All you need to know about the Infosys row - Timeline
The second largest Information Technology Company in India, Infosys recently found itself in a row of disagreement and dispute that just doesn’t seem to die down. To begin with, there was an exponential increase in compensation for chief executive officer (CEO) Vishal Sikka and an unusually high severance payment for two top-level executives, mainly former chief financial officer Rajiv Bansal, who had left the company last year. The main issue started when questions about corporate governance were raised by Infosys Ltd co-founder and former chairman N.R. Narayana Murthy and other founding members. What followed is time-lined below:
February 2016Sikka was rewarded with a 55% rise in compensation, to $11 million. This was a major decision taken by Infosys board in order to reward Sikka.
April 2016Sikka was appointed CEO in 2014 for a term of five years. However, only 3.57% of promoter votes were cast in favour of a resolution reappointing Vishal Sikka as CEO.
May 2016Rs 23.02 crore severance pay, salary and other benefits were paid to Rajiv Bansal in 2015. This raised controversy as he was outgoing executive and proxy advisors and analysts interpreted this as unfairly high compensation. Bansal had joined Infosys in October 1999 and resigned on 12 October 2015. He left the company to join as head of finance at Ola, run by ANI Technologies Pvt. Ltd.
September 2016Some of the company’s founders expressed their disagreement over the high compensation and hence Infosys had to stop the remaining installation of severance payment of Rs 17.38 crore to Bansal.
October 2016D. N. Prahlad was appointed as an independent director on the company’s board. This did not go down well with many since he happened to be a relative of Murthy.
December 2016Founders including N.R. Narayana Murthy, S.D. Shibulal and Kris Gopalakrishnan went on to hold a meeting V. Seshasayee, chairman of the board, and Vishal Sikka, CEO. In the meeting the founders expressed their unhappiness with Seshasayee on the issues of corporate governance.
January 2017The board of Infosys had to include director D.N. Prahlad into the nomination and remuneration committee (NRC) that is responsible for administering the nomination progression and the perks and pays offered to its senior-most executives, including the chief executive. Prahlad was made one of the five members of the new NRC. This decision makes it more difficult for the management to grant higher salaries to its senior executives.
February 7, 2017With Trump becoming the President, it will be difficult for Infosys to estimate how much the US clients with invest. Hence, it was speculated that the company would have to do away with the practice of giving an annual revenue forecast.
February 9, 2017Murthy said in an interview that the idea of giving high compensation like this to outgoing employees would seem a suspicion on speculations that the company could be doing so as hush money to hide something. He also expressed that the governance standards at Infosys has dropped.
February 10, 2017The company’s third largest institutional investor, Oppenheimer Funds extended support to CEO Sikka.
February 11, 2017There were reports that Sikka directed the senior management not to get distracted by the new rows and concentrate on developing better business strategies for growth.
February 13, 2017Even though there was clear indication of trouble in heaven, Infosys chairman R. Seshasayee went on to deny the tussle saying that there was no conflict of interest between the firm’s founders and the board of directors.
Vishal Sikka declared that the media reports on conflict between founders on corporate government were distracting and that his relation with everyone including Chairman Murthy was good.
Independent director Kiran Mazumdar-Shaw assured that the severance pay issue will be solved sooner and it would bring the dispute between Murthy and Sikka to an end.
On the same day Murthy went on to call off the fight about corporate government, making it official that there will be a media conference and the company will deal with the issues inside rather than making it public.
February 17, 2017A senior SEBI official declared that they are keeping a close watch and anyone found guilty will not be spared, regardless of the culprit being big or small.
