Infrastructure and construction giant Larsen and Toubro (L&T) on Friday named KV Venkatramanan as its new CEO while AM Naik stays on as executive chairman. The company split the posts of chairman and managing director in a major rejig, naming the 67-year-old Venkataramanan as managing director for three yaers. Naik has been elevated as executive chairman till 2017.
Venkataramanan is at present a whole-time director and president of the company’s hydrocarbon business.
Both Venkataramanan and Naik were scheduled to retire this year, as the company’s rules mandate retirement of directors at 67 years and 70 years for the managing director.
Under the new rules, the retirement age for directors remains unchanged, but for the CEO and MD it has been fixed at 70, and 75 for the chairman.
“It’s a complex company and we have a lot of investments. The bulk of the company is in projects business and I will run this company, while Naik will concentrate on restructuring, mergers and acquisitions and building up the verticals,” Venkataramanan, who will take charge on April 1, told HT over a telephonic chat.
L&T first discussed the separation of its various businesses with their own independent heads in 2009-10. Over the last six to seven months, the nomination committee has been meeting to discuss the proposal of separating the posts of chairman and MD.
Venkataramanan said since the time the plan of forming independent companies was first proposed, the company had faced challenges in its growth which he expected to continue for two or three years. The vertical split plan is seen as Naik’s initiative, which could explain the extension given to him.
“Post 2017, after Naik, the post of chairman might be non-executive,” said Venkataramanan. He however ruled out any extension of his own tenure as CEO and MD after 2015.
During his tenure, L&T will also seek to list two or three of the new verticals, and increase its revenue from global operations. “Currently, 18% of our revenues come from our international operations, we hope to increase this to 25% over the next two to three years,” he said.