Phaneesh to lose about Rs 84 cr in severance benefits
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US-based outsourcing firm iGate on Wednesday said the company’s sacked chief executive Phaneesh Murthy will not be paid the contractual severance benefit of around $15.09 million (about Rs 84 crore) as he was dismissed from service for professional misconduct.
While Mr Murthy, who was sacked for hiding a relationship with a subordinate, will not get anything from the severance package, he is still eligible for $6,000 per month as post-termination benefit.
An iGate spokesperson told PTI: “Mr Murthy was terminated for cause, for a violation of iGate’s policy. He is not entitled to severance under the terms of his employment agreement. The parties are in discussions regarding potential compensation for transition-related services.”
In a filing to the US Securities and Exchange Commission (SEC) in March, iGate had said, “Upon termination other than for cause, Mr Murthy would receive a lump sum payment of 12months’ severance at $1,000,000."
The filing had further added: “Upon a change in control, Murthy’s unvested stock units would immediately vest at a total value of $6,841,373. Upon a change in control, Murthy's unvested stock options would immediately vest at a total value of $7,245,707.”
Yesterday, iGate sacked Mr Murthy for violating company policy by hiding a relationship with a subordinate and for alleged sexual harassment.
Earlier in 2002, Mr Murthy was forced to quit Infosys following a sexual harassment lawsuit against him. This was settled out of court.
On the post termination benefit for Mr Murthy, iGate in another SEC filing filed earlier this month had said: “On May 1, 2013, iGate Technologies Inc entered into Second Amendment Agreement with Phaneesh Murthy to provide for post termination benefits of $ 6,000 per month, indexed for inflation, until the latter of Mr Murthy and his spouse reach the age of 65 or become eligible for health coverage under a government-sponsored programme.”
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