IT services major Cognizant offered single-digit hike in compensation to its key executives including chief executive officer Francisco D’Souza in 2017 considering the market trends.
Compensations of the company’s top three executives – D’Souza, Rajeev Mehta, President, and Karen McLoughlin,chief financial officer – were raised between 3 and 8% last year.
Both D’Souza and Mehta have not received any hike in base salary and annual cash incentive.
The chief executive received 3% overall increase in target direct compensation as against 2016 to reflect general market trends and the compensation was set close to median but weighted more heavily towards equity compensation versus company peer group, providing the opportunity for higher realized compensation based on company performance, said the company in its proxy statement filed to the USSEC.
D’Souza’s target direct compensation was $12.23 million in 2017 and annual performance stock units (PSU) and restricted stock units (RSU) grants increased by 3% over 2016.
Mehta, who was given 14% increase upon his promotion to President in September 2016, received a 3% overall increase in target direct compensation. His annual PSU and RSU grants increased by 3% and 4%, respectively from 2016.
McLoughlin received 8% overall increase in target direct compensation for 2017 to align compensation to market and her base salary and annual cash incentive increased by 17% over 2016. She received 5% and 6% hike respectively in annual PSU and RSU grants.
The IT services industry is passing through a major transformation as more organisations are shifting towards use of digital technologies globally and this has impacted growth of companies such as Cognizant, Infosys, TCS and others.
Ramakrishna Prasad Chintamaneni executive vice-president and President, Global Industries and Consulting, saw his target direct compensation being raised 31% at the time of his promotion to his current role in December 2016 and there was no further changes made in 2017.
Cognizant said that compensations for executives were set primarily based on the company’s performance during 2017, 2016 and in previous years and its growth compared with industry; anticipated and desired company performance for 2017 and 2018 based on company and industry projections and company goals; individual executive performance and responsibility and the market for executive talent.
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