The perceived differences between Infosys’ promoters and its current management under CEO Vishal Sikka must be resolved swiftly to save the image of a company that has earned respect domestically and globally as IT pioneers. Coming so soon after the dramatic events at the Tata Group with the unceremonious sacking of Cyrus Mistry, there’s a temptation to compare the two. But this ends at both facing a succession crisis. Both N.R. Narayana Murthy and Ratan Tata appear unable to cut the umbilical cord, nor are they able to accept that things can run without them. Ratan Tata brought up the issue of Mr Mistry not conforming to the group’s value system while Mr Murthy has raised the corporate governance issue.
Taking recourse to his “compassionate capitalism” philosophy, Mr Murthy voiced concern over the high remuneration ('49 crores annually) given to Mr Sikka, a raise of over 55 per cent, and the 24-month severance pay given to the outgoing chief finance officer. Mr Murthy and his co-promoters never took severance pay when they stepped down. Besides, the promoters built a treasure chest of '34,000 crores, and would rather this be distributed to the shareholders, which was not done. Whether their stand is right or wrong isn’t the point. The promoters own just 12-13 per cent share of the company, compared to the Tata Trusts, which held 73 per cent, and could easily oust Mr Mistry at the EGM. In Mr Sikka’s case, he has the backing of institutions which have 55 per cent shareholding, and they are pleased with his performance.
Whatever Mr Murthy’s grouses, one of them certainly has sexist overtones. He has said the appointment of Punita Sinha, wife of Union minister of state for finance Jayant Sinha, as an independent director is against Infosys’ practice of not employing ministers’ relatives. Mr Murthy is on slippery ground here as Ms Sinha is a professional businesswoman in her own right and is the founder and managing partner of Pacific Paradigm Advisors, an independent investment advisory and management firm focused on Asia. The Infosys board has appointed a crisis management company to act as go-between the board and the promoters, and this too has been criticised by the latter, who wants the board to communicate directly with them. It seems as if they have an ego problem.
Though Infosys’ shares have not tanked as in the case of Tata company shares following the spat, it would certainly be in the company’s interest to resolve these issues, which seem like much ado about nothing. This is particularly so while the IT industry is going through a slowdown crisis created by the uncertainties over the policies of US President Donald Trump on H-1B visas.
