Infosys
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i) Shibulal's role unclear as Murthy calls shots Suman Layak,ET Bureau | Oct 20, 2013
ii) THE OLD ORDER CHANGES The Times of India Jun 13 2014
iii) Balakrishnan's exit raises concern over Infosys's ability to retain core talent: Analysts Shilpa Phadnis,TNN | Dec 23, 2013 The Times of India
iv) Why Infosys is losing momentum in every vertical Shilpa Phadnis,TNN | Jul 6, 2013 The Times of India
v) Infosys whistleblower could get $5-8m PTI | Oct 31, 2013
vi) Infosys wins contract from Chinese company FESCO PTI | Dec 17, 2013
vii) Infosys reduces staff strength of R&D arm The Times of India Shilpa Phadnis,TNN | Oct 9, 2013
Vii a) Infosys: Revenue from North America up 4.9% ET Bureau | Jul 12, 2013
ix) Leaving the dream: Infosys battles worker exodus Reuters | May 11, 2014
x) Infosys settles sexual harassment lawsuit out of court for $3m Rediff, PTI, NDTV, Reuters [1] May 11, 2003 Indian Express
The Infosys story
Rise It's a story that's been told often. Infosys was founded in 1981 when seven engineers, including NR Narayana Murthy, pooled $250 — mostly borrowed from their wives. The company's rapid growth kick-started the outsourcing movement in India and coined the term 'to be Bangalore-d'.
After seeing the company grow from strength to strength, the founders finally are letting go
The best training
New company hires are put on a 23-week training programme regarded as among the best in the industry, and work in a Silicon Valley-style headquarters campus on sprawling grounds, with multi-cuisine food courts and state-of-the-art gymnasiums. Employee stock options helped make some of India's first salaried millionaires.
Fall
Around 2012 Infosys was criticized for not changing with the times, for being too conservative in chasing new business and, at times, for depending too much on Murthy, which some investors and analysts say has hobbled the development of new leadership.
A revamp, dubbed "Infosys 3.0", aimed to move the company up the value chain but fell short of expectations, prompting the return of Murthy from retirement in June 2013 to try to revive its fortunes. But his return, with his son Rohan as his executive assistant, saw at least nine senior executives depart [June 2013 to Apr 2014] amid a reshuffle of teams and titles. Some Infosys insiders say Murthy's return was aimed at grooming Rohan for the top job, prompting confusion and damaging morale.
"When senior management leaves in bunches, we begin to wonder if it's a sinking ship," said one Bangalore-based software consultant who had worked at Infosys for six years .
"For the last two years [2012-2014], there have been no significant wage hikes, there's saturation in career growth, the company's results have been below market expectations and there's internal strife, with senior guys leaving," she said. "Regular workers are feeling there's not much chance of growth in the company."
Addressing shareholders for the last time (in June 2014) NR Narayana Murthy said the nation's second largest IT services firm Infosys had "diluted focus on meritocracy and accountability" in the past decade [roughly 2004-14], forcing him to take "hard and tough decisions [in 2013]" However, former finance and HR head of Infosys Mohandas Pai attributed the exits [of 2013-14] to lack of empowered senior managers. "Lack of empowerment of senior managers is the reason the company failed in the last [2011-14]. The people who left, they are doing extraordinarily well, wherever they are."
Resurrection?
Murthy has said it would take a few years before Infosys gains significant ground in SMAC [social media, applications (apps) and cloud computing (SMAC)]
Will Vishal Sikka, CEO, w.e.f October 2014 be able to resurrect Infosys?
The beginnings
Infosys was started by seven mostly engineering professionals who were working together at Patni Computers.At Murthy's farewell at the Infosys Campus --when he retired the first time in 2011 -his wife Sudha jokingly said that she must rank among the world's most successful venture capitalists because it was the Rs 10,000 she had saved from her salary and household expenses that bank-rolled her husband's dream to start a software services company . Today, Infosys has a market capitalisation of Rs 2,20,000 crore ($32.2 billion).
The one decision that planted Infosys in the imagination of the general public and went on to become part of business folklore was the offer of generous stock options (ESOPs) at the time of listing, which made millionaires of almost all the early employees, numbering in the thousands, and emboldened many to quit their jobs to start their own firms. It also played a role in catapulting sleepy Bengaluru into a humming hub for young tech professionals.
Early struggles with the licensing regime
When Narayana Murthy took 3 years and 50 trips to Delhi to import one computer The Times of India By NR Narayana Murthy Jul 21, 2016
Infosys was a 10-year-old company with just one international office in Boston. NR Narayana Murthy was just another struggling entrepreneur, running from pillar to post, trying to get licences for importing computers.
Murthy went on to become a doyen of the Indian IT services business. Infosys became an icon of wealth creation in the country, spawning over 200 dollar millionaires and about 20,000 rupee millionaires through its employee stock option plans. Infosys revenue grew from $1.5 million in 1992 to $9.5 billion in 2016.
First, we did not have current account convertibility, so even if I had to travel abroad for one day, I had to apply to the Reserve Bank of India. That appears stupid today. I had to wait for 10-12 days. They might or might not get back. So, opening an office abroad, hiring consultants from abroad, having sales people abroad — they were possible before 1991.
Second, we had an official called the Controller of Capital Issues, who incidentally did not understand capital markets at all. He was a civil servant sitting in Delhi. Nobody ever asked a question about why he was sitting in Delhi and not in Bombay, where the capital markets are. He rarely gave any premium on par value. When we went to the Controller of Capital Issues in 1990, for a Rs 10 par value share, he said that he would allow me Rs 11. We went to Rs 95 in 1993 when this was abolished by Manmohan Singh.
There was also such a strict licensing regime to import a computer that it took me three years and I went about 50 times to Delhi. Those days I couldn't afford a flight, so I took a train. I had to stay in some seedy place near Old Delhi Railway Station. Even that cost money for a fledgling company.
For new companies, there was such a heavy tariff because even before you got a licence, 50 visits meant — even if it was $500 a trip (at that time, it was Rs 6 per dollar) — $25,000 spent on a $100,000 computer before you bought it or got a licence.
The officers did not know anything about computers. They would quibble about small things. Why do you need 64MB of memory? Go with only 48MB, they would say. Let's say, if one got a licence after two years of running around, one would discover that the models one got the licence for had become old in the US.
India was always three generations behind. Once licensing was abolished, it allowed companies to make decisions in their boardrooms rather than in the corridors of North Block.
The good, bad and ugly of Infosys
Oct 25, 2017: The Times of India
India's second-largest software exporter Infosys has announced its second-quarter results. This is Infosys' first quarterly earnings report after co-founder and former CEO Nandan Nilekani returned to Infosys' board. Nilekani joined the company's board as non-executive chairman on August 24 after a gap of seven years following the resignation of former CEO Vishal Sikka.
Other than announcing the quarterly numbers, the new board also reaffirmed that it found no wrongdoings in the acquisition of Israeli software company Panaya as well as in the severance package given to a former CFO. This while exonerated the company's former board as well as CEO Vishal Sikka, it has drawn ire of co-founder NR Narayana Murthy.
1. Poor growth projections
Infosys has reduced the revenue guidance for FY18. Though most analysts were expecting a cut in guidance, they were not expecting a steep downwards revision. The company cut the revenue and growth projections to 5.5% from 6.5% at the lower end of the guidance range and to 6.5% from 8.5% at the higher end.
2. Fears of Murthy vs Infosys board yet again
Infosys co-founder Narayana Murthy fumed at the Infosys board for giving a clean chit to the Panaya deal. In a statement Infosys has reaffirmed the conclusion of the independent investigation that there was no merit to the allegations of wrongdoing with respect to the acquisition of Panaya. It further said that the review confirmed that the company made appropriate and timely disclosures relating to severance payments to a former CFO at the end of the quarter of his resignation, and subsequently in the the company’s 20-F and annual report.
This seems to have not gone well with Murthy who said he was "disappointed." Murthy also issued a statement saying, "I stand by every question on poor governance raised in my speech to Infosys investors dated August 29, 2017. The fact remains that none of these questions have been answered by the Infosys board with the transparency it deserves. I am disappointed. The core question still is how and why the Infosys board approved an unusual and unprecedented severance payment agreement of 1000% (of the standard Infosys employment contracts) to the former CFO, and why the board did not disclose this information proactively and much earlier. Sadly, it appears we will no longer know the truth."
3. The number of employee additions remains unimpressive
The number of employee additions was tepid, declining sequentially for the second consecutive quarter. As a result, Infosys' total workforce stood at 1,98,440 at the end of September 2017 compared with 2,00,364 at the end of FY17.
4. Clean chit to Panaya raises questions on former CEO Vishal Sikka's resignation
The reaffirmation of the new board that there was no merit into the allegations of wrongdoing with respect to the acquisition of Israel-based company Panaya as well as in severance package given to former CFO Rajiv Bansal do raise questions over ouster of the former CEO Vishal Sikka. These were the biggest corporate governance-related issues on which Sikka faced constant offensive attacks from Murthy.
Also, the company may find it tough to deal with another distraction at this juncture (in case another board vs Murthy fight starts) when it severely needs a long phase of stability to get back to its growth days.
5. No CEO announcement
Analysts were also looking forward to the announcement of the company's new CEO. Though the Infosys board reiterated that the process of identifying the next CEO has been initiated and is progressing well, stability at the helm is bound to help the company achieve its growth goals faster.
6. Beats profit estimates
Infosys reported better-than-expected financial results in terms of profit growth for the quarter ended September 30, 2017. The IT major reported 7% quarter-on-quarter profit growth at Rs 3,726 crore against Rs 3,483 crore in the sequential quarter ended June 30, 2017. The Bengaluru- based company has posted 3.32% profit growth on a year-on-year basis.
7. Improved operating margins
Infosys has been able to retain the operating margin in the target range of 23-25%. In the September quarter, the IT giant reported 24.2% margin compared with 24.1% in the previous quarter. This is positive considering that the company has been struggling with higher topline growth.
