Amid the rift between the founders and board of Infosys, former Pai, who backed Infosys CEO Vishal Sikka, said the leadership is not focussed on creating shareholder value.
"I am very saddened. All of us spent a major part of our lives building up this great company, and I am very saddened by what has happened," Pai, who is not a founder but spent 17 years with the company before quitting in 2011, told PTI.
There are reports of trouble in Infosys with Murthy,
Infosys, however, in its statement, defended the pay hike to Sikka and the severance package for two former senior executives, saying all decisions were made "in the overall interest of the company".
Pai, who served as CFO from 1994 to 2006, said: "The concern is that in the last five years, the focus (of Infosys leadership) has not been there, the leadership that we built up has left for various reasons, new leadership has come in and they are still not focusing on creating shareholder value.
"There is automation coming, which they are trying to face, they have got a good CEO (in Sikka), growth rates have come down, there is uncertainty, shareholders who have put trust in the company have not seen increase in the value in the last five years," Pai added.
He cited three top reasons for "the slide". One is "lack of adequate leadership as many people left because of Murthy's focus on only founders becoming leaders and that was a mistake". Second, "not changing the business model to face automation and change in the marketplace and (the change was) slow because of the leadership flux". Third, he said, was capital allocation and lack of capital efficiency, which are hurting the company.
Further, Pai said he had confidence in CEO Sikka's leadership, but "you need a strong chairman".