In its 36th annual general meeting (AGM), Infosys struck the right chord with shareholders, assuring them of a ₹13,000-crore capital allocation plan, and underplayed differences with its founders, but were unable to convince them about its gameplan going forward and the image beating it has taken over the last year.

Generally at Infosys AGMs, minority shareholders tend to eulogise co-founder NR Narayana Murthy and the company for good returns, coupled with decent dividends.

However, in this AGM, shareholders were visibly upset at the spat between the board and the founders, and repeatedly asked them to “settle differences” inside rather than bringing it out in the open. Sadananda Shastri, a long-time investor, called it a “year of episodes”, referring to the showdown.

Murthy and other co-founders were absent from the AGM and so were former board member TV Mohandas Pai and V Balakrishnan.

R Seshasayee, Chairman, started the proceedings, touching upon various aspects such as new shifts in technology, revised capital allocation policy, challenges like commoditisation of 65 per cent of services business, and cleared the air on corporate governance, executive compensation and severance pay to former CFO Rajiv Bansal, which was labelled as ‘hush money’ with regard to Panaya acquisition.

Seshasayee reiterated that Infosys has paid only ₹5.2 crore out of the total ₹17.37 crore as severance pay, adding that it had an external law firm look into the matter, whch gave it a clean chit.

Industry watchers Kris Lakshmikanth, CEO, Head Hunters India, said a clean chit still does not justify the value of this acquisition. “While the Panaya deal has been cleared, it has not added significant value to Infosys,” he said.

CEO Vishal Sikka made an eloquent presentation of technological forces and macroeconomic factors at play, that 11,000 jobs had been ‘released’ due to automation, revenue per full-time employee (FTE) increased by 1.2 per cent due to automation, utilisation and productivity improvements.

While Sikka may have hoped for plaudits, shareholders seemed to think differently. One of them asked what the company is going to do about the ‘released’ engineers, some asked for empathy in automation, some said this should not add to India’s unemployment problem, and one of them even asked if they could be redeployed in projects of national importance.

“The headcount reduction has also been positively messaged, demonstrating organisational agility to take timely decisions to rationalise cost base and enhance utilisation,” said Sanjoy Sen, Doctoral Research Scholar, Aston Business School.

However, some shareholders came out in support of Sikka, saying a higher compensation does not matter as long as the company continues to deliver value.

Shareholders also questioned about job losses in India, especially with Infosys planning to hire in the US. Seshasayee said there will be net addition in India. “There is no direct correlation between hiring in the US and hiring here.”

Questions on the fall in value of their shares were echoed by some of the investors. Regarding the firm’s aspirational target of achieving $20 billion by 2020, Co-Chairman Ravi Venkatesan told reporters at the sidelines that it is not achievable and the company is working on evaluating the target.

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