New Infosys CEO Salil Parekh to get Rs6.5 cr; fraction of Sikka's package
04 January 2018
Infosys chief executive Salil Parekh will be paid a fixed salary of Rs6.5 crore a year and would be eligible for variable pay of Rs9.75 crore at the end of the 2018-2019 financial year year.
This is less than what Infosys was paying his predecessor Vishal Sikka, who quit the IT bellweather after three years in turmoil.
"Infosys CEO Salil Parekh will be paid a fixed salary of Rs6.5 crore. He would be eligible for variable pay of Rs9.75 crore at the end of the fiscal year," independent board member at Infosys Kiran Mazumdar Shaw said in Bangaluru.
Sikka earned $6.75 million (Rs44 crore) in FY17, which was strongly criticised by Infosys cofounder N R Narayana Murthy.
Wipro chief executive Abidali Neemuchwala is getting a little over over $2 million.
Shaw, who is part of the Infosys Nomination and Remuneration Committee (NRC), said Parekh will also receive Rs3.25 crore in restricted stock units. He will also get Rs13 crore in annual performance equity grants, she said.
The stock compensation will vest at different points over Parekh's term. He has been appointed for a 5-year term,
Parekh's employment contract also comes with a non- compete clause, Shaw said. It also specifies the amount he will be paid should he fail to meet minimum performance targets, the company decided in a postal ballot, Shaw said.
The company said in a postal ballot that Parekh will not work with named competitors for six months from the day he leaves the company. He will also not work with or for a client to whom he has rendered service for the last 12 months.
Parekh, a soft-spoken executive who was poached from global rival Capgemini, is the second non-founder CEO at Infosys.
The severance pay to Rajiv Bansal, the former CFO, which was 10 times his annual compensation, had sparked a controversy for alleged corporate governance failure, which eventually brought about the downfall of Sikka and R Seshasayee, the former chairman at Infosys.
Chairman and cofounder Nandan Nilekani's choice of Parekh, a low-profile executive who grew up the ranks at Capgemini, comes at a time when the company has struggled to grow in an environment where customers are shifting budgets towards digital projects. Infosys and its peers earn just a quarter of their revenue from digital, while the legacy traditional services business that contributes over three-fourths of revenue is seeing a massive fall as customers cut budgets and expect them to embrace automation to deliver services.
Parekh emphasised the point of reskilling in his first message to employees, pointing to the grim business environment, where there is an opportunity provided IT firms position themselves to help their clients navigate towards the shift to digital.
On Tuesday, Infosys gave a low-key welcome to Parekh, unlike the aggressive marketing exercise it undertook to welcome Sikka, hoping that he would transform the company. Parekh will be based at the Infosys headquarters in Bengaluru, unlike Sikka, who worked from Palo Alto in the US.
Pravin Rao, the interim managing director and CEO, has been redesignated as chief operating officer, stock exchange filings disclosed.