Infosys CEO’s salary package cut by 45%
bengaluru — In a bid to avoid criticism of high pay to its top official, global software major Infosys has said it will pay its new CEO and managing director Salil S. Parekh ₹162.5 million salary per annum.
In a regulatory filing on the BSE, the company said in addition to ₹65 million fixed pay and ₹97.5 million variable pay, Parekh would get its restricted stock units (RSUs) or shares (₹5 face value) equivalent to ₹32.5 million as annual equity grant and annual performance equity grant worth ₹130 million, taking the total package to ₹325 million ($5 million) per annum for five years.
Parekh’s overall annual compensation ($5 million) is 45 per cent less than the $11.26 million (₹730 crore) the company paid to Vishal Sikka per annum during his threeyear tenure from August 1, 2014, to August 24, 2017.
Infosys founder N.R. Narayana Murthy had severely criticised the company for paying such high compensation to Sikka, saying pay for top executives should be moderate.
Sikka’s compensation included a fixed annual salary of $5.08 million, variable pay of $4.18 million and stock options worth $2 million.
“The compensation for Parekh is subject to approval of the board’s special resolution by the company’s shareholders through postal ballot and electronic voting by February 20,” said the filing.
The resolution also sought the investors’ approval for Parekh’s appointment as the CEO and MD and additional director on the board from January 2, 2018, to January 1, 2023.
In addition to salary and stock options, Parekh will get health and life insurance as applicable to his executive post.
“Compensation benefits will include paid vacation, travel and entertainment expenses as applicable to the company’s executive,” added the filing.
As the variable pay (₹97.5 million) will be applicable from April 1, the company will pay Parekh ₹240 million from January 2 to March 31 of this fiscal (2017-18) as initial variable pay.
“The variable pay will be payable to Parekh subject to the company’s achievement of certain milestones determined by the board or its committee from time to time,” noted the filing.
Parekh will also be given a onetime equity grant of RSUs having a value equal to ₹97.5 million in two installments of 50 per cent each on the first anniversary of the grant date and its second anniversary.
According to other terms of the appointment resolution, Parekh’s five-year term has an option of renewing it for three more years subject to the shareholders’ approval.
“Parekh, 53, will retire upon attaining the age of 60 years,” added the filing.
In the event of leaving the company during the tenure, Parekh or Infosys has to give a three-month notice. Parekh joined the citybased outsourcing firm on Tuesday after the board appointed him on December 2.
A veteran in the software industry, Parekh is the second nonfounder executive of the $10 billion firm after the exit of the first non-promoter CEO Sikka in August following a spat with its cofounders over governance issues last year.