The astronomical severance pay given to Infosys former Chief Financial Officer (CFO) Rajiv Bansal was a judgement error made by the company board due to a subjective element that guided the drawing up of severance packages, Infosys Chairman R Seshasayee said on Monday.
“In determining the severance package of Bansal when he left the company in October 2015, there was a business judgement by the Board and this amount was agreed to be paid,” Seshasayee told reporters in Bangalore.
“In retrospect, I have no hesitation in saying that this compensation would have been different, had the judgement, made in the circumstances, been different. We had some subjectivity in making this judgement,” he said.
“It would serve everyone concerned much better, if that subjectivity element is taken away from severance packages,” the chairman added describing in euphemism what was clearly a major error in business judgement.
In fact, Seshasayee said that on the review of severance packages globally conducted with the help of a consultant, Infosys has removed this subjective element from the severance package contracts being applied since 2016.
“Business judgements can be wrong, perceptions can be different,” Seshasayee said in defense of the decision to do away with the earlier practice that has led to the controversy over Rajiv Bansal’s compensation package.
Seshasayee also told reporters that though a sum of Rs 17.30 crore, or equivalent to 24 months’ salary was agreed to be paid to Rajiv Bansal on his departure, he has actually been paid Rs 5 crore something because the payment was suspended in April 2016.
In this connection, Infosys founder-chairman NR Narayana Murthy said last week that the company had previously never paid such high compensation to any other executive in possession of highly competitive (corporate) information.
“Certain acts of the board’s corporate governance could have been better. Several people on the Board had highly competitive information. A former chairman said at the AGM that he had highly competitive information,” Narayana Murthy told the CNN-News 18 channel in an interview.
Citing that following a whistleblower’s complaint about payment of “hush money” to Rajiv Bansal on his departure, Seshasayee clarified that two independent investigations did not reveal any wrongdoing on the part of the company or the former CFO.