Indian software exporter Infosys Ltd. (INFY) said Saturday that it has re-appointed co-founder and former chairman NR Narayana Murthy as executive chairman of the board and additional director, with immediate effect. The company, which has been grappling with lackluster growth in revenue and profits, added that the appointment was in response to shareholder demands.
Murthy's tenure, for a period of five years, brings the industry veteran out of his two-year retirement. Murthy has served as the company's CEO from 1981 to 2002, as chairman and chief mentor from 1981 to 2011, and as chairman emeritus since August 2011. K.V. Kamath will step down as chairman of the board and take up the position of lead independent director, effective immediately.
Infosys co-founder and executive co-chairman S. Gopalakrishnan has been re-designated executive vice chairman and will primarily focus on key client relationships and broader industry issues. S.D. Shibulal, also a co-founder of the company, will continue to be the managing director and CEO.
Infosys said that Murthy's election as a director would be placed for the consideration of the company's shareholders in the annual general meeting or AGM to be held on June 15.
Subject to his election as a director at the AGM, the company's board will take up in its June 15 meeting the resolutions for convening an extraordinary general meeting within the requisite period, in order to seek shareholders' approval for appointing Murthy as executive chairman and whole-time director.
Commenting on Murthy's appointment, Kamath said, "The 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. Murthy's entrepreneurial and leadership record and the long experience he has had as a technology pioneer make him eminently qualified to lead the company and provide strategic direction at this point in time."
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."
Infosys said that during Murthy's five-year term, he will draw a token compensation of one rupee per year. The company added that its board has also accepted the requests of Gopalakrishnan and Shibulal to draw a compensation of one rupee each per year year.
In order to function more effectively, Murthy plans to create the chairman's office to assist him during his tenure and has requested the board to permit him to put together a team for this function. The team will include his son, Dr. Rohan Murty, as executive assistant. Rohan Murty has requested that he should also be paid only a token compensation of one rupee per year.
Bangalore-based Infosys, India's second-largest software exporter by sales, competes with peers Tata Consultancy Services Ltd. as well as Wipro Ltd. (WIT), in addition to Accenture Plc (ACN). The company used to previously set the industry standard for growth and profits, but has been struggling to keep pace during the past two years.
In April, Infosys reported a 4 percent decline in profit for the fourth quarter and issued a weak revenue outlook for fiscal 2014. On the other hand, Wipro reported a 17 percent increase in profit for the fourth quarter from last year, helped by double-digit revenue growth amid client additions.
INFY closed Friday's trading on the NYSE at $41.75, up $0.03 or 0.07 percent on a volume of 1.90 million shares.
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