It’s not often that corporations have coups. But that’s what just happened at Infosys Ltd., Asia’s second-largest computer-services company and the first Indian company to list on the Nasdaq stock exchange. A public spat between the board and its founders, led by ex-chairman N.R. Narayana Murthy, ended Aug. 25 with a co-founder, Nandan Nilekani, returning as board chairman amid a spate of board exits. A week earlier, Vishal Sikka had resigned as chief executive officer, citing founder interference. It’s the second time in 10 months that India’s venerable business titans have meddled — and prevailed — on their former patches.
1. Where else has this played out?
Recall the shock coup at Tata Sons last year, when the founding-family scion, Ratan Tata, unexpectedly returned to replace Cyrus Mistry, his successor as chairman. The Tata Sons board cited a “trust deficit” for ousting Mistry and reinstating Tata.
2. What happened at Infosys?
Last year, a spat between the founders and the board spilled into the open. Murthy and other co-founders had been sparring with the board over corporate governance and executive pay. Murthy and his allies sent the board a letter questioning Sikka’s increased compensation — his total package was $6.75 million for fiscal 2017 — and severance packages for two departing executives.
3. How did matters escalate?
The clouds seemed to have lifted in February when Murthy, 71, called off his fight with the board, saying he was confident it would deal with his concerns. The storm was just getting going, in reality. The latest (and final) salvo arrived Aug. 18, when the Mint financial newspaper reported that Murthy had sent an email to advisers in which he cited independent directors as saying Sikka was more chief technology officer material than CEO material. Within hours, Sikka was gone. His resignation took many investors by surprise; Infosys lost more than $3 billion in market…