Sikka’s good reason clause global practice; Infy disclosure norms not good

Infosys, Vishal, Sikka, Vishal Sikka

Latest News – Infosys Chief Executive Officer Vishal Sikka will be able to take 90 per cent of his annual compensation, or nearly $10 million, if he wishes to exercise a clause in his employment contract. This clause is a global practice, analysts say. However, Infosys’ selective disclosure about this clause to the US Securities and Exchanges Commission and Indian stock exchanges last year, according to analysts, violates good corporate governance practice.

Though Infosys has notified to the stock exchanges that Sikka’s salary might fall to $3 million from $11 million if performance targets set by the board are not met, the “good reason” clause permits him to terminate his job if the salary reduces by more than 10 per cent or goes below $10 million. Officially, out of Sikka’s $11 million salary, $8 million is variable.

“As far as he (Sikka) is concerned, the company has something like a watertight contract. Such compensation clauses are not prevalent in (Read More)

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