Infosys CEO Salil Parekh handed strict job contract

BENGALURU: Infosys chief executive Salil Parekh cannot join a rival company for six months if he decides to leave the IT services firm.

Infosys has handed him an employment contract with strict and detailed terms, after facing flak over what critics called an overly generous agreement with his predecessor, Vishal Sikka, who had left the company after an ugly public spat with its founders.

So, Parekh cannot return to former employer Capgemini, or join others like Tata Consultancy Services, Accenture, Wipro, IBM, Cognizant, Tech Mahindra or HCL Technologies during the cooling-off period. The contract with Parekh is also far more detailed in terms of what constitutes the cause for termination of employment. If Sikka had six such conditions, Parekh has 14, including refusal to follow “reasonable and lawful instructions of the board”, if it continues for 10 days after the board provides him a written notice.

“Executive’s engaging in any wilful misconduct which is injurious to the financial condition, reputation or goodwill of the company” is another potential cause for termination in the employment agreement, which the company has filed with the US Securities and Exchange Commission.

The agreement included a waiver of all rights to civil court action, a condition that was not placed on former CEO Sikka, and also has detailed non-disclosure clauses. Parekh’s agreement allows the company to place him on gardening leave — suspension from work on full pay — during the notice period, which will last three months.

Infosys has also spelt out the various metrics on which its top executives will be evaluated in fiscal 2019. The Bengaluru-headquartered firm had not specified whether Sikka’s incentives were — as insinuated by a board member during a media interview — tied to the company achieving his 2020 goal of becoming a $20 billion revenue company. Sikka, though, had insisted that the target was aspirational.

“For CEO, the goals mirror the company targets consisting of revenue growth, operating margin percentage and organisation development goals. For other executives, performance bonus is linked to the achievement of company goals of revenue and operating margin percentage, along with components of individual goals,” Infosys said in the filing with the US regulator.

Chief operating officer UB Pravin Rao will be evaluated on new capability development, revenue forecasting and operational efficiency as part of his individual goals. For deputy COO Ravi Kumar S, it will be based on the fulfilment of the US talent model and the financial plan for the consulting business.