Corporate governance research and advisory firm InGovern on Monday put question marks on Infosys’ handling of the separation of its General Counsel and chief compliance officer David Kennedy.
“If an employee voluntarily resigns from the company, there is no logic of paying a severance package by the company. Also, in such cases the employee has to serve a notice period before leaving the company. Mr Kennedy is being paid a severance pay and is also not serving any notice period in the company, which makes it clear that his service has been terminated by Infosys,” InGovern noted in a corporate governance alert, adding that the company should reveal the real reason behind Kennedy’s termination.
In a release to stock exhanges on Sunday, Infosys had said that Kennedy’s employment with the company had ceased on December 31 on mutually agreed upon terms and that he was being paid a severance package of $8,68,250 plus reimbursements. According to InGovern, the sudden departure of a senior executive like Kennedy, who’s also on the board of a couple of the company’s subsidiaries, “may have been triggered by an event that may have material consequences on the company” and hence it should come out with the real reasons.
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According to InGovern, Kennedy was included in the list of Key Managerial Personnel (KMP) by the company’s audit committee in October 2016 and his annual remuneration was increased to $1.03 million. “His departure, only within two months of being given a revision in pay, is surprising,” InGovern observed. The advisory firm’s founder Shriram Subramanian added that Infosys had paid a fat severance package to even the then CFO Rajiv Bansal who had ‘resigned’ in 2015 and investors should question such practices of the company and the basis for calculating Kennedy’s severance pay.
In response to a query regarding the same, an official statement from Infosys said, “It is a mutual separation as mentioned in the statement. We won’t be able to give a break-up of the package.”