Infosys rift over compensation and growth target
Indian IT behemonth's founders have questioned a 55% hike in the CEO's salary and an ambitious growth target amid an uncertain global environment
All does not seem to be right with Infosys, India’s second largest software services exporter. In addition to an uncertain global environment aggravated by US President Donald Trump’s move to curb H1B visas, there is now a dispute brewing between the company’s founders and its current management over internal governance.
According to the financial daily Business Standard the founders, led by N.R. Narayana Murthy, have questioned the revised compensation package of Chief Executive Officer (CEO) Vishal Sikka as well as recent severance packages for top executives.
They have also raised questions about how exactly the IT behemoth aims to achieve its goal of becoming a US$20 billion company by 2020. Last month, Murthy, along with two other founders – Nandan Nilekani and Kris Gopalakrishnan – raised these concerns with the board. The current projections, the newspaper said, were contrary to how Murthy built the company according to a mantra of “under promise, over deliver.”
Sikka’s salary was revised to US$11 million in 2017, up from US$7.08 million in 2016, a 55% increase, while average salary hikes in the company were between 6% and 8%. High severance packages for departing top executives including CFO Rajiv Bansal and legal counsel David Kennedy also irked the founders.
Another financial daily, the Economic Times, quoted sources as saying that Baburaj Pillai,a prominent investor who heads Singapore-based Arohi Capital, was attempting to patch up differences in the boardroom. Pillai is reportedly in touch with both camps and working towards an amicable solution.
Some founders were also upset with the appointment of Punita Kumar-Sinha, an investment banker and the wife of the government minister Jayant Sinha, as an independent director, the Economic Times added.
Analysts feel the situation can be resolved, however. “This isn’t like the Tata case,” Shriram Subramanian, MD of shareholder advisory firm InGovern, told ET. However, he added that the company would have to be more transparent about its decisions in future.