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By: India West Staff
Teaneck, N.J.-based Cognizant Technology Solutions Corp., an IT outsourcing company, swiftly named a new president of the company following Gordon Coburn’s abrupt resignation, naming chief executive officer of IT services Rajeev Mehta as the replacement.
Cognizant also announced Sept. 30 in a filing with the U.S. Securities and Exchange Commission that it is conducting an internal investigation into whether it violated the U.S. Foreign Corrupt Practices Act with its India-based facilities.
The law, launched in 1977, made it illegal for U.S. companies or their representatives to bribe foreign officials to further their business interests. The majority of Cognizant’s 200,000-plus employees are based in India.
Coburn, who has been with Cognizant since 1996 and president since February 2012, resigned Sept. 27, the company said in its filing, though it did not note why he resigned.
Cognizant is cooperating fully with both the SEC and the U.S. Department of Justice on the investigation, which is focused on a small amount of company-owned facilities, it said in the filing.
It added it didn’t know what action, if any, would be taken by the two agencies or any government authority in connection with the investigation, “or the effect of the matter on the company’s results of operations, cash flows or financial position.”
Shares for the company have subsequently dipped significantly in the wake of the news. Cognizant had previously cut its revenue forecast amid the U.K. leaving the European Union, including less spending in the financial services and healthcare industries, which comprises about 70 percent of its business, a NorthJersey.com report said.
Mehta, 49, who has been with Cognizant since 1997, was the third highest-paid Cognizant executive last year, receiving a package valued at $6.5 million, including $5.4 million in stock awards, according to the NorthJersey.com report.
The Indian American executive started out as senior manager of business development and rose through the ranks to become group chief executive for industries and markets before being named CEO of IT services.
Mehta will earn a base salary of $630,000, up from $538,500 a year ago, the company said in the filing.
In a statement, Cognizant CEO Francisco D’Souza called Mehta a “proven leader” with “a deep understanding of new technologies and new delivery models, and their potential to fundamentally transform businesses.”
Prior to joining Cognizant, Mehta was involved in implementing GE Information Services’ offshore outsourcing program and held consulting positions at Deloitte & Touche and Andersen Consulting. He received a bachelor’s degree from the University of Maryland and an MBA degree from Carnegie Mellon University.
“I am honored to assume this new role at an exciting time in Cognizant’s history,” said Mehta. “Over the past year, we have designed and introduced a new operating model to support our strategic vision and growth. I look forward to working with our clients, our associates, and our business partners to take the company to the next level.”
According to its most recent annual report, Cognizant occupied 22.6 million square feet of property at 45 locations in India, including 12.8 million square feet owned by the company.
This story was originally published on India West.