Leaders eat last: NR Narayana Murthy stresses fairness in executive pay, high governance standards

Infosys founder NR Narayana Murthy at IIM-Bangalore along with former CEO of HDFC Bank Aditya Puri.

• Murthy urges leaders to prioritize employee benefits over personal salary hikes
• Infosys founder stresses fairness, values, and broad-based wealth creation
• Murthy praises Aditya Puri as India's finest entrepreneur post-Independence

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Infosys founder NR Narayana Murthy said corporate leaders lose moral authority when they reward themselves generously while holding back salary hikes for employees, calling for restraint and fairness at the top even during challenging business cycles.

“Leaders eat last. You should be the last person to obtain benefit from the company only after every employee has gotten,” Murthy said in a fireside chat at IIM-Bangalore along with former CEO and MD of HDFC Bank Aditya Puri.

The session was moderated by M.D. Ranganath, the Chairman of Catamaran Ventures, shines a light on their leadership journeys.

Framing the issue beyond pay alone, Murthy said leaders must consistently demonstrate commitment to organisational values. “In order to keep the memory fresh of the values of the organisation, the leader has to demonstrate his or her commitment to the values from time to time,” he said.

Murthy also recalled Infosys’s early focus on broad-based wealth creation, particularly through employee stock ownership.

He said the company had distributed stock at an unprecedented scale in India, benefiting employees across levels, from support staff to managers. “The then value of the stock options that we provided was $19 billion on a market capitalization of about $60 billion. That’s almost 30% to the employee… the best peon, the best clerk, the best accountant, the best software manager, every one of them benefited a lot.”

The Infosys founder highlighted that leadership responsibility extends to safeguarding stakeholder trust, including that of minority shareholders. “A shareholder at large, a minority shareholder, he or she puts either her hard-earned money in your company and if you were to lead a profligate life and blow it up, then you’re not a great human being.”

‘India’s finest entrepreneur post-Independence’

Murthy described legendary banker Aditya Puri as “India’s finest entrepreneur post-Independence,” drawing a contrast between the paths taken by Infosys and HDFC Bank in building scale and influence.

“I call Aditya Puri India’s finest entrepreneur post-Independence,” Murthy. “Infosys focussed on revenues outside India, he succeeded in the Indian environment.”

Murthy highlighted the difference in outcomes by citing market cap: “Infosys is at $70 billion, (while) HDFC is at $180 billion,” he said.

Puri, reflecting on his early awareness of Murthy, said the Infosys founder’s reputation had travelled well beyond India. “i heard about him when I was working in Malaysia,” Puri said, adding that Murthy’s example “inspired me to come back to India.”

Further, Puri highlighted the need for values and unit level profitability. "There is no Ebidta or adjusted Ebidta. You're either profitable or you're not, he said