What’s going on at Infosys?
The matter came to a head after Infosys founders took exception to the IT firm’s decision to reward its non-founder CEO Vishal Sikka with a 55% increase in compensation to $11 mn
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New Delhi: That things haven’t been great between Infosys Ltd’s first non-founder chief executive officer (CEO) Vishal Sikka and its band of founders headed by N. R. Narayana Murthy is well known. As are all the issues that have been circulated in media reports over the past two days.
The first sign that all was not well surfaced last April, and was first reported by Mint. According to filings by Infosys with stock exchanges, and information on the company’s website, only 23.57% of promoter votes were cast in favour of a resolution reappointing Sikka as the managing director and CEO.
The founders were reportedly not happy with the Infosys board’s decision to reward Sikka with a 55% increase in compensation to $11 million.“It’s more a vote on the higher compensation than the reappointment,” that Mint story quoted an anonymous Infosys executive as saying.
The next sign of trouble came in May, and was again first reported by Mint. That was when Infosys revealed that it paid Rs23.02 crore severance pay, salary and other benefits to former chief financial officer (CFO) Rajiv Bansal, drawing criticism from proxy advisory firms and analysts for awarding unusually high compensation to an outgoing executive.
The founders didn’t take this decision well, and their angst was soon reflected in the company’s decision to stop the payment.
Mint first reported on 27 September that under pressure from the founders, the board had halted Bansal’s severance payment.
Soon after, in an exclusive interview, Infosys’s chairman R. Seshasayee denied that the founders, especially Murthy, were emerging as an alternative power centre at Infosys.
Things didn’t end there.
Perhaps in an effort to have more say in what was happening, the founders convinced the board to appoint as director D. N. Prahlad, a former Infosys employee who is related to Murthy.
Not long after, Mint first reported that Prahlad had been named to the nomination and remuneration committee of the board.