Infosys Q4 results: CEO Vishal Sikka's salary drops 40% after lacklustre performance

Following lacklustre performance of Infosys in the final quarter of FY17, the first non-founder CEO and MD of the company, Vishal Sikka's annual compensation has dropped by 40 per cent.

Sikka, who has a fixed compensation of $3 million, took home a salary of $6.7 million for the last fiscal, instead of $11 million that included variable pay based on performance targets.

Sikka received only $3.68 million of his target variable compensation of $8 million for 2016-17.

The drop in Sikka's take home pay for 2016-2017 comes amid IT firm's lack of success in achieving the target of double-digit growth.  

Sikka's $11 million compensation is mainly through restricted stock units, whose value will do well only if the company does well.

India's second-largest software exporter on Thursday posted a consolidated net profit of Rs 3,603 crore for the January-March quarter of FY17. It had posted a consolidated net profit of Rs 3,708 crore in the October-December quarter of FY17.

Last year, Sikka took home an annual salary package of $7.45 million (about Rs 48.73 crore) for the 2015-16 financial year.

Differences have come to the fore between the promoters of Infosys Ltd and the board over the high salary of Chief Executive Officer Vishal Sikka and the hefty severance packages given out two top executives recently.

Sikka's annual pay package during 2015-16 worked out to a whopping Rs 49 crore which is much higher than his counterparts in other Indian IT companies. 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.

Infosys' tepid performance in 2016-17 performance has made it very hard for the company to meet Sikka's aspiration to hit $20 billion revenue target by 2020-21.

Earlier, Infosys founder, N R Narayana Murthy had criticized the proposed salary hike of Chief Operating Officer (COO) Pravin Rao.

Questioning a steep hike in compensation of the COO, Murthy had said, "Giving nearly 60% to 70% increase in compensation for a top level person when the compensation for most of the employees in the company was increased by just 6% to 8% is, in my opinion, not proper."

"The impact of such a decision will likely erode the trust and faith of the employees in the management and the board. With what conscience can a decent person like Pravin tell his juniors that they should work hard and make sacrifice to reduce cost and protect margin," he had said.

Batting for maintaining a reasonable ratio between the lowest salary and the highest salary, Murthy said, "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.

In his letter, Murthy said that without compassionate capitalism, this country cannot create jobs and solve the problem of poverty. "Experts tell me that capitalism may come to an end in the not-so-distant future if the current corporate leaders do not heed this advice in India."

NR Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani had also written to the company's board raising concerns including the pay hike given to Chief Executive Vishal Sikka.