8. Client additions continue to be strong
Client addition continue to be strong during the quarter. Infosys added 72 new accounts during the quarter compared with 59 additions in the previous quarter. In all, Infosys received five large contracts during the second quarter worth $731 million in total value.
9. Poor guidance takes pressure of the new management
Though poor guidance is surely not going to please investors, but it may help the new management give better results. As with no pressure of delivering big numbers, the management can focus better on long-term strategy and execution.
10. Business optimism is returning
Industry-wide business optimism appears to be returning. Green shoots appearing globally in the IT companies' core banking and financial services sector may help further boost the recovery.
Profits, revenues, CAGR
1981-2017
See graphic:
Profits, revenues, CAGR, Operating margin, total employees, Infosys, 1981-2017
Tussle between Infosys and the company's founders/ 2017
Gadgets Now, Feb 10, 2017
Infosys co-founder NR Narayana Murthy's statement to the media saying that he is "distressed" by what is happening at Infosys has brought the ongoing spat between the company's founders and management out in the open.
According to insiders, the trouble has been brewing for past many months between the founders, who own some 13% stake in the company, and Infosys management led by CEO Vishal Sikka.
Former SAP CTO Sikka happens to be the first non-promoter CEO of the country's second-largest IT company.
1. One big flashpoint is said to be CEO Vishal Sikka's salary. In fiscal year 2016-17, Sikka's compensation saw a sharp increase to $11 million, from $7.08 million in 2016.
Infosys says that the cash component of the salary has actually come down for Sikka with most of it in restricted stock units (RSUs) against extremely steep targets.
Sources close to Sikka say that he actually gets less cash now than when he was chief technology officer at German software major SAP.
Infosys founders one big concern has been the 55% increase in CEO compensation that appears particularly large when average salary hikes have hovered in the single-digits of 6% to 8% at the company.
2. High severance packages to departing top executives, such as CFO Rajiv Bansal and legal counsel David Kennedy, too has been an issue of friction.
Founders claim that no explanation has been goven for the high severance package of Rs 173.8 million (24 month’s pay) announced for former CFO Rajiv Bansal.
The untimely exit of David Kennedy and his compensation package too has been a thorny issue.
3. Some promoters are said to be upset over the appointment of Punita Kumar Sinha, an investment banker and wife of Union minister Jayant Sinha, as an independent director. Infosys co-founder NR Narayana Murthy abstained from voting on her appointment.
While emphasizing that he had great respect for her as a professional, he grounded his objection in the fact in that the entire history of Infosys, it had never invited the spouse of any active politician to the board.
Sikka and the board's argument to this was that she was eminently qualified -- having been a fund manager with Blackstone and Oppenheimer, among others -- and that the decision was taken on merit.
4. Infosys is also said to be battling concerns that it has two power centres, with senior executives sometimes being called upon to brief a few promoters informally about the working of the company.
5. According to some insiders, the founders are still attached to a business model that is facing an existential crisis, and are wary of aggressive acquisitions that are necessary to grow the company. "They are just too conservative when it comes to investing in the future," told a Young Turk to Times of India.
The gameplan to position Infosys as a next-generation services company leveraging automation, artificial intelligence and analytics, requires different skillsets and bold acquisition strategy, say industry experts. Infosys, under the founders, has traditionally been wary of large acquisitions.
6. There's also a perception among the new generation that somewhere deep down, the 'old guard' doesn't want to 'let go' of a company they built from scratch. CEO Vishal Sikka is the first non-promoter CEO of Infosys.
7. The founders of Infosys Ltd are said to have expressed unhappiness with non-executive chairman R Seshasayee over some of the decisions taken by the company’s board in the past two years.
They claim to be upset with the board for not closely scrutinizing some of the company's recent decisions which they claim have been at odds with established practices.
Reports also suggest that Seshasayee was even asked to consider stepping down.
Shibulal
1980
In 1980 NR Narayana Murthy had unwittingly locked up his junior colleague SD Shibulal in his office - asking him not to go home before finishing a complex piece of software - he seems to have done it again.
Back in 1980 the two worked at Patni Computer Services, before co-founding Infosys Technologies with five others a year later. Murthy himself had rescued Shibulal when he found him 48 hours later, labouring away in his lungi, over the weekend.
2011-13
In 2011, Shibulal, the brilliant backroom boy, got his turn as CEO at Infosys. Two years later, he was still CEO, but only just, with Murthy who came back as executive chairman in June 2013 making subtle shifts in strategy and changing the way it is executed - and in the process reversing many of Shibulal's decisions.
In a less genteel environment, Shibulal would have gone They treated him well and with respect because he was a co-founder.
Shibulal (born 1955) stuck on for a while- even as he saw his own well-crafted strategy being improvised on by his mentor. He is slated to retire in March 2015 and ever since he took over in 2011, there was speculation about his successor.
2002-03: Sexual harassment lawsuit against Phaneesh Murthy
Infosys Technologies Ltd, the Bangalore-based global IT major, on Sunday announced that it had reached an out-of-court settlement in the sexual harassment lawsuit against the company's former board member Phaneesh Murthy, who was based in the United States.
The lawsuit was filed by Phaneesh's executive secretary Reka Maximovitch, a Bulgarian American national, complaining of sexual harassment and wrongful termination of her employment.
Under the terms of the settlement, the company retained all rights to proceed with legal action against Phaneesh Murthy.
Giving details of the settlement, Infosys chairman and chief mentor N R Narayana Murthy told mediapersons in Bangalore that the company would be paying $3million to the plaintiff.
Of this, Infosys would contribute $1.5 million while insurers would cough up the remaining $1.5million under the company's directors and officers liability insurance cover.
Under California law, the company was also liable for the conduct of Phaneesh because he was an officer and a member of the board.
Murthy said "Phaneesh did not disclose to the company management, as an important functionary, that he had a relationship with Maximovitch and also of the fact that she had filed in the court for a restraining order against him".
The company paid $570,000 to Phaneesh Murthy as part of the final settlement of his dues when he resigned in July 2003 as head of Infosys' worldwide sales and marketing and from the company's board of directors.
After leaving Infosys, Murthy founded a company that was bought by iGate in mid-2003. In 2011, he teamed up with buyout firm Apax Partners to conduct iGate's $1.2 billion purchase of much-bigger Indian rival Patni Computer Systems.
iGate shares, and revenues, more than quadrupled since Mr Murthy joined the company, but the scandal threatened to cut short Mr Murthy's long and illustrious career.
Eleven years after he was forced to quit Infosys Ltd following sexual harassment charges, Phaneesh Murthy was in 2013 sacked by US-based outsourcing firm iGATE Corporation for not disclosing his "relationship with a subordinate".
2012: Infosys lost momentum in every vertical
Infosys's overall revenues dropped below that of Cognizant in 2012. But what worried the IT company more was its loss of momentum in almost every vertical. And in both its flagship verticals - BFSI (banking , financial services & insurance ) and manufacturing - its rank has dropped.
In BFSI, Infosys's revenue in the March quarter of fiscal 2011 was $571.9 million and this grew modestly to $657 million in March 2013. But Cognizant's revenue grew from $570 million to $855 million in the same period , pushing Infosys to No. 3 in that space. In fact, Cognizant surpassed Infosys in this vertical in the June quarter of fiscal 2012.
In manufacturing, Infosys used to be No. 1, but in the September quarter of fiscal 2013, TCS's revenue ($402 million) crossed that of Infosys ($397 million) and has remained ahead since then. In retail, Infosys and TCS's revenues were similar in the March quarter of 2011, but by March 2013, TCS had grown its revenues to $407 million, while Infosys's rose to just $298 million.
This loss of momentum and ranking put the company at risk of losing mindshare among customers in the long run.
2013: Infosys blatantly flouted immigration laws: USA
Federal prosecutors have alleged that IT major Infosys indulged in blatant violation of immigration laws by not only bringing its employee inside the country on a visa which does not permit work, but also issuing specific directions to its workers to mislead the immigration officials on their point of entry on their nature of work.
NEW YORK: A former American employee of Infosys, who had brought a whistleblower lawsuit against the IT giant, could receive between $5 to 8 million of the total $34 million that the Indian company will pay to settle visa fraud allegations.
In one of the largest settlements in an immigration fraud case, Bangalore-based Infosys has agreed to pay the amount to resolve claims made by federal prosecutors in Texas.
The payment by Infosys includes $5 million to Homeland Security Investigations for civil or administrative forfeiture, a similar amount to the Department of State and $24 million to the US Attorney's Office for the Eastern District of Texas.
Jack Palmer, who had worked at Infosys, brought the whistle-blower lawsuit in Alabama in February 2011, saying that he had been punished and sidelined by company executives after he reported witnessing widespread visa fraud. His lawsuit was dismissed in 2012 by a federal judge but it spurred the federal investigation into Infosys' visa procedures.
Palmer said he had turned down an early settlement offer from Infosys, because it would not have allowed him to continue cooperating with federal investigators. "They wanted to buy my silence, and I wouldn?t do it," he said. "I never did it for the money. I did it because they were violating the law."
June 2013: Murthy returns
Shibu, as he is known popularly, was sidelined from the decision-making process, even though he continued to be the public face of the company. "He would often say 'go ask Murthy'," it was said
The percentage game
At an investor conference organised by Motilal Oswal on September 3, 2013, Murthy pointed out to an audience of analysts how the growth and margins at Infosys started falling after Gopalakrishnan handed over the CEO's baton to Shibulal.
Infosys grew at 26% during fiscal year 2011 over a year ago, operating margins were at 29.5% and post-tax profit margin was just under 25% when Gopalakrishnan laid down office. A year later the growth rate slipped to 16%, although operating margins and post-tax profit margins were maintained. But as Murthy pointed out at the conference: "The year 2012-13 was what was of great concern...because our growth went down to 5.8%, our net income margin went down to 23.3%."
