Underperforming Infosys launches hunt of Shibulal successor
11 April 2014
Infosys Ltd, the third-worst performer this year on the S&P BSE Information Technology Index, said today it has started to look for a successor to chief executive officer S D Shibulal.
The nominations committee of the board of directors has hired executive search firm Egon Zehnder to help identify external candidates for the job, the software-services provider said in an e-mailed statement from Bangalore.
This would be the first time Infosys is likely to have a chief executive who isn't a founder of the company.
The Infosys stock has declined 7.2 per cent this year, compared with an 11 per cent gain for smaller rival HCL Technologies Ltd, as Infosys told investors in March that annual sales growth may be at the lower end of its projections and lag behind the domestic industry forecast.
N R Narayana Murthy, who returned as chairman in June, has shuffled top management to revive earnings after some executives including the company's US chief quit last year.
Infosys stock has slumped 15 per cent since the end of February, compared with a 7.1 per cent gain in the benchmark S&P BSE Sensex and a 4.9 percent drop at Tata Consultancy Services Ltd. (TCS), India's biggest software exporter.
Infosys shares underperformed during Shibulal's tenure. They have risen 45 per cent since August 2011 when Shibulal took charge compared with an 86 per cent rally in the 10-company S&P BSE IT index, data compiled by Bloomberg show.
''Shibulal was due to retire in March 2015,'' K V Kamath, lead independent director at Infosys, said in an e-mail. ''As the last board meeting prior to his scheduled retirement date is on January 9, 2015, Shibu has offered to step down from the date of the last board meeting prior to his scheduled retirement or earlier if we were to complete the search and appointment process before that date. This is routine and I believe how successions happen.''
Infosys will also look for internal candidates to fill the position, according to the statement.