BENGALURU (TIP): : Struggling IT major Infosys has recalled its founder N.R. Narayana Murthy and returned control of the company that has disappointed investors with poor earnings in the last nine quarters and losing ground to smaller rivals. Murthy, who had shed executive role seven years ago and finally retired as head of Infosys in August 2011, has been appointed Executive Chairman, replacing K.V. Kamath during whose tenure the company shares slumped 15 percent.
The current executive co-chairman S. Gopalakrishnan will be redesignated executive vice-chairman while S.D. Shibulal, who was one of the seven engineers to launch the company in 1981 by pooling together USD 250, will continue as Chief Executive Officer (CEO). Billionaire Murthy accepted a five-year term, over which period he will earn a salary of one-rupee per year and will have his son, Rohan, as his executive assistant.
Both Gopalakrishnan and Shibulal have requested that they too draw an annual compensation of 1 and the Board has accepted their requests, subject to necessary shareholder and government approvals. Describing his return as ‘very unusual’, Murthy, who will turn 67 in August, said the company was facing challenging times and his job would be to add value to Shibulal’s job with ideas. “The board has taken this step keeping in mind the challenges that the technology industry and the company faces,” Kamath said acknowledging calls from shareholders to strengthen executive leadership of the company. Under Murthy’s 19-year tenure as CEO until 2002, Infosys became the first Indian company to list on Nasdaq and grew to become an over 40,000 crore (USD 7.3 billion) enterprise.
He is returning at a time when Infosys has performed below market expectations and has struggled to retain clients in North America and Europe. The firm has over past two years losts its IT bellwether status to Tata Consultancy Services, the country’s largest software services exporter. In FY13, revenues lagged its own forecast and projected lower growth in earnings than industry during the current year.