Infosys braces for stormy AGM today
Bangalore: Co-founders and the board of India’s second-largest global software major Infosys Ltd are bracing for a stormy 32nd annual general meeting (AGM) – over a “son rise” – in this tech hub Saturday.
Though analysts and market watchers hailed the dramatic return of its iconic co-founder N.R. Narayana Murthy as executive chairman from June 1 to steer the fortunes of the beleaguered IT bellwether, the appointment of his son Rohan Murthy as his executive assistant did not go well with the USD 7-billion company’s investors and industry observers.
“Murthy may have to do a lot of explanation to investors in bringing his son on board as it is contrary to the company’s own policy of not promoting co-founders’ kith and kin in the management and its against highest corporate governance,” an analyst told the agency on condition of anonymity, ahead of the AGM.
Murthy’s return to the top executive post 22 months after he retired in August 2011 at the age of 65 also flies in the face of the company’s policy that promoters or co-founders would not hold any such (executive) post after attaining 65 years.
Institutional Investor Advisory Services (IIAS), an investor advisory firm, has also said that with Murthy’s reappointment, Infosys has diluted the standards of corporate governance.
As per IIAS, Murthy’s appointment has led to amendments to at least three key Infosys principles — the retirement age for executives and non-executives, founder children do not take up executive roles and bringing back the post of executive chairman, which had been done away with at Murthy’s retirement.
As the letter dated April 12 notifying investors of the AGM preceded the board’s emergent meeting June 1, Murthy’s election as a director will be placed for consideration of the shareholders Saturday.
On his election as a director, the board will move a resolution to convene an extraordinary general meeting (EGM) soon to seek the approval of shareholders for appointing Murthy as the executive chairman and whole-time director for five years with effect from June 1.
Murthy’s return to the helm also abruptly cuts short the five-year tenure of outgoing non-executive chairman K.V. Kamath, who will be a lead independent director on the board.
Another co-founder S. Gopalakrishnan, who was made co-chairman in August 2011, has been re-designated as executive vice-chairman, while chief executive and managing director, also a co-founder, S.D. Shibulal will continue in the same post.
Murthy, Gopalakrishnan, Shibulal and Rohan have volunteered to draw a token compensation of Re.1 per month during their tenure.
Rohan’s appointment as executive assistant to the company’s chairman will be co-terminus with that of Murthy senior.
As Murthy’s only son and a blue-eyed boy, 30-year-old Rohan will take a sabbatical from Harvard University in the US where is a junior fellow in the Society of Fellows to assist his father in the company’s chairman’s office.
A PhD in computer science from Harvard and a graduate from Cornell University, Rohan also held fellowships at MIT, Caltech and Microsoft Research in the US.