Sikka to mint Rs 30 cr a year at Infy

New CEO will also get $2 million in stock options

In line with expectations, Vishal Sikka, chief executive officer (CEO)-designate of city-based Infosys, is set to become the highest-paid executive in the Indian information technology (IT) services space. Sikka’s total annual remuneration would be up to $5.08 million (Rs 30 crore), in addition to stock options worth $2 million, the company said in a regulatory filing on Wednesday.

Sikka, 47, is set to take charge at Infosys on August 1, replacing incumbent S D Shibulal.

As experts had estimated, Sikka’s salary structure has a large variable component, keeping in mind the fact that he has been brought in to arrest the company’s weak business performance. He will be paid an annual base salary of $900,000 and an annual variable pay of $4.18 million, besides being eligible to receive annual stock options valued at $2 million.

“Sikka has been brought in at a time when Infosys needs to see immediate results and so, I am sure his compensation is closely linked with the company’s fortunes,” said the head of a leading human resource consultancy, on condition of anonymity. “Since Sikka is coming from a global company, he would have easily agreed on a higher variable and performance-linked remuneration, because that is how things work there.”

Even as Sikka’s remuneration at Infosys is higher compared to the CEOs of all other Indian IT services companies, it is less (excluding stock options) than his compensation in his previous role of chief technology officer at German technology major SAP. At SAP, where he was also an executive board member, he earned about euro 4.23 million (Rs 34.2 crore) a year.

“It’s not really a salary cut, because he is getting a much larger role as a CEO, which he was not getting at SAP,” said Kris Lakshmikanth, founder of Headhunters India.

Sikka’s pay will be way higher than that of Tata Consultancy Services CEO N Chandrasekaran, the highest paid chief in the Indian infotech sector so far. For 2013-14, Chandrasekaran received a total remuneration package of Rs 18.68 crore ($3.2 million), 59.7 per cent more than the Rs 11.69 crore he had received a year earlier.

However, against experts’ expectations, Sikka’s remuneration will not be comparable to those of global CEOs such as Microsoft Corp’s Satya Nadella ($18 million) or IBM Corp’s Virginia M Rometty ($16.2 million).

Further, with Sikka being based out of California, experts say his compensation should be compared to that of Francisco D’Souza, the CEO of Infosys’s close competitor Cognizant, who is also based out of the US. Sikka will be paid less than D’Souza, who received a total remuneration of $12.2 million (about Rs 73 crore) last year.

Sikka’s remuneration is much higher than his predecessors at Infosys, as they were co-founders and drew low salaries, owing to the stocks they owned.

In an interaction with investors a few months ago, non-executive chairman N R Narayana Murthy (then the executive chairman) had said Infosys would pay industry-leading compensation to bring the most appropriate candidate as its first non-founding CEO.

In 2013-14, then president B G Srinivas was the highest paid employee at Infosys ($1.3 million, or Rs 7.8 crore), which included a salary of $844,453, bonus, incentives of $281,415 and additional compensation of $154,143.

Of those who left the company last financial year, Stephen R Pratt was the highest paid, earning $2.1 million (about Rs 12.57 crore).

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