Bengaluru: With a clutch of high-profile co- founders gunning for the Infosys board, Chairman R. Seshasayee on Monday said he has been elected by shareholders and has a job to do that he will do.
He strongly defended the hefty pay hike to CEO Vishal Sikka and the large severance packages to some former executives and said the board will continue to uphold high standards of corporate governance.
More than a week after co-founders N.R. Narayana Murthy, Nandan Nilekani and Kris Gopalakrishnan flagged what they said were corporate governance issues, Seshasayee and other board members, including CEO Vishal Sikka, addressed an hour-long press conference to clear the air.
“Shareholders and board have asked me to do a job. As long as they don’t ask me... I will do my job,” he said, adding that the Infosys management was “professionally run”. He was responding to a question on some of the former executives asking him to step down and suggestion that an interim chairman should look into concerns raised by co-founders.
Seshasayee defended Sikka’s pay package, which has been increased to $11 million from $7.08 million, saying the compensation is tied to achievement of very high levels of target. Justifying the hefty compensation of Sikka, Seshasayee said that while the compensation was raised to $11 million, the fixed component was down to $4 million from $5.08 million earlier.
On Murthy’s contention that Infosys had paid severance packages to former CFO Rajiv Bansal and general counsel David Kennedy as “hush money” to keep them from revealing Infosys secrets, the chairman said such a “suspicion” is “deeply disturbing”.
“He (Bansal) is a brilliant colleague. There were team chemistry issues with Rajiv and his exit was mutually agreed upon... He conducted his job with integrity,” Sikka said.
Stating that the company’s former CFO was finally paid about Rs 5 crore and not Rs 17 crore as agreed, Seshasayee said “taking out subjectivity and putting severance pay in contracts was a learning” from the Bansal episode.
Responding to the co-founders raising concerns, the chairman said, “Here we have some stakeholders, founders and others along with them, who have nothing other than the best interest of the organisation on their mind and obviously, there will be a lot of passion.” “It is our obligation to listen to these voices, assimilate these messages, be sensitive to these comments and calibrate our actions,” he said.
He emphasised that there is no conflict of interest and whatever battle is being talked about is media creation. “There is convergence. I don’t think there is any battle,” he said. “Governance is a collective responsibility of the board. There could be issues of perception.”
He also backed independent directors D N Prahlad and Punita Kumar Sinha, saying these appointments were made on merit. On appointment of Cyril Amarchand Mangaldas, he said the law firm was not brought in to mediate, but to give a road map on governance. On being asked if he would step down from his position as suggested by Murthy, Seshasayee said he has been elected by Infosys shareholders and the board to do a job and that he will continue to do it.
Seshasayee argued that Sikka’s pay revision was decided through a postal ballot with approval through an overwhelming majority. Quipping that Infosys does not have a corporate jet, Seshasayee sought to put to rest arguments that Sikka had billed the company for travelling with family.
“Only 8 per cent of Vishal Sikka’s travel in last few months was on chartered jets,” he added. Seshasayee urged the stakeholders to let the company focus on its operations, saying: “Because we live in a glass house, so please don’t stare at us for too long, let us get on with our business.”
Earlier in the day, Sikka had said the “drama” going on in the media is “very distracting” even as Narayana Murthy—Infosys’ longest-serving chairman —insisted that concerns over corporate governance need to be addressed “properly”.
Sikka said he has always shared a “heart-felt, warm relationship” with Murthy. Murthy, along with other co-founders, holds some 13% interest in Infosys. Some of the founders had aired concerns about Sikka’s $11 million pay and expensive severance packages for former executives Bansal and Kennedy and flagged governance issues. Infosys, on its part, has denied any governance lapses and said it has made “full disclosures” on all developments. On the issue of Infosys’ huge cash pile of $5.25 billion, the company maintained that all capital allocation policies are reviewed periodically and all options will be evaluated.