A few days after truce was called between the Infosys board and its founders, N.R. Naryana Murthy on Sunday accused the company he founded of poor governance standards. In an email statement sent to select media houses, he said the compensation hike given to the Infosys Chief Operating Officer, U.B. Pravin Rao, was not proper.
Mr. Murthy also alleged that the hefty hike to top management would likely to erode the employees’ faith in the management and the board.
“Giving nearly [a] 60-70% increase in compensation for a top level person, even including performance-based variable pay, when the compensation for most of the employees in the company was increased by just 6-8% is, in my opinion, not proper,” Mr. Murthy said in his email.
“I have lots of affection for Pravin. Let me state you the facts. I recruited Pravin in 1985 and had nurtured him throughout my stay at Infosys,” he said.
In February, the Infosys board approved a pay revision of the COO and also appointed D.N. Prahlad as an additional director. Mr. Rao’s fixed salary was hiked to ₹4.62 crore a year while the variable component was ₹3.87 crore, payable on achievement of targets set by the board.
Pointing to the board, Mr. Murthy said: “Given the current poor governance standards at Infosys, let us also remember that these targets for variable pay may not be adhered to if the board wants to favour a top management person.”
“I have always felt that every senior management person of an Indian corporation has to show self-restraint in his or her compensation and perquisites,” he wrote.
Mr. Murthy’s letter comes after the company on Sunday published the results of e-voting by shareholders on decisions such as increasing the salary of Mr. Rao and the appointment of Mr. Prahlad.
According to information filed to the stock exchange, about 32.54% shareholders voted against the decision to hike Mr. Rao’s salary.
“No previous resolution in the history of the company has received such a low approval,” stated Mr. Murthy.
In February, the firm’s founders, led by Mr. Murthy, wrote to the board questioning governance issues in the company, the huge severance pay given to former CFO Rajiv Bansal, and the salary hike to CEO Vishal Sikka. Eventually, both parties agreed not to discuss such issues in public.
