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Business News/ Companies / News/  Stephen Pratt, Ashok Vemuri highest paid Infosys executives

Stephen Pratt, Ashok Vemuri highest paid Infosys executives

Pratt earned a total compensation of about $2.13 million, while Vemuri earned $904,378, in 2012-13

Infosys raised concerns about the proposed immigration law in the US, saying it could have a material impact on its revenue and profit. Photo: Aniruddha Chowdhury/Mint (Aniruddha Chowdhury/Mint)Premium
Infosys raised concerns about the proposed immigration law in the US, saying it could have a material impact on its revenue and profit. Photo: Aniruddha Chowdhury/Mint
(Aniruddha Chowdhury/Mint)

Bangalore:Stephen R. Pratt is the highest-paid executive at Infosys Ltd, India’s second-largest software services provider, for the second year in a row, while the company’s head of Americas business Ashok Vemuri has overtaken Europe head B.G. Srinivas to become the second-highest paid.

Pratt, who is managing partner for the company’s worldwide consulting and systems integration business, earned a total of about $2.13 million, including bonus, while Vemuri, who also heads global manufacturing and engineering services businesses, earned $904,378, including bonus and other compensation benefits, Infosys said in a regulatory filing on Monday night. Srinivas, who earned about $1.19 million last year including bonus and other benefits, took home a total of $869,035 for the 2012-13 fiscal.

Founders S.D. Shibulal and S. Gopalakrishnan did not figure amongst the top earners at the company and had roughly the same package, inclusive of bonus and other annual compensation benefits, of about $120,000. However, both chief executive officer (CEO) Shibulal and executive co-chairman Gopalakrishnan, earned much more through dividends from their own stock holdings and those held by other members of their families.

Gopalakrishnan and his family earned about $14.6 million through dividends from their stock holdings in Infosys, while Shibulal and his family made about $9.7 million through payouts, according to Bloomberg data. Gopalakrishnan and his family hold roughly 19.6 million shares, or a 3.4% stake in the company, while Shibulal and his family hold about 2.2% or 12.6 million equity shares.

The bonuses earned by top executives such as Vemuri and Srinivas have, however, steadily declined over the last three years. While Vemuri and Srinivas earned $617,714 and $520,814, respectively, as bonus in fiscal 2010-2011, the duo received payouts of $190,978 and $170,674 for 2012-13.

Over the past three years, Infosys has lost the title of sector bellwether and has been consistently outpaced in growth rates by rivals like Tata Consultancy Services Ltd (TCS) and Cognizant Technology Solutions Corp.Cognizant overtook Infosys for the first time in terms of quarterly revenue in the June quarter and repeated the performance over the next three quarters.

Last month, Infosys reported disappointing fourth-quarter earnings and forecast a revenue growth of 6-10% for the 2013-14 fiscal, much lower than industry lobby Nasscom’s 12-14% revenue growth estimate for software exports for the year. Last year, Infosys missed the lower end of its quarterly forecast at least twice and stopped giving quarterly forecasts.

The base salaries of top executives at Indian IT companies, such as TCS, Cognizant, Infosys and Wipro Ltd are roughly similar, according to human resource experts and headhunters. However, companies that performed better paid higher bonuses to top executives, while firms that did not meet targets lowered payouts.

“The pay package of executives at Wipro, Infosys and TCS are all in same bracket. The difference is that TCS has been meeting their targets. On an average, the bonus at TCS is 10% higher than at Infosys. So at TCS, the total compensation is higher than Infosys because of the bonus part," said Kris Lakshmikanth, founder and chairman of executive recruiting firm Head Hunters India Pvt. Ltd.

On Sunday, a Press Trust of India report said that Cognizant CEO Francisco D’Souza made $10.6 million for 2012, including bonuses and dividends from holdings. Cognizant posted strong earnings in its March quarter and also forecast a healthy sequential revenue growth.

Bangalore-based Infosys also raised concerns about the proposed immigration law that is being pushed in the US by the “Gang of Eight" senators, which if passed would drive up cost of doing business in the US significantly for Infosys—one of the highest users of H-1B visa work permits among Indian information technology (IT) firms.

“If those provisions are signed into law, our cost of doing business in the United States would increase and that may discourage customers from seeking our services. This could have a material and adverse effect on our business, revenues and operating results," the filing said.

According to the legislation, all employers in the US would be required to pay higher wages to workers on H1B permits and employ a higher number of locals. Also the legislation would limit the number of H-1B and L-1 workers in a company’s US workforce as well as place a limit on a company’s ability to place H-1B and L-1B workers at client worksites.

The legislation, if approved, could have significant repercussions for India’s $108-billion IT sector, as it will force India’s top IT firms to remove employees on H1B work permits from client offices in the US, disrupting their traditional business model that fetches nearly 25% of their revenues.

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Published: 14 May 2013, 01:29 AM IST
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