iGate Patni has rolled out long-term incentive plans and retention bonuses for some senior employees of the Patni entity with the company now starting to execute joint go-to-market strategies. iGate completed its $1.22 billion acquisition of Patni Computer Systems in May this year. Long-tern incentive schemes include stock options that are linked to company milestones as well as other remuneration.
During the acquisition announcement in January this year, more than 900 of iGate’s 8,000 employees, or more than 10% of its employees, already had stock options. In comparison, less than 150 of Patni?s 16,000 employees held any such options. iGate?s CEO Phaneesh Murthy has largely followed the egalitarian approach to wealth sharing pioneered by his former employer Infosys Technologies.
Murthy had earlier told FE that he would like to see a higher degree of stability when it came to senior Patni employees such as account managers, project and delivery managers. Retention packages are a tactical way of ensuring stability in the short run.
The firm?s CFO Sujit Sircar said overall attrition in Patni has come down as well after the firm affected salary increases in April ? attrition is down to 20% from 25% earlier. ?We are much ahead of the curve in terms of integration of the firms. The protection phase ? where you protect existing resources and clients ? went off very well,? he noted.
Sircar said iGate Patni has not lost a single customer and, of the top 100 employees, it has not lost even 2%. ?The broader attrition is in check; we have done retention plans, long-term incentive plans. Even before the integration was complete, we have done a common appraisal of 26,000 employees,? he added.
Bonuses and salary hikes may have meant higher people costs but the CFO said that it is cutting corners where it can. ?We have committed $20-25 million in SG&A savings a year. There is a lot of facility consolidation and some savings because of the attrition of high cost resources. We are not terminating any one. Normal attrition will take care of people costs,? he said.
The CFO noted that the pipeline of big deals as well as big client names are looking much better post the acquisition.
?The acquisition had defocused the management for 4-5 months. Now that we are structured, the focus would shift to external things and conversion of the pipeline. We have built up our front-end strategy, our vertical strategy, the portfolios have been distributed. Structurally, we are ready for growth,? Sircar said. iGate?s methodologies are being translated into sales and account management of the joint entity. Account management teams are currently being formed for better client engagements.