Infosys former CFO Rajiv Bansal demands Rs 12 crore amid controversy over salary hikes

BT Online   New Delhi     Last Updated: April 20, 2017  | 15:59 IST
Infosys former CFO Rajiv Bansal demands Rs 12 crore amid controversy over salary hikes

Months after NR Krishnamurthy advised Infosys Board to refrain from hefty pay for the top executives, the IT company has been dragged to an arbitral tribunal by its former CFO Rajiv Bansal over promised severance package. The Times of India reported that Rajiv Bansal is fighting for the portion of his controversial severance pay that Infosys has held back

Rajiv Bansal, who left Infosys in 2015, was promised to pay Rs 17.38 crore in severance, equalling 24 months of pay. However, Infosys's co-founder NR Krishnamurthy slammed the Infosys Board's decision and its falling governance standard.

Murthy termed the severance pay as 'hush money' and said: "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 ."

Read Also: Infosys' internal turmoil: Vishal Sikka defends COO Pravin Rao's pay hike after Murthy, Pai lash out

In an interview to Economic Times, Murthy said that such 'generosity' - severance pay - points to utter arrogance towards honest employees, total lack of fiduciary responsibility, and an unbelievable lack of application of mind.

Murthy was not the only one who found severance pay against the company policy, Infosys's former Chief Financial Officer Mohandas Pai raised the similar concern and said: "The founders who have built the company and created a value system have raised serious issues. As far as I know, no CFO in India has got a 24-month separation."

It seems, the Infosys Board came under pressure and paid only Rs 5 crore to Rajiv Bansal. Now, Bansal has invoked his rights to an arbitral tribunal for the remaining pay. However, the Infosys had recently issed a press statement saying, "Certain payments to Rajiv under the agreement have been suspended pending certain clarifications with regard to such rights and obligations."

The first arbitration meeting is scheduled in May. Former Supreme Court judge RV Raveendran has been appointed sole arbitrator in the case, the TOI report said.

In last couple of months, Murthy has shot multiple open letters flagging several governance issues at Infosys. It all started with the differences that erupted between the promoters of Infosys and the Board over Rs 49 crore package of CEO Vishal Sikka and the severance packages given out to two top executives.  

Vishal Sikka, the first non-founder CEO of Infosys, drew an annual pay package during 2015-16 that worked out to a whopping Rs 49 crore which was much higher than his counterparts in other Indian IT companies.  And, this sparked a debate over corporate governance and transparency at Infosys.  

While the then TCS chief N. Chandrasekaran was paid a pay packet of Rs 25.6 crore by the Tata Group for 2015-16, Wipro CEO Abidali Neemuchwala's annual pay was Rs 12 crore.

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