India just witnessed one of the most acrimonious corporate boardroom battle between the Tatas and the group's ousted chairman Cyrus Mistry in recent times, which grabbed the media attention for past few months. It seems, yet another giant could be heading for a somewhat similar situation.
The company in question this time is one of the India's largest software outsourcing giants Infosys. According to a report by CNBC-TV18, founders NR Narayana Murthy, Kris Gopalakrishnan, and Nandan Nilekani, among others, have raised concerns over the governance of the company.
Among various issues that have irked the founders is the steep hike in the compensation of Infosys' first non-founder CEO Vishal Sikka announced last year, the report said. For the current year, his yearly compensation has been fixed at $11 million, sharply higher than $7.08 million in 2016. The salary has $3 million in fixed salary and $8 million as variable component.
These components are directly linked to steep goals being set by Sikka for the company. The CEO has set a target of achieving $20 billion revenue against the current $10 billion revenue, 30 percent in operating margin and $80,000 in revenue per employee by 2021, said a report in The Times of India.
Further, the founders, who continue to hold 12.75 percent in Infosys, have raised questions also about the severance package of former Chief Financial Officer Rajiv Bansal and General Counsel David Kennedy.
Infosys gave a severance package of Rs 17.38 crore to Bansal, who quit the company in October 2015, and paid $868,250 plus reimbursements to Kennedy following his decision to quit in December. The founders have also raised question over the severage offered to former executive VP Michael Reh.
The third objection is the company's decision to hire Punita Sinha, wife of Union Minister Jayant Sinha, as the independent director. However, the board has stated that Sinha has the requisite qualification for the job.
According to the ToI report, a spokesman for Infosys said all decisions taken by the company were bona fide and backed by appropriate disclosures.
Asked for comment on the report, Infosys said "all decisions have been made bonafide in the overall interest of the company" and that full disclosures had already been made, a Reutersreport said.
Murthy declined to comment when contacted by Reuters on Tuesday, while Nilekani and Gopalakrishnan were not immediately reachable, the Reuters report added.
Published Date: Feb 08, 2017 01:31 pm | Updated Date: Feb 08, 2017 01:53 pm