Former Cognizant CEO D'Souza, ex-president Mehta paid $20 million as transition cost

Cognizant paid its former CEO Francisco D’Souza and its former president Rajeev Mehta $20 million as part of execution transition costs.

After Brian Humphries took over as the CEO on February 1, Cognizant and D’Souza entered into an amendment to his employment contract "in light of D’Souza’s long and highly successful tenure with the company and the desire to ensure a smooth CEO transition,” the company's 2019 proxy statement said.

In the three months ended June, Cognizant spent $49 million in realignment costs that includes $20 million to the two executives, $27 million in employee separation costs (that includes payout to other presidents, SVPs and VPs) and $2 million in third-party realignment costs. Cognizant said the employee separation will reduce its expenses towards compensation by approximately $65 million on an annualised basis.


Cognizant has been making a major effort to flatten the organisational structure and reduce operational costs.

D’Souza was to serve as a mentor and resource for the new CEO during the transition period from April to June. However, he will serve as non-executive vice-chairman of the board through the 2020 annual meeting. During this period, D’Souza is entitled to an annual base salary of $750,000, and a target annual bonus of $1,500,000. His new compensation will also include an equity award in the form of RSUs with a grant date value of $6,000,000.