Echoes of a turbulent year marked by confrontations between its founders and a new management resonated again at the 36th annual general meeting (AGM) of Infosys Ltd on Saturday, with shareholders frequently dwelling on incidents of the past year including controversies over salaries to top executives.
The founders of Infosys Ltd, N R Narayana Murthy and others, who have locked horns with the company Board and the executive management over decisions taken in the past year, were conspicuously absent from the AGM here on Saturday.
Addressing the meeting, chairman R Seshasayee, who has been questioned by the founders for allowing the clearance of big pay hikes to CEO Vishal Sikka and COO Pravin Rao over the last year, admitted that the Board could have handled the pay hike issue better.
“Executive leadership compensation was an issue that dominated the narrative on governance. Although the CEO compensation revision that was effected in April 2016 was implemented only after 98.7 per cent of shareholders voted in favour and the COO’s compensation was effected only after 67 per cent voted in favour, in the aftermath of the criticism, the board introspected and recognised that our communication on this matter could have been better,’’ Seshasayee said.
As a result of the fracas over huge pay hikes given to the top executives of the company, Infosys Board has released a document explaining “the policy on executive compensation, the key performance indicators for variable pay and related matters on the company’s website’’, he said.
“This is the first time that Infosys has outlined a policy on executive leadership compensation in such great detail,’’ said Seshasayee, who is on the Infosys Ltd board for his final year.
He said the executive leadership compensation at the company has been changed from “a predominantly cash-based structure to a total rewards structure with a high variability linked to company performance’’.
The chairman of the Infosys Board also stated that the company had been acquitted of wrongdoing with respect to other controversial issues that dogged it over the past year like a huge Rs 17.37-crore severance package paid to former CFO Rajiv Bansal and questions raised over the acquisition of companies like Panaya and Skava by Infosys Ltd.
An external law firm which investigated former CFO Rajiv Bansal severance package has found allegations of hush money being paid to him to be baseless, Seshasayee said. Bansal has been Rs 5.2 crore and the company has disputed his claim over the balance Rs 12.17 crore and the matter is in arbitration, he said.
Seshasayee said the Board holds the founder group led by N R Narayana Murthy in great esteem but the relationship between the Board and the founders has become the subject of inaccurate media reports.
“Some recent reports suggest that the board added a risk factor in its form 20F Filing in June 17 only to send a veiled message to the founders. This is not true as this risk factor was inserted as per applicable law. When the board communicates with the founder its does so directly, cordially and respectfully,” the Infosys Ltd Board chairman told the AGM.