The differences in Infosys were made public yet again, this time, the topic being a resolution to increase the total compensation of chief operating officer UB Pravin Rao by 35 per cent to £1.25 million. Several promoters of the company, including NR Narayana Murthy, abstained on the resolution. Murthy, however, provided a detailed explanation for why he chose not to vote, citing "current poor governance standards at Infosys" in a statement clearly directed towards Seshasayee.
Murthy said the company had always stood for fairness in compensation, and had practised it. The latest move, he said, went against this tradition. He said he believed in striving towards reducing differences in compensation and equity in a corporation, and indicated that Rao's compensation increase has sharpened the differences. Murthy said that giving such a big increase in compensation for a top-level person when the compensation for most of the employees in the company was increased by just 6 per cent to 8 per cent was not proper. "This is grossly unfair to the majority of the Infosys employees. The impact of such a decision will likely erode the trust and faith of the employees in the management and the board. With what conscience can a decent person like Pravin tell his juniors that they should work hard and make sacrifice to reduce cost and protect margin?"
He also said that no previous resolution in the history of the company had received such a low approval. About 24 per cent of the public institutions and 67 per cent of public non-institutions voted against the resolution. Murthy said that in a poor country like India, every senior management person of an Indian corporation has to show self-restraint in his or her compensation and perquisites. He said that giving nearly 60 per cent to 70 per cent increase in compensation to top level person, when the compensation for most of the employees in the company was increased by just 6-8 per cent is "in my opinion, not proper."
