Narayana Murthy’s letter to the media about Pravin Rao’s compensation
Dear Folks,
If you use the contents of this mail, please quote me verbatim and in full. Please do not paraphrase.
I have lots of affection for Pravin. Let me state you the facts.
I recruited Pravin in 1985 and had nurtured him throughout my stay at Infosys since then.
He had been sidelined. He was not even a member of the Executive
Council at Infosys in 2013 when I came back. Kris, Shibu snd I
encouraged him, elevated him to the board, and made him the COO when we
recruited Vishal as the CEO. So, this abstention has nothing to do with
Pravin.
Those of us who have always stood for fairness in
compensation and practised it, right from the day Infosys was founded,
will have to demonstrate it when needed. This is a time when it is
needed. Nothing more and nothing less.
I believe in striving
towards reducing differences in compensation and equity in a
corporation. You may not know that my Infosys salary at the time of the
founding of Infosys was just 10% of my salary in my previous job. I
ensured that my younger, co-founder colleagues got 20% higher salary
over their salaries in their previous job even though I was 7 levels
above them in my previous job and was 11 years older than them. I gave
them huge equity compensation the like of which has never been
replicated in this world. So, this abstention comes from somebody who
has walked the talk.
I have always felt that every senior
management person of an Indian corporation has to show self restraint in
his or her compensation and perquisites. He or she has to fight for
maintaining a reasonable ratio between the lowest salary and the highest
salary in a corporation in a poor country like India. The board has to
create a climate of opinion for such a fairness by their actions.
This is necessary if we have to make compassionate capitalism
acceptable to a majority of Indians who are poor. Without compassionate
capitalism, this country cannot create jobs and solve the problem of
poverty. Experts tell me that capitalism may come to an end in the
not-so-distant future if the current corporate leaders do not heed this
advice in India.
Further, giving nearly 60% to 70% increase in
compensation for a top level person (even including performance-based
variable pay) when the compensation for most of the employees in the
company was increased by just 6% to 8% is, in my opinion, not proper.
This is grossly unfair to the majority of the Infosys employees
including project managers, delivery managers, analysts, programmers,
sales people in the field, entry level engineers, clerks and office boys
who are toiling hard to make the company better. The impact of such a
decision will likely erode the trust and faith of the employees in the
management and the board. With what conscience can a decent person like
Pravin ( a man schooled in Infosys values for over 30 years) tell his
juniors that they should work hard and make sacrifice to reduce cost and
protect margin? I have got so many mails from these people asking
whether this resolution is fair. No previous resolution in the history
of the company has received such a low approval.
Finally, given
the current poor governance standards at Infosys, let us also remember
that these targets for variable pay may not be adhered to if the board
wants to favor a top management person.
Thanks.
