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  1. Infosys shares drag even as company tries to allay corporate governance fears

Infosys shares drag even as company tries to allay corporate governance fears

Infosys Ltd shares remain under heavy pressure on reports that the company founders have raised concerns over corporate governance with the board, including the quantum of salary hike given to CEO Vishal Sikka and the size of the severance packages given to two former executives.

By: | Published: February 8, 2017 12:30 PM
Infosys, Infosys Ltd, Vishal Sikka, MArgins, Change in Margins, World Economic Forum, World Economic Forum 2017, H1B visas, Donald Trump, artificial intelligence Infosys said that it had already addressed concerns about executive pay and had taken bona fide decisions in the interest of the company. (Image: PTI)

Infosys Ltd shares remain under heavy pressure on reports that the company founders have raised concerns over corporate governance with the board, including the quantum of salary hike given to CEO Vishal Sikka and the size of the severance packages given to two former executives.

Infosys shares fell sharply amid lacklustre broader markets, and were trading down 0.92% at Rs 936.1, after falling to the day’s low of Rs 933.3. BSE Sensex was down 0.1% at 28,306.05 points, while NSE Nifty was down 0.01% at 8,767 points, as investors wait and watch for the RBI’s monetary and credit policy due later today.

Don’t worry
On its part, Infosys said that it had already addressed concerns about executive pay, Reuters reported. Infosys founders NR Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani wrote to the board last month expressing their concerns on pay rise and severance packages, CNBC TV18 reported this morning citing unidentified sources.

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Infosys, India’s second largest information technology services company, said “all decisions have been made bona fide in the overall interest of the company” and that full disclosures had already been made, Reuters reported citing the company’s comments to its queries.

Payday
Former chief financial officer Rajiv 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.

CNBC TV18 said that Infosys had linked CEO Vishal Sikka’s compensation to the company’s aim of becoming a $20-billion company by 2021.

On board
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.

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CNBC TV18 also reported that the Infosys board and Sikka have alignment in their views, adding that the concern about Sikka’s compensation were misplaced.

“…The hike is more in optics. Besides, 98% of Infosys shareholders were in favour of the move to revise Sikka’s compensation structure,” the CNBC TV18 report said.

 

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