Stamp of approval on CEO’s strategy and long-term goal for the company
While investors in Tata Consultancy Services wanted more “sikkas”, their counterparts at Infosys seem to want the real deal. At its 35th annual general meeting, Infosys’ investors were extremely content with the performance of CEO Vishal Sikka and his management team and his assurances that the IT firm was in safe hands.
Unlike Sikka’s first AGM last year, mentor and Infosys founder NR Narayana Murthy was not present this time as a shareholder, though Sikka did not forget to invoke his name a couple of times during the proceedings.
Recounting something Murthy had told him over a recent lunch in London, Sikka said, “He told me, ‘Vishal, what you are trying to do is to transform us from reactive problem solvers to proactive problem finders’. And I said, ‘Mr. Murthy, only you could say it so beautifully’.”
Sikka, who referred to Infosys as an institution that was bigger than him as well as everybody else, said he was extremely excited about the future even after being at the helm of the company for 21 months.
“I never lost sight of that fact, that we, anyone of us at any given point of time, is only a transient temporary custodian of this incredible institution, that is bigger than any of us, that will last longer than any of us,” Sikka said.
At the AGM, almost all the investors who spoke were largely happy with the company’s performance and acknowledged the contribution of the top leadership, including that of Sikka.
Lauding Sikka’s leadership and the efforts of the management in aiding the company towards a stronger growth path, Rama Murthy, one of the investors, recalled how Sikka was even remembered at the AGM of TCS on Friday.
“Mr Sikka, you know that you were remembered yesterday in the TCS AGM when some shareholders were asking for ‘sikka’.”
“Mr Vishal, first of all I thank you very much that under your leadership, our company is doing (great),” said an investor who introduced himself as Vardharaj from Hyderabad. “I am very much happy that under your leadership, my company will be definitely be a $20-billion company by 2020.”
Even though one or two investors did mention that Sikka, along with the top management, were being paid a high salary, they did not raise an alarm over the issue.
However, in his reply to shareholders queries, R Seshasayee, chairman of Infosys, said it was extremely important for a company like Infosys to become competitive in salary in attracting world-class talent which is applicable even in the case of the CEO.
“We believe that we need to get the most competitive talent to work for our company and we must get globally competitive talents and in line with that principle, we certainly believe that we have some outstanding leaders like Vishal,” said Seshasayee.
“We have a lot more to gain from this very good leadership team and as part of this exercise, we believe that we must compensate not only the chief executive but also the team adequately and competitively.”
He said the compensation has various components, including the perks related to the cash components and the other is the perks related to the stock component which is linked to the performance of the company.
“I do not think that there are many companies in India, perhaps there is no company in India which has stated long-term goal in quantifiable terms and that is linked to the CEO compensation.”
In FY16, Sikka was paid a total remuneration of Rs 48.73 crore, an increase of 752 per cent over the previous year, which included a basic salary of Rs 5.96 crore and bonus and incentives of Rs 42.44 crore. In FY15, Sikka was not paid for the full year since his appointment was effective from June 14, 2014.
In February this year, Infosys board while approving the extension of Sikka’s term as CEO & MD till March 31, 2021, has also approved to raise his compensation package by close to 60 per cent from $7.08 million at present to $11 million (around Rs 76 crore), effective April 1, 2016.
The changes has been made to aligns Sikka's term with its vision 2020 by when the company aspire to cross $20 billion in revenues with an operating margin of 30 per cent.
