Bit­ten Once, Tech Co Tweaks Norms for Sev­er­ance Pay

Some se­nior of­fi­cials, how­ever, said to have re­fused to sign on the re­vised clause

The Economic Times - - The Infosys Saga - Our Bureau

Ben­galuru: In­fosys is said to be re­work­ing its sev­er­ance pay clause to avoid con­tro­ver­sies like the one stem­ming from the pack­age paid to for­mer CFO Ra­jiv Bansal.

A few se­nior man­age­ment of­fi­cials are said to have al­ready turned down a re­quest from the com­pany to agree to a three­month pay in case they have to leave in­vol­un­tar­ily. They have re­fused to sign on the re­vised clause in the ser­vice con­tract, mul­ti­ple sources told ET.

Ac­cord­ing to sources, the com­pany does not want the huge pay­outs given to Bansal and for­mer chief com­pli­ance of­fi­cer David Kennedy to be seen as a prece­dent for fu­ture sev­er­ance pack­ages. “There are dis­cus­sions on how to stan­dard­ise sev­er­ance pack­ages. There is a need to cre­ate a stan­dard process,” a source with knowl­edge of the dis­cus­sions told ET.

Ac­cord­ing to ex­perts, the lack of a stan­dard process could hurt the com­pany legally. “As per labour laws, a com­pany has to have a stan­dard sev­er­ance terms and con­di­tions. It is de­fined in the of­fer let­ter or in the ser­vice con­tract, and that can­not vary from em­ployee to em­ployee as per the whims of the man­age­ment,” said Hansa Sharma, chief op­er­at­ing of­fi­cer at Sim­pli­ance, a labour law com­pli­ance firm.

In­fosys did not of­fer com­ment on the story.

Ac­cord­ing to In­fosys’ fil­ings with the US Se­cu­ri­ties and Ex­change Com­mis­sion, only CEO Vishal Sikka had a clause on sev­er­ance in his con­tract. But since then, the com­pany has handed out huge sev­er­ance pack­ages of over two years' salary to Bansal and more than a year’s pay to Kennedy. The pay­ments have led to a storm at In­fosys, with the com­pany’s founders cas­ti­gat­ing the board for bad gov­er­nance prac­tices and say­ing that such large pay­outs could look like “hush money.”

In­fosys has spent nearly a year try­ing to ex­plain the out-size pay­ments to Bansal. The com­pany said it car­ried out an in­ves­ti­ga­tion at the be­hest of its au­dit com­mit­tee to specif­i­cally look into whether the pay­out was made to si­lence Bansal.

In Novem­ber, Sikka had also at­tempted to ex­plain the pay­out to ET. “In ret­ro­spect, you can ar­gue that it was larger than it should have been. It was a judg­ment that we made at the time, it was done over a two day pe­riod that was in­tense. The thing that I am com­forted by is that the com­pany has done noth­ing wrong. No­body did any­thing wrong,” he had said.

Ac­cord­ing to Infy’s fil­ings with the US SEC, only CEO Vishal Sikka has a clause on sev­er­ance in his con­tract

In­fosys work­ing on a stan­dard process for sev­er­ance pay

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