Ravi Venkatesan, chairman of Bank of Baroda, former chairman of Microsoft India and an independent director in the Infosys board since 2011, has been appointed the co-chairman of Infosys. Venkatesan says he has known Infosys chairman R Seshasayee since the time he returned from the US to India twenty years ago and shares a good relationship with him. Both were then in the trucking business, Seshasayee in Ashok Leyland and Venkatesan in Tata Cummins.
Explaining Venkatesan’s appointment, Seshasayee says the Infosys board wanted greater bandwidth for itself to look at all external and internal issues. “I have been asking for this. This has nothing to do with the promoters asking for any name and I can say categorically that Ravi’s did not come from the promoters. It was the result of our own deliberations,” he says. Excerpts from an exclusive interaction with TOI:
Narayana Murthy has been talking of poor governance at Infosys. He set very high corporate governance standards, and there’s something that’s troubling him today.
Seshasayee: Clearly there are issues which have bothered him and he has talked about it, such as the compensation of the CEO and COO and induction of a board member. I have dealt with all these previously and have said that we really need to be responsible listeners to all inputs coming from all stakeholders, including the promoters. Ideally, these kinds of inputs must take place in a private space and it is certainly unfortunate that it spilled over to the public. I do not think we will gain much if these are not addressed objectively but publicly. The only time I met the press was to lay out the facts relating to these cases. Everybody has his individual judgement and is entitled for it; the best way to tackle it is to look at the issues raised and respond to them responsibly.
Do you feel let down by the promoters? The Pravin Rao compensation issue flared up after an apparent truce between the board and the founders.
Seshasayee: I cannot comment or stop any investor from making these statements in public and we will continue to be engaged. In fairness, Murthy was flagging an issue in general, was stating his beliefs on compassionate capitalism and I think it was his passion and belief that was the trigger. Each one has his own religion and beliefs.
On Rao’s issue, we have explained it previously that it has not been interpreted correctly just like the CEO’s. The fixed component of the salary has come down, the variable portion has increased, the proportion of stock option has increased in alignment with shareholders’ interest. The net hike for Pravin is only 1.4% in the first year.
Despite repeated requests to keep the matter within the company, the fight spilled out again into the public domain. Do the founders feel they are not being taken seriously?
Seshasayee: It is wrong to assume that there was a fight and then a truce. There are issues that shareholders raise, some say in investor conferences while some in public. We can look at all the issues raised and take actions when they add value to the company. Some issues, we believe, are not in the best interest of all shareholders and so we do not act on them. Our endeavour is not to get our side of the story in the public space. We have not done that and you have not heard me saying anything to engage in a battle with anybody.
Which are the targets that Sikka did not meet that led to a drop in his compensation package for 2016-17? Is the 2020 target of $20 billion revenue part of this target?
Seshasayee: The variable compensation was linked to performance. I have not come across any other company where compensation is linked to targets. And Vishal, to his eternal credit, said since he has articulated the target, he would like to hold himself accountable to this vision. It is not often that people would have that kind of courage. The 2020 target is an audacious one, an aspiration; that is the goalpost, and despite the fact it is aspirational, we must give credit to the leader who holds himself accountable to it.
Which are the targets that Sikka did not meet that led to a drop in his compensation package for 2016-17? Is the 2020 target of $20 billion revenue part of this target?
Seshasayee: The variable compensation was linked to performance. I have not come across any other company where compensation is linked to targets. And Vishal, to his eternal credit, said since he has articulated the target, he would like to hold himself accountable to this vision. It is not often that people would have that kind of courage. The 2020 target is an audacious one, an aspiration; that is the goalpost, and despite the fact it is aspirational, we must give credit to the leader who holds himself accountable to it.
Ravi, how do you see your new role? What’s your take on the issues being raised within Infosys?
When a large aeroplane is flying through a storm, a co-pilot is sometimes useful. And the pilot also needs some break. There have been two profound changes at Infosys. One is the shift in technology and business model like all other companies, and the other a transformation from a promoter-led company. One alone would be challenge enough, but two is exciting. There are far more opportunities in front of Infosys than the challenges. I believe there are good times ahead, notwithstanding the challenges. We will stay focused on what lies ahead.
