Infosys ups the ante, says Nandan Nilekani voted ‘Aye’ on Vishal Sikka’s salary

By: | Updated: February 9, 2017 5:13 PM

Infosys Ltd on Thursday said that the pay hike to the CEO Vishal Sikka was approved by shareholders and was voted favourably by founder Nandan Nilekani, refuting the founders’ concerns about three executives’ high salaries and severance pay.

Infosys, Infosys news, Infosys share priceInfosys said it obtained shareholder approval before implementing CEO compensation.

Infosys Ltd on Thursday said that the pay hike to the CEO Vishal Sikka was approved by shareholders and was voted favourably by founder Nandan Nilekani, refuting the founders’ concerns about three executives’ high salaries and severance pay, ET Now reported amid the continuously unfolding high drama over corporate governance.

The company took precaution of obtaining shareholder approval before implementing CEO compensation, ET Now reported citing unidentified company sources. Nandan Nilekani, one of the three founders who have raised the concerns, had voted in favour of the CEO pay, ET Now report added.


Board room

“Entire Infosys board is aligned (with Sikka) and backs CEO,” the company sources told ET Now, further strengthening Sikka’s case in the matter.

Infosys founders N R Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani wrote to the board last month expressing their concerns over corporate governance with the board, including the quantum of salary hike given to the CEO Vishal Sikka and the size of the severance packages given to former CFO Rajiv Bansal and former General Counsel David Kennedy.

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Old guard

On its part, Infosys said that the issues raised by the founder group, including CEO compensation, are old, and have been already addressed by the board. “Issue of CEO compensation is being deliberately kept alive,” ET Now report cited the company sources as saying.

While the company board is reported be aligned with Sikka’s views, the three founders, who together have just about 13% shareholding in the company, had suggested that former board members like T V Mohandas Pai, V Balakrishnan and Marty Subramanian be brought back as directors in order to foster ‘Infosys values’.

The founders, in their letter, raised questions on certain decisions taken by the company in the last one year, feeling that the board should have been more proactive in questioning the decisions at their end.

Currently, Infosys board is led by the non-executive Chairman R Seshasayee. The founders, in their letter to the board, had said that the board should have upheld the corporate governance standards set by them. None of the original founders is on the board or in executive management position at the company.


Severed ties

Infosys further defended the severance package given to former CFO Rajiv Bansal by saying that there was no impropriety, and that the high pay was needed for amicable exit.

Bansal’s severance package amounted to Rs 17.38 crore, equalling his 24 month’s pay, Infosys said in a statement last year. In a January filing with the US market regulator, Infosys, which is also listed on Nasdaq, said former general counsel David Kennedy would receive severance payments of $868,250 and other reimbursements over 12 months.

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Flying high

Vishal Sikka, who joined Infosys as the CEO in 2014, has his compensation linked to the company’s aim of becoming a $20-billion company by 2021. Sikka’s annual compensation of $11 million is made up of a $3-million fixed salary and a $8-million variable component, which is subject to achieving the targets.

Defending Sikka’s activities even further, Infosys said that he did not use the company jet improperly, and that he paid the company the one time his family used it.

 

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