Infosys founders raise Corporate Governance concerns, says report

Infosys said the decisions had been taken in the interest of the company and the board evaluated with due importance the suggestions received from stakeholders, including promoters.

Infosys founders raise Corporate Governance concerns, says report

With the reports that the founders of Infosys have raised certain corporate governance concerns with the company's board, the shares of the company fell 1 per cent today to Rs 934.

According to the reports, Infosys founders NR Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani wrote to the company's board last month raising concerns about the sharp increase in Sikka's compensation early last year; the appointment of Punita Sinha, wife of Union minister Jayant Sinha, as an independent director; and a large severance pay to ex-CFO Rajiv Bansal and others.


The differences had been simmering for a while now and have now widened prompting the majority of the board, led by chairman R Seshasayee, to back Sikka. The founders, together, own 12.75 per cent in Infosys, with N R Narayana Murthy and his family owning the largest block.

Infosys said the decisions had been taken in the interest of the company and the board evaluated with due importance the suggestions received from stakeholders, including promoters.
Notably, Infosys had last year raised the annual compensation of Vishal Sikka, whose term has been extended till 2021, to $11 million, which includes variable pay subject to certain performance-based targets.

Former chief financial officer Rajiv Bansal's severance package amounted to Rs. 17.38 crore, or 24 months' pay, and the agreement was "being administered in accordance with the contractual rights and obligations", Infosys said in a statement last year.

In a January filing with the US market regulator, Infosys, which is also listed on NASDAQ, said former general counsel David Kennedy would receive severance payments of $868,250 and other reimbursements over 12 months.

"In this regard, the company would like to clarify that its policy is not to comment on rumors or speculations. Further, the Company has always complied with its reportable obligations under LODR (Listing Obligations and Disclosure Requirements) in a timely manner and will continue to do so," said in a statement to the Bombay Stock Exchange.

Avinnash Gorakssakar, head of research at Joindre Capital Services, told NDTV that Infosys has always maintained high corporate governance standards and from the market's perspective, any development on share buyback would be big news.