Vishal Sikka, on the sidelines of an extraordinary general meeting on Friday where shareholders approved his appointment, said the initiatives put in place by co-founder NR Narayana Murthy and CEO SD Shibulal had started yielding results. The focus will be instead on continuing with the existing businesses and become more effective at running them.
We are confident that with the team we have in place and the recent momentum being in our favour. we see no reason to change the strategy. There is no reason to make any grand changes to the present direction that we are going, but I do see a great opportunity to augment that with a new kind of innovation, Vishal Sikka said.
The former SAP executive said he will continue to build on Infosys' deep-rooted set of culture and values. But there comes a time in the life of a company when the knowledge of the founders is replaced by processes and innovations, he added. At the EGM, a few nostalgic shareholders, however, were apprehensive of Sikka's remuneration and the fact that he will be based in the US and not Infosys headquarters in Bangalore.
Last year, I opposed a resolution on a salary of R1 to Narayana Murthy. But now, we are considering an annual salary of $5.08 million for the new incumbent. Murthy had brought us a net profit of R10,000 crore against R1. So we can predict a proportionate increase for $5 million. We will be very happy if it is done, said a shareholder.
Infosys vice-chairman Kris Gopalkrishnan said since a chunk of Infosys business came from the US (62%) and Europe (23%), Sikka being based in the US will be a good model for the company.
The annual base salary of Sikka will be $900,000 and the variable pay will be $4,180,000 ($4.18 million), Besides this, Sikka will also be entitled to receive annual grant of restricted stock units (RSUs) covering either the company equity shares or American Depository Shares (ADS) with a value of $2 million. Sikka is being appointed as CEO and managing director of Infosys for a period of five years starting August 1, 2014 till June 13, 2019.
In comparison, the highest paid CEO among the Indian IT services companies till now was N Chandrasekaran of India's largest IT services exporter, Tata Consultancy Services (TCS), with a total compensation being a little above $3 million at R18.68 crore for the 2013-14 financial year. The next highest paid executive was TK Kurien, CEO of Wipro, with a total compensation of $1.02 million for FY14.
Infosys, the country's second-largest IT services exporter, in the first quarter of FY15, recorded a 1% sequential decline in net profit in dollar terms, surprising the Street, which had projected a steeper fall in profits. The good show was on the back of higher volumes and employee utilisation rates. Infosys, which registered a net profit of $482 million during the period, was able to sustain profit margins while delivering 2% sequential revenue growth.