Cognizant (CTSH) Says Conducting Internal Investigation Over Potential FCPA Violations
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Cognizant (Nasdaq: CTSH) disclosed the following in a U.S. SEC filing on Friday:
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As announced in the press release attached hereto as Exhibit 99.1 and incorporated by reference into this Item 5.02, on September 27, 2016, Gordon Coburn resigned from his position as President of Cognizant Technology Solutions Corporation (“Cognizant” or the “Company”), and on September 28, 2016, the board of directors (the “Board”) of the Company appointed Rajeev Mehta, current Chief Executive Officer, IT Services, as President of the Company. In connection with his appointment, Mr. Mehta’s base salary has been increased to $630,000. His target annual cash incentive award remains at 85% of his base salary.
Raj Mehta, 49, has been with Cognizant since 1997. In his most recent position as Chief Executive Officer, IT Services since December 2013, he was responsible for market-facing activities across the Company as well as for delivery across Cognizant’s IT Services business. His prior roles at Cognizant have included Group Chief Executive, Industries & Markets, where he was responsible for leading the Company’s industry vertical and geographic market operations on a global basis, and Chief Operating Officer, Global Client Services, where he was responsible for the Company’s sales, business development and client relationship management organizations. He earned his Bachelor’s degree from the University of Maryland and his MBA from Carnegie Mellon University.
Item 8.01 Other Events.
The Company is conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the U.S. Foreign Corrupt Practices Act and other applicable laws. The investigation is being conducted under the oversight of the Audit Committee, with the assistance of outside counsel, and is currently focused on a small number of Company-owned facilities. The Company has voluntarily notified the United States Department of Justice (the “DOJ”) and United States Securities and Exchange Commission (the “SEC”) and is cooperating fully with both agencies. The internal investigation is in its early stages, and the Company is not able to predict what, if any, action may be taken by the DOJ, SEC or any governmental authority in connection with the investigation or the effect of the matter on the Company’s results of operations, cash flows or financial position.
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