6.45 pm: Seshasayee asserts Infosys means business. He says, we live in a glasshouse and it is a huge responsibility. Please don’t stare at us for long, we have to focus on the job at hand, he says. We can’t get distracted and have to move on.
He assures that there will be no drop in Infosys' commitment to promoters, shareholders and customers. The company and its board will strive hard to maintain the gold governance standards at Infosys, he says.
6.30 pm: After explaining Sikka’s compensation, the chairman takes the bull by its horn — says concerns raised by Infosys founders over former CFO Rajiv Bansal’s severance pay are valid, but the ‘hush money’ suspicion raised is disturbing. Bansal’s severance was not ‘hush money’, he says.
Big revelation — Infosys had earlier agreed to a Rs 17.3 crore severance pay but after reviewing company practices it was decided that only Rs 5 crore be given as payout to Bansal, says Seshasayee. Next, the payout given to General Counsel David Kennedy was done as per his contract with the company, he adds.
Bansal, who quit in October 2015, was handed a Rs 17.38 crore severance package. “The severance agreement is being administered in accordance with the contractual rights and obligations. Certain payments to Rajiv under the agreement have been suspended pending certain clarifications with regard to such rights and obligations,” the company had said in a statement then.
General Counsel and Chief Compliance Officer David Kennedy left the company in December. The Bengaluru-based company had then said in a statement that "Kennedy will receive aggregate severance payments of USD 868,250 plus reimbursements for COBRA (insurance) continuation coverage over a period of 12 months," the company had said.6.20 pm: Seshasayee has defended the compensation revision of CEO Vishal Sikka’s. It was decided to get shareholder approval through postal ballot before increasing Sikka’s salary, which is an example of good governance, he said.
In October 2016, the country’s second-largest IT firm had linked Sikka’s compensation to its aim of becoming a USD 20 billion company by 2021. Sikka’s annual compensation of USD 11 million is made up of a USD 4 million fixed salary and a USD 7 million variable component which is subject to Infosys the progress it makes in achieving its targets.
“It was a postal ballot and every shareholder had an opportunity to vote. 98% of shareholders who voted, were in favour of the resolution,” Infosys had said in a statement earlier.
6.15 pm: Chairman Seshasayee has defended the appointment of DN Prahlad and Punita Sinha on Infosys board. Prahlad is well qualified to be on the board as he knows Infosys very well, the chairman said.6.10 pm: There is nothing other than best interest of organisation by founders, Seshasayee said.6.05 pm: There is no conflict of interest and instead this is a convergence of interest, says Seshasayee. He goes on to thank employees who have been undisturbed and undiverted.6.00 pm: Infosys Chairman R Seshasayee speaks to media, says it will be a long press conference. I am keen to answer as all questions, he adds. Infosys CEO Vishal Sikka present on stage.5.55 pm: The Board of Directors of Infosys have called for a press conference at 6 pm. It is expected that they will address the media on the concerns raised by the IT company's founders.3.30 pm: CEO Vishal Sikka shared with investors key performance metrics of the company and progress of the transformation at a Kotak Securities conference.In the two and half years that Sikka has been at the helm, the company’s revenues have grown from USD 8.2 billion to USD 10 billion on a LTM (last 12 months) basis, while attrition has come down from 24.2 percent to below 15 percent. Margins, too, have held on despite the challenging environment. Sikka has said that consulting business has been a disappointment, and wants to focus on improving its negative performance.Here's the story: Vishal Sikka places Infosys report card before investors12.30 pm: We've put out our story on what Infosys CEO Vishal Sikka said at the Kotak Conference this morning.Read: Drama in media is distracting, says SikkaThe video will also show up in a bit here. If you're a tech-oriented person, watch it for the pearls of wisdom Sikka offers on subjects such as artificial intelligence, quantum computing and Moore's Law.12.15 pm: The Indian Express has a nuanced take on the issue."Murthy, Nandan Nilekani, Kris Gopalakrishnan and other founders deserve all the accolades and more for turning India’s first start-up into a multi-billion dollar software company. But after handing over the baton to a professional in Sikka, it is incumbent upon and expected of the founders to give him a free hand, in order to give wing to the growth ambitions he sets for the company."Read more.12.00 pm: But on the crucial matter of capital allocation, there will likely continue to be differences of opinion between the board and the founders/ex-CFOs.In yesterday's exclusive interview, independent board member Roopa Kudva told Moneycontrol that the company's capital allocation strategy was in line with its "transformation plan".If that is anything to go by, Infosys may say no to the buyback demand raised by detractors and continue to pursue an aggressive acquisition policy.A buyback is a corporate action that is used by companies to either hike promoter stake or