It cannot get bigger than this. Infosys Chairman R Sheshasayee addressed the media in Mumbai today, making it clear that while there is no battle with the founders, there have been no governance lapses by the management under Vishal Sikka. Accepting that there have been some lapses in how the severance pay contracts were drawn with some of the exiting employees, Sheshasayee said that they have learnt from the issues and have taken measures to end the subjectivity element involved in the process. The chairman also made it clear that there will be no change in the ‘gold standard’ Infosys has set in terms of corporate governance.
On former CFO Rajiv Bansal’s exit and the hefty severance pay that became controversial, Vishal Sikka said that there were chemistry issues between them and hence they decided mutually to separate. Sheshasayee said it is very important to have aligned views when large changes are being made. Either ways, only Rs 5 crores were paid to Rajiv Bansal and the rest of the payments have been suspended.
Here are 10 things Sheshasayee said at the press conference.
1) I do not look at this discussion with the founders as a battle. It happens when you have two people with conflicting objectives.
2) Here we have founders and stakeholders who have nothing but the best interests of the organisation. We are a bunch of professionals who have no other objectives but to serve the company. There is no battle. We have differences in views, perceptions and its our job to be open to listen to all interests. The objective of this presser is to look at all the principal issues that have been raised about governance.
3) Sikka’s compensation was raised to $11 mn but cash component came down to $4 mn. Variable component was linked to the longevity of Sikka in the company. The other components were linked to stiff targets. The compensation was enhanced to give Vishal Sikka motivation to meet the ambitious targets.
4) We certainly think there are lot of validity in the observations made on the severance package to Rajiv Bansal. What was actually paid to Bansal was Rs 5 cr. The rest of the payments were suspended subsequently.
5) The learning from the severance pay issue is that we need to remove the subjectivity aspect of determining the payment.
6) We do not think there was a governance issue. The suspicion that this was ‘hush money’ was deeply disturbing.
7) When we first received the anonymous whistleblower complaint, we immediately wrote back to the same mailbox. We wrote to the whistleblower and asked him to identify a law firm and hand over the evidence. We appointed a law firm and got it investigated and conclusion was there was no buying of silence in this.
8) It is the duty of the organisation to follow the contract regarding severance pay. If you are in doubt, disclose. But we were not in doubt as it was done with advice from professional people.
9) I have been asked this question: Why is Sikka using a corporate jet? And let me make it clear we don’t have corporate jets. Sikka has used chartered flights sometimes. Vishal Sikka was traveling 50,000- 60,000 kms between Dec-Jan. 8% of that was chartered flights. Focusing on the cost without focusing on the value is a big disservice to Sikka. There should be no expenditure that does not deliver value. The Board should ensure the cost-value equation is set.
10) We are very proud to appoint Dr Punita Sinha as board member and she has had a strong professional career. A woman should not be judged by the profession of her husband. There is no governance issue here.