Infosys’s Vishal Sikka takes home only 61% of eligible pay
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New Delhi: Infosys CEO Vishal Sikka, whose pay package was a point of contention for the company’s founders, has drawn $ 6.68 million (about Rs 43 crore) or 61% of the promised compensation for the 2016-17 fiscal.
Sikka was eligible for a $11 million pay including basic salary, variable pay, restricted stock units (RSUs) and performance stock options for the year. Incidentally, this is also lower than what Sikka drew in the previous financial year when he took home Rs 48.73 crore.
According to Infosys’ financial statements that outline compensation to key executives, Sikka received only $3.68 million of the $8 million variable component that he was promised. One of the highest paid executives in the Indian IT industry, Sikka took home $0.82 million in variable pay, $1.9 million in RSUs and ESOPs worth $0.96 million, totalling $3.68 million.
Sikka’s salary was revised from $7.08 million to a handsome $11 million package with effect from April 2016, a move that did not go down well with the founders, including NR Narayana Murthy.
The $11 million package was to include a base salary of $1 million and $2 million worth of stock annually as well $3 million in variable pay. Sikka is also eligible for another $5 million worth of performance-based equity and stock options upon achievement of certain performance targets.
“The Board, based on the recommendations of the Nominations Committee, approved on April 13, 2017, $0.82 million as variable pay to CEO for the year ended March 31, 2017,” Infosys said.
It further mentions “...RSUs amounting to $1.9 million and ESOPs amounting to $0.96 million representing the performance-based equity and stock options for the financial year 2017”.
While the founders had raised concerns over the significant salary hike given to Sikka, the Board, on its part, maintained that the variable component was tied to steep performance goals.
However, Infosys has not made those goals public. Infosys had defended Sikka’s pay hike saying all decisions were made “in the overall interest of the company”.
Infosys’ performance of 2016-17 has disappointed the street, especially after it lowered its annual revenue guidance thrice last fiscal.
The “aspirational goal” of $20 billion revenue by 2020 set by Infosys looks like a tall order given the current performance, said industry watchers.
The Bengaluru-based firm, which posted a revenue of $ 10.2 billion in 2016-17, has been focussing on new areas like automation and artificial intelligence to bolster its revenues to meet the said target.
For the financial year 2017-18, Infosys expects its revenues to grow by 6.1-8.1% in dollar terms.