He added that the net margin stayed at that level because of Infosys' non-operating income (primarily interest income from a cash pile in excess of Rs 25,000 crore). "These are the things that cause tremendous concern because first of all [Infosys was] losing its growth rate by as much as 80%; second, losing the operating margin, particularly in the context of the devaluation of the rupee, is something that is not good news..." explained Murthy.
Phil Fersht, founder and CEO of HFS Research, says: "The lower margins are primarily a consequence of increased onshore labour to execute engagements; during this period Infosys has increased its on-site costs (36% of Infosys' cost base was on-site in fiscal year 2012 compared with 46% in fiscal year 2013). In addition, increasing labour costs in its offshore locations have also driven down margins, with a competitive labour market and currency fluctuations driving up costs of Indian delivery."
Murthy explains: he decided to focus on three areas as chairman. One is to reduce costs by reducing locations to improve margins; second is to focus on winning large deals to bring back growth; and the third is to better incentivise performers both in sales and delivery. Murthy also said the company had somehow taken its eye off the ball - the large outsourcing projects that can add to revenues.
There are early tentative signs of a revival. After Murthy returned on June 1, 2013, the company showed a 7.78% growth in net sales for April-June over the January-March quarter. And in the July-September quarter, sales growth jumped to 15% over April-June. However, profit growth over the previous quarter has stagnated at less than 2% for four quarters now.
The Infosys board restructured the hierarchy with executive co-chairman Kris Gopalakrishnan - who Shibulal had succeeded as CEO - transitioning to executive vice-chairman. And for good measure Murthy also brought along his son Rohan Murty to assist him.
Murthy basically decentralised decision-making, bringing executive authority closer to the chairman's office. The executive council that ran Infosys saw powers moving to the chairman's office, manned by MD Ranganath, Deepak Padaki and Rohan. So regional satraps, who had a lot of freedom to operate, suddenly found their decision-making executive powers taken away.
However, not everyone was sure that Murthy was on the right track. Says R Wang, principal analyst and CEO of San Francisco-based Constellation Research: "The strategy for higher margins and to expand in existing accounts still makes sense. However, there are broader shifts happening in this market and it's important that Infosys also builds IP, expands partnerships, and leads in specific verticals."
Bendor-Samuel of Everest says he has not been a fan of Infy's strategy or execution and feels they moved too fast and confused the customer base. He says Murthy's moves are smart ones for the short run but are unlikely to succeed in the long run and he will have to manage the tension between growth and higher margins. " Wipro, Cognizant and TCS are all decentralising, moving decision making closer to the customer. Infy is moving completely differently from the rest," Bendor-Samuel adds.
The family
The other factor that did not please many, including Bendor-Samuel, was the growing importance of Murthy's son Rohan in the company. Appointed executive assistant to Murthy in June, the company has since neither denied nor confirmed reports that he would be elevated to vice-presidentship soon.
CEO Shibulal added nothing to the story when he said in Oct 2013 that Murthy had clearly articulated his son's role in the company.
At the investor conference, Murthy said that he had "invited Dr Rohan Murty to come and join my office" as he "wanted somebody with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness". Rohan is junior fellow in the society of fellows at Harvard University.
John A Davis, professor at Harvard Business School and founder of the Cambridge Institute of Family Enterprise, Massachusetts, feels founders are often considered to have mythical abilities to turn around companies. "Employees and customers react well to a founder-entrepreneur and they see them as someone with a magic touch. So do the markets," Davis says.
And he says nothing is wrong with bringing in a family member, even as a CEO (not that Infosys has indicated any plan to have Rohan as CEO). "The CEO always needs to have confidence of the largest shareholders. For a family member CEO, it works out well," he says.
Bendor-Samuel disagrees. "Anytime you have a hint of nepotism in the way an organisation is run you have issues." He points out that Wipro too has a similar situation where promoter Azim Premji's son Rishad holds a senior management position, but the shareholding patterns of the two IT services giants make it a very different game altogether. While Murthy owns around 4.5% in Infosys and all the founders together around 16%, in Wipro promoter Azim Premji controls roughly 73.5% of the shares.
Bendor-Samuel says he finds both Rishad Premji and Rohan extremely talented and capable professionals but "it is discouraging for other people".
Those other people could well include Shibulal; those clued into the company in Bangalore suggest he is waiting for his daughter Shruti Shibulal's nuptials in November before he calls it a day. V Balakrishnan is the top internal contender for the CEO's mantle after the exit of Ashok Vemuri.
When asked by an analyst what are the leadership traits he would be looking for in Infosys' next CEO, Murthy articulated several, from the leader's ability to raise aspirations to being able to connect; he also said he was looking for the attribute of "courage to take tough decisions", the attribute of generosity - to "share credit" - and the ability to take quick decisions. Does Balakrishnan fit the bill?
Revenues for Apr-June 2013
Infosys said its revenues from North America—which contributes nearly two-thirds to the company's topline—grew 4.9% on a quarter-on-quarter basis.
The Bangalore-based company's revenues from Europe, however, declined 3% due to reduced client spending and macro-economic uncertainties. Europe has been a concern for most Indian software exporters, with revenues and profits declining 2011 to 2013. Clients in Europe contributed 23% of Infosys' revenues during the first quarter.
Infosys, India's second-largest software firm, posted a 3.7% year-on-year increase in its first-quarter net profit. The company said its revenues from India, where it provides information technology services to India Post and Ministry of Corporate Affairs, grew 10% during this quarter. India contributed 2.4% of Infosys' revenues.
Revenues from rest of the world, which contributes 12% to Infosys' overall revenues, grew 2.4%.
Attrition after June 2013
June 2013: attrition begins at the top
Six top executives at Infosys resigned within four months after Murthy came back in June 2013 as executive chairman. And in terms of financials, the Murthy-led team was able to bump up growth in the quarter ended September 30, 2013, over the previous quarter.
Dec 2013: Balakrishnan resigns
Infosys board member V Balakrishnan's exit, marking the eight between June and Dec 2013, raised concerns over the company's ability to retain core members. Balakrishnan's departure left a vacuum in the leadership team especially after he was seen as a strong contender for the CEO's role.
The resignation of V Balakrishnan was surprising given that he was only a few weeks before given additional responsibilities as the head of Switzerland-based consultancy firm Lodestone that was acquired in a $350mn deal in 2012. In 2013, he was given the given additional responsibility of managing utilities and resources for the North American region.
The nine key exits between June 2013-June 2014 were CFO V Balakrishnan, Americas head Ashok Vemuri, president BG Srinivas, global sales head Basab Pradhan, Infosys consulting head Stephen Pratt, BPO sales head Australia Kartik Jayaraman and BPO head Latin America Humberto Andrade.
2013-14: Record rate of attrition
Annual revenue in the year to end-March 2014 rose 24.2 per cent, lagging growth of 29.9 per cent at TCS.
The annualized rate of attrition at Infosys — effectively the number of staff leaving or retiring — was a record 18.7 per cent at end-March, 2.4 percentage points higher than a year earlier. That's close to a fifth of the company's workforce of more than 160,000. The attrition rate at market leader TCS was 11.3 per cent.
Infosys announced an average 6-7 per cent pay rise in April 2014 for India-based staff, below the average 10 per cent raise at TCS. Third-ranked Wipro Ltd said it plans raises of 6-8 per cent from June.
Infosys president Pravin Rao acknowledged that attrition is higher than the 12-13 per cent rate the company is comfortable with Unfazed by the exodus of top executives, Infosys co-founder and executive chairman Murthy said he wished luck to those who quit the company.
Changes after 2013
Oct 2013: R&D arm reduced
In yet another indication that Infosys was putting the focus back on its traditional services, the company cut the strength of its R&D arm, called Infosys Labs, and moved these employees to billable projects on the IT services side. This was in keeping with chairman N R Narayana Murthy's idea of taking a step back into the traditional space of application development and maintenance (ADM) and infrastructure services in the short term..
The Labs division was a technology and domain-focused team of 600, developing proprietary technologies . Infosys moved to reduce the strength by at least 30% over time .
Infosys Labs, established in 1999, worked to find ways to produce cheaper, faster and better services, and shared synergies in particular with the PPS (products, platforms and solutions) business.
ADM and infrastructure services have been the spaces that have driven revenues for the industry's growth leaders - TCS, Cognizant and HCL - in recent years. Infosys's assessment is that it took its eyes off those spaces in its effort to build the non-linear business
The talk in Infosys was that the Labs development followed soon after Murthy's son and executive assistant Rohan Murty had a meeting with business unit heads, including Labs head Subrahmanyam Goparaju, and reviewed the performance of each unit.
Infosys Labs was formerly called Software Engineering and Technology Labs (SetLabs). It collaborates with various universities -- University of Cambridge, University of Illinois at Urbana Champaign , Indian Institute of Technology Bombay, Monash Research Academy, Purdue University and Queens University Belfast.
It worked on immersive technologies like augmented reality, touch and gesture interfaces and data visualization.
2016: crorepati club gets bigger
Shilpa Phadnis
The crorepati club at Infosys is getting bigger. As many as 49 senior executives drew over Rs 1 crore in compensation in the 2015-16 financial year, up from 18 two years back. Last year was an aberration when 113 crashed past the crore mark due to a one-off, high-incentive payout. The increase in the number of VPs and SVPs entering the Rs 1-crore roster last fiscal explains the company's attempt to bridge the pay gap with competitors and stem attrition in a fierce war for talent. The top-level pay spike also reflects Infosys' efforts to align salaries with the market at a time when the company is on course to return to industry-leading growth rates under CEO Vishal Sikka. Sikka himself has raked in $7.45 million in the 2015-16 financial year that includes a variable pay of $4.33 million and RSUs (restricted stock units) granted to him that's valued at $2 million. However, this has put the spotlight on the ratio of Sikka's compensation to the median remuneration of employee that stood at 935.
