Bengaluru: Infosys Ltd offered $868,250 in severance pay to former chief compliance officer and executive vice-president (EVP) David Kennedy, who quit the company on Saturday, drawing flak for awarding such unusually high compensation to an outgoing executive.
Kennedy, who joined the company in November 2014, is the eighth EVP to quit Infosys since Vishal Sikka took over as the company’s first non-founder CEO in August 2014.
Kennedy is only the second executive to whom Infosys decided to award such a generous severance payment.
After agreeing to pay its former chief financial officer Rajiv Bansal Rs17.38 crore in 2015, Infosys was questioned by shareholders, proxy advisory firms and its founders on the rationale behind the step, forcing it to stop the payments. Infosys first disclosed that the it will be making these payment over 10 instalments. However, it is not known how much money it has already paid to Bansal, before it decided to stop the payments. Infosys has still not disclosed the reason behind paying severance money to Bansal and why it halted the payments.
“The company has entered into a separation agreement with Mr. Kennedy on December 23, 2016,” Infosys said in a statement on 31 December. “Mr. Kennedy was entitled to revoke his acceptance of the separation agreement within seven days of his signature of the agreement. Under his separation agreement, and in line with the employment agreement that it supersedes, Mr. Kennedy will receive aggregate severance payments of $868,250 plus reimbursements for COBRA (insurance) continuation coverage over a period of twelve months.”
“This is astounding. We are completely appalled,” said Shriram Subramanian, founder and managing director of proxy firm InGovern Research. “What is the reason behind paying this generous severance to an executive who has been with the company for just two years? Investors really need to sit up and take notice of these developments…”
An Infosys spokeswoman said the severance package offered to Kennedy was based on his employment agreement. However, none of Infosys’s employees, save for Sikka, are eligible for any severance payments, according to company’s annual report.
Infosys’s deputy general counsel Gopi Krishnan will be the interim general counsel while the company looks for a new general counsel.
In the past two years, Infosys has seen the departure of eight EVPs. These include former head of consulting Sanjay Purohit, former head of BPO Anup Upadhyaya and former head of EdgeVerve Michael Reh.