Infosys CEO Salil Parekh to be paid up to Rs17.3 crore in first year
Bengaluru: Infosys Ltd’s new chief executive officer (CEO) Salil Parekh has been given a Rs9.75 crore joining bonus and could earn up to Rs17.3 crore in the first year. His earnings could possibly double to Rs35.25 crore in the year ended March 2021, provided the former Capgemini executive steers the company well.
Parekh, who took over on 2 January for a period of five years, could earn up to Rs16.25 crore in cash every year, which includes a fixed salary of Rs6.5 crore and a variable pay of up to Rs9.75 crore, according to filings made by the company on Wednesday.
There are two additional components as well: an annual grant of Rs3.25 crore in stocks, a third of which will be vested every year over the next three years, and an annual performance equity grant of Rs13 crore which will be paid depending upon Infosys’s performance.
This means that if Parekh leads Infosys up to the board’s expectations, he can earn up to Rs17.3 crore in the first year ended March 2019, Rs19.25 crore in the year ended March 2020, and up to Rs35.25 crore in the year ended March 2021.
This is because Parekh will be eligible for his annual performance equity grant of Rs13 crore a year only after completing three years (at the end of March 2021), making many believe that Infosys wants its CEO to stay and deliver, consistently, for a few years.
Parekh will also be paid a one-time Rs9.75 crore in stocks, which people believe is similar to a joining bonus made to executives by companies.
“A One-time equity Grant of RSUs covering shares have a Value equal to Rupees Nine Seventy Five Lakhs (Rs 9,75,00,000). The One-time equity Grant shall vest in two (2) instalments as follows: (x) fifty percent (50%) of the Shares subject to the One-time Equity Grant shall vest of the first anniversary of the Grant Date; and (y) the remaining fifty percent (50%) of the Shares subject to the One-time equity Grant shall vest on the second anniversary of the Grant Date,” said an Infosys filing with the BSE.
Still, Parekh has received an annual pay package that is much lower than what was paid out to his predecessor Vishal Sikka and lower than his peers at rival firms Cognizant Technology Solutions Corp. and Tata Consultancy Services Ltd, although higher than his counterpart at Wipro.
Infosys’s decision to pay out a relatively moderate annual compensation package to Parekh comes months after the company’s founder N.R. Narayana Murthy lambasted Infosys’s decision to hand out high pay packages to top executives, including to former CEO Vishal Sikka and chief operating officer U.B. Pravin Rao.
Parekh’s salary is lower than what Infosys paid Sikka—who earned roughly Rs48 crore (over $7 million) in his first year at Infosys and the promised about Rs70 crore (over $11 million) after the board of Infosys raised his salary in his second year.
According to at least three people familiar with the details of Parekh’s compensation at Capgemini, this is a significant step-up for the 53-year-old, who made roughly up to $3 million at the Paris-based IT giant.
Wipro CEO Abidali Neemuchwala’s salary for 2016-17 was $2.09 million, including $800,000 in base pay, $150,244 in commission and other payouts of $1.13 million. At TCS, Tata Sons chairman N. Chandrasekaran earned Rs30.15 crore in compensation in 2016-17.
Chandrasekaran’s compensation included Rs2.44 crore in base pay, Rs25 crore in commission and Rs2.7 crore in allowances, and was paid out from April 2016 to February 2017. After February 2017, Chandrasekaran took over as chairman of Tata Sons.
Chandrasekaran’s successor Rajesh Gopinathan earned Rs6.22 crore from April 2016 to 21 February 2017, when he served as CEO. His compensation remained unchanged from February to March 2017 when he was CEO of TCS.
Cognizant, which follows a calendar-year reporting cycle, paid $12 million to CEO Francisco D’Souza in 2016.