The Infosys founders pulled off a coup on Thursday with Nandan Nilekani returning to head the company as chairman after R Seshasayee quit the post and co-chair Ravi Venkatesan resigned as vice-chairman. The ouster of Vishal Sikka, who resigned from the CEO's post on Friday, was completed with his resignation from the board as well on Thursday.
Venkatesan will however, continue to be an Independent Director on the board while Jeffery S Lehman and John Etchemendy have also quit the Infosys board with immediate effect. "I am happy to return to Infosys, now in the role of nonexecutive chairman, and look forward to working with my colleagues on the Board and in executive management on the business opportunities we see before us and delivering benefits to our clients, shareholders, employees and communities," Nilekani said in a statement after the announcement.
Nilekani also said that the Board will actively consider a broad based shareholder consultation process as a critical part of its overall engagement initiatives with all the stakeholders of the company that are being taken up on a priority basis. UB Pravin Rao, will continue as interim CEO and MD and the Infosys Board will continue with its earlier stated plan to identify a permanent CEO and MD. Lehman said he was stepping down as the changes would require additional time demands on independent directors while Echtemendy said he was stepping down to allow new independent directors to help the company on the new path it will undertake.
Given that Sikka's new contract as executive vice chairman has not yet been executed, the company said the board had decided to complete all resignation formalities as per his employment contract as MD and CEO. Sikka will receive base pay for 90 days in lieu of notice of USD 246,575, a variable pay of USD 205,572 and company-paid employee health insurance benefits during this period.
All equity awards outstanding as on separation date to the extent such awards are unvested will terminate on the date of separation. "A separation agreement reflecting this and other terms such as a mutual release and non-disparagement obligation has been approved by the Board," the statement said.
Nilekani's earlier tenure at the helm of Infosys from March 2002 to April 2007 represented a bright phase for the company with its market capitalisation surging by as much as 374 per cent during this period. Nilekani had taken over as CEO from NR Narayana Murthy in March 2002 and passed on the reins to his successor Kris Gopalakrishnan, who took over as CEO in 2007.
After Sikka's resignation last Friday, the company found itself standing at the crossroads with plenty of uncertainty, forcing several institutional investors to step in and persuade Nilekani to return. The return of a founder put an end to a three-year experiment by Infosys to bring for the first time an independent board and a professional CEO when Vishal Sikka was appointed to the post.
A group of 12 major institutional investors in Infosys Ltd has asked the Indian IT services company to bring former CEO Nandan Nilekani back on to its board to try to resolve a feud with the company's founders.