Before the invention of the word wide web in 1989, and before outsourcing became a mantra in the economy, seven Indian engineers co-founded Infosys in 1981with an initial capital of $250. The technology sector was still taking baby steps in its transition from analogue to digital, but what was then a risky gamble turned out to be a sweepstake.
The value of the company has grown manifold, and so has its brand equity. However, corporate governance at India's home-grown multinational has come under the scanner with N.R. Narayana Murthy and other co-founders crossing swords with the board of directors.
Vishal Sikka, the first non-founder CEO of Infosys, stepped down on Friday, three years after receiving the baton from S.D. Shibulal. Mr. Sikka, who was formerly with German software company SAP, quit blaming the antagonistic views on his leadership from the founders, causing "a stream of distractions and disruption."
Here is timeline of events from the genesis of the Bangalore-based IT behemoth, to how Mr. Sikka's resignation has left behind an onerous situation for both directors as well as investors.
1981 - Infosys is established by N. R. Narayana Murthy and six engineers in Pune, India, with an initial capital of US$ 250. The company strikes its first outsourcing contract with Data Basics Corporation, New York.
1983 - Relocates corporate office to Bangalore.
1987 - Opens first off-shore office in Boston, U.S.A
1993 - Introduces Employee Stock Options (ESOP) programme, and also takes the plunge with an Initial Public Offering (IPO).
1994 - Corporate headquarters shifted to new campus in Electronics City, Bangalore.
1995 - Forays into the European market by opening an office in the U.K. Global development centres are also set-up in Toronto and Mangalore.
1996 - Infosys Foundation, the Corporate Social Responsibility (CSR) wing, is established.
1998 - Starts Enterprise Solutions (packaged applications) practice.
1999 - Touches revenue of $100 million, and subsequently goes public in the U.S with a listing on NASDAQ. Infosys Business Consulting Services is launched.
2000 - Revenue doubles in the span of a year, touching $200 million.
2001 - Narayana Murthy is rated among Time Magazine/CNN's 25 most influential businessmen in the world. Rated best employer by Business World/Hewitt.
2002 - Nandan Nilekani takes over as CEO from Narayana Murthy.
2004 - Annual revenue touches $1 billion for the first time. Infosys Consulting Inc. is launched.
2006 - Riding on the demand for outsourcing, annual revenue doubles to $2 billion in 23 months. It had taken the company 23 years to get to the first billion in revenues. Narayana Murthy retires on turning 60. He continues as Chairman and Chief Mentor of Infosys.
2007 - Kris Gopalakrishnan takes over as CEO. Mr. Nilekani is appointed Co-Chairman of the Board of Directors.
2010 - Infosys crosses $5 billion revenue mark.
2011 - A boardroom reshuffle sees Narayana Murthy hand over chairmanship to K.V. Kamath while S.D. Shibulal, the incumbent COO, takes over as the CEO and MD from Kris Gopalakrishnan. Narayana Murthy becomes Chairman Emeritus.
2012 - Forbes ranks Infosys amongst the most innovative companies.
2014 - Vishal Sikka replaces Mr. Shibulal as the first non co-founder CEO. The board of directors hike the dividend pay-out ratio to up to 40% of post-tax profits. Four of the company's co-founders sell shares worth $1.1 billion, cashing in on gains accrued after the stock value surged 20% since Mr. Sikka’s appointment. In December 2014, the company gifts Apple iPhone 6s smartphones to top 3,000 employees in a bid to curb the high rates of attrition in the software industry.
2015 - Infosys acquires Panaya Inc., Skava and Noah Consulting LLC. The company pledges $250 million to its 'Innovate in India' fund to foster fledgling start-ups. In February 2015, the Infosys board more than doubles Mr. Sikka's compensation to $11 million. Rajeev Bansal, CFO, resigns to join cab-aggregator, Ola. His severance pay is set at ₹23.02 crore.
2016 - Annual revenue touches $10 billion.
Infosys Foundation USA collaborates with National Science Foundation and DonorsChoose.org to chart a public-private-community model for promoting computer science education, and digital literacy.
In a board meeting, only 23.57% votes are cast in favour of Mr. Sikka remaining as CEO. Mr. Bansal's disproportionately high severance pay is questioned by market analysts. In September 2016, Infosys announces the cessation of the release of the residual amount of ₹17.38 crore in Mr. Bansal's severance package, after the founders expressed displeasure at how the situation was handled.
2017 - In an interview, Narayana Murthy makes excoriating remarks on what he perceived as a crisis in corporate governance. He also said that the company was accountable to its stakeholders and that the hefty pay cheque handed to Bansal would raise the question of whether it was hush money to hide something.
Narayana Murthy also criticises the salary hike given to the present COO, U.B. Pravin Rao. Shortly thereafter, an anonymous letter sent to the Securities and Exchange Board of India (SEBI) and the US Securities and Exchange Commission alleges that the Panaya acquisition was overvalued. It went on to say that some senior Infosys executives had benefited from the deal.
Mr. Bansal, the then CFO was opposed to the takeover bid. In July 2017, Ritika Suri, an executive vice-president at Infosys, who was in charge of mergers and acquisitions, and led the Panaya deal, resigns. On August 18, Mr. Sikka resigns, citing the distraction caused by persistent attacks from Narayana Murthy, and how it had a negative impact on the company's efforts at corporate restructuring, and also technological innovation.
Mr. Sikka's departure had an immediate impact on the company's stock at the bourses with share value plummeting 9.6% to ₹923.10.
