Cognizant to appoint 3 directors, return $3.4 billion to shareholders

IT services provider Cognizant Technology Solutions Corp, bowing to pressure from activist investor Elliott Management, agreed to appoint three directors and return

IT services provider Cognizant Technology Solutions Corp, bowing to pressure from activist investor Elliott Management, agreed to appoint three directors and return $3.4 billion to shareholders.

Elliott disclosed a more than 4 percent stake in Cognizant in November and had urged the IT services provider to take steps to boost shareholder value.

Cognizant said it’s board has approved a plan to return $3.4 billion to shareholders over the next two years through share buybacks and dividend.

The company reported fourth-quarter revenue that narrowly missed analysts’ estimates while profit beat by a cent.

The company expects to start the repurchase of $1.5 billion worth of shares in the first quarter, initiate a cash dividend of 15 cents per share in the second quarter and repurchase $1.2 billion shares during 2017 and 2018.

Elliott had earlier urged that Cognizant should consider a $2.5 billion share buyback, acquisitions and initiate a dividend, among other measures to boost its shares.

Separately, Cognizant said fourth-quarter revenue rose about 7 percent to $3.46 billion from $3.23 billion helped by ongoing demand for its cloud services.