COO Pay Hike Row: Infosys Justifies Decision, says Effective Rise Only 1.4%


Infosys vehemently defended an over 33 per cent pay hike for its COO, saying it is in line with global standards, even as former executives V Balakrishnan and TV Mohandas Pai joined co-founder N R Narayana Murthy in criticizing the move.

The country's second-largest software services company said the increase in Rao's salary followed a comprehensive survey of best practices and benchmarked senior management compensation with key Indian and global companies.

The company claimed that the net hike for Rao came to just 1.4 per cent for 2017-18 after accounting for a four-year vesting period of stock, a 10.6 per cent drop in cash component and performance-based pay going up to 63 per cent from 45 per cent of total compensation.

"This (hike) could go up to 33.4 per cent in year 4, assuming similar grants are made in subsequent years based on company and individual performance," Infosys explained.

Soon after shareholders voted for Rao's pay hike, Murthy opposed the proposal saying near "60 per cent to 70 per cent increase in compensation" to the COO is "not proper" when most employees got just 6-8 per cent hike.

"This is grossly unfair to the majority of the Infosys employees," he had said. "The impact of such a decision will likely erode the trust and faith of the employees in the management and the board."

 

(Image Courtesy: Pixabay.com)

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