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Infosys CEO, Vishal Sikka’s statement on Pravin Rao's salary hike

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2017-04-06 Silicon Review

The spat at Infosys is no longer hidden from public and is expected to stretch further. The issue between the founders of Infosys and its board of directors is flaming up ahead of a vital meeting to be held in coming weeks where a series of controversial issues are expected to be come out. As India's second largest software services company clash in-house chaos and global headwinds that pose a serious challenge to the outsourcing industry. The board meeting which is scheduled for two days will be held on April 12 and 13.

In a thorough refutation related to the proposed pay hike for chief operating officer Pravin Rao following the criticism by founder NR Narayana Murthy, the company issued statement saying that said it had abridged his fixed pay while making a change by increasing variable pay based on his performance.

"It is essential for us to see that this revision in his compensation, as with several of our senior leadership team, is focused on making Infosys more competitive, is benchmarked against peers," said CEO Vishal Sikka in a statement.

"(It) is critical for us to retain key talent and align the long-term interests of our leadership team with that of our shareholders," he said.

As per the company, the stock which was given to Rao comes with a vesting period of four years. As a result, the net increase in his compensation for fiscal 2018 will be 1.4% which could go up to 33.4% in the fourth year, assuming that the alike grants are made in subsequent years.

Murthy criticized the pay hike being issued to Rao in an open letter to the reporters, saying the quantum of the pay-hike had proposed — nearly 60% to 70% increase — would crumble the trust of the rank-and-file employees. Immediately on the next day, the company said that the cash section of Rao's salary, including annual cash bonus, has fallen 10.6% to Rs 4.6 crore from Rs 5.2 crore earlier while the performance-based part, directly associated to the individual performance is increased 63% from 45% of the whole compensation.

 

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