Phaneesh Murthy, the sacked CEO of i-Gate Corporation, will lose $15 million in severance benefits.

An iGate spokesperson told Business Line that “Murthy was terminated for cause, for a violation of iGATE’s policy and (therefore) he is not entitled to severance under the terms of his employment agreement.” But Murthy and the company are in discussions regarding potential compensation for transition-related services, he added.

Murthy, who was sacked yesterday after failing to disclose his relationship with an employee, was eligible to receive a lump sum payment of $10 million as severance compensation, according to an SEC filing.

Stocks

Further, Murthy has stocks that he has not vested which is valued at around 7 million. So, in total, he would have received about $17 million. As Murthy had sold off shares worth about $2 million, his total compensation would have amounted to $15 million.

However, he is entitled to a health insurance benefit of $6,000 a month, till he reaches 65.

“Upon a change in control, Murthy’s unvested stock options would immediately vest at a total value of $ 7,245,707 and is subject to non-disclosure, non-competition and non-solicitation restrictions for a period of two years after termination,” according to the filing.

Murthy, however, did not lose it all. He sold off shares worth $2.7 million in March and April, according to a filing made in Nasdaq

Murthy, who holds around 655,292 shares in iGate valued at around $9 million, sold off 150,000 shares in the period March-April, filings data indicate.

In March, he sold 104,459 shares for $18.88 per share and raked in $1.97 million. Similarly, in April, he sold another 40,000 shares at $17.1 per share, thereby netting $684,000.

venkatesh.ganesh@thehindu.co.in

Related Topics