Infosys appoints Capgemini’s Salil S. Parekh as CEO and MD
The appointment of Salil S. Parekh as CEO marks the second successive time that Infosys has chosen a rank outsider to helm the company
Bengaluru:Salil Satish Parekh, who lost out to Vishal Sikka the last time Infosys Ltd was hunting for a new chief executive in 2014, has now been tasked with leading the company a little over four months after Sikka’s acrimonious exit, with chairman Nandan Nilekani and the board putting their faith on an industry veteran of nearly three decades.
The appointment of Parekh, who is a top executive at global IT services giant Capgemini, marks the second time that Infosys has chosen an outsider to helm the company, after being run by its founders for the better part of its first three decades of existence.
Yet, unlike with Sikka, Infosys has also played it safe by naming Parekh, who unlike Sikka, comes with plenty of experience in negotiating multi-million dollar outsourcing deals, which are staple for Infosys and its peers such as Tata Consultancy Services Ltd, Wipro Ltd and US-based Cognizant Technology Solutions Corp. Sikka, on the other hand, came into Infosys in 2014 with the reputation of a strong products and technology leader, but with virtually no experience in the outsourcing industry.
Parekh’s appointment drew immediate praise from Infosys founder N.R. Narayana Murthy, who had a bitter and public fallout with the previous board of Infosys and Sikka during the months preceding his ouster.
“I am happy that Infosys has appointed Mr. Salil Parekh as the CEO. My best wishes to him,” said Murthy in a statement to Mint.
Unlike Sikka, Parekh is not flashy or gregarious and is considered to be more amenable to the founders of the company, according to two executives. Parekh being a more understated executive is reflected by the fact that there is not much publicly available about the 53-year-old, who is an IIT-Bombay graduate and Cornell university alumnus.
Parekh also comes in with the reputation of being a leader adept at executing well in the world of IT services—something that co-founder and current chairman Nandan Nilekani prizes immensely and has alluded to in recent press conferences and media statements.
“We are delighted to have Salil joining as the CEO & MD (managing director) of Infosys. He has nearly three decades of global experience in the IT services industry. He has a strong track record of executing business turnarounds and managing very successful acquisitions. The Board believes that he is the right person to lead Infosys at this transformative time in our industry,” said Nilekani on Saturday.
Parekh, who held the designation of CEO of Capgemini’s UK, Asia and financial services businesses, will be the sixth CEO of Infosys, which was started in 1981 by seven engineers, including Narayana Murthy and Nilekani. Parekh, who is currently based out of Mumbai, will relocate to Bengaluru, which houses Infosys’s headquarters.
Interestingly on Saturday, Capgemini put out a separate press release, saying that Parekh “decided to leave the group in the context of the recent managerial evolutions communicated in October”. Capgemini appointed two chief operating officers in October.
Mint could not immediately verify whether Parekh left Capgemini because he was not elevated to the role of COO.
“Salil has relinquished his responsibilities within the Group and his managerial transition is already in place. His departure will be effective on January 1st,” Capgemini said on Saturday.
Capgemini reported €12.5 billion ($14.9 billion) in revenue for the last year as against Infosys’s $10.2 billion in revenue for the year ended March 2017. However, Capgemini’s market cap of €16.35 billion ($19.45 billion) is less than Infosys’s $33.6 billion.
Parekh, joined Capgemini in 2000 after the company bought the consulting arm of Ernst and Young, now EY.
Parekh will start his new job at Infosys in January, which indicates that he will have a three-month period to get familiar with the nearly 200,000-strong company before Infosys outlines its annual growth outlook for 2018-19 in April.
For now, Infosys has already scaled back its revenue outlook to at-best 6.5% in constant currency terms, as against at-best 8.5% growth outlined at the start of the financial year. This means Infosys has tempered street expectations and analysts believe that the company will be scrutinized on its performance in the next year.
“You got to give credit to Nandan for he has already taken pressure off from the new CEO by cutting back growth,” said a Mumbai-based analyst at a foreign brokerage, on the condition of anonymity.
“With his (Parekh’s) strong track record and extensive experience, we believe, we have the right person to lead Infosys. He was the top choice from a pool of highly qualified candidates,” said Kiran Mazumdar-Shaw, head of nomination and remuneration committee.
Experts tracking Infosys lauded Parekh’s appointment, but cautioned that the new CEO would need to be given enough freedom to effect a meaningful transition at Infosys, without interference from the founders.
“So Infosys appears to have played it safe as the company a bad experience of earlier appointing an American CEO based out of US,” said Shriram Subramanian, founder and managing director of proxy firm InGovern Research. “Salil has grown along with the Indian IT services industry, and has experience working out of India, and is going to be based out of Bengaluru.”
“One hopes that promoters give the new MD his own space and do not interfere,” added Subramanian.
- Q2 earnings: HCL Tech posts better-than-expected profit
- Rent a house from Oyo starting from Rs 7,999 per month. 5 things to know
- New Hyundai Santro gets over 1,000 bookings a day
- RBL Bank Q2 profit rises 36% to Rs 205 crore
- Paytm says consumer data safe after founder Vijay Shekhar Sharma’s personal data stolen
Editor's Picks »
- Hindustan Zinc dividend payout offsets dull Q2 results
- Q2 results no blockbuster for Inox Leisure as margins disappoint
- NBFC scare shaves 8.5% of IndusInd Bank share price
- Q2 results portent a dull Diwali for paint stocks investors
- Reliance Jio seen overtaking Vodafone Idea, Airtel to become India’s largest telecom firm by 2018-end