Updated: February 10, 2017 1:30:38 am
In the wake of reports of a stand-off between the founders and the board of directors over governance issues at the global information technology services provider Infosys Ltd, the chief executive officer of the company Vishal Sikka has asked employees at the firm to keep their focus and not be distracted by media speculation “designed to stir up gossip or rehash old rumour”. The communication from Sikka to employees on Thursday sought to project reports of the original founders of Infosys — N R Narayana Murthy, Nandan Nilekani and Kris Gopalakrishnan — raising concerns over governance of the company by the present board of directors over multiple issues including a pay hike given to Sikka last year as “eardrum buzz”.
The letter from Sikka, who was brought in as the CEO of the company in 2014 when the last of the founder CEOs stepped down from all active roles, has called for employees to stay focussed on strategy as the firm enters the second part of the fourth quarter in the current financial year.
“Let us not get distracted by media speculation that is designed to stir up gossip or rehash old rumours or speculate on the unknowns, around visas, or anything that questions our commitment to governance, integrity and values, in order to generate headlines and create, in the words of the Wire, Eardrum Buzz,’’ states the mail sent by the CEO. The comparison of media speculation to ‘Eardrum Buzz’ seems inspired by a song of British punk rock band Wire.
The mail to employees is the first reaction from the US-based CEO of Infosys to swirling reports of discontent among founders with respect to a pay hike given to Sikka last year, severance packages granted to former CFO Rajiv Bansal and two US executives, and the appointment of Union minister Jayant Sinha’s wife Punita Sinha to the board in January 2016.
The founders have remained mum officially on reports of their displeasure over happenings in the firm they founded 35 years ago. Several members of the board of Infosys did not deny the reports of the founders raising concerns but stated that they were not authorised to speak on these questions. “I am not answering any questions on Infosys. There is only one person who can answer, that is the chairman of the board,’’ said Biocon chairperson Kiran Mazumdar Shaw who has been on the Infosys board since 2014.
The chairman of the Infosys board R Sheshasayee in an official statement late on Thursday said: “The Board is fully aligned with the strategic direction of Vishal Sikka and is very appreciative of the initiatives taken by him in pursuance of this transformation’’.
Infosys on its part stated that “the issues highlighted by the media – CEO compensation, appointment of certain independent directors, and severance pay relating to former employees – are several months old, on which the company’s position has been repeatedly explained’’. “While there could be differences in views on these matters, they have been overwhelmingly approved by shareholders, wherever required, and on which due disclosures have been made,’’ the Infosys statement said.
“The members of the board are deeply engaged with the company and spend considerable time on the affairs of the company. The board has full confidence in the leadership of Seshasayee to steer this company in these challenging times,” Jeff Lehman, the senior most member of the Board said. “The independent directors have no interest other than their commitment to enable this great institution that has been assiduously built by the iconic founders to succeed,’’ Infosys said.
On Thursday the BSE took cognisance of reports of unrest in Infosys Ltd and sought clarification statement from the company. One of the issues reported to have been flagged in the company by the founders as a governance concern that was passed over by the board is the issue of remuneration to Vishal Sikka. The board in a decision taken on February 24, 2016 to reappoint Sikka as the chief executive officer from April 1, 2016 to March 31, 2021 also approved enhancement of the CEO’s package to $11 million from the previous $7.08 million under an executive employment agreement.
Sikka’s 2016 package comprised of $1 million as salary, variable performance linked pay of $3 million plus $2 million in restricted stock units and an additional $5 million as performance-based stock option. The 2014 package had comprised of $900,000 as the base salary, $4.18 million as variable pay and $2 million as one time stock compensation.
During discussions on the salary it was reportedly argued on behalf of Sikka that his cash take home in the 2016 pay package was less than what he earned during his SAP Labs days prior to Infosys. Sikka is aiming to push Infosys to earn a revenue of $20 billion by 2020 from the $10 billion range where it is located currently.
Among the other reported sources of concern were a decision to give a Rs 17.38-crore severance package to former CFO Rajiv Bansal who quit in October 2015. The Infosys leadership is said to have justified the move as necessary and keeping in line with requirements of a global company.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.