Infosys: COVID-19 threats company’s future profitability, 27% hike in CEO’s compensation

Infosys said that owing to the pandemic-induced shutdown, the company has faced extreme slowdown. Moreover, it expects a hit on its profit in months to come. The firm’s CEO, Salil Parekh’s total compensation increased by 27% annually to 6.1 million dollars in the current fiscal. This is as per the form 20F filed by the company with the US Securities and Exchange Commission (SEC).

The multinational company pointed out that its future profits might face the brunt as clients purse for discounts owing to the COVID-19 outbreak. “Our profitability may be marginally impacted as some clients have sought price reductions or discounts. Lower profitability and prolonged payment terms requests from clients can impact our cash flows negatively and may impact our ability to provide dividends to shareholders,” the company said in the filing.

The firm said that it suffered unsuspected expenses to ensure hygienic workplaces for the employees and providing them work from home options. Moreover, it sustained additional costs in attaining and installing hardware assets, technology infrastructure, and data connectivity charges for distant working.

While several risks occurred, the filing stated that other risks related to COVID-19 may materialize in the future. “Our exposure to cybersecurity and data privacy breach incidents may increase due to a large number of employees working remotely. This in turn can hinder our ability to continue services and/or operations, impacting revenue, profitability, and reputation,” it added.

In addition, it said owing to the remote working situation it may affect employees’ productivity. Moreover, if after reopening any employee test positive for COVID-19, it will stop the operations.

Further, Infosys raised concerns on threats caused by climate change across industry sectors in which its clients operate.

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