The letter sent by founders to Infosys board raising governance concerns has given rise to nagging suspicion that remote controlling of a company by former promoters may be an emerging trend in Indian corporates that are restructuring and reinventing themselves to come to terms with the new business realities.
“I fail to understand what the hullabaloo is all about,” says Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research.
“In all fairness, there is misreporting about Vishal’s compensation – per latest SEC filings while $906,923 is base salary, $6,488,727 is based on performance. This is standard industry practice and not out of the ordinary and hence deems no criticism of any sort,” he pointed out.
The founders letter to the board at Infosys points to several issues. With the letter that has been sent out with reported governance issues, while there may be some truth in what has been reported, it is critical to note that the governance issues haven’t been proved (yet) and it will be unfair to conclude on the basis of the letter that has been sent out, says Gogia.
Any organisation will have difference of issues within its current working members, leave alone with founders and the board when the former are no longer at the helm.
“Separating ownership from control is one of the long standing battles for founders and the latter raising concerns post stepping down from the helm is both correct and expected. In fact, the new management has a lot to gain from the experiences and constructive criticism by the founders. We witnessed a similar scenario at Tata Sons only recently. In a nutshell, such changes and counter actions by investors are a standard practice globally and such instances shouldn’t be blown out of proportion,” said Gogia.
To read the detailed research note on this topic by Greyhound Research, click here.