Thursday, February 28, 2013

Cognizant to cut bonuses this year

Due to the lower achievement of financial targets by Cognizant, top performers at the firm will get lower bonuses this year. An announcement with regard to this is due in a couple of weeks.

The bonus, calculated for performance in 2012, (Cognizant follows January-December fiscal) is likely to be in the range of 90% to 145%, sources said. For 2011, the average bonus payout was 165% while the maximum was 200%. The company is currently computing the bonuses for various business divisions and will communicate this to employees mid-March.
"In the years we beat our original growth guidance, we paid significantly above target. For 2012, where we missed our original guidance, our bonus payout will be a reflection of that performance. It must, however, be noted that our top performers will be rewarded well over 100%, and most others close to 100%," said a Cognizantspokesperson.

Cognizant has consistently exceeded its targets for the last few years except 2012, when it projected to 23% growth but registered only 20% growth. "In 2011, the company did 33% while it had projected 26% growth. Similarly in 2010, the company had projected 20% and ended up doing around 40%," said a Cognizant official.

"While the bonus payout in Cognizant last year was up to 200%, this year it is expected to be up to 145% for the highest performers," said a source. The likely peak bonus payout of 145% is way lower than what Cognizant employees and associates earned in 2011, where the average itself was 165%. Senior management officials and directors may get 90 to 100%, sources said.

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