- After less than four years in the position
- Praise and thanks for Humphries
- Ravi Kumar taking over
- Humphries said 72 words
(exechange) — Teaneck, New Jersey, January 12, 2023 — Brian Humphries, chief executive of Cognizant, leaves his position. As announced by Cognizant Technology Solutions Corp. in a news release on Thursday, January 12, 2023, Brian Humphries leaves his post as chief executive officer at the technology services and consulting company, after less than four years in the role, effective immediately.
The average tenure of CEOs who announced their departure over the past 12 months was 8.3 years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
Brian Humphries’s duties as CEO will be taken over by Ravi Kumar, most recently President at Infosys.
The fact that Brian Humphries’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.
In general, an outsider does not have the constraints of an insider when it comes to leading painful changes or making unpopular decisions.
“Capitalize on these opportunities”
Cognizant did not give an explicit reason for Brian Humphries’s departure from the CEO post. Stephen J. Rohleder, a member of Cognizant’s Board since March 2022, who has been elected Chair of the Board, stated: “Brian was a resilient leader, providing a steady hand as he steered the company through various challenges, including a global pandemic. We thank Brian for his many contributions to Cognizant, which have helped to position the company to capture a large, growing market and fuel profitable revenue growth. We believe now is the right time for new leadership to fully capitalize on these opportunities.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.8% of cases), implementation of a planned succession (16.2%) and the statement that the time was right for a change (8.5%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.2% of cases), personal reasons (2.9%) and conduct issues (2.4%). Rather rarely stated reasons are health problems (2.1% of cases), career change (2.1%), death (0.9%), the desire for more time with family (0.6%) and disagreement (0.6%). Sometimes, more than one reason was given. In 30.9% of cases, no reason was given.
Precise information regarding Brian Humphries’s future plans was not immediately available.
“Succeeds”
Cognizant said: “Cognizant (Nasdaq: CTSH) today announced that its Board of Directors (the “Board”) has named Ravi Kumar S as CEO and a member of the Board, effective immediately. Kumar succeeds Brian Humphries in both roles.”
Generally, when companies make statements that indicate rather than directly describe the CEO’s departure (e.g., “Bob succeeds Tom as CEO” or “Tom is expected to continue to serve as CEO until Bob’s accession”), analysis may be hampered because such sentences lack a verb (such as “retire” or “resign”) that describes the implied departure from the CEO position.
Companies often provide less precise information in their corporate announcements than in regulatory filings, which are sometimes published with a considerable delay and therefore cannot always be included in the exechange analysis. In the present case, a regulatory filing regarding Brian Humphries’s move was not available at the time of the analysis.
Share price decline since April 2019
The announcement follows a decline in Cognizant Technology Solutions Corp.’s share price of 17% since April 2019. April 2019 is the month in which Humphries’s tenure as CEO began.
In the position of CEO since 2019
Brian Humphries became CEO of the Company in 2019.
To facilitate a smooth transition, Humphries will remain with the Company as a special advisor until March 15, 2023.
Humphries joined Cognizant as the Company’s CEO on April 1, 2019.
Prior to joining Cognizant, he was CEO of Vodafone Business where he was responsible for the strategy, solution development, sales, marketing, partnerships and commercial and financial success of Vodafone Business, a division of Vodafone Group, one of the world’s largest telecommunications companies.
Vodafone Business accounted for nearly a third of Vodafone Group’s service revenue, with approximately €12 billion in sales globally, during Humphries’ tenure as CEO.
Prior to Vodafone, Humphries held a variety of executive roles at technology companies Dell Technologies and Hewlett-Packard.
72 words by Brian Humphries
In the news release announcing his departure as CEO of Cognizant Technology Solutions Corp., Brian Humphries received praise and thanks.
In the announcement of the leadership change, Brian Humphries said 72 words.
“All the best”
Brian Humphries stated: “I am proud of our team’s achievements during my tenure as CEO. Our brand is more visible, our portfolio is stronger, our client relationships are more consultative and we are better aligned to high growth digital segments within our market. The company is in a great position for success. It was an honor to lead our talented associates and I wish Ravi and the leadership team all the best for the future.”
Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 108 words. The longest statement was 382 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short, excessively long or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5.
34% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 340 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 12, 2022, to January 11, 2023), the average Push-out Score was 5.7, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 34% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, one in three departing CEOs were forced out or fired.
Pressure in the information technology sector well above the critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the consumer staples, communication and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, utilities and financials sectors, as measured by average Push-out Scores.
In the information technology sector, which includes Cognizant Technology Solutions Corp., the average Push-out Score over the past 12 months was 6.1, which is well above the critical threshold of 5.
In the information technology sector, 19 exiting CEOs received Push-out Scores of 8 or higher over the past 12 months, indicating that they were most likely forced out or faced strong pressure to step down.
Push-out Score for Brian Humphries’s move determined
The Push-out Score regarding Brian Humphries’s move is explained point by point in the exechange report.
exechange reached out to Cognizant and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 3.2023 ($).