that the decision was taken on merit.

Two power centres

Infosys is also said to be battling concerns that it has two power centres, with senior executives sometimes being called upon to brief a few promoters informally about the working of the company.

​Innate skepticism about aggressive acquisitions

According to some insiders, the founders are still attached to a business model that is facing an existential crisis, and are wary of aggressive acquisitions that are necessary to grow the company. "They are just too conservative when it comes to investing in the future," told a Young Turk to Times of India. The gameplan to position Infosys as a next-generation services company leveraging automation, artificial intelligence and analytics, requires different skillsets and bold acquisition strategy, say industry experts. Infosys, under the founders, has traditionally been wary of large acquisitions.

'Old guard doesn't want to let go'

There's also a perception among the new generation that somewhere deep down, the 'old guard' doesn't want to 'let go' of a company they built from scratch. CEO Vishal Sikka is the first non-promoter CEO of Infosys.

​Founders want chairman R Seshasayee to go

The founders of Infosys Ltd are said to have expressed unhappiness with non-executive chairman R Seshasayee over some of the decisions taken by the company’s board in the past two years. They claim to be upset with the board for not closely scrutinizing some of the company's recent decisions which they claim have been at odds with established practices. Reports also suggest that Seshasayee was even asked to consider stepping down.




Sikka is said to have cited among his reasons for leaving "a continuous stream of distractions and disruptions" in recent months and quater. In a filing to BSE, the company said, "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."



Sikka will receive an annual salary of $1 during his tenure as executive vice chairman according to a source.


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