Rajiv Bansal’s Severance Pay Issue Could Have Been Handled Better: Infosys Chairman
Infosys chairman says the board has nothing but the company’s best interest in mind.
The board of Infosys Ltd. could have considered a better way to calculate the severance pay for former Chief Financial Officer Rajiv Bansal but it wasn’t “hush money”, company’s chairman R Seshasayee said on Monday to dispel concerns raised by founders over the board’s decisions.
Chief Executive Officer and Managing Director Vishal Sikka’s increased pay was linked to to the company’s and his long-term goals, Sheshashaye said, while also defending appointment of Punita Kumar Sinha as an independent director.
Seshasayee, accompanied by Sikka during a press conference, struck a conciliatory note hours after the CEO tried to calm nerves by saying there was no conflict between the founders and the board.
The Infosys chairman said it it would be wrong to call the present situation a battle between the co-founders and the present board, which he described as a team of professionals “who have nothing but the company’s best interests in mind”.
Some co-founders, including NR Narayana Murthy, have questioned governance standards at the country’s second largest IT services provider, especially in deciding Sikka’s pay, Bansal’s severance package and Punita Kumar Sinha’s appointment as an independent director.
Governance values are equally important, it is our (board’s) duty to uphold the interest of these values.R Seshasayee, Chairman, Infosys
Referring to Vishal Sikka's salary, Seshasayee said though the total compensation had increased, that was mostly on account of a higher variable component whereas the fixed component has been brought down from $5.08 million to $4 million per annum. A large chunk of the payout is now based on Sikka's longevity in the company, a crucial factor to ensure continuity and consistency at the top, he said.
Defending the appointment of Punita Kumar Sinha as an independent board member, Seshasayee said it would be unfair to treat her only as Union Minister Jayant Sinha's wife, and pointed instead to her personal career and achievements.
A woman should not be judged by the profession of her spouse.R Seshasayee, Chairman of Infosys
He also defended DN Prahlad's appointment as a board member, arguing that his selection was also above board, and done after due diligence.
On Bansal’s severance pay, Seshasayee said it would be wrong to say that there was some sort of “hush money” in the contract. He admitted there was an “element of subjectivity” in the decision on the former CFO’s severance pay but added that a similar situation won’t arise in the future. The severance package is now benchmarked to geographies and managerial positions, he added, in response to a question raised by BloombergQuint at the company’s media briefing.
Seshasayee also defended the company’s $200 million acquisition of Israeli software company Panaya in 2015, saying there was “no issue of skipping processes” before the deal was approved. This deal has been under scrutiny with some media reports suggesting that Rajiv Bansal had raised objections to its high valuations, which is why he had been offered “hush money”.