Corporate governance issues demoralising for employees, says Narayana Murthy

Bengaluru: Despite Infosys denying corporate governance issues in the company, the co-founder and founder Chairman NR Narayan Murthy said on Thursday that corporate governance issues in the company are not only distressing but have also brought down the morale of employees.

"The issue is not with Vishal Sikka but with the quality of governance at the board. It has slipped," speaking on differences between the founders on one hand and CEO Sikka and the board on the other, Murthy told The Times of India.

Murthy along with his family, is the single largest shareholder (3.44%) in the company.

The report further quoted Murthy saying, "When David Kennedy (former legal and compliance head who quit recently) was appointed, it appears nobody went into details and asked, is it normal at Infosys to accept 12 months as severance pay, when the norm for all others is 3 months? It is the work of the chair of the remunerations committee to do that." When the former CFO Rajiv Bansal left, should he have got 30 months' severance pay?

That is 10 times the norm at Infosys. What is the real reason behind such an extraordinary payment?" asked Murthy. Bansal, incidentally, on Thursday left Ola, which he had joined after quitting Infosys last year.

Murthy added that he was concerned at the impact of hefty payouts for some senior executives on employee morale. "What kind of signal does this send to employees? So many employees at senior, middle-level and junior levels at Infosys are unhappy. I have received over 1,800 emails from various employees expressing their unhappiness at this situation. The common question they have all asked me is, if it is fair that they got only 80% of the variable part of compensation while somebody who has left the company is given 100% variable for the next two years after leaving. These are a subset of the governance issues," he said.

Infosys on Thursday had denied any governance lapses and emphasised that its board is "fully aligned with the strategic direction" of CEO Vishal Sikka.

Sikka had also written to employees asking them not to get distracted by speculations that question the company's commitment to "governance, integrity and values".

Taking a strong stand on issues -- purportedly raised by the founders -- such as CEO's compensation and severance pay of former employees, Infosys said while the board appreciates and respects inputs from the founders, it is committed to fulfilling its fiduciary responsibility to "act independently".

Infosys' former chief financial officer T V Mohandas Pai had recently said that the board should give a detailed answer and not take shelter under "bland" statement that decisions were taken in the interest of the company, which further added to the speculations.