Infosys COO Pravin Rao took home $1.4 million in annual compensation, while CFO MD Ranganath raked in $539,141 for the year. "We are in a global market, and competition for talent is intense. Therefore, it doesn't surprise me Indian companies are now paying their executives according to their global market value," said Dan Marcec, director (content & marketing communications) in US-based Equilar that provides data on executive compensation. "The safeguard for companies, of course, is the idea of pay tied to performance. They are providing incentives so that executive pay reflects the CEO's personal interest as well as that of the company." Harish V, partner in consultancy firm Grant Thornton, believes the performance metrics have changed significantly with individual contributors getting their fair share of rewards. However, in Infy's case, the actual number of crorepatis could be higher than what's mentioned in the annual report as its CEO has roped in top-notch executives from Palo Alto in the US from where he works. The Companies Act obliges firms to disclose the compensation details of every employee based in India drawing over Rs 60 lakh.
Sikka has successfully reversed Infosys' once-listless performance with a sharper positioning to clients, amplifying the people-plus-software approach by moving away from a headcount-linked model. This includes a base salary of $1 million, $3 million in variable pay, $2 million in restricted stock units (RSUs) and another $5 million in stock options, which would be awarded to him based on Infosys' performance.
Infy funds networking co Infosys has invested Rs 10 crore in Bengaluru-based networking company Nivetti Systems, which focuses on software defined-networking, routing and switching hardware. More recently, it invested $4 million in US-based data discovery and data governance software startup Waterline Data Science. Infosys has carved out a $500-million fund to tap into early-stage companies to gain access to new business models.
Infy gets finance panel Infosys has also set up a finance and investment committee comprising four independent directors - Roopa Kudva as its chairperson, along with Kiran Mazumdar-Shaw, Ravi Venkatesan and John Etchemendy. Infosys said the committee was set up to oversee acquisitions and investments made by the company. It will also periodically review the status of acquisitions and investments in terms of business objectives met, status of integration of acquired companies, risk mitigation and financial returns.
International business
2013: FESCO, China contract
In Dec 2013 IT services major Infosys bagged a contract from Chinese firm FESCO to develop a human resource (HR) services platform.
FESCO is the first Chinese firm to provide professional HR services to foreign enterprises, financial institutions and economic organisations in China. FESCO provides services to more than 10,000 global users located in over 100 countries.
Incorporated in 2003, Infosys China -- which in 2013 employed about 3,300 people -- has a sales office in Hong Kong, a global education centre in Jiaxing and development centres in Shanghai, Hangzhou, Beijing and Dalian. The company is developing a new campus at Zizhu Science and Technology Park in Shanghai.
Volvo
Infosys inked a multi-year pact with Volvo Cars to provide application development services for its global operations.
Lansforsakringar
Infosys signed a five-year deal with Lansforsakringar to provide application development and management support.
Sydney
Infosys has opened a new Sydney branch office to keep pace with business growth.
Vishal Sikka: 2014-17
See graphics:
Vishal Sikka, June 2014-May 2016
Vishal Sikka, October 2016-August 2017
2014: Vishal Sikka appointed Infosys CEO
Thirty-three after its inception, the Indian IT behemoth appointed its first non-founder CEO in Sikka, who was roped in from outside. In June 2014, executive chairman, Murthy, announced that he along with his son Rohan had decided to step down full four years ahead of their term, said his "work was done" and hoped that the new CEO Vishal Sikka would chart a new course without any interference from founders
Murthy, who founded Infosys along with six engineers in 1981, bid adieu to the over USD 8 billion entity for the second time. He was called back from retirement in June 2013. After Sikka assumes charge, Murthy will be designated as chairman emeritus.
2014-2016: Attrition in Sikka’s tenure
Infosys executive vice-president (EVP) and the former global head of consulting Sanjay Purohit has resigned from the company , making it the seventh EVP exit since Vishal Sikka took over as CEO two years ago.
Purohit, who was previously the head of the products & platforms subsidiary EdgeVerve, moved to the US last year as the head of consulting, but was replaced within 18 months and was asked to relocate to India to work on strategic initiatives alongside COO U B Pravin Rao. Rajesh Krishnamurthy , president and head of energy & utilities and telecommunications, replaced Purohit as head of consulting.
Just a couple of months ago, Manish Tandon, who was EVP and head of healthcare and life sciences, quit to become the CEO of CSS Corp.
Sikka had attributed Info sys' relatively weak performance in the June quarter partly to the consulting business. The consulting business was affected partly by an exodus of executives in Lodestone, the Zurich-based consulting firm that Infosys acquired for $350 million about four years ago. Lodestone founder Ronald Hafner quit after Infosys elevated Purohit as consulting head. Hafner's exit encouraged several other executives to follow suit.
The spate of top-level exits is beginning to worry analysts.“Infosys is in danger of skidding onto thin ice. On the one hand, it is undergoing a reorganization with the goal to become more agile and to empower management. On the other, the continued attrition of its senior executives could slow down decision-making. As the market enters a phase of accelerated macro headwinds, all eyes will now be on the next earnings.Vishal urgently needs a decent quarter,“ Tom Reuner, MD of US-based HfS Research, said. In terms of share price performance, Infosys's has been the best among its Indian peers in the period since Sikka took over.But the more recent performance has been less impressive.
Tensions between Sikka, Infy founders
Shilpa Phadnis, Feb 9, 2017: The Times of India
HIGHLIGHTS
Sikka is the first non-promoter CEO of Infosys
Under Sikka, Infosys is targeting to be a $20-billion company
Founders say their issues with Sikka are about governance, principle, values & transparency.
The clash of cultures at Infosys - old guard vs the new; frugal salaries, low-key lifestyles vs globally benchmarked compensation severance structures; innate skepticism of buying growth vs aggressive acquisitions -is playing out at an inopportune moment for the $10-billion company, as the Indian IT services industry faces its toughest external environment in a decade. In the midst of a big technology transformation wave, wherein many low-end jobs are getting automated, the overall external situation has worsened on account of US President Donald Trump's protectionist policies, especially with regards to work visas and preference for American jobs.
At this critical juncture, emerging reports of friction between a section of founders of the company and its executive management -reported in detail by TOI in its February 8 edition -is distracting and, if unresolved, deleterious to the health of the company , say industry analysts.
Under Sikka, Infosys is targeting to be a $20-billion company with a 30% operating margin and $80,000 revenue per employee by 2020. A stretch target by any standards as its revenue, currently, is half that. Out of the $20 billion, $16.5 billion is to come from existing business, $1.5 billion from acquisitions and $2 billion from new businesses.
The founders have sought to take the high ground, arguing that their issues with Sikka and the board are about governance, principle, values and transparency . Although Sikka could not be reached for comment, people close to the board -a majority of which is said to be backing him, at least for the moment -say most of the founders are still attached to a business model that is facing an existential crisis, and are wary of aggressive acquisitions that are necessary to grow the company . "They are just too conservative when it comes to investing in the future," says a Young Turk. There's also a perception among the new generation that somewhere deep down, the `old guard' doesn't want to `let go' of a company they built from scratch. Sikka is the first non-promoter CEO of Infosys.
The first signs of frayed relations between some of the founders, notably N R Narayana Murthy , Infy's first chairman, and the board, emerged about a year ago over the induction of Punita Sinha, wife of Union minister Jayant Sinha, as an independent director.Murthy abstained from voting on her appointment. While emphasising that he had great respect for her as a professional, he grounded his objection in the fact in that the entire history of Infy , it had never invited the spouse of any active politic ian to the board. Sikka and the board's argument to that was that she was eminently qualified -having been a fund manager with Blackstone and Oppenheimer, among others -and that the decision was taken on merit.
Since then, there have been a number of friction points.The executive compensation -the main concern of the founders -is geared to support Sikka's transformational vision, but has run smack into founder-chairman N R Narayana Murthy's longstated philosophy on "compassionate capitalism" where the ratio between highest compensation in the firm and the median salary should ideally be 50 to 60. Their biggest concern has been the 55% increase in CEO compensation that appears particularly large when average salary hikes have hovered in the single-digits of 6% to 8% at the company . Murthy is reliably learnt to have told people that the board had placed him in a "moral dilemma" when it proposed such a steep hike, and he had chosen to abstain from voting on the resolution at last year's AGM. Three cofounders--Krish Gopalakrishnan, S D Shibulal and K Dinesh--followed suit in abstaining; only Nandan Nilekani, also a co-founder and who succeeded Murthy as chairman, Sudha Murty voted in favour of the resolution.
Sikka's compensation saw a sharp increase to $11million, annually , in 2017 from $7.08 million in 2016. Infosys says that the cash component of the salary has actually come down for Sikka with most of it in restricted stock units (RSUs) against extremely steep targets. Sources close to Sikka say that he actually gets less cash now than when he was chief technology officer at SAP .
High severance packages to departing top executives, such as CFO Rajiv Bansal and legal counsel David Kennedy , has al so been an issue of concern.Tom Reuner, managing director of US-based HfS Research, said Sikka's honeymoon period is clearly over. "While the whole industry is in transition, away from labour arbitrage and into uncharted waters of the Trump administration, it is easily forgotten that Infosys is a much happier place these days and that he (Sikka) gave the company back the pride of being perceived as an innovator. In the end much will come down to execution. Should the numbers improve, the rest will be easily forgotten -but only then."
The gameplan to position Infosys as a next generation services company leveraging automation, artificial intelligence and analytics, requires different skillsets and bold acquisition strategy , say industry experts. Infosys, under the founders, has traditionally been wary of large acquisitions.
The biggest acquisition that Infosys ever made, Lodestone, hasn't panned out well. The Zurich-based consulting company Infosys acquired in 2012, before Sikka joined, for $350 million, has also been a point of conflict.Sources say Sikka thinks of it as a bad acquisition, one that does not fit into his strategy . Lodestone has been posting weak results and has been affected by an exodus of executives over the past year.
