Cognizant Technology Solutions has provided an annual bonus payout at 100-130 per cent to its employees for 2014. Traditionally, the bonus at Cognizant is in the range of 100-200 per cent depending on the performance of the employees.
The $10 billion US-based software company has over 75 per cent of its employees working in India. It ended 2014 with nearly 2 lakh employees.
“As a company, we have always believed in sharing the rewards of our performance with our associates, and our bonus payout for this year is yet again an expression of this philosophy,” the company spokesperson said in a statement.
While 2014 was a strong year for Cognizant, the company did not meet the growth guidance set at the beginning of the year. As a performance-oriented company, the bonus payout reflects that, said sources.
The US-based company with large offshore presence in India had already hinted at the lower payouts during its December quarter earnings call.
Cognizant’s CFO Karen McLoughlin told analysts while discussing the company’s fourth quarter financial results that during the quarter, the company adjusted its estimate of 2014 incentive compensation downward to reflect the margin impact of accelerated hiring and other investments.
The company’s president Gordon Coburn said that in terms of wage inflation “we do our wage increases later in the year and certainly we will make sure that we are competitive with what others do. But I would expect given the strong supply that wage increases will be relatively modest compared to prior year but in the end we will certainly match what others do so but I would expect others to be fairly disciplined in their wage increases.”