Vishal Sikka plays down compensation row, says he’s on good terms with Narayana Murthy

Two years into the job, Vishal Sikka’s ambitious target of creating a $20 billion firm by 2021 looks more aspirational than realistic. Two downward revisions in revenue guidance in three months has shaken some of the confidence industry analysts had over the IT giant, putting a question mark on Sikka’s run rate.

“There is a fundamental change happening in the industry and that change is not only very visible but it has reached a very large scale. This is pricing pressure, higher frequency of rebids and rate cuts. That is reflective of a very pervasive and accelerating commoditisation of the work that we are doing. So as I have been saying for the last two years, there is only one answer to that we cannot outpace this downward spiral,” he told TOI in an interview.

But that’s not the only challenge Sikka has been facing. The company CEO is battling perceptions that he is not on the same page with the company’s founder on several matters, including his compensation, which, according to reports, was seen as very high by the firm’s promoters.

“My compensation is something you should ask the board. All I can tell is the cash part of the compensation has come down and the restricted stock units and stock options are linked to the achievement of steep targets.”

Sikka, however, steers clear on reports of conflict with NR Narayana Murthy.

“Mr Murthy is a huge supporter and I am a great fan of him. I meet him once in a while. People in the corporate world and media may not believe the sort of conversations we have around physics and computer science. I am fortunate to have a close relationship with him. He never interferes in what I do though he does give advice when I ask and it is a good thing to have a different perspective,” Sikka adds.

Sikka is hopeful he will weather this storm. “When you look at the big picture, it’s the downward pricing pressure and the role of automation that has to be in there. When I think about the renew part of our strategy, it’s awesome. Our core services have been improving significantly,” he adds.

Infosys will fine-tune its M&A strategy in the coming months, COO UB Pravin Rao said, as the company looks to use dealmaking to buy domain expertise or expand geographic footprint.

So far, Rao said, Infosys has used M&A as a tool to acquire tech, or ‘platforms,’ which are again technologies, but that is changing now.

Infosys signalling a changed approach to acquisitions comes at a time when most industry players face stalling growth and are looking at buyouts to boost their businesses, either by bringing in a new technology that can lead to new clients, or by getting in deeper into certain clients and verticals.