Ashok Vemuri to pocket $19.7 million in Capgemini's acquisition of IGate

BENGALURU | MUMBAI: In the autumn of 2013, when Ashok Vemuri left Infosys to helm IGate, his move was seen as a consequence of the fact that his ambition of becoming CEO of India’s most high-profile technology company was taking too long in coming.

In less than two years, he has overseen one of the biggest transactions in the IT services industry and pocketed $19.7 million (Rs 120 crore) in the bargain just by virtue of his remaining shareholding in the company.

This is a far cry from his starting salary at the Fremont, California-based company. When he joined, his pay was a relatively modest $1.3 million, with a potential additional bonus of $1 million.

Vemuri holds 0.49% of IGate, or 4,00,000 shares. “In all my past stints, I’ve always believed in adding value, whether it is for employees or business models of a company,” Vemuri said in a phone interview on Monday. “And I’m very happy now in that, in these past 16-20 months, I’ve added value for shareholders as well and market capitalisation has gone up by three times.”

For comparison, Infosys CEO Vishal Sikka’s annual salary is around $7 million, including stock options. For Francisco D’Souza of Cognizant it is $11 million.



“When I joined IGate, it was a billion-dollar (market value) company. And now it is (worth) almost four (billion),” said Vemuri.

The IGate sale also puts Vemuri in a sweet spot — it could open up offers for him in an industry where a number of investors and founders are looking for large exits.

“ Vemuri will be remembered as someone who came into the company and in two years helped sell it for a really good valuation. If he wants to leave, I am sure he will be very much sought after by other mid-tier firms,” Ajit Deshmukh, at investment bank Equirus Capital, said.

Vemuri’s IGate predecessor Phaneesh Murthy, who was aiming for $5 billion in revenue, said for mid-sized software services firms there will be tepid growth at best going forward.

“IGate was always trying to position as an acquirer (not a target),” he said on Monday. “It’s very difficult for mid-sized companies to survive without differentiation. As for the industry, growing through acquisitions will now be a critical path.”

Before joining Infosys, Vemuri worked at Deutsche Bank and Bank of America. A physics graduate from St Stephens, Delhi, he studied business management at IIM-Ahmedabad.

In 1995, when Vemuri was at Bank of America as part of the team that was handing out its outsourcing mandate to Infosys, he caught the eye of top executives at the Bengaluru company.

“This is a seminal transaction for IGate,” Vemuri said.