give part of excess cash back to shareholders. It typically tends to give share prices a temporary boost (by reducing outstanding shares, thereby boosting EPS and optically suppressing the PE ratio).But for a company that has outlined a clearly-articulated renewal strategy, is it a bit much on the part of ex-CFOs to expect Infosys to dip into its war chest or to want to dictate terms?11.50 am: ET is now reporting that the tussle at Infosys is likely to result in changes being made to the board. Analysts the newspaper spoke to feel the board is likely to appoint a co-chairman (NYU Stern professor Marti Subrahmanyam) and make DN Prahlad the head of remunerations committee.11.10 am: Infosys shares, which were up about a percent in early trade, have given back some gains after Murthy's statement to CNBC-TV18.11.00 am: Meanwhile, CNBC-TV18 has spoken to NR Narayana Murthy on reports floating around this morning indicating that a truce was in sight.Murthy clearly says he has "not withdrawn" concerns he has raised over governance but adopts a conciliatory tone with respect to how he is referring to the management."They are all good-intentioned people of high integrity but even good people make mistakes," he says. "Good leadership demands they listen to all shareholders and address concerns, take corrective action and improve governance." 10.46 am: An analyst talks about Infosys' 2020 growth plan (of achieving USD 20 billion revenues), and asks Sikka whether he feels confident of achieving it, especially given the "media noise" over its capital allocation strategy.Sikka says that the goal was always "aspirational" but adds that he is heartened by the changes that the company has witnessed.10.43 am: Meanwhile, over at the Kotak conference, an analyst addresses the elephant in the room, asks Sikka about the trouble between the board and the founders.He asks: "How is your relationship with Mr Murthy?"
Sikka's answer: "My relationship with Mr Murthy is wonderful. We meet frequently. The drama that has unfolded is frankly distracting."10.43 am: The news of a truce was broken by Bloomberg this morning. Check it out here.10.40 am: Infosys is also holding a board meeting in Mumbai at 6 pm today, where it is expected to address some of the issues raised by co-founders and its ex-CFOs Mohandas Pai and V Balakrishnan.If you want to get yourself up to speed on the charges that have been levelled at the company's board, check out the graphic we've created for this story, that neatly sums up the accusations along with the company's defence. 10.30 am: The CEO has completely side-stepped the controversy. He is delivering an amazing lecture on automation, artificial intelligence and is lucidly explaining just how the digital revolution will change people's lives, and what it means for IT companies such as Infosys. We'll try to post the exclusive video here as soon as we lay our hands on it.10.20 am: Sikka invokes Moore's Law, says advances in computers' processing speeds would lead to exponential growth for areas such as artificial intelligence, which in turn would offer plenty of business opportunities.10.15 am: He adds that the company's attrition is rate has fallen below 15 percent (from 23.4 percent) since he joined. "We are simplifying internal processes to become more agile."Sikka discusses a change that he is passionate about, says automation (led by its MANA platform) is playing a huge role in renewal of its existing business.10.10 am: Sikka has so far stayed away from touching about the Murthy controversy.He says the company has managed to keep margins steady despite the challenging environment. "Our strategic execution is starting to show success. Our sales performance has improved significantly in the last two years."10.05 am: Vishal Sikka is addressing investors at the Kotak Conference. This is the first time he is speaking publicly since the row broke out.10.00 am: Welcome to the live blog where we're tracking updates on the Infosys row. The developing story has seen a number of, well, developments over the past few days, with a number of charges being levelled and defences made.But in what appears to be a major u-turn, agencies are saying co-founder Narayana Murthy has resumed talking to the board and says company Chairman R Seshasayee enjoys the "highest integrity".The row started after Murthy and other co-founders wrote a letter to the board questioning several recent practices at the board, including the decision to pay a 24-month severance to ex-CFO Rajiv Bansal, a payout very uncharacteristic of the traditionally-conservative Infosys.Reports further said they had questioned the "profligate" lifestyle of Vishal Sikka, even as Murthy went on record saying he had no problem with the CEO.Separately, ex-CFOs Mohandas Pai and V Balakrishnan have publicly questioned the company's capital allocation strategy, asking why the company is focusing on using its ample cash reserves for acquisitions and not buybacks (a buyback would shore up share prices).But Infosys board members have so far adopted a very conciliatory tone, indicating they are willing to discuss and settle outstanding issues, with Roopa Kudva telling Moneycontrol yesterday they have learned some lessons from this episode while Kiran Mazumdar-Shaw telling CNBC-TV18 the differences were a matter of perception.
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