House­keep­ing in Times of Tre­mors

Many fear pro­mo­tions will be halted, oth­ers con­sider likely im­pact on their po­si­tions

The Economic Times - - Front Page -

Neha Alawadhi & Jochelle Men­donca

New Delhi | Bengaluru: Amid the cri­sis un­fold­ing at In­dia’s sec­ond-largest soft­ware ser­vices ex­porter, In­fosys em­ploy­ees are most fo­cussed on their own limited pay hikes, with CEO Vishal Sikka’s 55% pay rise that’s in the spot­light caus­ing some heart­burn.

The big­ger worry for se­nior em­ploy­ees is about the po­ten­tial im­pact to their po­si­tions in the com­pany in the event of a man­age­ment change.

ET spoke with sev­eral present and former In­fosys em­ploy­ees to get a sense of how they see the on­go­ing con­tro­versy around is­sues of cor­po­rate gov­er­nance un­fold­ing. In­fosys co­founder NR Narayana Murthy and other pro­mot­ers have made pub­lic their dis­con­tent with the com­pany’s man­age­ment and called for an overhaul of its board. While the em­ploy­ees seem rather dis­in­ter­ested in the larger bat­tle, there was am­ple heart­burn about Sikka’s com­pen­sa­tion that amounts to about $11 mil­lion a year from this year. Even at his 2016 salary of about $7.08 mil­lion, Sikka had the high­est ra­tio of CEO com­pen­sa­tion to me­dian em­ployee re­mu­ner­a­tion— 935.38 times the me­dian salary — among the top three In­dian IT com­pa­nies.

“Peo­ple are happy with Vishal Sikka but not with his salary,” said a Pune-based em­ployee. “In­fosys hasn’t raised visa re­quests for the sys­tem en­gi­neers and se­nior sys­tem en­gi­neers. There is a gen­eral sense that pro­mo­tions will be halted or de­layed by us­ing th­ese gov­er­nance is­sues and re­sults as an ex­cuse.”

A Bengaluru-based se­nior em­ployee said more wor­ried con­ver­sa­tions were hap­pen­ing at the level of busi­ness unit heads. “Af­ter Sikka came in, the en­vi­ron­ment changed and some peo­ple used to the tra­di­tional way of func­tion­ing did not like things chang­ing. Right now, the se­nior em­ploy­ees con­sid­ered close to Sikka are seem­ingly in a hud­dle, wor­ried about any pos­si­ble top-level changes,” she said.

Coca-Cola’s as­sess­ment of the im­pact of cur­rency swap comes about four months af­ter the In­dian gov­ern­ment with­drew bills of 500 and 1,000 ru­pee de­nom­i­na­tions overnight to help curb coun­ter­feit­ing and ex­pan­sion of a par­al­lel econ­omy that the state ar­gues be­gins with cash as the pri­mary store of value. The with­drawal of th­ese bills hurt sales of goods and ser­vices across sec­tors in the Oc­to­ber-De­cem­ber quar­ter in a coun­try where 98% of con­sumer trans­ac­tions were done in cash. “Things we saw oc­cur in the quar- ter and re­sponded to in­cluded, for in­stance, In­dia, where de­mon­eti­sa­tion im­pacted the whole CPG (con­sumer prod­ucts and goods) land­scape. Our sys­tem re­sponded quickly by fa­cil­i­tat­ing dig­i­tal pay­ments, ex­tend­ing credit to mit­i­gate de­stock­ing, and in­creas­ing our em­pha­sis on mod­ern trade,” said the CEO-des­ig­nate. In 2016, the maker of Coke and Sprite fizzy drinks and Minute Maid juices, re­ported 3% or­ganic rev­enue growth. Head­winds fac­ing Coca-Cola in­clude shift­ing con­sumer tastes and gov­ern­ments plans to tax sug­ary drinks. “I think what we need to see is some sta­bil­ias­tion, and we will be able to then come back and ex­e­cute our game plan. So I don't think that's par­tic­u­larly about re­set­ting ev­ery­thing we do in In­dia. I think it’s about work­ing through the ef­fects of this one-off de­mon­eti­sa­tion,” Quincey added.

Coca-Cola chief fi­nan­cial of­fi­cer and ex­ec­u­tive VP Kathy Waller told an­a­lysts and in­vestors that some of the prob­lems may take time to re­solve. “For ex­am­ple, in In­dia, the tough op­er­at­ing en­vi­ron­ment stem­ming from de­mon­eti­sa­tion is likely to per­sist at the start of the year be­fore grad­u­ally re­cov­er­ing,” she said.

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