Cognizant's ex-CEO Brian Humphries was laid off without cause
What's the story
Brian Humphries stepped down as Cognizant CEO in January this year. Although there were speculations about the company firing him, Cognizant did not make any statements then. Now, in a regulatory filing, Cognizant has confirmed Humphries was terminated without cause. In other words, he was fired for no specific reason. He ceased to be Cognizant's CEO on January 12.
Involuntary
Humphries received $3.8mn in severance payments
In its 2023 proxy filing, Cognizant said Humphries's axing was considered an "involuntary termination without cause." It means the executive did not commit any workplace misconduct. When someone is terminated without cause, they are eligible for severance pay. Humphries received $3.8 million in severance payments from Cognizant. Former Infosys president Ravi Kumar is currently the CEO of the company.
Information
Humphries's severance was within the company-approved limit
Humphries's severance pay was within 2.99 times the sum of his base pay and bonus. This is because Cognizant's board recently decided to disallow severance payments to senior executives exceeding 2.99 times.
CEO transition
Cognizant struggled under Humphries
In a letter to shareholders, Cognizant chairman Stephen J Rohleder said a "CEO transition" was necessary to increase the company's commercial momentum and accelerate its revenue growth in 2023. Under Humphries, Cognizant struggled to compete with its peers in terms of revenue. The company also had low organic growth rates, and its attrition rate remained high.
New CEO
Ravi Kumar was expected to be the president initially
Kumar was initially expected to be Cognizant's president. However, the company decided to make him CEO. Humphries remained in the company till March 15 to help with the transition. "As a proven leader with deep experience in building a culture of success, we believe Ravi is the right person to take Cognizant into its next phase of growth," Rohleder said at the time.
Without severance
An EVP's severance pay was less
In the proxy statement, the company noted that Gregory Hyttenrauch, the former EVP and president of Americas, was fired because of "behavior inconsistent with company policy." As a result, his severance payment was lower than what he would have received if it was a termination sans cause. The former president of global growth markets, Ursula Morgenstern, was also fired without any cause.