So far these tensions haven't impacted the company . Among peers, its stock has done the best in the two years. Under Sikka, Infosys's share price rose 18% (till December 2016) while TCS's fell about 9% and Wipro 14%.
Murthy doesn't deny there are issues
When TOI reached out to N R Narayana Murthy on Wednesday about his concerns on how Infosys is being run, he did not deny specifically that there were issues. Asked if he had written a letter recently to Sikka appreciating his work, Murthy said: "I do not remember writing any recent letter to Vishal." When asked, "You have raised some concerns in the past including Sikka's compensation, severance packages and shifting value system.Are these still concerns for you? Do you feel Infosys is moving away from your philosophy of compassionate capitalism?", Murthy replied: "I am in Hyderabad. These are best answered by Vishal and not me since I do not know answers to them except the first and the second questions. You know my answer to the first part of the second question. I leave the second part to Vishal."
Murthy recently called for a visa-independent global delivery model. He seemed to be publicly suggesting that the initiative he started has not been taken forward as aggressively as it should have been.
Infy director tweets support for Sikka
In a tweet that is being seen as a sign of support for Infy's CEO, Kiran Mazumdar Shaw, an independent board member of the company and one of India's most high-profile businesswomen, said late Wednesday, "Exciting new business opportunities which VSikka and his brilliant team are leading to new frontiers of growth." This was in response to a tweet by Sikka saying, "3AM. Road warriors heading east for client mtgs. Focus & silence amidst chaos"- leading to speculation as to whether he was referring to the situation at Infosys.
Issues of contention
After months of tussle with the co-founders, Infosys CEO Vishal Sikka has resigned. During his three-year tenure as CEO, Sikka faced several salvos from NR Narayana Murthy and other co-founders. The most recent being in a letter, dated August 9, where Murthy is said to have raised questions over Sikka's leadership.
Earlier too, Murthy has publicly criticised Infosys over lapses in corporate governance, allegations that the company firmly denied repeatedly.
Here are some of the things that NR Narayana Murthy and other co-founders 'attacked' Vishal Sikka and Infosys for over the last several months.
1. Using chartered planes to meet clients
Murthy is said to have criticised him for chartering private planes to meet clients.
2. Questioned pay hike given to Vishal Sikka
The founders questioned the pay hike given to Sikka. In February last year, the board decided to give Sikka a 55% pay hike to $11 million. The sharp increase in his salary is said to have been a big issue of disagreement.
3. Only 23.57% of promoter voted in Sikka's favour
Only 23.57% of promoter votes are reported to have been cast in favour of reappointing Sikka as managing director and CEO in April 2016.
4. Severance payout given to former CFO Rajiv Bansal
The co-founders also slammed the size of the severance payout given to former CFO Rajiv Bansal. Infosys board had approved Rs 17.38 crore severance payment for Bansal. In its defence the company said that the employment contracts of key members of the executive team include a severance clause, and such clauses are guided by the complexity of the role as well as country-specific regulations.
5. Vishal Sikka "not CEO material"
According to a report in business daily Mint, Narayana Murthy in an email quoted some independent directors as saying that Vishal Sikka was more chief technology officer (CTO) material than chief executive officer (CEO) material.
"All that I hear from at least three independent directors, including Mr Ravi Venkatesan (co-chairman), are complaints about Dr Sikka. They have told me umpteen times that Dr Sikka is not a CEO material but CTO material. This is the view of at least three members of the board, and not my view since I have not seen him operate from the vantage point of an Infosys board member," Murthy reportedly said in the email.
6. Questioned the company's Panaya acquisition and some other decisions
The company conducted an independent valuation into the $200 million acquisition of Panaya after claims of inconsistencies in the deal. The investigation aimed to find out if any company executive benefitted from the acquisition.
August 2017: Vishal Sikka's resignation
Vishal Sikka's resignation letter: 10 key points, Aug 18, 2017: The Times of India
Infosys CEO Vishal Sikka has resigned as managing director and chief executive officer of Infosys. U B Pravin Rao has been given the interim responsibility for both the posts
1. After a lot of reflection, I have resigned from my position as your MD & CEO effective today. A succession process has been initiated, with Pravin serving as interim MD & CEO, and I will work closely with the Board and management team over the next few months to ensure a smooth transition. In addition, I have agreed to serve as Executive Vice Chairman on the Board to further ensure continuity until the new management is in place.
2. It is clear to me that despite our successes over the last three years, and the powerful seeds of innovation that we have sown, I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks.
3. In 2014, we started with a very challenging set of conditions, and in the last three years, we have decisively turned things around. That time, around and before June 2014, was a difficult time. Our growth rates were low and attrition was high. There was a sense of apprehension all around and I came here to help enable a great transformation as our core business faced intense pricing pressure, and clients looked increasingly to innovative partners to help shape their digital futures. Now, a bit more than three years later, I am happy to see the company doing better in every dimension I can think of.
4. I was, and remain, passionate about the massive transformation opportunity for this company and industry, but we all need to allow the company to move beyond the noise and distractions.
5. For sure this journey has been a difficult one. No one, especially me, thought it would be easy. Transformations are hard to begin with. A massive transformation, of such an iconic institution, with such groundbreaking achievements behind her, would be even tougher, and the exponential rates of change all around us, further amplified by geopolitical matters, would add that much more headwind.
6. But after much contemplation I have decided to leave because the distractions, the very public noise around us, have created an untenable atmosphere.
7. The founding principle of the strategy I laid out for our renewal was personal empowerment, working in an entrepreneurial environment. I need this for my own work as well. I now need to move forward, and return to an environment of respect, trust and empowerment, where I can take on new lofty challenges, as can each of you.
8. Over the next weeks and months, I look forward to working with the Board and management to create a smooth transition, and simultaneously staring into the great unknown, and to doing something great, something purposeful, for the times ahead.
9. However difficult the noise of the last several months has been, I wouldn't trade our time together for anything. I would not give up the experience of seeing the gleam in your eyes as you described a new idea, invention, or contribution.
10. Together we have achieved a lot. Even in the midst of all of the distractions, even as the tendency was to return to the familiar, we still managed to persevere and make wonderful progress. We have laid the foundation for the next 30 years of Infosys, and I feel deeply proud to have worked alongside all of you in sowing the seeds that will return this company to the bellwether it once was.
A legacy left by Sikka
Sikka leaves Infy in good shape but a bad spot, August 19, 2017: The Times of India
When Vishal Sikka took over the reins of Infosys three years ago, the company was in disarray , hit by a regular exodus of top executives, lagging growth compared to its industry peers, low employee morale and a high level of attrition. He had his task cut out: turn around the IT behemoth in the age of digital technology and put it on course.
The former SAP executive was quick to highlight the threats and opportunities that automation would bring and how Infosys, if it had to survive in the new age of technology , needed to change its model from a hardcore software services company to one innovating products and platforms. To support this, Sikka had set an ambitious target of $20 billion in revenue by 2020, with operating margins of 30% and employee productivity of $80,000 and at least in the beginning of his tenure, the wind seemed to be in his sails. Infosys reported higher percentage of revenue growth for two consecutive fiscals, of 9.2% and 7.35%, beating Indian rivals TCS and Wipro but falling only behind Cognizant. Margins also improved, with the company closing the past quarter at 24.1%, beating TCS for the first time in many years. Shares of the company soared about 30% in the first two years as investors cheered. In the last one year, starting August 1, 2016, shares have fallen 15%.
The first non-founder CEO of In fosys had to deal with multiple challenges. In spite of Sikka's incessant harping on automation and products such as Skava and Panaya, new services contributed 8.3% while the plat forms 1.6%, totalling just $26.5 million of total revenue in the first quarter.
At the same time it was also difficult to change the culture of the company . Sikka has spoken of a dual strategy -to renew traditional business with automation, and develop new businesses around new digital technologies.
Adding to it all was the tussle between the board and the founders since the beginning of last year over issues ranging from former CFO Rajiv Bansal's severance package to the real motive behind the Panaya deal and the board's decision to raise Sikka's pay last year by 55%.
At the end of his third year, experts wondered how Sikka would pull himself out of the bind he had gotten into. Some wondered if he would stay on and attempt the difficult task.True to their fears, the Infosys CEO put in his papers, leaving Infosys in almost a similar cloud of uncertainty as he inherited.
2016: Restructuring
The Times of India, Sep 08 2016
Shilpa Phadnis
Infy reshapes, to split into 12-15 smaller business units
In a massive reorganization, Infosys is splitting itself into 12-15 smaller business units, each with revenue of $500$700 million, its own sales heads and P&L (profit & loss) responsibilities. Currently , the organization is divided into four large verticals -banking & financial services and insurance, with $3 billion in revenue; retail & life sciences, with $2.3 billion; manufacturing & hi-tech, with $2.2 billion; and energy & utilities, communications and services, with $1.9 billion. Each of these will be split into smaller units.
The four verticals are headed by four presidents -Sandeep Dadlani, Mohit Joshi, Rajesh Krishamurthy and Ravi Kumar (in charge of delivery). These overarching responsibilities will continue. But under each of them, there will be a greater number of independent units.The exact number of units and heads of each are expected to be finalized by October.
“This will help us in better market penetration and in client management,“ CEO Vishal Sikka said at a recent analyst meet in Pune. Sources told TOI that Infosys will also collapse some of the layers between the customer and the company to create sharper sales and delivery units. There are several layers between the two -project manager, senior project manager, group project manager, delivery manager and senior delivery manager, delivery head and service offering head. “Some of these will go to respond to client needs more nimbly ,“ one source said.
Chip Wagner, CEO of US-based IT advisory firm Alsbridge, said the new SBU (strategic business unit) structure allows for benefit of nimble and fast deci sion-making against the backdrop of a large company with a strong balance sheet and brand.“This model is exactly what EDS did in late 1980s and it was successful. After a strong period of success with the SBU structure, EDS then super-imposed a “group“ structure on top of collections of SBUs and that, in my opinion, was the beginning of the end as it added bureaucracy and a large overhead cost layer into the mix,“ he said.
