Infosys board member Kiran Mazumdar-Shaw has said that CEO Vishal Sikka has the backing of the company’s board of directors, and that the difference of opinion between the founders and the board is an issue of “perception”, reports Darlington Jose Hector in Bengaluru.
Talking to FE on Friday, Mazumdar-Shaw said that the board is well aligned and there is no need for anyone to come under pressure, reacting to speculation that chairman R Seshasayee was under a great deal of duress. Co-founder NR Narayana Murthy had alleged that the corporate governance standards in the IT major has dropped a few notches, in a stinging accusation.
Mazumdar-Shaw said Sikka’s annual compensation and the severance package to former chief financial officer Rajiv Bansal have created this new perception about the company but this could be sorted out soon. “Let me put it this way. Some people are used to leading a frugal lifestyle, but some others do tend to spend more. It is difficult to say what is right and what is wrong in such a scenario,” she said.
Sikka, who gets an annual package of $11 million, is also getting some flak for the use of the company jet. “It is possible that the founders have a problem with such matters. As I said, it is a matter of perception,” Mazumdar-Shaw said.
The board of directors has already said that it is appreciative of Sikka’s performance. But the fact that his compensation went up from $7 million to $11 million in one shot has not gone down well. Former board member TV Mohandas Pai has pointed out that the founders are well within their rights to question things like the heavy severance package offered to ex-CFO Bansal. “However, I do not have any interest in joining the board again,” Pai told FE.
The Infosys board has inducted director DN Prahlad into the nomination and remuneration committee that oversees the incentives and pay granted to to the top brass. The nomination committee is headed by Jeffrey Lehman, John Etchemendy, Seshasayee and Mazumdar-Shaw.
Sikka’s $11-million compensation includes $4 million in cash and $7 million in stock. The cash component has a base pay of $1 million and a $3-million performance-oriented payment. Now with the new controversy regarding corporate governance standards, the nomination committee will find it difficult to further raise the CEO’s pay. Sikka’s objective is to make Infosys a $20-billion company by FY21.