Infosys Ltd has linked CEO, Salil Parekh’s compensation to the progress of the firm. He will be paid INR 13 crore annual performance-linked shares in March 2021 based on the firm’s total shareholder return, quality of revenue and organizational capability building. This is the first time that the Infosys board has disclosed the parameters on which the company will give the variable pay to Salil Parekh. However, the weight of each of these parameters is still undisclosed. 

“The number of shares that will vest shall be calculated upon the CEO’s successful completion of three full fiscal years with the company, concluding on 31 March 2021, and will be determined by company’s performance on total shareholder return, quality of revenue and organizational capability building, as determined by the board (or its committee) in its sole discretion for the three-year period,” said Infosys in a filing to the exchanges.

Salil Parekh had joined Infosys on 2nd January for a period of five years and at the time of joining he was given a bonus of INR 9.75 crore. He earns up to INR 16.25 crore in cash every year, which includes a fixed salary of INR 6.5 crore and a variable pay of up to INR 9.75 crore. However, his compensation includes two additional components as well. These are an annual grant of INR 3.25 crore in stocks, a third of which will be vested every year over the next three years, and an annual performance equity grant of INR 13 crore that will be paid at the completion of three years. 

Former CEO Vishal Sikka’s $11 million compensation was linked to Infosys’ progress to become a $20 billion firm with an operating margin of 30% and revenue per employee of $80,000 by March 2021. These terms were perceived to be ambitious. In fact, it is said that the higher compensation was one of the many areas of discontent between Vishal Sikka and some of the founders, which culminated with Sikka resigning in August. 

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