Infosys divided over its CEO Vishal Sikka's Rs 49 crore package

Differences have come to the fore between the promoters of Infosys Ltd and the board over the high salary of Chief Executive Officer Vishal Sikka and the hefty severance packages given out two top executives recently.

Sikka, the first non-founder CEO of Infosys, drew an annual pay package during 2015-16 that worked out to a whopping Rs 49 crore which is much higher than his counterparts in other Indian IT companies. While the then TCS chief N. Chandrasekaran was paid a pay packet of Rs 25.6 crore by the Tata Group for 2015-16, Wipro CEO Abidali Neemuchwala's annual pay was Rs 12 crore.

This, according to sources, has sparked a debate over corporate governance and transparency in the country's second largest infotech company, on somewhat similar lines as the Tata Group controversy. Former chief financial officer Rajiv Bansal's severance package amounted to Rs 17.38 crore or 24 month's pay, Infosys had said in a statement.

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In a January filing with the U.S. market regulator, Infosys, which is also listed on Nasdaq, said former general counsel David Kennedy would receive severance payments of $868,250 and other reimbursements over 12 months. Infosys founders N.R. Narayana Murthy, Kris Gopalakrishnan and Nandan Nilekani are reported to have written to the board last month expressing their concerns about Sikka's pay rise and severance packages given to two former senior officials. However, an Infosys spokesman said, "all decisions have been made bona fide in the overall interest of the company" and that full disclosures had already been made.

The company takes suggestions and inputs from all stakeholders, including founders, the spokesman added. Infosys founders along with their family members owned 12.75 percent of the company as of end-December, according to stock exchange data. Murthy declined to comment when contacted by Reuters on Tuesday, while Nilekani and Gopalakrishnan were not immediately reachable.

The rift in Infosys over corporate governance comes close on the heels of the trouble in the Tata Group , is mired in allegations of corporate governance lapses by its former chairman, who has waged a legal battle against his ouster.

The issues they have raised over the past year or so include the sharp increase in Sikka's compensation early last year; the appointment of Punita Sinha, wife of Union minister Jayant Sinha, as an independent director; and a large severance pay of Rs 17.4 crore to ex-CFO Rajiv Bansal.

These differences, simmering for a while now, are thought to have widened, prompting the majority of the board, led by chairman R Seshasayee, to back Sikka, according to people close to the situation.

The founders, together, own 12.75% in Infosys, with N R Narayana Murthy and his family owning the largest block. The company, on its part, has been pointing out that Sikka's cash compensation actually went down and the increase has been primarily in restricted stock units and stock options, and that these are directly linked to achieving very steep goals.

The goals have not been made public, but Sikka is said to have laid out a stiff target of $20 billion in revenue by 2021. This would entail doubling the current revenue of the company of around $10 billion.