Infosys CEO Vishal Sikka has received only 61% of his total compensation of $11 million for FY17, given the financial performance of the company during the course of this fiscal. Sikka has received only $6.75 million (Rs 43.2 crore) for FY17, which includes the basic salary, restricted stock units (RSUs), variable pay and stock options. Under the break-up, the Infosys CEO received $1 million of basic salary and $2 million of RSU. The biggest cut was in the variable pay where he got just $0.82 million, against the target of $3 million. Even in the stock options category, Sikka got $2.93 million as against $5 million as per the contract.
The compensation of Infosys CEO had become a sore point for founder NR Narayana Murthy, who questioned the huge differential in pay ratio of the top executives and the rest of the employees.
The contract between Infosys and Sikka on the minimum and maximum remuneration states, “Should Dr Sikka fail to achieve minimum performance targets, his remuneration as proposed will fall to $3,000,000 annually consisting of $1,000,000 of base salary and $2000,000 of time based RSUs.”
In fact, Sikka’s total compensation had increased to $11 million for FY17, compared with $7.08 million for FY16, which was a 50% jump. This made him one of the highest paid CEOs in the Indian IT fraternity. For FY16, Sikka received a total salary of Rs 48.73 crore, which included a basic salary of Rs 5.96 crore, retiral benefits of Rs 0.33 crore and bonus & incentive component includes Rs 6.29 crore.
The board of Infosys had already extended the term of Sikka till 2021, in recognition for restoring the company’s leadership in the industry and setting the goals for the next five years which are likely to be achieved. Sikka was formally appointed as CEO for a period from August 1, 2014 to June 13, 2018. The new agreement with effect from April 1, 2016 until March 31, 2021.
Sikka has laid out an ambitious goal for Infosys by 2020 to achieve a revenue of $20 billion with a operating profit margin of 30% and an average revenue per employee of $80,000. Though he has termed it as a aspiration.
Infosys COO U B Pravin Rao also recently saw an upward revision of his compensation to Rs 12.50 crore, which once again came under severe attack from Narayana Murthy. The company defended the salary increase stating that the cash component was in fact lower, while the stock portion has risen. “There has been a decrease of 10.6% in the cash component of Rao’s compensation to Rs 4.6 crore from the earlier level of Rs 5.2 crore,” Infosys had said.