Infosys CEO Vishal Sikka now as highly paid as Cognizant’s Francisco D’Souza

New Delhi: Infosys Ltd’s board on Wednesday decided to extend Vishal Sikka’s tenure as chief executive officer (CEO) by two years to 2021, crediting him with putting India’s second largest software services firm back on the growth path.

The extension gives Sikka, who took over as Infosys’s first non-founder CEO in August 2014, a chance to steer Bengaluru-based Infosys towards its 2020 goal of becoming a $20 billion company by annual revenue.

Sikka will be chief executive and managing director of Infosys for a period of five years, starting 1 April 2016 and ending 31 March 2021. Under the earlier five-year contract, Sikka’s term was to end on 13 June 2019.

“The Company’s Nomination and Remuneration Committee (Committee) and Board recognized the outstanding initiatives taken by Dr Vishal Sikka (Dr Sikka) towards restoring the company to Industry leadership, which have already begun to show results,” said a company statement sent to the stock exchanges.

Sikka’s total compensation now stands at $11 million a year, which includes $1 million in base salary, $3 million in variable pay, $2 million in restricted stock units, and another $5 million in stock options, which will be awarded based on how Infosys performs in a year.

Sikka’s compensation of $11 million is just short of $11.33 million earned by Francisco D’Souza, chief executive of Nasdaq-listed Cognizant Technology Solutions Corp.

“Vishal has been able to provide Infosys a clear vision and strategy towards achieving industry leading financial performance,” said R. Seshasayee, chairman of the board of directors, Infosys. “To ensure that the momentum that has started is sustained through 2020, the board has decided to extend the contract term and revise the CEO compensation to align it with global benchmarks in the industry. The new compensation structure also ensures a strong alignment between company performance and larger shareholder interests.”

Under the earlier contract, Sikka was to be paid $7.08 million a year. His earlier pay package included $900,000 in base salary, $4.18 million in variable pay and another $2 million in restricted stock units. The new contract will come into effect after it is approved by Infosys’s shareholders, the company statement added.

Infosys expects revenue to grow between 8.9% and 9.3% in dollar terms (12.8% and 13.2% in constant currency) in the year ending 31 March, faster than the 5.6% growth recorded last year.

For the year ending 31 March, Infosys’s growth will also be faster than homegrown rivals including Tata Consultancy Services Ltd (TCS), which is expected to grow at-best 8% while Wipro will lag behind at 4%.

Although Infosys will give its forecast for the next financial year in April, Sikka and senior management ranks have set an internal growth target of 16% for the financial year 2016-17.

Sikka has also rolled out an ambitious plan to make Infosys a $20 billion firm with an operating margin of 30% and revenue per employee of $80,000 by 2020. Last year, Infosys had $8.7 billion in revenue, an operating margin of 25.9% and revenue per employee of $52,300.

“The management, under the leadership of Dr Sikka has drawn up goals for revenue, margins and people productivity for the financial year 2020-2021 which are expected to be progressively achieved in the next five years. The Board believes that Dr Sikka’s leadership will be essential to achieve these goals,” the statement said.

Sikka, who was born in Shajapur, Madhya Pradesh, completed his engineering in computer science from Syracuse University in New York and got a doctorate from Stanford University.

At SAP AG, Sikka earned $5.75 million, and also held stock units. Sikka’s compensation of $11 million at Infosys makes him the highest paid CEO in the Indian information technology industry.

TCS paid N. Chandrasekaran Rs.21.28 crore last year while Wipro Ltd is still to make public the compensation paid to newly appointed CEO, Abidali Z. Neemuchwala.