Infotech Lead India: IT major iGate has signed a special termination deal with the ousted CEO Phaneesh Murthy, days before sacking.
On May 6, iGate informed foreign stock exchanges that the company on May 1, 2013, entered into Second Amendment Agreement to the Senior Executive Employment Agreement dated January 1st, 2010 with Phaneesh Murthy to provide for post termination benefits of $6,000 per month, indexed for inflation, until the latter of Murthy or executive and his spouse reach the age of 65 or become eligible for health coverage under a government-sponsored program.
This means Phaneesh Murthy’s exit is part of a negotiated deal with the board. The board earlier admitted that its enquiry on the sexual harassment case begun some time ago.
iGate announced the termination of its CEO on May 20 to the media and public officially.
On May 22, iGate informed the stock exchange that Phaneesh Murthy was terminated as CEO and president of iGATE on May 20, 2013.
iGate also said Murthy is not entitled to severance payment under the terms of his employment agreement with the company. The company and Murthy are in discussions concerning a possible transition services agreement, whereby he will be compensated for services provided to the company.
Meanwhile, the new and interim CEO and president Gerhard Watzinger will receive $100,000 per month during his term.
According to a press release on Wednesday from law firm Aiman-Smith & Marcy, Phaneesh Murthy will face court action for sexually harassing the company’s investor relations head Araceli Roiz.
The California-based law firm said that Roiz was pregnant with Murthy’s child. It said that when Murthy discovered this, he pressured Roiz to have an abortion. “When she refused, he told her to leave the company, quietly, to protect his position as CEO,” the law firm said.