L&T's Wholetime Director and President, Hydrocarbons, Mr K. Venkataramanan, will succeed Mr A. M. Naik as Managing Director from April 1.
However, Mr Naik, who is now the Chairman and Managing Director, will continue as Executive Chairman of the Group for five years.
The decision by the L&T Board to bifurcate the position of Chairman and Managing Director brings to end speculation regarding a successor to take over the reins from Mr Naik, who is 70.
Mr Naik had been Chief Executive Officer and Managing Director since 1999 and Chairman and Managing Director from 2003.
Mr Venkataramanan will be responsible for the businesses of the parent company, while Mr Naik will focus on completing the portfolio restructuring, institutionalising the independent companies' structure, mentoring and developing the leadership team.
Mr Venkataramanan, 67, is a chemical engineer from IIT (Delhi). He joined L&T as a graduate engineer trainee. He was elevated to the Board as a whole time director in 1995. He will serve for a period of three years.
Addressing a press conference, Mr Naik said the search for a suitable CEO and Managing Director began over a year ago and was overseen by a high-powered Non-Executive Directors' Committee which has one member on the board of each independent company of the group. The Chairman did not participate in the selection process. The L&T Board also decided that Mr Naik would continue as Group Executive Chairman till he attains the age of 75. Mr Naik said the company policy was that executive or non-executive Chairmen would retire at 75.
L&T undertook project ‘Lakshya' to simplify its portfolio and created nine independent companies and seven subsidiaries to bring focus, autonomy and accountability in functioning.
While the project is still on, changes in the economic environment have necessitated that L&T undertake a mid-term review of the strategic plan which is currently under finalisation. The Lakshya project will be completed by 2015, Mr Naik said.