 "Chief Executive Officer of Infosys Tecnologies Vishal Sikka laughs during a press conference to announce the 3rd quarter results of the company at its headquarters in Bengaluru")
Infosys, India’s second largest information technology services company, has recommended extending the tenure of its chief executive officer and managing director Vishal Sikka by two years apart from revising his annual compensation significantly.
In a regulatory filing on Wednesday, the Bengaluru-based company said the board of directors proposed to extend his tenure until March 31, 2021 in recognition of his “outstanding initiatives towards restoring the company to industry leadership, which has already begun to show results”.
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The board has also said the management has drawn up goals for improving revenue and people productivity by 2020-2021, to progressively achieved in the next five years. “The board believes Sikka’s leadership will be essential to achieve these goals. Hence, it recommends Sikka’s present contract of employment be replaced with a new contract fully aligned to the period and goals, as well as to shareholder value creation,” the company said.
As per the proposed revised compensation, Sikka would receive a total compensation of $11 million per annum including a base pay of $1 million, target variable pay of $3 million and another $7 million on stock based compensation. In case, he fails to achieve the minimum performance target, Sikka’s minimum remuneration would fall to $3,000,000 annually, the company added.
Previously, Sikka’s annual compensation stood at $5.08 million (Rs 30 crore), in addition to stock options worth $2 million. The new agreement that would be effective from April 1, 2016.
The proposal, with a few others, would now be sent for voting by shareholders through postal ballot, the statement added.
Sikka, widely recognised as an ace technocrat and former technology head at German software company SAP, had joined Infosys in June 2014 and assumed the role of CEO and MD with effect from August 1 the same year. According to the original contract, his term till June 13, 2019. This was ratified by the shareholders in an extraordinary general meeting on June 30, 2014.
As a part of Sikka’s ‘Vision 2020’, Infosys has set a target to touch $20 billion in revenue by FY21, with an operating profit margin of 30 per cent and per-employee revenue contribution of $80,000. The company expects to come back to industry leading growth path in FY17.
