Looks like culture clashes have moved from living rooms to boardrooms. What can arguably be called another such incident comes in the wake of the friction between Infosys founders and the board.
The past few days we've been hearing about Infosys founders' displeasure towards how the company is functioning. The friction between the founders and the board is all about governance, principles and transparency, or so to say. Under Sikka, the company plans to achieve the target of becoming a $20 billion company, but the founders led by Murthy have been asking how that can be achieved in such uncertain global environment. He spoke to The Economic Times and highlighted the reason for his displeasure towards the board.
# He said that the founders have strove extremely hard for the company from the day it was founded until they decided to 'voluntarily' step down from the board. The company has won awards for good governance, but from June 1, 2015 there has been a 'concerning' drop in governance. Sikka was appointed as the Infosys chief in June 2014. He said good governance is all about transparency and being fair. He pointed out that at several occasions in the past, Infosys has accepted responsibility for the downfalls and spoken about it in public, and managed to rise back.
#Vishal Sikka's annual compensation. Infosys’s board has given Sikka’s a higher compensation of $11 million a year, up from the earlier $7.08 million. $8 million of Sikka’s pay is based on Infosys’s performance this year. The board linked this higher annual compensation to the progress Infosys makes in achieving the target of becoming a $20 billion firm by March 2021. The founders had previously abstained from voting on giving Sikka an extension.
# "Providing huge severance pay (with 100 per cent variable) to some departing employees while giving only 80 per cent variable for employees in the company is one such example. Such payments raise doubts whether the company is using such payments as hush money to hide something," he said, referring to the Rs 17 crore severance package paid to former CFO Rajiv Bansal. He didn't hesitate from saying that the severance package for Rajiv Bansal should have been discussed, and there was no need to wade away from the policy. In the past, according to him, there have many others with company 'secrets' but weren't offered a severance package.
# He questioned the disparity in the treatment meted out to other former employees. He said even if it isn't a misdeed, the generosity is arrogance towards honest employees and some stellar former employees, mentioning Mohandas Pai, Sharad Hegde, among others. And, he confirmed that the disappointment has come from a host of other employees (current as well as former) as well.
# Among other concerns, there was also the question of the exit of Infosys's former chief compliance officer David Kennedy and the compensation package of $868,250 he had.
#He required that the responsibility of the financial decision, be taken by the chair of the board, who should have revised the suggestions of the nomination and remuneration committee which looks into the senior management compensation and severance pay.
Finally, talking about the founders' displeasure towards Sikka, he said Sikka was given was given total freedom to craft his own strategy and there was no interference at all. He even went ahead to say that the meetings they had were usually unofficial with topics of discussion varying from Physics to Maths.
Meanwhile, Vishal Sikka has penned down a letter to employees, asking them to not get distracted by rumours.