Infosys Ltd. has linked the performance-linked pay of six of its topmost officials to digital revenue growth, i.e. revenue generation from digital technologies. This is the first time any big IT services company is including its performance in digital revenue as a performance criteria against which top employee’s performance will be measured.
The term ‘digital’ encompasses analytics, cloud progress, machine learning and the internet of things (IoT). By linking pay to digital revenue growth, Infosys CEO Salil Parekh is emphasizing the importance of the new digital market in the company’s future growth plans and trying to get the company to sell more digital content.
The 6 chief employees the new incentive plan will be applicable to are U.B. Pravin Rao, Chief operating officer (COO); M.D. Ranganath, chief financial officer (CFO); Mohit Joshi, head of banking and financial services; S. Ravi Kumar, deputy chief operating officer; Krishnamurthy Shankar, head of human resources and Inderpreet Sawhney, general counsel.
A few weeks ago, Infosys’ board disclosed how CEO Parekh’s incentives were to be calculated, apart from his pay of ₹16.25 crore per annum, which is linked to the company’s digital revenue growth, securing high returns for stakeholders and organization development in terms of building a strong management team.
Infosys is following the likes of Walmart and Ford, who’s number one agenda is to become relevant in the digital technology space. A senior executive from the company was quoted saying: “This calls for a fundamental transformation for the Indian IT industry, from helping Fortune 500 companies digitise their current business model to helping clients innovate digitally-enabled new business models. This shift is easier said than done. By linking executive compensation to revenues from digital business models, Infosys has taken the right step to secure its future”.
Infosys digital revenue grew by 8% to $803 million, which translates to 28.4% of total revenue earned by the company in the last quarter.