BANGALORE: IGateBSE 0.00 % Corporation, will pay its new CEO Ashok Vemuri, a salary of $ 1.3 million (Rs 8.2 crore) and a performance-linked bonus that could go up to $1 million (Rs 6.3 crore), the Nasdaq-listed technology services company told stock exchanges.
In addition to the bonus, Vemuri, who leftInfosysBSE -0.51 % for the iGate job, will be eligible for 150,000 stock options, with a fourth of it vesting at the end of first year, and every year after that. Other than this, Vemuri, who was one of the highest paid executives in Infosys, will qualify for 100,000 restricted stock units, also vesting over a four-year period with 25% vesting at the end of each year. At Infosys, Vemuri was drawing a salary of a little over $900,000.
Some of part of Vemuri's equity-linked compensation, will depend to iGate achieving an EBITDA (earnings before interest, taxes, depreciation and amortisation) goal of $400 million, with a further upside if the EBITDA touches $500 million anytime before June 30, 2017. In the first case, Vemuri stands to gain 300,000 more shares in iGate, and in the second case, he will get double that.
"It's a well-structured compensation package. Some years back such a structure would've been considered unique but it's becoming fairly common these days. This kind of structure, where the package is linked to performance and accelerated on surpassing certain EBITDA targets, is more typical of Silicon Valley firms and tech firms with private equity investors," said CK Guruprasad, principal at executive search firm Heidrick & Struggles.
After a four-month long headhunt, iGate chose Vemuri to replace Phaneesh Murthy, its former CEO, who was sacked for not disclosing his relationship with a subordinate. Murthy had led iGate's acquisition of Patni Computer SystemsBSE -0.08 %, a company more than twice its size in 2011.