Murthy and Son @ Infosys: what’s the big deal?

Everything that the Indian offshoring giant Infosys does comes under intense scrutiny, especially from Indian media that has been enamored with the hi-tech sector for long. Not surprisingly, the return of Infosys’ founder and godfather of Indian offshoring lead to intense analysis in media. Comparisons include to that of Steve Jobs’ return to Apple and Michael Dell’s effort to take charge of Dell’s strategy. If there was any doubt about the move by Infosys to seek the return of its founder, it was reassured by the stock market (re: Infosys Jumps Most Since January as Billionaire MurthyReturns)

Leadership changes are bound to follow major management announcements. Not surprisingly, there has been a barrage of announcements, among which has been an interesting move by Mr. Murthy: recruiting his son to be an executive assistant to the Executive Chairman. Following that announcement are reports of Murthy junior being appointed “Vice-president” at Infosys.

Analysts and the media are torn between two school of thoughts here

• The sour grape school of thought. The thinking goes something like this: most of us have to work extra hard to survive and thrive in a crowded world of  business while a select few who happen to be born into a family with the right last name are automatically admitted to the club.
• Acceptance school of thought. Acceptance of the reality of dynasties in business and politics. The last name Bush (Wikipedia) can get you elected as a President of America, or governor of Florida just like the Gandhi name in India. Same goes for successful business dynasties scions of which have not only proudly carried the family name but also managed to outshine their fathers and forefathers.

Back when I worked for Infosys, the grandiose sounding title of VP was something the company didn't dole out to employees lightly. This said, there were scores of “Associate” VPs, many of them senior engagement and sales managers, consulting partners who were given the title. This was done generally to signal clients and others that the title holder was empowered to negotiate a proposal or sign a SoW on the company’s behalf.

I continue to closely watch the company, wearing my shareholder hat (I still happen to hold a few shares that vested from the options I received when I joined INFY nearly a decade ago). All I see here is a storm in the teacup.  The stock price has bounced nicely since Mr. NR Murthy’s return. The news of Murthy Junior coming aboard and debate over his title has barely caused the stock to budge. There is another key fact to bear in mind: The Murthy family holds nearly a 4.5% stake in the company. And Rohan Murty, himself is a significant share holder with 7,949,782 shares (1.38% stake) has a skin in the game.

As a significant individual shareholder, Rohan's voice of course counts. And if he wants to be at the forefront and ensure ROI of his investment: Sure, by all means!