Shareholders hailed Murthy as the Don Bradman and Visvesvaraya of the IT industry.

Shareholders hailed Murthy as the Don Bradman and Visvesvaraya of the IT industry.

Anshul Dhamija & Shilpa Phadnis, TNN | Jun 17, 2013, 10.57 AM IST

BANGALORE: It was paeans and poetry at Infosys's 32nd annual general meeting held in Bangalore on Saturday. And it kept everybody in good humour. The signature IPL saxophone tune played in the background welcoming NR Narayana Murthy back to his home turf nearly two years after he resigned from the company. Shareholders hailed Murthy as the Don Bradman and Visvesvaraya of the IT industry. Some called him a messiah of good tidings. 

Gundu Rao, a shareholder, said, "We are so happy that NRN is back. When he said thatInfosys was his second child, it is expected of parents to handhold their children for sometime, if they find that their child is in a bit of difficulty. 

And this is nothing unusual in our Indian ethos." Jagadeep D, an employee with Canara Bank, who along with his wife holds 40 shares in Infosys, said that he was overwhelmed with the news of NRN making a comeback. 

"In the last two to three years the company has faltered on growth. When news of Cognizant overtaking Infosys came, there was a clear indication that Infosys was facing some drawbacks and a certain lacuna had been created." 

Hanif Sheikh, a shareholder who had come from Pune, said, "Even though Murthy is 67 chronologically, biologically he's 47. JRD Tata retired at 87, and recently Ratan Tata retired at 75. So NRN is good enough to continue for another 10 to 15 more years." 

But many shareholders were disappointed with the company for its dividend payout of Rs 42 per share for the year, which fell short of last year's Rs 47 per share. 

A shareholder said Infosys's payout traditionally is around 30 % of its net profit compared to 90 % in some other companies. TCS, one said, pays more than Infosys. Shareholders complained that the company had been sitting on cash and not giving bonus shares for the past ten years, nor considering a stock split after 2005. 

Some asked the company's board to consider increasing the dividend payout to 50% of net profit. The company's CFO Rajiv Bansal said that as a policy the company's divided payout does not exceed 30 % of net profit. 

Thirty-year-old software engineer and shareholder Neel questioned whether NRN bringing his son Rohan Murty as executive assistant (EA) was an exception and if other board members could bring in family members as EAs. The question was not answered. 

The 32nd AGM saw 383 shareholders in attendance with 86 shareholders being represented through proxy votes. 

(With inputs from Asfiya Faisal)

Infosys brings back N. R. Narayana Murthy as exective chairman

N. R. Narayana Murthy has been reappointed as the executive chairman of the board. Photo: Mint
Live Mint :Pankaj Mishra : Sat, Jun 01 2013. 11 43 AM IST

Narayana Murthy’s son Rohan Murthy too would join the company as his executive assistant

Bangalore: Nearly seven years after he stepped down from all executive roles at Infosys Ltd., the company’s iconic founder N. R. Narayana Murthy has been reappointed as the executive chairman of the board, replacing the new leadership led by ICICI Bank Ltdchairman K. V. Kamath put in place in August 2011 that failed to help the company regain its bellwether status in India’s $108 billion information technology industry.

“This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility. I am grateful to Mr. K V Kamath—the chairman, the board, and every Infoscion for giving me this opportunity. I intend to do my best to add value to the Company in this challenging situation,” Narayana Murthy said in a statement.

The Board will take up in its meeting on 15 June 2013, the resolutions for convening an extraordinary general meeting within the requisite period, in order to seek approval from the shareholders for appointing him as the executive chairman and whole-time director for a period of five years commencing on 1 June 2013, Infosys said in a statement. During his five year term, Narayana Murthy would draw a token compensation of Rs.1 per year.

Founded in 1981 by Narayana Murthy and six others, including Nandan Nilekani, S. Gopalakrishnan andS. D. Shibulal, Infosys was considered the bellwether of India’s $108 billion information technology (IT) sector until three years ago.

In the past two years, the company has missed its revenue and profit growth forecasts several times and has been overtaken by Cognizant Technology Solutions Corp. in annual revenue. It also pursued the new 3.0 strategy doggedly in an environment when outsourcing customers are only looking to save costs.

Last year, Infosys missed the lower end of its revenue forecast at least twice and stopped giving quarterly forecasts. The sluggish growth rates and increasingly impatient investors prompted Infosys to re-examine its strategy and it started cutting prices for select clients. The company also entered into revenue-sharing agreements with companies such as IPsoft Inc. to drive up business volumes, even at the cost of margins.

