Ashok Vemuri, the newly-appointed president and chief executive officer of mid-size IT services company iGate would be paid an annual base salary of $1.3 million (around Rs 8.15 crore), close to twice what he was getting at Infosys. Vemuri, a former board member and Head of Americas, Manufacturing and Engineering Services business at Infosys joined iGate on Monday.
According to Infosys’ annual report for 2012-2013, Vemuri’s annual base salary was $708,000 (Rs 3.86 crore based on the exchange rate at that time). During that period, Vemuri’s total compensation including bonus incentive of $190,978 and other annual income of $5,400 stood at $904,378 (Rs 4.91 crore).
iGate has said that other than his annual base salary, Vemuri is also entitled for a cash bonus ranging between zero to 200 per cent of the target bonus of $500,000.
Assuming that he is paid the full bonus, Vemuri stands to gain an additional amount of $1 million (around Rs 6.3 crore) which could take his total annual compensation package to $2.3 million, more than double of the remuneration he was paid during his Infosys days.
However, bonus can never be considered as an assured sum since its quantum depends multiple parameters.
According to HR experts, usually when top level executives of a tier-I IT services company switches job to a tier-II company, typically they ask for a raise of between 60 to 90 per cent because of the perceived risk associated with such moves.
Besides, the salaries offered by most of the Indian IT services companies to their top management are typically lower than their global counterparts.
“In all Indian (IT services) companies, the salaries are lower than the industry standards.
"Besides, there is always a risk when someone changes job from a company like Infosys to a midsize company, especially iGate.
"They always know that they are taking some sorts of risk and thus ask for a much better compensation,” said Kris Lakshimkanth, CEO and MD at executive search firm, Headhunters India.
iGate has also said that Vemuri will be eligible for 150,000 stock options, exercisable at fair market value and with 25 per cent of the options vesting at the end of each year in a four-year period.
He will qualify for 100,000 restricted stock units, also vesting over a four-year period with 25 per cent vesting at the end of each year.
Additionally, a part of Vemuri's equity awards will be linked to iGates' financial performance.
He would stand to gain 300,000 more shares in iGate if the company achieves an EBITDA goal of $400 million by June 30, 2017, with an upside of getting 600,000 shares if a goal of $500 million is achieved within the same time.
Vemuri will be employed initially for a five-year term started September 16, 2013, at iGate, the filing said.
Image: Ashok Vemuri; Photograph, courtesy: Business Standard