Will U B Pravin Rao continue to head Infosys after March?

When Rao was named interim CEO after Vishal Sikka stepped down, the feeling was different

When Infosys appointed U B Pravin Rao as chief operating officer in June 2014, it was seen as a reward for nearly three decades of service. On Friday, when Rao was named interim Chief Executive Officer after Vishal Sikka stepped down, the feeling was different.

Rao had been hired as a management trainee by founder Narayana Murthy himself in 1986, soon after a degree in electrical engineering from Bangalore University. After various roles at Infosys, including head of infrastructure management services, Europe delivery and retail, and consumer packaged goods, Rao became second in command at the company.

“I feel privileged that I recruited Pravin in 1986 and he has had a dream run in the company, with extraordinary value systems,” said Murthy in June 2014 when he was executive chairman. Rao had been the perfect mentee of Murthy. He was seen as humble, from a middle class background and never really had a flair for the fancy — all things the company's co-founders stood for. While none of these qualities seem to have left Rao in the past three years, the support of the founders definitely has to some extent.

Under Sikka's leadership, Rao began to flourish. He seemed much more confident at addressing the press. He was never as flamboyant as Sikka but developed his own calm, to-the-point method of answering. Sikka was always ready to interject with  needed flair — their tag team tactics were evident. Even away from the reporters and cameras, Rao was Sikka’s eyes, ears and hands in India. Being an operations person rather than a leader, Rao was a good choice to implement Sikka’s grand visions. This closeness to Sikka however, led to a rift between the founders and Rao.

The disparity finally showed itself this April, when only 24 per cent of promoter votes were cast in favour of a resolution seeking a 35 per cent increase in Rao’s yearly compensation to Rs 12.5 crore. Murthy in a letter said the abstention had nothing to do with Rao, instead citing his belief in “compassionate capitalism” and how he felt every senior management person of an Indian corporation should show self-restraint on his or her compensation.

He reiterated his belief in Rao, saying: “He had been sidelined. He was not even a member of the Executive Council at Infosys in 2013 when I came back. Kris, Shibu and I encouraged him, elevated him to the board, and made him the COO when we recruited Vishal as the CEO.” The question on everyone’s mind is whether Rao will finally graduate from an ‘interim’ MD & CEO to a full-time one?

While the board of the company might have come out fighting in favour of Sikka, even taking an open stance against Murthy’s constant interference, the fact of the matter is it couldn’t keep him from resigning.
 

Rao of all people knows of Murthy and the promoters’ growing clout on the Infosys board. He could well be the next person in the firing line. If nothing else, the ongoing conflict at Infosys will surely put Rao in a dilemma about retiring from the company, a a longstanding dream of his.