The battle between Infosys founders and the company’s management led by its Chief Executive Officer and Managing Director Vishal Sikka is far from over.
After a month's lull, co-founder Narayana Murthy, who has taken on the management over what he says are poor corporate governance standards at Infosys, has fired a fresh salvo.
The issue this time: the Infosys board, at its February 23 meeting, approved a massive pay hike to its Chief Operating Officer and Wholetime Director UB Pravin Rao -- a move that was ratified by shareholders by a postal ballot ending March 31, the company informed exchanges today.
The promoters, barring Nandan Nilekani, had abstained from voting in favour of resolution at the board’s February 23 meeting.
Murthy today sent a letter to various media outlets, saying that a 60 percent-70 percent pay hike to a top level person when compensation for most of the employees was increased by just 6 percent-8 percent was not proper.
“Those of us who have always stood for fairness in compensation and practised it, right from the day Infosys was founded, will have to demonstrate it when needed. This is a time when it is needed. Nothing more and nothing less,” Murthy wrote.
“I have always felt that every senior management person of an Indian corporation has to show self restraint in his or her compensation and perquisites. He or she has to fight for maintaining a reasonable ratio between the lowest salary and the highest salary in a corporation in a poor country like India. The board has to create a climate of opinion for such a fairness by their actions,” he added.
Murthy said that he had “lots of affection for Pravin”, who he hired in 1985 and, helped elevate him to the board upon his 2013 return after he had been “sidelined”.
“With what conscience can a decent person like Pravin (a man schooled in Infosys values for over 30 years) tell his juniors that they should work hard and make sacrifice to reduce cost and protect margin?” he asked.
Murthy and other promoters including Nandan Nilekani, S. Gopalakrishnan and SD Shibulal have over the last year fought public battles with Sikka over the high compensation paid to the top management.
Murthy has been very vocal about the difference in compensation paid to the top management and the employees and has often lamented that corporate governance standards at the company he founded have slipped.
The last to be fought – in February -- was over the Rs 23-crore severance package given to the company’s former Chief Financial Officer Rajiv Bansal when he quit the company in December 2015.
The contents of the letter, calling into question the morality of Rao’s pay hike, leave little doubt that Murthy is not hesitant in going public with a fresh showdown between the founders and the Sikka-led management.
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