Information technology (IT) services company iGate has proposed a hike in the annual performance-based incentives of its president and CEO Phaneesh Murthy who played a pivotal role in the successful acquisition and integration of Mumbai-based Patni Computer Systems.
For 2012, Murthy’s performance based incentives have been raised to $600,000 from $500,000 in 2011, the Nasdaq-listed company said in a filing on US market regulator Securities and Exchange Commission.
The company’s compensation committee has also approved an increase in Murthy’s termination and severance notice period from the present six months to 12 months. This means that in the event of Murthy deciding to leave the company, he has to serve a years’ notice period. In the case of the company deciding to terminate him, it has to serve him a notice of 12 months or pay a severance package equals to his 12 months’ salary.
“The increase to the termination notice and severance period shall become effective upon amendment of Murthy’s employment agreement,” the SEC filing said. The company and Murthy intend to amend his existing employment agreement to reflect the revised terms, it added.
The company also said the actual bonus payable to Murthy, as decided by its compensation committee, would be based on certain revenue targets and performance measures.
For 2011, as against his actual annual performance-based incentive of $500,000, Murthy was rewarded with a performance bonus of $880,000 “on his achieving the targets set by the committee”. For 2012, the committee has decided to allocate 50 per cent weightage to achieving the budgeted revenue target; 25 per cent to the achievement of the EPS (earning per share) performance measures and rest 25 per cent to certain other performance measures.
Other than Murthy, the company has also increased the annual salary and perks of its CFO Sujit Sircar for 2012 and 2013.
As per the revised package as approved by the company’s compensation committee on January 25, 2012, Sircar’s annual base salary has been revised to Rs 1.2 crore from earlier Rs 8,000,000 (Rs 80 lakh). Similarly, the Sircar’s annual performance based incentive for 2012 and 2013 has been revised to Rs 4,120,000 and Rs 6,000,000 crore. It was Rs 4,000,000 in 2011. Besides, his termination notice and severance period has been doubled to six months for both these years.
The company has also hiked the annual base salary and performance-based incentives of its HR Head Srinivas Rao Kandula. Both Kandula and Sircar played key roles in the successful merger of Patni with iGate.
Additionally, in recognition of the efforts of its top executives in 2011 “to successfully integrate Patni Computer Systems’ operations and business with those of the company”, the compensation committee has approved a one-time bonus payment of $400,000. This will be distributed equally among the members of the Executive Committee, it said in the filing.