Home / Companies / News /  Wipro may extend CEO TK Kurien’s term

Bengaluru: Wipro Ltd is likely to extend T.K. Kurien’s tenure as chief executive officer of India’s third-largest software services provider for at least a year after his current five-year term ends in January.

The development may curb speculation about an imminent change of guard at Wipro. News reports about the company scouting for a successor surfaced after the Bengaluru-based firm elevated three executives to the rank of presidents and named a former top Tata Consultancy Services Ltd (TCS) employee as chief operating officer earlier this year. Importantly, the extension will give chairman Azim Premji and the board more time to find the successor to Kurien, who took over the reins of the Bengaluru-based company on 1 February 2011, experts say.

“Will (Kurien) stay in February 2016 or December 2016 or January 2017? The answer is yes… (Kurien) is not going any time soon," said an executive directly familiar with the matter. The executive declined to be named because of the confidential nature of the subject.

To be sure, the board’s three-member nominations committee has not reached an agreement on extending Kurien’s tenure for now, but people familiar with the developments said that Kurien’s contract is expected to be extended. The nominations panel, headed by Ashok S. Ganguly, and independent directors Narayanan Vaghul and William Arthur Owens, should extend Kurien’s term by “at least a year" when they meet in January 2016.

“This is the general understanding for now (of Kurien staying for at least another year). (But) it finally is the call of the nominations committee, and they should make it public early next year," said another executive briefed with the developments.

“Any such decision will be taken by the board of directors of Wipro Ltd based on the recommendation of the nominations committee and will be communicated to the stock exchanges," said a spokesman for Wipro.

Kurien, who turns 58 late next year—the retirement age set by the company for executives—will become only the second senior executive at the 167,000-strong Wipro to get an extension.

P. Surendra Pai also got an extension to continue as chief executive, in the past.

Kurien heading Wipro beyond January next year will make him the longest serving CEO at Wipro since the company first started selling computers in 1981.

Some experts say that Kurien getting an extension underscores the board’s confidence in him.

“Kurien has done a good job in not only espousing Wipro’s values, but also guiding the company through the market place digital transformation," said Ray Wang, founder of Constellation Research Inc., a technology research and advisory firm.

“The company has sought to bolster its leadership ranks and put in the right management teams for succession planning. This shift has not been easy but at the end of the day Wipro has transformed itself. The company has invested more in platform and native IP. The company has stepped up its alliances. It has invested more in platform and native IP. The company has stepped up its alliances. The stability afforded by T.K. (Kurien) has helped the company make these shifts. More importantly, the search for a successor may require more than a year’s worth of time," he added.

Despite Kurien’s efforts in helping his firm become a leaner and more decentralized organization and embrace automation, Wipro has under-performed its rivals and industry body Nasscom’s growth estimates.

Wipro Ltd reported a revenue growth of 5% in dollar terms in the year ended March 2013. The following year, it grew at 6.4% and last year it reported 7% growth.

The biggest challenge ahead for Kurien remains to get Wipro to post industry-matching growth numbers, especially since the company risks ending this financial year growing at a lower pace than in the last fiscal.

Wipro hardly recorded any growth during the first quarter of this financial year and posted a 2.1% sequential growth in dollar terms in the second quarter.

“With the company expecting a soft third quarter, Wipro could see its dollar revenue growth coming at less than 6%. This is worrisome for a tier I IT company," said the Mumbai-based head of research at a domestic brokerage. The person declined to be named.

For this reason, it has been speculated in newspaper reports that Kurien may step down at the end of his five-year term, and Wipro may name Abid Ali Neemuchwala, its current chief operating officer, or one of the other top executives as the new chief executive.

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