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BW Businessworld

Grievances Galore At Infosys AGM

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Three. That's the number of years Infosys Executive Chairman N.R. Narayana Murthy said the company would take to show better results and turn an improved performance. The 32nd Annual General Body Meeting (AGM) of Infosys held in Bangalore on a windy and wet Saturday saw the company's shareholders express their opinion on a range of subjects from Murthy’s return as the Executive Chairman, the quantum of dividend paid, the acquisition policy of the company and even the parking habits of the driver of the former CFO came in for comments.

"The challenge is daunting and the task is tough, therefore the task of rebuilding a desirable Infosys will take at least 36 months, even with a high quality team and full dedication of every Infosian," said Murthy.  "In the process there will be some tough decisions that we have to take and that will result in pain as we move forward."

While Murthy spoke about the turnaround plans, a subdued and tired looking S.D. Shibulal presented about the year gone by but also admitted to Infosys specific challenges. However, the most interesting part of the AGM was when shareholders took turns to quiz, praise and criticise the management.
Picture by Bivash Banerjee
While most shareholders welcomed and praised the return of Murthy, one shareholder felt that it was a wrong move and set a bad precedent. “Now you have returned, what about after another 5 years? Also, why did you bring your son into the company? Among 120 crore people in the country wasn’t there anybody available to lead the company? Does your return reflect good on your leadership and the company?” The AGM was held at the Christ University auditorium but this aggrieved shareholder demanded why the AGM couldn’t be held in Mysore (where the company has a sprawling 325-acre campus?). “Is there a legal bar in holding AGM there? If not, why isn’t it being held in other cities?.” He also demanded to know that just like Murthy had been recalled would former CFO Mohandas Pai, now the Chairman on Manipal Universal Learning, also be recalled to the company? 

Just two years after he stepped down from a leadership role at Infosys, a company he co-founded with six others, one of Indian IT’s tech titans Narayana Murthy returned as the executive chairman of the company. K.V. Kamath, who was the chairman of Infosys, stepped down took up the role of an independent director on the board. Murthy has requested for just a token compensation of Rs 1 per year. Murthy's son Rohan Murty will be his executive assistant. In the past, Infosys founders had deliberately chosen not to involve their children in company affairs.
Read: The Return Of Mr Murthy by BW's Prosenjit Datta

Grievances Galore
Most other shareholders defended Murthy’s return saying that Infosys was a private sector, meritocratic organisation and age shouldn’t be a bar if somebody was fit and able to add value to the company.

A common grievance was about the 30 per cent dividend paid out. “The company has Rs 24,000 crore in cash and cash equivalents. If it is not being deployed for acquisition, then payout higher dividends, issue bonus shares or at least announce a buyback,” said another shareholder. A few others also expressed apprehension on the Bill in the US which is likely to limit the flexibility of Indian IT services companies in deploying their personnel. They wanted Infosys to work with Nasscom in lobbying to ensure that this bill did not impact the company.

Several of the shareholders compared Infosys performance over the last few years and contrasted it with that of TCS, Cognizant and HCL. They felt that return of Murthy was a good augury and he would work towards improving the company’s performance. Some of them said that they had not received notice of the AGM and had to depend on media to find out the date and venue. K.V. Kamath spoke to Shibulal on the dias and intervened to say that this was a serious matter and would be addressed. A shareholder who said he had travelled all the way from Pune complained that a few hundred employees of the company were seen smoking outside the company’s campus on the footpath. “How can they smoke on the footpath which is a public place. I hope company discourages this practice of the employees.”

Another shareholder said that he regularly saw the driver of the audi which ferries V. Balakrishnan the former CFO and currently the head of its India business, park the car on the footpath opposite to the company’s campus in electronics city Bangalore. “Occupying the footpath opposite to the company and impeding pedestrians, is it a right move?”.  The management including Narayana Murthy patiently heard out all the shareholders and responded to some of their concerns.

Surprisingly the AGM was relatively sparsely attended.

Twitter: (at)venkateshababu