Infosys, which was beginning to grow strongly under Sikka, posted a relatively disappointing performance in the last quarter. Sikka has since made several changes, including changes in executive responsibilities. “Ever since Vishal took over Infosys, the challenge has been to drive his strategic vision through the organization and to reignite the sales engine,“ Tom Reuner, managing director of US-based IT research firm HfS Research, said.
Infosys splits 4 verticals into 15 smaller units
BENGALURU: In a rejig aimed at making the company agile and sharpen client focus, IT services major Infosys has split its four large industry verticals into 15 smaller units. The objective is to give its presidents more time to build CXO-level relationships and strategy to improve sales, than be bogged down by internal operational matters.
According to some of the details of the new structure announced by Infosys, 15 smaller industry units, each with $500-$700 million in revenue, will have a separate head, and profit & loss (P&L) responsibilities. Its four large verticals now are banking & financial services and insurance (BFSI), with $3 billion in revenue; retail & life sciences, with $2.3 billion; manufacturing & hi-tech, with $2.2 billion; and energy & utilities, communications and services, with $1.9 billion.
BFSI, which counts Deutsche Bank and Goldman Sachs among its key accounts, will now have four industry heads — Jasmeet Singh, VP and regional head for financial services in the US (excluding West Coast); Ajay Vij and Kannan Amaresh, both VPs & regional heads of financial services in Europe; and Andrew Groth, VP of Australia and New Zealand, who will also lead financial services and insurance for the rest of the world. All four will report to president and financial services head Mohit Joshi.
Infosys' platform revenue crosses $500 million
Healthcare and life sciences will be a separate unit, and will be headed by former Wipro veteran Sangita Singh, who is joining Infosys on Monday. She too will report to Joshi. "The industry heads will be responsible for strategy for sales, P&L and increasing customer footprint. This will ensure greater client focus through the industry heads while allowing the presidents to focus on enterprise strategy," wrote COO U B Pravin Rao in an email to all business unit heads.
Rao said the industry heads have been identified based on the current size and future potential of the business opportunities. The energy and utilities, communications and services vertical has been split among three executives — Anurag Sinha will lead telecom, media and entertainment in the US; Avichal Kulshrestha will lead the same in Europe; and Ashiss Kumar Dash will head resources and utilities. All three will report to president Rajesh Krishnamurthy.
In manufacturing, retail, CPG and logistics (MRCL), Dinesh Bajaj and Madhu Janardhan will lead the Americas for RCL, Nitesh Bansal will head manufacturing in the US, and Karmesh Vaswani will lead MRCL-Europe. All three will report to president Sandeep Dadlani, as will Nitesh Banga, who will lead sales of new services, and Sourav Banerjee, who continues as client partner for Apple, one of Infosys's top clients, and who will now also oversee other Silicon Valley tech accounts.
Infosys Q2 net profit rises 6%, beats market estimates
Decision perhaps aims at fulfilling aspirations of seniors to be given higher responsibilities to lead from front keeping in check their exodus fro infosys.Latest comment by Ashwani Monga
In the delivery organization, Scott Sorokin will drive the digital experience service line, Narasimha Rao Manepally will continue to head cloud and infrastructure solutions, Sudip Singh will lead engineering services, and Satish H C will lead the data and analytics service line. All will report to president Ravi Kumar.
Ray Wang, CEO of USbased Constellation Research, said the management is betting on a more focused industry strategy that is customer-driven. "Right now, the matrix of offerings can be confusing for not only the customer but also internally, in terms of ownership of the customer," he said.
Infy provides muted FY18 guidance, stock dips 4%, April 14, 2017: The Times of India
Co Sees 6.5-8.5% Growth, Offers Shareholders $2Bn Payout
Infosys reported a near flat revenue growth sequentially in constant currency terms in the fourth quarter and provided a muted revenue guidance for the current fiscal, highlighting the challenging environment for Indian IT services companies. Shares of the company fell nearly 4% to close at Rs 931 on the BSE on Thursday after the weak guidance more than offset India's second largest IT service provider's decision to pay out $2 billion to its shareholders through a dividend andor stock buyback.
Infosys said it expects to grow between 6.5% and 8.5% in constant currency terms, which discounts the effect of currency fluctuations, over which the companies have no control. On reported basis, the growth is projected at 6.18.1%. This is lower than last fiscal's 8.3% growth, and lower than Cognizant's guidance of 8-10% for 2017, suggesting that Infosys CEO Vishal Sikka's turnaround strategy focusing on automation and innovation is yet to prove itself, or that Cognizant is doing the same thing better. “Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance,“ Sikka said, referring to the unusual public spat between the board and the founders during the quarter that had rocked the company . Over the past fiscal year, the company slowed down significantly from what it had initially predicted. It had provided a revenue growth guidance of 11.5-13.5% in constant currency in April, but several events -including Brexit, US president Donald Trump's protectionist policies, as also pri cing pressures and clients keeping IT outsourcing budgets tight -compelled the company to lower the guidance thrice. The final number, at 8.3%, is three percentage points below the lower end of the initial guidance. That's lower than Cognizant's 8.6% growth for 2016, but is likely to be higher than that of TCS and Wipro, which are yet to announce their final quarter results.
Such lacklustre growth makes Sikka's 2021 target of hitting $20 billion in revenue, operating margins of 30% and $80,000 revenue per employee appear a distant dream.And Sikka admitted as much.“With the performance we have seen in the last few quarters, it was already a difficult thing, and now it is incredibly difficult,“ Sikka said. At the current growth rate, Infosys should end at about $14.1 billion in revenue by 2021.
“This reinforces our con cern that Infosys has underinvested in client-touching capabilities that could lead to further pressure on growth rates and operating margin.Near-term model uncertainty remains high given, commoditisation of legacy offerings and questions around the near-term contribution potential of the CEO's new areas of investment,“ Wells Fargo wrote in a note.
For the quarter ended March 31, revenue grew 0.7% to $2.57 billion sequentially (5% year-on-year) in reported terms, which translates into just $18-million incremental revenue. Net profit dropped 0.8% to $543 million and operating margin slipped 400 basis points (100 basis points = 1 percentage point) to 24.7% as the rupee strengthened against the dollar. It expects operating margin to remain between 23-25% for the ongoing fiscal.
“We have held margins more successfully than our competitors,“ chief financial officer M D Ranganath said.
2017: CEO gets only 46% of variable pay
Shilpa Phadnis & Avik Das, Sikka gets only 46% of variable pay , April 14, 2017: The Times of India
This might please those who felt Vishal Sikka has been given an un duly high salary -the Infosys CEO has received only 46% of his target variable compensation for 2016-17. It's a reflection of the modest performance of the company in the year. But it might also be, partially , in deference to co-founder N R Narayana Murthy and other promoters who have been vigorously and publicly opposing the steep compensation increases given to top executives, including Sikka and chief operating officer U B Pravin Rao, over the past year or so.
Sikka has received $3.68 million of his target variable compensation of $8 million for 2016-17. He has a fixed compensation of $3 million. So his total take home for the year is $6.68 million of the total $11 million.This is lower than the $7.45 million that he drew in 2015-16.
The company board and Sikka have consistently maintained that the increase in compensation granted was primarily in the variable portion, and that the variable compensation was tied to steep performance goals. What those goals are ha ve not been publicly disclosed.
Asked about Sikka's compensation for the last fiscal, chairman R Seshasayee said the variable compensation was linked to performance. “I have not come across any other company where compensation is linked to targets. And Vishal, to his eternal credit, said since he has articulated the target ($20 billion by 2020-21), he would like to hold himself accountable to this vision. It is not often that people would have that kind of courage.“
Reasons for fall in salary
HIGHLIGHTS
Infosys CEO Vishal Sikka’s salary (cash component) in the financial year ending March 31, 2017 fell as much as 67 per cent, when other senior executives of the company in fact went home with more salaries, according to the Bengaluru-based IT giant’s annual report.
Infosys CEO Vishal Sikka's salary has been in news.(Representative photo)Infosys CEO Vishal Sikka's salary has been in news.(Representative photo)
1. Vishal Sikka's salary (cash component) fell by 67 per cent owing to a lower bonus payout. According to Infosys' annual report, the cash component of Sikka's salary was Rs 16.01 crore in 2016-17, down from Rs 48.73 crore in 2015-16.
2. The cash component that includes fixed pay and incentives dropped due to an 81 per cent fall in bonus in 2015-16. His bonus and incentives dropped to Rs 5.30 crore ($0.82 million), compared to Rs 28.15 crore ($4.36 million) in FY16.
3. The fall was however compensated by performance-based incentives in the form of restricted stock units worth Rs 12.9 crore ($2 million) which is same as the previous year and performance based stock incentives of Rs 18.6 crore ($2.88 million), which was nil last year.
4. Sikka's total compensation, including bonus and grant of stocks fell 7 per cent to Rs 45.11 crore in 2016-17 from Rs 48.41 crore in the previous financial year. He received a base salary of Rs 6.46 crore ($1 million) in FY17, up from Rs 5.81 crore ($900,000) in previous year.
5. Sikka's remuneration for FY17, however remains a whopping 283.07 times higher than the median remuneration of employees (MRE) of Infosys. The MRE of Infosys for FY17 stood at Rs 5,65,585.
6. Infosys founder NR Narayana Murthy had earlier criticised and questioned the principles on which the company's board was paying Sikka such a high salary. Last month the Infosys founder also questioned the steep hike in the company's Chief Operating Officer (COO) U B Pravin Rao's compensation.
7. COO Rao's total salary increased to Rs 11.80 crore in FY17 from Rs 8.14 crore in the previous year. Deputy chief operating officer, Ravi Kumar S's salary went up to Rs 14.87 crore from Rs 8.27 crore.
