Infosys may appoint CFO M D Ranganath on board amid Vishal Sikka’s pay hike concerns

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Updated: February 9, 2017 12:59:56 PM

The proposed induction of M D Ranganath, who is thought to represent ‘Infosys values’, is being seen as a move to strengthen Infosys culture on the board.

M D Ranganath’s proposed elevation to the boardroom is understood to have approval from the promoter group.M D Ranganath’s proposed elevation to the boardroom is understood to have approval from the promoter group.

Infosys Ltd Chief Financial Officer M D Ranganath may be inducted on the company board, ET Now reported citing unidentified sources, amid high drama over the tussle between the promoters, the management and the board about corporate governance concerns.

M D Ranganath’s proposed elevation to the boardroom is understood to have approval from the promoter group, ET Now reported.

Infosys founders N R Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani wrote to the board last month expressing their concerns over corporate governance with the board, including the quantum of salary hike given to the CEO Vishal Sikka and the size of the severance packages given to two former executives.


Boarding cost

On its part, Infosys said that it had already addressed concerns about executive pay, and that “all decisions have been made bona fide in the overall interest of the company” and that full disclosures had already been made.

While the company board is reported be in alignment with Sikka in their views, the three founders, who together have just about 13% shareholding in the company, had suggested that former board members like T V Mohandas Pai, V Balakrishnan and Marty Subramanian be brought back as directors.

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Value buying

The founders, in their letter, raised questions on certain decisions taken by the company in the last one year, feeling that the board should have been more proactive in questioning the decisions at their end.

The proposed induction of M D Ranganath, who is thought to represent ‘Infosys values’, is being seen as a move to strengthen Infosys culture on the board, ET Now report said.

Currently, Infosys board is led by the non-executive Chairman R Seshasayee. The founders, in their letter to the board, had said that the board should have upheld the corporate governance standards set by them.


Frugal engineering

Infosys was founded in 1981 by N R Narayana Murthy, Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora with a capital of Rs 10,000. None of the original founders is on the board or in executive management position at the company.

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Former chief financial officer Rajiv Bansal’s severance package amounted to Rs 17.38 crore, equalling his 24 month’s pay, Infosys said in a statement last year. In a January filing with the US market regulator, Infosys, which is also listed on Nasdaq, said former general counsel David Kennedy would receive severance payments of $868,250 and other reimbursements over 12 months.

CNBC TV18 said that Infosys had linked CEO Vishal Sikka’s compensation to the company’s aim of becoming a $20-billion company by 2021. Sikka’s annual compensation of $11 million is made up of a $3-million fixed salary and a $8-million variable component, which is subject to achieving the targets.

 

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