Moneycontrol BureauClose on the heels of the acrimonious boardroom battle at the salt-to-software conglomerate Tata group, a similar conflict seems to have taken root at software major Infosys.
Founders NR Narayana Murthy, Kris Gopalakrishnan, and Nandan Nilekani among others are learnt to have raised concerns over the governance of the company, sources told CNBC-TV18 late last evening.Read more: Infosys founders raise governance concerns with board: SourcesHere are the factors that have irked the founders and others at the second largest IT firm in the country.
- Compensation of Chief Executive Vishal Sikka, the first non-founder chief is under the radar. Starting January, Sikka’s annual compensation is USD 11 million, up from USD 7.08 million last year. But this also comes with higher component of stock options and relatively less part of the salary linked to variable pay. The current compensation has USD 3 million in fixed salary and USD 8 million variable component, subject to progress in achieving the target of becoming a USD 20 billion company by 2021.
- Questions have also been raised on the severance package of former Chief Financial Officer Rajiv Bansal, and General Counsel David Kennedy. Bansal who quit in October 2015 was handed a severance package of Rs 17.38 crore, while Kennedy was paid USD 868,250 plus reimbursements for COBRA (insurance) continuation coverage over a period of 12 months after he quit in December. Severance offered to former Executive VP Michael Reh is also under debate.
- The appointment of independent director Punita Sinha, wife of Union Minister Jayant Sinha has also raised eyebrows. Countering allegations of nepotism, Infosys in a notice had defended its decision, saying the former Senior Managing Director of Blackstone "will bring valuable perspectives to the Infosys Board".
Once considered a shining example of high corporate governance, Infosys has run into the concerns over the past few years.Shriram Subramanian, Founder and Managing Director of proxy advisory firm InGovern also raised objection on the appointment of DN Prahlad on the board as he is non-independent and NR Narayana Murthy’s relative. Subramanian told Business Standard also called Murthy’s behaviour for the last two years as being “non-transparent”.A few years ago, the management reshuffle at Infosys, when Murthy returned out of retirement to take temporary charge, also caused some consternation after his son Rohan Murty was appointed as executive assistant to the founder.
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