Cognizant names 3 new independent directors after Elliott deal

IT services firm Cognizant on Wednesday said it has entered into a "cooperation agreement" with activist shareholder Elliott Management and appointed three independent directors to its board.

"Pursuant to the terms of the cooperation agreement, the Cognizant board of directors has agreed to continue the ongoing process of refreshing the board by appointing three new independent directors," Cognizant said in a statement.

Three existing members of the board will concurrently not stand for re-election, it added.

The company, which competes with the likes of TCS and Infosys, said it will also form a Financial Policy Committee, which will assist and advise the board on issues relating to Cognizant's operating plan and capital allocation policy.

The Committee will comprise of three directors, including CEO Francisco D'Souza, an incumbent director with previous operational experience and one of the new directors.

Elliott, which manages funds that collectively own more than 4 per cent of Cognizant's shares, had reached out to the Board and management of the company last year. It had also urged that Cognizant consider share buyback, acquisitions and initiate a dividend, among other measures to boost its shares.

"In an evolving industry, Cognizant must continue to invest for growth and the digital transition, while further optimising operations and returning capital to its shareholders," Elliott Management Senior Portfolio Manager Jesse Cohn said.