Krithivasan Will Be Chief Executive Of TCS For 5-year Term

“In TCS, the retirement age for executive directors is 65 years. So he (Krithivasan) will easily have six years. And appointments are always for five-year terms," Gopinathan told reporters on Friday. “See, when I took over, your question was if I was way too young. Now, when Krithi is taking over, your question is if he is too old. Those kinds of questions will keep coming up, but our board and NRC (nomination and remuneration committee) looked at a complete set of candidates and in the current situation, (depending on) what is required and what is the best fit, the unanimous choice was that Krithi is the best person for the job."

On Friday morning, the outgoing boss and the new CEO fielded questions from the press on the changes at the top, described by many former employees and analysts as uncharacteristic, announced a day earlier.

In a surprising development on Thursday, TCS said that Gopinathan, who succeeded Natarajan Chandrasekaran as CEO in February 2017 and was given a second five year-term in October 2021, had decided to step down. The company said that starting 15 September, Krithivasan, who joined TCS as a trainee in 1989, would take over as CEO.

Investors appeared relatively unfazed after the sudden change of guard: TCS shares were little changed, ending 0.18% down to close at ₹3,178.95 a share, even as the broader Sensex was up 0.6% to end at 57,989.9 points.

A possible answer to this is the unanimous view among analysts that the company’s business won’t be impacted.

“TCS is a well-oiled machine. When it comes to execution, TCS has almost perfected it," said a Singapore-based analyst at a foreign brokerage on the condition of anonymity. “The way it is organizationally designed, we believe there won’t be any immediate business impact."

The CEO-designate ruled out any immediate changes. “I don’t expect to see a great strategy change or organizational change coming in the immediate future," said Krithivasan.

The appointment of Krithivasan as the fifth boss at TCS in its 54-year history is surprising for two reasons.

First, only in October 2021, Gopinathan had been awarded a second five-year term.

Second, the announcement of a CEO change was made less than four weeks before the company declares its fiscal fourth-quarter earnings on 12 April.

“Companies typically don’t announce such leadership changes when they are so close to their earnings. This is because arranging the dates of all board members is not easy. For this reason, a company would announce a leadership change, if it is planned, at the time of earnings. Also, an executive like Rajesh could have been accommodated in any business of the Tata Group if indeed he was tired of running the IT services business," said a former employee.

Gopinathan reiterated that he had been talking about stepping down with the Tata Sons chairman Chandrasekaran for some time.

“I have always been telling him (Chandra) that at some point in time, I want to do it. So that has been an ongoing dialogue. So one day, you get up, and you say, okay, we have spoken about it long enough, so it is better to pull the trigger. So that happened a week or so ago," Gopinathan said.