In an interview with Mint on 7 May Narayana Murthy had denied any plans to come back at Infosys, but added that it’s “difficult to predict what will happen tomorrow”. Narayana Murthy, 66, who served as chief executive officer (CEO) from 1981 to 2002 and as chairman from 2002 to 2011, said he has no immediate plans to do so.

“At this stage, looking at the data that I have, I wouldn’t say that. So, who knows what happens in the future, I am not gone, cannot say what I will do tomorrow, I may not be there tomorrow morning. So, it is not possible for me to predict what will happen tomorrow,” Narayana Murthy had said.

“The Board has taken this step keeping in mind the challenges that the technology industry and the company faces and in the interest of all stakeholders, particularly shareholders large and small, who have asked for strengthening of the executive leadership during this challenging time. Narayana Murthy’s entrepreneurial and leadership record and the long experience he has had as a technology pioneer makes him eminently qualified to lead the company and provide strategic direction at this point in time,” said Kamath.

The challenge for the Infosys board is to ensure that the company does not become an outlier in an industry where top firms including Tata Consultancy Services Ltd, HCL Technologies Ltd and Cognizant continue to gain market share in the same industry, serving similar customers.

Experts had raised questions about the Infosys 3.0 strategy being pursued by CEO Shibulal.

Experts such as Partha Iyengar, who heads research at Gartner Inc.’s India office, said recently Infosys’s pessimistic stance at the beginning of the year is a cause for concern and it’s time the board gets aggressive.

“If you’re in a position of strength and you’re making changes, then it’s alright. But when your position is weak, you should not be making drastic changes. They made those changes at a time when they came to the realization that the market doesn’t see them at a premium,” said Iyengar.

In another significant departure from the rules imposed by Narayana Murthy himself, the company said his son Rohan Murthy too would join the company.

In order to function more effectively Narayana Murthy intends to create the chairman’s office to assist him during his tenure and has requested the board to permit him to put together a team for this function. The team will include his son, Rohan Murthy, as Narayana Murthy’s executive assistant, Infosys said in a statement.

If appointed, Rohan Murthy’s term as executive assistant to the chairman would be co-terminus with that of Narayana Murthy. Rohan Murthy has requested that he should also be paid only a token compensation of Rs.1 per year, the company added.

B T ;BT Online Bureau       Last Updated: June 1, 2013  | 12:10 IST

Infosys on Saturday announced that the company has appointed NR Narayana Murthy into the board and executive leadership of the company. The company said in a press release that Murthy has been appointed Executive Chairman of the Board and Additional director with effect from June 1, 2013.

K.V.Kamath would step down from his position as chairman of the board and take up position of lead Independent director effective June 1, 2013.

S Gopalakrishnan would be re-designated Executive vice chairman effective June 1, 2013 and would primarily focus on key client relationships and broader industry issues. S D Shibulal would continue to be the Managing Director and CEO.

Murthy's appointment as a director would be placed for the consideration of the company's shareholders in the Annual General Meeting (AGM) on June 15, 2013. Subject to his election as a director at the AGM, the board will take up in its meeting on June 15, 2013, the resolutions for convening an extraordinary general meeting within the requisite period, in order to seek approval from the shareholders for appointing him as the Executive Chairman and Whole-time Director for a period of five years commencing on June 1, 2013.

N R Narayana Murthy said, "This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility. I am grateful to K V Kamath - the Chairman, the Board, and every Infoscion for giving me this opportunity. I intend to do my best to add value to the Company in this challenging situation."

During his five year teunre, Murthy would draw a token compensation of Rupee One per year. 

The press release further said, "In order to function more effectively, Narayana Murthy intends to create the Chairman's office to assist him during his tenure and has requested the Board to permit him to put together a team for this function. The team will include his son, Rohan Murty, as Narayana Murthy's executive assistant."

Business Today in its Feb 1, 2013 edition and cover story 'Is Infosys missing Narayana Murthy?' had reported that Infosys, a company that grew from a seven man start-up in 1981 to the 155,629 person, $7 billion enterprise it is today, has time and again been called India's most admired and respected company. But its halo has dimmed.

An internal restructuring, a leadership vacuum, complacency towards customers, rigid contracting terms, and a stubborn high-margin pricing model have made recording growth at Infosys as difficult as walking on wet tar. So much so, the company is now struggling to beat even the average industry growth rates. Its bigger rival, Tata Consultancy Services (TCS), has pulled away and widened its revenue lead by about $3 billion, while third-placed Cognizant has already overtaken Infosys in terms of quarterly revenues in the June and September quarters of 2012.