Cognizant Technology Solutions Corporation and its subsidiaries will not enter into any new employment agreement, severance, separation arrangement or agreement with any senior executive, providing cash severance benefits exceeding 2.99 times the sum of the senior executive’s base salary plus target bonus without seeking stockholder approval of such severance arrangement.
Cognizant said in a filing to the US Securities and Exchange Commission (SEC) that it would not establish any new severance plan or policy covering any senior executive of the company in each case.
The filing comes two months after the company’s CEO, Brian Humphries, left the company.
A statement from Cognizant says, “Having a policy like this is part of good corporate governance. The disclosure reflects the adoption of this policy.”
Compensation and human capital panel
The Board has delegated to the Compensation and Human Capital Committee exclusive authority to make determinations regarding the interpretation and application of the provisions of this policy.
Suppose the Board or the Committee determines that it would be in the best interest of stockholders to enter into a future severance arrangement that would require seeking stockholder ratification of such arrangement. In that case, the company may seek stockholder approval of such a Severance Arrangement after the material terms have been agreed upon. Still, the payment of any benefits above the foregoing limits will be contingent upon such stockholder approval.