Bangalore, Jun 1: In a dramatic development, the country's second largest software services major Infosys today re-appointed N R Narayana Murthy as its executive chairman with immediate effect to put the company back on high growth path.
At a meeting held here earlier in the day, the Board approved appointment Murthy, who will turn 67 in August, as Executive Chairman and Additional Director with effect from June 1, 2013, the city-headquartered NASDAQ-listed firm said in a statement.
Veteran banker K V Kamath would step down from his position as Chairman of the Board and take up the position of Lead Independent Director effective June 1, 2013.
“...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,” Kamath said.
“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,” he said.
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 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.”
The statement said, subject to his election as a director at the AGM, the Board will take up in its meeting on June 15, the resolutions for convening an extraordinary general meeting within the requisite period.
This is in order to seek approval from shareholders for appointing Murthy as executive chairman and whole-time director for a period of five years commencing today.
The re-shuffle also marks the entry of the next generation of Infosys founder with Murthy's son, Rohan, joining the over USD 7 billion firm as his father's executive assistant.
Murthy intends to create the Chairman's office to assist him during his tenure to function more effectively and has requested the Board to permit him to put together a team, which will include Rohan, the statement said.
Global uncertainties have impacted performance of Infosys. Often considered a bellwether for the sector, Infosys has given lower-than-expected revenue guidance of 6-10 per cent growth.
This is less than industry body Nasscom's estimate of 12-14 per cent growth for the Indian software services industry in FY2013-14.
S Gopalakrishnan, who was serving as the Executive Chairman, would be re-designated Executive Vice Chairman and would primarily focus on key client relationships and broader industry issues, the Infosys statement said.
S D Shibulal would continue to be the Managing Director and CEO of the company, it said.
In August 2011, Kamath was appointed Chairman, succeeding Murthy, who was made the Chairman Emeritus post his retirement. Also, the then CEO and MD S Gopalakrishnan (Kris) was elevated as the executive co-chairman, while COO S D Shibulal filled in Kris' position.
During his term, Murthy would draw a token compensation of Re 1 per year.
Both Gopalakrishnan and Shibulal have requested that they too draw an annual compensation of Re 1 and the Board has accepted their requests, subject to necessary shareholder and government approvals.
On his appointment being confirmed, Rohan Murthy's term as Executive Assistant to the Chairman would be co-terminus with that of Narayana Murthy. Rohan has requested that he should also be paid only a token compensation of Re 1 per year.
Murthy, along with six fellow software engineers, established Infosys with about USD 250 in 1981. In the last 30 years, they have made it one of the most respected names in the software outsourcing sector.