IT major Infosys on Monday defended its move to raise chief operating officer U B Pravin Rao’s salary and said that the compensation was decided after benchmarking top management salaries with key Indian and global companies.
Yesterday, Infosys co-founder N R Narayana Murthy slammed the company for increasing the compensation of Rao, and said that the company’s governance standards were poor.
Infosys said in a statement that the cash component of Rao’s compensation has actually gone down whereas performance linked compensation has been increased.
The statement said
The cash component of his compensation has decreased from Rs. 5.2 crores (including annual cash bonus) to Rs. 4.6 crores, a decrease of 10.6%
The performance based component of the compensation (directly linked to company and individual performance) has been increased from 45% to 63% of total compensation.
Given the 4 year vesting period of stock, the net increase in Mr. Pravin Rao’s compensation for FY 18 will be 1.4%. This could go up to 33.4% in year 4, assuming similar grants are made in subsequent years based on Company and individual performance.
The revised compensation proposal was placed before the shareholders and the recommendations have been approved by 67% of the company’s shareholders in a postal ballot, the company said. Infosys founders including N R Narayana Murthy had abstained from voting.