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Severance pay raises doubts whether Infosys is hiding something: Narayan Murthy

Over the various reports of falling corporate governence at Infosys, Murthy said, "We won several awards for good governance all over the world. However, since June 1, 2015, we have seen a concerning drop in governance standards at Infosys."

BT Online   New Delhi     Last Updated: April 3, 2017  | 20:25 IST
Severance pay raises doubts whether Infosys is hiding something: Narayan Murthy

Infosys co-founder NR Narayan Murthy has voiced out his thoughts on a number of issues related to the IT giant that have dominated headlines in recent days.

Over the various reports of falling corporate governence at Infosys, Murthy told The Economic Times in an exclusive interview: "We won several awards for good governance all over the world. However, since June 1, 2015, we have seen a concerning drop in governance standards at Infosys."

He also raised his doubts over the severance pay Infosys has made to employees who left the organistaion.

"Providing huge severance pay (with 100 per cent variable) to some departing employees while giving only 80 per cent variable for employees in the company is one such example. Such payments raise doubts whether the company is using such payments as hush money to hide something.," he said.

Murthy said Infosys needs to take initiative to win the trust  of its shareholders.

"First is for the chair of the nomination and remuneration committee and the chair of the board to accept their mistakes and show contrition. Second is to follow the good practices of pre-2014 Infosys and improve upon them. Third is for the board to consult from time to time experts like Mohandas Pai, Bala, Marti Subrahmanyam and Omkar Goswami in finance and good governance"

On the question of the rumours of a rift between CEO Vishal Sikka and its founders, he said: "Neither has he asked for my opinion on any aspect of his strategy or its execution, nor have I offered any advice on these issues."

He, however, added: "At Infosys, the culture has always been for all predecessors to only wish the best for the succeeding CEO and his management. It is in the same spirit that I continue to wish Vishal, the management, and every employee the best of everything in the coming year like I have done in the past".

On the issue of Sikka's pay which has created a huge controversy, Murthy said: "In countries with good governance in developed countries, the ration of the CEO salary to the next lower level is generally 1:2. At Infosys, today, it is about 2000 between the CEO salary and the entry-level for a software engineer."

Earlier, former Infosys CFO T V Mohandas Pai said that the present leadership at the Bengaluru-based company is not focussed on creating shareholder value even as he reposed faith in CEO Vishal Sikka's leadership, saying there is "need for a strong chairman".

Pai, who served as a board member of Infosys from 2000 to 2011, also said it was a "mistake" on the part of N R Narayana Murthy to "focus on only founders becoming leaders (CEOs)" which led many people to quit the company."I am very saddened. All of us spent a major part of our lives building up this great company, and I am very saddened by what has happened," Pai, who is not a founder but spent 17 years with the company before quitting in 2011, told PTI.

(With inputs from PTI)



 


 

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