The appointment of Salil Parekh as CEO of Infosys: this is the inside story | business news –

The appointment of Salil Parekh as CEO of Infosys: this is the inside story | business news


In April of this year at the Infosys Ltd office in Palo Alto, when Vishal Sikka began to become disillusioned about his future at Infosys, another senior executive stationed on the other side of the globe -about 8,400 miles away- in a rival, global the information technology (IT) services company began to feel equally uneasy about their own future in their company.

This executive, who had long had ambitions for the position of global chief executive in his company, had just learned that his company planned to elect two other executives for the role of joint operations chiefs later in the year , a development that could strike a blow to their own ambitions.

Fortuitous for that executive, while a door of opportunity had been firmly closed in his face, another door opened a few months later.

On Saturday, that executive, Salil Satish Parekh, 53, was named CEO of Infosys, a development that made it even more rewarding due to the fact that he had lost that job with Sikka in 2014.

For Parekh , the appointment of this weekend also marked the culmination of eight months of constant exchange with multiple companies, including Infosys and International Business Machines (IBM), among others. others, a process that at times was frustrating for him, with many handshakes, before he finally got his last job at Infosys.

These accounts for the past eight months have been obtained after Mint spoke at least half a dozen executives and others directly familiar with the Infosys CEO search process. All these executives requested anonymity to talk more freely about the search process.

Sikka & Parekh: a story of two CEOs

In April, the seeds of the eventual Parekh coronation on Infosys were sown when Sikka was increasingly frustrated with what he considered the efforts of the Infosys board of directors to control and oversee its performance, in the midst of a bitter public battle with founder NR Narayana Murthy, who repeatedly questioned decisions made by the Infosys board of directors.

On April 15, Infosys named Ravi Venkatesan as co-chair and then appointed a three-member panel to "support and advise" Sikka in executing the strategy.

As he mentioned on August 21, Sikka was "deeply unhappy" with Venkatesan's appointment, even telling some executives close to him that he "wanted to leave," since he and Venkatesan had a difficult working relationship on the board.

Around the same time, Parekh learned in Mumbai d Capgemini planned to elevate two other executives to joint chiefs of operations roles later in the year, a development that effectively eliminated his chances of being elevated to the position of global CEO of the giant of IT with headquarters in Paris.

In the following weeks, Parekh made the private decision to leave Capgemini and look for opportunities elsewhere.

Calls, emails and text messages to Parekh over the weekend were left unanswered.

A door of opportunity would open at IBM in June, when CEO Ginni Rometty was looking to hire a senior executive to lead the company's multibillion-dollar IT infrastructure business. While accepting the role would mean an increase for Parekh, it did not fit the stature of his own ambitions. Parekh would eventually pbad the job and IBM would choose the former Wipro CEO, Suresh Vaswani for that role.

Then, around September, an offer came from the American DXC Technology, which was formed earlier this year after the merger of Computer Sciences Corp. and the business services business of Hewlett-Packard (HP).

A spokesperson for DXC Technology said the company had no comments to offer while an email sent to IBM for comments was not answered.

According to two of the people mentioned above, Mike Lawrie, CEO of DXC, made an offer to Parekh to take over the company's business for $ 7,000 million in the Americas. The offer was generous. If Parekh had badumed the role, he could make an annual compensation of at least $ 5 million, which is a significant jump from the estimated two and a half million he made in Capgemini.

Parekh, however, had his sights set on Infosys at that time, with the post of chief executive vacant in the company after the harsh dismissal of Sikka.

According to two other executives directly familiar with his thinking, Parekh requested an introduction to the Infosys council in less than a week after Sikka resigned on August 18.

However, it was some time before the Infosys board communicated with Parekh.

A list of CEOs

On August 25, Infosys named co-founder Nandan Nilekani as president. Nilekani would soon depart to the US UU For a long-planned trip. Infosys director and head of the board nominating committee Kiran Mazumdar-Shaw, who also made a trip to the US. UU At the same time, and Nilekani remained in constant contact during that time and coordinated with each other in the search.

In the coming weeks, the board began to create a firm list of potential candidates, with the help of search firm Egon Zehnder. That list contained 10 names, including Parekh, according to a fifth and sixth executive directly familiar with the search process that was being headed by Mazumdar-Shaw.

The Infosys board had three clear mandates this time, unlike the previous one in 2014. First, they wanted a leader who was a reputable vendor with a strong base in the IT outsourcing industry, traits that Sikka does not I had

Second, the new CEO had to be based in Bengaluru. There are not two ways to do it.

"The experiment abroad (with Sikka) proved to be a disaster for Infosys, the new CEO could not be based anywhere outside of Bangalore," said the fifth person.

And, finally, Infosys wanted to play it safe and chose to take a "conventional and conservative" route, said this person.

"When Sikka joined Infosys in 2014, he had a reputation for being a nonconformist change agent, that did not work so well, and Infosys learned his lessons, they chose stability this time," he said.

Parekh and Infosys: a marriage of convenience

Mazumdar-Shaw and Nilekani further reduced that list of names in the coming weeks. Parekh was on the final list that the board began to seriously consider in early October.

"The group of IT service executives with global experience has shrunk and become increasingly smaller over the years, and you no longer have global leaders based in India, Salil was probably the only one And companies like Infosys have been unable to get world leaders to move to India, an example of this is Abid (Ali Neemuchwala) in Wipro and Sikka in Infosys, "said the sixth person.

With Parekh, all three criteria were found. Parekh, a Gujarati from Mumbai, has three decades of global experience in the IT services world, and has sat at the table with the CEOs of the Fortune 500 companies and has negotiated complex multimillion-dollar and multi-million dollar outsourcing agreements. over the years. 19659002] And most importantly for Infosys, Parekh, father of three small children, was more than happy to move to Bangalore from Mumbai.

After the initial set of talks, Nilekani, Mazumdar-Shaw and the Infosys council decided to meet Parekh. In October-November, Parekh would travel to Bangalore several times and meet with the council in luxurious five-star hotels in the city.

In the second week of November, the board made a decision, as did Parekh.

However, the search was so closely monitored that many were still not sure who Infosys would finally focus on.

One such person was Ray Wang of Constellation Research, who worked with Parekh on Ernst and Young (now EY) and Capgemini, and who had met Parekh in November. When Mint asked Wang on November 29 if he would be surprised if Parekh would get the job, Wang laughed, saying he had also heard the rumors in the past.

Only two days before (on November 27), this newspaper had addressed Parekh, asking if he had in fact accepted the Infosys offer. Mint's query was not answered and by the time Mint was able to confirm the development independently, the Infosys board met on Saturday afternoon, fulfilling Parekh's ambition to become the head of the high-profile IT company. .

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