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Bloomberg
Salil Parekh overcame long odds to become Infosys Ltd.’s choice for its next chief executive officer. He now faces at least as challenging a task in getting the iconic Indian outsourcing company back on track.
The low-key, 53-year-old from Capgemini SE was named to the helm of Infosys, beating out a field of internal candidates and former executives who had originally been considered front runners.
Parekh will leave Capgemini’s executive board to start his five-year term at Asia’s second-largest outsourcer in the beginning of 2018. Infosys’ shares advanced 2.8 percent to 985.35 rupees in Mumbai, the biggest gain in two weeks.
He’s taking over a company in tumult. His predecessor, Vishal Sikka, quit after he came under intense fire from the company’s founders who objected to his strategy and compensation. Parekh will have to balance maintaining a genial relationship with strong-willed founders such as N R Narayana Murthy with taking bold steps to revive growth and restore employee confidence. Infosys is struggling to move beyond its traditional low-margin outsourcing business into more profitable markets such as digital services.
“Salil brings hugely relevant
experience to Infosys,†Nandan Nilekani, another founder who returned as chairman when Sikka left in August, said in an interview. “He will fit into our culture and, at the same time, bring about the required transformation.â€
The spat pitted the former CEO and the company’s board against the founders, and took a toll on the 200,000-person, $10 billion-in-revenue company. Sikka quit over what he described as “a continuous drumbeat of allegations†over management and corporate governance. The share price tumbled, wiping out billions of dollars investor wealth.
After the drama that Chairman Nilekani described as reaching “reality TV†like proportions, the quiet Parekh may be an apt choice.
A few years ago, Parekh gave a presentation to the industry trade body Nasscom. His talk, after recapping the sector’s challenges, included a slide that read: “Stay calm, don’t panic.â€
Parekh has a blend of Ivy League credentials and operational experience that appealed to the board. He earned a degree as an aeronautical engineer from the Indian Institute of Technology in Mumbai and has a master’s degree in computer science from Cornell University. He is only the second outsider after Sikka to take the top job at the 36-year-old Infosys.
The new CEO will also have more than $5 billion in cash to make acquisitions at a time of opportunity. That’s where Parekh’s experience will come in handy.