8. Infosys presidents Mohit Joshi, Sandeep Dadlani and Rajesh Murthy received total compensation of over Rs 14 crore. Joshi got Rs 14.62 crore in 2016-17, up from Rs 9.02 crore in the previous year, Dadlani got Rs 14.97 crore as against Rs 8.4 crore in the previous year and Murthy got Rs 14.25 crore as compared to Rs 8.55 crore. Non-executive chairman R Seshasayee got Rs 1.95 crore in remuneration in 2016-17 as compared to Rs 1.84 crore in the previous year. Other independent directors too received remunerations of over Rs 1 crore.
9. The hike in the senior management's salaries was primarily owing to increased performance-based stock incentives. In a letter to shareholders, Sikka said the best and most talented employees want to be measured on performance - not role maturity or tenure. So, in 2016-17, stock incentives plan for top performers was introduced.
10. "It has been my personal endeavour since joining Infosys to enable all employees to share in the successes of the company, and in fiscal 2017, we made the first step of this a reality...In addition, we restructured the compensation of senior leaders to be more performance-based, with a significant portion of their compensation now coming through stock incentives, creating a more direct alignment with the interest shareholders," Sikka wrote in the letter to shareholders.
The Times of India, June 9, 2017
See graphic, ‘The shareholding pattern in Infosys in June 2017.’
From The Times of India
The spat between Infosys CEO Vishal Sikka and Narayana Murthy played out very publicly in February 2017 with Murthy raising serious concerns over corporate governance and the changing cultural ethos of the company . He was particularly upset at the high compensation packages drawn by Sikka and other senior Infosys ex ecutives, the outsized severance package offered to former CFO Rajiv Bansal, and by acquisition strategies of Infosys. He believed the board led by R Seshasayee had failed in its duty to guide the management in the right direction.
When asked whether it was his unhappiness at Sikka's style of functioning that was making him want to exit the company he co-founded 36 years ago, Murthy said, “Whatever I had to say about Sikka and Infosys I have said some months back. I have nothing to add to that.“ (He was on his way to London to be with his daughter Akshata and son-in-law Rishi Sunak, who is the Conservative parliamentary candidate from Richmond, on counting day.) Private equity firms and sovereign wealth funds have been sniffing around for big buyout opportunities in the sector despite the fact that business outlook--driven by automation and digital disruption--has remained under pressure. But they aren't sure if the Infy stake would give them enough clout to steer a widely-held company .
“It doesn't even guarantee a board seat,“ a prominent fund manager said. None of the founders are on the board of Infosys at the moment. This makes it imperative for any long-term investor to engage with the management and the board as well. In December 2014, Infosys founders pared a collective 2.8% of their stake for $1 billion, which was the single largest promoter selloff in the Indian technology sector. This came not long after Sikka took over as CEO. The founders had then said they were partially encashing ownership for charitable activities, as they were no longer strategically involved with Infosys. Earlier, some members of the founders' families had offloaded small stakes for personal reasons.
2017: The crisis, a backgrounder
Venkatesha Babu , Thrust and parry “India Today” 4/9/2017
See graphic
Salil Parekh, 2017-
Appointed CEO
Infy picks Capgemini’s Salil Parekh as its CEO, December 3, 2017: The Times of India
Gets 5-Yr Term; To Take Charge On January 2
After months of stress, turmoil and billions of dollars in shareholder value destruction, Infosys has finally named a new CEO, Capgemini’s Salil Parekh.
With Infosys’ first attempt at a non-promoter CEO in Vishal Sikka ending in bitter acrimony, accusations of governance lapses, lawsuits and plenty of dirty linen washed in public, the company is hoping to start the new year with a clean slate by appointing the 53-year old Mumbai-based Parekh to lead the country’s second largest IT services firm.
The drama surrounding Infosys’ CEO search has in recent times been rivalled by what transpired at the Tata Group. However, unlike the Tatas, who finally opted for an insider to be chairman of Tata Sons, Infosys has again looked outside and brought in Parekh, apparently much to the disappointment of internal candidates. Whether this will lead to another round of exits has to be seen.
Infosys founder-chairman N R Narayana Murthy, who led the charge against Sikka, endorsed the new candidate. “I am happy that Infosys has appointed Salil Parekh as the CEO. My best wishes to him,” he said.
New CEO will need to fix frayed ties
Three and half months after Infosys CEO Vishal Sikka’s surprise resignation, the company board’s unprecedented attack on founder-chairman Narayana Murthy and co-founder Nandan Nilekani’s rescue return as chairman, the company on Saturday appointed French consulting & technology services major Capgemini’s Salil Parekh for a five-year term effective January 2.
Parekh, who had been a member of Capgemini’s group executive board (equivalent to a deputy CEO), was the CEO of the company’s financial services business across Europe, North America and Asia. He had been with the company for 17 years.
“We are delighted to have Salil joining as CEO & MDof Infosys. Hehas nearly threedecadesof global experience in the IT services industry. He has a strong track record of executing business turnarounds and managing very successful acquisitions. The board believesthat heisthe right person to lead Infosys at this transformative time in our industry,” Infosys chairman Nandan Nilekani said. Parekh, like Nilekani, is an alumnusof IIT-Bombay.
Parekh’s previous employer issued a surprisingly brief statement given his importance to the company and his rank in the hierarchy. “I would like to thank Salil for his involvement in the Capgemini journey. Salilcontributedin particular to the development of the Group in India and in the US,” Capgemini CEO and chairman Paul Hermelin said in a statement.
Parekh has his job cut out. His first priority will be to mend thefrayed relations withsome of the promoters, especially Narayana Murthy, to ensure that a Sikka.2 doesn’t recur. Employee morale is in the dumps. Infosys went from being the gold standard in corporate governance and most preferred employer to one where talk of over-valued acquisitions and unprecedented severance packages and confrontation between the board and promoters led to it bleeding people at both senior and junior levels.
Infosys will hope that Parekh’s background in the financial services industry throughout his career will help it garner more deals in the BFSI sector across Europe and North America. BFSI, the bread and butter for all Indian IT services companies, contributed about 33% to the company’s topline for the second quarter ended September 30.
“He was the top choice from a pool of highly qualified candidates. With his strong track record and extensive experience, we believe, we have the right person to lead Infosys,” Kiran Mazumdar-Shaw, chairperson of the nomination & remuneration panel, said.
Parekh, who got the top job from a pool of 30 candidates who were considered for the role, has a master’s degree in computer science and mechanical engineering from Cornell University. He was a partner in global tax and audit firm Ernst & Young between 1992 and 2000 in financial services and joined Capgemini in 2000 as a result of the latter’s acquisition of the consulting division of Ernst and Young.
As part of the appointment, Infosys saidthat interim CEO and MDPravin Rao, acompany veteran, willstep down from his role but will continue as thechief operating officer and a whole time director till August 2022. “The board is also gratefulto Pravin for his leadership during this period of transition,” Nilekani added.
His election creates internal tension
Shilpa Phadnis, Infosys set for senior management recast, December 5, 2017: The Times of India
HIGHLIGHTS
Parekh's appointment as the MD & CEO is believed to have caused heartburns which may lead to a rejig in top management
U B Pravin Rao's return to the role of chief operating officer has raised questions on the need for a dual-COO model
Parekh will need to eliminate the overlapping structures and functions for better execution
As Salil Parekh takes over the reins at Infosys in 2018, the $10-billion firm might be bracing up for another round of restructuring of its senior personnel.
U B Pravin Rao's return to the role of chief operating officer has raised questions on the need for a dual-COO model. The company had named Ravi Kumar as Rao's deputy to run the delivery organization earlier this year and the latter was named acting CEO following the resignation of Vishal Sikka in August. Parekh will need to eliminate the overlapping structures and functions for better execution.
The new CEO will also need to manage expectations as Kumar, along with BFSI head Mohit Joshi, was the internal candidate in the longlist for the CEO gig. Dealing with candidates who were passed over for the job is never an easy task for an outside nominee.
As reported by TOI, Parekh's appointment has caused heartburns internally that could lead to some shake-up. While Infosys chose to go for an outsider, industry observers like HfS Research CEO Phil Fersht believe that the board did so to get the balance right. "Having someone who hasn't been sucked into this internal quagmire and can drive change with a little distance from the intense (and proud) history is the right way to go," he said.
Though Parekh is likely to rope in a handful of lieutenants from Capgemini — his previous company — he would be mindful of not upsetting the apple cart by making sweeping changes that's not aligned with Infosys' DNA and culture.
"I am sure he will make some changes in areas where Infosys is lagging, such as bringing in some new counsel for growth and strategy. I would be surprised if Ravi Kumar or Pravin leave, as this was likely a key component in the new appointment — someone who wouldn't decimate the current structure like Sikka did. I expect Parekh to be more externally focused — on M&As, clients and driving the overall strategy, while Pravin and Ravi will work on executing against these directions," Fersht said.
Parekh has spent a long time in financial services, worked with global banks like HSBC and grew accounts like Royal Mail and GE. Constellation Research CEO Ray Wang said, "Salil gets the shift in IT services. He was responsible for the growth at Capgemini in his regions. He also understands the Indian services firms' culture. Having a consulting, global view, and position to influence growth are all good factors."
Angel Broking said in a report, "Parekh takes up the mandate at the time when Infosys is battling with the industry challenges like commoditisation of traditional services and foray into new services like digital."
2017, allegations
The case of Rajiv Bansal, CFO
Shilpa Phadnis, Infy moves Sebi to settle payout row, December 7, 2017: The Times of India
See graphic:
The case of Rajiv Bansal, CFO, Infosys
From: Shilpa Phadnis, Infy moves Sebi to settle payout row, December 7, 2017: The Times of India
Files Application With Regulator Over Alleged Disclosure Lapses In Ex-CFO Severance Pact
Infosys has submitted a settlement application with the Securities and Exchange Board of India (Sebi) following the market regulator’s inquiry into alleged inadequate disclosures and procedural lapses in the severance agreement with former CFO Rajiv Bansal.
