The founders and the board of Infosys have not reached a “negotiated settlement”, the company’s chairman R Seshasayee said in an interview to Mint, but there is no “conflict”, only “convergence”.
He added that he has spoken to founder and former chairman NR Narayana Murthy and that he hopes “something like this doesn’t happen again.”
Seshasayee said that he would not quit unless asked by the board and the shareholders to do so.
His reference was to broadside launched by the promoters, led by Murthy, against the board of the company for initially signing off on a handsome severance package for former CFO Rajiv Bansal, and approving a sharp increase in the salary of CEO Vishal Sikka to $11 million a year. Some news reports said the founders wanted Seshasayee to quit.
In a press conference on Monday evening, Seshasayee admitted that the Bansal episode had taught the board to insert severance details in contracts and not be subjective about them. Bansal, he clarified, was eventually paid ?5 crore as severance pay, not the previously agreed-upon ?17 crore. He dismissed the suggestion aired by Murthy last week that this was “hush” money to get Bansal to keep the peace. Seshasayee also defended Sikka’s salary and said it had been approved by shareholders.
Seshasayee’s comments followed conciliatory remarks by Murthy and flattering ones about Murthy by Sikka that seemed to suggest that the battle between founder and former chairman Murthy and the board and management of the company he founded, Infosys, was over.
On Monday, for perhaps the first time in several days, Murthy aired no fresh grievances, called Seshasayee a man of “highest integrity”, and indicated that he was confident the company would address the issues.
The same morning, while addressing analysts at an investor conference organised by Kotak Securities, Sikka said his relationship with the founders “is wonderful”. He added that “it is a real privilege” to be Infosys’ leader.
At the press conference, Seshsayee and Sikka said Infosys’ board continues to “address issues all stakeholders, including ones that the founders have.” Seshasayee clarified later in the interview that these issues would be addressed by the board “within the overall framework of the fiduciary responsibility it has to all shareholders.”
He added that the board would treat the promoters just as it does “any other shareholders”.
That isn’t the clear message analysts were expecting to hear, although it may be all they get. “I believe both parties (founders and the board) have realised that there has to be some compromise, meaning some demands of the founders met, and at the same time letting the current board and management run they want,” said a Mumbai-based analyst at a foreign brokerage after the press conference. “But the most surprising thing is that looking at the commentary from the press conference, we do not know if that compromise has been reached.”
Still, both Sikka and Seshasayee described the recent events as “distracting” and implied that it was important to focus on business.
Only five of the seven original co-founders, Murthy, Nandan Nilekani, SD Shibulal, Kris Gopalakrishnan and K Dinesh are categorised as promoters of the company, who together hold 12.75% stake in the company. Foreign institutional investors hold 39.02% stake, insurance companies have 11.26% and mutual funds hold 7.42% equity. Foreign non-institutions hold another 16.78% stake, others have 2.87% and retail investors or public have 9.9% interest.
(Reuters contributed to this story)