Bengaluru: The bruising boardroom battle between the founders and the board of the country’s second largest software services firm, Infosys, which saw board members raise concerns over lapses in governance took a turn for the worse on Friday as founder NRN Murthy made it clear that his differences were not so much with CEO Vishal Sikka as much as with chairman of the board R. Seshasayee, with calls from former board members for the chairman’s head to roll.
Mr Murthy defended Mr Sikka saying that he has done a good job. In an interview, Mr Murthy said however that certain acts of the board regarding corporate governance could have been better.
In a war of words that many said was similar to the damaging row at Tata Sons, the contradicting views of board members and founders pertaining to the salary and severance packages paid to the C-level executives has driven a wedge among shareholders of the IT bellwether. “For sure, we don’t see another Tata happening,” a boardroom source said.
The crisis has been simmering in the boardroom for several months now. However it came out in the open when, the founder of Infosys, Narayana Murthy questioned the board over the Rs 23 crore severance paid to the company’s ex CFO, Rajiv Bansal.
The severance is usually paid to departing employees on the basis on an agreement that keeps details of the payment, and information about the company, confidential.
Infosys’ former CFO V. Balakrishnan said that the incumbent chairman of the board, R. Seshasaaye should be held responsible for the lapses in corporate governance and that he should resign.
Mr Balakrishnan said the company’s board had become “lax on corporate governance and was undermining the values on which the company was built”. He also said “it is not about performance, or Vishal Sikka.”
T.V. Mohandas Pai, the ex board of director of Infosys told this newspaper: “Narayana Murthy questioned the 24 month severance pay given to Rajiv Bansal and the board did not respond properly. We were informed that the board stopped the severance paid to Bansal. Similarly, the compensation paid to the CEO is also a matter of concern for the shareholders.”
He added “Infosys is built on fairness, compassion, and meritocracy. There are certain value systems and norms that they need to follow.” That’s exactly what Narayana Murthy is questioning and all the shareholders are supporting.”
“A fresher joining Infosys has not seen his compensation above Rs. 3.5 lakhs in the last seven years and why should the top level executives get higher salaries,” questioned Pai. “Vishal Sikka should reveal the strategy to achieve $20 billion revenue and 30 % margin by 2020,” said Pai, highlighting his concern over Sikka’s salary package,
However, in an official statement issued by Infosys, R Seshasayee, the chairman of the board defended Vishal Sikka.
"The Company is in the process of a formidable transformation journey. The Board is fully aligned with the strategic direction of Dr. Vishal Sikka and is very appreciative of the initiatives taken by him in pursuance of this transformation. Vishal and the Board, while being pleased with the Company's resumption of industry leading performance on many parameters, are keen to further accelerate the progress and achieve even more shareholder value increase, on the foundation of sound governance. We will remain undistracted with this focus," said Seshasayee in the statement.
Sources said that the board is likely to take the legal route to address the concerns of the founders NRN Murthy, Kris Gopalakrishnan and Nandan Nilekani.
