3rd AIMA-ICRC Case Writing Competition & Conference, 2023       
Case Study

FOUNDING FATHER VS TOP BRASS

Gandhi. L, Asst. Professor (OB/HRM), Prerana Jain & Prajakta Jayant Upasani of SDM Institute for Management Development, Mysore
Top Executives, Founders roles, HR Practices, Severance pay, IT, India

Abstract: The case revolves around governance lapses and the need for the Indian IT giant Infosys to revisit its employee contracts to ascertain various clauses. This step was taken when the issue of a massive severance package paid to the former Chief Financial Officer, Mr. Rajiv Bansal caught the public’s eye. Rajiv Bansal resigned from his position in October 2015 for several reasons amongst which the major part was his divergence with the management over one of their acquisitions. Mr. Bansal was offered an unprecedented level of the severance package of Rs 17.38 crore by the previous board headed by Mr. R Seshasayee. This raised several eyebrows, and over 1800 e-mails to the Co-founder Mr. Narayan Murthy, objecting to the payment as excessive and undue to the shareholders’ investments. Addressing this objection, Infosys suspended the payments after a transaction of Rs 5 crore was made to Rajiv Bansal. As a subsequent action, Mr. Bansal filed an arbitration for claiming the remaining amount of severance pay to be paid with interest. In response to Mr. Bansal’s claim, Infosys filed a counterclaim, alleging for breach of trust and non-fulfillment of obligation and demanding a refund of initially made payments. However, the case was resolved in Mr. Bansal’s favor, and as part of the obligation, Infosys paid the remaining amount with interest. This controversy cautioned the management to standardize the severance packages paid to the senior level management and top executives, making it up to the fixed salary of four months will be paid.

Learning Objectives
• To learn the roles and powers of the founding fathers and top executives of the company.
• To learn the ways and means to handle HR issues specifically Severance pays

 

  • Pub Date:
    17 Dec 2022
  • Source:
    SDMIMD
  • Discipline:
    Human Resource Management
  • Product#:
    1846
  • Keywords:
    Top Executives, Founders roles, HR Practices, Severance pay, IT, India
  • Length:
    Pdf : 12 page(s) ,

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