Pai in Race for Infosys COO Post

Murthy may stay chief mentor after retirement while Kris could be vice-chairman

TV Mohandas Pai is among the candidates being considered for the post of COO at Infosys Technologies, as India's second-largest software exporter prepares for a top-level shuffle involving the CEO and chairman later this year, at least two people familiar with the discussions said.
Pai, 51, is currently a member of the Infosys board and also heads the company's human resources (HR) and administration departments.
As Infosys prepares to appoint SD Shibulal, the current COO and the last among the founders to take on the role of CEO later this year, there is an opportunity for non-founders like Pai and newer leaders to get a chance to run the firm. Chairman NR Narayana Murthy will also retire in August this year.
"Shibu could be CEO and Pai COO. There is also a possibility Murthy could resign as non-executive chairman but continue as chief mentor," said one of the people. "There is a high likelihood of KV Kamath becoming non-executive chairman (if he accepts) and Kris (S Gopalakrishnan) becoming vice-chairman," he added. Pai's long innings at Infosys, his leadership qualities and record make him an ideal candidate, the second person said. Most Infosys COOs have gone on to become CEOs. The current CEO, S Gopalakrishnan, popularly known as Kris, was COO before he was elevated to the CEO's position. Pai Hand-Picked by Murthy
"He's (Pai) extremely entrepreneurial and has a tremendous sense of global business. He's a man for all seasons," pointed out a senior Infosys executive.
According to Infosys' policy, the maximum retirement age for executive directors is 60, which means if Shibulal, who is around 57, is made CEO, he could continue till about 2014 after which the CEO's position would fall vacant. Pai was appointed chief financial officer of Infosys in 1994, and later handed responsibility of the critical functions of HR and education.
He's also a well-known public face and has been part of various committees such as the Kelkar committee for reforming direct taxes and is currently on the Sebi board.
"It could be a great move for Infosys. He's got the ability to galvanise the team, and also address the customer. He can do both—drive the team and carry the objective to deliver. The only downside is that he's not a technical person, but that doesn't matter so much for a multibillion-dollar company like Infosys," said R Suresh, MD, Stanton Chase India, who's placed a number of top IT executives.
When contacted by ET, Pai said, "I am not aware of it—the nominations committee is an independent committee, it will take a decision on these matters."
The nominations committee, comprising Jeffery S Lehman, Deepak M Satwalekar and Omkar Goswami, is responsible for succession planning for the roles of chairman, CEO, COO and CFO.
"It is an internal matter; I would not be able to comment. The committee is engaged in the process and an announcement will be made at the appropriate time. There is no fixed date—it can be made anytime in April, May, June, July or August-—before Mr Murthy retires," Satwalekar said.
An email sent to Lehman did not receive a response.
"As this is speculative in nature, we will be unable to offer comments," Infosys said in an email.
Pai was with Bangalore-based transport firm Prakash Roadlines before being reportedly picked up by Murthy to join Infosys in 1994. When Murthy retired from an executive role in Infosys, insiders say Pai wanted to quit but was convinced by him to stay on.
More recently, Pai was criticised for iRace, an HR initiative that resulted in 4,000-4,500 demotions. It demoralised employees and the move backfired on Infosys when demand for IT services returned in October 2010. "Infosys' HR restructuring initiative could not have been more ill-timed.
A policy that could have been pushed through in a weak demand environment turned ugly as demand surged. iRACE drove some 4,500 demotions and general discontent among employees, some of which continue to haunt the firm now that employee retention has slipped," said a report by brokerage CLSA on Infosys' employee attrition.
The global HR head of a rival firm termed it more a problem of expectation setting and communication gap between the management and employees rather than a mistake attributable to a single person.
A person who has worked with Pai says while a majority of Infosys leaders are more cautious and riskaverse, and till recently preferred organic growth to potential downside from acquisitions, Pai is more pragmatic.
"There are always some risks to acquisitions but that shouldn't stop you from doing them and Mr Pai understands that more than anyone else," he said.