CEO Salil Parekh to earn a fourth of what Vishal Sikka signed up at Infosys

Infosys gave a low key welcome to Parekh, unlike the aggressive marketing exercise it undertook to welcome Sikka

Salil Parekh will earn an annual salary of Rs 162. 5 million ($ 2.55 million) as the CEO of Infosys, which is a quarter of what Infosys had signed up with his high profile predecessor Vishal Sikka, who quit the firm after three years in turmoil.

The compensation also reflects the reality at Infosys and its chairman Nandan Nilekani who would like the low profile senior executive to execute a vision of focused delivery for customers than over promise and under delivery that would be in contrast with the company's culture.

Parekh, the soft-spoken executive who was poached from global rival Capgemini, will get an annual fixed salary of Rs 65 million and variable pay of Rs 97.5 million that would be compensated based on achieving metrics set by the company. Infosys has also offered stock options worth Rs 97.5 million that would be vested over two years, the company said in its postal ballot that was disclosed in regulatory filings. Pravin Rao, interim MD and CEO has been redesignated as COO.

Sikka, who had a tumultuous three-year stint at Infosys, had signed up $ 11 million package including stock options. However, in fiscal 2017, the last of the three-year term, Sikka earned Rs 451 million ($ 7 million), after he struggled to grow business faster in a volatile business environment and the battle he was facing internally with the entrenched system at Infosys.

Infosys has also spelt out the severance pay terms - half his compensation of the previous 12 months and vesting of outstanding stock options till that period.

The severance pay to Rajiv Bansal, the former CFO, ten times his annual compensation, sparked a controversy over alleged failure in corporate governance norms, which eventually brought the downfall of Sikka and R Seshasayee, the former Chairman at Infosys.

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Infosys founders raise a stink on governance, question Vishal Sikka's pay

Board told about Sikka's pay hike, generous severance packages, disclosures

Founders of Infosys have flagged concerns over transparency and corporate governance at second-largest software exporter in the country. They have questioned the compensation package of Chief Executive Officer (CEO) Vishal Sikka and the severance package to its former chief compliance officer David Kennedy.

The founders, led by N R Narayana Murthy, have asked how the company would achieve the $20-billion target by 2020, as set by Sikka, in an uncertain global environment, said sources. Last month, Murthy, Nandan Nilekani and Kris Gopalakrishnan raised their concerns with the board.

The current projections are contrary to how Murthy built the company, with his mantra of “under promise over delivery”. Murthy and the five founders had stepped down as promoter-shareholders to ensure that their influence over the company reduced after they moved away from executive roles.

Since taking over as CEO in August 2014, Sikka has pushed the company to adopt design thinking, brought in automation and invested in artificial intelligence platforms, anticipating a shift in customer spending from traditional services to cloud. The shift in culture towards a less-people more-software-driven business approach also has seen several executives quit.

It includes former chief financial officer Rajiv Bansal and Kennedy, who resigned on December 31.

“There is a question mark on disclosures. Infosys was a gold standard in corporate governance. It doesn’t have that premium now,” said a person familiar with the developments.

Since Sikka took over as the company’s first non-founder CEO, several questions have been raised at Infosys that, analysts say, have not been answered satisfactorily. Read More