moneycontrol.com
Infosys 's 33rd Annual General Meeting (AGM) will be remembered for the historic change of guard at the India's second largest IT company, which has got its first external CEO. Also, this was NR Narayana Murthy's last AGM as the executive chairman.
Murthy, who first retired in 2011, was called back in June last year to head the firm and put it back on a high-growth trajectory when peers TCS and HCL Tech were outperforming Infosys.
Speaking at the AGM, Murthy thanked the shareholders for their support and welcomed ex-SAP executive Vishal Sikka into the top job. Sikka will take over as the CEO and MD of the company from August 1, 2014.
"Sikka is well-known for being a tech visionary and a great leader," Murthy told the shareholders at the AGM. He said the new CEO will chart his own goals without founder interference.
Sikka, however, was not present at the all-important AGM.
Also Read: Murthy failed to do a Steve Jobs: Now will Sikka deliver
Murthy's return has been marred by a host of executive exits, including board members Ashok Vemuri, V Balakrishnan and BG Srinivas. The selection process of the new CEO also got a lot of press.
Murthy was also criticized for breaking corporate governance rules Infosys was famous for by getting his son Rohan Murthy to assist him. Murthy had said in the past that the children of Infosys's founders should stay out of the company.
Murthy defended his decision saying he needed someone "smart and fresh" when the company called upon him to get its business back on track. Murthy said he came back to assist the board in finding a suitable CEO and stablise growth in the company.
He said the Sikka was zeroed in on after a long and tedious selection process, which second-to-none in transparency and rigour. But managers weren't the only staff leaving. Infosys's attrition rate has climbed from one of the lowest in the industry to one of the highest.
Around 19 percent of its employees left the company in the 12 months ended March 31.
Analysts say that many of the departures were part of Murthy's efforts to shake things up. In February, Murthy said most of those that have quit "were deriving high salaries and not adding value."
Investors have not been so sure. Infosys shares have plunged from last year's highs and underperformed other technology stocks. Former Infosys official Mohandas Pai attributed the exits to lack of empowered senior managers.
"Lack of empowerment of senior managers is the reason the company failed in the last three years. The people who left, they are doing extraordinarily well, wherever they are," Pai, who held the finance and HR responsibilities at Infosys said.
Despite the employee exodus, Infosys's bottom line improved under Murthy's leadership. In the nine months ended in March, profit rose 16 percent from a year earlier, while revenue measured in dollars grew 11 percent.
Also Read: Here's what experts make of Infosys' 33rd AGM
According to Murthy, employees are the biggest asset for the company. He identified a need to start a fast-track career programme and incentives for high performers. The not-so-well performing people are being moved to other tasks, he said.
Sales, which a lot of analysts feel is the biggest challenge for the IT major, will be a focus point for the company along with delivery.
Murthy said the company has improved its assessment process in hiring trainees and freshers. It is invested in creating a process to enhance quality, he promised shareholders. He said Infosys gave salary increases twice in the last 12-months.
He said is it extremely important to cut wasteful and avoidable spends. Also, he said Infosys needs to reduce expenditure on non-revenue earning people abroad. "We have started initiatives to encourage technical competence," he said.
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