Infosys founders Vs board: Here’s what CEO Vishal Sikka said in COO Pravin Rao's defence

The spat between Infosys founders and the board members regarding the pay packages and governance issues is getting uglier.

On one hand where Infosys founders are raising objections over pay hikes and severance packages of the people at the helm, the board is saying not much has been raised in the salaries of the top management.

Infosys founder NR Narayana Murthy wrote a letter criticising pay hike given to Infosys COO Pravin Rao, calling it unjustified.

However, Infosys CEO Vishal Sikka said pay hike is critical to retain top talent.

"It is essential for us to see that this revision in his compensation, as with several of our senior leadership team, is focused on making Infosys more competitive, is benchmarked against peers. (It) is critical for us to retain key talent and align the long-term interests of our leadership team with that of our shareholders," said CEO Vishal Sikka.

Meanwhile, Infosys stated the stock given to Rao has a vesting period of four years. This means the net increase in his compensation for fiscal 2018 will be 1.4% which could go up to 33.4% in the fourth year, assuming similar grants are made in subsequent years.

The company said cash component of Rao's salary, including annual cash bonus, has fallen 10.6% to Rs 4.6 crore from Rs 5.2 crore earlier while the performance-based component, directly linked to company and individual performance, has been increased to 63% from 45% of total compensation.

"I do not see Rao's compensation as a corporate governance issue. That is because it is not a related party transaction. Rao is a professional and not a promoter," said JN Gupta, managing director at Stakeholders Empowerment Services.

The issue will be discussed during the two-day board meeting, which is scheduled for April 12 and 13.