6 things that led to abrupt end of Vishal Sikka from Infosys as CEO
The three-year long journey of Infosys CEO Vishal Sikka came to an abrupt end when big-man send the shockwaves around of his resignation on August 18. It is believed that Vishal Sikka has his own share of problems with NR Narayan Murthy and other co-founders of the company. Earlier too, Murthy criticized Infosys over lapses in corporate governance, allegation 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. Narayan Murthy has criticised Sikka of using private charter planes for meeting clients.
2. Pay hike to Vishal Sikka.
The founders have 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 percent of promoter voted for 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 is 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.
The resignation resulted in company bleeding on NSE. With -9.97 percent dip in the value, the stocks of Infosys was down to 901.1 from 1020.85 i.e a loss of 101.75.