Infosys founder Narayana Murthy has denounced the company’s decision to increase Chief Operating Officer UB Pravin Rao’s pay by a significant amount, multiple reports said on Monday. In an email to various news organisations, Murthy accused the administration of “poor governance standards” and said the move could cause employees to lose confidence in the management, News18 reported. The hike was approved by co-founders, including Nandan Nilekani, and other investors, the company’s stock exchange filing said.
Maintaining that his opposition was not personal as he had hired Rao and “nurtured him”, Murthy said the pay hike was “grossly unfair” to other employees. “Giving nearly 60% to 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% to 8% is, in my opinion, not proper,” Murthy’s email reportedly said.
“With what conscience can a decent person like Pravin (a man schooled in Infosys values for over 30 years) tell his juniors that they should work hard and make sacrifices to reduce costs and protect margins? I have got so many mails from these people asking whether this resolution is fair. No previous resolution in the history of the company has received such a low approval,” Murthy wrote.
Under the new plan, Rao is entitled to a total compensation of Rs 12.5 crore, including Rs 4.62 crore in fixed salary, Rs 3.88 crore in variable compensation, and Rs 4 crore as performance-based stock compensation, The Times of India reported. This works out to a 35% hike.
In February, Murthy along with other co-founders had questioned the pay hike awarded to Chief Executive Officer Vishal Sikka. Murthy had also demanded the resignation of Infosys Chairperson R Seshasayee over “failing corporate governance”.