In April this year at Infosys Ltd’s Palo Alto office, when Vishal Sikka was starting to get disillusioned about his future at Infosys, another top executive stationed on the other side of the globe—roughly 8,400 miles away—at a rival, global information technology (IT) services firm was starting to feel equally uneasy about his own future at his company.
This executive, who had long harboured ambitions of landing the role of global chief executive at his firm, had just learnt that his company was planning to pick two other executives for the role of joint chief operating officers later during the year—a development that would deal a severe blow to his own ambitions.
Fortuitously for that executive, while one door of opportunity had shut firmly 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 made all the more gratifying owing to the fact that he had lost out on that job to Sikka in 2014.
For Parekh, this weekend’s appointment also marked the culmination of eight months of constant back-and-forth with multiple companies, including Infosys and International Business Machines (IBM), among others—a process that proved to be frustrating at times for him, with plenty of hand-wringing, before he finally landed his latest gig at Infosys.
These accounts of the past eight months have been obtained after Mint spoke to at least half a dozen executives and other people directly familiar with Infosys’s CEO search process. All these executives requested anonymity in order to speak more freely about the search process.
Sikka & Parekh: a tale of two CEOs
Back in April, the seeds of Parekh’s eventual coronation at Infosys were sown when Sikka was growing increasingly frustrated with what he viewed as the efforts of the Infosys board to rein him in and oversee his performance, amid a bitter, public fight with founder N.R. Narayana Murthy, who was repeatedly questioning decisions made by the Infosys board.
On 15 April, Infosys named Ravi Venkatesan as co-chairman and then appointed a three-member panel to “support and advise” Sikka in executing strategy.
As Mint reported on 21 August, Sikka was “deeply unhappy” with Venkatesan’s appointment, even telling some executives close to him that he “wanted to leave”, given that he and Venkatesan had a tough working relationship on the board.
Around the same time, Mumbai-based Parekh learned Capgemini was planning to elevate two other executives to roles of joint chief operating officers later during the year—a development that effectively snuffed out his chances of being elevated to the role of global CEO of the Paris-based IT giant.
Over the next few weeks, Parekh privately made up his mind to move on from Capgemini and seek opportunities elsewhere.
Calls, emails and texts to Parekh over the weekend went unanswered.
One door of opportunity would open up at IBM in June, when CEO Ginni Rometty was looking to hire a top executive to lead the company’s multi-billion dollar IT infrastructure business. While accepting the role would mean a step-up for Parekh, it did not quite fit the stature of his own ambitions. Parekh would eventually pass on the job and IBM would pick former Wipro joint-CEO Suresh Vaswani for that role.
Next, around September, came an offer from US-based DXC Technology, which was formed earlier this year after the merger of Computer Sciences Corp. and Hewlett-Packard’s (HP) enterprise services business.
A spokesperson for DXC Technology said the company had no comment to offer while an email sent to IBM seeking comment went unanswered.
According to two of the people mentioned above, Mike Lawrie, CEO of DXC, made an offer to Parekh to take over the $7-billion Americas business of the company. The offer was generous. If Parekh had taken up the role, he would stand to make at least $5 million in annual compensation, which is a significant jump from the estimated two-and-a-half million he made at Capgemini.
Parekh, however, had his sights on Infosys at the time, with the CEO position lying vacant at the company after Sikka’s acrimonious ouster.
According to two other executives directly familiar with his thinking, Parekh asked for an introduction to the board of Infosys less than a week after Sikka stepped down in a huff on 18 August.
However, it was a while before the Infosys board itself reached out to Parekh.
A shortlist of CEOS
On 25 August, Infosys named co-founder Nandan Nilekani as chairman. Nilekani would soon depart for the US for a long-planned trip. Infosys director and head of the board’s nominations committee Kiran Mazumdar-Shaw, who also made a trip to the US around the same time, and Nilekani stayed in constant touch during that time and coordinated with each other on the search.
Over the next few weeks, the board started creating a firm list of potential candidates, with the help of search firm Egon Zehnder. That list contained 10 names, including that of Parekh, according to a fifth and sixth executive directly familiar with the search process that was being firmly spearheaded by Mazumdar-Shaw.
The board of Infosys had three clear mandates this time, unlike back in 2014. Firstly, they wanted a leader who was a reputed sales guy with a strong grounding in the IT outsourcing industry—traits that Sikka did not possess.
Secondly, the new CEO had to be based out of Bengaluru. No two ways about it.
“The overseas experiment (with Sikka) proved to be a disaster for Infosys. The new CEO could not be based anywhere outside Bangalore. Period,” said the fifth person.
And, finally, Infosys wanted to play it safe and opted to take a “conventional and conservative” route, said this person.
“When Sikka came into Infosys in 2014, he had the reputation of being a maverick change agent. That didn’t work out so well, and Infosys learnt its lessons. They chose stability this time around,” he said.
Parekh and Infosys: a marriage of convenience
Mazumdar-Shaw and Nilekani further whittled down that list of names over the next few weeks. Parekh was on the final shortlist that the board began to consider seriously in early October.
“The pool of IT services executives with global experience has shrunk and become smaller and smaller over the years. You just don’t have any global leaders based out of India anymore—Salil was probably the only exception. And it has become impossible for companies like Infosys to get global leaders to relocate to India—a case in point being Abid (Ali Neemuchwala) at Wipro and Sikka at Infosys,” said the sixth person.
With Parekh, all three criteria were met. Parekh, a Gujarati from Mumbai, possesses three decades of global experience in the world of IT services, having sat across the table with CEOs of Fortune 500 firms and having negotiated complex multi-year, multi-million dollar outsourcing deals over the years.
And more importantly for Infosys, Parekh, a father of three young boys, was more than happy to relocate to Bengaluru from Mumbai.
After the initial set of conversations, Nilekani, Mazumdar-Shaw and the board of Infosys decided to meet Parekh. In October-November, Parekh would travel to Bengaluru a number of times and meet the board at plush, five-star hotels in the city.
By the second week of November, the board made up its mind—as had Parekh.
However, so closely guarded was the search that many were still unsure as to who Infosys would finally zero in on.
One such person was Ray Wang of Constellation Research, who has worked with Parekh both at Ernst and Young (now EY) and Capgemini, and who had met Parekh in November. When Mint asked Wang on 29 November if he’ll be surprised if Parekh will get the job, Wang laughed it off, saying he had heard the rumours in the past, too.
Just two days earlier (on 27 November), this paper had reached out to Parekh, asking if he indeed had accepted Infosys’s offer. Mint’s query went unanswered and by the time Mint could independently confirm the development, Infosys’s board had met on Saturday afternoon, fulfilling Parekh’s ambition of becoming the boss of the high-profile IT firm.