In a filing with stock exchanges in India, US and Europe, Infosys said it wants to resolve the allegations about not seeking prior and separate approval of the nomination and remuneration committee and the audit panel of the company in relation to the severance agreement, as also relating to disclosures pertaining to the same pact, cessation of severance payments, and initiation of arbitration under the agreement.
The settlement application appears to be an effort to iron out all regulatory bottlenecks before the new CEO, Salil Parekh, takes charge in January. Infosys said the settlement application process is based on an undertaking that the company would “neither admit nor deny the finding of fact or conclusion of law”.
The issue relates to the time when Bansal was leaving the firm in 2015.
Infosys then had agreed to pay him Rs 17.38 crore as severance, the equivalent of 24 months’ pay. Subsequently, it disbursed only Rs 5 crore and halted the remaining payment on the grounds that Bansal had not stood by some of the conditions he was obliged to. Some whistleblowers had alleged that due process was not followed in the approval of the severance pay and that timely disclosures were not made. Co-founder N R Narayana Murthy highlighted these allegations at the time, and had gone so far as to say that the payment may be viewed by some as “hush money”.
Earlier this year, Bansal invoked his rights to an arbitral tribunal on the issue of the company holding back most of his severance pay.
Corporate lawyers that TOI spoke to said the settlement application would have been made under the Settlement of Administrative and Civil Proceedings Regulations of 2014. The settlement can include monetary or non-monetary terms. The former will be a minimum of Rs 2 lakh. The latter can include major actions such as voluntary suspension of certificate of registration, or closure of business for a specified period. It can also include actions like removal from management and debarment of certain individuals from acting as a partner or officer, or directions relating to internal audit and reporting requirements. The actions will take into consideration the conduct of the company during investigation, nature and impact of the alleged defaults, and the extent of amount of harm and/or loss to investors, and/or gain by the applicant.
Infosys’ investigations into the issue — conducted by third parties — found no wrongdoing. And the new Nandan Nilekani-led board has stood by the findings of the investigation.
The company said it would provide an update on the settlement application upon completion of the process.
Infy told to pay Bansal full severance pay
Arbitration Ends, Bansal To Get ₹12.17-Crore Dues
In a setback to Infosys, the company has been ordered to pay the Rs 12.17-crore outstanding severance payment to former chief financial officer (CFO) Rajiv Bansal. The order brings the curtains down on a nearly two-year long dispute and a year-long arbitration process. The severance payment was also the genesis of the conflict between some of the company’s promoters on the one hand, and former CEO Vishal Sikka and the then company’s board on the other, which eventually led to the resignations of Sikka and several board members.
Bansal will walk away with Rs 17.38 crore in severance pay — perhaps the highest such payment by India Inc. The amount itself is insignificant for a company the size of Infosys. But the company’s reputation has been brought into question.
Infosys had levelled serious charges of breach of confidentiality, including deletion of data from the company’s systems, against Bansal. It had also filed a Rs 143-crore counterclaim against Bansal for loss and damage. On these grounds, it had held back a significant portion of the severance pay.
The sole arbitrator in the case, former SC judge R V Raveendran, is said to have dismissed all these charges and rejected the counter-claim, and ruled that Bansal be paid the entire Rs 17.38 crore that was contractually due to him.
The arbitrator also ordered payment of 12% interest per annum effective January 1, 2018, and the arbitration costs.
Bansal filed a caveat petition on Tuesday in the civil court to ensure that if Infosys takes the severance pay issue to court, he will have the opportunity to be heard.
Infosys said in a statement to the stock exchanges that it will take legal advice for necessary actions to be undertaken in respect of the award. “While the award acknowledges that Infosys had bona fide disputes, its counter claim for refund of the previously paid severance amount of Rs 5.2 crore and damages has been rejected,” Infosys said.
Law firm Indus Law represented Bansal, and Nishith Desai Associates was Infosys’ counsel.
PART II: ISSUES, TRENDS
High-paid executives
2014-15: increase in the number of high-paid executives
May 24 2015
Crorepati count at Infy up from 18 to 113 in a yr
Sujit John & Shilpa Phadnis
There's been a dramatic increase in the number of crorepatis and high-paid executives in Infosys in the past year, a move that analysts ascribe to CEO Vishal Sikka's effort to align salaries with the market and stem the spate of top-level exits in the run-up to his ap pointment in August last year. As many as 113 executives drew over Rs 1 crore in total compensation in 2014-15, up from a mere 18 in the year before. And as many as 202 drew over Rs 60 lakh, compared to just 72 in 2013-14. There was a quantum jump in the compensation of many executives. Several long-serving executives who did not figure in the 2013-14 list of those earning over Rs 60 lakh, drew more than Rs 1 crore last year. Al most all executive VPs earned between Rs 3 crore and Rs 4 crore, up from an average of Rs 1.5 crore in the year before.
All the figures have been compiled from Infosys's annual reports, and a note in the latest report indicates that significant bonuses were paid to several executives in 2014-15. The Companies Act obliges firms to disclose the compensation details of every employee based in India drawing over Rs 60 lakh.Considering that several of the major new appointments that Infosys CEO Vishal Sikka has made included positions based overseas, especially in Palo Alto, US, where he himself is located, the actual number of crorepatis in the company now would be higher than that mentioned in the latest annual report.
These executives include Michael Reh, head of Finacle and Edegverve, Kaustav Mitra, VP of innovation ecosystems, Abdul Razack, head of platforms, big data and analytics, Ritika Suri, head of corporate development, Sanjay Rajagopalan, head of design and research, and Navin Budhiraja, head of architecture and technology .
Rival Wipro's annual report for the last fiscal year is yet to come out. In 2013-14, the company had 36 executives drawing over Rs 1 crore, and 114 drawing more than Rs 60 lakh. The numbers in that year were significantly higher than for Infosys, but it's likely that in the last year, Infosys has pulled way ahead of Wipro. The two companies are also comparable because they have similar overall employee strengths -Infosys has 1.76 lakh, and Wipro 1.58 lakh.
Mervyn Raphael, managing director of global human resource management consulting firm People Business, said Infosys was setting the stage for a “certain equalization.“
“They are following the 80:20 rule -about 20% of high-potential leaders who drive the organization's strategy laid out by the new CEO are paid salaries above market. It's a well thought out strategy as the company is shifting gears in an evolving IT landscape. It's a small blip in the overall cost of operations, but the returns would be much higher,“ said Raphael.
2018: the 6 highest-paid executives
It's was big paydays for some top honchos at Infosys. The company's chief financial officer MD Ranganath saw his compensation jump plus-60% during the financial year 2017-18. President Mohit Joshi saw a jump of over 50%. Wonder who are the other top-paid executives at Infosys? Read on to find out …
1. Salil Parekh, CEO, Infosys: Rs 18.6 crore
Infosys CEO Salil Parekh draws an annual salary of up to Rs 18.6 crore, including variable component.
2. MD Ranganathan, CFO, Infosys: Rs 7.9 crore in FY2018
Ranganathan's salary during the fiscal year 2017-18 grew 68% over the previous fiscal (2016-17) when he received Rs 4.7 crore. 3. Mohit Joshi, President, Infosys: Rs 10.3 crore in FY2018
Joshi's salary during the fiscal year 2017-18 grew 52% over the previous fiscal (2016-17) when he received Rs 6.8 crore.
4. Ravi Kumar, Deputy COO, Infosys: Rs 9.5 crore in FY2018
Kumar's salary during the fiscal year 2017-18 grew 36% over the previous fiscal (2016-17) when he recieved Rs 7 crore.
5. Krish Shankar, Group HR Head, Infosys: Rs 4.2 crore in FY2018
Shankar salary during the fiscal year 2017-18 grew 13% over the previous fiscal (2016-17) when he recieved Rs 3.7 crore.
6. UB Pravin Rao, COO, Infosys: Rs 8.2 crore in FY2018 Rao's salary during the fiscal year 2017-18 grew 5% over the previous fiscal (2016-17) when he recieved Rs 7.8 crore.
2018: CFO Ranganath leaves
A yr after Sikka’s departure, Infy CFO Ranganath quits, August 19, 2018: The Times of India
Exactly a year after former CEO Vishal Sikka left Infosys after a bruising public spat with the promoters, the company’s CFO MD Ranganath has abruptly resigned. This is the first major exit under current CEO Salil Parekh.
The move surprised many because Ranganath, who had been with Infosys for 18 years, was a very visible public face of the company as early as last month at its June quarter earnings call. There had been no indications then of him wanting to quit to pursue ‘opportunities outside the company’.
Ranga, as he is popularly called, was also particularly close to Infosys cofounder NR Narayana Murthy and was even seen to be in line for a Board position. The Infosys Board met on Saturday and accepted Ranganath’s resignation. The company said he would continue in his current role till November 18 and the Board would immediately commence search for the next CFO.
Ranganath’s proximity to Murthy was evident on Saturday when the latter took the unprecedented step of issuing a statement on the former’s exit, something that Murthy has not done for any top-level exit ever since he left the company in 2014.
“He is clearly one of the best CFOs in the country. His ability to take tough decisions in challenging situations, his solid financial expertise, strong value system, unfailing courtesy and flawless execution always distinguished him as a key asset for the company. He has been instrumental in raising investor confidence in the company during the last five years,” Murthy said, adding that Ranganath is everything the idea of Infosys has always stood for.
The exit was all the more surprising because it comes at a time when the company’s stock price is at a high. Ranganath had recently concluded the company’s first share buyback. It also comes at a time when the company was beginning to see some stability under CEO Parikh after the turbulent last year.
In the Infosys statement, Ranganath was quoted as saying he planned “to pursue professional opportunities in new areas”. Infosys chairman Nandan Nilekani said over the last 18 years, Ranganath had played a pivotal role in the growth of Infosys.
See also
Infosys<> TCS (Tata Consultancy Services)
