BENGALURU: The crorepati club at Infosys is getting bigger. As many as 49 senior executives drew over Rs 1 crore in compensation in the 2015-16 financial year, up from 18 two years back. Last year was an aberration when 113 crashed past the crore mark due to a one-off, high-incentive payout.
The increase in the number of VPs and SVPs entering the Rs 1-crore roster last fiscal explains the company’s attempt to bridge the pay gap with competitors and stem attrition in a fierce war for talent. The top-level pay spike also reflects Infosys’ efforts to align salaries with the market at a time when the company is on course to return to industry-leading growth rates under CEO Vishal Sikka.
Sikka himself has raked in $7.45 million in the 2015-16 financial year that includes a variable pay of $4.33 million and RSUs (restricted stock units) granted to him that’s valued at $2 million. However, this has put the spotlight on the ratio of Sikka’s compensation to the median remuneration of employee that stood at 935.
Infosys COO Pravin Rao took home $1.4 million in annual compensation, while CFO MD Ranganath raked in $539,141 for the year. “We are in a global market, and competition for talent is intense. Therefore, it doesn’t surprise me Indian companies are now paying their executives according to their global market value,” said Dan Marcec, director
(content & marketing communications) in US-based Equilar that provides data on executive compensation. “The safeguard for companies, of course, is the idea of pay tied to performance. They are providing incentives so that executive pay reflects the CEO’s personal interest as well as that of the company.”
Harish V, partner in consultancy firm Grant Thornton, believes the performance metrics have changed significantly with individual contributors getting their fair share of rewards. However, in Infy’s case, the actual number of crorepatis could be higher than what’s mentioned in the annual report as its CEO has roped in top-notch executives from Palo Alto in the US from where he works. The Companies Act obliges firms to disclose the compensation details of every employee based in India drawing over Rs 60 lakh.
Sikka has successfully reversed Infosys’ once-listless performance with a sharper positioning to clients, amplifying the people-plus-software approach by moving away from a headcount-linked model. This includes a base salary of $1 million, $3 million in variable pay, $2 million in restricted stock units (RSUs) and another $5 million in stock options, which would be awarded to him based on Infosys’ performance.