Narayana Murthy cited former Infosys CFO T.A. Mohandas Pai to say that there are no such precedents in Indian corporate history of a departing CFO being paid the equivalent of "30 months' salary" as severance pay.
Commenting on the controversy provoked by Infosys founders’ concerns over the severance pay given to former Chief Financial Officer (CFO) Rajiv Bansal, Infy’s founder-chairman N.R. Narayana Murthy said on Friday that the company had previously never paid such high compensation to any other executive in possession of “highly competitive (corporate) information”.
Bansal, who resigned from the company effective December 31, 2015, was given a severance pay of Rs 23 crore.
“Certain acts of the board’s corporate governance could have been better. Several people on the Board had highly competitive information. A former chairman said at the AGM that he had highly competitive information,” Narayana Murthy told the CNN-News 18 channel in an interview.
“But we have never paid such sums earlier to CFOs. We didn’t give any severance pay earlier. Therefore, there is a little bit of consternation as to why such a huge salary was paid and on the payment made to the former legal counsel,” he said.
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“No other CFO, including Mohandas Pai, V. Balakrishnan, Ashok Vemuri or B.G. Srinivas, had been given a severance package when they quit,” he added.
Narayana Murthy cited former Infosys CFO T.A. Mohandas Pai to say that there are no such precedents in Indian corporate history of a departing CFO being paid the equivalent of “30 months’ salary” as severance pay.
“In Kannada, there is a saying that if you drink milk sitting under a toddy tree, then people will think you’re drinking toddy. To be seen to be doing the right thing…that is the issue here,” he added.
Recent reports said that Infosys co-founders Nandan Nilekani, Narayana Murthy and Kris Gopalakrishnan had written to the board raising various concerns, including the increase in salary for CEO Vishal Sikka.
Infosys had, in October last year, clarified on the payment of severance pay to Bansal that two independent investigations had not revealed any wrongdoing on the part of the company or the former CFO.