Infosys seems to have for the time being left behind all the controversies concerning its co-founders and the board as the former IT bellwether came up with good numbers during the first quarter results on Friday.
But there are issues which need to be looked into from every angle. One is of course the relocation of a key member of the management, Chief Financial Officer MD Ranganath to the US whose salary too has been revised accordingly. His fixed pay has been increased to Rs 4.48 crore from Rs 2.84 crore while the variable pay is up to Rs 3.64 crore. As per the annual report, he was paid Rs 1.8 crore in bonus and incentives in FY17.
This change effectively means that both the CEO and the CFO will be based out of the US and it is probably because more than 60 percent of the revenues come from that country. Therefore, having a CFO in the same country will come in handy since the changes in H-1B visa policy have made the IT major hire 10,000 American workers in the next two years.
Since the announcement, Infosys has hired 600 employees in the US. The first hub, which was launched in Indiana, will hire 2,000 American workers by 2021 and a similar number of jobs will be created at North Carolina.
“Ranga and I work very close. In my early days for 5-6 quarters, Ranga was in the US and we used to work together and we want to get some of that back,” Infosys CEO Vishal Sikka said at the press conference.
He also added that there was a significant transformation happening in the US and the nature of this transformation is quite different. Hence, it was important to get the CFO in the US. Interestingly, Indiana is the home state of Vice-President Mike Pence and this move is seen as ‘appeasing’ the political power in the US, something which Sikka vehemently denies. “More than visas, it is about changing nature of work and nature of services, which mandate being closer to clients,” he said.
Emkay Global analyst Ruchi Burde said the relocation of the CFO is more to do with the style of functioning of the CEO but at the same time will have little material impact on the operations of the company. “It definitely helps in smooth running of operations,” said Sarabjit Kour Nangra, V-P Research — IT, Angel Broking.
Others believe that Infosys is following a larger trend of top management sitting where key customers and key stakeholders are based. Cognizant CEO Francisco D’Souza as well as others are based in the US.
Shifting power centres
“Unlike the past, the power centres will start to shift away from India as companies become global,” said Kris Lakshmikanth, CEO, Head Hunters India. CFOs of TCS and HCL Tech are based out of India.
There are others who believe that with the top management being close to key FII investors like Oppenheimer would help them handle any issue that the promoters bring up. – The Hindu Business Line