Murthy to lose $1-mn benefits

Phaneesh Murthy, who lost his job as president and CEO of IT services company iGate Corp on Tuesday over charges of sexual harassment, could lose his severance package of $1 million (Rs 5.5 crore). This is the amount Murthy was entitled to get ‘upon termination other than for cause’.

“Murthy is terminated for cause, for a violation of iGate’s policy,” the company replied to a specific query by Business Standard if Murthy would be offered any severance package for terminating his employment contract without any prior notice. Murthy was sacked by the company for not informing his personal romantic relationship with a subordinate employee to his superiors.

In a filing to the US Securities and Exchange Commission earlier, the Nasdaq-listed company had stated: “Upon termination other than for cause, Murthy would receive a lump sum payment of 12 months’ severance at $1 million.”

As per iGate’s policy, where a romantic or sexual relationship exists, the person in the position of greater authority must notify her or his supervisor, head of the human resources department, or the board of directors. In such a case, the higher authority in the company can ensure that alternative supervisory or evaluative arrangements are put in place, according to the company.

However, Murthy will be entitled for the unvested stock units and options which would vest at a certain value as per his termination clause. “Upon a change in control, Murthy's unvested stock units would immediately vest at a total value of $6.8 million.

Upon a change in control, Murthy’s unvested stock options would immediately vest at a total value of $7.2 million,” the company has said in the SEC filing in March this year.

Apart from this, Murthy is also entitled to a post termination benefit of $6,000 per month till he and his spouse reach the age of 65 or become eligible for health coverage under a government-sponsored programme.

Murthy evaded a question related to the severance benefits he would get from the company while speaking to media persons through a conference call on Tuesday.

“Let me not talk about any of the termination benefit right now. Anything that happens to me will be public and you will be able to get to know that soon,” he had said.