The ongoing high drama over corporate governance concerns at Infosys has left former Chief Financial Officer Rajiv Bansal poorer by a staggering Rs 12.2 crore.
The biggest casualty of the ongoing high drama over corporate governance concerns at Infosys Ltd have not been the company’s management, board members, employees, shareholders or its share price or reputation. It has been the this guy: former Chief Financial Officer Rajiv Bansal. The tussle has left him poorer by a staggering Rs 12.2 crore.
Rajiv Bansal is in news for being in the eye of the corporate governance drama, and is one of the three executives whose high salaries and severance packages have created a turmoil at Infosys, with three founders – N R Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani writing to the board last month expressing their concerns.
In a bid to quell the concerns of the investors, clients, employees and other stakeholders, the Infosys board seems to have sealed the fate on Bansal’s remaining payout, which is a major chunk of his agreed severance package.
Bansal quit Infosys in October 2015 after a 17-year stint, including four years as the Chief Financial Officer of India’s second-largest information technology company. His severance package from Infosys was agreed at Rs 17.38 crore, equalling his 24 months’ pay. For the year ending March 2015, his salary package of $770,858 at Infosys was next only to the Chief Operating Officer U B Pravin Rao and Chief Executive Officer Vishal Sikka.
However, Infosys’ non-executive Chairman R Seshasayee said that out of the agreed Rs 17.38 crore, the company decided to pay Bansal only Rs 5.2 crore later, with the remaining amount being withheld pending clarifications on the terms of the severance contract.
“The severance agreement is being administered in accordance with the contractual rights and obligations. Certain payments to Rajiv under the agreement have been suspended pending certain clarifications with regard to such rights and obligations,” the company had said earlier.
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INFOSYS CHMN: There Will Be No ‘Rajiv Bansal’ Situations Here On. R Seshasayee, Chairman, Infosys responds to CNBC-TV18’s query. pic.twitter.com/qi3kA3XHCC
— CNBC-TV18 News (@CNBCTV18News) February 13, 2017
With the board making frantic efforts to play down the whole corporate governance issue and trying to bridge any differences with the founders – specially by openly admitting that it erred in awarding such a high severance package to Bansal – it is now becoming increasingly unlikely that Bansal will ever get to see the remainder of the money, which was promised to him.
Infosys board has reinforced its position on all the issues raised and has justified all its decisions except for this one matter of Bansal’s pay, where it has sought to extend an olive branch to the unhappy founders by saying that such situations will not be repeated in future.
Seshasayee has stressed that there will be no more Rajiv Bansal-like situation at the company, as it has now formulated standardised practices and has benchmarked the severance pay packages, taking away the ‘subjectivity element’.
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Seshasayee said that Rajiv Bansal’s exit from the company was on mutually agreed upon terms as his approach to work was not aligned with CEO Vishal Sikka and the rest of the team. He further said that while the concerns raised over Bansal’s severance package were valid, the allegations of it being ‘hush money’ were deeply disturbing.
CEO Vishal Sikka also pitched in, saying that the team had chemistry issues with Bansal.
Notably, earlier last week, Bansal quit the homegrown taxi aggregator company within just over a year of joining. Bansal had joined Ola Cabs in January last year as the Chief Executive Officer, replacing Mitesh Shah. The switch to a startup after a long career at one the country’s largest companies was seen as a radical change for Bansal, as the dynamics of working in a fast-paced growth environment at an organisation in its infancy are drastically different from that at an industry bellwether.