The new year is, without doubt, ringing in good times for Indian IT’s comeback kid.
Barely two weeks after getting into the driver seat of a billion dollar entity — Patni Computer Systems, a company three times his own — Phaneesh Murthy has got a substantial gift. His basic pay has doubled from about $500,000 to a million dollars.
iGate Corp’s compensation committee has also approved performance-based bonus of up to $500,000, more than double the $200,000 he was eligible for in 2010, taking his total pay to $1.5million (Rs6.83 crore).
That’s more than twice what N Chandrasekaran, chief executive of Tata Consultancy Services, India’s largest IT exporter, gets — Rs3 crore.
Once a reputed rainmaker for Infosys Technologies, the stellar salesman Murthy’s career took a hard blow when two of his female colleagues filed sexual harassment charges against him in 2003.
Ousted from Infosys, the “other Murthy,” — as he is sometimes referred to so as to differentiate him from Infosys co-founder N R Narayana Murthy — had a long journey back to the high table.
In the second week of January, Murthy’s iGate Corp announced intent to acquire a little over 60% stake in Patni for $921million, nearly $700 million of it in debt.
At about $250 million in total sales, iGate is just about a third in size compared with Patni, which earns over $650 million in sales.
The latest pay hike helps Murthy breeze past by Patni’s chief financial officer Surjeet Singh, who takes home about $1.26 million (Rs5.73 crore) as per company’s filings with the Securities and Exchange Commission, the US regulator.
But Jeya Kumar, Patni’s chief executive, still earns 44% more than Murthy at Rs12.2 crore.
“The pay differences might be only the tip of the iceberg that senior executives at both firms will have to deal with during the integration of the two entities,” said a senior executive at a IT services firm that competes with Patni. He did not want to be identified.
In the third week of December, barely two weeks before the acquisition was consummated, iGate’s head of sales and marketing Sambhashiva Hariharan had resigned, for reasons that the company did not disclose.
Senior managers of both iGate and Patni are currently meeting in Bangalore to figure out way of working together to make the most of the newfound size.
While the size does give the company a chance to compete for larger deals, it also presents tremendous integration challenges and analysts are divided on whether the acquisition will be a success.