All is not well in Infosys! Amid the news of high-profile row between its CEO Vishal Sikka and a clutch of co-founders, the company had lessened the gross salary of about 45 per cent of its senior executives. It has been learned that the decision was implemented in 2015-16, according to the Indian Express report. The employees who have been getting an average salary of more than Rs 5 lakh per month and were employed throughout the last financial year had to bear the brunt, the report says. “Out of total 195 executives, which came in this salary bracket, 88 saw their gross remuneration decrease in the range of 0.45 per cent to 47.31 per cent in 2015-16, as compared with 2014-15. The information regarding gross salary of this particular category of employees was shared by the company with its shareholders — under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 — through its annual reports,” the report says.
Earlier, the founders have aired concerns about CEO Vishal Sikka’s USD 11 million pay and expensive severance packages for former executives Rajiv Bansal (CFO) and David Kennedy (General Counsel). The Indian multinational conglomerate has clarified that this fall in remuneration can be observed in 2015-16 because long-term bonuses were paid to senior executives in 2014-15. However, people from the founders’ camp have said that this data is inadequate and the true picture can come out only when the salaries of Infosys senior executives, who are working in its foreign offices, are analysed.
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“I am assuming that you have done a comparative analysis with the 2014-15 annual report and, hence, raising this question. To clarify, the remuneration of employees included in the Annual Report for 2015 included long-term bonuses paid to eligible employees for fiscal 2013, 2014 and 2015. Versus that, the remuneration reported in the 2016 annual report only has the payouts for 2016. Hence it appears to be lower,” said the Infosys spokesperson.
The Companies (Appointment and Remuneration of Managerial Personnel) Rules came into force from April 1, 2014 and, therefore, the company has disclosed the data for 2014-15 and 2015-16 only. These rules state that the board’s report must include the details of “every employee of the company” who was getting an average salary of more than five lakhs per month during the financial year.
T V Mohandas Pai told The Indian Express: “I am not sure your data is right. Pay for these people has 2 components fixed and variable. Variable depends on performance. To make a comparison please look at the total pay of these people over the last 3 years. Further, the pay of people overseas is not disclosed. Please get pay of people in US Palo Alto office over the last two years by name.”
Surya Prakash K, a senior vice president and head of global services at one of the unit of Infosys, saw the biggest decrease in his gross salary among all of 195 senior executives. His income was reduced by 47.31 per cent to Rs 1.21 crore in 2015-16. Shyam Sundar V, an associate vice-president, saw the second-highest decline in his gross remuneration. Shyam’s income was reduced to Rs 80.52 lakh in 2015-16 from Rs 1.21 crore in 2014-15.
Earlier, Infosys Chairman R Seshasayee strongly defended the managements decision on CEO Vishal Sikkas compensation and the severance package of former key executives, while emphasising that the board will continue to uphold high standards of governance. Seshasayee said he has been elected by Infosys shareholders and the board to do a job and that he will continue to do it. In the press meet, Seshasayee defended various other decisions, including those involving appointment of certain independent directors. The software major has been in the eye of a storm after some of the founders flagged concerns about governance standards that included issues like hike in Sikkas compensation and the severance pay given to former executives, Rajiv Bansal and David Kennedy.
Infosys CEO Vishal Sikka had said the “drama” going on in the media is “very distracting”, even as the firm’s longest serving chairman N R Narayana Murthy insisted concerns over corporate governance be addressed “properly.” Making his first public statement on the row that broke out after co-founders Murthy, Nandan Nilekani and Kris Gopalakrishnan wrote to Infosys Board questioning hike in CEO’s compensation and severance pay to quiting executives, Sikka said the company is based on a very strong fabric.