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Employee bonuses decline at Cognizant

Update : 2015-03-14 13:17:22
Employee bonuses decline at Cognizant

Nasdaq-listed IT major Cognizant will pay lower bonuses to its associates this year as it seeks to take advantage of oversupply of talent.It is learnt that compared to average variable payouts (bonus) of 150% enjoyed by the employees in the past, this year the average payouts are around 97%. Those with highest performance ratings have received bonuses of around 135%. Traditionally , bonuses paid at Cognizant have ranged between 100% and 200% depending on the employee's performance.


"Annual bonus payout for most levels has been approximately 100% of target on average, while high performers have been rewarded at much higher levels of target bonus payout. 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 phi losophy ," said a spokesperson of the company .

Early indications of this year's variable pay levels emerged in Cognizant's December quarter earnings call when company CFO Karen McLoughlin said, "During the quarter, we adjusted our estimate of 2014 incentive compensation downward to reflect the margin impact of accelerated hiring and other investments."

On increments, Gordon Coburn, president of Cognizant said, "In terms of wage inflation we will do our wage increases later in the year and cer tainly make sure that we're competitive...I expect given the strong supply that wage increases will be modest compared to ealrier years, but we will certainly match what others do so," Last year, Cognizant's offshore employees were awarded double-digit salary hikes.

Cognizant posted industry-leading results in the December quarter riding on its robust healthcare business. The revenue for the quarter, which is traditionally subdued, clocked a 6.2% increase from September and was 16% higher compared to the year ago period.

Cognizant exceeded its quarterly revenue guidance by 3% and increased its guidance for 2015 to 19% vis-a-vis 16% in 2014.

The IT major crossed the 200,000 employees mark globally during December quarter and added the highest number of employees (11,800) compared to rivals TCS (4,868), Infosys (4,227) and HCL (4,718).

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